On Friday, New York-based private-equity firm -
Apollo Global Management, LLC
) entered into a deal with Canada's largest natural gas producer -
) to buy the latter's Bighorn properties in Alberta for about C$2
billion ($1.8 billion). The transaction is anticipated to close by
the end of third-quarter 2014, subject to certain regulatory
The deal includes the purchase of about 360,000 net acres, which
mainly produces natural gas and Encana's working interests in all
pipelines and production facilities along with service
arrangements. Notably, Apollo has struck a deal to buy Bighorn
assets through Jupiter Resources Inc. of Calgary, a private
Canadian oil and gas exploration company managed by Apollo
RBC Capital Markets, a unit of
Royal Bank of Canada
) and Burnet, Duckworth & Palmer LLP acted as advisors to
Evercore Partners Inc.
) served Apollo and Jupiter as advisors.
Since the last few months, Apollo has been engaged in buying
natural-gas assets. The firm looks forward to Jupiter Resources'
acquisition of Bighorn assets in the core of the Deep Basin and
anticipates further development of the huge resources available,
thereby enhancing returns.
Recently, Apollo funded oil and gas producer - Zenergy LLC with
$700 million for developing properties in the U.S. In May, the firm
contracted to aid with $500 million funds for the growth of CSV
Midstream Solutions Corp., a Canadian natural-gas gathering and
On the other hand, to increase earnings, Encana aims to focus more
on attractive oil and natural-gas liquids and thereby vend natural
gas properties due to the downturn in prices of natural gas.
Notably, the deal follows Encana's plans announced in November to
divest assets to pay down debt and centers on higher margin
Jupiter Resources look forward to the acquisition of Bighorn assets
along with Apollo's support and foresees advantage from the
latter's proficiency in natural resources. Further, Apollo
anticipates triumph over its energy investment management efforts
as Jupiter Resources has an experienced managerial team, skilled
resources and good track record.
As an investment management firm, Apollo has grown through
meaningful acquisitions, strategic alliances and divestures. The
company's interest lies not only in the energy sector but in varied
spaces including chemicals, commodities, mining, agriculture,
financial services and manufacturing. We look forward to the
company's greater involvement in such attractive deals that augur
well for its growth. Apollo Global currently carries a Zacks Rank
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
ENCANA CORP (ECA): Free Stock Analysis Report
APOLLO GLOBAL-A (APO): Free Stock Analysis
ROYAL BANK CDA (RY): Free Stock Analysis Report
EVERCORE PARTNR (EVR): Free Stock Analysis
To read this article on Zacks.com click here.