Citadel, a hedge fund giant, is reportedly looking to purchase US assets for shale production.

Citadel has been in talks with a?U.S. Five people with knowledge of the matter have confirmed that Citadel is considering expanding its?business into?physical assets.

Four sources claim that Ken Griffin's firm was one of the bidders on WildFire Energy. The company was sold earlier this year by Warburg Pincus & Kayne Anderson. Magnolia Oil & Gas won the auction and agreed to purchase the Eagle Ford shale operator in South Texas, for $4.06 Billion.

Sources said Citadel had engaged in a number of discussions with private equity firms who own exploration and production companies about buying oil-weighted properties. The sources asked to remain anonymous because it is a private matter.

Oil and gas assets in the United States have attracted increased buyer interest as crude prices rise and tensions in?Middle East disrupt the global energy market. This is because these assets can deliver oil to customers without having to pass through chokepoints like the Strait of Hormuz.

Although rare, hedge funds and other trading houses who have traded commodities on exchanges are also expanding their ownership of physical assets. This is often done to complement their trading businesses.

Citadel and Warburg declined to comment. Kayne Anderson declined to comment on a request for comment.

PLATFORM ASSET

Citadel has already established itself as a major commodity trader, including oil, natural gases, power, and other commodities.

Physical production assets are a good hedge for firms who trade commodities via futures and derivatives. This is because physical barrels tend to increase in value during the same market conditions that can cause losses on paper trading positions, such as disruptions of supply or geopolitical events.

The oil prices have remained high this year. U.S. crude reached a six-week peak on Thursday, amid an escalating Middle East conflict. This has been a boon to oil producers. Many of them have recorded their best earnings for years in the second quarter. Executives in the oil industry have warned that it could take several months for tight supplies to be eased, even if the hostilities ended immediately.

Other major commodity traders are also expanding into oil production, generating high returns. Vitol agreed to sell its VTX Energy 'Partners U.S. shale project in July, and Gunvor reported last week they were in negotiations to purchase assets in the?Haynesville shale area for over $1 billion.

Citadel would benefit from purchasing a platform like WildFire, as it offers not only producing assets, but also a management team that is already in place to manage them and future acquisitions.

This would be similar to the strategy that Citadel adopted when it entered into the U.S. natural gas production space last year. Last year, Citadel entered the natural gas production sector. Citadel purchased Paloma Natural Gas in February 2025 from EnCap Investments, renamed the company Apex Natural Gas and acquired additional assets from Comstock Resources, Azul Resources which is backed Carnelian Energy Capital.

(source: Reuters)