Kiel Porter and Rachel Butt 06/10/2022
(Bloomberg) – Sabinal Energy, an oil producer backed by Kayne Anderson, is sharing its assets for a sale of the company that could raise more than $1 billion, according to people with knowledge of the situation.
The company launched an auction last week with the help of an adviser, said the people, who asked not to be identified because the matter is private. Sabinal could be worth up to $1.5 billion, one of the people said.
Sabinal, the people said, markets about 132,000 net acres in parts of the Permian Basin, including the Central Basin Platform and the Northeast and East Tablelands, as well as the Delaware Basin extending into in New Mexico. The blocks of assets could be sold to one or more buyers, one of the people said.
With daily production of 13,000 barrels of oil equivalent, the assets are expected to generate more than $400 million in earnings before interest, taxes, depreciation and amortization over the next 12 months, the sources said. A sale has not been made and plans for Sabinal could change, the people said.
A representative for Sabinal did not immediately respond to a request for comment. A spokesperson for private equity sponsor Kayne Anderson declined to comment.
Sabinal, based in Woodlands, Texas, received a $300 million equity commitment from the Kayne Private Energy Income Fund in 2016. The company is led by Bret Jameson, who began his career at Exxon working on assets from the central basin platform.
The Permian basin of western Texas and New Mexico has long been a center of consolidation because it is extremely lucrative and quite fragmented.
Last month, Permian producer Centennial Resource Development Inc. agreed to acquire private equity-backed rival Colgate Energy in a cash and stock deal valued at around $2.5 billion. dollars.
Dealing in the shale patch is set to accelerate as companies seek to replenish dwindling supply from premier wellsites. Oil prices, which hit $120 a barrel, could rise as the energy supply crisis drags on, according to Bank of America Corp.