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Gas Producer Aethon Considers IPO at $10 Billion-Plus Valuation

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(Bloomberg) -- Aethon Energy Management, a closely held gas producer in Texas and Louisiana, is considering an initial public offering that could value the business at more than $10 billion, according to people familiar with the matter.

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Aethon is also considering other options including selling its assets in northern Louisiana, said the people, who declined to be named because the talks are private. Aethon is under no pressure to do a deal and no decisions have yet been made, the people said.

A representative for Aethon declined to comment.

Henry Hub gas prices are up almost 90% this year, increasing valuations for US gas producers, which are central to Europe’s ability to wean itself off Russian sources. Aethon is the most active driller in the Haynesville shale basin, which straddles East Texas and northern Louisiana, and is close to several liquefied natural gas export terminals along the Gulf Coast.

An IPO would provide public investors with a free-cash-flow producing gas business with growth opportunities that are less burdened by the pipeline constraints affecting rivals in other parts of the country, the people said.

Dallas-based Aethon was founded by oil and gas investor Albert Huddleston in 1990 and has managed $1.6 billion in assets for family and institutional investors since its inception, according to its website.

In 2015, the Huddleston family partnered with New York- and Dallas-based RedBird Capital Partners to help scale the business. In 2016, RedBird helped bring in Ontario Teachers’ Pension Plan to further increase the company’s capital availability and in 2019 Aethon completed the acquisition of QEP Resources.

A representative for RedBird declined to comment. Reuters reported in January that the Louisiana sale could be valued at around $6 billion.

(Updates with RedBird in seventh paragraph)

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