Mainland Resources, Inc.(fka MNLU)

[Ecomike]

More bullish NG news for MNLU and merger partner AEXP:

TPG Backing Natural-Gas Venture With as Much as $1 Billion

Q

By Beth Jinks and Jim Polson - Nov 9, 2011 9:03 AM PTWed Nov 09 17:03:02 GMT 2011

TPG Capital, the private-equity firm run by David Bonderman, committed as much as $1 billion to buy and operate conventional natural-gas fields in partnership with Dan Allen Hughes Jr. and Thomas M. Hart III.

The new company, Maverick American Natural Gas, will acquire North American gas fields at a time when “other companies divest them to raise capital,” Hart said today in a statement.

Gas futures have fallen almost 70 percent to average $4.14 a million British thermal units this year on the New York Mercantile Exchange from a peak of $13.69 on July 2, 2008. The decline reflects the impact of the economic slowdown and a 15 percent increase in energy demand and production, according to the Energy Department. The U.S. government yesterday lowered its forecasts for 2011 production, price and gas consumption.

TPG, based in Fort Worth, Texas, and rival private-equity firms including KKR & Co. and Blackstone Group LP (BX) are increasing gas investments in anticipation prices will rise as the gap to the cost of oil narrows. The firms are raising money to buy mature oil and gas fields that energy companies are shedding to finance new exploration.

“It’s a price bet,” William Weidner, chief executive officer of Weidner Advisors, an oil and gas investment-consulting firm with offices in Boston and Houston, said in a telephone interview. “The strategy is to take advantage of what could be the bottom of the natural gas price cycle.”

Selling Oil Fields

The value of deals in the energy industry this year has climbed almost 75 percent from a year earlier to $22 billion, according to data compiled by Bloomberg. The value of global leveraged buyouts fell 33 percent to $23.2 billion in the third quarter from the second, as banks hesitated to finance deals amid Europe’s debt crisis and slowing U.S. economic growth.

Producers including Oklahoma-City based Chesapeake Energy Inc. have sold gas fields or stakes in gas fields to finance acquisition and drilling of deposits that yield oil, which is more valuable in current markets, and petroleum liquids, whose price is tied to the cost of oil. On an energy-equivalent basis, oil was worth 4.4 times more than gas at yesterday’s closing prices, well above the historic average.

Hughes, who is chairman of the San Antonio-based TPG Maverick venture, is also chief executive officer and president of Dan A. Hughes Co. and Hupecol Operating Company LLC., with more than 30 years in the exploration and production industry. Hart, who is president of the new venture, has worked in energy transactions for 20 years and was formerly with El Paso Corp.

KKR, Blackstone

TPG Capital and KKR led a 2007 acquisition of Energy Future Holdings Corp., then known as TXU Corp., in the largest buyout in history with a value of $43.2 billion.

Blackstone, the world’s biggest private-equity firm, is seeking as much as $3 billion for its first energy fund, people familiar with the New York-based firm’s plans said last month. It has raised commitments of $1 billion, President Tony Jamessaid an Oct. 20 conference call.

KKR this month hired energy-industry bankers Claire Scobee Farley and David Rockecharlie as it expands oil and gas investments. KKR is in exclusive talks to buy Samson Investment Co., a Tulsa, Oklahoma-based oil and gas producer, people with knowledge of the matter have said.

Earlier TPG energy bets include Alinta Energy Ltd., Beta Renewables, Belden & Blake Corp., Copano Energy LLC, Denbury Resources Inc., Greenko Group Plc, Hong Kong Energy Holdings Ltd., Northern Tier Energy LLC, Petro Harvester Oil & Gas LLC, Texas Genco Holdings Inc. and Valerus Compression Services Ltd.