Corporate M&A

Civitas Resources to Acquire Crestone Peak Resources

By Sakshi Jain
June 07, 2021
2 minutes read
Onshore Oil Rig

Civitas Resources Inc., an E&P company to be formed through the merger of NYSE-listed Bonanza Creek Energy Inc. and NASDAQ-listed Extraction Oil & Gas Inc., has entered into a definitive agreement to acquire 100% of the issued share capital of privately-held Crestone Peak Resources LLC, in an all-stock corporate transaction valued at approximately US$1.06 billion.

Upon completion, Bonanza Creek and Extraction shareholders will each own approximately 37% of the combined entity, with Crestone shareholders owning approximately 26%.

Under the terms of the deal, Civitas will acquire 100% of the equity interests in Crestone for approximately 22,500,000 Bonanza Creek shares valued at US$47.22 per share (based on Bonanza Creek’s closing share price on June 4th, 2021, the last trading day prior to the transaction announcement), for an aggregate transaction value of approximately US$1.06 billion.

Based in Colorado, Crestone Peak Resources currently holds interests in approximately 120,000 net acres of oil and gas properties in the DJ basin.

Pro forma, the combined entity will have an estimated enterprise value of approximately US$4.5 billion, based on the closing market equity capitalisations of Extraction and Bonanza Creek as of June 4th, with approximately 525,000 net acres of DJ basin acreage in Colorado. The estimated average daily production attributable to the assets of the combined entity will be approximately 160,000 barrels of oil equivalent per day (boe/d) during 2022.

“We are actively building one of the most durable and profitable producers in the DJ Basin. Our combination with Crestone is just one early marker of what we hope to achieve as Civitas, as we establish ourselves as the preferred consolidation partner in the DJ Basin and work toward becoming one of the top energy producers in the nation,” commented Eric Greager, President & CEO of Bonanza Creek.

Tony Buchanon, President & CEO of Crestones said, “The benefits of in-basin consolidation are compelling, and we are pleased to become part of the dynamic enterprise that is Civitas. Crestone has long been a leader in safety and sustainability issues, and we look forward to continuing that leadership at Civitas.”

JP Morgan Securities is acting as financial advisor to Bonanza Creek and Petrie Partners Securities is advising Extraction on the transaction. Crestone is being advised by Jefferies and TD Securities (USA).

The transaction is subject to customary closing conditions and regulatory approvals, including approvals by Bonanza Creek shareholders and consummation of the Bonanza Creek-Extraction merger agreement, and is expected to close in Q4-2021.

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