CIC Partners Backs Big Gas Men in Three Energy Exploration Companies

CIC Partners has recently committed over $25 million to three energy exploration companies – Dale Gas Partners II, Castex Energy and Schuepbach Energy with aspirations to find significant natural gas reserves in all corners of the globe. Led by some of the most successful operators in the natural gas business, these companies have the potential to help meet our growing energy needs.

Natural gas is America’s fastest growing energy source and demand for natural gas is expected to increase by about 22 percent between now and 2030, including a more than 62 percent increase for electric power generation, according to the U.S. Department of Energy.

With Dale Gas Partners II, CIC Partners has teamed up for a second time with energy developer Larry Dale. CIC helped Dale form Dale Gas Partners I, which had a spectacular success with resource plays in East Texas and more recently in the Barnett Shale. Dale pioneered the extension of the Barnett Shale in eastern Tarrant County and drilled several of the field’s top producing wells before selling to Chesapeake Energy in 2006.

“CIC was a wonderful partner and lead investor in Dale Gas I. They were particularly helpful building a first class board of directors and co-investors who gave me great advice and wisdom in addition to their capital resources,” said Dale. “We have put the same team together for my new venture, Dale Gas Partners II, and we have high expectations for continued success.” Dale II has already made significant investments in prospects in the Rockies and Alaska.

CIC joined Dale and certain institutional partners in acquiring an interest in Castex Energy. For over twenty years, Houston-based Castex Energy, Inc. has operated in South Louisiana, drilling more than 125 successful wells in the region since 2003. With a significant 3D seismic database in South Louisiana, the company has enjoyed great success in finding natural gas reserves at low finding costs. One of its principals, Ron Rinard, first worked with CIC on the Dale board, an experience that exposedhim first-hand the value CIC can bring to any energy venture.

“After seeing how effective CIC was as a partner in Dale, we welcomed them as a partner in our company,” said Rinard. “They bring a wealth of energy and financial expertise to the table.”

At the helm of Schuepbach Energy is Martin Schuepbach. A proven energy entrepreneur and former senior exploration executive with companies including Exxon and Maxus Energy, Schuepbach will use his international experience and native Swiss accent to exploit resource plays outside of the US.

“CIC provided me with a capital base that enabled me to pursue my exploration plan and still retain a large piece of my company,” said Schuepbach. “They have also given me strategic guidance that has enhanced and focused my business plan where I can be most productive.”

“I am confident that CIC will be critical to my success with Schuepbach Energy,” he added.

Serving as an advisor to all three companies is CIC resident energy partner, Marshall Payne. Grandson of East Texas wildcatter Bryan Payne and son of renowned Dallas energy lawyer Bob Payne, Payne has the energy business in his blood and has created a superb track record investing in energy exploration companies.

“The key to our success is finding great partners, and we are fortunate to be working with Larry, Martin and Ron and his partners at Castex,” said Payne. “I think Grandpa would be proud that his grandson is teaming up with these exceptional explorationists poking holes all over the world finding exciting and profitable energy investments …”

Fouad Bashour is Payne’s partner at CIC covering the energy space and serves as a director of two of CIC’s energy companies. “Given our success in energy investing and the wealth of talented executives, I know that CIC can continue to find great opportunities and grow its energy practice,” said Bashour.

With some of the largest private equity firms eager to team up with Dale, Schuepbach and Castex, many wonder how much-smaller CIC Partners was chosen to back these companies. The primary reason is the team of energy and non-energy partners CIC has accumulated over the years, a real “virtuous circle” of successful operators and investors.

Joining Dale, and several Castex partners as investors in CIC’s funds are Kyle Thompson, former President of Victoria Gas, Casey McManemin, CEO of Dorchester Minerals, and Eric Stroud, General Partner of Hoak Fund, all of whom are frequent co-investors and board members in CIC-backed companies. CIC has also partnered with Kyle Burnett, President of Arcadia Exploration, and Howard Bagby, President of Bagby Energy, in money-making energy plays.

CIC’s willingness to “play small,” letting their founding partners retain up to 50% ownership of the companies they worked so hard to build, has been another important factor in CIC’s appeal to these energy pioneers. Also appealing is CIC’s reputation of attracting industry giants like T. Boone Pickens, Casey McManemim and George Kaiser to serve as Limited Partners.

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