Shale producer Ovintiv Inc is seeking to hire an investment bank to consider alternatives for its acreage in the Uinta basin of Utah, which is looking to capitalize on a surge in energy prices to cut debt, according to three sources familiar with the matter.
Ovintiv, one of the largest producers in the Uinta basin, would have options, according to sources, as a whole- or partial sale might fetch $1 billion.
There has not been a final decision on the assets, and Ovintiv may still retain them, according to sources. They requested anonymity as discussions remain confidential.
A spokesperson for Ovintiv said the company does not comment on a potential or alleged acquisition or divestiture activity.
If the sale is successful, it would be the second opportunity for a major player in the oil-rich region to buy EP Energy's position to KKR, supported by Crescent Energy last week.
On a previous suggestion to sell the holdings to EnCap-backed XCL Resources, the EP already had some assets in the region, the issue has been awry.
Producers of publicly traded shale in the United States are attempting to take advantage of crude oil approaching $100 per barrel, selling off operations that are no longer a factor in their development plans and using the funds to clean up their balance sheets or reward investors.
Ovintiv, which in the past operated as EnCana and was once Canada's largest company, was moved to the United States in January 2020 in hopes of attracting more investors following years of problems in the Canadian energy industry.
The coronavirus epidemic was a theme for the company's expansion, but it was weakened by another environmentalist. A year later, Ovintiv was under greater pressure from an activist investor who is urging changes in its budget and non-core asset sales.
In March 2021, Ovintiv settled with activist fund Kimmeridge, and while oil prices reached a big profit, it sold its assets in the Eagle Ford and Duvernay shale plays.
Ovintiv created a target for its $4.8 billion net debt by the end of 2022, owing to the proceeds raised from those sales.
The company, which makes its holdings in the Uinta basin non-core, has reduced its spending on them in recent years, converting its budget to more profitable areas in the Anadarko and Permian basins.
As part of its 2020 annual report, Ovintiv's assets date back to around 207,000 net acres in central Utah.
On Thursday, Ovintiv is planning to release its fourth-quarter results.