Nov. 16 (Bloomberg) -- The family that owns Yates Petroleum Corp., one of the largest closely held U.S. oil and gas producers, may opt not to sell after getting lower-than-expected bids, said three people with knowledge of the matter.
While Yates Petroleum’s board continues to evaluate the offers, the disappointing bids earlier this month mean it’s unlikely to be able to complete a sale of the Artesia, New Mexico-based company by the end of the year, two of the people said, speaking on condition of anonymity because the talks are private.
The family had been seeking a sale by year-end in order to avoid U.S. tax-law changes that take effect Jan. 1 and would increase the family’s tax bill in a transaction, the people said.
Yates hired JPMorgan Chase & Co. earlier this year to solicit bids from among the world’s largest oil producers, in a sale that may have generated billions of dollars, the people said. Occidental Petroleum Corp. and Concho Resources Inc. are among the oil companies that reviewed Yates’ books during the sale effort, two of the people said.
James Lucas, a spokesman for Yates, declined to comment, as did Tasha Pelio of JPMorgan. Representatives of Occidental and Concho did not return calls seeking comment.
Wildcatter Martin Yates Jr. pioneered oil and gas exploration in New Mexico in the 1920s, when, according to family lore, his wife’s intuition directed him to the location of his first successful well. His grandchildren are now involved in the business.
Oil & Gas Financial Journal estimated in 2009 that Yates was the fourth-largest private oil and natural-gas company in the U.S., producing the equivalent of 8.77 million barrels of oil.
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