Bloomberg News reports that Civitas Resources is considering selling DJ Basin assets.

Bloomberg News reported Wednesday that oil and gas producer Civitas is considering selling part or all its assets located in the Denver-Julesburg Basin in Colorado. These assets could be worth more than $4 billion.

The report cited people who were familiar with the situation as saying that the company was working with a financial advisor to gauge buyer interest. If it received a sufficiently appealing offer, they would be willing to divest fully from the basin.

Civitas didn't immediately respond to our request for comment.

Gabriele Sorbara is an analyst with Siebert Williams Shank. She said: "A valuation above $4.0 billion would be reasonable. However, the company's market cap, enterprise value and capital returns will be reduced, and this may not be well accepted in a market where value is placed on scale."

Gabriele stated that a sale of Civitas would be a positive move, as it would eliminate the negative perceptions about Colorado and investors, which are affecting the company's valuation. It will also turn Civitas a pure Permian-based company.

Civitas is expanding its operations into the lucrative Permian Basin in Texas and New Mexico. In 2023 it purchased some Permian assets for $4.7 billion from the private equity firm NGP Energy Capital Management as well as some land in the Midland Basin for around $2.1 billion from Vencer Energy.

According to the company's website, its average daily production of Colorado basin oil is 169,000 boe. Reporting by Pooja menon in Bengaluru, editing by Shilpa Majumdar

(source: Reuters)