Midland’s Colgate Energy Partners and Denver-based Centennial Resource Development said last week they agreed to merge to create the largest pure-play Delaware Basin company valued at $7 billion. The combine will operate under a new name to be announced prior to closing with headquarters in Midland. The new company will hold 180,000 net leasehold acres, 40,000 net royalty acres, and production of about 135,000 boed. Sean Smith, CEO of Centennial who will be chair of the board, said May 19, “The combined company will have a high-margin, low-cost asset base with an extensive portfolio of high-rate-of-return inventory.”
Colgate currently produces about 70,000 boed and owns 105,000 net leasehold acres and 25,000 net royalty acres concentrated in Reeves and Ward counties in Texas and Eddy County in New Mexico. Centennial holds about 75,000 net acres in Reeves and Lea County, N.M. Colgate co-CEOs Will Hickey and James Walter will serve on the board. Oil & Gas Journal said existing Centennial shareholders will own 53 percent of the combine following closing.