Freepoint Commodities LLC has closed a volumetric production payment (VPP) transaction with Elm Ridge Exploration Company LLC, a private oil and gas company located in Dallas, Texas.
The VPP transaction, which closed on July 17, involves the purchase of a term overriding royalty interest in Elm Ridge's proved developed producing and proved undeveloped oil and gas reserves. With specified volumes of oil and gas to be delivered over an 11-year term, the transaction involves production from almost a thousand wells located in the San Juan Basin in New Mexico and Colorado.
Freepoint Commodities LLC was founded by former Sempra Energy Trading executives. Based in Stamford, Connecticut, the company has launched multiple platforms in the energy and metals markets, starting in March 2011. Management, employees and private equity funds managed by Stone Point Capital have provided the initial equity capital for Freepoint Commodities LLC and its subsidiaries.