In our early years, we established an in-depth investment research capability that we leveraged to build a highly successful corporate advisory practice. We also began to invest as principals and with partners in the equity of early-stage energy companies, and to acquire oil and gas production assets.
The evolution of our production acquisition business led to the founding of ARC Resources Ltd. in 1996. ARC Resources Ltd. is a TSX-listed company (ARX) that has become one of the leading players in the Canadian oil and gas sector. The contract under which ARC Resources Ltd. was managed by ARC Financial Corp. was internalized in 2002, at which time the corporate affiliation between the two organizations ended.
Our investment research, corporate advisory and equity investment businesses evolved into an exclusive focus on private equity investing with the launch of our first fund in 1997.
We have since raised seven additional private equity funds. Collectively, the eight ARC Energy Funds represent $5.3 billion of committed capital. Our investors are largely institutional, comprised primarily of endowments, family offices, pension funds and foundations from Canada, the United States and Europe. The mandate for the ARC Energy Funds is to provide growth equity capital for energy companies with a core focus on the Canadian oil and gas industry.
Since the establishment of Fund 1, we have invested $3.9 billion in more than 180 portfolio companies. To date, we have distributed $2.7 billion to our investors, and are currently invested in approximately 30 portfolio companies across Funds 3 – 8 that represents over $1.9 billion of invested and committed capital. We are actively investing and seeking opportunities that range in size from $50 million to $200 million with additional co-investment potential from our institutional investors.
Source: ARC Financial Corp.
ARC Financial Corp. focuses on the Canadian oil and gas business where we can leverage our specialized knowledge and expertise, and our deep relationship network.
Established and emerging resource plays and select conventional plays are providing tremendous opportunities for growth. This potential is being unlocked by the application of innovative new drilling and completion technologies, most notably horizontal drilling and multi-stage fracturing.
Established and Emerging Resource Plays
Our investment focus in this area is to finance the capture of opportunity and initial development activities. A range of strategies is employed, from the purchase of Crown lands, to joint ventures or farm-ins, to the acquisition of conventional assets that have under-recognized resource potential. Canada has a very active transaction market for the sophisticated buyer to acquire assets at attractive valuations, and that provide under-recognized upside such as resource play potential or a substantial inventory of probable reserves.
Select Conventional Plays
Canada has an abundance of hydrocarbon resources, including those from conventional deposits. Our investment focus in this area targets oil and natural gas reservoirs that have redevelopment potential and large remaining resource in-place. Notably, the plays of interest would be those that can be developed commercially with vertical wells, enhanced oil recovery methods and horizontal drilling with multi-stage fracture technology. The strategies to capture the opportunity would be similar to those described for emerging resource plays.
Canada’s oilfield service industry is recognized as a global leader in technical innovation. Hundreds of companies of all sizes are providing services and equipment to an upstream industry that invests approximately $55 - $65 billion annually in oil and gas exploration and development activities. Our focus is to identify and finance those companies that are differentiated by technology and/or that have exposure to growing areas of the business that are capacity constrained. Examples of such opportunities are the advancing technologies in horizontal drilling and multi-stage fracturing that are driving the development of resource plays.
Source: ARC Financial Corp.