I talked earlier this week about increasing private equity activity in the U.S. shale patch.
And news the last few days shows energy PE is also growing in the international E&P space. With major players Blackstone Group and Warburg Pincus saying Tuesday they will monetize $290 million in value from Africa-focused Kosmos Energy.
But elsewhere, private equity is buying into plays — with one group putting up $300 million in fresh capital for an unexpected start-up in one of the world’s most mature basins.
Baupost's investment process involves "never-ending" gleaning of facts to help support investment ideas Seth Klarman writes in his end-of-year letter to investors. In the letter, a copy of which ValueWalk has been able to review, the value investor describes the Baupost Group's process to identify ideas and answer the most critical questions about its potential Read More
The North Sea.
London-based PE outfit Blue Water Energy was named Tuesday as the major backer for a new E&P focused on the Norway North Sea — Mime Petroleum. With that company announcing that Blue Water will inject $300 million into the firm.
That’s a significant amount of cash coming in — for a place many oil and gas insiders have written off as over-the-hill. But just as fast as E&Ps have been exiting the North Sea, new capital has been pouring in. Evidenced by very strong bid round activity in Norway during the last few years.
That shows big investors still see a lot of potential in this mature basin. In fact, the region has been seeing a “silent” investment boom — underscored this week by another massive deal.
That’s a $1.05 billion transaction from chemical-maker INEOS, unveiled Wednesday. With that company buying the entire North Sea portfolio of Denmark’s DONG Oil & Gas — covering assets in the UK, Norway and Denmark.
The INEOS buyout is a big one, coming with 100,000 barrels equivalent per day of production, and 570 million boe of reserves. Which the chemical major will use as supply for its downstream operations.
The biggest takeaway: a lot of money is still out there for North Sea projects. And much of it is coming from non-traditional sources. Watch for more deals on assets in this part of the world, and for continued activity in bid rounds here as they press into frontier plays with world-class upside.
Here’s to strong hands,
Article by PiercePoints