Warburg leads UK energy investment

The New York-based private equity firm has led a syndicate of investors in funding a start-up UK oil exploration firm.

Fairfield Energy, a newly-formed UK-based oil exploration and production company has secured provisional commitments of $200 million (€170 million) from management and a syndicate of private equity investors led by global investor Warburg Pincus.

Other investors in the syndicate include SGAM/4D Global Energy Development Capital Fund, a private equity fund managed by Paris-based 4D Global Energy Advisors that is dedicated to investing development capital in companies active in the hydrocarbons sector, and KERN Energy Partners I Fund, a Calgary-based $230 million private equity fund investing in early stage and emerging energy companies.

Warburg Pincus has invested $1.5 billion in the energy sector since the 1980s, according to the firm. The firm previously invested in Europe in July 2005 when acquiring ElectroMagnetic GeoServices (EMGS), a Trondheim-based provider of electromagnetic imaging services for the detection of hydrocarbons, from Norwegian oil and gas company Statoil and the Norwegian Geotechnical Institute. No price was disclosed for the transaction.

According to a spokesperson for Warburg Pincus, the firm is expected to invest more than €720 million in Europe in 2005, around double that of previous years.

Staines-based Fairfield Energy has been formed to appraise and develop known but neglected oil and gas resources and low-risk exploration prospects in the North Sea. The business will initially target the appraisal of blocks containing the Maureen and Crawford fields in the Central and Northern North Sea, with the intent of sanctioning new developments in 2006 and 2007.

In addition, Fairfield announced that it has agreed to acquire subsidiary companies from the UK’s Acorn Oil & Gas, including Acorn’s interests in the abandoned Maureen and Crawford fields.