canaan resource partners history and strategy 2016
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HISTORY
Canaan Resource Partners is an Oklahoma City-based management team that has served as the general partner of a series of private limited partnerships since 1990. Current funds under management are Canaan Natural Gas Fund IX LP (“Fund IX”), Canaan Natural Gas Fund X LP (“Fund X”) and Canaan Resource Partners Drilling Fund LP (“CRP”); their combined capital deployment totals about $500 million. These three funds serve as direct investment vehicles for an institutional investor group that includes endowments, foundations, funds of funds, retirement plans and family offices.
Fund IX and Fund X, with vintage years of 2005 and 2008, respectively, were formed under a risk-averse, acquire-and-exploit investment strategy. This model had posted attractive, best-in-class returns for decades – since the team was founded by Johnnie K. Penton and Leo E. Woodard in 1987, when they began making energy investments for the benefit of other general partners. In 1990, Penton and Woodard formed the Coral Reserves Natural Gas Income Fund 1990 Limited Partnership, the first of eight such funds the two would create and manage as general partners over the next 10 years.
In 2000, the eight partnerships were rolled into a public company during the acquisition of an Oklahoma City energy company of similar size. The result was Canaan Energy Corporation, a company traded on the Nasdaq exchange under the symbol KNAN from October 2000 through June 2002. In June 2002, Chesapeake Energy Corporation purchased the company’s outstanding shares, providing the final exit for the limited partners of those first eight funds.
HISTORY
CURRENT FUND 11 STRATEGYCURRENT STRATEGY
The advent of the “shale revolution” has caused a major shift in suitable energy investment strategies for institutional limited partners, and it has positioned Canaan Resource Partners to successfully assume the role of a capital provider for development-drilling efforts in domestic onshore shale plays. CRP, typically a non-operator, is technically proficient in evaluating the investment suitability of projects within America’s top 20 shale plays, and we closely follow the development phases of each. We have a compelling level of capital commitments that can be delivered for deployment in an immediate time frame for projects we deem suitable, available at both modest and significant investment levels.
Johnnie K. Penton, Dean S. Sergent and Chris Gordon serve as managing partners of CRP, which currently is in its investment phase. CRP is well-equipped to review development-drilling projects with exceptional speed using proprietary “big data” analysis and creative deal structures.
Please make us aware of any interest you may have for further discussion.
JOHNNIE K. PENTON was a co-founder of Coral Reserves Group Ltd. and, along with Leo E. Woodard, formed the original management team of Canaan’s predecessor entities. Penton served as a general partner of the first eight partnerships, as well as president of Canaan Energy Corporation. Currently, he serves as a general partner of Canaan’s Fund IX and Fund X, as well as CEO of each fund’s operating companies. Penton will be actively involved in all aspects of the funds, with a particular focus on acquisitions, divestitures and financing.
Through his career, Penton has developed a tremendous contact resource base that covers a range of energy companies, brokers and financial institutions.
Penton received a B.S. in economics from Oklahoma City University in 1978 and an MBA from the University of Central Oklahoma in 1980. Hunt Energy Corporation employed him as a petroleum landman in its Oklahoma City office from 1980 through 1984; from 1984 until the founding of Canaan in 1987, he owned and managed Newport Resources Inc., an independent exploration company based in Oklahoma City.
DEAN S. SERGENT has been with the Canaan team for more than nine years, sharing more than 25 years of reservoir engineering and acquisition experience. In 1985, Sergent began working for Tenneco Oil Company in Oklahoma City, where he gained significant experience in acquisitions and risk analysis. After Tenneco sold its oil company in 1988, Sergent attended The University of Texas and earned an MBA. After graduation, he returned to Oklahoma City to launch and direct an acquisition effort for Raydon Exploration.
Prior to Canaan, Sergent worked for Devon Energy, where his latest assignment was a management position in Devon’s Barnett Shale asset group. While there, he supervised a budget in excess of $800 million and participated in a research effort with the University of Oklahoma to better understand the producing characteristics of shales.
At Canaan, Sergent has been instrumental in the development of a portfolio model, as well as analytical techniques and risk-analysis software to properly evaluate resource plays.
Sergent graduated Phi Beta Kappa from Marietta College in 1985 with a B.S. in petroleum engineering and is a registered professional engineer.
CHRIS GORDON has had both a professional and personal relationship with Johnnie Penton since 1980, when Gordon began his career at Gulf Oil Company and Penton started working with Hunt Energy Corporation. After leaving Gulf and Hunt to begin their independent efforts, Gordon and Penton co-partnered their respective businesses, combining offices, employees and capital sourcing from 1984 through 1987, when Penton (along with Leo Woodard) formed the original Canaan management team. Over the past 30 years, Gordon has been a primary catalyst to effect drilling of more than a thousand oil and natural gas wells, located exclusively onshore and focused in the Mid-Continent region, with substantive funding provided by industry partners and outside investors. Since the beginning of the shale revolution, he has been an active minerals participant, deploying more than $150 million to acquire some 350,000 acres in the various shale plays – Marcellus, Utica, Niobrara, Mississippian, Woodford, Granite Wash and SCOOP – for the benefit of institutional-level family offices.
Throughout the past three decades, Gordon has developed a deep inventory of industry relationships with experience in all facets of the oil and gas sector. He holds a B.A. in business administration from The University of Oklahoma with a major in petroleum land management.
MICHAEL S. MEWBOURN is a senior partner and chief financial officer of Canaan Resource Partners. Mewbourn, who joined the group in June 1993 after serving in a consulting capacity for several years, is responsible for financial, tax and banking functions, including the structuring of all Canaan-related entities. Mewbourn is a general partner in Canaan’s Fund IX and Fund X and has served as an executive officer and board member of Canaan Energy Corporation. Additionally, he has been extensively involved with the investor relations and fundraising functions of Canaan Funds IX and X.
Mewbourn is a graduate of the University of Oklahoma, where he earned a Bachelor of Business Administration degree with majors in accounting and marketing. Mewbourn began his professional career at the Oklahoma City office of Ernst & Young before moving on to financial work with Sabre Oil and Gas Co., and Devon Energy Corporation. At Devon, he supervised a staff that provided both private and public financial reporting for the company and its affiliates, and he was involved in the registration process for Devon’s initial public offering.
Mewbourn is a certified public accountant and a member of the Oklahoma Society of Certified Public Accountants.
SHILPA ABBITT joined Canaan Resource Partners as a partner in January 2015. Abbitt’s efforts are centered on opportunistic capital deployment for Canaan Resource Partners Drilling Fund LP, with an emphasis on evaluating prospective investments and managing existing assets.
Abbitt’s energy-industry career spans 23 years, and among other things, includes extensive shale experience gained while associated with Sergent at Devon. Her investment evaluation responsibilities with Canaan Resource Partners LP interface closely with the business development activities of Freddie Barela, profiled below.
Abbitt earned a Master of Science in environmental engineering from Georgia Tech University in 1999 and a Bachelor of Science in chemical engineering from Texas A&M University in 1992. She began her career at Texaco in 1992 and served in various roles, including executive business analyst at the corporate headquarters in White Plains, N.Y., and asset engineer in Midland, Texas. From 2001 to 2013, Abbitt was a senior advisor-reservoir engineer for Devon, working on projects across Oklahoma and Texas. Immediately prior to joining the Canaan team, Abbitt served as the vice president of reservoir engineering at Warwick Energy Partners I and II in Oklahoma City.
FREDDIE BARELA joined Canaan Resource Partners as a partner in March 2015. He manages the business development activities of Canaan Resource Partners LP and works closely with Abbitt in their joint capital deployment effort.
Barela’s prior industry experience evolved during eight years at Chesapeake Energy Corporation, beginning as a landman in the Permian Basin in 2007. In 2010, Barela assisted in assembling Chesapeake’s Rockies Division, where he aided in the closing of a $1.2 billion joint venture with CNOOC Limited. Immediately prior to joining Canaan, Barela served as the land manager for the Rockies Business Unit. His acquired knowledge of the Eagle
Ford Shale, Niobrara Shale and Permian Basin complements an extensive base of industry contacts.
Barela graduated from Texas Tech University in 2006 with a Bachelor of Science in management with an emphasis on energy commerce, and in 2015, he earned a Master of Business Administration from Southern Methodist University’s executive program. He was recently selected as one of the Best of the Class of 2015 for Executives by Poets and Quants magazine.
FREDDIE BARELA, PartnerOffice: 405-604-9231 | Main: [email protected]
SHILPA ABBITT, PartnerOffice: 405-604-9225 | Main: [email protected]
crpok.com
CONTACT INFORMATION
1101 N. Broadway Ave., Suite 300Oklahoma City, OK 73103
crpok.com
Canaan Resource Partners is now located in the newly renovated historic Buick
Building on Automobile Alley in Midtown Oklahoma City.