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NGP eyes $7bn from Permian basin sales

TOP STORY: Energy-focused private equity buyout firm NGP Energy Capital Management is considering the potential sale of two Permian basin-focused oil producers, which could realise combined proceeds in excess of $7 billion, according to a report by Reuters.

Energy-focused private equity buyout firm NGP Energy Capital Management is considering the potential sale of two Permian basin-focused oil producers, which could realise combined proceeds in excess of $7 billion, according to a report by Reuters.

The report cites unnamed sources as revealing that the Dallas-based firm is working with investment banks on an auction process, which is expected to begin in the coming weeks, to offload both Tap Rock Resources and Hibernia Resources.

With OPEC members voting on Sunday to cut oil production by about 1.16 million barrels a day, US crude has jumped to $81 a barrel boosting the valuations of oil producers.

The sources say that Tap Rock, which is one of the largest private equity-controlled oil producers in the Permian basin, could fetch NGP around $5 billion, while Hibernia, which operates in the Midland part of the Permian basin in Texas, could be worth upwards of $2 billion.

NGP seeded Tap Rock with capital in 2016 and backed Hibernia with $250 million of equity in 2017.

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