Dow Jones, citing people familiar with the matter, said the Madrid-based company has recently told investment bankers that it is prepared to spend between $5 billion and $10 billion for a US exploration and production company.
Its preference is for a company weighted more towards oil than gas, the news wire said. A Repsol spokesman declined to comment.
Repsol has its hand in a variety of unstable an unpredictable regions that carry high potential rewards along with substantial risk. It is among the most heavily exposed to frontier exploration areas like Morocco and Sierra Leone, according to a recent Bernstein Research report.
Repsol has seen its output disrupted by violence in Libya, and has had its South American unit YPF nationalised by Argentina’s government.
The Spanish company has slimmed down and shored up its core assets over the past year and is now poised to grow again, with hopes of gaining a piece of the US oil boom, which could provide a welcome dose of stability, Dow Jones said.
It has previously invested in such stable environments as Australia and Norway.
Among the possible US targets could be Bakken shale-oil players Whiting Petroleum and Kodiak Oil & Gas, which have recently explored sales and are around the size that might pique Repsol’s interest.
Whiting’s stock-market value is about $6.4 billion and Kodiak’s is in the ballpark of $3 billion.
Other larger players like Antero Resources and EP Energy – both of which are private equity backed – are pursuing initial public stock offerings and fit roughly with the budget Repsol has given bankers, Dow Jones said.
Financing for Repsol’s plans would likely become available by year’s end when the sale of most of company’s LNG business to Shell closes and brings around $4.4 billion in pre-tax revenue.
The Spanish oil major’s office in the Houston suburbs is its fastest growing, and the company has drilling interests in the Gulf of Mexico, and the US states of Oklahoma, Kansas and Alaska.
It has also secured rights to drill in a handful of exploration blocks in Canada.
Repsol would likely consolidate its North American operations within an acquired company, people familiar with the company’s thinking told Dow Jones.