Double Eagle Energy launched a new venture to “aggressively pursue very large acquisitions” in the Permian Basin, Co-CEOs Cody Campbell and John Sellers said, with the addition of a new financial backer—EnCap Investments LP.

“I have known Cody and John for many years and our team at EnCap has long admired their approach to business,” Gary Petersen, founder of EnCap Investments, commented in a company release on June 19.

In the release, Double Eagle said it had entered a strategic partnership with EnCap to form Double Eagle Energy Holdings IV LLC and Tumbleweed Royalty IV LLC. The new entities have also received minority investments from Apollo Global Management LLC, Magnetar Capital and other strategic institutional partners. In total, Double Eagle IV has raised over $1.7 billion of equity commitment.

Double Eagle IV will pursue a similar strategy that led to the success of the predecessor companies, according to the release, but on a “considerably larger scale” and with a more substantial upfront commitment from funds managed by EnCap, along with Apollo, Magnetar and the Double Eagle management team. Tumbleweed IV will focus on royalty and mineral investments across the Permian Basin.

“Together with the financial strength of our partnership, our track record of success and our world-class operating team, we can confidently and aggressively pursue very large acquisitions while continuing to organically assemble smaller opportunities and undertake an ambitious development program,” Campbell and Sellers commented in the company release.

For more on Campbell and Sellers, check out Double Eagle Energy: Natural-Born Deal Makers featured in the February 2019 issue of Oil and Gas Investor.

Since forming Double Eagle in 2008, Campbell and Sellers have completed thousands of individual transactions encompassing more than 1 million acres and more than $6 billion in transaction value, according to the company’s website.

Formation of their new venture with EnCap follows the recent successful sale in 2021 of Double Eagle III Midco 2 LLC, wholly owned by DoublePoint Energy LLC, to Pioneer Natural Resources Co. for approximately $6.4 billion. DoublePoint was backed by equity commitments from Apollo, Magnetar, Quantum Energy Partners and GSO Capital Partners LP.

“Pairing EnCap with our longtime investors, Apollo and Magnetar, along with several large strategic institutions and our own personal capital, provides us with a unique strategic advantage,” Campbell and Sellers added in the release on June 19.

Apollo has backed Double Eagle since April 2013 and Magnetar first invested in the company in November 2016.

Kyle Kafka, partner of EnCap Investments, also commented on June 19, “The Double Eagle team brings unique relationships and a proven track record of success in the industry. We are excited to partner with John, Cody and the entire management team and look forward to building a substantial business together.”

EnCap engaged Vinson & Elkins LLP and Double Eagle engaged Akin Gump Strauss Hauer & Field LLP as their respective legal advisers.

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