Private equity firm Apollo Global Management (APO) and Blackstone Group’s credit arm are considering divesting Canada-based Ridgeback Resources, reported Reuters, citing four sources familiar with the development.

A potential sale of the Canadian oil and gas producer could be valued at more than C$1bn ($765.58m).

The move comes amid surging global oil price, which reached multi-year highs in recent months because of increased demand and Russia’s invasion of Ukraine. To capitalise on the surging prices, energy firms have been considering asset sales.

To manage the sale process of Ridgeback, the private equity investors have hired two undisclosed investment banks, the report says.

The publication cited sources as saying that there is no certainty that Ridgeback will be offloaded. The firm’s assets could be divested in several transactions.

In 2016, Apollo and Blackstone formed Ridgeback to acquire bankrupt Canada-based oil firm Lightstream Resources for C$1.35bn.

Ridgeback is the largest Canadian remaining upstream asset for Apollo, and the only production asset in the North American country for Blackstone Credit.

Ridgeback holds assets that cover a total area of more than 535,000 net acres in the Alberta, Saskatchewan, and British Columbia provinces. 

As per the marketing document seen by Reuters, Ridgeback is expected to have a production capacity of 22,619 barrels of oil equivalent per day (boepd) this year and 24,532boepd in 2023.

Earlier this year, Apollo unveiled a sustainable investing platform to invest $50bn over the next five years in decarbonisation and energy transition opportunities.

Over the last 18 months, Blackstone offloaded US oil and gas producers GeoSouthern, and Guidon Operating. It is also focusing on green investments.