Tanking up

8 May 2017 By

The industry has raised over $2 bln this year via blank-check entities to buy up energy assets, with TPG the latest to join the party. Exxon and Shell are also prowling for west Texas acreage. As prices climb, the special-purpose funds will have to be nimble to avoid a shakeout.

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On May 5, TPG Pace Energy Holdings, a group formed by private-equity firm TPG Capital, started trading as the first special-purpose acquisition company on the New York Stock Exchange. The outfit raised $600 million with an initial public offering of 60 million shares at $10 each. The SPAC is being led by Stephen Chazen, the former chief executive of Occidental Petroleum.

On March 29, Silver Run Acquisition II, a SPAC backed by private-equity firm Riverstone Holdings, raised $1.035 billion in an IPO. On the same day, Kayne Anderson Acquisition Corp raised $350 million in an IPO. On April 11, Vantage Energy Acquisition priced a $480 million offering. Each blank-check vehicle intends to make investments in the energy sector.

In February 2016, Riverstone’s first energy SPAC, Silver Run Acquisition, raised $500 million in an IPO. In October it purchased an 89 percent controlling interest in Centennial Resource Production, an oil company with assets in the South Delaware Basin of west Texas’ Permian shale oil region. Terms weren’t disclosed.

KLR Energy Acquisition raised $80 million in March 2016 with the intent of making investments in the energy sector. On April 27, it completed a merger with Tema Oil and Gas, an exploration and production company that focuses on the Delaware Basin.

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