Leading operators are repositioning assets in the Denver-Julesburg Basin, where M&A activity is trending differently than other basins. Occidental Petroleum (OXY) and Civitas Resources (CIVI) are considering sales, while Prairie Operating Co. is expanding its footprint through a ~$603MM acquisition.
East Daley Analytics’ DJ Production Scenario Tool, available in Energy Data Studio, shows Chevron (CVX), OXY and CIVI are the three largest producers in the DJ, accounting for ~75% of the basin’s oil production (see figure). The sale of these portfolios may mark a shift to the DJ returning to a landscape dominated by private producers versus the public-led consolidation seen in the Permian Basin and elsewhere.
OXY is divesting a minerals package valued at between $900MM–$1B as part of its broader strategy to reduce debt following its $12B acquisition of CrownRock. The company holds 700,000 net acres in the DJ and has already made substantial asset sales, including the Barilla Draw and Western Midstream (WES) assets.
Meanwhile, CIVI is exploring the sale of its DJ assets, which could be valued at over $4B. The company produces ~120 Mb/d of crude oil in the basin but faces regulatory challenges in Colorado. Civitas’ DJ production could fetch ~$3.6B based on Prairie Operating’s recent deal, suggesting that undeveloped acreage may not significantly impact the final price.
Prairie’s acquisition of Bayswater Exploration & Production assets adds ~24 Mb/d of production and expands its DJ holdings to 54,000 net acres. The deal, priced at ~$23,500 per boe/d, provides a benchmark for assessing CIVI’s potential sale. While Prairie sees the move as a transformational step, its stock dropped 25% following the announcement, reflecting investor caution.
The future of the DJ Basin remains uncertain. While OXY and CIVI look to exit, Prairie’s expansion signals confidence in the region’s long-term potential. However, stringent regulations and valuation concerns could shape how these deals ultimately unfold. – Gage Dwan Tickers: CIVI, CVX, OXY, WES.
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