Texas Billionaire Timothy Dunn Backed US Oil & Gas Player Explores $10B Sale

CrownRock is reportedly in the early stages of preparing for a potential sale, with insiders indicating that the company's valuation could surpass $10 billion, including its outstanding debt. 

This prospective deal, slated for early 2024, could mark a significant milestone in the U.S. oil and gas industry, as it may be the largest transaction involving an oil and gas producer in the past three years.

Most of CrownRock's ownership is attributed to buyout firms, with Lime Rock Partners taking a 60% stake when it played a pivotal role in its inception in 2007.

CrownRock is helmed by Timothy Dunn, who, through his family's CrownQuest Operating, merged his prior oil and gas assets into the partnership with Lime Rock.

The privately held firm has initiated discussions with investment banks to secure advisers for overseeing the sale process, Reuters reported.

Notable oil industry giants like Exxon Mobil Corp XOM and Chevron Corp CVX are expected to be approached to gauge their interest in the potential acquisition of CrownRock.

If this sale were to materialize, it could potentially become the most significant transaction in the U.S. oil and gas sector since ConocoPhillips' COP all-stock acquisition of Concho Resources in 2020, which amounted to $13.3 billion, encompassing debt.

CrownRock's decision to explore a sale is underpinned by the recent upswing in oil prices, driven by a tightening supply outlook and investor confidence in sustained energy demand within major economies. Furthermore, it underscores the high demand for prime positions in the prosperous Permian basin, the largest oilfield in the United States, where CrownRock operates. 

The company possesses approximately 86,000 net acres in the northern part of the Midland basin, a component of the Permian in Texas. Intense competition among energy firms for valuable acreage in the region has increased merger and acquisition activity.