Apollo Global Management Inc and the credit arm of Blackstone Group Inc are looking to sell Canadian oil and gas producer Ridgeback Resources for more than C$1 billion ($765.58 million), four sources familiar with the matter said on Tuesday.
Rising demand and Russia’s invasion of Ukraine pushed oil prices to multi-year highs in recent months, giving owners of energy assets a window to sell and lock in profits. Global crude benchmark Brent has soared more than 30% this year.
Two investment banks have been hired to manage the sale of Ridgeback, one of the largest private oil producers in Canada, the sources said. They added no deal for Ridgeback was guaranteed and the company’s assets could be sold in multiple transactions.
The sources requested anonymity to discuss confidential information. Ridgeback did not immediately respond to a request for comment. Apollo and Blackstone Credit declined to comment.
Apollo and Blackstone formed Ridgeback in 2016 to buy bankrupt Canadian oil producer Lightstream Resources in a C$1.35 billion deal. The two U.S. buyout firms were among the largest bondholders of Lightstream.
The company’s assets span over 535,000 net acres (216,500 hectares) in the Alberta, Saskatchewan and British Columbia provinces. Ridgeback forecasts production of 22,619 barrels of oil equivalent per day (boepd) this year and 24,532 boepd next year, according to a marketing document seen by Reuters.
International players have been pulling back from Canada’s oil and gas production industry in recent years.
Some have left to pursue cheaper, more profitable opportunities in the United States and elsewhere: Exxon Mobil Corp and its Canadian unit, Imperial Oil Ltd, sold their shale properties in the Montney and Duvernay basins to Whitecap Resources Inc on Tuesday for C$1.9 billion.
Others have left due to environmental considerations: Canada’s oilsands are among the most carbon-intensive forms of crude production, for example.
Both Apollo and Blackstone have been pivoting away from oil and gas in North America to focus on renewables and other clean energy investments.
Apollo launched a sustainable investing platform in February which aims to deploy $50 billion in decarbonization and energy transition opportunities over the next five years.
Blackstone has also been making numerous green investments and, in the last 18 months, sold U.S. oil and gas producers GeoSouthern and Guidon Operating.
Ridgeback is Apollo’s largest remaining upstream asset in Canada, while it is Blackstone Credit’s only production asset in the country.