Family-owned Henry Resources LLC, which has worked the Permian Basin for 50 year, is partnering up with Houston energy investor Pickering Energy Partners (PEP) to acquire more oil and natural gas assets.
Under the terms of the partnership, plans are to invest at least $500 million in proved developed producing (PDP) asset packages that would be operated by the Henry team.
“We see a unique opportunity today in the acquisition market for producing oil and gas assets,” said PEP’s Dan Pickering, chief investment officer. “Partnering with Henry Resources and our investors allows us to opportunistically exploit the liquidity driven mispricing in the market.”
Henry President David Bledsoe said the private Texas operator, which is based in Midland, has had a “front row seat to the Permian Basin through various cycles over the past few decades, and today looks like one of the most favorable PDP acquisition markets we have ever seen.
“Henry believes we are well positioned with the PEP joint venture to exploit the current correction and deliver predictable returns to the Henry family and our partners.”
The original Henry company was founded in 1969 by Jim Henry, who drilled his first Permian well in 1971. Since that time, the company, still chaired by its founder, has drilled and completed more than 1,600 vertical wells and 80 horizontal wells, all mostly in the twin Midland and Delaware sub-basins.
A spokesperson told NGI’s Shale Daily that most of Henry’s current assets are in West Texas in Martin, Midland, Upton and Reeves counties, with a total leasehold of around 15,000 net acres. Operations now include about 14,000 b/d of oil and 21 MMcf/d of natural gas.
Until 2008 the company focused primarily on investing in operated oil and gas assets. However, following “liquidity events” from a corporate sale to Concho Resources Inc. in 2008 and an asset sale in 2010 to a predecessor company of Linn Energy Inc., the family began diversifying its investments into sectors outside of oil and gas “to stabilize returns during fluctuating commodity price cycles that will invariably show up in an oil and gas portfolio.”
Henry now is comprised of two segments, one focused on oil and gas, and the other on investments.
PEP originally was founded in early 2004 by Dan Pickering before he partnered in 2007 with Bobby Tudor and Maynard Holt to form Tudor, Pickering, Holt & Co. (TPH). PEP was reformed earlier this month by spinning off TPH’s energy asset management strategies within Perella Weinberg Partners Capital Management.
PEP plans to capitalize on opportunities “that have arisen from the ongoing five-year cyclical correction.” Tudor and Holt are investors in PEP and serve on its advisory board, while Pickering has become a senior adviser to TPH.
“This spin out into an employee-owned firm will allow us to continue to develop energy investment strategies and related businesses that can take advantage of energy market opportunities for our clients,” said Pickering. “My PEP partner Walker Moody and I have assembled a team over the past decade with a strong entrepreneurial mindset, which is critical for attacking opportunities during energy’s cyclical corrections, expansions and transitions.”
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