UPDATE 1-Bonanza Creek to combine with Extraction Oil & Gas in $1.1 billion deal
Adds deal details, industry background
May 10 (Reuters) - Bonanza Creek Energy BCEI.N and Extraction Oil & Gas EH4.MU said on Monday they will combine in an $1.1 billion all-stock merger of equals to create one of Colorado's largest oil and gas drillers.
Deal-making in the oil and gas sector has had a record start this year as companies take advantage of improved oil price expectations as global fuel demand picks up from pandemic lows.
The combined company, Civitas Resources Inc, will be the largest pure-play oil and gas company in the Denver-Julesburg Basin in Colorado and will operate on about 425,000 net acres, with a production base of 117,000 barrels of oil equivalent per day.
Shareholders of Extraction will receive 1.1711 shares of Bonanza Creek for each share of Extraction, representing a less than 1% premium.
Bonanza and Extraction shareholders will own 50% each of the new company. The deal is expected to close in the third quarter of 2021. [https:/refini.tv/3vOoyzg]
(Reporting by Rithika Krishna in Bengaluru; Editing by Vinay Dwivedi and Arun Koyyur)