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Montney, Duvernay-Focused Private Secures Equity from Riverstone

Riverstone Holdings LLC agreed to provide C$200 million ($180 million) in equity to fund a Canadian International Oil Corp. (CIOC) development program in the Western Canadian Deep Basin, and in particular, the Montney and Duvernay formations.

CIOC, founded in 2010 a 100% interest in about 400,000 acres in the two formations, which together produce 3,000 boe/d, including one of the highest performing liquids wells in the Montney.

CIOC is helmed by CEO Scott Sobie, who had worked at Talisman Energy Corp. for more than 22 years, most recently as vice president of conventional development in North America.

The privately held operator, based in Calgary, is in the process of delineating its resource base through a combination of development wells and step-out pilots.

Sobie said the Riverstone investment would help the company "embark on the next phase of our development strategy...We are strongly encouraged by the initial results of our 2013 program in our Montney acreage, and we expect to expand it significantly in 2014 with Riverstone's support."

Riverstone Partner Robert Tichio said the equity commitment "reflects our confidence in Scott and the CIOC team, as well as in the rich opportunity set we see in the Deep Basin. This investment exemplifies Riverstone's strategy of partnering with proven management teams with extensive, basin-focused operating expertise."

Riverstone has been one of of the leading equity financiers for emerging oil and gas developments in North America and it likes to fund projects led by previously successful executives, such as Sobie. Last year Riverstone raised $7.7 billion to invest in energy businesses, exceeding its original $6 billion target (see Daily GPI, June 20, 2013). As of last June, affiliates Riverstone Global Energy and Power Fund V LP had invested about $2.3 billion in 19 companies, including more than $550 million in a series of deepwater exploration projects in the Gulf of Mexico (see Daily GPI, March 6).

Most recently, re-formed Rock Oil Holdings LLC secured a commitment of up to $250 million to lease acreage in the Eagle Ford and Utica shales, and the Permian Basin (see Shale Daily, March 13). Affiliate Riverstone Energy Ltd. also committed $82 million to privately held Fieldwood Energy LLC, which it formed and which has since become the largest producer in the Outer Continental Shelf of the Gulf of Mexico (see Daily GPI, March 12).

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