Canadian pension fund CPP Investments is exploring strategic options, including a potential sale or initial public offering (IPO), for its majority-owned U.S. oil and natural gas producer, Encino Acquisition Partners. This move comes amid a favorable outlook for the energy sector driven by policies supporting fossil fuel production and surging demand for power.
Canadian pension fund CPP Investments is considering strategic options for Encino Acquisition Partners, a U.S. oil and natural gas producer, including a potential sale or initial public offering ( IPO ). This could value Encino at as much as $7 billion, including debt. Sources familiar with the matter say these deliberations are taking place as the energy sector anticipates favorable trends under the administration of U.S. President Donald Trump.
The Trump administration has implemented policies aimed at boosting fossil fuel production, such as expediting energy project permits and rolling back environmental regulations. Furthermore, the surge in demand for artificial intelligence and data centers is projected to significantly increase U.S. power consumption, which in turn is expected to drive a greater need for natural gas to fuel power generation.Encino, headquartered in Houston, Texas, and majority-owned by CPP, is currently in the early stages of evaluating these options. The company is working to select investment banks to lead the review process. Sources anticipate a deal could be finalized later this year, but emphasize that Encino's plans are contingent on market conditions. Encino operates in Ohio's Utica shale basin and is one of the largest privately held oil and gas exploration and production companies in the United States. It was established in 2017 as a partnership to acquire and develop U.S. oil and gas assets. Under the agreement, CPP Investments contributed $1 billion to the venture, while oil and gas producer Encino Energy agreed to manage the acquired assets. A year later, Encino Acquisition Partners purchased Chesapeake Energy's Ohio assets for $2 billion. CPP Investments announced in April 2024 that it would invest an additional $300 million in the business to expedite the development of its assets.The positive market reception to Infinity Natural Resources' IPO in January, where the company raised $265 million and its shares experienced a significant surge upon their debut on the New York Stock Exchange, is believed to have influenced Encino's decision to explore its strategic options. Sources indicate that the successful IPO of Infinity Natural Resources, another natural gas producer, provided a compelling example of the favorable market conditions for energy companies in the current environment.
ENERGY IPO SALES OIL & GAS INVESTMENTS
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