Privately held 1776 Energy Operators LLC told Reuters on Friday it would put itself up for sale, after sources familiar with the South Texas-focused oil and gas producer said they expected it to be valued at around $1.5 billion, including debt.
The Houston-based firm, which drills for oil and gas in the Eagle Ford shale play and was founded by oilman Jim Huff, has hired two investment banks to run a sale process for the firm, a company official said.
Companies see the Eagle Ford basin as one of the most attractive drilling areas in the United States, given its proximity to export and refining facilities on the Gulf coast, and its cheaper acreage costs than the high-profile Permian basin to the north west.
Much of 1776 Energy’s production comes from Karnes and Gonzales counties, close to where Marathon Oil Corp, Devon Energy Corp and Magnolia Oil & Gas Corp all have Eagle Ford operations, as well as La Salle County, where EOG Resources Inc has a large position.
Private equity-backed producers are likely bidders for 1776 Energy, given they have shown good appetite for Eagle Ford acreage in recent times.
Earlier this month, Pioneer Natural Resources said it was selling its Eagle Ford position to Ensign Natural Resources, a portfolio company of Warburg Pincus.
Source: Reuters.com