More Producers Split the Sheets with Assets in the Name of Debt Reduction

We’re knee deep in 2Q earnings reports where the common thread among producers continues to be slashing debt load even if it means bringing paper sack lunches to the office. Reese Energy Consulting today is following news from Houston-based Oxy and Denver-based Civitas Resources—both of which enjoyed solid quarters and both of which operate in the Permian and the Rockies.

There’s no denying Oxy’s near domination of the Permian, and since its $12 billion acquisition last year of CrownRock, the company’s mission has been to decrease its debt by $6 billion within 18 months. That, of course, means divesting non-core assets which Oxy has done to the tune of $4 billion so far. The company in its 2Q earnings report has now announced four Permian deals made in 2Q and early 3Q valued at $950 million, bringing that $6 billion goal ever closer.

Civitas, one of the top three largest producers in the DJ Basin, delivered a double whammy to shareholders and Wall Street with news of a sudden leadership change along with two divestitures in the DJ Basin to put a dent in its $5 billion of debt. The collective $435 million deal includes average production of 10 MBOED (50% oil). Civitas has steadily expanded its Permian position, most recently picking up 80 acres for $3.4 million in Eddy County, N.M., in the state’s July online auction.