Capital Raising: GSO commits $500m to Sequel Energy II to buy non-op interests

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[Context: On February 28, GSO Capital announced the formation of Sequel Energy Group II LLC with a $500 million capital commitment. The Denver-based company will pursue investments in non-operated working interests. Sequel Energy Group (I) received a $500m commitment from GSO to invest in drilling joint ventures. Further details and related links are below.]


GSO Capital Partners Announces the Expansion of its Partnership with Sequel Energy Group to Pursue Drilling Joint Ventures and Non-Operated Oil & Gas Transactions

DENVER & NEW YORK–February 28, 2019–(BUSINESS WIRE)–GSO Capital Partners LP (“GSO”), the credit platform of Blackstone (NYSE: BX), is pleased to announce the formation of Sequel Energy Group II LLC (“Sequel II” or the “Company”), a private, Denver based oil and gas company. GSO and the current management team, led by industry veterans Doug York, Jeff Hemphill and Dave Kornder, formed Sequel Energy Group LLC (“Sequel I”) in November 2016 with an initial capital commitment in excess of $500 million. Over the past two years, Sequel I has successfully deployed this capital in four separate drilling joint venture transactions. Consistent with its current strategy, Sequel II will target structured investments in non-operated oil and gas working interests in proven resource plays throughout North America. The additional $500 million capital commitment from funds managed by GSO and the founding members of Sequel will bring combined committed capital to the Sequel platform to over $1 billion, making the Company a leader in its market.

Sequel will continue to benefit from its large and flexible capital base and the technical expertise of its management team, and has developed a reputation as the preferred partner for operators seeking capital to support the development of their oil and gas assets. The Sequel management team has over 80 years of combined experience in the exploration, development, and operation of oil and gas fields across nearly every major producing basin in the United States.

Commenting on the newly formed company, Sequel’s three founding members stated, “We could not be more delighted to expand our partnership with GSO. We believe drilling joint ventures provide the ideal shareholder and balance sheet friendly capital solution for oil and gas operators looking to maintain their capital development programs within cash flow. We look forward to working with GSO and its energy team in successfully executing the next iteration of our business plan.”

Michael Zawadzki, Senior Managing Director and Co-Head of GSO Energy said, “We are excited to continue our partnership with the Sequel leadership team and build upon the success of Sequel I. Our scale and flexible capital, large relationship network, and deep industry expertise uniquely position GSO and Sequel to be the partner of choice for drilling joint venture transactions. We look forward to continuing our great relationship with Doug, Jeff, and Dave and are highly confident in their ability to implement this strategy in the years ahead.”

About GSO Capital Partners LP

GSO Capital Partners LP is the global credit investment platform of Blackstone. With approximately $128 billion of assets under management, GSO is one of the largest alternative managers in the world focused on the leveraged-finance, or non-investment grade related, marketplace. GSO seeks to generate attractive risk-adjusted returns in its business by investing in a broad array of strategies including mezzanine debt, distressed investing, leveraged loans and other special-situation strategies.