By Shariq Khan and Jessica Resnick-Ault
June 22 (Reuters) – Privately owned oil driller Recoil Resources is scouting for a buyer for its assets spread across 71,000 acres in the Eagle Ford shale play of South Texas, according to two sources familiar with the matter.
The assets, expected to produce around 4,000 barrels of oil equivalent per day in July per Recoil’s marketing materials seen by Reuters, could fetch over $200 million in a sale, one of the sources said.
A sale could be finalized over the coming months, one of the sources said, requesting anonymity as the talks are confidential.
Recoil did not immediately respond to a Reuters request for comment.
Backers of private oil producers across North America have been looking to capitalize on a recent run-up in crude prices, buoyed by economies reopening as vaccinations gather pace.U.S. crude was trading around $74 per barrel on Wednesday, up 51% from the end of last year.
In the Eagle Ford region, which neighbors the prolific Permian shale play, multiple companies are currently pursuing divestitures, Affiliate Agentur according to multiple people involved in the bidding processes.
“We haven’t seen a ton of announced EF (Eagle Ford) deals yet but expect to see activity pick up given the number of processes being run in the play,” said Andrew Dittmar, senior M&A analyst at Enverus.
“As one of the most developed shale plays with substantial existing production, the EF stands to particularly benefit from rising commodity prices both for oil and gas production.”
EP Energy, another Eagle Ford focused driller, has attracted interest from multiple private equity firms for its assets in the region, Reuters reported earlier this month.(Reporting by Shariq Khan and Jessica Resnick-Ault; Editing by Sriraj Kalluvila)