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3 Minutes Read by, Reuters, 1 July – According to three people familiar with the situation, Mesquite Energy, which emerged from a protracted bankruptcy last year, is considering selling its Catarina Ranch properties in the Eagle Ford region of South Texas. According to Mesquite’s documents, divestiture of the assets, which span 100,000 acres, might be a precursor to a business sale, according to one of the sources. One of the persons said the firm, which was known as Sanchez Energy before its bankruptcy case, has yet to begin promoting Catarina Ranch, and that it could take another month or more to do so. As they focus on the most profitable regions, several oil producers have abandoned the Eagle Ford region to concentrate on the neighboring Permian basin. In March, Ovintiv Inc announced that it would sell its Eagle Ford holdings to Validus Energy for $880 million, while Reuters reported that privately held EP Energy is in the process of selling its assets. Chesapeake Energy Corp has also contemplated selling its regional assets. The persons emphasized that Mesquite might still elect to keep the Catarina Ranch assets, and that no final decision has been made. They spoke on the condition of anonymity because they were discussing confidential conversations. Reuters reached out to the Houston-based business, which has over 400,000 gross acres in South Texas, but it did not answer. Sanchez declared bankruptcy in August 2019, blaming low oil prices and a $2 billion debt incurred to expand through acquisitions for the company’s demise. The restructuring was marred by a severe inter-creditor dispute that continues despite the company’s exit from bankruptcy, as well as legal challenges with erstwhile partners Gavilan Resources and Occidental Petroleum Corp over contracts and other commitments. After emerging from bankruptcy in July 2020, Sanchez fired founder Tony Sanchez III as CEO and renamed the company Mesquite, dropping the name of the founding family. (Editing by Sriraj Kalluvila; reporting by Shariq Khan and Arathy S Nair in Bengaluru, Jessica Resnick-Ault in New York.)/nRead More

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