Despite the naysayers, Ontario Teachers' Pension Plan is bullish on natural gas. At least over the long term.
The private equity arm of the behemoth pension fund has invested $150-million in privately owned Canbriam Energy, which operates in the Montney region of British Columbia. Although the cheque isn't so big for such a massive firm, Teachers is joining a blue chip consortium of big name players who support the company.
Cambrian's existing group of private investors includes Warburg Pincus, ARC Financial and GE Asset Management. According to the company's website, they've already put in about $400-million (U.S.).
While Canadian pension fund money isn't brand new in the energy sector – Canada Pension Plan Investment Board acquired a 17.5 per cent stake in Laricina Energy back in 2010, for instance – the latest deal is a reminder that foreign firms aren't the only ones looking at opportunities in British Columbia and Alberta.
Cambrian currently produces about 7000 barrels of oil equivalent per day in the Montney region, of which 30 per cent are natural gas liquids. The firm also owns land in the Lorraine play, east of Montreal. The firm's management has a lengthy history in the energy sector, including stints at Espirit Energy Trust and Pengrowth Energy Trust and in investment banking at Goldman Sachs in Calgary.