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

Limestone Exploration

Investment Realized: 2010

Limestone Exploration is a Midland, Texas-based independent oil and gas company focused on acquiring and developing acreage in the Spraberry and Wolfcamp (Wolfberry) trend.  Limestone was formed by a multidisciplinary management team with extensive experience in the Permian Basin and strong connections in the Midland area.

At the time of EnCap’s initial commitment to Limestone in April 2008, the company had identified and obtained an option on 7,500 contiguous net acres in Martin County, Texas, that were highly prospective for the Spraberry and Wolfcamp formations. The management team believed that the Wolfberry model of combining several discrete stratigraphic reservoirs in the Permian Basin and stimulating them with modern technology would result in economically viable wells. Limestone drilled a total of 19 successful wells, generating 28.2 MMBoe of proved reserves and ~1,000 boe/d of net production by September 2010. In October 2010, Limestone closed the sale of its assets to an undisclosed buyer.

EnCap is currently partnered with the Limestone management team in Carrera Energy, which was formed in October 2010.

Modern Resources Inc.

Investment Realized: 2020

Modern Resources Inc. is a Calgary, Alberta-based oil and gas company focused on the pursuit of proved reserve acquisitions with resource upside in the Western Canadian Sedimentary Basin. Modern focused on resource validation and development of the Spirit River and Cardium plays of the Deep Basin.

OGX Resources

Investment Realized: 2008, 2011

OGX is a Midland, Texas-based oil and gas company focused on acquiring and exploiting oil and gas properties primarily in the Permian Basin of West Texas and Southeast New Mexico. Key management members have extensive experience as independent owners and operators of oil and gas properties in the region. Management's track record of value creation includes two successful EnCap sponsored entities.

The team initially partnered with EnCap in 2006 and subsequently sold the majority of its assets to Legend Natural Gas III in March 2008.

Subsequently, the team partnered with EnCap in May 2011 to form OGX II, and through the course of the investment, acquired and sold assets through four separate transactions:

• the sale of ~33,600 gross acres in Eddy and Lea counties in New Mexico and Culberson, Reeves, and Loving counties in Texas to Concho Resources in November 2011 for $250.0 million;
• the sale of 4,640 acres in Reagan and Upton counties in Texas to Parsley Energy in June 2014 for $127.6 million;
• the sale of ~30,000 gross acres in Winkler County, Texas, to an undisclosed buyer in July 2014 for $124.8 million; and
• the sale of ~2,800 acres in Reeves and Loving counties to an undisclosed buyer for $80.6 million.

EnCap currently is partnered with the OGX management team in OGX III, formed in January 2015.

PayRock Energy

Investment Realized: 2016

PayRock Energy is an Oklahoma City-based exploration and production company focused on the pursuit of statistically proven, liquids-rich unconventional assets within the most economic basins. PayRock was formed in November 2012 by a seasoned management team with an extensive track record of value creation and experience working for top tier operators in the oil and gas industry.

PayRock amassed 61,000 net acres as an early mover in the core of the STACK play, primarily in Oklahoma's Kingfisher and Canadian counties.  By continuously refining its drilling and completion practices to drive down well costs and enhance well performance, management was able to unlock substantial value and deliver a sizeable and scalable opportunity with compelling, oil-weighted economics and tangible upside in the core of one of the most attractive resource plays in the United States.

In August 2016, PayRock closed on its sale to Marathon Oil Corporation (NYSE: MRO) for an all-cash consideration of $887.5 million.

Piedra Resources

Investment Realized: 2011, 2014

Piedra is a privately held, Midland, Texas-based oil and gas company focused in the Permian Basin. Consistent with management's expertise and historical track record, Piedra has pursued the exploration and development of lower risk resource plays with scalability and upside. Management's track record of value creation includes two successful EnCap-sponsored entities.

The team initially partnered with EnCap in 2007 and sold the majority of its assets to Berry Petroleum (NYSE:BRY) in 2011.

Subsequently, the team partnered with EnCap in July 2011 to form Piedra II, and through the course of the investment, acquired and sold assets through two transactions:

• the sale of 70% of its 11,800 net acres in the Wolfbone Play in Pecos and Reeves counties in Texas; and
• the sale of its Midland Basin assets to Athlon.

EnCap currently is partnered with the Piedra management team in Piedra III, formed in 2014.

Plantation Petroleum Company

Investment Realized: 2003, 2005, 2007, 2011

Headquartered in Houston, Plantation Petroleum Company is an upstream oil and gas company focused on opportunities in the Permian Basin.

• Plantation I: In July 2002, EnCap invested growth capital to facilitate Plantation’s acquisition of a publicly held company focused in the Permian Basin. The Plantation management team implemented a successful development plan and sold to Forest Oil Corporation (NYSE: FST) in December 2003.
• Plantation II: Subsequent to the sale of Plantation I to Forest Oil, management again partnered with EnCap to form Plantation II in November 2003. Using a combination of bank debt and equity, Plantation II closed a highly attractive acquisition in Southeast New Mexico and created additional value by increasing production at a minimal cost. In June 2005, Plantation II sold to Range Resources Corporation (NYSE: RRC) for $116.5 million.
• Plantation III: In December 2005, management partnered with EnCap for the third time in Plantation III. Again management successfully closed an attractive acquisition in the Permian Basin and successfully implemented a drilling and production enhancement program. In July 2007, Plantation III entered into a definitive agreement to sell its assets to EV Energy Partners, L.P. (Nasdaq: EVEP) for $160 million.
• Plantation IV: Formed in August 2007, Plantation IV acquired producing Permian Basin properties and used its expertise to realize value through (i) operational economies of scale, (ii) recompletions in existing wells, (iii) secondary recovery efforts and (iv) horizontal drilling.  The properties were sold to Merit Energy in November 2011 for $326.3 million.  

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).