DLJ Spinout invests $50m in oil exploration

Avista Capital Partners has committed $50 million to London-based Celtique Energie Limited to develop and explore onshore basins in Europe and Africa.

New York-based Avista Capital Partners, which was founded last year by a team of former DLJ Merchant Banking Partners executives, has committed $50 million (£26.5 million) to Celtique Energie Limited. The London-based energy company is working to develop prospects for oil and natural gas exploration in onshore basins in Europe and Africa.

Avista’s investment will be used to fund exploration and development activities in the region. The company, which was founded in 2004, will work to identify onshore basins in Europe and Africa, evaluate them and apply for exploration licenses. After receiving licenses for these areas, Celtique will complete a full evaluation and develop drilling prospects.

Avista said it expects a portion of the initial investment to fund formation costs and the evaluation of projects in France, Switzerland and Niger.

Avista Capital Partners was formed in 2005 by Thompson Dean after he left DLJ Merchant Banking, the private equity affiliate of Credit Suisse Group, and took 15 of his former CSFB colleagues with him. The firm is currently on the fundraising trail with a reported target of $2 billion. The spinout was a result of DLJ’s efforts to reduce conflicts of interest with its lucrative private equity clients, who use Credit Suisse for advisory services but were also facing the firm as a competitor.

Although most of the Avista team’s attention had been focused on the US energy sector while at DLJ, Steven Webster, who leads the firm’s efforts in the energy sector from Houston, said Avista is looking at areas outside of the US for oil exploration because there is less competition.

“We’re interested in areas outside of the US because we believe there’s a lot of untapped potential,” he said. “It’s not quite as competitive as it might be in some of the US basins right now.”

As former chairman of DLJ’s Global Energy Partners, Webster led an investment in Caledonia Oil and Gas, which explores offshore basins in the North Sea, in 2002. That company was sold to energy company E.ON in November of 2005.

Webster said that the firm chose to invest in on-shore exploration rather than another company focusing on the North Sea because they want to focus on areas that are less picked over.

Celtique was formed by David Williams, Geoffrey Davies and Christopher Pullan in 2004. All three men are former managers of geological, geophysical and exploration and development activities in basins in Europe, Africa and the Middle East.