Who’s Going to Buy the Civitas Assets?

In the light of recent speculation that Civitas is considering divestment of its Denver-Julesburg Basin assets to focus on the Permian basin in Texas, it’s a good time to review the major players in the basin. Let’s take a look at current assets, recent acquisitions, who’s in a position to acquire these assets, and how the acquisition might impact future development in the Basin.

Current Denver-Julesburg Basin Assets

Wells by Operator: Weld County, January 2025

Parent CompanyOperator/SubsidiaryTotal WellsActive WellsPlugged Wells
OccidentalKerr McGee861536124842
ChevronNoble Energy815127255318
ChevronPDC Energy643529063246
CivitasCrestone Peak Resources17281015701
KPKKP Kauffman1143973169
CivitasExtraction Oil & Gas1138780317
CivitasBonanza Creek892617234

First, let’s look at the major players in the D-J Basin. The above table shows all the operator subsidiaries who have more than 800 wells in Weld County. Given the recent legal troubles of KP Kauffman, we can reasonably limit the potential acquiring companies to Chevron and Occidental Petroleum.

Curiously, Chevron made a failed attempt in May 2019 to acquire the assets of Anadarko for $33 billion, but Occidental Petroleum was able to complete the $38 billion acquisition of Anadarko in November 2019.

From the well density map above, we see Chevron and Occidental have densely populated well infrastructure, whereas Civitas’ infrastructure is more spread out across the basin. The Occidental wells are more dense at the southwest corner of Weld County.

Future Drilling Plans

The map above shows the various comprehensive drilling plans (CDPs), comprehensive area plans (CAPs), and oil & gas development plans (OGDPs) for the subsidiaries of Chevron, Civitas, and Occidental in the D-J Basin. Either Chevron or Occidental would be able to significantly expand their future drilling plans by acquiring the Civitas assets.

Chevron is the Top Contender

In August 2023, Chevron acquired PDC Energy in a $6.3 billion all-stock transaction three years after they acquired Noble Energy in October 2020 in another all-stock transaction valued at $5 billion. If they were to acquire the Civitas assets, it would be most likely done in a similar manner.

Chevron stock is doing quite well, they’re up 9.8% over the last year. The existing Civitas infrastructure in the D-J Basin would complement those already in Chevron’s portfolio, as shown in the well density maps above.

Chevron is the more attractive buyer due to its proven track record of recent acquisitions with all-stock transactions, its commitment to the D-J Basin, as well as its strong stock performance.

Can Occidental Make It Work?

Occidental Petroleum isn’t doing nearly as well as Chevron; their stock price is down 11.26% over the last year, and they had to sell $13 billion in bonds to finance the Anadarko acquisition. Occidental recently acquired the assets of CrownRock for $12 billion in August 2024, bolstering its Permian Basin investment, including 1,700 undeveloped locations.

Occidental’s declining stock price, problematic history with Anadarko, and an apparent focus on the Permian Basin make it a less likely contender for the Civitas assets.

Future Development Implications

For the acquiring operator, it’s most likely going to be drill, baby, drill. It’s the sentiment of our newly-elected President, and the inevitable result of acquisitions and mergers where billions of dollars change hands for the express purpose of increasing shareholder value.

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