Double Eagle explores $6.5 billion sale of shale oil producer, sources say

Marathon Oil

29/05/2024 20:07

By David French
       May 29 (Reuters) - Prolific oil and gas developer Double
Eagle is exploring a sale of its latest Permian Basin-based
producer in a deal that could be worth more than $6.5 billion,
including debt, according to people familiar with the matter.
    The Double Eagle team is expected to launch a sale process
for the producer in the second half of this year, the sources
said, requesting anonymity as the matter is confidential.
    Publicly listed oil and gas producers, including those
already operating in the Midland portion of the Permian where
Double Eagle Energy Holdings IV is located, are expected to be
potential acquirers, the sources added, cautioning a deal is not
guaranteed.
    If the deal talks are successful, Double Eagle IV's sale
would mark one of the largest transactions involving a
privately-held U.S. energy producer during the past year.
    Recent notable deals involving privately-owned producers
include Diamondback Energy's  FANG.O  $26 billion tie-up with
Endeavor Energy and Occidental Petroleum's  OXY.N  $12 billion
cash-and-stock deal for CrownRock. 
    A deal would generate another huge payday for the team led
by oil entrepreneurs Cody Campbell and John Sellers, who sold
their third iteration of Double Eagle to Pioneer Natural
Resources for $6.4 billion in 2021.
    Double Eagle IV, which counts EnCap Investments as its
biggest investor, has raised $2.3 billion in total funding since
it was launched from investors including Apollo Global
Management  APO.N , Elda River Capital, and members of its
management team.
    Double Eagle, EnCap and Elda River declined comment. Apollo
did not immediately respond to a request for comment.
    The fourth Double Eagle covers around 55,000 net acres in
Texas and is expected to generate more than 90,000 barrels of
oil equivalent of net production by the end of this year, the
sources said. 
    Merger and acquisition activity in the U.S. shale patch has
hit record levels over the past year due to a flurry of
megadeals, as exploration and production companies are seeking
to boost scale and add premium drilling locations as part of a
once-in-a-generation consolidation wave. 
    Notable deals include Exxon Mobil's  XOM.N  $60 billion
takeover of Pioneer; Chevron's  CVX.N  $53 billion pending
acquisition of Hess  HES.N ; and ConocoPhillips'  COP.N  $22.5
billion deal for Marathon Oil  MRO.N  that was announced earlier
on Wednesday. 

 (Reporting by David French in New York; Editing by Anirban Sen
and David Gregorio)
 ((davidj.french@thomsonreuters.com;))