Canada Pension Hungry for More Energy Assets After Two Deals

Canada Pension Plan Investment Board, the country’s largest pension fund, isn’t done shopping for energy assets after committing almost $2 billion to the industry in the past two weeks.

"We think we can make returns through cycles and right now there’s a compelling opportunity to invest," Avik Dey, head of natural resources at Canada Pension, said in an interview in Toronto Thursday. "We’re not trying to pick the bottom."

A new entity, 95-percent owned by Canada Pension, agreed on Thursday to buy oil and gas properties in Colorado from Encana Corp. for $900 million. The remaining interest is held by the Denver-based Broe Group, an investment management company.

Last week, the pension fund struck a partnership with Calgary-based Wolf Infrastructure Inc. to acquire midstream energy infrastructure assets. The initial goal is to invest more than C$1 billion ($766 million) in the sector.

Canada Pension and the Broe Group will inherent the management from Encana on their new assets in the DJ Basin in Colorado and are looking to put a permanent management team in place in the coming weeks, Dey said.

"We think the DJ basin is one of the most attractive basins in the U.S.," Dey said. "We certainly have an appetite to do more. We think there’s great running room in this asset itself and if those opportunities persist, we’d be excited to invest more capital in this asset."

The slump in the price of oil is prompting energy companies to consider asset sales or outright corporate sales, creating opportunities for acquisition.

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