EnCap Investments is looking to divest two oil and gas producers with assets in Permian basin, US, to raise nearly $3bn in total, reported Reuters citing people familiar with the matter.
The private equity firm is working with an undisclosed investment bank on the process to separately offload the Novo Oil & Gas Holdings and Forge Energy II.
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The latest move comes as EnCap looks to exit older investments while capitalising on higher global energy prices.
A potential sale of Novo is expected to fetch over $2bn for EnCap while the sale of Forge could raise more than $600m, according to the sources.
The sources said that the final valuations of the assets could be influenced by the global volatile commodity prices, and there is no certainty on the sale of one or both companies.
Novo Oil & Gas holds 17,000 net acres in the Northern Delaware Basin of the Permian in Southeast New Mexico.
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By GlobalDataThe Northern Delaware Basin is said to hold high-quality, liquids rich, stacked pay zones.
In May 2023, Novo is expected have production of 60,000 barrels of oil equivalent per day (boepd).
Forge Energy II owns assets that cover more than 40,000 gross acres in the southern Delaware Basin. The firm currently has production of about 14,000 boepd.
Stretched across Texas and New Mexico, the Permian is considered the country’s heart of shale industry.
Recently, Ovintiv agreed to buy all leasehold interest and associated assets in the Midland Basin in the US, from entities controlled by EnCap Investments.
The assets will be acquired from Black Swan Oil & Gas, PetroLegacy Energy, and Piedra Resources.
