Avista Strengthens Energy Operations
PE firm will help finance development of oil and natural gas properties in Northern Europe and North Sea.
July 21, 2008
Avista Capital Partners said Monday it has committed $100 million to London oil and gas exploration company Hansa Hydrocarbons, following the private equity firm’s latest personnel appointment of petroleum and gas industry veteran John Huff as an advisor for its energy investment practice.
A New York- and Houston-based private equity firm, Avista’s equity commitment will be used to finance Hansa’s development of oil and natural gas properties in Northern Europe and the North Sea. More specifically, it will focus on low-risk and undeveloped natural gas fields located mainly in the Dutch, German and UK regions of the Southern North Sea. It will also explore on-shore drilling opportunities in the Permian Basin from the Netherlands to Poland.
“With major oil and gas companies leaving the North Sea to focus on larger fields elsewhere, we think considerable opportunities exist to acquire and develop stranded natural gas assets which have either been overlooked or are too small for larger companies to cost-effectively develop,” said Steven Webster, co-managing partner of Avista Capital Partners.
John Huff
Separately, Webster, who oversees Avista’s energy practice, said the appointment of former Oceaneering International chief executive Huff will help Avista in assessing different deepwater investment ventures. “John knows a lot about the service business and has insights into deepwater in particular. We think that’s going to be a big growth area.”
Webster said many exploration and production companies are either spending or planning to allocate much of their budgets to deepwater drilling activities.
Neither Huff, currently chairman of Oceaneering International, nor Avista are unfamiliar with the deepwater energy business. While at the helm of Oceaneering International for more than 20 years, Huff oversaw the Houston company’s metamorphosis from a small, publicly-listed diving business into a provider of diversified offshore oilfield services with a $3.8 billion market capitalization on the New York Stock Exchange.
Last Thursday, brokerage Stifel, Nicolaus & Co. initiated coverage of Oceaneering International with a "buy" rating.
Avista, meanwhile, has an investment in Frontier Drilling, a Norwegian firm with offices in Houston that provides offshore drilling services.
Avista’s Webster and Huff, a former managing partner of investment banking firm Falcon Partners, have known each other for more than two decades. From 1972 to 1986, Huff held various positions at offshore drilling contractor Western Oceanic and spent his last six years at the company as its president and chairman.
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