Carnelian Energy Capital is seeking to divest six of its North American oil and gas production investments, according to multiple sources familiar with the matter, Reuters reported. The simultaneous sale effort represents an unusual strategy in the private equity sector, where firms typically stagger asset sales to maintain buyer interest.
The portfolio companies targeted for sale include Canadian oil producer Hawthorne Energy, Veritas Permian III, Azul Resources, Grit Oil and Gas II, Zavanna Energy, and Parallax Energy. Combined, these assets represent the majority of Carnelian’s oil and gas producing companies and approximately 40 percent of its total investment portfolio.
Transaction Status
Carnelian has entered advanced sale discussions for Hawthorne Energy and Veritas Permian III, according to six sources. The firm co-owns Veritas Permian III with Old Ironsides Energy, which is also divesting its stake. Azul Resources has agreed to sell certain Haynesville assets to Apex Natural Gas, a company backed by hedge fund Citadel, Bloomberg reported.
Grit Oil and Gas II, which operates in South Texas’ Eagle Ford formation, has been marketed for sale in recent weeks. The firm plans to market Zavanna Energy and Parallax Energy in early 2026, with investment bank Moelis hired to handle the Zavanna transaction. Zavanna focuses on production in North Dakota’s Bakken basin.
Asset Values and Investment Timeline
The assets under consideration range in value from several hundred million dollars to more than $1 billion, sources said. Production figures are not disclosed, though the companies are considered small by global industry standards.
The investment dates vary significantly. Grit Oil and Gas II dates to 2019, making it one of Carnelian’s longest-held positions. Carnelian invested in Hawthorne Energy in 2020, Azul Resources in 2021, and Veritas Permian III in 2022. Zavanna Energy and Parallax Energy received initial commitments from Carnelian in 2024.
Market Context
The sale effort comes as private equity firms face increasing pressure from investors to accelerate exits and return capital. Carnelian’s strategy has drawn attention because buyout firms typically space out sales to avoid saturating buyer demand.
The current U.S. energy deals market remains subdued compared to recent years. Uncertainty surrounding crude oil prices has led publicly traded energy producers to prioritize cost reduction over acquisition-driven growth. However, natural gas assets are attracting heightened interest due to growing demand from artificial intelligence infrastructure.
Sources noted that Carnelian holds a mix of long-term investments at a time when quality assets with development inventory are scarce in the market.
Firm Background
Houston-based Carnelian Energy Capital is a mid-market energy investor led by Tomas Ackerman and Daniel Goodman. The firm closed its $975 million Carnelian Energy Capital V fund in February 2024 and announced a $600 million fund dedicated to Canadian energy investments in October 2024.
According to the Florida State Board of Administration, Carnelian’s second, third, and fourth funds delivered net internal rates of return between 17.2 percent and 20.8 percent as of the end of 2024.
Sources cautioned that completion of all planned sales is not guaranteed. Carnelian declined to comment on the matter.
