LongPoint Minerals LLC closed its initial $525 million capital raise, the company said June 8.
The lead commitment of $450 million came from an affiliate of CPPIB Credit Investments Inc., a subsidiary of the Canada Pension Plan Investment Board. Third-party investors provided $75 million, and there will be a second closing within 60 days for up to $200 million in additional commitments.
Denver-based LongPoint Minerals acquires oil and gas mineral interests. Recently formed, it will focus on the Midcontinent, Permian and D-J basins, and later will expand to the Marcellus and Utica basins and East Texas. The company’s management team, led by CEO George Solich, has more than 30 years’ experience in these regions.
"This is an important partnership for LongPoint. With CPPIB's strong financial backing along with other institutional investors, we can deploy our differentiated technical model for strategic mineral and royalty acquisitions in the targeted basin areas," Solich said in a statement. "Over time, we will look to expand our capabilities to other regions in the U.S."
"Our multi-year commitment represents an attractive entry into the mineral interest and royalty sector. In owning royalty interests, we are able to participate in production revenues without the burden of associated capital or operating costs," added Adam Vigna, managing director and head of Principal Credit Investments.
Over the past year, LongPoint has acquired assets in the Midcontinent’s core areas, including the Scoop/Stack, Cana and Western Anadarko areas, and the Midland and Delaware basins. To date, the completed and pending acquisitions give LongPoint an initial footprint of more than 15,000 net mineral acres producing more than 2,000 barrels of oil equivalent per day, with hundreds of future drilling locations.
Jefferies LLC was LongPoint Minerals’ financial adviser, and Andrews Kurth LLP was its legal adviser.
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