Houston explorer Sheridan Production Partners LLC has raised $1.8 billion of new equity commitments that it plans to use to build its portfolio of domestic onshore natural gas and oil properties, the company said Monday.
Sheridan Production Partners II, the second private offering of limited partner interests, was oversubscribed and reached its hard cap, company officials said.
Since its formation in 2006 Sheridan has raised more than $3 billion in equity through private placements of its two investment vehicles. Sheridan was established in 2006 by Sheridan Management and Warburg Pincus.
"We intend to use the second fund, combined with leverage, to acquire mature producing properties to complement Sheridan's existing operations in Oklahoma, Texas and New Mexico," said Stewart. "We also will look to expand our footprint to East Texas, Louisiana and the Rocky Mountain region."
Sheridan's limited partners share a "strategic vision of acquiring a diverse portfolio of mature, predictable oil and gas producing properties, optimizing those assets through operational improvements and cost savings, hedging the production for several years, and enhancing returns through prudent leverage."
Sheridan Production Partners II is under common management with Sheridan Production Partners I, the initial series of oil and gas partnerships established in 2007 with a similar investment strategy. The first fund obtained equity commitments of $1.3 billion.
In the past three years Sheridan has purchased close to $1.65 billion of oil and gas properties in Texas, Oklahoma and New Mexico using a combination of equity commitments and debt financing. The company also has reinvested more than $100 million in its existing properties for maintenance and production enhancement.
"The success of our second fund's offering in a challenging fundraising environment is a testament to the strategy, execution and strength of the entire Sheridan team," said Stewart. "With the equity commitments raised in Sheridan II, plus $245 million of equity remaining from our first fund and our credit facilities, we now have over $3 billion of available capital and are actively reviewing acquisition opportunities that meet our strategic objectives and return profile."
Sheridan currently produces about 19,000 boe/d net; 90% is operated. At the end of September the company had an estimated 127 million boe of proved reserves with a 19-year reserve life.
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