Warburg Pincus has agreed to invest up to $500 million in oil & gas exploration and production startup RimRock, marking yet another large commitment to the sector for the firm. Just two weeks ago, Warburg Pincus became a new investor in Terra Energy Partners, which is also focused on acquiring and developing North American oil & gas assets, joining previous backer Kayne Anderson Capital Advisors as an equal partner.
The recent deals may signal the precipice of elevated private equity activity in the distressed energy sector. As the oil supply glut has continually depressed prices per barrel, PE firms have raised ever-increasing sums for oil & gas-focused investment vehicles. According to the PitchBook Platform, PE firms raised $33.7 billion for oil & gas funds in 2015, a 94% increase from three years earlier. Conversely, the number of funds closed each year has gradually decreased—from 23 in 2012 to 14 last year—perhaps reflecting an overall shift in PE focus toward operational expertise.
Here are the largest 2015 vintage oil & gas funds raised by PE firms:
1. EnCap Energy Capital Fund X — $6.5B
2. ArcLight Energy Partners Fund VI — $5.6B
3. Blackstone Energy Partners II — $4.5B
4. Quantum Energy Partners VI — $4.45B
5. Carlyle International Energy Partners — $2.5B