New York – Citadel, the hedge fund and commodities trader founded by Ken Griffin, is actively seeking to buy U.S. oil production assets, five sources familiar with the matter said. The firm has been in discussions with private‑equity owners of exploration and production companies about acquiring oil‑weighted assets.
Citadel was among the bidders for WildFire Energy, a shale operator in the Eagle Ford basin of South Texas. The auction, originally launched by buyout firms Warburg Pincus and Kayne Anderson, was ultimately won by Magnolia Oil & Gas, which agreed to purchase WildFire for $4.06 billion.
Why hedge funds are moving into physical production
As crude prices spike and geopolitical tensions in the Middle East disrupt global energy markets, U.S. oil and natural‑gas assets have attracted heightened buyer interest. Domestic production can deliver oil without relying on chokepoints such as the Strait of Hormuz, offering a strategic hedge against supply disruptions.
While traditionally focused on trading commodities on exchanges, firms like Citadel are expanding into ownership of physical assets to complement their trading businesses. Owning production facilities provides a natural hedge for financial firms that trade futures and derivatives, because the physical barrels they produce tend to rise in value under the same market conditions that can generate losses on paper positions.
Industry trends and recent deals
Oil prices have remained elevated this year, with U.S. crude reaching a six‑week high amid escalating Middle East tensions. The strong price environment has benefited producers, many of whom reported record earnings in the second quarter. Executives warn that tight supply could persist for months even if hostilities were to end.
Other major commodity traders are following a similar path. In July, Vitol agreed to sell its VTX Energy Partners U.S. shale venture, and Reuters reported that Gunvor is in talks to buy assets in the Haynesville shale for more than $1 billion.
Citadel’s previous foray into natural‑gas production
Citadel’s interest in physical production is not new. In February 2025 the firm entered the U.S. natural‑gas market by acquiring Paloma Natural Gas from EnCap Investments, rebranding it as Apex Natural Gas, and subsequently adding assets from Comstock Resources and Azul Resources, which is backed by Carnelian Energy Capital.
Acquiring a platform such as WildFire would give Citadel not only producing assets but also an experienced management team and a foothold for future acquisitions, mirroring its earlier strategy in natural‑gas.
Citadel and Warburg declined to comment on the reported talks, and Kayne Anderson did not respond to a request for comment.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
