The consolidation of the Colorado oil and gas industry advanced with a $1.06 billion acquisition, the latest in a wave of mergers in the fragmented shale patch, Bloomberg News reported. Bonanza Creek Energy Inc. and Extraction Oil & Gas Inc. — which announced a merger last month and a plan to rename the combined entity Civitas Resources Inc. — said yesterday that they’re buying closely held Crestone Peak Resources LLC. Crestone investors will get 22.5 million shares of Bonanza, according to a statement. All three companies operate in the Denver-Julesburg Basin. The swift move to scoop up a third company before Bonanza Creek and Extraction closed their own deal is due to investor sentiment more than a heightened thirst for deals in the Colorado market, where more onerous government regulations remain a concern for the industry, Eric Greager, chief executive officer at Bonanza Creek, told analysts and investors yesterday on a conference call. While going through bankruptcy last year, Extraction held talks with Crestone but ultimately couldn’t get a deal done on its own, Ben Dell, chairman of Extraction, said yesterday. Dell, founder and managing partner of Kimmeridge Energy Management Co., will be chairman of Civitas. Canada Pension Plan Investment Board is Crestone’s primary shareholder and will be become Civitas’s biggest investor. It will also get a director on the Civitas board following the closing of the latest deal, which is expected in the fall, immediately after the completion of the Bonanza-Extraction combination.
