Bonanza Creek Energy and Extraction Oil & Gas are to merge in a move that will make the combined company, Civitas Resources, the largest oil and gas driller in Colorado’s Denver-Julesburg (DJ) Basin, with a value of approximately $2.6bn.
The combined company will operate across approximately 425,000 net acres, with a production base of 117 thousand barrels of oil equivalent per day (mboe/d).
Colorado’s DJ Basin is characterized by low operating costs, extensive infrastructure, ample takeaway, multiple producing horizons, and responsible energy production.
Civitas expects to achieve annual expense and capital savings of approximately $25mn. Bonanza Creek’s recently announced annual dividend of $1.40 per share is expected to be increased by Civitas to $1.60 per share effective at closing, with such increase representing a distribution of approximately half of the transaction synergies to Civitas’ shareholder base.
Bonanza Creek president and CEO, Eric Greager, will lead Civitas the same roles. Civitas will take to the next level an exploration and production (E&P) business model that has been actively embraced by both Bonanza Creek and Extraction. “Successful E&P operators will be those who place a priority on disciplined capital deployment, deliver operational and cost excellence, maintain a relentless focus on shareholder value, and have governance standards that are aligned with the times,” said Greager.
Tom Tyree, CEO of Extraction, commented: “Collectively, we will create significant value for all stakeholders as we will become Colorado’s first net-zero oil and gas producer through the continuing reduction in operational emissions coupled with a multi-year investment in certified emissions offsets.”
For more information visit: https://bonanzacrk.com
