Novo Oil & Gas, which is engaged in developing acreage in the Northern Delaware Basin in Southeast New Mexico can get a valuation of over $2bn, while Forge Energy II, which could be valued at over $600m has a footprint of more than 40,000 gross acres in the Delaware Basin
Novo Oil & Gas and Forge Energy II are upstream operators in the Permian Basin backed by EnCap Investments. (Credit: Christian Allen from Pixabay)
EnCap Investments is reportedly planning to sell Novo Oil & Gas and Forge Energy II, two upstream operators in the Permian Basin in the US, with an aim to realise proceeds of around $3bn.
The Texas-based private equity firm has engaged an investment bank to independently sell the two oil and gas producers, reported Reuters, citing undisclosed sources having knowledge of the matter.
As per the sources, Novo Oil & Gas can get a valuation of over $2bn, while Forge Energy II could deliver proceeds of more than $600m. However, they cautioned that unstable commodity prices may impact the final valuations.
Based in Oklahoma City, Novo Oil & Gas is engaged in developing acreage in the Northern Delaware Basin in Southeast New Mexico where high-quality, liquids rich, stacked pay zones are known to be present.
The company was established in 2016 with EnCap Investments providing an initial capital commitment.
Forge Energy II, which is based in San Antonio, pursues the acquisition and development of horizontal resource plays located in the Lower 48.
Backed by an initial investment from EnCap Investments in 2018, Forge Energy II has established a footprint of more than 40,000 gross acres in the Delaware Basin.
The sources told the publication that there is no guarantee on either of Novo Oil & Gas or Forge Energy II or both the oil and gas firms being sold. They added that the talks about the matter are private.
Earlier this week, EnCap Investments entered into a deal to sell certain northern Midland Basin assets to Ovintiv for $4.27bn. The deal includes almost all leasehold interest and associated assets of Black Swan Oil & Gas, PetroLegacy Energy, and Piedra Resources, which are portfolio companies of funds managed by the private equity firm.