A March acquisition brings Foundation Energy’s managed proven reserve base to over 13M boe 

Dallas-based Foundation Energy Management LLC, a manager of oil and gas investment partnerships for institutional investors, has closed Foundation Energy Fund III with $73 million in total capital commitments. 

Foundation Energy Fund III will acquire, directly operate, and enhance lower-risk onshore oil and gas properties in the US. An initial acquisition for the fund was completed in March, bringing Foundation Energy’s managed proven reserve base to over 13 million barrels of oil equivalent.

Institutional investors, including leading endowments, foundations, pension funds, and family offices, made capital commitments to Foundation Energy Fund III. The firm also broadened its investor base, which now includes three of the top 25 university endowments.

Eddie W. Rhea, PE, CEO of Foundation Energy, said, “Although this fund was raised during turbulent times, we were able to earn the trust of many high quality new investors that appreciate our firm’s unique market position...this closing positions us well as a leading participant in the mid-size segment of the oil and gas reserve acquisition market. We believe continued rationalization, repositioning and consolidation among majors and large independents will present excellent opportunities in our size range during the next few years.”
Foundation Energy raised and invested two funds since its inception in 2005 with over $80 million in total invested capital. Based in Dallas and with offices in Denver and Tulsa, the Foundation Energy team has completed nine substantive acquisitions. It has acquired oil and gas properties in eight states from Louisiana to Utah and is seeking to acquire other mature producing properties in multiple basins in the lower 48 states.

Foundation Energy’s prior funds have already returned 30% of capital to investors through monthly distributions of operating cash flow and still own 95% of their acquired properties. Including the acquisitions already completed, the three Foundation Energy funds have acquisition capacity of over $160 million and investor equity capital of $138 million. Foundation Energy typically seeks acquisitions in the $10 million to $50 million range and at times evaluates opportunities up to $150 million where co-investment arrangements can be utilized.

Jack Wetzel, CFO of Foundation Energy, added, “This closing firmly establishes Foundation Energy among the leading managers of institutional direct oil and gas funds and as one of only a handful that are not affiliated with a private equity firm.”