SM Energy and Civitas Resources have agreed to merge and create a top 10 independent oil and gas company that will produce more than 500,000 boed from Permian Basin in Texas and New Mexico, DJ Basin in Colorado and two other basins. The combined company’s enterprise value of about $12.8 billion includes each company’s net debt. Monday’s announcement of the all-stock transaction said the company will continue to trade as SM Energy.
The combined company’s production in 2Q would have been 526,000 boed – nearly half from Permian Basin. Completing the company’s output are assets in DJ (28 percent), south Texas (15 percent) and Uinta (9 percent) basins. The combined company will have a portfolio of about 823,000 net acres “across the highest-return U.S. shale basins.”
Herb Vogel, CEO of SM Energy, said, “Congratulations to the Civitas team on building a leading sustainable energy company in the Permian and DJ basins since its inception in 2021.” Ben Kell of investment manager Kimmeridge added, “This transformative transaction will immediately create a leading independent E&P company with a strong asset position across the premium oil-oriented basins in the U.S.” Vogel will serve as CEO of the combined company before those duties transition to Beth McDonald, president and COO of SM Energy. Oil & Gas Journal said the merger “had been rumored for several weeks.”
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