Global commodities trader Vitol is exploring a sale of its VTX Energy Partners business, in a deal that could value the U.S. shale oil and gas producer at as much as $3 billion, including debt, people familiar with the matter said.

The move aims to capitalize on the fact that the VTX oil and gas business is one of the few remaining privately-owned operators of scale in the Permian Basin after the last two years' run of dealmaking in the top U.S. oilfield resulted in many unlisted energy producers being scooped up by listed peers seeking to boost their scale.

This scarcity value may help Vitol secure a bumper payout on its bet on VTX, having pledged $1 billion in 2022 to establish the company and fund its management team, which had previously built and sold a number of privately-owned oil and gas producers, according to the company's website.

Vitol is working with investment bankers at Jefferies to solicit potential buyer interest in VTX's assets, which lie in the Permian Basin's southern Delaware region, the sources said, requesting anonymity as the discussions are confidential.

The deliberations are at an early stage, the sources said, cautioning that a deal is not guaranteed and Vitol could ultimately choose to keep the business.

Vitol and Jefferies did not immediately respond to requests for comment.

VTX produces around 46,000 boe per day from about 46,000 net acres (186 sq km) across two Texas counties, according to its website.

The company also owns a water treatment business, which is part of the sale effort, per two of the sources.

VTX is Vitol's second U.S. shale venture, having launched Vencer Energy in July 2020 to scoop up assets at depressed valuations at the height of the COVID-19 pandemic, when global commodity prices plunged due to a steep fall in demand.

In 2023, Vitol sold Vencer to Civitas Resources in a deal worth $2.1 billion. Last year, VTX sold its surface acres to oil and gas land management company LandBridge for $245 million.

Among recent deals involving private Permian producers selling to publicly-listed peers were Double Eagle's $4.1 billion agreed purchase by Diamondback Energy and Coterra Energy's acquisitions of Franklin Mountain Energy and Avant Natural Resources for a combined $3.95 billion.

Comments