Bonanza Creek Energy Inc. and Extraction Oil & Gas Inc. agreed to combine in an all-stock merger on May 10 as the U.S. shale E&P landscape continues to consolidate.

The combined company, to be named Civitas Resources Inc., will be the largest pure-play energy producer in Colorado’s Denver-Julesburg (D-J) Basin, with an aggregate enterprise value of approximately $2.6 billion, the Denver-based companies said in a joint statement. The combined company will operate across approximately 425,000 net acres in Colorado, with a production base of 117,000 boe/d.

The transaction adds to a growing list of mergers among U.S. shale producers after upstream M&A activity took off beginning in the second half of 2020, including Bonanza Creek’s merger with HighPoint Resources, which closed on April 1. The combination, according to Enverus’ Andrew Dittmar, is the first significant corporate deal between public companies in 2021 after public E&P consolidation dominated deal markets last year.

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