Two private-equity backed companies are beginning to hunt for land, oil and the seemingly endless plunder of the Permian Basin.
Blackstone Energy Partners, an affiliate of Blackstone (NYSE: BX), has made commitments to two companies worth a combined $1.5 billion: Guidon Energy and Jetta Permian.
The move comes after months in which public companies have bought out private operators in the Permian Basin. Private-equity firms have since been reloading management companies amid the basin’s scramble for acreage.
Blackstone and Guidon Energy, based in Dallas, said Aug. 25 their Midland Basin “platform company” closed an April purchase of about 16,000 net acres in the core of Martin County, Texas. The website TheStreet.com quoted unidentified sources as saying the seller of the assets is Endeavor Energy Resources. A Blackstone spokesperson said the firm would not comment on the seller.
Blackstone and its affiliate have committed about $500 million in capital to Guidon with the potential to commit “significantly more with future acquisitions,” the firm said.
Guidon is led by Jay Still, former president and COO of Laredo Petroleum Inc. (NYSE: LPI) and an experienced senior executive for Pioneer Natural Resources (NYSE: PCD). Guidon’s veteran team includes oil and gas executives with significant operational experience across a range of basins in North America.
Still and Blackstone formed Guidon in first-quarter 2016 with the concept of a significant, independent shale company focused in the Midland.
Still said Guidon acquired a significant, strategic and “top-tier position in the core of the Midland Basin, a premier North American liquids-rich play, [in a deal] which was signed in the second quarter of this year and has subsequently closed.”
On Aug. 25, Blackstone also announced its partnership with Jetta Permian, an affiliate of Fort Worth, Texas-based Jetta Operating Co. Inc.
Jetta Permian will target assets and leasehold in the Delaware in West Texas and southern New Mexico with a $1 billion capital commitment from Blackstone and Jetta.
The company will pursue creative “opportunities of scale” in the Delaware Basin. Jetta plans to pursue asset and leasehold acquisitions, farm-in transactions and partnerships or joint ventures with existing operators and landowners.
Greg Bird, CEO and president of the general partner of Jetta Permian and the president and owner of Jetta, is an engineer who previously worked for Hunt Energy Corp. and was a partner at petroleum engineering firm Cawley Gillespie & Associates.
“With a $1 billion equity commitment and with the collective resources of the Blackstone team to support the partnership, coupled with the Jetta team’s operating capabilities and track record, this will allow for and enable the strategic and successful acquisition and development of high-quality oil and gas assets in the Delaware Basin,” Bird said. “We look forward to the challenges ahead and to applying our technical passion, experience, and diligence into creating a pure play Delaware Basin platform.”
Angelo Acconcia, a senior managing director of Blackstone Energy Partners who oversees their oil and gas investments, lauded both companies in separate press releases. Blackstone has invested more than $9 billion of equity worldwide across a range of sectors within the energy industry.
Kirkland & Ellis LLP counseled Blackstone on the formation of Jetta Permian LP and advised Guidon Energy and Blackstone Energy Partners on their decision to acquire in the Midland Basin.
Darren Barbee can be reached at dbarbee@hartenergy.com.
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