The ripple effect of last month’s SVP bank failure may have tightened energy lending, but for shale producers fat with cash flow, a capital crunch probably won’t keep them up at night. What it may well do is offer up some dandy opportunities for producers to expand their assets, especially in the Permian. Add in the surprise decision this week by OPEC+ to take 3.66 MMBPD off the global market raising the price of crude, and the stage is lit, propped, and set for an M&A windfall.
Reese Energy Consulting today is following the latest news from Dallas-based private equity firm NGP Resources, which looks to sell two of its Permian-focused portfolio companies over the coming weeks. This follows our Tuesday post when we covered Ovintiv’s $4.275 billion acquisitions in the Permian and a $825 million divestiture of assets all managed by EnCap. NGP now looks to score a combined $7+ billion for Tap Rock Resources and Hibernia Resources III.
Based in Golden, Colo., Tap Rock operates 35,000+ acres in the Delaware with 100 MBOED. The company is one of the largest PE-backed producers in the Permian’s Lea and Eddie counties, N.M. Hibernia operates in the Texas Midland. NGP last year began raising capital for its 13th natural resources fund, the first in almost five years.