Civitas Resources Inc is in talks with private equity firm NGP Energy to acquire oil and gas operations in the Permian Basin in the southwestern US for close to $5 billion, Reuters has reported, citing unnamed sources.
The deal would extend Civitas’ operations beyond the Denver-Julesburg basin in Colorado into the heart of the US shale industry in Texas and New Mexico.
Citing sources familiar with the matter, Reuters said discussions with NGP to buy portfolio company Hibernia Resources as well as much of Tap Rock Resources were advanced. Civitas, which is currently valued at $5.6 billion, would fund the deal using a combination of cash and newly-issued Civitas shares.
A deal could be announced as early as Tuesday, per the report.
In April, Reuters reported, again citing unnamed sources, that NGP was considering a sale of the two portfolio companies for roughly $7 billion. However, since then, oil prices have retreated by about 14%, affecting the valuations of the assets.
Civitas Resources currently operates on about 500,000 net acres in the Denver-Julesburg Basin, with a production base of roughly 160,000 barrels of oil equivalent per day, according to its website.
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