Charger Shale Oil Company, Oaktree form $900M Permian Basin JV

Charger Shale Oil Company LLC, an oil and gas partnership headquartered in Midland, Texas, and funds managed by Oaktree Capital Management LP have formed a joint venture focused on the Permian Basin. Oaktree has pledged $600 million in an initial equity commitment with an additional $300 million runway commitment.

Prior to funding, Charger secured more than 40,000 acres in the Delaware Basin using capital sourced from management and strategic investors. Charger has since closed on the initial acreage and has development plans to expand to over 85,000 acres. At full development, the partnership is targeting over 100 horizontal well locations across multiple horizons.

Charger is led by several executives previously employed by Tall City Exploration (TCE). TCE acquired and developed more than 34,500 core acres (and another 48,000 prospective acres) utilizing $245 million of capital. TCE sold these assets for $1.2 billion in two transactions in 2014 and 2015.

Joseph Magoto, former President of TCE and current CEO and president of Charger, was deeply involved in the development and sale of TCE assets.

“Leveraging the experiences of the team from Tall City Exploration and our other notable staff members has helped jump start our company, allowing us to immediately acquire significant acreage and commence drilling this month. We plan to run two rigs one month after the company’s official funding,” said Magoto. “Oaktree’s funding represents an exciting step forward in our goal to build an enterprise in excess of 100,000 acres and to drill sufficient horizontal wells to ‘prove-up’ some 1,500 locations.”

Charger utilized the investment banking services of Jefferies for the transaction.

Charger is an oil and gas partnership with headquarters in Midland, Texas and satellite offices in Houston, Texas.

Los Angeles, CA-based Oaktree is a global investment managers specializing in alternative investments, with $98 billion in assets under management as of June 30, 2016.

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