New York private equity firm Warburg Pincus is investing up to $500 million in energy startup Independence Resources Management (IRM).
IRM, headquartered in Houston, plans to buy onshore oil and gas assets in the mid-continent and Rockies regions, focusing on the Anadarko Basin.
The investment comes at a time when low crude oil prices are causing distress in the energy sector, creating an opportunity for companies to buy assets at a discount. For more, see Investors Flow Into Oil & Gas.
IRM is led by CEO Mike Van Horn, who was formerly senior vice president of exploration at Newfield Exploration. "We are excited to have the support of Warburg Pincus, especially in the present commodity price environment, as we pursue the significant opportunity set we are seeing in our regions of interest," says Van Horn.
Warburg Pincus invested from Warburg Pincus Private Equity XI LP and Warburg Pincus Energy LP, as well as Navitas Midstream Partners LLC, Venari Resources LLC and Zenith Energy LP.
Warburg has closed 14 private equity funds since it was founded in in 1966, including a $4 billion fund focused on energy that closed in October 2014. The firm has committed more than $10 billion to energy investments.
We've seen several deals in the oil sector recently as dealmakers look to take advantage of prices. Canadian energy company Jericho Oil Corp. bought assets in Oklahoma, saying turbulent market conditions allowed them to purchase at a discount.