Loews Corp. (NYSE: L), the holding company run by New York’s Tisch family, is weighing a divestiture of HighMount Exploration & Production LLC seven years after it purchased the business in a bet on natural gas prices, according to Bloomberg May 23

Loews is considering alternatives for HighMount, “including a potential sale of the business,” according to a statement May 23, and “may incur a loss as a result of this process.”

Natural gas surged the year after Loews purchased HighMount in 2007 for about $4 billion. Since then, new drilling technologies have boosted supply and driven down prices. U.S. output from shale formations increased by more than 50-fold from 1990 to 2013, according to the Energy Information Administration.

As a result, HighMount has sought to shift to oil exploration in recent years. The company posted a loss of $20 million in the three months ended March 31, after an unprofitable 2013 and 2012. Loews said in its first-quarter report that HighMount’s efforts to drill for oil still hadn’t yielded sufficient quantities.

The explorer’s effort to pivot has been frustrated as deeper-pocketed rivals including Chevron Corp. (NYSE: CVX) and Apache Corp. (NYSE: APA) expanded their holdings in crude-rich geologic formations such as the Permian Basin in Texas and New Mexico, driving up acquisition costs for the entire industry.

HighMount had total assets of $1.1 billion, excluding deferred tax assets, at the end of March, Loews said May 23. Long-term debt and other liabilities were about $592 million.

Drilling rights span 1.1 million acres (445,000 hectares) of Texas and Oklahoma. These acres include parts of the Wolfcamp and Woodford Shale layers that are attracting interest from international energy companies including Exxon Mobil Corp. (NYSE: XOM), the world’s largest oil producer by market value. In addition to its drilling leases, HighMount owns about 3,200 miles (5,100 kilometers) of gas and oil pipelines.

Loews hired Barclays Plc and RBC Richardson Barr, a division of RBC Capital Markets, to lead the review, according to Mary Skafidas, a spokeswoman for Loews.

Owning HighMount has been a costly episode for CEO James Tisch, who took over Loews in 1998 and has reshaped the business his father and uncle built. In 2008, he sold watchmaker Bulova Corp. and spun off cigarette maker Lorillard Inc. (NYSE: LO) Loews' operations today include a a chain of luxury hotels and majority stakes in commercial insurer CNA Financial Corp., a pipeline business and an offshore oil drilling contractor.

Tisch joins investors including Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc. (NYSE: BRK-A, NYSE: BRK-B), who have been caught off-guard by the revolution in drilling technology. While natural gas prices have rebounded in the last year to more than $4 per million British thermal units, they’re still less than a third of their 2008 peak.

Buffett, who played bridge with Tisch’s late father Laurence, wrote down a $2 billion bond investment in Energy Future Holdings Corp. The Texas power company declared bankruptcy this year after the decline in natural gas prices made its power plants less competitive. Buffett has called the wager a “major unforced error.”

Loews rose 0.1% to $43 at 11:27 a.m. in New York. The company has fallen 11% this year, compared with the 2.7% gain in the Standard & Poor’s 500 Index.

HighMount is led by Steve Hinchman, who formerly was an executive vice president at Marathon Oil Corp. (NYSE: MRO) In August, he brought ex-Chesapeake Energy Corp. (NYSE: CHK) vice president Steve Turk aboard as COO.