$7 billion commitment exceeds $6.5 billion goal

EnCap Investments announced it has closed EnCap Energy Capital Fund XI, which achieved capital commitments above its target.

EnCap raised a total of $7 billion for this new fund, above its $6.5 billion goal. EnCap ‘s new fund follows its $6.5 billion predecessor, which was formed in April 2015. That fund is now entirely committed, according to the Wall Street Journal.

EnCap is highly active in investing in the oil and gas sector, and has stakes in numerous companies. The fund lists just under 50 current upstream investments and 45 investments that have already been realized.

One of EnCap’s realized investments, for example, is American Resource Development (Ameredev). Ameredev I was formed in 2015 with an equity commitment of $250 million from EnCap. Ameredev amassed a 27,500 acre position in the Delaware, and was purchased by Callon Petroleum (ticker: CPE) for $633 million last year.

Ameredev has returned recently, with a $400 million commitment, and is now building core acreage in the New Mexico portion of the Delaware Basin. The company plans to drill delineation wells in late 2017 to early 2018, the first production from its properties.

Many private equity-backed funds seek to acquire a large undeveloped acreage position, then sell to a public company. However, that alone is no longer good enough, EnCap Managing Partner Jason DeLorenzo told the Wall Street Journal. “Buyers are not being rewarded for buying large chunks of acreage that might be prospective. To really realize value today you need a more fully-developed asset base and convert undrilled locations into cash flow and production.

“We are extremely pleased to close Fund XI, our 20th institutional fund to date,” said Marty Phillips, a Founder and Managing Partner at EnCap.

“This fund represents a significant milestone in EnCap’s 29-year history and we are incredibly proud to have completed another successful fundraise. We see this latest close as a clear endorsement of our strategy and thank our new and existing investors for their partnership.”

Doug Swanson, a Managing Partner, added, “Fund XI allows us to continue to build upon our 29-year track record of building companies in the upstream sector with proven high-quality management teams.  The opportunity set for investment remains compelling and dynamic and we are pleased to have a new pool of capital from a diverse range of investors to begin taking advantage of opportunities in the marketplace.”


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