(Reuters) – Former Parsley Energy Inc Chief Executive Officer Bryan Sheffield said his new fund Formentera Partners bought oil wells in the Texas panhandle for about $121 million, marking the private equity income fund\u2019s first ever purchase.<\/p>\n
The assets, which span nearly 11,000 acres, have a production of 30 million cubic feet equivalent per day from about 200 wells, said Sheffield, who founded Formentera with two others in 2020 after Parsley was acquired by Pioneer Natural Resources. He declined to name the seller, citing confidentiality agreements.<\/p>\n
A source familiar with the matter said the assets acquired by Formentera were Oklahoma-based privately held Tapstone Energy\u2019s Stiles Ranch assets. The source declined to be named as the talks were confidential.<\/p>\n
Sheffield said the fund was looking at other oil and gas properties, even though they were out of favor with investors, who are pushing for lower-carbon and cleaner energy sources.<\/p>\n
\u201cNo matter what, the world is going to need fossil fuels. Our industry needs to get better at containing leaks and flaring. And I think that\u2019s what the ESG movement will do,\u201d said Sheffield, a third-generation oil tycoon.<\/p>\n
Sheffield said he expects Formentera to do two or three more deals between $75 million and $175 million in the next six months and a fourth at the beginning of 2022.<\/p>\n
\u201cThe strategy is to maintain and operate long life assets and return cash flow to investors,\u201d he said.<\/p>\n
Pioneer Natural Resources Co, run by Bryan Sheffield\u2019s father Scott Sheffield, bought smaller rival Parsley this past January in a deal valued at about $4.5 billion as U.S. shale producers consolidated to scale up and cushion the blow from a rout in oil prices during the pandemic.<\/p>\n