Civitas Resources is expanding its operations in the Midland Basin with a $300 million investment aimed at increasing production and drilling locations.
According to a press release, Civitas has set a divestiture target of $300 million, likely from Colorado's D-J Basin, to offset the purchase price. The transaction will add 19,000 net acres and approximately 130 future development locations in the Midland Basin based on two-mile average laterals.
"Our 2025 outlook is designed to maximize free cash flow, capitalizing on the sustainable efficiencies we have delivered in our first full year of operating in the Permian Basin and our strong track record of execution in the DJ Basin," said Civitas President and CEO Chris Doyle. He added that these initiatives will enhance the Denver-based company’s "free cash flow delivery well into the future."
According to the news release, last year Civitas worked to delineate the Wolfcamp D bench on its Midland Basin asset with higher-than-anticipated productivity and lower costs. Doyle noted that Civitas sees additional upside from the acquisition in the Wolfcamp C and deeper Woodford and Barnett zones. The acquired assets in Howard, Glasscock, and Upton counties are expected to add 3,000 barrels of oil equivalent per day this year, with the deal anticipated to close by the end of the month.