Civitas to boost DJ-basin holdings with Crestone acquisition

Civitas Resources Inc., to be formed upon closing of the recently announced merger of Bonanza Creek Energy Inc. and Extraction Oil & Gas Inc. (OGJ Online, May 10, 2021), has agreed to acquire Denver-Julesburg basin producer Crestone Peak Resources. The acquisition will give Civitas more than 500,000 net acres and an estimated production base of 160,000 boe/d from year-end 2020 US Securities Exchange Commission proved reserves of more than 530 MMboe.

Civitas expects to have an enterprise value of about $4.5 billion after the all-stock transaction, which it anticipates closing in fourth-quarter 2021.

Crestone’s primary shareholder is Canada Pension Plan Investment Board, which will become Civitas’ largest shareholder and will designate one member to the Civitas board upon closing.

Civitas also noted that, inclusive of the Crestone assets, it will be Colorado’s first carbon-neutral oil and gas producer (Scope 1 and Scope 2) upon closing, advancing its net-zero goals.

Scope 1 emissions are direct greenhouse (GHG) emissions that occur from sources controlled or owned by an organization (e.g., emissions associated with fuel combustion in boilers, furnaces, vehicles), according to the Environmental Protection Agency. Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling. Although Scope 2 emissions physically occur at the site where they are generated, they are accounted for in an organization’s GHG inventory because they are a result of the organization’s energy use.