The private equity owners of Colgate Energy Partners III are preparing to float the shale oil producer on the stock market at a valuation approaching $4 billion, including debt, according to people familiar with the matter.
If launched, the deal would be the first major initial public offering of a US oil producer since 2018.
The New York listing preparations come as energy prices soar on strong demand from economies emerging from COVID-19 pandemic lockdowns, creating attractive corporate valuations in the oil patch after years of financial under-performance.
Pearl Energy Investments and NGP, the buyout firms that own Colgate Energy Partners III, are working with Credit Suisse Group AG on getting it ready for an IPO that could launch by the middle of 2022, the sources said.
They cautioned the IPO plan had not been finalized and spoke on condition of anonymity because the matter was confidential.
Pearl, NGP and Colgate did not respond to comment requests. Credit Suisse declined to comment.
Colgate will have around 108,000 net acres in the Delaware portion of the Permian basin – the region of Texas and New Mexico considered the heart of the US shale industry – producing approximately 62,000 barrels of oil equivalent per day, after the closure of a previously announced $190 million land purchase, according to a November statement.
The IPO would be the first by a sizable US oil producer since Berry Petroleum Corp raised $182 million in July 2018. It would be the first major offering in the Permian since Jagged Peak Energy raised $474 million in January 2017.
Investors soured on buying stock in oil and gas producers in recent years because of the poor returns they delivered and the environmental concerns they raised.
But with US crude prices hitting their highest in seven years in late-October, and the S&P energy index delivering roughly double the S&P 500’s return in 2021, investor confidence is returning.
As well as supportive commodity prices for producers such as Colgate, the Permian basin is on course for record-setting output in January.
For more information visit www.colgateenergy.com