Private equity company EnCap Investments is exploring the sale of its Bakken shale-focused oil and gas producer, Grayson Mill Energy, reported Reuters, citing sources.  

Sources close to the matter suggest the deal could value the company at around $5bn, inclusive of debt.  

Investment bank Jefferies Financial Group has been appointed to oversee the sale process, which is expected to commence later in 2024, depending on market conditions. 

The sources indicated that the outcome of the sale process is not certain.  

When approached for comments, both EnCap and Jefferies declined to respond, while attempts to reach Grayson Mill were unsuccessful, the news agency said. 

Grayson Mill Energy, established in 2016 by EnCap and its management team, has risen to prominence as one of the largest privately held energy producers in the Bakken region.  

The oil and gas producer also has some assets in the nearby Powder River Basin of Wyoming, US. 

The company's expansion has been significantly bolstered by strategic acquisitions, including the purchase of Equinor's Bakken operations for $900m in 2021 and Ovintiv's Bakken assets for $825m in 2023. 

The US shale sector witnessed a surge in mergers and acquisitions activity in 2023, setting new records as companies aimed to enhance their operational scale and secure prime drilling sites.  

Notable transactions included Exxon Mobil's and Chevron's acquisitions of Pioneer Natural Resources and Hess, respectively, each exceeding $50bn. 

More recent transactions in the US oil and gas industry also include the merger of Chesapeake and Southwestern Energy, along with Sunoco's agreement to acquire NuStar Energy.  

This trend presents a conducive backdrop for private equity entities such as EnCap to divest their holdings, reported Reuters.  

Last year, EnCap divested a trio of companies to natural gas company Ovintiv in a deal valued at $4.27bn.