Midland Basin E&P Endeavor Energy Resources has entered into a $300 million drilling partnership with Development Capital Resources (DCR), a newly formed oil and gas subsidiary of asset manager Ares Management LP (NYSE: ARES).

DCR, based in Houston, is also funding a second, undisclosed company in the Stack/Scoop with a $150 million investment, a spokeswoman said, bringing DCR’s total inaugural drilling partnerships to $450 million. Both companies DCR is partnering with have drilling in progress, the company said in an April 3 press release.

Endeavor is a large, private independent with 370,000 Midland acres prospective for the Wolfcamp, where it has developed expertise in the development of horizontal wells.

DCR will spend $300 million—with most of the capital designated for drilling—with Endeavor and participate as a non-operator to finance and develop identified locations with the company.

Upon achieving an undisclosed, agreed-upon return, DCR’s working interest will decrease during the operations phase of the drilling joint venture (JV).

The $150 million JV in the Stack is a similar transaction that swaps working interest as returns reach an unspecified level.

DCR is led by president and CEO Ronnie Scott and Matt Loreman. Scott previously created and led E&P True Oil Co., a private-equity startup, until December 2016. DCR will identify opportunities to partner with existing operators throughout North America to help them accelerate growth through the development of their assets.

“The Endeavor program was of interest because it provided an opportunity to participate alongside a highly-respected operator in one of the premier basins in the U.S.,” Scott said. “Endeavor’s ability to identify development locations and then quickly begin implementation of the program was important to us. Rather than begin with a capital commitment spread across many years and multiple prospects, the parties involved in the project were interested in drilling known locations at a reasonable pace.”

Scott said the Endeavor JV is off to a rapid start with two drilling rigs already in operation.

“In the same way, the second transaction allowed us to quickly deploy capital, as it too is now in progress,” he said.

DCR was formed as an investment vehicle that provides growth capital to established operators in a variety of oil and gas basins.

“There is a demand for this type of capital, and we anticipate significant interest from operators,” Scott said. “We have a substantial amount of capital available to deploy around a variety of similarly-styled investments, including but not limited to drilling joint ventures, nonoperated working interests, and royalty participation.”

Nate Walton, partner in Ares’ private-equity group, said DCR is intended to be a flexible capital provider.

“We are increasingly finding that a single equity or debt solution does not meet every operator’s needs, so the establishment of the DCR platform gives Ares another avenue to provide competitive capital solutions, Walton said.

Darren Barbee can be reached at dbarbee@hartenergy.com.