Denver-based LongPoint Minerals LLC on Wednesday said it has $525 million in equity commitments to acquire acreage and royalty interests initially in the Midcontinent, Permian and Denver-Julesburg (DJ) basins.
The privately held operator said the lead equity commitment came from a unit of the Canada Pension Plan Investment Board (CPPIB), CPPIB Credit Investments Inc., as well as a $75 million from third-party investors.
Headed by George Solich, a former CEO of Cordillera Energy Partners, the newly launched private investment firm plans to use the same model applied to his former exploration and production (E&P) company, which was sold to Apache Corp. in 2012 (see Shale Daily, Jan. 24, 2012).
"LongPoint seeks to acquire high-growth, long-life mineral interests in the top U.S. resource plays by leveraging management's unique technical and land expertise," the company said.
With the CPPIB financial backing, Solich said LongPoint "can deploy our differentiated technical model for strategic mineral and royalty acquisitions in targeted basin areas." Over time, the focus will broaden beyond the three initial target areas, including the Marcellus and Utica shales, and East Texas basins, the company said.
Adam Vigna, managing director heading principal credit investments, said LongPoint would be making multi-year commitments to mineral interests and royalties to "participate in production revenues without the burden of associated capital or operating costs."
In the past year, LongPoint officials said the company has been acquiring assets in the stacked plays of Oklahoma’s Anadarko Basin, as well as the Permian Basin’s Midland and Delaware sub-basins. Those assets include more than 15,000 net mineral acres that are producing more than 2,000 boe/d, with hundreds of future drilling locations.
In 2012, Cordillera Energy Partners III LLC sold its third and last set of E&P assets to Apache for $2.85 billion, which included 254,000 net acres in the Granite Wash, Tonkawa, Cleveland and Marmaton plays in Oklahoma and Texas with estimated proved reserves of 71.5 million boe.