Sierra Oil & Gas S. de R.L. de C.V., Mexico's first independent exploration and production company, received $525 million in equity from private-equity firms Riverstone Holdings LLC and EnCap Investments LP, the company said Sept. 18. Mexican infrastructure-focused private-equity firm Infraestructura Institucional committed $75 million, the company added.
Riverstone and EnCap both committed $225 million, Mexico City-based Sierra noted. All three firms have the option to double their commitments, the company said.
Sierra, led by CEO Ivan Sandrea, will consider hydrocarbon transportation, storage and processing opportunities, but plans to participate in exploration and development opportunities under Mexico’s energy reform, the company said.
Sandrea has leadership experience with Statoil ASA (NYSE: STO), BP Plc (NYSE: BP), OPEC and Energy Intelligence, the company noted. He assembled a team of oil and natural gas professionals from Mexico and around the world, with 350 years’ collective experience, the company added.
"The opening of Mexico's energy sector represents a transformational opportunity for the country. Mexico has a world-class petroleum system, a significant oil and gas industrial base, a new and modern oil and gas framework, professional institutions, professional human capital and is one of the most progressive economies in the world,” Sandrea said.
“At Sierra we have been preparing for this opportunity for several years, having assembled a unique team with outstanding commercial, technical and operational experience as well as the financial backing and expertise of some of the world's top energy investors and of Mexico's leading infrastructure fund. We are proud to be Mexico's first independent oil and gas company," he added.
"We are delighted to partner with Sierra's outstanding management team for what is our first investment in Mexico. We have been very impressed with the progress of the energy reform and look forward to contributing to the growth of a vibrant, private energy sector in the country, as we have done in the U.S., Canada and elsewhere," said Jim Hackett, a Riverstone partner.
"Our equity commitment to Sierra reflects the confidence that we have in Ivan and his team, as well as our belief in the potential for significant growth in Mexico's oil and gas sector," said EnCap partner Jason DeLorenzo.
Riverstone Holdings LLC is based in New York.
EnCap Investments LP is based in Houston.
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