Oklahoma E&P Canvas Energy Explores Midcon Sale, Sources Say

Privately held Oklahoma E&P Canvas Energy is exploring a sale of its Anadarko Basin assets, sources told Hart Energy.

The move comes as several recent deals have emerged in the once dormant Midcontinent market.

Canvas Energy has retained investment bank Evercore to market the Midcontinent assets to potential buyers, according to sources familiar with the matter, noting that the process is in early stages and that a deal is not guaranteed.

Canvas, which rebranded from Chaparral Energy in 2022, held 223,000 net acres in the Anadarko Basin as of second-quarter 2024, according to investor materials on the company’s website.

In the presentation, Canvas touted its optionality to develop both crude oil and natural gas wells, depending on commodity prices. Canvas’ production averaged around 24,000 boe/d (27% oil, 58% liquids) in the second quarter of last year.

Canvas’ presentation said its proved developed producing PV-10 was worth $659 million, based on Securities and Exchange Commission pricing rules. Proven undeveloped PV-10 reserves were valued at $106 million, according to the presentation, which was removed from the company’s website but recovered by Hart Energy.

Oklahoma City-based Canvas’ investors include Millstreet Capital Management, Amzak Capital Management and Avenue Capital Group.

Hart Energy reached out to Canvas, Evercore and Canvas’ backers for information. Only Avenue Capital Group responded to say the firm didn’t want to comment.

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Since rebranding in 2022, Canvas’ core development has occurred in Alfalfa, Canadian, Kingfisher, Major and Woods counties, Oklahoma, according to Rextag data.

Founded in 1988, Canvas’ predecessor, Chaparral Energy, focused on developing the Anadarko Basin’s oil and liquids window.

Chaparral filed for Chapter 11 bankruptcy in August 2020 along with other upstream producers hit by the COVID-19 pandemic.

Chaparral emerged from bankruptcy as a privately held company in October 2020. It had previously filed for bankruptcy protections in 2016 after oil prices collapsed.

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Midcon M&A

Canvas’ decision to explore a potential sale comes as M&A experts say buyer interest is increasing in the Midcontinent.

ConocoPhillips is shopping Anadarko Basin assets it picked up through its blockbuster $22.5 billion acquisition of Marathon Oil last year, Hart Energy reported April 2.

However, Anadarko Basin drilling activity has declined significantly over the past decade, driven by low natural gas prices and exits by several major operators.

As natural gas prices rise and demand grows, buyers are considering Midcontinent M&A once again.

Privately held Validus Energy has been an active consolidator in the Midcontinent. In the past year, Validus has spent around $4 billion on Anadarko acquisitions, including transactions with Citizen Energy, 89 Energy and Continental Resources.

Validus closed an $850 million acquisition from 89 Energy in late March.

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