Jan 23 (Reuters) – HighPeak Energy Inc, an
oil-focused exploration and production company operating in the
heart of the Permian basin, said on Monday it would explore
strategic options including possible sale of the company.
U.S. energy producers have enjoyed stellar returns in the
last two years, buoyed by higher oil prices stemming from the
economic rebound from the pandemic and disruption to supply
markets caused by Russia’s invasion of Ukraine.
Smaller producers – such as HighPeak – have struggled to
capture the same investor attention, and therefore valuation
increase, as larger rivals. This makes pursuing a merger to
bolster scale, or a sale to a bigger peer, an attractive option.
“The Board and I believe now is an opportune time to capture
the value we do not consider is presently reflected in our share
price,” said HighPeak Chief Executive Jack Hightower in the
HighPeak said it retained bankers from Credit Suisse and
Wells Fargo to assist with exploring such options.
The Fort Worth, Texas-based company said it has around
110,000 acres in the Midland portion of the Permian, an area
considered some of the most cost-effective for oil and gas
drilling in the United States.
HighPeak shares closed up 3.6% on Monday, prior to the
announcement, giving the company a market capitalization of $3.1
A sale would be viewed as a lucrative win for oil and gas
veteran Hightower and his team, with HighPeak taken public
through a 2020 merger with Pure Acquisition Corp, a special
purpose acquisition company (SPAC) affiliated with Hightower, at
a $1.58 billion enterprise value.
HighPeak Pure Acquisition LLC still owns 71.8% of HighPeak
Energy, according to Refinitiv Eikon data.
HighPeak joins other smaller U.S. producers, including
Ranger Oil Corp, Berry Corporation and Brigham
Minerals, which have put themselves for sale in recent months.
(Reporting by David French in New York; Editing by David