Houston-based Sheridan Production Partners has raised $1.8 billion for its second fund: Sheridan Production Partners II. The firm, which focuses on acquiring oil and gas properties across the U.S., aims to expand its holdings in East Texas, Louisiana and the Rocky Mountain region. The firm has raised more than $3 billion in equity since it was formed in 2006 by Sheridan Management and Warburg Pincus.
Sheridan Production Partners announced today that it has raised $1.8 billion of equity commitments through its second fund, Sheridan Production Partners II, to continue to implement its strategy of funding the acquisition of onshore producing oil and gas properties in the United States.
The private offering of limited partner interests in Sheridan Production Partners II was oversubscribed and reached its hard cap. Sheridan has raised over $3 billion in equity through private placements of two investment vehicles since its formation in 2006.
“We intend to use the second fund, combined with leverage, to acquire mature producing properties to complement Sheridan’s existing operations in Oklahoma, Texas and New Mexico. We also will look to expand our footprint to East Texas, Louisiana and the Rocky Mountain region,” said Sheridan’s founder and Chief Executive Officer Lisa Stewart. “Our limited partners share Sheridan’s strategic vision of acquiring a diverse portfolio of mature, predictable oil and gas producing properties, optimizing those assets through operational improvements and cost savings, hedging the production for several years, and enhancing returns through prudent leverage.”
Sheridan Production Partners II is under common management with Sheridan Production Partners I, the initial series of oil and gas partnerships established in 2007 with a similar investment strategy. Sheridan I has made five acquisitions for an aggregate purchase price of $1.6 billion utilizing a combination of equity commitments and debt financing. Sheridan I has now invested approximately 80 percent of its original commitments.
“The success of our second fund’s offering in a challenging fundraising environment is a testament to the strategy, execution and strength of the entire Sheridan team,” Stewart said. “With the equity commitments raised in Sheridan II, plus $245 million of equity remaining from our first fund, and our credit facilities, we now have over $3 billion of available capital and are actively reviewing acquisition opportunities that meet our strategic objectives and return profile.”
Sheridan Production Partners (www.sheridanproduction.com) is a Houston-based oil and gas operating company dedicated to building a balanced portfolio of mature properties across diverse onshore basins in the United States. Established by a proven and talented management team, Sheridan acquires mature assets and operates them to enhance recovery through capital reinvestment while focusing on cost control. Its strategy is to build value at the field level in order to maximize overall investor returns. The company’s three districts, staffed by 250 employees, currently produce approximately 19,000 barrels equivalent per day net, of which 90 percent is operated. As of September 30, 2010, Sheridan had approximately 127 million barrels equivalent of proved reserves with an approximate 19-year reserve life.
Sheridan was established in 2006 by Sheridan Management and Warburg Pincus (www.warburgpincus.com), a leading private equity investor since 1971 and one of the preeminent private equity investors in upstream energy.