Texas-based Private equity firm Quantum Energy Partners has teamed up with LINN Energy to acquire oil and natural gas assets in the US. The two firms will create a new entity – AcqCo for the newly acquired assets.
LINN Energy is an independent developer of oil and gas in the US. Its work typically centers on energy development in the basins throughout the US. Quantum was the first investor in LINN.
The board of directors of AcqCo will be comprised of five directors, with Quantum and its representatives retaining three seats and LINN having two seats. The partnership will be focused on conventional and unconventional resource development opportunities across the United States.
Quantum will initially commit up to $1 billion in equity capital for acquisitions and development of the assets. LINN will also be able to participate in acquisition opportunities up to a 50% stake.
LINN will be tasked with managing the acquisitions, and will be covered for general and administrative expenses. Should any of the assets be sold, LINN will also have the right of first offer to the assets.
The agreement also provides allowances to expand the alliance beyond the $1 billion commitment. The alliance will allow both firms to participate in acquisitions outside of the conventional MLP asset profile, and pick up distressed assets as sluggishness in energy markets persists, LINN Energy said in a statement.
This is not the first time Quantum has partnered with an energy developer to acquire assets. In August the firm partnered with ZaZa Energy Corporation on a $17 million joint venture for 15 wells in Texas, as PEI reported at the time. Quantum is also in market with its sixth energy focused fund, which is targeting $2.5 billion. The firm held a first close on $1.17 billion in June of last year.