CrownRock LP is preparing to explore a sale that could value it at well over $10bn including debt, people familiar with the matter said, in what could be the largest deal for a U.S. oil and gas producer going back at least three years.
The private equity-backed company, which is led by Texas billionaire businessman Timothy Dunn, has initiated discussions with investment banks about hiring advisers to run a sale process that will kick off by early 2024, the sources said.
Oil majors with pockets deep enough to afford buying CrownRock, such as Exxon Mobil Corp (XOM.N) and Chevron Corp (CVX.N), are among those expected to be contacted to gauge their interest in the process, the sources added.
The sources cautioned that no deal is certain and requested anonymity because the matter is confidential. CrownRock and Chevron did not respond to comment requests. Exxon declined comment.
The potential sale of CrownRock could end up being the largest in the U.S. oil and gas producing patch since ConocoPhillips’ (COP.N) all-stock deal for Concho Resources in 2020, which valued the latter at $13.3bn, including debt.
CrownRock’s decision to explore a sale follows a rally in oil prices this year, fueled by a tighter supply outlook and investor optimism over the resilience of energy demand in major economies. It also underscores how coveted spots are in the lucrative Permian basin, the largest U.S. oilfield, where CrownRock operates.
