NextEra Energy has reached an agreement to purchase Caliber Resource Partners, a U.S. oil and gas investment firm, for $1.3 billion and will simultaneously establish a joint venture with Caliber’s private equity backer, Quantum Capital Group, to oversee the power company’s U.S. shale holdings, four sources told Reuters on Wednesday.
Under the transaction, a NextEra subsidiary will assume ownership of Caliber’s assets, which consist of passive, non-operated stakes in producing oil and gas properties across several onshore U.S. shale basins. Holders of such non-operated interests contribute a portion of drilling costs and in turn receive a share of hydrocarbon sales revenue, without taking an active role in drilling operations.
The Caliber interests, together with natural gas producing assets NextEra already controls through its Trinity Operating arm, will be moved into a newly created joint venture that both NextEra and Quantum have agreed to form, according to one of the sources. The new company will operate under the name NEQ Operating and will be equally owned by NextEra and Quantum, the source said.
Sources, who requested anonymity because the details are confidential, indicated the joint venture is intended to be a platform for further investments to grow NextEra’s natural gas producing portfolio. Alan Smith, managing director at Quantum Energy Partners, is expected to serve as executive chairman on an interim basis while Quantum completes the assembly of a full management team to run the JV’s operations, the source added.
Quantum has also agreed to bankroll the next iteration of Caliber, which the sources said will continue to be led by the firm’s current management team. The arrangement will allow Caliber’s management to continue operating a version of the company with funding from Quantum while its passive assets transition to NEQ Operating.
The move comes shortly after NextEra announced a separate $67 billion deal to merge with Dominion Energy that, if completed, would significantly expand NextEra’s scale as an electric utility and supplier of power to demanding consumers such as data centers. Industry observers cited in the sources say the boom in data centers is widely expected to elevate demand for natural gas as a fuel for power generation.
Neither NextEra, headquartered in Juno Beach, Florida, nor Quantum provided immediate comment on the arrangement, according to the sources.
Summary: NextEra will buy Caliber Resource Partners for $1.3 billion and form a 50-50 joint venture with Quantum Capital Group called NEQ Operating to consolidate Caliber’s non-operated shale stakes with NextEra’s existing gas assets. Quantum will fund a new Caliber entity and place an interim executive chairman at the JV while a permanent management team is finalized.