Avista in $125m shale gas deal

The firm has made its second shale investment in the past month, committing up to $125m in Houston-based drilling company Sidewinder.

Avista Capital Partners has agreed to invest up to $125 million for a controlling stake in Houston-based drilling company Sidewinder Drilling.

Sidewinder is a land-based drilling contractor that uses drilling rigs to service exploration and production companies. Sidewinder was formed earlier this year by former members of Scorpion Offshore’s management team after Scorpion was acquired by offshore deepwater drilling company Seadrill.

Avista, which invests in sectors including healthcare and media in addition to energy, closed its second fund on $1.8 billion in 2010.

Avista’s investment in Sidewinder expands the firm’s investments in shale gas, a hot sector among private equity firms. Last month, Avista agreed to commit up to $176 million to Appalachian Midstream Partners (AMP), operator of a pipeline in the Marcellus Shale.

Private equity titans KKR and TPG have been particularly active in the sector in recent months. KKR acquired a number of properties in Texas’ Barnett Shale region from Carizzo Oil & Gas for $104 million in April. The firm also committed $125 million to a $625 million joint venture with El Paso Midstream Group, purchasing half of El Paso’s natural gas assets in Utah, which include 800 miles of pipelines.