Exclusive: Endeavor Energy Sets Stage for Historic $30 Billion Sale Amidst Oil and Gas Reshuffle

Endeavor Energy Partners, the eminent figure in the heart of the Permian basin, is charting unprecedented territory with an exploration of a potential sale that could value the privately-held oil and gas giant between $25 billion and $30 billion, reveal sources deeply entrenched in the matter. This strategic move marks a pivotal moment almost 45 years since the visionary Texas oilman Autry Stephens laid the foundation for what evolved into Endeavor.

Sources close to the 85-year-old wildcatter disclosed that Stephens, an industry stalwart, is seizing the opportune moment to leverage a wave of mega-deals currently sweeping through the sector. Seeking to capitalize on this momentum, Stephens has reportedly engaged JPMorgan Chase (JPM.N) bankers to meticulously craft a sales process set to launch in the first quarter of 2024. The insiders, cautious about the uncertainty inherent in such transactions, insisted on anonymity due to the confidential nature of the ongoing deliberations.

Notably, Stephens, who had entertained offers for Endeavor in the past, including a reported consideration in 2018, is now driven by a profound desire to determine the company's destiny while he is at the helm, as opposed to leaving the decision to his estate posthumously. Endeavor and JPMorgan declined to provide comments on the matter.

Endeavor's operational footprint sprawls across 350,000 net acres (1,416 square kilometers) in the Midland segment of the Permian shale basin, spanning the vast landscapes of West Texas and eastern New Mexico. Despite the limited pool of potential buyers for a company of Endeavor's magnitude, the prevailing industry consolidation trend, aimed at scaling up operations and securing prime acreage, suggests a palpable appetite among the select few.

The recent blockbuster deals, such as Exxon Mobil's ($XOM) $60 billion acquisition of Pioneer Natural Resources ($PXD) and Chevron's ($CVX) $53 billion agreement to acquire Hess ($HES), underscore the industry's voracious appetite for transformative transactions. Notably, these acquirers are leveraging their stock as a financial instrument, leaving ample financial prowess to vie for Endeavor, even as they navigate the integration complexities of prior acquisitions.

Exxon Mobil's familiarity with Endeavor's operations, stemming from their collaboration in drilling endeavors until 2022, positions the energy titan as a formidable contender. Concurrently, ConocoPhillips ($COP) is not a bystander, having recently completed a $2.7 billion deal to acquire a 50% stake in the Surmont oil sands project in Canada. Reports also suggest their keen interest in CrownRock, currently majority-owned by private equity firm Lime Rock Partners and helmed by Texas wildcatter Timothy Dunn. The ongoing sale process for CrownRock is unfolding against this backdrop of industry dynamism and transformative transactions.

As Endeavor Energy embarks on this monumental exploration of its future, the industry watches with bated breath, anticipating the ripple effects that a potential $30 billion sale could impart on the oil and gas landscape.

Endeavor's Fate Hangs in the Balance as Industry Titans Keep Bid Plans Under Wraps

The looming question of whether energy behemoths Exxon, Chevron, or Conoco will throw their hat into the ring for the highly anticipated bid on Endeavor Energy remains shrouded in uncertainty. Both Exxon and Chevron have maintained a resolute silence on the matter, leaving industry insiders and market analysts eagerly speculating on the potential contenders.

Insiders privy to the matter have disclosed that Endeavor has experienced a flurry of interest from multiple parties in recent times, a factor instrumental in steering the decision to explore a sale. The covert negotiations and strategic considerations underpin a dynamic landscape where the energy sector's major players vie for supremacy and strategic advantage.

Autry Stephens, the visionary force behind Endeavor and a former appraisals engineer, rose to prominence through his appearances on the TV documentary series "Black Gold." His unconventional approach to growth involved acquiring overlooked acreage from competitors and pioneering cost-effective oil and gas extraction. Stephens ingeniously slashed production costs by establishing and leveraging his suite of fracking, construction, trucking, and other services companies.

Endeavor's robust performance is evident in its second-quarter production figures, boasting a 25% increase to 331,000 barrels of oil equivalent in 2023 compared to the same period in 2022, according to Fitch Ratings. The credit ratings agency foresees Endeavor generating approximately $1 billion in free cash flow in 2024, adding a compelling financial dimension to the unfolding narrative.

As the saga unfolds, the industry watches Autry Stephens's brainchild with a keen eye, contemplating the strategic maneuvers of potential bidders and the subsequent impact on the oil and gas landscape. Against this backdrop, the veil of uncertainty surrounding Endeavor's future adds an extra layer of intrigue to an industry already pulsating with transformative energy.

Reporting by David French and Anirban Sen in New York; Editing by Susan Fenton and Marguerita Choy

Our Standards: The Thomson Reuters Trust Principles.

Anirban Sen is the Editor in Charge for U.S. M&A at Reuters in New York, leading the coverage of the biggest deals. With a history degree from Jadavpur University and a post-graduate diploma in journalism from the Indian Institute of Journalism & New Media, Anirban brings a wealth of experience to his role. Contact: +1 (646) 705 9409.

Navigating Uncharted Waters in the Endeavor Saga

The denouement of Endeavor Energy's future unfolds against a backdrop of intrigue and speculation, as industry titans Exxon, Chevron, and Conoco keep their bid strategies veiled in secrecy. The deafening silence from Exxon and Chevron, coupled with a surge of interest from multiple undisclosed parties, underscores the high-stakes nature of the impending sale.

Autry Stephens, the maverick force propelling Endeavor's growth, has etched an unconventional path marked by strategic acquisitions and innovative cost-cutting measures. From the unloved acreage of competitors to a 25% surge in production, Endeavor's journey is emblematic of resilience and adaptability.

Fueled by Stephens' ingenuity, Endeavor stands at the precipice of change, with Fitch Ratings projecting a robust $1 billion in free cash flow for 2024. The impending sale beckons as a pivotal moment, where the energy landscape braces for transformative shifts, echoing recent mega-deals that reshaped the industry.

As Autry Stephens contemplates the destiny of his creation, industry observers and stakeholders are left on the edge of their seats, anticipating the seismic impact of a potential $30 billion sale on the oil and gas panorama. The Endeavor saga, rich with strategic maneuvers and financial implications, encapsulates the dynamism defining the energy sector's evolution.

In this unfolding narrative, the coming chapters promise revelations that will not only shape the fate of Endeavor Energy but reverberate across an industry poised for further disruption. As the energy landscape witnesses this pivotal moment, the denouement of Endeavor's tale beckons, offering a glimpse into the future of oil and gas, where change is the only constant.