Sources: Encino's owner is considering a $7 billion sale and the IPO of an energy producer.
CPP Investments, a Canadian pension fund, is considering strategic options for Encino Acquisition Partners, such as a sale or an initial public offering that could value Encino Acquisition Partners at up to $7 billion including debt.
The energy industry has been anticipating a boost from President Donald Trump's administration, which has outlined an economic agenda that aims to increase fossil-fuel production by speeding up the approval process for energy projects, and rolling back environmental protections.
The booming demand for data centers and artificial intelligence is likely to increase the demand for power in the United States, which will in turn lead to a rise in the demand for natural gas for power generation.
The sources, who requested anonymity because the matter was confidential, said that Encino in Houston, Texas, which is owned by CPP to a large extent, is currently evaluating its options. It is also working on selecting the investment banks leading the review process. The sources expect a deal to be completed later this year. They cautioned that Encino's plans depend on market conditions.
Encino and CPP declined comment.
Encino is a privately-owned oil and gas exploration company in Ohio.
In 2017, it was established as a joint venture to acquire and develop oil and gas assets in the United States. CPP Investments agreed to invest $1 billion into the venture while Encino Energy agreed that it would operate the assets acquired.
Encino Acquisition Partners purchased Chesapeake Energy Ohio assets for $2.4 billion a year later. CPP Investments announced in April 2024 that it would invest $300 million more in the business in order to accelerate the development and growth of the assets.
Infinity Natural Resources raised an initial public offering of $265 million in January. The company's stock soared on its debut in New York. One source said that the positive reaction of the stock market to the natural-gas producer's IPO helped Encino accelerate its decision to explore options. (Reporting and editing by Anirban Shumaker and Lisa Shumaker in New York. Reporting by David French, New York)
(source: Reuters)
