Oil producer Mesquite eyes sale of certain Eagle Ford assets in US

Oil producer Mesquite Energy is reportedly looking to divest its Catarina Ranch assets located in the Eagle Ford region of South Texas.

Reuters reported that the assets cover a total area of more than 100,000 acres, citing three people familiar with the matter.

Mesquite is expected to commence sale process for its Catarina Ranch assets in next month or later, the report added.

Mesquite Energy is the rebranded named of Sanchez Energy, which emerged from a Chapter 11 bankruptcy protection in 2020. With the financial restructuring, the firm could substantially eliminate its debt of $2.3bn.

Although a final decision on assets sale is due to be made, Mesquite may also retain these assets.

Several oil and gas players have previously divested their Eagle Ford operations in a bid to concentrate on the profitable assets in neighbouring Permian basin.

In March 2021, Ovintiv agreed to sell its Eagle Ford assets to Validus Energy for $880m. These assets included approximately 45,500 net acres in the counties of Karnes, Wilson and Atascosa in southern Texas.

In a similar move earlier this year, US shale gas producer Chesapeake Energy reportedly said it is mulling the sale of its oil-producing assets in southern Texas.

As part of this plan, which is expected to yield returns of $2bn, the company had engaged two banks. These assets span more than 220,000 acres in the Eagle Ford shale basin.