Investment firms Warburg Pincus and Kayne Anderson are exploring a potential sale of WildFire Energy, with any deal expected to value the U.S. shale operator at more than $4 billion including debt, people familiar with the matter said. The move comes at a time when crude prices have surged, with U.S. benchmark oil back above $100 per barrel this week, due to the conflict in the Middle East. While the disruption to energy markets, and the wider global economy, is substantial, the value of energy production assets has also been boosted significantly by these higher commodity prices, making it an attractive time for owners of such companies to consider selling.
WildFire Energy is among the largest privately owned operators in South Texas’ Eagle Ford shale basin, producing around 50,000 net barrels of oil equivalent per day, according to its website.
Investment bankers at Jefferies have been hired to run an auction process for WildFire, with formal marketing expected to kick off in the coming weeks, according to four people familiar with the matter.
These people cautioned that volatile markets meant there was no guarantee a sale of WildFire will be agreed, and the valuation of the company could shift from the $4 billion expectations. They also spoke on condition of anonymity to discuss confidential deliberations.
WildFire and Jefferies did not respond to comment requests, while Warburg and Kayne Anderson declined comment.
WildFire was first backed by Warburg and Kayne Anderson in 2019. Since then, the management team has grown the business through a number of acquisitions, including production assets from APA Corp and Chesapeake Energy.
(Reporting by David French and Shariq Khan in New York; Editing by Chizu Nomiyama )