Reuters – Fairfield Energy Raises $350m from Riverstone

Fairfield Energy has raised up to $350 million from private equity firm Riverstone Holdings to help fund investment in oil and gas exploration and development in the British North Sea, writes Reuters. Fairfield said that the energy-focused private equity firm agreed to invest $150 million, with an option to top that up by an additional $200 million to match further contributions from its current backer, buyout house Warburg Pincus.

(Reuters) – Fairfield Energy raised up to $350 million from private equity firm Riverstone Holdings to help fund investment in oil and gas exploration and development in the British North Sea, where it sees opportunities even while the area’s overall output falls.

The unlisted company said on Monday that the energy-focused private equity firm agreed to invest $150 million, with an option to top that up by an additional $200 million to match further contributions from its current backer, buyout house Warburg Pincus.

Output from the British part of the North Sea plunged 19 percent in 2011 and is forecast to fall further this year due to the impact of older, harder-to-predict fields and expensive maintenance of ageing infrastructure.

Fairfield said that while the region may be less attractive to oil majors, whose chief interest has shifted to bigger finds west of the Shetland Islands, the smaller opportunities that remain suit players such as itself.

“We see it as a great place to invest,” Chief Executive Chris Wright said in a telephone interview, citing new allowances made by the government after a shock tax rise in 2011.

The company, which shelved plans for a $500 million listing in July 2010 citing market conditions, was set up six years ago to take advantage of an expected shift of oil field ownership to smaller companies from majors such as BP and ExxonMobil .

“We’ve seen majors beginning to turn over their portfolio as they look to invest in other parts of the world. We’ve also seen a more robust secondary market amongst the smaller companies, particularly as some of them are not that well funded,” Wright said.

As part of the deal, John Browne, BP’s former chief executive, will join Fairfield’s board as a representative for Riverstone.

When asked whether Fairfield could look to relaunch its IPO plans in the medium term, Wright refused to rule it out:

“The intention is to build a strong company that has a number of options available to it in realising value for the shareholders,” he said. (editing by Jane Baird)

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