Quantum Energy Partners, the $6.5 billion Houston-based private-equity firm, is bankrolling a company to acquire offshore U.S. oil fields as rival explorers shift attention to shale and other so-called unconventional prospects.
Quantum’s Renaissance Offshore will have $300 million to start and will be led by Jeffrey Soine, the former executive vice president of international business at Australian oil producer Woodside Petroleum Ltd., Dheeraj Verma, a managing director at Quantum, said in a telephone interview yesterday.
Renaissance made its first acquisition on Dec. 30, buying Chevron Corp.’s Ship Shoal 266 field, Verma said. The field produces primarily oil and is located about 75 miles (121 kilometers) off the Louisiana coast in 180 feet (55 meters) of water, he said. Ship Shoal 266 was the first U.S. well to tap crude trapped below the salt layer beneath the Gulf floor, Offshore Magazine said in a 1999 article.
Energy producers such as Chevron and Exxon Mobil Corp. have been selling assets in the Gulf to drill unconventional oil and natural-gas prospects in Pennsylvania, Ohio, Texas, Oklahoma and North Dakota. Renaissance, based in Houston, plans to increase production from Ship Shoal 266 and make other shallow-water acquisitions in the Gulf, Verma said.
“There are a lot of assets for sale in the Gulf, partly because companies are facing massive capital requirements to fund their shale programs,” Wil VanLoh, co-founder of Quantum, said during a telephone interview yesterday.
Offshore asset prices have declined during the past year as tougher drilling rules imposed after the fatal 2010 disaster at BP Plc’s Macondo well prompted explorers to shrink their investments in the region, VanLoh said.
Gas prices that tumbled to a 10-year low last month also have driven asset sales by energy producers in need of cash to fulfill drilling obligations in onshore shale leases, he said.
Newfield Exploration Co. said yesterday it will halt exploratory drilling in the Gulf and may seek a buyer for those “non-strategic” assets.
Investors punished a move into the shallow waters of the Gulf last week by SandRidge Energy Inc., the Oklahoma City-based energy producer founded by Tom Ward.
SandRidge lost as much as 14 percent of its market value on Feb. 2, the day after announcing the $1.28 billion acquisition of Dynamic Offshore Resources LLC, which operates wells in the shallow coastal waters of the Gulf.
Ward’s Dynamic deal was panned by analysts such as David Heikkinen of Tudor Pickering Holt & Co. because it will expose SandRidge to hurricane risks and increase its gas output amid a supply glut that has depressed prices.
Verma said Renaissance is different because its focus will remain on “oily” Gulf properties. Many of the assets being offered for sale by major energy companies produce mostly gas and are money losers at current commodity prices, he said.
Since its founding in 1998, Quantum’s startups have included Titan Exploration, later named Pure Resources and sold to Unocal Corp. for $1.6 billion, and Celero Energy Partners, which was sold to Whiting Petroleum Corp. in 2005 for $800 million.