After a year of trying, maybe the second time is the charm. That’s if you’re private equity firm Warburg Pincus back on the hunt for a buyer for Denver-based Bakken producer RimRock Oil and Gas.
Reese Energy Consulting is following the latest news from Warburg, which in 2021 failed to land a buyer for RimRock with a then-low price tag. This, at a time when gas prices averaged $4.70 per MMBTU vs today’s $6.69 per MMBTU. Naturally, Warbus values RimRock much higher this go-round—and no doubt, the E&P’s position in the Bakken, along with attractive well economics, is bound to turn heads.
According to a recent report by The N.D. Pipeline Authority, the Bakken’s core is expanding thanks to newer applied technologies. Nine years ago, wells there averaged estimated ultimate recoveries of 240 MBbls. In 2020, that number zoomed to 580 MBbls, reducing break-even costs from an average $70 per Bbl to $37.
According to its website, RimRock operates 181 wells with total land holdings of 37,800 net acres at an 89% average working interest. Also of note, this divestment will mark Warbus’ third of a U.S. energy portfolio company in less than five months to include Chisholm Energy last December and Navitas Midstream in January.