Equity Ramping Up to Target Unconventional Plays Including the Permian
The past few quarters have seen a marked resurgence in activity and investment in unconventional oil and gas basins in the United States. So much so that discussions about decline curves and pipeline capacity have also resurfaced. Some industry watchers have said pipeline relief in key shale basins may not happen until 2020. Despite these challenges, smaller companies to well-known behemoths like Exxon Mobil Corp. and Chevron Corp. continue to flock to the Permian in particular due to its vast resources and reasonable operating costs.
With so many experienced industry players adding to the revived unconventional buzz, it’s no surprise to see private equity responding in kind.
This month Dallas-based Grey Rock Energy Partners held its first close of Grey Rock Energy Fund III, which was oversubscribed with $232.5 million in capital commitments. The firm typically acquires non-operated working interests in core unconventional basins, either by acquiring non-op directly from owners, or by providing joint-venture capital to operators.
Currently Grey Rock has interests in more than 2,000 wells in the Permian, Bakken, Eagle Ford, SCOOP and Haynesville plays. To date, it has more than $450 million of assets and committed capital.
“…With [our investors’] strong institutional backing, Grey Rock is well positioned to deliver healthy, risk-adjusted returns in an underserved area of the oil and gas market,” said managing director Matt Miller.
Separately, the management team of Denver-based E&P company FourPoint Energy has raised another fund of just over $800 million under LongPoint Minerals II LLC to buy mineral royalties in US oil and gas fields, according to The Denver Business Journal.
LongPoint Minerals II has raised $802 million from investors in in Colorado, Massachusetts, Oklahoma, Texas and Wyoming, according to a June 8 filing to the US Securities & Exchange Commission. The firm has not disclosed what the money will be used for just yet, but the company website states that the firm is actively pursuing the purchase of mineral interests in the Permian and Anadarko basins.
LongPoint Minerals is backed by the management team of FourPoint Energy, a private exploration and production company led by oil and gas veteran George Solich.
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