Castlelake, a private investment firm, has entered into a joint venture with Perpetual Production, a Dallas-based oil and natural gas company, to invest in minerals and “overriding royalty interests” in the US mid-continent region.
The venture—called Perpetual Production – MidCon, LLC—will also be interested in opportunistic plays, such as leasehold interests in other regions. Josh Camp, Perpetual’s president and CIO, will lead the joint venture. Camp noted, “Castlelake’s opportunistic investing approach in oil and gas aligns with our outlook and our focus on portfolio optimization through a balanced approach to risk and reward, as well as evolving strategic focus as market dynamics change.”
Castlelake’s approach to these investments is to opportunistically provide capital input to small- to mid-size ventures with quality assets. According to Evan Carruthers, managing partner, Castlelake, “The joint venture enhances Castlelake’s ability to aggregate smaller, off-the-run mineral interest assets that may generate and preserve value in today’s evolving economic environment.” He expects that Perpetual’s “expertise in mineral interests” and Castlelake’s “track record in oil and gas as a reliable, value-added capital partner” will strengthen the joint venture.
The Minneapolis-based Castlelake invests globally in private investments in areas such as alternative assets, nonperforming loans, industries that are going through dislocations, and corporate “special situations.” The firm manages about $10 billion in assets for various institutional investors.
According to a CNBC news report citing the Energy Information Administration, the US exported more natural gas than it imported in three months during the five-month period of January through May 2017. The US is also likely to emerge a net exporter of natural gas next year. This comes about with rising overseas demand for natural gas from Mexico, and reduced US imports from Canada. And Morgan Stanley expects that natural gas prices will rise this winter, according to the CNBC report.