Warburg Pincus LLC, the private-equity firm with more than $35 billion in assets under management, said it will invest as much as $1.13 billion with three other partners in Venari Resources LLC, a deep-water oil exploration company.
Warburg joins Kelso & Company, Temasek Holdings and the Jordan Company in committing to fund the Dallas-based oil exploration and production company, the firms said today in a statement. Venari is led by Brian Reinsborough, the former chief executive officer of Calgary, Canada-based Nexen Inc.’s U.S. business, who left the energy company last year to join New York-based Warburg as a so-called executive-in-residence.
“We think the deal flow right now in the deep water Gulf of Mexico is very high,” Reinsborough said in a telephone interview today. “There are a lot of drill-ready prospects available in the region, and we want to take advantage of that oversupply.”
Warburg, which focuses more on backing companies it thinks will grow than engaging in traditional buyouts, has invested over $6 billion in energy companies during the past 20 years. Led by Charles Kaye and Joseph Landy, the firm has raised more than $5 billion for its next fund, which is seeking $12 billion in total, a person familiar with the plans said this month.
The value of private-equity deals in the energy industry almost doubled last year to $33.3 billion from $17.5 billion in 2010, according to data compiled by Bloomberg, as the firms seek to build track records in order to attract capital from clients focused on the industry.
Temasek, Singapore’s state-owned investment company which owns assets worth S$193 billion ($152 billion), said this month it will back Cheniere Energy Inc. with about $468 million alongside investor RRJ Capital.
Apollo Global Management LLC (APO) in February agreed to acquire El Paso Corp.’s oil and gas exploration business for $7.15 billion, and KKR & Co. (KKR) in November agreed to buy most of oil and gas producer Samson Investment Co. for $7.2 billion.
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