Chief Oil & Gas Explores Sale for More Than $3 Billion
(Reuters) — Chief Oil & Gas LLC, the Appalachian exploration and production company founded and controlled by Texas wildcatter Trevor Rees-Jones, is exploring a sale that could value it at more than $3 billion, including debt, people familiar with the matter said.
Rees-Jones launched Chief Oil & Gas in 1994, and it is now one of the largest privately-owned natural gas producers in the United States. His decision to attempt a sale now comes as energy prices have surged to multi-year highs, boosting corporate valuations in the industry.
Chief Oil & Gas has hired an investment bank to begin a sale process for the company, the sources said, requesting anonymity because the matter is confidential.
A Chief Oil & Gas spokesperson declined to comment.
Chief Oil & Gas operates in the Marcellus shale in northeastern Pennsylvania and has around 600,000 net acres, producing more than 1 billion cubic feet per day (bcf/d) of natural gas.
The company started out in the Barnett shale formation in Texas but sold its position there in two chunks, the first going to Devon Energy Corp in 2006 and the second to Quicksilver Resources in 2008, according to its website.
Chief sold it midstream assets to Crosstex Energy in 2006 before entered the Marcellus gas play in Appalachia, with its primary leasehold position in Pennsylvania, West Virginia and New York.
Another privately held Marcellus natural gas producer, Alta Resources, was sold in July to EQT Corp for $2.9 billion. Alta had around 300,000 net acres and produced 1 bcf/d of gas.
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