Canada Pension Plan Investment Board (CPPIB) is set to invest $450m in LongPoint Minerals, which focuses on the acquisition of oil and natural gas mineral and royalty interests in the US.
The investment is planned to be deployed over two to three years and will give the company a majority ownership stake in LongPoint.
LongPoint will acquire oil and natural gas mineral, as well as royalty interests in the lower 48 states of the country, while initially focusing on three key basins including the Anadarko Basin, Permian Basin and Denver-Julesburg Basin.
CPPIB principal credit investments managing director and head Adam Vigna said: "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."
LongPoint president and CEO George Solich said: "?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.
"Over time, we will look to expand our capabilities to other regions in the US."
LongPoint plans to develop undrilled locations to acquire mineral and royalty interests with current cash flow, as well as growth.
