Antero Resources and its midstream provider Antero Midstream announced Monday (Dec. 8) their separate but coordinated acquisitions of Marcellus Basin assets from HG Energy II and HG Energy totaling $3.9 billion.
In two more similarly separated and coordinated announcements, Northern Oil and Gas and Infinity Natural Resources said they are acquiring a total of $1.2 billion of Utica Shale with Antero Resources and Antero Midstream on the sell side.
Antero Resources and Antero Midstream, both Denver-based and publicly traded, are independent companies as the result of a 2018 simplification transaction.
In the first of the two Antero acquisitions, Antero Resources agreed to pay $2.8 billion in cash for the upstream assets owned by HG Energy II, in addition to its commodity hedge book. The deal includes 385,000 acres in the West Virginia Marcellus and 850 MMcfe/d of expected natural gas production in 2026.
In the second deal, Antero Midstream agreed to pay $1.1 billion in cash to acquire strategic bolt-on the midstream assets of HG Energy which include 50 miles of gathering pipelines that serve Antero Resources, as well as water pipelines and above-ground storage.
As for the Antero divestitures, Northern Oil and Gas and Infinity Natural Resources have partnered to acquire the Ohio Utica upstream and midstream assets of Antero Resources and Antero Midstream, which include 35,000 acres and 140 miles of low- and high-pressure gathering pipelines, as well as 90 miles of water sourcing and handling systems.
The Antero Resources assets were purchased for $800 million, the Antero Midstream assets for $400 million. NOG said it is paying $588 million of the total $1.2 billion purchase price for a 49 percent operating share of the partnership.
Kirkland & Ellis provided legal counsel to HG Energy, a portfolio company of Quantum Energy Partners based in Parkersburg, West Virginia. Vinson & Elkins counseled Antero Resources and Antero Midstream on both the sale and divestiture agreements.
Latham & Watkins advised the Antero Midstream conflicts committee on both its acquisition and divestiture deals. Gibson Dunn & Crutcher advised Northern Gas and Oil and Kirkland advised Infinity Natural Resources on their involvement in the Antero divestitures.
Michael Kennedy serves as president and CEO of both Antero Resources and the midstream operations. Kennedy said the upstream acquisition expands the company’s position in the Marcellus Shale while the midstream acquisition solidifies it “a premier pure-play midstream company in North America’s lowest cost basin.”
“The acquired assets are highly capital efficient and complementary to our existing infrastructure portfolio,” Kennedy said. “This acquisition expands Antero Midstream’s multi-decade dedicated inventory by another five years in the liquids core of the Marcellus Shale. In combination, today’s strategic transactions high-grade our asset base from a reservoir quality, midstream capital efficiency, and free cash flow trajectory standpoint creating significant shareholder value.”
Antero plans to fund the transactions with proceeds from the Utica Shale sales, free cash flow, a loan from Royal Bank of Canada and JPMorgan Chase Bank, and its revolving credit facility.
The Latham & Watkins team that advised the midstream unit’s conflicts committee was led by Houston partners Nick Dhesi and Ryan Maierson with associates Clayton Heery and Morgen Seim.
The Vinson & Elkins teams that advised Antero on both deals were led by partners Chris Bennett and Scott Rubinsky. Other V&E lawyers advising on both deals include: Vestita Zumot, Walt Baker, Joseph Balhoff, Michael Gassman, Danielle Patterson, John Larbalestier, Kelly McGee, Rachel Campbell Alexander, Ryan Dolmanet, Ishaan Golding, Shiyuan Wang, Tamra Kenebrew, Randy Thomas, Todd Way, Lina Dimachkieh, Brett Santoli, Zach Rider, Maya Bobbitt, Megan Hardy, Kara Kuritz, Ryan Will, Rami Rashmawi, David D’Alessandro, Becky Baker and Regina Ibarra,
In addition, V&E’s counsel on the Antero acquisitions also included Dan Henderson, Kylan Kinkade and Jennifer Cornejo. And on the Antero divestments: Elena Sauber, Adam Bateman, Katie Dillard, Patrick Darby, Matt Dobbins, David D’Alessandro, Becky Baker, Regina Ibarra, Corinne Snow, Alyssa Sieja ,
Kirkland advisors for HG Energy II and HG Energy included: David Castro Jr., Lindsey Jaquillard, Jonathan Strom, Rizwan Popatia, Lyle Paul, Stephen Noh, Jack Chadderdon, Michael Wells, Damien Lyster, Mark Dundon, William Bos, Michelle Williamson, Kirby Swartz, Michael Rigdon, Robbie Dillard, Christie Alcala, Maddison Malone Riddick, Stephen Jacobson and Urvi Patel.
The Kirkland lawyers who advised from Dallas were Nicole Faria, Max Anderson, Brett Ackerman, Christina King and Chad Davis. Paul Tanaka works for Kirkland in San Francisco and Houston, and Colleen Mayer is in Philadelphia. Others who worked on the deals from Washington include Vito Whitmore, Jeff Ayer, Matthew Wheatley, Andrew Schilling, Erin Davey. From New York, Mona Kwasnik provided counsel with Miguel Suarez Medina and Maureen O’Brien advising from Chicago.
Kirkland did not identify the lawyers who advised Infinity Resources.
A Gibson Dunn team in Houston advised Northern Oil and Gas, including Rahul Vashi, Atma Kabad, Graham Valenta and Luke Smith.