CPP Investment Board lines up US$450 million oil and gas deal with LongPoint

TORONTO – Canada Pension Plan Investment Board has committed US$450 million to LongPoint Minerals, a Denver-based company that focuses on investments in the U.S. oil and gas sector.

The Toronto-based pension fund manager says it will end up with a significant majority stake in LongPoint within two to three years.

LongPoint’s strategy is to acquire mineral and royalty interests in three key oil and gas production areas in the U.S.

CPPIB manages a fund worth C$278.9 billion as of March 31 on behalf of the Canada Pension Plan.

It’s awaiting the official completion of an earlier oil and gas deal with Calgary-based Encana (TSX:ECA), one of Canada’s largest oil and gas companies.

Under a plan announced in October, Encana will sell some of its U.S. assets for US$900 million to Crestone Peak Resources, which is owned 95 per cent by CPPIB and five per cent by Denver-based Broe Group.

That deal was originally expected to close by the end of 2015 until Encana announced in December that it would be delayed. An Encana spokesman said Wednesday by email that the Crestone deal remains on track to close this month.