New York private equity firm Pine Brook is investing $300 million in equity to form energy company Red Bluff Resources Holdings LLC.

Oklahoma City, Oklahoma-based Red Bluff will focus on buying and developing onshore crude oil and natural gas reserves in the Midwest as well as the Permian basin.

“It was critical for us to select a firm that had both the financial resources and the strong understanding of the energy industry’s specific challenges and opportunities,” says Red Bluff CEO Timothy Haddican.

Falling oil prices are challenging the balance sheets on several oil and natural gas companies, which will provide attractive opportunities for private equity firms.

Several firms have closed sector-specific funds. In July, Ridgewood Energy closed a $1.9 billion energy-focused private equity fund and in April, Warburg Pincus announced that it will invest up to $500 million in energy startup Independence Resources Management.

Pine Brook has a number of energy portfolio companies, including Brigham Resources LLC, High Ground Energy Inc. and Serafina Energy Inc.

The firm is also investing up to $100 million to create Cahill Services LLC, which provides specialty rental services to oil and energy companies, it announced in July. Read more about Pine Brook’s energy investments here.

Rivington Holdings LLC and Crowe & Dunlevy are advising Red Bluff. Vinson & Elkins LLP is representing Pine Brook.

For more on how oil prices are affecting M&A, see Investors Flow Into Oil & Gas and watch our video interview with Jones Day’s Jeff Dinerstein, who says to expect more energy deals.

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