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September 28, 2021

Warburg and Ontario Teachers looking to divest Chisholm Energy

The firms are working with an undisclosed investment bank to run the sale process for the US-based oil and gas company.

By Archana Rani

Warburg Pincus and the Ontario Teachers’ Pension Plan (OTPP) are reportedly looking to sell US-based oil and gas company Chisholm Energy.

To run the potential sale process, the two owners of the Permian basin-focused oil and gas exploration and production company have hired an investment bank, Reuters reported citing undisclosed sources.

A potential transaction is expected to attract a valuation of approximately $1bn.

However, the sources noted that there is no guarantee on the sale of Chisholm and the holding could be retained by one or both owners.

Formed in 2016, Chisholm Energy is backed by private equity firm Warburg Pincus with a $500m line-of-equity.

In 2017, Chisholm purchased an asset located in Eddy and Lea counties in New Mexico, US.

Several energy firms in the US are consolidating and acquiring assets to gain on the surging oil price, which increased by more than 50% since the start of the year following the pandemic-led crash in 2020.

Recently, Reuters reported Pioneer Natural Resources has launched the divestment of its assets in the Delaware basin in Texas to secure more than $2bn.

With the sale, Pioneer intends to focus on its assets located in the mid-land portion of the greater Permian Basin in the US and reduce its debt following two acquisitions this year.

Similarly, the news agency recently reported Gulfport Energy is considering strategic options for its business, which includes a potential sale. The firm has hired an investment bank to help in assessing its options and to solicit potential bids for the transaction.

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