EnCap invests $100m in shale gas company

EnCap's $792m energy infrastructure fund will commit $100m in equity to US Infrastructure Holdings, a Texas-based company focused on acquiring assets in shale gas developments across the US.

Texas-based firm EnCap Flatrock Midstream has committed $100 million in equity from its energy infrastructure fund to US natural gas developer US Infrastructure Holdings (USI) , according to a statement.

USI, also based in Texas, is particularly focused on acquiring and developing natural gas gathering and processing systems in the Bossier/Haynesville shale, located in western Texas and eastern Louisiana, and Marcellus/Utica shale, which spans parts of West Virginia, Pennsylvania and New York.

Bill Waldrip, managing partner and founder of EnCap Flatrock Midstream, said the investment is not dedicated to any single project being developed by USI.

“It's just a commitment to their team. We look at it as kind of like an equity line of credit that gives the team capital behind them to get started,” Waldrip said.

Encap’s Energy Infrastructure Fund closed last year on $791.6 million. The USI commitment marks the fund’s second investment focused on the Marcellus shale, though Waldrip said that the firm is active in “a number of the shale plays” across the US.

Following the USI investment, the fund will be around 30 percent invested and 60 percent committed, according to Waldrip.

EnCap Flatrock Midstream is a partnership between oil and gas-focused private equity firm EnCap Investments and Flatrock Energy Advisors. The partnership was established in 2008 to focus on raising private equity funds for midstream oil and gas investments in North America, according to the firm’s website.

The firm is backed by 66 institutional investors and manages equity of more than $1.2 billion, according to a statement.