TRP Energy is exploring a possible sale of its oil and gas operations in the Permian basin that could fetch more than $1.5 billion, the latest company to do so at a time of high demand for acreage in the heart of U.S. shale country, people familiar with the matter said.

TRP, in which Greenbelt Capital Partners owns a controlling stake, holds around 15,000 net acres in the Midland Basin and produces about 25,000 boe/d, said the sources.

An investment bank is advising TRP on the process, added the sources, who cautioned a deal is not guaranteed and spoke on condition of anonymity to discuss confidential information.

TRP and Greenbelt did not respond to requests for comment.

Private operators of oil and gas assets in the Permian, which stretches across parts of Texas and New Mexico, are securing profitable exits as listed companies pursue deals to expand there.

Buoyed by earnings from elevated crude prices in the past 18 months, buyers have been seeking deals to boost their land reserves and cash flow generation. This in turn strengthens their shareholder returns, such as dividend payouts, making them more attractive to investors.

More than $10 billion of such deals have been struck in the Permian so far in 2023, according to data provider Enverus.

"As we reach the later innings of private businesses being consolidated, private equity is finding itself having a significant role, providing public companies with the opportunity to improve their portfolios and increase their scale, relevance and inventory," said Alex Burpee, senior managing director at Guggenheim Securities.

The bank advised Civitas Resources, which agreed to $4.7 billion purchase of Permian operations from NGP Energy Capital Management. The deal included Hibernia Energy III, situated close to TRP's operations.

Greenbelt, an energy-focused investment firm, was spun out of Trilantic North America in early 2022. Trilantic first backed TRP with a $250 million investment in 2015.

Comments