Endeavour Energy Partners is considering a sale that could put the largest privately-held producer of gas and oil in the Permian basin, the largest oilfield in the United States, at a valuation of between $25 billion and $30 billion, according to persons familiar with the subject.
Nearly 45 years had passed since Texas oilman Autry Stephens founded the business that would eventually become Endeavour, when the sale took place. According to the sources, the 85-year-old wildcatter has chosen to take advantage of the recent surge in large transactions in the industry.
According to the sources, Stephens has instructed JPMorgan Chase bankers to get ready to start the Endeavour sale process in the first quarter of 2024. Stephens has asked not to be named because the discussions are private and cautioned that no acquisition is certain.
Stephens has previously reviewed proposals from potential Endeavour suitors, including one from Reuters in 2018. According to the reports, he no longer wants to wait for his estate to decide who should buy the company after his death to decide how to proceed.
The 350,000 net acres (1,416 square kilometres) that Endeavour operates on are located in the Midland region of the Permian shale basin, which is divided into West Texas and eastern New Mexico.
There were no comments available from Endeavor and JPMorgan.
There is a restricted pool of well-funded buyers for a business the size of Endeavour. Nonetheless, there appears to be demand among a select few, as seen by the industry's current wave of consolidation as companies compete to increase scale and secure the best acreage.
October saw the announcement of Exxon Mobil's $60 billion acquisition of Pioneer Natural Resources and Chevron's $53 billion purchase of Hess.
Rather than drawing from their cash reserves, the acquirers in these deals are using their shares as currency. They now have the financial wherewithal to pursue a bid for Endeavour as they work to finalise and integrate these acquisitions. Because the two businesses joined forces to drill on a portion of Endeavor's territory until 2022, Exxon is acquainted with the latter's operations.
In October, ConocoPhillips closed a $2.7 billion deal to acquire half of the Canadian oil sands project, Surmont.
According to Reuters, it has also expressed interest in CrownRock, which is run by Timothy Dunn, a fellow Texas wildcatter and primarily controlled by the private equity firm Lime Rock Partners. The CrownRock selling procedure is still in progress.
It's uncertain if Conoco, Chevron, or Exxon will try to acquire Endeavour. Chevron and Exxon both opted not to comment.
Two of the individuals stated that the decision to investigate a possible Endeavour sale was influenced by recent outreach from several interested parties.
Stephens, a former appraisals engineer who rose to prominence on television documentaries like Black Gold, expanded Endeavour by buying his rivals' abandoned land and successfully extracting gas and oil.
Stephens established and used his own fracking, construction, trucking, and other service companies to reduce his production expenses.
According to Fitch Ratings, Endeavour produced 331,000 barrels of oil equivalent in the second quarter of 2023, a 25% increase over the same time in 2022. As of last month, the credit rating agency estimated that Endeavor's free cash flow in 2024 would be close to $1 billion.
(Source:www.reuters.com)
Nearly 45 years had passed since Texas oilman Autry Stephens founded the business that would eventually become Endeavour, when the sale took place. According to the sources, the 85-year-old wildcatter has chosen to take advantage of the recent surge in large transactions in the industry.
According to the sources, Stephens has instructed JPMorgan Chase bankers to get ready to start the Endeavour sale process in the first quarter of 2024. Stephens has asked not to be named because the discussions are private and cautioned that no acquisition is certain.
Stephens has previously reviewed proposals from potential Endeavour suitors, including one from Reuters in 2018. According to the reports, he no longer wants to wait for his estate to decide who should buy the company after his death to decide how to proceed.
The 350,000 net acres (1,416 square kilometres) that Endeavour operates on are located in the Midland region of the Permian shale basin, which is divided into West Texas and eastern New Mexico.
There were no comments available from Endeavor and JPMorgan.
There is a restricted pool of well-funded buyers for a business the size of Endeavour. Nonetheless, there appears to be demand among a select few, as seen by the industry's current wave of consolidation as companies compete to increase scale and secure the best acreage.
October saw the announcement of Exxon Mobil's $60 billion acquisition of Pioneer Natural Resources and Chevron's $53 billion purchase of Hess.
Rather than drawing from their cash reserves, the acquirers in these deals are using their shares as currency. They now have the financial wherewithal to pursue a bid for Endeavour as they work to finalise and integrate these acquisitions. Because the two businesses joined forces to drill on a portion of Endeavor's territory until 2022, Exxon is acquainted with the latter's operations.
In October, ConocoPhillips closed a $2.7 billion deal to acquire half of the Canadian oil sands project, Surmont.
According to Reuters, it has also expressed interest in CrownRock, which is run by Timothy Dunn, a fellow Texas wildcatter and primarily controlled by the private equity firm Lime Rock Partners. The CrownRock selling procedure is still in progress.
It's uncertain if Conoco, Chevron, or Exxon will try to acquire Endeavour. Chevron and Exxon both opted not to comment.
Two of the individuals stated that the decision to investigate a possible Endeavour sale was influenced by recent outreach from several interested parties.
Stephens, a former appraisals engineer who rose to prominence on television documentaries like Black Gold, expanded Endeavour by buying his rivals' abandoned land and successfully extracting gas and oil.
Stephens established and used his own fracking, construction, trucking, and other service companies to reduce his production expenses.
According to Fitch Ratings, Endeavour produced 331,000 barrels of oil equivalent in the second quarter of 2023, a 25% increase over the same time in 2022. As of last month, the credit rating agency estimated that Endeavor's free cash flow in 2024 would be close to $1 billion.
(Source:www.reuters.com)
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