Herbert Smith Freehills has advised Mercuria Energy Group on its debt and minority equity investments in the international oil investment business Seacrest Petróleo. Mercuria is one of the world's largest privately held energy and commodities companies.
The investments support Seacrest's acquisitions of the Cricare and Norte Capixaba onshore oil assets for USD 155 million and USD 544 million, respectively. Located in the state of Espírito Santo in south-eastern Brazil, the Cricare oil cluster has 27 onshore exploration and production fields, while the Norte Capixaba cluster comprises four producing fields.
Mercuria has made a minority equity investment into Seacrest and taken a position in a convertible loan note. Mercuria provided debt financing for the Cricare and the Norte Capixaba transactions and is also an off-taker from the assets. Financial close for the transactions was achieved on 23 December 2021 (Cricare) and 23 February 2022 (Norte Capixaba).
"We are grateful for the continued support from HSF across both our traditional energy investments and our energy transition portfolio," said David Haughie, Managing Director at Mercuria. "The Cricare and Norte Capixaba transactions required legal oversight and structuring across several jurisdictions and against a demanding timetable. The HSF team has our thanks for their focus and flexibility of approach."
Herbert Smith Freehills' London team was led by finance partner William Breeze and corporate partner Laura Hulett, supported by senior associates Edgar Monteiro and Nicholas Rutter and associate Charlotte Croney on the debt financing aspects and associate Becky Wee on the equity investment and corporate aspects. Additional support was provided by partner Isaac Zailer on tax matters.
Will Breeze commented: "We are delighted to have supported Mercuria, a longstanding and valued client, on two significant transactions related to onshore oil and gas assets. Mercuria's role demonstrates the importance of independent commodity trading houses in ensuring a reliable supply of energy and the development of energy assets worldwide. Our involvement in these investments reflects the firm's strengths and expertise in the energy sector."