US mid-market firms Post Oak Energy Capital and Ridgemont Equity Partners have committed $100 million to newly formed oil and gas exploration and production company Titan River Energy.
Post Oak and and Ridgemont will each invest $50 million in Titan River. The company’s management team will also co-invest an undisclosed amount in the business. Titan will focus on oil and gas exploration and production in shale rock formations in Texas.
“What makes this team unique for a $100 million-backed private equity team [is] they really have drilled a lot of shale wells,” partner at Ridgemont John Shimp told Private Equity International. “We’re looking to put our money into the actual drilling of wells as soon as possible as opposed to trying to lease acreage and hold onto the acreage and hope it increases in value.”
The investment in Titan marks Ridgemont’s first transaction of 2013 and third energy investment since spinning out of Bank of America in August of 2010. Ridgemont invested in Texas-based exploration and production company Unitex last year and oil and gas gathering and processing company Momentum Energy in 2010.
Ridgemont is in the process of raising its first fund as an independent firm, Ridgemont Equity Partners I, which is targeting $675 million and had collected about $586 million as of December 2012, according to documents filed with the US Securities and Exchange Commission. The Charlotte, North Carolina-based firm invests in four sectors: energy, healthcare, industrials and telecommunications.
Houston-based Post Oak is expecting to launch the fundraising process for its next oil and gas-focused private equity fund before the end of 2013, Post Oak managing director and founding partner Frost Cochran told Private Equity International in a previous interview. The Houston-based firm will likely target between $400 million and $500 million for the fund, well north of the $200 million its debut fund collected in late 2011.
Post Oak was unavailable for comment at press time.