NGP Energy Considering Offloading Two Oil Producers for $7B
Energy buyout company NGP Energy Capital Management is considering selling two oil producers, Tap Rock Resources and Hibernia Resources, in auction processes, which could raise over $7 billion in capital, reported Reuters citing people familiar with the matter.
Dallas-based NGP is working with undisclosed investment banks for the sale of the oil producers, which is expected to begin in the coming weeks.
The latest move comes as NGP looks to capitalize on higher energy prices. With OPEC members voting on Sunday to cut oil production by about 1.16 million barrels a day, US crude has jumped to $81 a barrel, boosting the valuations of oil producers.
Tap Rock is producing more than 100,000 barrels of oil equivalent per day from the Delaware portion of the basin in New Mexico. Its assets cover an area of more than 35,000 net acres. Hibernia holds assets in the Midland part of the Permian basin in Texas.
The potential sale of Tap Rock Resources and Hibernia could garner around $5 billion and $2 billion respectively for NGP, according to the sources.
NGP provided Tap Rock with capital in 2016 and backed Hibernia with $250 million in 2017.