Kerogen Energy Fund, L.P. (“Kerogen” or the “Fund”) has invested $100 million in Convertible Preference Shares (“CPS”) in HKN Holding Ltd. (“HKN” or the “Company”). HKN represents an attractive investment opportunity for the Fund’s Middle East and North Africa (“MENA”) strategic allocation.
HKN is a holding company for HKN Energy, a private E&P company focused exclusively on
Kurdistan. The Company is primarily owned by its founding shareholder, Hillwood International
Energy, L.P., part of the Hillwood family of companies founded by Ross Perot Jr., a well-known
investor with a history of interests primarily in the upstream oil and gas, real estate, and information technology sectors.
HKN Energy has a 37% participating interest (with an option to acquire an additional 5% from the KRG which HKN Energy has initiated) and is the operator of the Sarsang block in Northern Kurdistan. HKN Energy was an early entrant to the region and has made a world-class oil discovery on the Swara Tika structure with first commercial production scheduled to commence in mid-2014. The use of proceeds of Kerogen’s investment includes the financing of HKN’s indirect share of the initial development of Swara Tika and additional drilling activities.
HKN Energy has a first-rate management team with more than 150 years combined experience in global energy exploration, development and operations who have previously worked at companies including Chevron and ConocoPhillips. The co-venturers of HKN Energy in the Sarsang block are Maersk Oil, Marathon Oil KDV B.V., and the Kurdistan Regional Government (“KRG”).
Kurdistan is one of the most attractive proven hydrocarbon basins globally. Since 2007, a number of substantial oil discoveries have been made in the region. Kurdistan has also attracted large industry participants including ExxonMobil, Chevron, Total, Marathon Oil Corporation, the Korean National Oil Company and China’s Sinopec.
Kerogen’s Executive Chairman, Mr. Ivor Orchard, commented:
“HKN represents a unique opportunity for Kerogen to gain exposure to Kurdistan through HKN Energy’s interest in the development of Sarsang, a world class block with an existing giant discovery and considerable upside potential. We look forward to working with the Ross Perot Jr. and the HKN Energy management team as they advance Sarsang up the development curve.”
Mr. Ross Perot Jr., commented:
“HKN is very pleased to welcome Kerogen as an investor as HKN Energy embarks on the next phase of development at Sarsang. Kerogen is a specialist oil and gas fund with strong technical capabilities, financial expertise and a broad range of contacts and networks in industry. We look forward to working with Kerogen to meet the opportunities and challenges ahead.”