Civitas Resources, Inc. , a Colorado energy leader and the state’s first carbon neutral oil & gas producer, announced that it has closed its previously announced acquisition of privately held Denver-Julesburg Basin (“DJ Basin”) operator Bison Oil & Gas II, LLC (“Bison”). Consideration for the Bison acquisition was modified to reflect an all-cash transaction (no Civitas shares issued), with a total cash outlay by the Company of approximately $300 million, which was funded with cash on hand. The transaction demonstrates Civitas’ disciplined approach to consolidation with a focus on value creation and accretion.
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Transaction Highlights
Strengthens Civitas’ portfolio by adding 102 gross high-quality rural locations, of which 38 are already fully permitted
Attractive valuation with total consideration at a discount to PDP PV-12 and below 1.6x 2022E EBITDA(1)
Enhances Civitas margins with pro forma 2022E production increase of approximately 9,000 Boed composed of 75% oil and 90% liquids, without incremental G&A expense
Accretive to Civitas’ Net Asset Value, 2022E production, EBITDA and Free Cash Flow
Preserves Civitas’ fortress balance sheet, with pro forma net leverage of 0.2x
Civitas will integrate the Bison properties under its net zero policy, further reducing basin emissions
(1) Based on strip pricing as of February 25th, 2022
Ben Dell, Civitas’ Chairman and interim CEO, commented: “Civitas continues to demonstrate its commitment to delivering unprecedented value to all of its stakeholders. We firmly believe that the Company is well positioned to continue successfully executing its business plan, with a clear objective of identifying and executing on the highest value-accretive consolidation opportunities.”
Petrie Partners, LLC and RBC Capital Markets, LLC served as financial advisors and Kirkland & Ellis LLP served as legal advisor to Civitas. CIBC Capital Markets served as financial advisor and Bracewell LLP served as legal advisor to Bison.
CivitasResources, Inc. is Colorado’s first carbon neutral oil & gas producer and is focused on developing and producing crude oil, natural gas and natural gas liquids in Colorado’s Denver-Julesburg Basin. The Company is committed to pursuing compelling economic returns and cash flow while delivering best-in-class cost leadership and capital efficiency. Civitas is dedicated to safety, environmental responsibility, and implementing industry leading practices to create a positive local impact. For more information about Civitas, please visit www.civitasresources.com.
Forward-Looking Statements and Cautionary Statements
Certain statements in this press release concerning the credit facility, the results, effects, benefits and synergies of the acquisition of Bison, future opportunities for Civitas, future financial performance and condition, guidance and any other statements regarding Civitas’ future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts are “forward-looking” statements based on assumptions currently believed to be valid. Forward-looking statements are all statements other than statements of historical facts. The words “anticipate,” “believe,” “ensure,” “expect,” “if,” “intend,” “estimate,” “probable,” “project,” “forecasts,” “predict,” “outlook,” “aim,” “will,” “could,” “should,” “would,” “potential,” “may,” “might,” “anticipate,” “likely” “plan,” “positioned,” “strategy,” and similar expressions or other words of similar meaning, and the negatives thereof, are intended to identify forward-looking statements. Specific forward-looking statements include statements regarding Civitas’ plans and expectations with respect to the merger with Extraction Oil & Gas, Inc., (“Extraction”) and the acquisition of CPPIB Crestone Peak Resources America Inc. (“Crestone Peak”) (the “Transactions”) and the anticipated impact of the Transactions on Civitas’ results of operations, financial position, growth opportunities and competitive position. The forward-looking statements are intended to be subject to the safe harbor provided by Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995.