Fund also financed purchase of WPX’s Piceance basin assets by backing Terra Energy Partners earlier this year
In a move likely to deploy capital raised for natural gas assets in its new Energy Income Fund, investment firm Kayne Anderson has committed US$106 million and US$250 million in the SCOOP and Eagle Ford plays, respectively, according to consultancy Wood Mackenzie.
The fund adheres to a model of backing basin expert management teams with opportunities to build basin scale, and was designed with a longer-term payout schedule for investors.
By backing Casillas in the Mid-continent and Phoenix Resources in the Gulf Coast, the fund is adding to the 200,000-net-acre purchase it executed for WPX’s Piceance basin assets by backing Terra Energy Partners earlier this year — and potentially plans to add more, citing three to four target investments.
These purchases mirror the framework of the Piceance acquisition, and Wood Mackenzie says it anticipates the Casillas and Phoenix teams to ultimately target the gassier sections of their respective plays.
In this case, the operators could arguably secure a more favourable purchase price for proved developed producing acreage with multi-zone upside.