Private equity firms Quantum, EnCap bid for oil producer EP Energy

Oil and gas producer EP Energy, which emerged from bankruptcy last year, has received takeover bids from private equity firms including EnCap Investments and Quantum Energy Partners, four people familiar with the talks told Reuters.

The Houston-based company is targeting a valuation of as much as $1.5 billion, two of the sources said.

It is exploring a full sale, while also trying to sell its Eagle Ford and Northeastern Utah assets in separate deals, four sources said.

The sources requested anonymity since the talks were confidential and said there is no guarantee a transaction will materialize.

 A deal would be the latest in the sector experiencing a strong rebound in commodity prices after one of its worst downturns last year, encouraging buyers to grab cheap acreage from struggling companies.

Privately held Validus Energy, which recently took over Ovintiv’s OVV.N assets in the region, has made a more than $600 million bid for EP’s Eagle Ford acreage, a person familiar with the matter said.

EP had 115,000 net acres and produced from over 900 wells in the Eagle Ford at the end of 2020, while its Utah assets spanned 155,000 net acres and had production from over 400 wells.

The company and Quantum did not respond to Reuters requests for comments. Encap declined to comment.

EP, which filed for bankruptcy protection in October 2019 and emerged from it a year later, said in March it began exploring options through investment banks Credit Suisse and Jefferies.

The company, which expects to produce 46,000 barrels of oil equivalent per day to 51,000 boepd this year, sold Southern Midland basin acreage in Texas in February.

Source: Nasdaq