Nov 18 (Reuters) – Ranger Oil Corp (ROCC.O) is exploring a possible sale because the south Texas oil and gasoline producer appears to capitalize on excessive power costs to pursue strategic choices, folks accustomed to the matter stated on Friday.
Ranger is working with an advisor and has actively began advertising and marketing itself to potential consumers, the sources stated, requesting anonymity as these discussions are confidential.
Shares in Ranger, which operates within the Eagle Ford shale basin, jumped over 5% on Friday after Reuters reported the corporate’s sale efforts. This gave the corporate a market worth of round $1.9 billion.
The corporate additionally holds long-term debt price $603 million as of Sept. 30, in keeping with its newest earnings assertion.
Ranger Oil didn’t instantly reply to a request for remark.
Elevated oil and gasoline costs have inspired many personal equity-backed or public power corporations to contemplate promoting themselves, as their valuations have swelled in latest months. Ranger had gained round 58% this yr, previous to information of its sale efforts.
The Eagle Ford has witnessed a flurry of deal exercise in latest months. Its proximity to different main power hubs, together with the U.S. Gulf coast, makes it a beautiful location, whereas the basin is residence to quite a lot of smaller producers, which makes it simpler for them to be absorbed by strategic gamers.
Marathon Oil Corp (MRO.N) struck a deal earlier this month to purchase pure gas-focused belongings from personal equity-backed Ensign Pure Sources for $3 billion, whereas in September, Devon Power Corp (DVN.N) closed its deal to purchase Validus Power for $1.8 billion.
Primarily based on latest comparable transactions, Ranger Oil’s upstream belongings are estimated to be price between $2 billion and $2.2 billion, in keeping with Dhriti Bafna, M&A analyst at Rystad Power.
Final yr, Penn Virginia Corp purchased Lonestar Sources US Inc in an all-stock deal valued at $370 million, and later rebranded the mixed firm as Ranger Oil.
Reporting by Shariq Khan in Bengaluru; further reporting by Arunima Kumar and David French
Modifying by Nick Zieminski
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