Equity Group Investments and Colony Capital have joined forces to invest in the US upstream oil and gas industry.
The pair have rebranded Colony HB2 Energy as Alpine Energy Capital to create the new joint venture partnership which will provide capital and asset management solutions, enabling institutional investors to participate directly at the asset level “without the overhead and reinvestment risks”.
In a joint statement, the companies said Alpine’s first investment is the recently closed $500m (€453m) DrillCo financing with California Resources Corporation. Alpine has committed $320m in the first tranche of this joint venture.
Sam Zell, chairman of Equity Group Investments, said: “The energy sector is being impacted by a shortage of capital, which is a direct result of the sector’s previous performance and investors’ inability to earn a return.
”We have a long history in investing in dislocated situations, of which this is an example.”
Tom Barrack, chairman and CEO of Colony Capital, said: “The industry conditions that helped create the opportunity we set out to capitalize on a year ago have persisted and only become more entrenched.
”We look forward to what we can accomplish together on behalf of our investors.”
Craig Perry, chairman of Alpine Energy Capital, said: “We are aggressively pursuing opportunities in the upstream oil and gas industry and look forward to speaking with operators in need of capital solutions.”