$133m ATP deal marks Petroleum Equity's maiden investment

The deal value stands at $133m. Petroleum Equity invested via its first vehicle, Alpha Petroleum.

"We are raising funds on a deal-by-deal basis. We were oversubscribed on this transaction and based on the support of our existing LPs we are expecting to raise an interim fund of $250-350m over the next nine to twelve months. Our LPs are a mix of blue chip institutional investors and very large family offices, both from the US, Europe and the Far East," says Daniel Reis, founding partner at Petroleum Equity. 

The parent company put ATP UK up for sale in late-2012, having filed for protection under the US Bankruptcy Code as a result of a multi-billion dollar insolvency.

"I'm familiar with most of the assets in the UK, having worked as a consultant for most small and large companies," explains Sven Tiefenthal, founding partner at Petroleum Equity. "We did some work in my previous firm for ATP. We were familiar with the assets and it came to our knowledge that they were financially distressed in 2012. We went to speak to the management team in August 2012 - just before the Chapter 11 announcement in the US. After the Chapter 11 announcement we backed off because we thought the transaction was too complex and there were some unresolved issues with liability. We took a back seat and followed from a distance for about eight to ten months, then we re-engaged with them in June 2013 when a picture began to crystallise of what you could buy these assets for and once the liability issues had been carved out."

Petroleum Equity launched in 2012 to focus on oil and gas investment opportunities in Europe, the Middle East and Africa. Average investment size stands at $75-150m of equity per deal.

"We've identified a gap in the market in terms of private equity capital. The space is covered by private equity capital in the US; about 90% of the world's private equity capital is chasing some 5% of the world's oil and gas reserves. The story is completely different in the European, Middle East and Africa space though. There is very little competition - there are a few large private equity houses in the space, but very few specialist private equity houses," says Tiefenthal.

Company
ATP UK's assets include four gas fields, development reserves and a corporate entity with UK North Sea operator status. Established in 2000, the company pursues the development and production of oil and gas fields in the UK North Sea.

The firm's management team will remain at the helm following the deal.

People
Sven Tienfenthal and Daniel Reis are founding partners at Petroleum Equity.

Advisers
Equity - Debevois & Plimpton (Legal) 

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• UK / Ireland
• Industrials
• Buyouts
• United Kingdom