Civitas Said to Explore Potential Sale

Civitas Resources Inc., an oil and gas explorer with operations in Texas and Colorado, is exploring a sale as smaller shale players pursue deals to gain scale, according to people familiar with the matter. 

The Denver-based company, which is working with advisers, is considering a tie-up with a similarly sized or larger peer, the people said, asking not to be identified because the deliberations are private. No final decision has been made, and Civitas could opt to remain independent, the people added. 

A representative for Civitas declined to comment. 

Civitas rose 1.9% to close at $32.50 in New York trading Tuesday, giving the company a market value of about $3 billion.

Civitas comes to market amid steady consolidation in US oil and gas, particularly in the Permian Basin of West Texas and New Mexico, the largest and most productive US oilfield. That basin — where Civitas has operations — remains fragmented and ripe for mergers. 

In August, Crescent Energy Co. agreed to buy Permian Basin rival Vital Energy inc. for $3.1 billion. 

Civitas has drilling operations across the Permian and Colorado’s Denver-Jules Basin, according an investor presentation in August. 

The company has more than $5 billion in debt, thanks to a string of acquisitions in recent years to branch into the Permian. It’s been selling assets to pay down that debt, including a package of lower-margin assets in the DJ in August. 

It also considered selling out of the DJ entirely but failed to attract an offer in line with expectations, the people familiar with the matter said. 

In August, the company announced that Chief Executive Chris Doyle was departing and named an interim leader while it seeks a replacement.