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(Bloomberg) – Repsol SA is contemplating a reverse merger of its upstream unit with potential companions together with U.S. power producer APA Corp., folks with data of the matter stated, because it seeks methods to checklist the enterprise in New York.
Repsol’s Pikka oil undertaking in Alaska, a key progress asset for the corporate’s upstream portfolio.
The Spanish oil and gasoline firm has held exploratory discussions with APA, previously generally known as Apache Corp., about the potential for a deal, in response to the folks. It has additionally held preliminary talks with different potential merger companions for the enterprise, they stated.
Any deal may assist Repsol bulk up the portfolio of its upstream enterprise and supply it a quicker path to changing into publicly traded. Shares of APA have gained about 5% in New York buying and selling this yr, giving the corporate a market worth of roughly $8.6 billion.
Repsol agreed in 2022 to promote a 25% stake within the upstream division to personal fairness agency EIG International Power Companions LLC in a deal valuing the enterprise at $19 billion together with debt. The transaction was geared toward serving to the unit additional develop within the US, whereas additionally elevating funds for Repsol to spend money on low-carbon actions.
Executives have stated they’re getting ready the upstream unit for a possible “liquidity occasion,” reminiscent of a public itemizing, in 2026. Repsol Chief Government Officer Josu Jon Imaz instructed analysts final month that firm is contemplating choices together with an IPO of the enterprise, a reverse merger with a U.S.-listed group or the introduction of a brand new personal investor.
Deliberations are ongoing and there’s no certainty they’ll result in a transaction, the folks stated, asking to not be recognized as a result of the data is personal. Repsol continues to check a wide range of choices for the enterprise and it might nonetheless go for an IPO or stake sale, the folks stated.
Representatives for APA, Repsol and EIG declined to remark.
Repsol’s upstream division produced 551,000 boed within the third quarter. It operates in nations together with Brazil, the U.S. and Mexico. It’s been working to start out up the primary section of the Pikka undertaking in Alaska, one of many largest U.S. fields.
Houston-based APA will get most of its company-wide manufacturing from the U.S. — primarily via the Permian Basin and Gulf of Mexico — whereas its worldwide portfolio is led by pure gasoline progress. Oil accounts for 51% of APA’s whole output, with a 3rd coming from pure gasoline and the remaining from pure gasoline liquids.
The corporate is one among many operators which have been slashing spending and chopping employees to realize efficiencies as the very best spots within the Permian — the world’s most efficient shale patch — get drilled up. Oil operators within the U.S. have additionally launched into a consolidation wave in recent times to realize scale and harvest depleting sources within the shale fields.
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