Privately held producers are rushing to exit at 2005 prices. "Some asset owners, particularly private producers, are concerned that commodity prices will not hold up after year-end and hope to exit at the top of the current market cycle," says Bill Marko, a managing director of Houston-based M&A advisor Randall & Dewey Inc. Market prices are at an all-time high for U.S. assets. Proved reserves are getting more than $2 per thousand cubic feet equivalent (Mcfe) on the market. At times, they're fetching more than $2.50, depending on the location and the nature of the reserves. And, privately held producers' assets are getting particular attention. Houston-based M&A advisor Richardson Barr & Co. reports, "Private-equity-backed companies, sporting better asset quality and substantial running room, have received a considerable premium in the market over the past 18 months." Among private producers whose exits are under way: • West Virginia-based Triana Energy Holdings LLC will sell its Columbia Natural Resources business unit in a deal valued at approximately $3 billion to Chesapeake Energy Corp. The price is some $3 per proved Mcfe for CNR's estimated 1.1 trillion cubic feet equivalent of Appalachian Basin assets, which, by the way, Triana had purchased two years ago for approximately $330 million. Triana is a portfolio company of private-equity provider Metalmark Capital LLC. • First Reserve Corp. will sell its North Sea-focused Caledonia Oil & Gas Ltd. to Germany-based E.on for approximately $832 million. Caledonia has reserves of approximately 494 billion cubic feet of gas equivalent (Bcfe), plus midstream and gas-trading assets. • In one case, a public-company exit is under way in which a major shareholder is a private-equity provider. Norway-based Norsk Hydro ASA plans to buy Gulf-focused Spinnaker Exploration Co. in a deal valued at $2.5 billion. Warburg Pincus has been an investor in Spinnaker for years. Exiting has been made easier for private producers because stronger value is being assigned to their proved undeveloped reserves. Richardson Barr & Co. reports, "Divestitures from private-equity portfolio companies have averaged 40% (proved developed producing) compared with 55% for publics. Portfolio companies continue to deliver concentrated assets with plenty of meat on the bone that public companies are eager to acquire." Among private producers whose exits are done: • Enerplus Resources Fund has added Sleeping Giant LLC's interests in the Bakken Shale, Montana, play for $93 million. The interests are in addition to those Enerplus acquired recently with the acquisition of privately held Lyco Energy Corp. Cosco Investments LP was among private shareholders in Sleeping Giant. • Barnett Shale player Hallwood Energy LP has divested the balance of its interests in northeastern Texas to Chesapeake. • Medicine Bow Energy Corp. was bought by El Paso Corp., which picked up 383 Bcfe of proved reserves across several U.S. basins for $834 million. EnCap Investments was among private-equity-holders in Medicine Bow. • Crusader Energy Corp. has sold its primarily Midcontinent assets to Encore Acquisition Co. for $107 million. Kayne Anderson Energy Fund II was among Crusader shareholders. • Woodside Petroleum Ltd. has acquired Gulf of Mexico-focused Gryphon Exploration Co. for approximately $297 million, gaining some 72 Bcfe of proved reserves. Warburg Pincus was among Gryphon shareholders. Some privately held producers are buying, however: • Exco Resources Inc. bought Oneok Inc.'s E&P assets for $645 million, picking up some 240 Bcfe of proved in Oklahoma and Texas. • Mariner Energy Inc. plans to acquire the Gulf business of Forest Oil Corp. in a deal valued at $1.17 billion, gaining 344 Bcfe of proved reserves. Watch for more divestments by private companies by year end.