With a combined $1.25 billion in commitments, the Canada Pension Plan Investment Board (CPPIB) and Houston’s Encino Energy LLC on Wednesday launched an exploration company to hunt for oil and natural gas assets in the U.S. onshore.
Encino Acquisition Partners (EAP) was formed with up to $1 billion in commitments by the Canada board and another $25 million from privately held Encino Energy. The plan is to look for “large, high-quality assets” in mature basins across the Lower 48.
"Our commitment to EAP allows us to efficiently expand our natural resources portfolio in our target U.S. energy markets, further contributing to the diversification of the CPP Fund," said CPPIB’s Avik Dey, head of natural resources.
Encino Energy would originate, evaluate and execute acquisition opportunities, as well as operate EAP’s assets. The exploration company, formed in 2011 and chaired by John Pinkerton, formerly executive chairman at Range Resources Corp., today concentrates most of its efforts in the Anadarko Basin.
"As the oil and gas industry continues to rationalize, we see the opportunity to build a world-class oil and gas company with a diverse portfolio of high-margin assets,” said Encino Energy CEO Hardy Murchison. “Encino Acquisition Partners is the logical extension of Encino's long-term strategy” to acquire and exploit assets.
CPPIB’s Michael Hill, managing director of natural resources and based in New York, is acting as lead director for EAP on behalf of CPPIB.
Toronto-based CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments independently of the pension plan and at arm's length from governments. At the end of March the fund totaled C$316.7 billion.