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Citadel weighs buying US oil production assets amid geopolitical risk

The discussions include Citadel bidding for WildFire Energy, an Eagle Ford shale producer that Magnolia Oil & Gas bought for $4.06 billion in July.

Reported · Written up by our desk · Hedge Funds

Citadel is exploring opportunities to acquire US oil production assets, according to a Reuters report citing unnamed people familiar with the matter. The hedge fund, founded by Ken Griffin, is also understood to be in talks with private equity owners of exploration and production companies, with an emphasis on oil-heavy assets.

Citadel’s interest includes WildFire Energy, an Eagle Ford shale producer in South Texas that was being sold by private equity owners Warburg Pincus and Kayne Anderson. Four people familiar with the process said Citadel was among the bidders, but Magnolia Oil & Gas ultimately won the auction in July, agreeing to acquire WildFire for $4.06 billion.

The potential expansion comes as crude markets remain sensitive to geopolitical disruption in the Middle East. According to the sources, US oil and gas production can reach markets without relying on vulnerable transit routes such as the Strait of Hormuz.

For hedge funds and commodity trading firms, Reuters said physical production can complement derivatives trading by providing exposure to physical barrels that may rise in value when supply disruptions push oil prices higher. Citadel is already active across oil, natural gas, electricity, and other commodity markets, and the firm and Warburg Pincus declined to comment, while Kayne Anderson did not respond to requests for comment.

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