Kerogen to invest $100m in North Sea gas developer

This will be the first deal from the private equity firm's second fund, which is said to have reached a first close in June. Zennor could receive as much as $400 million from Kerogen and its LPs over the course of the investment. Kerogen will become the majority shareholder alongside Zennor management.

The proceeds will be used to support the development of existing assets and expansion through acquisitions, farm-ins and licensing rounds. Zennor holds a 100% interest in the Finlaggan gas-condensate discovery in the central North Sea. Formerly known as MPX E&P, the company was set up in 2006 and is led by a team with a proven track record in the region, having previously worked at ARCO - now part of BP - and for several independent E&P players.

"Kerogen is attracted to the UK North Sea given recent market dynamics, combining attractive pricing for assets, substantial reductions in operating cost structures, and an increasingly favorable fiscal environment," said Jason Cheng, Kerogen's co-founder and managing partner. "Unlike many other asset markets, funding distress and a lack of liquidity has resulted in many immediately actionable investment opportunities."

Kerogen was set up by executives from J.P. Morgan's Asia energy and natural resources team who subsequently moved to Indonesia's Ancora Capital. It currently has approximately $1.6 billion in invested and committed capital, having closed its debut fund at in excess of $1 billion in 2012.

The firm provides growth and development capital to junior upstream oil and gas companies that focus on global emerging oil and gas basins and unconventional assets. While there is an emphasis on catering to rising demand for energy in Asia, Kerogen invests in a broad range of geographies.

Two deals were announced last year: a A$30 million ($27 million) commitment to Twinza Oil, which has oil and gas interests in Australia, Papua New Guinea and Thailand; and a $100 million investment in HKN Holding, owner of an oil and gas developer with an exclusive focus on Kurdistan.

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