A new mineral and royalty acquisitions company, Sierra Energy Holdings LLC, recently launched, backed with $500 million in equity commitments through a new partnership between Providence Energy Ltd. and funds managed by Oaktree Capital Management LP.

Providence, a privately held energy investment and management company formed in 1993, will serve as the service provider for Sierra Energy Holdings. The Dallas-based company was originally formed to acquire and manage mineral, royalty and nonoperated working interest assets throughout the U.S.

However, in 2010, Providence began investing in renewable energy resources, including wind, hydropower and alternative fuel-based power generation. By early 2015, Providence had further differentiated itself by forming Providence Energy Operators LLC, an E&P company primarily focused on direct investments in working interest assets in the most profitable oil and gas regions across the country, according to a release by the company on Sept. 8.

“Providence has always been a company with a family atmosphere, committed to treating our staff and our business partners with respect and honesty,” commented Mike Allen, president of Providence Energy Ltd., in the release.

“For these reasons, Providence enjoys an excellent reputation throughout the energy industry,” he continued, “which has supported our efforts to create a sustainable company through responsible energy development, whether that be in minerals, direct working interest investment or renewable energy.”

Sierra Energy will pursue the acquisition of mineral and royalty interests throughout the continental U.S. led by Phil Ream, who serves as COO of Providence Energy Management LLC.

“I am excited to lead the Sierra efforts and think our decades of industry experience and knowledge, combined with the strong financial backing and support from Oaktree will enable Sierra to quickly evaluate and close on targeted mineral and royalty opportunities,” Ream commented. “Our aim is to provide financial solutions to landowners, mineral companies, high net-worth families and institutional mineral owners, and do so with the highest level of integrity.”

Currently, Providence owns and/or manages interests in nearly 2 million gross acres of minerals, with interests in over 10,000 producing wells.

Kaj Vazales, co-head of North America for Oaktree’s global opportunities strategy, also added, "We are excited to partner with the Providence management team, who has extensive experience in acquiring and managing mineral and royalty assets. Oaktree's equity commitment will allow Mike and his team to apply their proven framework to opportunities which we believe will generate attractive returns to our investors over the long-term."

Oaktree is a global investment management firm specializing in alternative investments, with $156 billion in assets under management as of June 30. The firm has over 1,000 employees and offices in 19 cities worldwide.

Vinson & Elkins LLP (V&E) advised funds managed by Oaktree Capital Management in its transaction with Providence Energy. The V&E team was led by John Grand, Dan Komarek, Heather Brocksmith and Tara Tegeleci.

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