Civitas in pact with Vencer to acquire accretive Permian Basin assets for $2.1B

Civitas Resources signed an agreement with Vencer Energ a Vitol investment, to acquire oil producing assets in the Midland Basin of west Texas for a total consideration of approximately $2.1B, subject to customary terms, conditions, and closing price adjustments . The Acquisition is expected to close in January 2024 with an effective date of January 1. Attractively priced and immediately accretive to Free Cash Flow per share: The Acquisition is attractively priced at 2.8x 2024 estimated Adjusted EBITDAX at $80/Bbl NYMEX WTI and $3.50/MMBtu NYMEX Henry Hub, which compares favorably to recent transactions in the Permian Basin. Approximately 80% of the purchase price is underwritten by the value of proved developed and proved developed non-producing reserves, with significant upside in future developments. The Acquisition is expected to deliver an estimated 5% uplift to Free Cash Flow per share in 2024. Pro forma, Civitas expects to generate approximately $1.8B of Free Cash Flow in 2024 at $80/Bbl and $3.50/MMBtu. Increases Permian Basin scale, balancing Civitas’ portfolio between premium Permian and DJ positions: The Acquisition will add approximately 44,000 net acres in the Midland Basin and current production of approximately 62 Mboe/d (approximately 50% oil). Pro forma for the Acquisition, Civitas’ 2024 estimated Permian production is expected to be about 170 Mboe/d . Pro forma for the Acquisition, Civitas expects that its 2024 total company production will be 325 – 345 Mboe/d and total capital expenditures will be $1.95 – $2.25B. Adds premium, low breakeven oil inventory in the Midland Basin: The Acquisition will add an estimated 400 gross development locations located primarily in the Spraberry and Wolfcamp formations. Approximately 40% of the new locations have an estimated IRR of more than 40% at $70/Bbl WTI. Pro forma for the Acquisition, Civitas will have more than 1,200 high-quality oil development locations in the Permian Basin. Total consideration for the Acquisition is approximately $2.1B consisting of approximately 7.3M shares of common stock to be issued to Vencer and $1.55BN of cash, of which $1Bn will be due at closing. The remaining $550 million will be payable on January 3, 2025. Civitas has the option to accelerate the deferred cash payment to the closing of the Acquisition, which would lower the total purchase price by $50M to $2.05B. Civitas plans to fund the cash portion of the purchase price with a combination of debt and equity financings. Outlook