An oilfield worker walks past the Statoil oil sands facility near Conklin, Alta., in this 2011 file photo.Todd Korol/Reuters
Private equity firms have been poised for months to pounce on energy acquisitions as the industry creaks under the strain of the oil-price collapse – and now some are doing just that.
KERN Energy Partners has made an investment in Kaisen Energy Corp., a private firm that produces heavy oil. The firms declined to give the dollar figure, saying only that it is "sizable."
Cameron King, Kaisen's CEO, said the cash injection will allow his company to help fund development and capitalize on opportunities that pop up with the energy sector in turmoil.
The company, led by former managers at such firms as Husky Energy, Penn West Petroleum and Canetic Resources, produces about 1,800 barrels a day in the Lone Rock and Edam regions of Saskatchewan.
KERN executives Dave Pearce and Chris Hooper are joining the board, along with Baytex Energy Corp. chief operating officer Richard Ramsay.
The move was announced two days after Riverstone Holdings LLC, the U.S. private equity investor, said it aims to buy the shares and warrants in privately held Canadian International Oil Corp. that it does not already own. CIOC has assets in the Montney and Duvernay areas of Alberta.
That offer is anything but a done deal. CIOC said in a release that it retained Canadian Imperial Bank of Commerce to study the offer, and that the bank concluded it was fair from a financial point of view.
Even so, it is not making a recommendation to its shareholders on whether to accept the bid. In addition, none of the company's directors or officers intends to do so, it said.
Riverstone, which has invested $29-billion (U.S.) in energy holdings around the world, is offering $1.675 in cash per share and $0.475 per warrant, according to CIOC.
Jeffrey Jones