Civitas Resources Inc will acquire peer Crestone Peak Resources for $1.3 billion, including debt. The merger between Bonanza Creek and Extraction will create the largest exploration and production company focused on Colorado’s Denver-Julesburg Basin. Taking over Crestone, which is also active in Colorado, will further expand that footprint.
Civitas will use its stock as currency to pay Crestone Peak Resources owners, including the Canada Pension Plan Investment Board and investment firm The Broe Group, the sources said. The agreement could be announced as early as Monday.
Extraction’s largest shareholder is investment firm Kimmeridge Energy Management, which has been pushing for measures to improve the shale industry’s green credentials which includes putting forward the creation of a carbon trading platform for the U.S. oil and gas industry. Bonanza Creek Energy and Extraction Oil & Gas will combine in an all-stock merger of equals, a deal worth about $2.6 billion, the companies announced. The combined company will be called Civitas Resources, Inc. and will be the largest pure-play energy producer in Colorado’s Denver-Julesburg Basin.