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U.S. shale producer Centennial launches Texas land sale

reuters.com · 09/24/2021 09:51
U.S. shale producer Centennial launches Texas land sale

By Shariq Khan

- U.S. shale oil producer Centennial Resource Development Inc CDEV is seeking buyers for properties covering about 6,000 net acres in the southern Delaware basin of Texas, according to the company managing the sale.

The assets, estimated to produce about 1,600 barrels of oil equivalent per day in October, could be valued at about $100 million in a sale, two sources familiar with the matter said.

Centennial has retained Dallas, Texas-based Ten Oaks Energy Advisors for the sale of the assets and bids are due on Oct. 15, according to a listing on Ten Oaks' website.

The sources requested anonymity as the sale plans were confidential. Centennial and Ten Oaks did not respond to requests for comment.

Founded by shale pioneer Mark Papa, Centennial joins a wave of U.S. shale producers looking to sell assets and capitalize on this year's strong rebound in oil prices from 2020's coronavirus-induced slump.

U.S. crude oil CLc1 was trading about $73.15 per barrel on Friday, up more than 50% this year.

The surge has given companies a chance to part with some of their assets and apply the proceeds to clean up their balance sheets and reward investors through dividends or share buybacks.

For Centennial, its priority is likely to cut leverage, one of the sources said. The company on June 30 had net long-term debt of more than $1 billion and liquidity of $446 million.

Among other companies looking to sell assets, rival Pioneer Natural Resources Co PXD also is searching for buyers of its Delaware basin assets, Reuters reported this month.

(Reporting by Shariq Khan; Editing by Edmund Blair)

((Shariq.Khan@thomsonreuters.com; Twitter: @shariqrtrs;))