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Tug Hill, Quantum Partner for North American Oil, Gas Investments

Privately held investment developer Tug Hill Inc. is forming a partnership with equity firm Quantum Energy Partners to acquire and develop conventional and unconventional properties in North America.

Supported initially with a $450 million total equity commitment from the partners, the partnership would be looking at, among other areas, the Marcellus Shale, where exploration subsidiary Tug Hill Operating now has interests.

Under the leadership of Michael G. Radler, who formed Tug Hill in 2007, the company to date has participated in more than 750 wells in the Marcellus formation "and plans to continue to participate in the drilling and development of its Marcellus assets," management said. Aside from the Quantum partnership, Tug Hill plans to manage its existing Marcellus and legacy properties.

Radler "has an outstanding track record of building and monetizing oil and gas companies over his more than 30-year career and we believe this experience will enable him to deliver superior opportunities and results in our new partnership," said Quantum CEO Wil VanLoh.

"Tug Hill wanted to find a partner that is committed to adding long-term value, has an entrepreneurial culture, is able to navigate the capital markets and shares a common view on energy investing; we found all of these attributes with Quantum," said Radler. "Together, Tug Hill and Quantum bring a strong combination of technical, operating and financial skills that will allow the partnership to execute on a number of attractive opportunities in capital intensive shale plays and conventional fields."

Tug Hill, based in Fort Worth, TX, has been a frequent exploration partner with cross-town operator Chief Oil & Gas LLC. Among other things, they now partner in a 75,000 acre leasehold in Pennsylvania's Bradford, Lycoming, Sullivan, Susquehanna and Wyoming counties (see Shale Daily, Dec. 18, 2013).

Tug Hill and Chief collectively built a land position of more than 600,000 acres in the Marcellus Shale before selling about one-third to Chevron Corp. in 2011 (see Shale Daily, May 5, 2011). Chief at one time also was the second largest driller in the Barnett Shale (see Daily GPI, June 30, 2006).

In early 2010, Tug Hill also joined a consortium with Chief to acquire land in Kansas within the Mississippian Lime (see Shale Daily, Nov. 29, 2012). Today it has more than 800,000 acres in the Kansas formation. Other exploration investors include BP Capital Management, PEC Energy-Kansas LLC and Arad Energy LLC.

Quantum has several big investments in the U.S. onshore with private operators, including Vantage Energy Inc., a Barnett and Marcellus operator (see Shale Daily, July 8). Jagged Peake Energy LLC, based in Denver, is another Quantum-funded producer (see Shale Daily, Aug. 12, 2013).

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