Private Equity Raises $250 million for Houston Upstream Company

Hibernia Energy III, LLC (“Hibernia III”) is pleased to announce it has raised $250 million of new equity commitments from NGP through NGP Natural Resources XII, L.P., the most recent NGP private equity fund focused on natural resources.


In addition to the commitment from NGP, Hibernia management and members will be committing in excess of $21 million in equity. Hibernia III’s strategy is to acquire and prudently develop unconventional oil and gas assets in Texas, leveraging its proprietary relationships and operational expertise. The Houston, Texas based Hibernia team previously acquired, operated and developed assets in Martin County, Texas within the Midland Basin, divesting assets to both Athlon Energy and Eagle Energy Trust.
Hibernia III is led by P. Embry Canterbury, Sean Keenan and John Blevins. Embry previously co-founded Hibernia Energy, LLC (“Hibernia I”) and Hibernia Energy II, LLC (“Hibernia II”), which originally partnered with NGP in July 2010 and May 2013. Embry will be joined by Sean Keenan and John Blevins who will act as CFO and COO, respectively. Additional management team members have served in various roles at Permian-focused companies as reservoir engineers, operations engineers, geologists and land and business development managers. Carl Carter III, who co-founded Hibernia I and II, will act as a Strategic Advisor to the Hibernia III team. The senior management team has developed a strong track record in the Permian and other unconventional basins throughout the United States and brings 60+ years of industry experience to Hibernia III.
P. Embry Canterbury, CEO of Hibernia III, commented, “After two successful partnerships in the Midland Basin, we are excited to again be working with NGP on building another oil and gas company focused on creating significant value for our partners and team members. We believe there are tremendous opportunities in today’s market to acquire, develop, and realize value in multiple, unconventional resources and we have assembled a best-in-class team to execute this strategy.”
“NGP is excited and grateful to partner with the Hibernia III team,” Patrick McWilliams, Partner at NGP, said. “We are thrilled to get to work again with such an energetic, disciplined and skilled company and could not be happier to continue the partnership. We have known Embry and the Hibernia III team for years, and respect the dynamic culture, top-tier operating capabilities, and deep local relationships that will make Hibernia III truly successful.”

Private equity firms Pine Brook and Riverstone to Invest Up to $600 Million in Permian

Admiral Permian Resources LLC has secured $600 million in financing from Pine Brook and Riverstone Holdings. Based in Midland, Texas, Admiral is an exploration and production company focused on acquiring and developing oil and gas properties in the Permian Basin.

NEW YORK and MIDLAND, Texas —March 9, 2017— Admiral Permian Resources, LLC, (“Admiral” or “the Company”) today announced it has secured a $600 million line of equity investment co-led by Pine Brook and Riverstone Holdings (“Riverstone”). Admiral is a newly-formed exploration and production (“E&P”) company focused on the acquisition and development of oil and gas properties in the Permian Basin.

Headquartered in Midland, Texas, Admiral is led by Chief Executive Officer Denzil West, former President and Chief Operating Officer of Reliance Energy, which sold the majority of its upstream assets to Concho Resources for $1.625 billion in October 2016. Mr. West is joined on the senior management team by co-founders Scott Parkison (Chief Commercial Officer), Jason Henderson (Chief Financial Officer), and Paul Colwell (Executive Vice President of Land). Admiral’s management team brings strong E&P and midstream industry experience from companies such as Occidental Petroleum, Concho Resources and Reliance Energy.

Admiral is capitalized to pursue opportunities across the entirety of the Permian Basin and will target a variety of transaction structures – asset and leasehold acquisitions, farm-in transactions and / or joint ventures with existing operators and landowners.

“We are honored to have world-class partners in Pine Brook and Riverstone,” said Mr. West. “This partnership, along with the technical and operational expertise of the Admiral team will provide an exceptional opportunity to take advantage of the current market environment and build a substantial oil & gas business in the Permian Basin.”

“We are extremely pleased to partner with the Admiral team,” said Rich Aube, Co-President of Pine Brook. “The Admiral team has an outstanding track record of success and will leverage its deep knowledge of the Permian Basin to identify and develop high quality properties. The Company has already built a healthy pipeline of prospects and is well situated to capitalize on the continued opportunities we see in the Permian Basin.”

“Our equity commitment to Admiral reflects the confidence that we have in Denzil and the entire Admiral team,” said Robert Tichio, Partner at Riverstone. “The leadership team at Admiral brings a wealth of technical knowledge in all aspects of the oil & gas business and we look forward to providing our capital and resources to help build this venture.”

About Pine Brook
Pine Brook is an investment firm that manages more than $6.0 billion of limited partner commitments that makes “business building” and other equity investments, primarily in energy and financial services businesses. Pine Brook’s team of investment professionals collectively has over 300 years of experience financing the growth of businesses with equity, working alongside talented entrepreneurs and experienced management teams to build businesses of scale without relying on acquisition leverage. 

About Riverstone
Riverstone is an energy and power-focused private investment firm founded in 2000 by David M. Leuschen and Pierre F. Lapeyre, Jr. with over $34 billion of capital raised. Riverstone conducts buyout and growth capital investments in the exploration & production, midstream, oilfield services, power, and renewable sectors of the energy industry. With offices in New York, London, Houston, and Mexico City, Riverstone has committed over $34 billion to more than 130 investments in North America, South America, Europe, Africa, Asia and Australia.

About Admiral Permian Resources
Admiral is a privately held exploration and production company focused on the acquisition and development of oil and gas properties in the Permian Basin. Admiral’s strategy is to use leading edge technologies to identify and develop oil rich resource properties. Its experienced management team has a proven track record in the oil and gas industry, predominantly in the Permian Basin, and is focused on maximizing value. Admiral is headquartered in Midland, Texas with offices in Austin, Texas.

Local energy-focused Private Equity firm leading $200M equity commitment

A local energy-focused private equity firm is pumping millions into a Midland oil and gas company.

Houston-based Post Oak Energy Capital LP is leading a $200 million equity commitment to Moriah Henry Partners LLC, according to a release. Two other firms, Midland-based Henry Energy LP and Moriah Energy Investments LLC, are co-investing with Post Oak.

Moriah Henry Partners aims to acquire and develop oil and gas in the Midland Basin, which is part of the Permian Basin, an area that’s seen a surge in deals in recent months. The company plans to use proceeds from the investment money to fund acquisitions in the core of the Midland Basin.

“We are delighted to partner with these industry veterans and leaders,” Post Oak Managing Director Frost Cochran said in the release. “Their deep experience in the Midland Basin will allow us to capitalize on numerous opportunities in one of the most economic basins in the country.”

Post Oak Energy Capital closed a $600 million fund in May. The fund was expected to be used for investments in North American oil and gas companies, oil field services and other similar projects.

U.S. Shale Sees Rebound In 2017 Mostly From The Permian

The oil industry invested more than $28 billion in buying up land in the Permian Basin in 2016, three times the amount spent in 2015, according to Reuters. That accounted for about 39 percent of all money spent on land acquisitions in the U.S. oil industry last year. Other shale basins do not even come close to that level of investment. By way of comparison, the Marcellus Shale attracted 10 percent of total land investment in 2016, while the once-hot Bakken only captured 3 percent.

Money has flooded into West Texas because the Permian has both below-ground and aboveground advantages over other shale basins. To start with, the Permian has a vast volume of oil waiting to be tapped. But more importantly, it is geologically favorable for drillers – multiple shale formations are stacked on top of each other, which means that a driller can sink a vertical well through several shale plays at once, and then drill horizontally through even more liquid-rich shale. More oil per given well means lower breakeven costs and larger profits. All else equal, that alone is enough for shale companies to concentrate their efforts on the Permian at the expense of other shale basins in the U.S.

But then there are above-ground factors. Texas is a friendly place for oil companies. West Texas has seen drilling for decades, which means that pipeline networks are established and well connected. Reuters notes that Texas also enjoys abundant labor and equipment suppliers, also a legacy of a long oil history. Plus warm temperatures mean that drilling can take place 365 days of the year.

It is no surprise then that over the past two years the Permian has emerged as the favorite for shale drillers. Since the U.S. rig count bottomed out in May 2016, the industry has added 250 oil rigs back into action through the end of January – the Permian accounted for 154 of those, or more than 60 percent. No other shale basin comes even remotely close to those gains.

“We could easily see an extra 100 rigs out here in the Permian by June,” Josh Clawson of Gesco, an electrical contractor for oil drilling rigs, told Reuters.

The surge in interest in the Permian continues to push up land prices. Companies are paying more than $60,000 per acre, double the average paid back in 2014, and even twice as high as some deals signed in 2016. High land prices are not scaring away companies; interest in the Permian continues to rise.

This is the reason that ExxonMobil just paid $5.6 billion in January to double its acreage in the Permian Basin, which was the largest oil deal in the U.S. since prices started to spiral out of control in November 2014. Exxon just reported fourth quarter earnings this week, which showed that overall production declined by 3 percent from a year earlier. The oil major is stepping up capex this year, unlike many of its peers, in order to reverse that decline in output. The Permian could be key for the company, where it hopes to add more than 200,000 bpd in production, taking its Permian output up to 350,000 bpd. As the FT notes, that would mean that the Permian makes up almost a quarter of Exxon’s total production, sharply up from 12 percent today. For a company that has a long track record of taking on hulking, complex offshore drilling projects, the pivot to smaller shale wells in Texas speaks volumes about how enticing the Permian has become.

The big question is how the rush for land in the Permian changes as oil prices rise (assuming that they do). The Permian has benefited from the severe cuts to spending and drilling activity in rival shale basins, as companies concentrate their efforts in the West Texas shale basin. But if oil prices rise to, say, $60 per barrel, places like the Bakken and the Eagle Ford could come surging back. Of course, rising oil prices will only improve the economics of the Permian, but it could lose its status as the only game in town.

On the other hand, there is no guarantee that oil prices do rebound. There are plenty of reasons to think that they won’t, and could in fact decline. For now, the EIA is forecasting flat oil prices for the next two years, which would be high enough to allow for an impressive uptick in production by 400,000 bpd, jumping to 9.3 million barrels per day in 2017. However, with annual average production rising from 2.0 to 2.3 mb/d this year, most of the gains in U.S. output will come from the Permian Basin.