Petroleum buys German assets from US owner – Exclusive

The European energy specialist is in the market raising its debut fund having previously funded investments on a deal-by-deal basis.

Petroleum Equity, the specialist investor in upstream oil and gas assets established in 2012, has acquired German exploration and production company Kimmeridge from its US private equity owner, Kimmeridge Energy.

The investment is the first fresh acquisition from the €300 million investment platform RDG, set up last year in partnership with European exploration and production company Rohöl-Aufsuchungs Aktiengesellschaft, otherwise known as RAG.

RDG was established to capitalise on the low price of oil to pick up attractively valued assets in the onshore European oil and gas market, with a specific focus on Germany. RAG initially transferred a number of assets into the venture when it was formed.

Financial details of the acquisition were not disclosed, but the two firms said the acquisition will broaden RDG’s existing portfolio in Germany by adding four licences in the country’s main oil province, the Lower Saxony Basin.

“The licences have significant redevelopment potential as they include conventional oil fields that previously produced, but were decommissioned more than 25 years ago due to the low oil price and technological limitations at the time,” the firm said.

“Kimmeridge has done an excellent job screening and acquiring prime redevelopment assets and has identified significant potential, which we now plan to bring to production,” said Bernhard Schmidt, chairman and founding partner of Petroleum Equity.

Neil McMahon, managing director of Kimmeridge Energy, said the firm had received interest from “a number of parties” for the assets, but had chosen to work with RDG because it was “the best-placed operator to realise the value in Kimmeridge’s German licences”.

The deal has been structured to allow Kimmeridge to “retain a portion of the upside” when production starts.

Petroleum Equity is currently in the market raising capital for its debut fund, Petroleum Equity Rho, according to a filing with the US Securities and Exchange Commission, which says the firm is being advised on the capital raising by London-based Rede Partners and San Francisco-based Growth Capital Services.