Month: January 2018

by:Business Wire

HOUSTON – Business Wire – Trilogy Midstream Investments, LLC (“Trilogy Midstream” or the “Company”) is pleased to announce the addition of NGP as a partner. Both the Company’s Founders and NGP have made significant capital commitments to the Company in support of its strategy to develop midstream infrastructure along the Gulf Coast.

Trilogy Midstream was founded in 2017 by Jerry Dearing, Dave Marye and Drew Tingleaf who worked together for almost a decade at NET Midstream, which was sold to NextEra Energy Partners for $2.1 billion in 2015.

At the time of sale, NET Midstream operated seven natural gas pipelines in South Texas with a combined 3.0 Bcf/d of ship-or-pay contracts with a weighted average term of over 16 years and over 1.0 Bcf/d of available expansion capacity. The pipelines developed and operated by NET Midstream serve utilities, municipalities, power plants, industrial loads and natural gas producers.

Dave Marye, the Company’s President said, “Jerry, Drew and I started Trilogy with the goal of leveraging our expertise and experience to provide innovative and cost efficient midstream solutions for our customers. When we considered bringing on a private equity partner, we looked for a team with a great track record and the ability to support large-scale pipeline projects. We are proud to add NGP to the team and look forward to developing projects that will serve end-users and producers along the Gulf Coast.”

“We are thrilled to partner with the Trilogy management team to build upon their successful track record of creating value in the midstream sector,” said Chris Carter, Managing Partner of NGP. “What the team at NET Midstream was able to accomplish is an example of what can be achieved through the combination of industry experience, creativity and tenacity. The Trilogy management team’s track record building demand-driven midstream systems combined with anticipated oil and natural gas volume growth in the United States provides a compelling backdrop for this investment.”

ABOUT NGP
Founded in 1988, NGP is a premier private equity firm in the natural resources industry with approximately $17 billion of cumulative equity commitments organized to make strategic investments in the energy and natural resources sectors. For more information visit www.ngpenergycapital.com.

by:Reuters

 
HOUSTON, Jan 4 (Reuters) – Luxe Energy LLC said on Thursday it had received an additional $296 million from its private equity backers to buy and develop acreage in the Permian Basin, the largest U.S. oilfield stretching across Texas and New Mexico.

NGP Energy Capital Management is increasing its funding for Luxe and a related company to $820 million, up from a previous commitment of $524 million.

This latest private equity investment in the U.S. shale industry is as much a bet on consolidation opportunities in the Permian as it is a vote of confidence in Luxe, which used a prior round of NGP funding two years ago to buy 18,000 acres and then within months sold it for a double-digit profit to Diamondback Energy Inc.

Luxe plans to use the cash to buy as much as 60,000 across the Permian that it would at some point in the future sell or list as a publicly traded company.

“We think there is a great opportunity for consolidation now” in the Permian, Lance Langford, Luxe’s chief executive, said in an interview. “We want to build something big.”

Luxe, formed in 2015 by Langford and other former Statoil executives, is betting that as publicly-traded oil producers focus more on cutting costs, they’ll shed acreage that might be considered non-core.

“We can see what’s hitting the market right now, and we’re excited,” said Langford. He declined to discuss potential or pending deals.

Luxe’s operations team, staffed with some of Statoil’s former Bakken Shale engineers, has yet to actually drill any wells together because the company quickly sold its initial acreage to Diamondback. That does not seem to bother Irving, Texas-based NGP.

“We have an extremely high degree of confidence in the technical and operational skill set of this team,” NGP’s Tony Weber said in a statement.

Ideally, Langford said, Luxe would quickly begin drilling any acreage it acquires with the fresh NGP funds.

The company will have to contend with spiking land costs in the Permian, considered one of the most-active oilfields in the world and one expected to grow more active with oil prices now trading about $60 per barrel. Oasis Petroleum Inc , for example, paid $946 million last month for 20,300 acres, or roughly $46,000 per acre.

The rising land costs could dent Luxe’s plans to amass land holdings of as much as three times what Oasis acquired, though Langford said he was not dissuaded.

“I have a team of roughly 30 that is always looking around at potential deals,” he said. “When the economics are right, they’ll know.”

Reporting by Ernest Scheyder; Editing by David Gregorio