Transaction Reports Natural Gas Production
NorthWestern Energy acquires Natural Gas
Production in Bear Paw Basin, Montana from NFR Energy LLC
Legal advisors to NorthWestern Energy:
NorthWestern Energy acquires Natural Gas Production in Bear Paw Basin, Montana from NFR Energy LLC
NorthWestern Corporation d/b/a NorthWestern Energy announced the purchase of operating and non-operating natural gas production interests in northern Montana’s Bear Paw Basin from NFR Energy LLC. The purchase also includes NFR Energy's 75% interest in the Lodge Creek and Willow Creek Gas Gathering Systems.
The Bear Paw Basin purchase includes approximately 600 producing wells and two connected gathering systems with over 400 miles of pipelines in Blaine, Choteau, Fergus and Hill Counties. The amount of net proven developed producing reserves purchased is estimated to be 13.4 billion cubic feet (Bcf). Net production attributable to the assets purchased will be approximately 1.6 Bcf in 2012, or about 8% of NorthWestern’s current annual natural gas load in Montana.
Environmental due diligence provider to Bear Paw Natural Gas Production:
The purchase price for the Bear Paw Basin assets including the interests in the two gathering systems was $19.5 million (subject to customary post closing adjustments). NorthWestern funded the transaction with a portion of the proceeds from its August bond issuance and with internally generated cash flows. The intent is to capitalize the asset on a long term basis at approximately 50% debt and 50% equity.
Due diligence provider:
“This acquisition is part of our strategy to provide our Montana natural gas customers with a regulated source of proven supply from within our region that should help provide price stability to the gas portfolio for many years,” said CEO Bob Rowe. “We are focused on traditional gas assets with longer and more stable production lives.” Rowe added, “Although it’s hard to think of winter at this time of year, natural gas is an efficient, reliable and cost-effective heating source. Our customers expect us to provide them with good value and we believe this
investment in Montana provides very good long-term value.”
NorthWestern plans to include the cost of service for the Bear Paw Basin properties as part of its monthly natural gas supply rate adjustment on an interim basis commencing October 1, 2012, pending NorthWestern’s filing with the Montana Public ervice Commission for full review of the costs. This acquisition is expected to provide natural gas to ratepayers at a cost under $4/dekatherm for at least five years.
Michael Larson, Principal Scientist at KC Harvey Environmental LLC, led the transaction, and conducted environmental due diligence assessment of all Bearpaw natural gas field facilities acquired by NorthWestern Energy.
The number of facilities (500+) located within an area of 2,175,000 acres required continuous logistical strategies and teamwork to complete the work. Our KCH team of five professionals, who performed the Bearpaw Natural Gas Production Area Due Diligence Assessment, has a combined total of 35+ years of experience performing environmental management and assessment at oil and gas facilities.
KC Harvey Environmental, LLC is an environmental consulting and field services firm headquartered in Bozeman, Montana, with field offices in Rawlins, Baggs, and Cheyenne, Wyoming, and Grand Junction Colorado. We perform environmental consulting and field services for the oil and gas, mining, and energy industries. We have extensive expertise in soil science, land reclamation, wildlife and ecology, environmental chemistry and geochemistry, environmental due diligence and permitting, GIS and data management, hydrology, and water resources engineering.
Patron Capital L.P IV
Patron Capital establishes
Patron Capital L.P IV Legal advisors to Patron Capital:
Patron Capital establishes Patron Capital L.P IV
Patron Capital, the specialist pan-European opportunistic and distressed asset investor, today announced that it has raised over €880m, which includes a €100 million dedicated discretionary co-investment pool, for its new fund, Patron Capital, L.P. IV (‘Fund IV’). The fundraising significantly exceeded expectations, creating one of the largest funds within the Patron Capital portfolio. Monument Group acted as the exclusive placement agent.
Fund IV attracted blue chip investors comprising many existing investors as well as over 40% of new investors, including prominent universities, major institutions, private foundations and high net worth individuals located throughout Europe, North America, Asia and the Middle East.
Tax advisor to Patron Capital: Gibraltar Counsel:
Fund IV will acquire assets on its own as well as co-investing its war chest of €3 billion with partners and banks. The Fund has been established to continue the same successful strategy as Patron’s prior funds, opportunistically targeting distressed and undervalued investments, directly or indirectly related to property, primarily across Western Europe. The Fund will continue to target distressed property and property backed corporate investments including property companies, hotels and leisure and healthcare, which fit Patron Capital’s risk-adjusted return characteristics.
The Fund’s objective is to generate superior, absolute and risk-adjusted returns through a diversified portfolio of acquisitions. Investments are targeted with the aim of generating a 17% to 22% gross IRR over a three to five year investment horizon.
Guernsey Counsel:
15% of Fund IV has already been deployed, with initial investments including Luxury Family Hotels (the distressed Von Essen properties), the Motor Fuels Group chain of retail/petrol stations and the distressed Uni-Invest CMBS transaction in the Netherlands. Commenting on the final close of Fund IV, Keith Breslauer, Patron Capital’s founder and Managing Director, said:
“We are delighted with the excellent response we have received to Fund IV. The banking crisis, recession and real estate downturn has created exceptional conditions for Patron to source and execute investments with highly attractive absolute and risk-adjusted return potential over the Fund’s investment period. There is a plethora of opportunities in Europe at this point in time and the €880 million we have attracted will enable us to pursue our clear thematic approach.
“We have a large, experienced, passionate and hands-on investment team, whose interests are fully aligned with our investors’ and a deep in-house skill base in all aspects of deal sourcing, structuring, closing, development and management. Our focus is on becoming the market leader in distressed asset investment in Europe.”
Mr James Lasry, Partner and Head of Funds at Hassans led the transaction, with Hassans as the Gibraltar Counsel.
This was the first fund in any of the firms’ experience which was subject to dual primary regulation both in Gibraltar and in Guernsey. Many funds are regulated in one jurisdiction and then recognised in other jurisdictions for distribution. Because of various legislative requirements in Guernsey and in Gibraltar, the fund needed to obtain regulatory authorisation in both Gibraltar and in Guernsey before it could begin trading. It was particularly difficult to implement as it required the regulators from two separate jurisdictions to communicate and to liaise with each other in order to appreciate the differences between their respective regulatory frameworks’ requirements. It is safe to say that without our strong reputation and relationship with the Regulator this structure would not have been possible. Gibraltar is increasingly seen as a jurisdiction of choice in setting up funds to comply with AIFMD.
This is an excellent example of the flexibility that Gibraltar offers to real estate and private equity funds.
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