Oil and gas explorer Civitas Resources is involved in discussions over a potential merger with Permian Basin peer SM Energy, reported Bloomberg, citing people with knowledge of the matter.

According to the report, the talks envision a merger of equals that would not include a takeover premium.

The sources, who spoke on condition of anonymity because the discussions are not public, said no agreement has been reached and that other parties are also pursuing Civitas. Representatives for both companies refused to comment, reported the media outlet.

If completed, the merged business would have an enterprise value of at least $14bn, encompassing debt, making it among the largest oil and gas transactions so far this year, as per data compiled by Bloomberg.

The Permian Basin of West Texas and New Mexico, considered the most productive oilfield in the US, has experienced a wave of consolidation in recent years as smaller producers seek greater scale and larger operators pursue footholds in the region. Recently, Crescent Energy entered into a definitive agreement to acquire Vital Energy for $3.1bn.

Civitas and SM are mid-size, publicly traded producers in the basin.

As per an August investor presentation, Civitas holds around 140,000 net acres in the Permian Basin and has a market capitalisation of roughly $3.2bn.

SM’s market capitalisation is around $2.9bn, with roughly 109,000 acres concentrated in the Midland Basin.

Bloomberg’s figures put SM’s enterprise value at approximately $5.5bn and Civitas’ at roughly $8.5bn, encompassing debt.

Both companies also hold assets outside the Permian. SM has positions in the Eagle Ford shale and Utah’s Uinta Basin, while Civitas has acreage in the Denver-Julesburg Basin in Colorado.

In August, Wouter van Kempen succeeded Chris Doyle as interim chief executive of Civitas.