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IOG Resources II, announced the acquisition of oil and gas interests in the DJ Basin from Civitas Resources, Inc. The Assets include 1,480 wellbores in Weld County, Colorado, with a current net production of 4.7 mboe/d. This marks the fourth investment for IOGR II and the sixteenth for the IOG Resources platform.
Positive
Acquisition of oil and gas interests in the DJ Basin from Civitas Resources, Inc.
Assets include 1,480 wellbores in Weld County, Colorado.
Current net production of approximately 4.7 mboe/d.
Top-tier operators include Occidental Petroleum and Chevron
Negative
None.
Insights
The acquisition of oil and gas working interests and royalty interests in the DJ Basin by IOG Resources II from Civitas Resources provides a clear growth narrative for the company. The sheer number of wellbores, both developed and undeveloped, indicates a strategic move to bolster reserves and production capacity. Current net production metrics are important as they offer insight into immediate revenue generation post-acquisition. Investors should assess the operational synergy between IOGR II and the top-tier operators, which can lead to cost efficiencies and improved margins. Furthermore, the financial backing by First Reserve, a firm with a substantial capital raising history, adds credibility to IOGR II's expansion efforts. The long-term potential of the Assets hinges on the commodity price environment and the ability to sustain or increase production levels efficiently.
This deal places IOG Resources II in a pivotal position within the DJ Basin, a key area for oil and gas production in the U.S. The involvement of established operators like Occidental Petroleum and Chevron Corporation lends operational expertise and may attract further investor confidence. It's essential to evaluate the geological prospects of the acquired assets, as well as the regulatory environment in Colorado, which could influence future production and development costs. Additionally, while the acquisition is a growth mechanism, the balance between developed and undeveloped wellbores implies a commitment to both immediate and future production, balancing short-term gains with long-term resource management.
The role of Gibson, Dunn & Crutcher LLP as legal counsel is a testament to the acquisition's complexity and importance. Legal diligence is critical in such transactions to ensure compliance with federal and state regulations, particularly in the energy sector which is subject to stringent environmental and operational standards. It's also important for investors to understand that the legal frameworks governing oil and gas operations can affect production timelines, the scope of development and financial liabilities. Observing the smooth proceedings from a legal standpoint can be indicative of a well-vetted deal, potentially minimizing future legal risks associated with the assets.
DALLAS--(BUSINESS WIRE)--
IOG Resources II, LLC (“IOGR II”) today announced that it has acquired oil and gas working interests and royalty interests (the “Assets”) in the DJ Basin from Civitas Resources, Inc. (NYSE: CIVI). The Assets include approximately 1,480 developed and undeveloped wellbores located primarily in Weld County, Colorado. Current net production is approximately 4.7 mboe/d under top-tier operators including Occidental Petroleum and Chevron Corporation. The acquisition represents the fourth investment in IOGR II and the sixteenth investment for the IOG Resources platform. Gibson, Dunn & Crutcher LLP acted as legal counsel to IOGR II.
About IOG Resources
IOG Resources, LLC and IOG Resources II, LLC are Dallas, Texas-based energy investment platforms sponsored by First Reserve. The group was established in 2017 and is focused on onshore producing non-operated oil & gas investments and structured drilling capital in North America. For more information, please visit www.iogresources.com.
About First Reserve
First Reserve is a global private equity firm focused on investing across diversified energy, utility, and general industrial end-markets. Founded in 1983, First Reserve has more than 40 years of industry insight, and has cultivated a network of global relationships. First Reserve has raised more than $34 billion of aggregate capital since inception. Its investment and operational experience have been built from over 750 transactions, including platform investments and add-on acquisitions, on six continents. The firm’s portfolio companies have operated globally in over 60 countries and span the entire energy and industrial spectrum. Please visit www.firstreserve.com for further information.
