Metalmark in E&P Play
The former Morgan Stanley PE arm backed Jones Energy in its acquisition of Crusader Energy Group’s assets.
January 4, 2010
As private equity investments in the midstream sector heat up, Metalmark Capital partnered with Jones Energy, a midstream company based in Austin, Texas, to purchase Crusader Energy Group Inc. out of bankruptcy.
Metalmark, the New York-based private equity firm that was formerly known as Morgan Stanley Capital Partners, backed the transaction, enabling Jones Energy to strengthen its drilling capacity in the Texas Panhandle area. In addition to Jones Energy’s current involvement in the Texas Panhandle region, the company is also focused in opportunities in Fort Worth Basin, West Texas and the Williston Basin.
In March, listed, Oklahoma-based Crusader Energy filed for bankruptcy protection, less than a year after its reverse merger with Dallas-based Westside Energy Corp. in June 2008.
Metalmark was spun out from Morgan Stanley in 2004, then was later acquired by Citigroup Alternative Investments in December 2007. Metalmark’s predecessor firm, Morgan Stanley Capital Partners, was founded in 1985.
The buyout firm has been an active investor in the midstream space. In November, Metalmark backed Monarch Investments Holdings, LLC, a midstream company launched by Greg Sales, Terry Klare, Dave Kenyon and Keith Finger. Earlier in the month, the firm partnered with Northeast Natural Energy, LLC to explore opportunities in the Marcellus Shale region. The firm also acquired a stake in Old Greenwich, Connecticut-based Maxum Petroleum in December 2008.
The sale comes on the heels of several midstream bankruptcies that were filed over the past year. In December 2008, Longhorn Partners Pipeline filed for Chapter 11 bankruptcy protection. In July 2008, SemGroup LP filed for bankruptcy.
Crusader was advised by Jefferies & Company, Inc., and received legal counsel from Vinson & Elkins LLP and Tulsa, Oklahoma-headquartered Hall Estill.
Crusader shares traded at $0.0010 per share, as of last Thursday's close. When contacted by Mergers & Acquisitions, Metalmark declined to comment on the transaction. Calls placed to Jones Energy were not returned by press time.
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