Raging River Exploration Inc. has hired GMP FirstEnergy to explore a potential sale, according to people familiar with the matter.
The Calgary-based oil and gas exploration company, whose operations are primarily focused in the Viking play in Saskatchewan, has a market valuation of about C$2.3 billion. The company opened its data room to potential bidders last month, said the people, who asked not to be identified because the process is private.
The company is expected to draw interest from Teine Energy Ltd. and Whitecap Resources Inc., among others, the people said.
Representatives for Raging River, GMP FirstEnergy, Teine, and Whitecap didn’t immediately respond to requests for comment.
Shares of Raging River jumped as much as 9.6 percent to C$10.40 Wednesday. The stock closed Tuesday 19 percent below its October peak of C$11.68 amid weak oil prices. Fourteen of 16 analysts covering the stock rate it as the equivalent of a buy, while two have a hold recommendation, according to data compiled by Bloomberg.
“They have one of the more clean balance sheets,” Dennis Fong, an analyst with Canaccord Genuity Group Inc. in Calgary, said in a telephone interview.
Raging River said it achieved a production record in the fourth quarter, the equivalent of 20,447 barrels of oil a day, a 38 percent increase over the fourth quarter of 2015.
Chief Executive Officer Neil Roszell previously ran several oil and gas companies, including Wild Stream Exploration Inc. and Wild River Resources, both of which were subsequently sold to Crescent Point. Wild Stream was sold in 2012 for C$600 million, while Wild River was sold for C$150 million in 2009.