Canada Pension Plan Investment Board (CPP Investments) is selling its 98% stake in Encino Acquisition Partners (EAP), a US oil and gas firm, to EOG Resources in a $5.6bn (€4.9bn) deal.
Having co-founded EAP with CPP Investments in 2017 to acquire oil and gas assets, Encino Energy will also be selling its interest in EAP.
EOG said it expects to fund the acquisition, which includes EAP’s net debt, through $3.5bn of debt and $2.1bn of cash on hand.
Ezra Y Yacob, chairman and CEO of EOG, said: “This acquisition combines large, premier acreage positions in the Utica, creating a third foundational play for EOG alongside our Delaware Basin and Eagle Ford assets. Encino’s acreage improves the quality and depth of our Utica position, expanding EOG’s multi-basin portfolio to more than 12bn barrels of oil equivalent net resources.
“We are excited to execute on this unique opportunity that is immediately accretive to our per-share metrics and meets our strict criteria for acquisitions – high-quality acreage with exploration upside, competitive with our current inventory, gained at an attractive price.”
Bill Rogers, head of sustainable energies at CPP Investments, said: “When we established Encino Acquisition Partners with Encino Energy in 2017 we envisioned creating a company that would be a leader in acquiring US oil and gas assets. Since then, it has done just that, and we are pleased with EAP’s success and the strong returns this investment has delivered.”
The C$36.3bn (€23.2bn) sustainable-energies business of CPP Investments invests in energy assets including renewables, conventional energy, carbon capture and storage, distributed and energy services and emerging and disruptive technologies.
To read the latest IPE Real Assets magazine click here.
