Cordillera Energy Partners

Investment Realized: 2003, 2008, 2012

Cordillera Energy Partners is a Denver-based exploration and production company focused on pursuing an acquire-and-exploit strategy. Cordillera actively pursues growth through producing property acquisitions with a focus toward long-life gas reserves principally in the Rocky Mountain and Mid-Continent regions. The founder and CEO of Cordillera was an experienced industry executive who had been instrumental in the consummation of over $1 billion in acquisition and divestiture transactions while at HS Resources and Apache Corporation (NYSE: APA).

• Cordillera I: In February 2000, EnCap and management formed Cordillera Energy Partners I to acquire and develop properties in the Rocky Mountain and Mid-Continent regions. Utilizing a combination of bank debt and equity, Cordillera pursued an aggressive growth strategy, closing six acquisition transactions between February 2001 and December 2002. In the process, the company amassed over 200 Bcfe of proved reserves at an attractive price of less than $0.90/ss. In 2002, the company initiated an active development program, which substantially increased production volumes and cash flow. In October 2003, Cordillera was sold to Patina Oil & Gas Corporation for cash and warrants.
• Cordillera II: In December 2004, EnCap and management formed Cordillera Energy Partners II. Over the ensuing three and a half years, Cordillera II deployed its commitment in the Texas Panhandle and East Texas while following a similar strategy as Cordillera I. Due to favorable market conditions, Cordillera II sold its assets to Forest Oil Company (NYSE: FST) in September 2008.
• Cordillera III: In May 2007, EnCap and management formed Cordillera Energy Partners III to pursue a hybrid acquire-and-exploit/lease-and-drill strategy in the Texas Panhandle Granite Wash play. The company ultimately supplemented a promising initial position in the Granite Wash by expanding its focus to include numerous additional oil and liquids-rich horizons in western Oklahoma. By mid-2012, the company had established a commanding presence in the Western Anadarko Basin with 312,000 net acres and over 24,000 boe/d of liquids-rich production.  Cordillera III merged with Apache Corporation (NYSE: APA) on May 1, 2012 for total consideration of $3.1 billion.

Enduring Resources

Investment Realized: 2008, 2010, 2014

Enduring Resources is a Denver-based independent oil and gas company focused on acquiring and developing oil and natural gas reserves in domestic onshore basins. Enduring is led by the former management team of Westport Resources, a publicly traded Rocky Mountain-based exploration and production company that was sold to Kerr-McGee (NYSE: KMG) in 2003.

• Enduring I: Over a six-year period, Enduring assembled and developed multiple assets located primarily in the Uinta Basin, East Texas and the Eagle Ford Shale in South Texas. Enduring monetized the majority of these assets through two major sales: the August 2008 sale of East Texas assets to Cabot Oil & Gas (NYSE: COG) for approximately $600 million and the December 2010 sale of Eagle Ford Shale South Texas assets to Statoil ASA (NYSE: STO) and Talisman Energy (NYSE: TLM) for approximately $1.4 billion.
• Enduring II: Recapitalized in June 2011, Enduring built and developed a sizable acreage position in the core of the Wolfcamp play in the Southern Midland Basin. In May 2014, the company announced the sale of these assets to an affiliate of American Energy Partners for $2.5 billion in an all-cash transaction.

Felix Energy II

Investment Realized: 2020

Felix Energy II is a Denver-based exploration and production company focused on the pursuit of a diverse portfolio of opportunities in central domestic basins. Felix Energy II  was formed in September 2015.

www.felix-energy.com

Grenadier Energy / Stroud Energy

Investment Realized: 2006, 2012

Headquartered in The Woodlands, Texas, Grenadier Energy Partners is an upstream oil and gas company led by Patrick J. Noyes and other former members of the Stroud Energy management team who have an extensive track record of value creation. Grenadier actively pursues attractive asset acquisitions and low-risk exploratory drilling opportunities in unconventional reservoirs throughout the U.S.   

• Stroud Energy: Originally established in 1985, Stroud Energy was a Fort Worth-based, independent oil and gas company. At the time of EnCap’s investment in 2003, Stroud had recently undergone an extensive transformation, having replaced its senior management team, restructured its balance sheet and redefined its strategy. EnCap’s equity infusion substantially delevered the company providing Stroud’s new management team with growth capital to pursue their acquisition strategy. The company expanded its existing position in the Barnett Shale and East Texas through a number of acquisitions and farmout agreements. As a result of successful drilling in these two areas, as well as the Austin Chalk, Stroud substantially increased production and doubled its base of proved reserves. Due to a receptive public market and a compelling valuation, Stroud engaged Raymond James in early 2005 to take the company public through a 144A offering. In September 2005, Stroud successfully completed the 144A offering and in June 2006, Stroud sold to Range Resources (NYSE: RRC) for $450 million.
• Grenadier Energy Partners: In April 2007, core members of Stroud’s management team and EnCap partnered to form Grenadier Energy Partners. Grenadier was led by Patrick J. Noyes and focused on a strategy that included a blend of asset acquisitions and exploitation combined with low-risk exploratory drilling in unconventional resource plays. The company initially explored opportunities in the Fort Worth Basin before turning its attention to the Marcellus Shale Play in West Virginia. From 2009 to 2012, Grenadier built a blocked up, attractive position of approximately 15,000 net acres in Wetzel County, West Virginia, and drilled eight wells before electing to sell as part of a three-company package to Statoil USA Onshore Properties, Inc. for total consideration of $590 million.  

EnCap currently is partnered with the Grenadier management team in Grenadier Energy Partners II, formed in July 2012.

www.grenadierenergy.com

Laramie Energy

Investment Realized: 2007

Laramie Energy is a Denver-based, independent oil and gas company formed by former executives of Forest Oil Corporation (NYSE: FST) and Mesa-Hydrocarbons, Inc. Laramie is focused on acquiring and exploiting unconventional natural gas plays in the Rocky Mountains, primarily in the Piceance Basin of Colorado.

From its inception in May 2004 to its exit in May 2007, Laramie acquired a total of 66,000 gross / 58,000 net acres in the Piceance Basin through small acquisitions and Federal Lease Sales. These acquisitions were primarily acreage acquisitions without PDP reserves.

Laramie was able to create significant value on this acreage through a successful drilling effort that resulted in over 380 Bcfe of Total Proved reserves at the time of its sale. Over the three-year period, the Company successfully drilled over 200 wells in the Piceance Basin. The Company’s developmental success also added significant Probable upside resulting in 2.2 Tcfe of total net (2P) reserves at exit.

In May 2007, Laramie sold to Plains Exploration & Production Company (NYSE: PXP) for approximately $1.0 billion.

EnCap currently is partnered with the same management team through Laramie Energy II.

Marquette Exploration

Investment Realized: 2011

Marquette Exploration was an upstream oil and gas company focused on unconventional resource plays in several basins throughout North America. Marquette was formed by a seasoned management and technical team that formerly served with Burlington Resources and ConocoPhillips (NYSE: COP) and exhibited a proven track record of discovering and developing significant unconventional resources throughout North America.

Subsequent to formation in September 2006, Marquette identified three underexploited resource plays located in East Ohio, North Louisiana and Michigan and built significant leasehold positions in each play. Over the next several years, Marquette successfully tested and delineated each play in order to establish the resource potential. Marquette ultimately sold its Michigan assets (125,000 acres) in Q2 2010 to an undisclosed buyer for $74 million and, in Q3 2011, Hess Corporation (NYSE: HES) purchased Marquette and other leases in Ohio’s Utica Shale play for $750 million.

Oasis Petroleum

Investment Realized: 2010

Oasis Petroleum (NYSE: OAS) is a Houston-based independent oil and gas company focused on the acquisition and development of unconventional oil and natural gas resources. Oasis was formed by former senior management members at Burlington Resources, which was acquired by ConocoPhillips (NYSE: COP) in March 2006.

Since its formation in March 2007 through June 2010, Oasis aggregated more than 292,000 net acres in the Williston Basin through a series of acquisition and farm-in transactions. By pursuing an aggressive horizontal development program in the Bakken and Three Forks formations, the company was able to successfully grow production and reserves while demonstrating the resource potential of its acreage. In June 2010, Oasis successfully priced its IPO at $14 per share and is now listed on the NYSE under the symbol OAS.

Paloma Partners

Investment Realized: 1999, 2008, 2012, 2015

Paloma Resources is a privately held, Houston-based oil and gas company focused on the acquisition and development of acreage in resource plays throughout the United States. Management’s track record of value creation includes four successful EnCap sponsored entities: San Juan Partners, Paloma Barnett, Paloma Partners II and Paloma III.

• San Juan Partners: Formed in January 1998, San Juan took a controlling interest in Burlington Resources Coal Seam Gas Royalty Trust. EnCap ultimately realized proceeds of $27.7 million on this transaction.
• Paloma Barnett: Paloma Barnett was formed in February 2007 to pursue the acquisition and development of properties in the Barnett Shale play. Management deployed a highly focused leasing and development strategy, and in February 2008, Paloma Barnett was sold to Chesapeake Energy (NYSE: CHK) for $225 million.
• Paloma Partners II: Capitalized in November 2009, Paloma Partners II was formed to pursue an acquisition-and-development strategy in the Haynesville Shale. After identifying the condensate window of the Eagle Ford Shale as one of the most economic plays in the U.S., the company exited its Haynesville position and began to focus exclusively on aggregating leasehold and drilling wells in the most economic areas of the Eagle Ford. In August 2012, Paloma II sold its position to Marathon Oil Corporation (NYSE: MRO) for $750 million.
• Paloma III Realization: Capitalized in August 2012, Paloma Partners III was formed to pursue a leasing-and-development strategy in the Utica. Paloma III amassed a 23,700-net-acre dry-gas Utica position, which was ultimately purchased by Gulfport Energy (NASDAQ:GPOR) in August 2015 for $301 million.

PetroHawk Energy Corporation

Investment Realized: 2011

Petrohawk Energy Corporation was a publicly traded E&P company based in Houston. The company was formed in May 2003 by Floyd Wilson, the former founder and CEO of 3TEC Energy, a successful EnCap Fund III investment. The company has aggressively pursued its acquire-and-exploit growth strategy and has evolved from a startup to a substantial mid-cap independent.

In May 2004, Petrohawk acquired a controlling interest in Beta Oil & Gas (“Beta”), a small publicly traded oil and gas company based in Tulsa, with the intention of utilizing Beta as a platform to raise public equity for future growth. Subsequent to the transaction, Beta was renamed Petrohawk.

In January 2005, Petrohawk completed a Reg-D offering to supplement bank financing in consummating the acquisition of Wynn Crosby Energy, Inc. Following this offering, EnCap sold enough of its common stock in Petrohawk to recoup its initial investment.

In July 2005, Petrohawk finalized a merger with Mission Resources Corporation, a publicly traded E&P company with assets in the Permian Basin and Gulf Coast. The combined company had over $1 billion of oil and gas assets. Subsequent to this merger, EnCap began to strategically liquidate its remaining ownership in the company until the last of the securities were sold in February 2006.

In July 2006, Petrohawk completed a merger with KCS Energy, creating a combined company with estimated proved reserves of approximately 1 Tcfe.

In August 2011, Petrohawk was sold to BHP Billiton for a cash offer of $38.75 per share, representing a total equity value of ~$12.1 billion and a total enterprise value of ~$15.1 billion. EnCap has again backed PetroHawk CEO Wilson in a new venture, Halcón Reserves.

Plains All American Pipeline, L.P.

Investment Realized: 2009

Plains All American is a publicly traded master limited partnership (NYSE: PAA) engaged in crude oil gathering, transportation, marketing and storage in the U.S. and Canada.  EnCap’s storied investment in PAA stems from its extremely strong relationship with the senior PAA management team. Dating back to EnCap’s investment in Plains Resources in June 2001 (“PLX”, formerly the sole GP owner of PAA), EnCap developed an understanding of the exceptional, value-driven PAA management team. 

Over the following eight and a half years, PAA pursued an aggressive development strategy growing from a $75 million equity valuation in 2001 to a $2.8 billion equity valuation in 2009. 

In December 2009, Occidental Petroleum Corporation (NYSE: OXY) purchased EnCap’s general-partner interest in PAA.

Protege Energy

Investment Realized: 2008, 2012

Protégé Energy is a Tulsa-based independent oil and gas company focused on acquiring and developing assets in the domestic onshore basins of the United States.

While partnered with EnCap, the Protégé team has successful realizations in both the Andadarko/Arkoma basins and Marcellus/Utica Shale plays.

• Protégé I: EnCap and the Protégé management team formed Protégé in 2004. The company pursued an acquire-and-exploit strategy as well as a lease-and-drill strategy. Protégé I made strategic acquisitions in the Anadarko and Arkoma Basins, and, through strategic acquisitions and development drilling, Protégé I grew its production to nearly 4 MMcfed, proved reserves to 43 Bcfe and 3P reserves to 69 Bcfe by mid-2008. Notable reservoir targets included the Granite Wash in the Texas Panhandle and the Woodford Shale in Eastern Oklahoma. In 2008, Protégé I sold the majority of its assets in several transactions to Forest Oil, EV Energy Partners and Newfield.
• Protégé II: Subsequent to the sale of Protégé I, EnCap again partnered with management to form Protege II in late 2008. Over the ensuing year, Protégé II formed a strategic partnership with a Columbus, Ohio-based producer, then pursued a lease-and-drill strategy for the liquids-rich Marcellus and Utica Shale plays in Southeast Ohio. Protégé II created a contiguous 20,000-acre lease position in one of the most abundant areas of the liquids-rich Marcellus, growing its 3P reserves to 1,300 Bcfe by mid-2012. Protégé II sold its Marcellus/Utica assets to Statoil at year-end 2012.

EnCap currently is partnered with Protégé management in Protégé III, which was formed in 2013.

Sierra Oil & Gas

Investment Realized: 2019

Sierra Oil & Gas is a Mexico City and Houston-based independent oil and gas company focused on exploration, development and production opportunities in Mexico. The company was sold in March 2019 to Deutsche Erdoel AG, a German E&P company.

Talon Oil & Gas

Investment Realized: 2010

Talon Oil & Gas was a Dallas-based independent oil and gas company focused on creating value through the acquisition and exploitation of producing properties in the Barnett Shale, East Texas and the Texas Panhandle. Talon was formed by a team of seasoned E&P executives with over 180 years of aggregate experience in all facets of the upstream oil and gas business. Furthermore, the majority of the team has worked together for 19 years in key senior positions at Coda Energy, Belco Oil & Gas, Westport Resources, Kerr-McGee Corporation and Talon, where they have been involved in $27.5 billion of oil and gas transactions.

After its formation in January 2007, Talon completed $551 million of producing property acquisitions yielding an aggregate 537 Bcfe of proved reserves and 83 MMcfe/d of daily production for an attractive $1.03/Mcfe and $6,607/Mcfe/d. In addition to creating value through privately negotiated acquisitions of quality assets for below-market prices, the team utilized its technical expertise to further enhance returns through strategic exploitation and operational improvements. As a result of these efforts the aggregate PDP, total proved and 3P reserves of the properties increased by 25%, 58% and 65%, respectively. In December 2010, Talon closed the sale of its assets for a combined $1 billion to EnerVest (Barnett), Devon (Texas Panhandle) and an undisclosed third party (East Texas).