Triangle Petroleum, an oil and gas exploration and production company with assets in North Dakota and Eastern Canada, has formed a joint venture with Oppenheimer Global Resource Private Equity Fund I and a related co-investment fund, each a New York based investment fund managed by an affiliate of Oppenheimer.
OGR has made a USD25m capital commitment to co-invest with Triangle in its future acquisition and development of assets in the North Dakota Bakken Shale play.
USD10m of OGR’s initial capital, which OGR has the right to increase up to USD19m, is allocated for leasehold acquisition with the remainder available for well development.
Under the agreement, OGR has the right to participate in up to 25 per cent of future Triangle activity in the Williston Basin.
OGR will pay its share of leasehold costs in all leases in which it participates, plus a premium to Triangle equal to an additional percentage of lease acquisition costs which is designed to remunerate Triangle for its services in sourcing and managing the acreage activity in the Williston Basin. The acreage premium varies depending upon the level of lease acquisition costs.
OGR will also bear 25 per cent of all of Triangle’s brokerage costs in the region. In addition, OGR will pay its proportional share of all drilling and completion costs, plus a ten per cent premium thereof to Triangle for its services associated with well development. Triangle will also earn an annual management fee as G&A reimbursement.
Future leasehold acquisition pursuant to Triangle’s joint venture with Slawson Exploration is excluded from the OGR agreement.
"We are very pleased to partner with Oppenheimer in the Williston Basin," says Jonathan Samuels, chief financial officer of Triangle Petroleum. "Their financial strength combined with our team’s technical capacity and growth platform will allow both parties to pursue the expanding opportunity set in the Williston Basin in a cost effective manner. We look forward to working with Oppenheimer and jointly accelerating our growth trajectory in the Bakken."
Triangle has also acquired substantially all the assets of Williston Exploration, a privately held Texas based company. The assets, approximately 1,732 net undeveloped acres in Williams County, North Dakota, are in contiguous blocks in three separate 1,280 acre drilling units and will provide Triangle’s first operated drilling locations. Total consideration will be up to USD2.2m of cash and up to 4.3 million shares of Triangle stock. The closing, which is subject to typical conditions and financing, is scheduled to occur in two parts in December 2010 and February 2011.
