US-based oil and natural gas company HighPeak Energy is considering strategic options, including the possible sale of the business.
Currently, the company owns approximately 110,000 acres, including two highly contiguous blocks, in the Midland portion of the Permian basin in the US.
Go deeper with GlobalData
HighPeak chairman and CEO Jack Hightower said: “The board and I believe now is an opportune time to capture the value we do not consider is presently reflected in our share price.
“We have worked diligently over the last few years to secure this position and are poised to capitalise on the favourable energy market outlook.
“Based on our forecast, we anticipate having self-sustaining operations and becoming cash flow positive in the second half of this year, and then transitioning into consistent free cash flow generation thereafter.”
Credit Suisse Securities (USA) and Wells Fargo Securities will serve as financial advisors while Vinson & Elkins LLP is acting as legal counsel to assist in the company’s review process.
The company, however, said that there is no certainty that evaluation would result in one or more transactions or other strategic outcomes.
During the first half of this year, HighPeak is planning to reduce its drilling operations to four drilling rigs, from its current six rigs.
The company said it regularly undertakes financial viability assessments of its capital development plan to ensure its cohesion with the wider market dynamic.
HighPeak president Michael Hollis said: “We have substantially de-risked our highly contiguous acreage blocks and have positioned the company for future, consistent strong returns.”
In the recent months, several other smaller US-based oil and gas producers, including Berry Corporation, Ranger Oil, and Brigham Minerals, have put themselves up for potential sale, reported Reuters.
