Petroleum Equity seals debut investment

The newly-established UK firm will invest $133m in ATP Oil & Gas. 

Petroleum Equity will acquire the UK subsidiary of ATP Oil & Gas for about $133 million, according to a statement.

The transaction marks the first investment for the firm, which was founded in 2012. Houston-based ATP Oil & Gas develops and produces oil and natural gas in the Gulf of Mexico and the North Sea. The corporation filed for bankruptcy at the end of 2012 and put its subsidiary ATP UK up for sale.

“This was a complex transaction due to the nature of the assets, the cross-border restructuring process and the need to acquire ATP UK from its insolvent parent company,” Daniel Reis, a founding partner at Petroleum Equity said in the statement.

Petroleum Equity expects to complete the acquisition in February.

“It has been an extremely challenging period for ATP UK since ATP Corporation filed under Chapter 11 and we look forward to driving the business forward with Petroleum Equity’s support,” ATP UK managing director Graham Walters said in the statement.

Petroleum Equity focuses on oil and gas exploration and production investment opportunities outside of North America and primarily in Europe, the Middle East and Africa. The firm is pursuing a deal-by-deal fundraising structure, with the hope of transitioning to a standard fund structure over time. Petroleum made the ATP investment from its Alpha Petroleum fund, which was oversubscribed for the deal, according to a source familiar with the matter. The firm expects to close an interim fund of between $250 million and $350 million in the next 12 months, the source said.

Petroleum Equity declined to comment on fundraising.

The firm plans to invest between $75 million and $150 million per deal and has already identified about 15 other investment opportunities, totalling more than $1 billion in value, according to the statement.

Petroleum Equity was founded by four oil and gas professionals, including former Shell International executives Sven Tiefenthal, Bernhard Schmidt and Arun Subbiah.