Toronto, Canada (June 8, 2016) – Canada Pension Plan Investment Board (CPPIB) announced today that an affiliate of its wholly owned subsidiary, CPPIB Credit Investments Inc. (CPPIB Credit), has committed US$450 million to LongPoint Minerals, LLC (LongPoint), a company focused on the acquisition of oil and natural gas mineral and royalty interests in the U.S. The initial commitment, which is expected to be deployed over a two-to-three-year period, represents a significant majority ownership stake in LongPoint.
Based in Denver, Colorado, LongPoint will acquire oil and natural gas mineral and royalty interests in the lower 48 states of the U.S. Initially, the Company will focus on three key basins: the Anadarko Basin, Permian Basin and Denver-Julesburg Basin.
“Our multi-year commitment represents an attractive entry into the mineral interest and royalty sector. In owning royalty interests, we are able to participate in production revenues without the burden of associated capital or operating costs,” said Adam Vigna, Managing Director, Head of Principal Credit Investments. “We’ve partnered with LongPoint given management’s deep knowledge of these basin areas and successful proven track record spanning over 30 years of collective expertise.”
“This is an important partnership for LongPoint. With CPPIB’s strong financial backing along with other institutional investors, we can deploy our differentiated technical model for strategic mineral and royalty acquisitions in the targeted basin areas,” said George Solich, President and CEO. “Over time, we will look to expand our capabilities to other regions in the U.S.”
Mineral and royalty interests provide revenue from production without an obligation for the associated capital or operating costs, and are typically held in perpetuity by the owner. LongPoint will seek to acquire mineral and royalty interests with both current cash flow and growth via development of undrilled locations.
About CPPIB Credit Investments Inc.
CPPIB Credit Investment Inc., a wholly owned subsidiary of CPPIB, is comprised of CPPIB’s Principal Credit Investments (PCI) group and its Private Real Estate Debt group. With investments and 39 professionals in the Americas, Europe and Asia, CPPIB’s PCI group focuses on providing financing solutions both globally and across the capital structure. The group makes direct primary and secondary investments including in leveraged loans, high yield bonds, mezzanine and intellectual property. PCI participates in unique event-driven opportunities, such as acquisitions, refinancing, restructurings and recapitalizations, and targets positions between US$50 million to US$1 billion in any single credit. The team underwrites on a standalone basis or with select partners depending on the investment opportunity. Since its first investment in 2009, the group has invested over
C$30 billion in the global credit markets.
About Canada Pension Plan Investment Board
Canada Pension Plan Investment Board (CPPIB) is a professional investment management organization that invests the funds not needed by the Canada Pension Plan (CPP) to pay current benefits on behalf of 19 million contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, CPPIB invests in public equities, private equities, real estate, infrastructure and fixed income instruments. Headquartered in Toronto, with offices in Hong Kong, London, Luxembourg, Mumbai, New York City and São Paulo, CPPIB is governed and managed independently of the Canada Pension Plan and at arm’s length from governments. At March 31, 2016, the CPP Fund totalled $278.9 billion. For more information about CPPIB, please visit www.cppib.com or follow us on LinkedIn or Twitter.
LongPoint Minerals is a Denver-based company focused specifically on the acquisition of oil and gas mineral interest. The company’s focused strategy is to acquire mineral interest in three initial prolific basins, the Mid-Continent, Permian and Denver-Julesburg with future expansion into other top U.S. basins.