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March 14, 2022

EnCap looking to sell oil producer Ameredev II for $4bn

EnCap also selected an undisclosed bank to assist in launching an auction for its portfolio company in the coming weeks.

Private equity firm EnCap Investments is considering the sale of its portfolio company Ameredev II, a US-based oil producer, reported Reuters.

With the sale of the Delaware basin operator, the equity firm looks to raise over $4bn, including debt, reported the news agency, citing people familiar with the matter.

As part of the plan, EnCap appointed an undisclosed bank to launch an auction for Ameredev II in the coming weeks.

In December, EnCap combined two of its portfolio companies, Advance Energy Partners, and Ameredev II, to create one of the largest privately-owned oil producers in the Delaware basin, a part of the larger Permian basin.

Ameredev II currently operates what it claims to be largest privately held contiguous land position in northern Delaware. It also manages the assets owned by Advance Energy Partners.

The latest move by EnCap comes as several buyout firms look to capitalise on surging US crude prices, which reached their highest level since 2008, following Russia’s invasion of Ukraine.

In a separate development, in the wake of surging oil price, India’s Cairn Oil & Gas is planning to more than triple its gas production over a three-year period, reported Bloomberg News.

Cairn deputy CEO Prachur Sah told Bloomberg TV in an interview that the firm, a unit of Vedanta, intends to drill additional wells across its 51 blocks in India, to uncover potential oil and fuel reserves.

Sah added: “Our target is to reach half a million production in a very short time by doing these investments.

“This investment is not just a number, but we have projects in line. We are looking at exploration heavily over the next few years to get to these levels.”

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