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Investing.com -- Civitas Resources, an oil and gas producer, is reportedly considering selling some or all of its assets in the Denver-Julesburg Basin (DJ Basin) in Colorado. The assets could be valued at more than $4 billion, according to anonymous sources cited by Bloomberg News on Wednesday. The company is working with a financial adviser to assess buyer interest and is open to fully divesting from the basin if it receives a sufficiently attractive offer.
Civitas Resources has been growing its operations in the profitable Permian basin in Texas and New Mexico. In 2023, the company acquired Permian assets from private equity firm NGP Energy Capital Management for $4.7 billion and additional acreage in the Midland Basin from Vencer Energy for around $2.1 billion.
The Denver-based company's average daily production in the Colorado basin is approximately 169,000 barrels of oil equivalent (boe), as stated on its website. A sale of the DJ Basin assets could provide Civitas with additional funds for acquisitions and debt reduction. According to Bloomberg data, the company's debt stands at about $4.8 billion.
Chevron Corp. (NYSE:CVX) and Occidental Petroleum Corp (NYSE:OXY). are among the producers operating in the DJ Basin. The basin is considered challenging to operate in due to Colorado’s regulatory requirements.
Civitas also has a significant business in the Permian Basin, the most productive and profitable oil basin in the U.S. This is largely due to its $4.7 billion acquisition of assets from companies controlled by NGP Energy Capital Management in 2022.
The potential sale comes as midsize shale producers are increasingly restructuring their portfolios in response to a rapidly consolidating industry. In November, Ovintiv (NYSE:OVV) Inc. signed deals to exit the Uinta Basin and enhance its activities in Canada, and Coterra Energy (NYSE:CTRA) Inc. agreed to acquire two companies for about $4 billion to expand its presence in the Permian Basin.
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