Upstream oil and gas operator in Denver, FourPass Energy, and funds managed by American global asset management firm Oaktree Capital Management have launched a new oil and gas company with a USD 900 million commitment.
Vinson & Elkins advised funds managed by New York Stock Exchange-listed and Los Angeles-headquartered Oaktree Capital on forming a strategic partnership with FourPass, under which it will provide USD 900 million to acquire FourPass’ oil and gas producing assets.
The USD 900 million pledge from Oaktree comprises USD 600 million in initial equity, with an option to upsize the commitment by USD 300 million.
FourPass, which was founded this year, is led by former Denver-headquartered private oil and gas company Felix Energy (since acquired by WPX Energy) executives Ben Jackson and Andrew Dunleavy. FourPass plans to use its experienced management team to advance the company’s offering in the oil and gas space.
“Having participated in the acquisitions and divestitures market over the past seven years, we understand the opportunity set requires a sizable equity commitment as well as flexibility and creativity when structuring transactions” said Jackson in a statement.
He added: “Our partnership with Oaktree fulfils each of these requirements, which will be a key differentiator for us. We’ve built a strong acquisition and operations team with this opportunity in mind, and we’re proud to have Oaktree partner with us in this endeavour.”
Oaktree Opportunities Funds North America head, Brook Hinchman, emphasised: “Amidst an evolving energy landscape, the FourPass team has unparalleled experience in pursuing its strategy of acquiring producing, cash-flowing assets and delivering investor returns through excellent execution.”
Hinchman continued: “Oaktree’s equity commitment will allow FourPass to apply its proven framework to larger acquisition opportunities, which we believe will generate attractive returns to our investors over the long-term.”
The Vinson & Elkins advisory team was led by mergers and acquisitions (M&A) and private equity partners Dan Komarek and John Grand, and M&A and capital markets partners Abby Branigan and Heather Brocksmith.
It was reported in March that the impact of the Covid-19 health crisis on the global energy sector had already seen oil prices and demand drop dramatically.
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