NGP’s decision to sell the oil producers is driven by the hike in energy prices by the Petroleum Exporting Countries (OPEC) and others, and the sale would deliver profits to the investors and help NGP raise its 13th natural resources fund
NGP to sell Permian oil producers. (Credit: Mihai on Unsplash)
US-based private equity firm NGP Energy Capital Management is looking to sell two of its Permian basin-focused oil producers for more than $7bn.
The energy buyout firm is working with investment banks to sell its entities, Tap Rock Resources and Hibernia Resources, in auction processes that are expected to start in a few weeks, reported Reuters.
NGP’s decision to sell the oil producers is driven by the rise in their valuations due to a hike in energy prices by the Petroleum Exporting Countries (OPEC) and others, including Russia.
The divestment would deliver profits to the investors and will help the company raise its 13th natural resources fund, the publication said.
Tap Rock, an oil and natural gas company focused on exploration and production, is one of the largest private equity-controlled oil producers left in the Permian basin.
The company produces more than 100,000 barrels of oil equivalent per day from the Delaware portion of the basin in New Mexico, and NGP could raise about $5bn.
Hibernia is an acquisition and development company focused on the exploration, growth and production of oil and natural gas assets in the Midland part of the Permian basin in Texas.
NGP expects more than $2bn from the sale of Hibernia. The company made a seed investment in Tap Rock in 2016 and a $250m equity investment in Hibernia in 2017.
The buyout firm has deployed more than $20bn in energy investments and has been raising its NGP Natural Resources XIII fund late in 2022, reported Reuters.
Last week, Denver-based natural gas company Ovintiv agreed to buy assets in the Midland from entities controlled by EnCap Investments for about $4.3bn.