Sources say Crescent Energy is close to a deal with US shale rival Vital Energy

People familiar with the matter reported on Friday that Crescent Energy was in advanced discussions to acquire Vital Energy, a smaller competitor. This would give the energy company a strong position in the Permian basin.

Sources said that the terms of the merger could not be revealed, but the transaction could be announced next week. They cautioned, however, that a deal might still fall through at the last moment and spoke under condition of anonymity in order to discuss private discussions.

Crescent Energy's market value is around $2.5 billion while Vital Energy is valued at around $600,000,000. Vital Energy also has a long-term debt of around $2.3 billion.

Vital did not respond immediately to a comment request. Crescent declined to make a comment.

After the report, Vital Energy shares jumped over 7% in extended trading to $16,92 per share. Crescent Energy shares fell by about 1%, to $9.85.

Crescent Energy focuses on the exploration and production of older wells that do not offer the same growth potential as new shale-wells, but still provide consistent oil and gas output with steady returns.

The company's current footprint is primarily the Eagle Ford Basin in south Texas, and the Uinta Basin in Utah. In January, the Eagle Ford assets of Ridgemar Energy, a privately held company in Texas, were acquired for a little over $1 billion.

According to its website, Vital Energy owns around 267,000 acres net in the Permian Basin. It produces 137,900 barrels equivalent per day.

The second quarter saw a decline in mergers and acquisitions in the U.S. Shale space as the volatility in energy and equity markets dampened sentiment. Consolidation is still justified by economies of scale. (Reporting and editing by Dawn Kopecki and Lisa Shumaker in New York, and Shariq French and David French from New York)

(source: Reuters)