Civitas Resources Buys Oil Producing Assets In Midland Basin For $2.1B, Raises FY24 Outlook & More
Portfolio Pulse from Lekha Gupta
Civitas Resources Inc (NYSE:CIVI) has agreed to acquire oil-producing assets in the Midland Basin of west Texas from Vencer Energy for approximately $2.1 billion. The acquisition, expected to close in January 2024, will add around 44,000 net acres in the Midland Basin and current production of about 62 Mboe/d. Following the acquisition, Civitas raised its FY24 total production guidance to 325 – 345 Mboe/d and capital expenditure to $1,950 million – $2,250 million. The company expects the buyout to boost FCF per share by 5% in 2024.
October 04, 2023 | 4:06 pm
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NEUTRAL IMPACT
Civitas Resources' acquisition of oil-producing assets in the Midland Basin could boost its production and financial outlook for FY24. However, the stock is currently trading lower.
The acquisition is expected to boost Civitas' production and financial outlook for FY24, which could be positive for the company in the long term. However, the immediate market reaction has been negative, with the stock trading lower. This could be due to concerns about the cost of the acquisition and the company's increased capital expenditure.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 100