© 2014 The Texas Lawbook.
By Natalie Posgate
Staff Writer for The Texas Lawbook
(May 6) – Houston-based Sabine Oil & Gas LLC and Denver-based Forest Oil Corporation announced Tuesday that they will merge their businesses in an all-stock transaction. Mounds of Texas lawyers from Vinson & Elkins and Gibson, Dunn & Crutcher are involved in the deal.
The merger of the two companies, which both conduct a significant amount of their operations in East Texas, will create one of the industry’s largest East Texas players, benefitting from drilling program optimization and economies of scale, a joint statement said. The combination of the companies’ assets also creates a 65,000 net acreage position in the Eagle Ford Shale.
Sabine reported $354.2 million in annual revenues in 2013 for oil, natural gas and liquid natural gas production. Forest reported $441 million.
A Houston-based team from V&E is advising Sabine on the the M&A matters of the transaction, with corporate partner Jeff Floyd and associate Lande Spottswood as the lead attorneys. They are receiving significant assistance from corporate partners Doug McWilliams and Matt Pacey and associates Lauren Anderson and John Bell.
Other V&E attorneys playing key roles in the transaction include Houston partners John Lynch, Mark Rodriguez and Shay Kuperman; Dallas partners Jim Meyer and David D’Alessandro and associates Julia Pashin, Missy Spohn, Katherine Mull and Alex Farr; Austin associate Taylor Holcomb; and Washington, D.C. partners Michael Wigmore and Billy Vigdor and associate Dennis Schmelzer.
Sabine’s general counsel is Tim Yang, who assumed the role as well as the company’s senior vice president and chief compliance officer in 2011. Before joining Sabine, Yang was the associate general counsel and assistant corporate secretary for Dallas-based Eagle Rock Energy.
Greenwich, Conn.-based energy private equity firm First Reserve is backing Sabine in the merger agreement.
Gibson Dunn represents First Reserve in the transaction, with Denver corporate partner Beau Stark as the lead attorney and Dallas corporate associates Jonathan Whalen and Jeff Henderson assisting. Tax attorneys from the firm’s Los Angeles office are also involved in the deal.
First Reserve has been a longtime client of Gibson Dunn. The firm’s previous representation includes representing the private equity firm in its investment in Amromco Energy, a Romanian oil and gas company with Houston headquarters.
Gibson Dunn has also represented various portfolio companies of First Reserve (such as the Southeast Asian company KrisEnergy Holdings and Houston-based Midstates Petroleum Company) in initial public offering transactions and the sale of interest shares.
New York firm Wachtell, Lipton, Rosen & Katz is providing legal advice for Forest.
The merger is expected to close in the third or fourth quarter of 2014. The combined company, named Sabine Oil & Gas Corporation, will be headquartered in Houston and will be led by Sabine’s current executive management team.
When the transaction closes, Sabine stockholders will own approximately 73.5 percent of the new combined entity and Forest shareholders will own approximately 26.5 percent.
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