Lime Rock Partners said June 28 that it closed a $1.9 billion acquisition fund, Lime Rock Partners IV AF LP. The fund has acquired the remaining assets of Lime Rock Partners IV LP, which has most of its value wrapped up in one investment called CrownRock. The fund received $741 million in new capital commitments from secondary and primary investors and from existing Fund IV investors. HarbourVest served as lead investor of the fund. Evercore provided financial advice to Fund IV. Morgan, Lewis & Bockius LLP served as legal adviser to the funds and Lime Rock.
Houston, June 28, 2018 – Lime Rock Partners, private equity investors of growth capital in E&P and oilfield service companies in the U.S. shales and elsewhere, announces the successful closing of a $1.9 billion acquisition fund, Lime Rock Partners IV AF, L.P. The fund has acquired the remaining assets formerly owned by Lime Rock Partners IV, L.P. (Fund IV), a 2006 vintage fund, and seeks to benefit from further value appreciation in those assets. The acquisition fund, in which HarbourVest served as the lead investor, received $741 million in new capital commitments from a diverse group of secondary and primary investors and from existing Fund IV investors. Employees of Lime Rock constitute, as a group, the single largest investor in the acquisition fund.
All Fund IV limited partners had the option of reinvesting their Fund IV exposure into the acquisition fund or receiving full or partial liquidity at the most recent fair value estimate.
The vast majority of the asset value in Lime Rock Partners IV AF is in the controlling interest in CrownRock LP, a Midland, Texas-based oil and gas producer operated by CrownQuest Operating. CrownRock is the largest private equity-backed private oil and gas company in the Permian Basin, with over 90,000 operated acres in the core areas of the Midland Basin and with recent production in excess of 40,000 barrels of oil equivalent per day. CrownQuest’s management and employees and Lime Rock Partners formed CrownRock in 2007 and remain the only common equity owners.
Jonathan Farber, co-founder and Managing Director of Lime Rock Partners, said, “We are gratified by the performance of Fund IV, and we are thankful to the new acquisition fund investors and rollover investors for their diligence and thoughtfulness as we jointly seek continued outperformance by CrownRock and the other assets in the fund. We believe a central lesson from the shale revolution is the differentiated value created by long-term exposure to low-cost, advantaged shales and management teams that are executing business plans in those areas.”
J McLane, Managing Director of Lime Rock Partners, added, “For the last 11 years, our partnership with CrownQuest in both CrownRock and CrownRock Minerals has allowed us and our investors to benefit from their prudent, thoughtful, Permian-focused approach in land, geology, engineering, and finance. We are grateful for the hard work of everyone at CrownQuest and look forward to the continued development of our assets as we continue the transition to full-scale development.”
Evercore served as financial adviser to Fund IV. Morgan, Lewis & Bockius LLP served as legal adviser to the funds and Lime Rock.
Since its inception in 1998, Lime Rock Management has raised $8.6 billion in private equity funds and affiliated co-investment vehicles for investment in the energy industry through Lime Rock Partners, investors of growth capital in E&P and oilfield service companies worldwide, and Lime Rock Resources, acquirers and operators of oil and gas properties in the United States. Lime Rock Partners is a creative investment partner in building differentiated oil and gas businesses, side by side, with entrepreneurs every day. The Lime Rock Partners team brings together specialist finance and operating expertise, technology leadership, people-centered strategies, and patient hard work with the goal of helping its investors and portfolio company partners profit from operational growth. For more information, please visit: www.lrpartners.com.