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Post Oak Prowling For More U.S. Upstream Investments

Houston-based Post Oak Energy Capital LP, which already has equity investments in several North American upstream operators, said Tuesday it has raised $600 million for a third fund to pursue the same strategy.

Post Oak Energy Partners III LP plans to hunt for equity investments in oil and gas companies, oilfield services (OFS) and related infrastructure. Funding from Post Oak would be used for growth capital, development acceleration, acquisitions and recapitalization purposes.

The initial private equity funds now include investments in 14 oil and gas companies, one OFS company and one midstream company.

"We see great potential to once again work with best in class management teams in identifying and capturing good value in energy assets, particularly given current industry conditions," Managing Director Frost Cochran said.

Established in 2006, Post Oak works in partnership with operating management teams. On the exploration side, three years ago Post Oak invested $100 million in Eagle Ford Shale-focused PetroEdge Energy III LLC (see Shale Daily,July 24, 2013). Two years ago it helped fund onshore explorer CP Exploration II LLC (see Shale Daily,July 30, 2014). In addition, Post Oak in 2008 bought into Chaparral Energy Inc., which declared bankruptcy earlier this month (see Shale Daily,May 10;Daily GPI,July 16, 2008). In the midstream arena, Post Oak in 2014 helped finance Oryx Midstream Services LLC's infrastructure expansion in the Permian Basin (see Shale Daily,April 9, 2014).

Current exploration and production company investments, all in Texas, include Crown Oil Partners VI, Balcones Energy Holdings LLC, Mavros Minerals, UpCurve Energy LLC, Rimrock Resource Operating LLC, Exponential Resources LLC, Veritas Energy Partners LLC, Saxet Minerals, Cornerstone Petroleum Resources and Core Minerals Management II. It also has an interest in OFS operator Refinery Specialties Inc.

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