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Major: Ameredev II Oil Producer to be Sold for $4 Billion by EnCap
03/29/2022
A US-based oil company, Ameredev II, that EnCap Investments owns as part of its portfolio, is on the verge of being sold for over $4 billion including debt — at least according to some inside sources. As part of the plan, EnCap appointed an undisclosed bank to launch an auction for Ameredev II in the coming weeks.
It’s important to note, however, that both EnCap and Ameredev II alike are declining to comment further on the matter.
Yet in light of the conflict in Ukraine, this move isn’t surprising. Buyout firms are currently scurrying to make cash from U.S. crude prices reaching their highest level since 2008, therefore bolstering their assets' value.
But the reason why these assets warrant such a price is not exclusively related to geopolitical shifts: at the end of last year, Ameredev II saw a huge overhaul, when EnCap combined it with another portfolio company, Advance Energy Partners, thus virtually creating one of the largest privately-owned oil producers in the country. And now the company looks to reap the benefits, while the iron is hot.
After selling its predecessor, Ameredev I, to Callon Petroleum Co. in 2017, EnCap invested $400 million in Ameredev II. And after continuous development, The company now operates the largest privately held contiguous land position in northern Delaware — the hub of the shale industry which spans Texas and New Mexico.
But EnCap is not the only one looking to earn a couple of brownie points off of its foresight. In addition to them, Aethon Energy Management, as well as NGP, are also currently exploring the sale of their acreage in North Louisiana for $6 billion. The two companies are aiming to exit Colgate Energy Partners III for more than $5 billion.
Tracking such movements is hard. In order to foresee possible opportunities or threats, one needs to be fully aware of not only the market, but assets, their locations, borders, and resource bases alike, which requires access to special energy data and deep analyses.
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To Be or Not To Be: Bakken Assets Could Fetch $5 Billion for Exxon Mobil
Exxon Mobil Corp. is weighing prospects of selling its assets in North Dakota’s Bakken, after gauging interest from potential buyers — 5 billion is the issue price, at least according to rumors. The price point came about after the news that the oilgiant is in the final round of hiring bankers to help launch the sale. Yet Exxon Mobil itself stays tight-lipped regarding the situation.
$1B Deal: Williams Buys Out Houston-based Midstream in Haynesville Basin
By purchasing the gathering and processing assets of Trace Midstream, Williams' existing footprint gains expanded capacity in one of the nation's largest growth basins, bringing its Haynesville gathering capacity to over 4 Bcf/d — increasing more than 200% from 1.8 Bcf/d. The deal also includes a long-term commitment from Trace and Quantum to support Williams' Louisiana Energy Gateway project (LEG), which is aimed to deliver responsibly sourced Haynesville’s naturalgas to markets along the Texas and Louisiana GulfCoast
Kinetik Holdings recently announced a series of transactions in the energy sector. They struck a deal to buy Durango Permian infrastructure for $765 million. At the same time, they're selling their 16% share in the Gulf Coast Express Pipeline to ArcLight Capital Partners for $540 million. The total purchase cost includes $510 million in cash paid immediately and an additional $30 million that will be paid later, depending on whether they decide to expand further.
Recently, the Permian has seen significant acquisitions: Exxon Mobil purchased Pioneer Natural Resources for about $60 billion. Diamondback Energy's $26 billion deal to acquire Endeavor Energy Resources is currently on hold due to requests from the U.S. Federal Trade Commission. Occidental’s acquisition of CrownRock for $12 billion in the Midland.
EOG Resources is pushing boundaries in Ohio's Utica oil play and now drilling on the Sable pad, also located in Noble County. This site features the 3.7-mile lateral currently under construction. The company's first multi-well pads in the area Timberwolf and Xavier have each produced over 200,000 barrels of oil since their inception—Timberwolf in August and Xavier in October. A third site, the four-well White Rhino pad in Noble County, is also showing promising early results, according to Keith Trasko, EOG’s Senior Vice President of Exploration and Production, who noted the wells are performing as expected in their initial weeks.