SM Vitality Firm and Civitas Sources have agreed to merge in an all-stock transaction valued at roughly $12.8bn, together with internet debt.
The merger will create a mixed entity with an in depth portfolio of round 823,000 internet acres, primarily targeted on the Permian Basin.
Underneath the phrases of the merger settlement, Civitas’ shareholders will obtain 1.45 shares of SM Vitality inventory for every Civitas share held.
Primarily based on this change ratio, the businesses’ closing share costs on 31 October 2025 and internet debt, the mixed entity’s enterprise worth stands at $12.8bn.
SM Vitality will subject roughly 126.3 million shares of widespread inventory as consideration.
The transaction, which has been unanimously authorized by each corporations’ boards, is anticipated to shut within the first quarter of 2026, topic to shareholder and regulatory approvals.
Upon closing, SM Vitality shareholders will maintain round 48% of the mixed firm, whereas Civita’s shareholders will personal roughly 52%.
The merged entity will proceed to function beneath the SM Vitality title and be headquartered in Denver, Colorado, US.
SM Vitality CEO Herb Vogel stated: “This strategic mixture creates a number one oil and fuel firm with enhanced scale, quite a few value-adding synergies and important free money movement, driving superior worth to stockholders.
“Congratulations to the Civitas workforce on constructing a number one sustainable power firm within the Permian and DJ basins since its inception in 2021.
“Their operational excellence and expertise are mirrored in at present’s transaction. Collectively, we look ahead to unlocking stockholder worth as a unified organisation.”
The mixed firm’s Board of Administrators will encompass 11 members, with six representatives from SM Vitality and 5 from Civitas.
Julio Quintana shall be appointed as non-executive chairman, whereas Herb Vogel will assume the position of CEO of the mixed firm.
It is going to function a portfolio of belongings throughout the highest-return US shale basins, aiming to ship free money movement and sustained capital returns.
Evercore and Gibson, Dunn & Crutcher served as advisors to SM Vitality, whereas JP Morgan and Kirkland & Ellis suggested Civitas on this transaction.
Civitas interim CEO Wouter van Kempen stated: “At present marks a pivotal second for Civitas and SM Vitality as we announce a merger that unlocks new potential to ship enhanced stockholder worth and obtain outcomes past the attain of both firm alone.
“By combining our robust technical groups and complementary belongings, we achieve scale, sharpen our aggressive edge, and strengthen our capacity to responsibly produce power that contributes to power safety and prosperity.
