Warburg-backed energy firm raises $1.3bn debut fund

Warburg Pincus-affiliated Sheridan Production Partners has closed its first fund on $1.3 billion (€940 million), surpassing its initial $1 billion target.

The fund has yet to make any investments, but will seek to acquire mature, US oil and gas properties, which Sheridan will optimise through “accelerated production, recovery enhancement and additional capital”, according to a statement. Sheridan will look for low-risk opportunities with “good returns”, said a person familiar with the firm’s strategy.

“We’re pleased to have the resources of a dedicated fund at a time when there is an increased focus on energy operations and optimization and a particularly attractive supply and demand dynamic for mature properties,” said the firm’s chief executive, Lisa Stewart, in a statement.

Private equity firm Warburg Pincus and Stewart, the former president of of El Paso Exploration & Production Company, founded Sheridan last September.

Warburg Pincus has long been active in the energy sector, having invested some $1.5 billion in oil and gas production and exploration, logistics, and energy services companies over the last two decades, including Antero Resources, Kosmos Energy, and Broad Oak Energy. The firm continues to make independent investments in the energy sector, although unlike Sheridan, Warburg Pincus does not make direct investments in properties.

As oil supplies shrink and prices rise, many private equity firms have raised large cap funds dedicated to the sector. In June Houston, Texas-based EnerVest Management Partners closed a $1 billion oil and gas fund, and Quantum Energy Partners, also based in Houston, closed on $1.32 billion for oil and gas investments in January.