KEY POINTS
- Ridgemar seeks $1 billion valuation for U.S. oil assets.
- Private equity owners capitalize on strong market conditions.
- Recent acquisitions position Ridgemar as a top private Eagle Ford producer.
The private equity owner of Ridgemar Energy is exploring a sale of its U.S. oil and gas assets, aiming for a valuation exceeding $1 billion, including debt, according to sources familiar with the matter.
The Texas-based producer, operating primarily in the Eagle Ford Basin, is backed by Carnelian Energy Capital and has retained RBC Capital Markets to manage the potential sale.
High interest from private and public energy firms
Ridgemar’s assets have attracted interest from various private and publicly listed energy firms, although sources indicate that a transaction is not guaranteed. Recent sales in the sector have demonstrated the appeal of such assets as private equity firms exit investments following a period of high commodity prices.
In 2023, Ridgemar acquired Eagle Ford assets from Callon Petroleum for $655 million, expanding its holdings through smaller acquisitions to over 70,000 net acres.
According to Reuters, while neither Carnelian nor RBC Capital Markets has commented on the potential sale, the move aligns with a trend of private equity firms capitalizing on elevated commodity prices to divest assets in oil and gas.
Major deals signal shifting sector dynamics
The energy sector has seen numerous deals in recent months, as private equity firms adjust portfolios. EnCap Investments recently sold XCL Resources and Grayson Mill Energy to SM Energy and Devon Energy, respectively.
In July, Point Energy Partners, backed by Vortus Investments, sold its holdings to Vital Energy and Northern Oil and Gas. Ridgemar, one of the last remaining private oil producers in the Eagle Ford, stands out as a major player after its acquisition of Callon’s Eagle Ford assets.
Sources reveal that Ridgemar’s production is projected to reach an average of 27,000 barrels of oil equivalent per day by 2025, with an estimated core earnings of $450 million.
The Eagle Ford properties offer promising returns, making them attractive to potential buyers as demand for U.S.-based energy assets grows.
Future growth anticipated in Eagle Ford operations
The present profile of Ridgemar cannot afford to lose sight of the important role played by the Eagle Ford Basin which contains the oil deposits. The company has recently increased its inventory by procuring about 17,000 net acres which have helped it to strengthened the position particularly in one of the most productive oil region in the country.
Ridgemar’s assets are considered as valuable by investors in the context of shifting business structure that concentrates on profitable and sustainable production of energy.
This strategic sale could also redraw the future of the US energy sector especially given the continued advances of private equity players common in sector exits in high valuations.
