Houston-based Sheridan Production Partners has raised $1.5 billion in equity commitments to acquire more onshore producing properties in the United States, the privately held producer said Wednesday.
Including commitments secured in the latest, and third, fund, Sheridan has raised $4.6 billion since its formation in 2006.
"We are excited to be in the acquisition market with a $1.5 billion equity war chest at this particular time," said Sheridan founder and Chairman Lisa Stewart. After running the exploration and production (E&P) arm of El Paso Corp. for close to three years, Stewart founded Sheridan with financial backing from Warburg Pincus (see Daily GPI, Aug. 9, 2007). Prior to joining El Paso, Stewart helped to run Apache Corp.'s E&P business (see Daily GPI, Jan. 13, 2004).
Many opportunities exist today because of cratering oil prices, which are pressuring some debt-laden E&Ps, Stewart said.
"Declining petroleum prices create opportunities for Sheridan as companies seeking to pay down debt sell mature properties with predictable production that fit our successful business strategy: optimizing assets through operational improvements and cost savings, hedging the production for several years and enhancing returns through prudent leverage," she said. "We view the strong support of our investors in this very successful fundraise as an important reaffirmation of our strategy."
Sheridan plans to continue to focus on transactions in the Midcontinent, particularly in Oklahoma, Texas, New Mexico and Wyoming, which complement existing assets. Sheridan's earlier oil and gas partnerships have completed eight acquisitions for an aggregate purchase price of $5.2 billion, using equity commitments and debt financing.
The company's four districts -- Midcontinent, Permian Basin, Rocky Mountains and Gulf Coast -- currently produce a total of 34,000 boe/d net, 97% operated. In 2013, the E&P had 5,183 wells, including 1,146 in the Midcontinent, 3,775 in the Permian, 194 in the Rocky Mountains and 68 on the Gulf Coast.
"We have a proven track record of closing transactions expeditiously, even during periods of turbulent commodity prices and limited capital markets access," Stewart said.