Team members from Terra Energy Partners are launching Terra II with Kayne Anderson backing. (Source: Shutterstock.com)
Terra Energy Partners II said June 3 it has launched with backing from private equity firm Kayne Anderson.
Terra II has secured $300 million in equity commitments from Kayne Private Energy Income Fund III LP and members of the company’s management team.
Terra II will focus on acquiring and developing “large, cash flowing oil and natural gas assets with significant existing production throughout the Lower 48,” the company said.
The oil and gas startup is led by CEO BJ Reynolds and COO Wes Hobbs, who previously held leadership roles at Terra Energy Holdings LLC, or Terra I. Terra I operated in Colorado’s Piceance Basin, where it grew into one of the largest privately held gas producers in the U.S.
Terra I produced approximately 600 MMcfe/d of net production at its peak and drilled and completed more than 700 wells over a nine-year run in the Piceance.
"We’re excited to renew our partnership with Kayne Anderson as we launch Terra II,” Reynolds said. “Building on the strong foundation and track record established with Terra I, we are confident in our ability to capture compelling opportunities in today’s market.”
Terra I was backed by private equity funds from Kayne Anderson and Warburg Pincus. In 2016, Terra made a $910 million acquisition of Piceance Basin assets from WPX Energy.
The WPX deal included about 200,000 net acres and 11,000 gross drilling locations in northwestern Colorado.
In 2020, Terra agreed to acquire assets from bankrupt Ursa Piceance Holdings LLC for $60 million.
Terra I successfully exited earlier this year, the companies said. Hart Energy has reached out for more information on the sale of Terra I.
The sale of Terra I marks the latest significant transaction in the Piceance, a basin that’s taken a back seat to more prominent gas plays such as the Haynesville and Appalachia.
Last year, Rockies producer Caerus Oil and Gas sold to private equity Quantum Capital Group through transactions valued at $1.8 billion.
One of those deals included Caerus’ gas assets in the Piceance, where the company held around 600,000 acres. Quantum portfolio company QB Energy now manages the Caerus Piceance assets.
The Caerus deal also included gas assets in Utah’s Uinta Basin, which sold to Quantum portfolio company KODA Resources.
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