FourPoint, EnerVest Strike Anadarko Basin Partnership
HOUSTON (The Deal) -- FourPoint Energy LLC and EnerVest Ltd. said late Thursday they agreed to partner in the Anadarko Basin of western Oklahoma and the Texas Panhandle, with FourPoint buying interests in properties from EnerVest and attracting equity and debt financing in a total arrangement valued at almost $1.52 billion.
Denver-based FourPoint is buying producing and undeveloped oil and gas properties and related midstream assets in the western part of the basin from affiliates of Houston-based EnerVest for $268 million, including stakes in the property acquisitions EnerVest made in the second half of last year from Laredo Petroleum Holdings Inc. and SM Energy Co. The deal included interests in more than 1,200 producing wells with net production to FourPoint of 33 million cubic feet equivalent per day.
FourPoint raised $200 million in direct private equity and $800 million in term debt from EIG Global Energy Partners LLC and funds advised by the Blackstone Group's GSO Capital Partners LP. It entered into a $250 million credit facility with JPMorgan Chase Bank and Wells Fargo & Co.
FourPoint and EnerVest inked joint development and area of mutual interest agreements to own, operate and develop oil and gas properties in the area, with each owning half and EnerVest operating the properties. The deal covers 90,000 net acres over 14 counties in Texas and Oklahoma. The two will also work together to acquire and develop more properties.The deal represents a return to the area by FourPoint president and CEO George Solich, who used to work at Apache Corp. and who sold EnCap Investments LLC-backed Cordillera Energy Partners III LLC to them in 2012 for $2.85 billion. "This is a strategic partnership that marries the strengths of both companies," he said in a statement. FourPoint CFO Tad Herz said launching the new venture and returning to the area provides "an advantage for optimal value creation" for its investors. FourPoint said it also will focus on the Permian Basin, which offers "multi-stacked pays with extensive vertical well control with industry transitioning to a more robust horizontal development model," FourPoint COO Kamil Tazi said. This is Solich's fourth enterprise in 12 years. In 2003, he sold Cordillera I, which owned properties in the Anadarko Basin, the Texas Panhandle and the San Juan Basin in New Mexico, to Patina Oil & Gas Corp. for $240.5 million in cash and $22.5 million worth of warrants. In 2008 he sold Cordillera II, which owned natural gas properties in the Greater Buffalo Wallow in the Texas Panhandle, and the East Texas and North Louisiana areas, to Forest Oil Corp. for $892 million. EnerVest bought the properties from SM Energy Co. at the end of last year for $329 million and the properties from Warburg Pincus LLC-backed Laredo in August for $400 million. Jefferies LLC's Ajay Khurana, Ralph Eads and Guy Oliphint advised FourPoint. JPMorgan was the lead arranger and bookrunner on the credit facility. Andrews Kurth LLP counseled FourPoint with a team including Mike O'Leary, Hal Haltom, Jon Daly, Marty DeBusk, Tammy Brennig, Allison Mantor, Lee McMurtry, Ashley Muehlberger, Callie Parker, Cindy Lin, Jerry Chandapillai, Taylor Landry, Brett Eilander, Conor Shary, Kristin Bachmann, Jillian Rae and Jason Reiner. Fabene Welch is EnerVest's general counsel. Thompson & Knight LLP's Arthur Wright and Robert Dougherty represented EnerVest.
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