Consortium backs C$625m Canadian oil play

Riverstone, Goldman Sachs and Kelso & Co. are among five investors backing an oil exploration and production company targeting the ‘hottest play in Western Canada’.

Shelter Bay Energy, a Canadian oil and gas exploration company, has received C$625 million ($614 million, €329 million) in growth capital from a consortium including Riverstone Holdings, an energy-focussed Carlyle Group affiliate, Goldman Sachs and middle market firm Kelso & Co.

Hedge fund Trafelet & Company, and Crescent Point Energy, a publicly traded Canadian income trust that formed Shelter Bay, were also part of the investing consortium. Specific details as to each entity’s investment amount were not disclosed.

The financing was increased to C$625 million from an originally agreed C$300 million to better capitalise on expansion opportunities in the Bakken lands of Southeast Saskatchewan, the company said.

“The Bakken is the hottest play in Western Canada,” Trent Stangl, Crescent Point’s investor relations manager, previously told local Canadian newspaper The StarPhoenix.

The Bakken rock lands encompass parts of the US states of Montana and North Dakota as well as the Canadian provinces of Saskatchewan and Manitoba; the Saskatchewan portion is estimated to hold between 25 billion and 100 billion barrels of light crude oil, The StarPhoenix notes.

Shelter Bay said it is currently producing more than 3,900 barrels of oil per day and has accumulated more than 55 gross sections of Bakken land with more than 200 drilling locations.

Riverstone founder and managing director David Leuschen said in a statement: “Shelter Bay represents a compelling opportunity for Riverstone to invest with a leading operator in the Saskatchewan Bakken, one of the most promising conventional oil plays in Western Canada.”