Private equity firm Warburg Pincus has placed its portfolio company RimRock Oil & Gas up for sale, three people familiar with the matter said, aiming to take advantage of the upswing in commodity prices to offload the Bakken gas producer.
It is Warburg’s second attempt to sell the gas producer in just over a year, the sources noted. A 2021 auction process failed to secure a buyer at the valuation that Warburg sought.
While current commodity price volatility makes it more challenging to appraise energy assets, RimRock is now expected to achieve a valuation in the high hundreds of millions of dollars, up from the target price last year of upwards of $500 million, the sources added.
This uplift reflects how sellers' expectations have risen due to a recent boom in U.S. natural gas prices—which have jumped by around three-quarters since the start of the year.
Warburg has retained an investment bank for the sale of RimRock, which owns assets spread over 29,500 net acres in the Bakken shale play of North Dakota.
The sources cautioned there is no guarantee that a sale of RimRock will materialize and Warburg could decide to retain the company. They requested anonymity as the plans are confidential.
Warburg declined to comment. RimRock did not respond to a request for comment.
U.S. natural gas futures were trading at around $6.63 per MMBtu on April 11, up 78% this year, due in part to Russia’s invasion of Ukraine creating a global supply crunch and increasing demand for American exports of LNG.
That surge has encouraged private equity firms to eye the sale of long-standing oil and gas investments. Warburg first invested in RimRock in 2016, pledging up to $500 million to acquire oil and gas acreage.
Warburg sold natural gas pipeline operator Navitas Midstream for $3.25 billion in January, just a month after it sold Permian Basin-focused oil and gas producer Chisholm Energy.
Recommended Reading
SilverBow Resets Shareholder Meeting After $2.1B Crescent Deal
2024-05-16 - SilverBow Resources said it will adjourn its May 21 shareholders’ meeting until May 29 following Crescent Energy’s agreement to buy the Eagle Ford operator.
Blue Racer Midstream Prices Senior Notes Offering
2024-05-15 - Net proceeds from the sale of senior notes will be used to pay off debt and other general corporate purposes.
Petrobras CEO Prates to Step Down
2024-05-15 - Brazil’s President Luiz Inácio Lula da Silva has requested that Petrobras CEO Jean Paul Prates resign following a dispute over dividend payments.
Pembina Pipeline to Renew Share Repurchase Program
2024-05-14 - Pembina Pipeline has approval from the Toronto Stock Exchange to purchase up to 5% of its outstanding common shares.
ProPetro Adds Exxon Designee Volkov to Board
2024-05-14 - Alex Volkov is currently the transition executive tasked with planning the integration of Pioneer Natural Resources and Exxon Mobil.