Global legal practice Norton Rose Fulbright has advised Sierra Oil & Gas S. de R.L. de C.V. (Sierra), Mexico's first independent exploration and production company in relation to the US$525 million investment commitment made by private equity firms: Riverstone Holdings LLC (Riverstone), EnCap Investments (EnCap), and Infraestructura Institucional (I2).

The investment will allow Sierra to fulfill plans to participate in exploration, development and production optimisation opportunities, which have made possible by Mexico's recent energy reform. Additionally Sierra may consider opportunities in hydrocarbon transportation, storage and processing.

Under the terms of the transaction, energy-focused private equity firms Riverstone and EnCap have each committed US$225 million in funding and I2, Mexico's leading infrastructure private equity firm has committed US$75 million. Additionally, all three investors retain the option to double their existing commitment once the initial equity has been deployed.

Elisabeth Eljuri, partner and head of Latin America, led on the transaction, she comments:

“After 75 years of nationalisation we are seeing the first privately-owned Mexican oil and gas company, making this is a landmark transaction for the Mexican energy sector. This signals the start of similar transactions to come. The fact that the private equity firms also have the option to double their investment highlights their commitment to Sierra and its management team.”

The cross border Norton Rose Fulbright team working on the private equity transaction was led by Elisabeth in Caracas and Roy Goldman in New York, and also included Remco Smorenburg, Ep Hannema and Stefanie Walthaus in Amsterdam, and Leonie Timmers in London. The Latin American team in the firm continues to advise the company going forward.