In the heart of the Permian basin, where fortunes have been made and lost in the pursuit of black gold, Endeavor Energy Partners stands as a testament to the grit and determination of its founder, Autry Stephens. Now, after almost 45 years of shaping the company into the largest privately-held oil and gas producer in the Permian, Stephens is contemplating a sale that could value Endeavor between $25 billion and $30 billion, according to sources familiar with the matter.
Autry Stephens, an 85-year-old Texas wildcatter, has seen the industry evolve over decades. From the unassuming beginnings of his company, which he founded in the late 1970s, Endeavor has grown to span 350,000 net acres in the Midland portion of the Permian basin, the most lucrative oil and gas region in the United States.
The decision to explore a sale is rooted in Stephens’ desire to shape the destiny of his life’s work while he is still at the helm. Having considered offers in the past, he now wishes to settle the company’s future rather than leave it to his estate to decide posthumously.
JPMorgan Chase bankers have been enlisted to prepare for the potential sale, with the launch of the process expected in the first quarter of 2024. The move comes amid a wave of mega deals sweeping the sector, with companies like Exxon Mobil and Chevron recently sealing multibillion-dollar agreements to expand their presence in the Permian.
The universe of potential buyers for a company of Endeavor’s magnitude is limited, but the recent consolidation trend in the industry suggests a growing appetite among the few. Exxon Mobil, familiar with Endeavor’s operations from a past collaboration, and Chevron, which recently closed a $53 billion deal, are potential contenders. ConocoPhillips, having completed a $2.7 billion deal in October, may also join the fray.
Intriguingly, these energy giants are employing their stocks as currency for acquisitions, leaving them with the financial firepower to pursue a bid for Endeavor. The consolidation wave is driven by a quest for scale and prime acreage, and Endeavor’s extensive operations make it an attractive asset in the eyes of potential suitors.
Endeavor’s unique success story is attributed to Stephens’ unconventional approach. To lower production costs, he established and utilized his own fracking, construction, trucking, and other services companies. This vertically integrated model allowed Endeavor to thrive even in the face of industry challenges, leading to a 25% increase in production to 331,000 barrels of oil equivalent in the second quarter of 2023, as reported by Fitch Ratings.
As the oil and gas industry undergoes transformative changes, the potential sale of Endeavor Energy Partners marks a pivotal moment in the legacy of Autry Stephens. Whether it becomes the next blockbuster deal in the Permian or an opportunity for Endeavor to continue thriving independently, only time will tell. The eyes of the industry are now fixed on the Texan wildcatter’s decision to part ways with the crown jewel he built from the ground up.
(Source: Reuters | Bloomberg | Seeking Alpha)
