Buyout firm EnCap Investments agrees $1.5bn purchase of EP Energy

Private equity firm EnCap Investments has agreed to acquire EP Energy for $1.5bn, people familiar with the matter said, less than a year after the oil and gas producer emerged from a bankruptcy process that handed control to its creditors.

EnCap plans to split EP, which holds production assets in South Texas and Northeastern Utah, into its separate geographies and merge them with existing portfolio companies, according to the sources. The Utah assets, in the Uinta Basin, will be merged with XCL Resources, while the operations in Texas’ Eagle Ford will be combined with an EnCap company with acreage in the area, the sources added.

EnCap, EP and XCL did not respond to comment requests. The sources spoke on condition of anonymity as the information is not public. EP filed for bankruptcy in October 2019, but its attempts to restructure were impacted by the cratering of oil prices in early 2020. Like many U.S. energy producers whose finances were decimated by the collapse, EP gave shares in a newly-constituted company in exchange for eliminating $4.4bn of debt.