NextEra reported to be buying Caliber, setting up shale JV with Quantum

NextEra Energy has reportedly agreed to buy US oil and gas investment firm Caliber Resource Partners for $1.3bn from private equity firm Quantum Capital Group. Citing four sources familiar with the matter, Reuters reported this week that NextEra had also set up a joint venture to manage its US shale assets, also with Quantum.

The Reuters report emerged on May 20, the same day that Hart Energy reported, citing its own sources familiar with the matter, that NextEra was close to forming a joint venture with Quantum to operate NextEra’s upstream business. It also comes two days after NextEra announced that it had agreed to combine with Dominion Energy in an all-stock transaction valued at $67bn. That transaction will create the world's largest regulated electric utility business by market capitalisation and one of the world's largest energy infrastructure companies, NextEra said in its announcement.

The combined company is expected to be a major supplier of power to the booming data centre industry and in turn, the growth of data centres is expected to raise demand for natural gas for use in power generation.

NextEra already has natural gas assets within its portfolio, which are currently operated by Trinity Operating. According to its website, Trinity has operations in Louisiana, Oklahoma and Texas, in the Haynesville and Eagle Ford shale plays, as well as in the Arkoma Basin.

Now, a NextEra subsidiary will also take over Caliber's assets, which include non-operated interests in producing assets spanning multiple onshore US shale basins, according to Reuters’ sources. One of the sources added that both the Caliber and Trinity assets would then be transferred to a new joint venture company that NextEra and Quantum have agreed to form. The joint venture will be called NEQ Operating and will be equally owned by NextEra and Quantum, the source added.

According to one of the sources, NEQ will pursue further investments in a bid to expand NextEra’s gas portfolio. ⁠The source added that a Quantum managing director, Alan Smith, would be appointed executive chairman on a temporary basis until Quantum finalises a full management team to oversee the joint venture’s operations.