Validus Energy Expands Presence in Oil and Gas Sector by Acquiring 89 Energy III

Validus Energy, a private American oil and gas company, recently announced an acquisition deal for its competitor 89 Energy III, valued at approximately $850 million, including debt. This acquisition significantly strengthens Validus Energy's position in the Anadarko Basin of Oklahoma, considerably boosting its production capacity and market influence.

Increased Production in the Anadarko Basin

According to sources, the deal with 89 Energy III will add over 25,000 barrels of oil equivalent per day to Validus Energy’s current production. This quantitative increase positions the company as one of the largest private players in the oil production market in the Midwest United States. 89 Energy III produces about 70% gas, as stated on its website, providing Validus with a more balanced resource portfolio.

History and Prospects of 89 Energy III

- 89 Energy III was formed through the merger of three Midwest oil and gas producers, initiated by private equity firm Kayne Anderson.  

- Announced in May 2021, the merger allowed 89 Energy III to consolidate its market position, becoming an attractive acquisition target amid rising oil prices in the subsequent years.  

Validus Energy’s Strategy in the Acquisition Market

1. Active in the Acquisition Market. Supported by institutional investors and its management team, Validus Energy is one of the most active players in ongoing acquisition waves in the Midwest.

2. History of Major Deals. Last year, the Denver-based company acquired competitor Citizen Energy for over $2 billion from Warburg Pincus. Previously, Validus also purchased certain assets in the same field from Continental Resources (CLR).

Insights from Kayne Anderson and Industry Prospects

Kayne Anderson, through the strategic merger in 2021, provided 89 Energy III with the opportunity to consolidate assets and increase market share. This proved favorable in the long term, as the firm became more prominent amid rising oil prices and heightened industry activity.

Responses from Deal Participants

At the time of writing, Validus and 89 Energy III have refrained from commenting on the prospects and details of the deal, and a representative from Kayne Anderson also declined to discuss it publicly.

The acquisition of 89 Energy III by Validus Energy demonstrates a strategic approach to strengthening market positions and seeking opportunities for production expansion. This deal is another step in the company's efforts to enhance its influence in a significant oil-producing region of the United States.