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The Texas Lawbook

Free Speech, Due Process and Trial by Jury

  • Appellate
  • Bankruptcy
  • Commercial Litigation
  • Corp. Deal Tracker/M&A
  • GCs/Corp. Legal Depts.
  • Firm Management
  • White-Collar/Regulatory
  • Pro Bono/Public Service/D&I

CDT Roundup: 12 Deals, 11 Firms, 112 Lawyers, $32.1B

August 11, 2020 Allen Pusey

Speaking generally, the energy market is no place for pessimism. Thorns have roses; not vice versa.

Down markets remind producers that the business is cyclical. Dry holes are the harbingers of great finds. Bankruptcy is a strategic retreat.

The last few weeks have been a demonstration of that. As of July 31, according to the Haynes and Boone Energy Patch Monitor, there have been 32 energy company bankruptcies filed in North America in 2020. Despite a rebound in crude prices from historic negatives to better than $40bls in all the global markets, energy company bankruptcies seem to be accelerating. In July, two well-heeled energy companies — California Resources Corp. and Denbury Resources — petitioned to restructure, acknowledging a combined $7.7 billion in debt.

Them’s the thorns.

But at the other end of the stem, the problem could be worse. In 2016, there were 34 bankruptcy filings in the second quarter alone — and 70 over the entire year. Moreover, recent weeks have seen some of the biggest deals in M&A have involved energy companies: Chevron/Noble Energy ($13 billion); 7-Eleven/Speedway ($21 billion); NRG/Direct Energy ($3.6 billion). And, finally, the midstream sector seems not to have suffered nearly as much E&P and OFS firms. That could change as the year progresses, of course, but it can be regarded as part of the corsage.

But as in any market, survival goes to those with sustainable finances. For the moment that goes for those who are able to refinance near-term obligations, or trade them for equity. And for those who have trouble resisting the temptation to go “all-in,” this week’s transactions include the cautionary example of Range Resources, the well-regarded Fort Worth energy firm.

Four years ago, during the last spate of energy bankruptcies, Range purchased Memorial Resource Development for $4.4 billion to gain control of Memorial’s Northern Louisiana assets. This week they sold those assets for a price that will end up somewhere between $245 million and $335 million. It was a deal that had soured long before COVID-19 or the crash in oil prices, showing that even deals made during a plethora of bankruptcies can turn out not to be a bargain — but for someone else.

As the Haynes and Boone report observes: “The recent resurgence of confirmed COVID-19 cases in the U.S. and abroad would indicate that any near term sustained demand growth is unlikely to prop up world oil prices higher. Until full economic activity returns and consumer confidence that the worst of the pandemic is behind us, demand levels will remain depressed. ‘Lower for longer’ remains the watchword for producers and their creditors.”

As for last week’s deals, there were 12 transactions reported worth a total of $32.1 billion. Including the $21 billion blockbuster merger of Speedway with 7-Eleven, this represents nine M&A transactions worth $30.5 billion and three capital markets transactions totaling $1.6 billion. Eleven unique firms and 112 Texas lawyers were involved.

Weekly Corporate Deal Tracker Roundup Stats

A compilation of weekly stats from The Lawbook's CDT Weekly Roundup
(Deal Values in Millions)

Week EndingDeal CountAmountFirmsLawyersM&A CountM&A Value $MCapM CountCapM Value $M
March 25, 202315$8,779.5101415$2,36210$6,416.5
March 18, 20237$14,048.86695$13,3452$703.8
March 11, 202321$11,5761616516$8,1315$3,445
March 4, 202320$9,6681122816$8,2094$1,459
February 25, 202313$5,3351313012$4,2351$1,200
February 18, 202314$5,743.7131588$898.76$4,845
February 11, 202316$12,0881213712$9,9654$2,123
February 4, 202317$8,0661514013$5,6144$2,452
January 28, 20237$2,1807755$1,692.752$488
January 21, 202317$5,7681617412$1,9185$3,850
January 14, 202311$2, 800101028$4213$2,400
January 7, 202318$8,2961116714$6,4613$1,835
December 31, 202214$2,732119912$2,0922$640
December 1714$7,9191311512$7,4191$500
December 10, 202214$10,093128811$7,0933$3,000
December 3, 202226$12,800.91117220$4,1416$8,659.9
November 26, 20228$2,266.7853$765$2,190.7
November 19, 202221$2,8861521219$2,5502$336
November 12, 202213$15,093.79819$14,2004$893.7
November 5, 20222519,337.21650922$8,267.23$11,070
October 29, 202215$7,805.3911614$7,180.31$625
October 22, 202220$8,193.51325313$5,4427$2,751.5
October 15, 20229$3,046.191397$2,588.32$457.8
October 8, 202219$2,011.81211416$833.83$1,178
October 1, 202223$5,532.91615618$4,952.35$580.6
September 24, 202218$5,1941421615$4,0503$1,144
September 17, 202221$8,352.31232015$4,759.66$3,592.7
September 10, 202215$19,853.51012613$19,403.62$450
September 3, 20229$2,3129629$2,31200
August 27, 202216$30,891.71013515$30,666.41227.7
August 20, 202212$1,977815299253$1,052
August 13, 202218$8,004.71124211$2,844.77$5,160
August 6, 202224$7,948.91224017$3,5777$4,371.9
July 30, 20228$6,9419787$6,8391$102
July 23, 202211$801119210$80110
July 16, 202214$3,6501012214$3,65000
July 9, 202210$3,557.77689$3,557.710
July 2, 202218$8,609.41315215$2,754.43$5,855
June 25, 202215$6,142131469$2,0176$4,125
June 18, 202217$11,890.11422815$11,4102479.7
June 11, 202217$7,6001212310$2,3007$5,300
June 4, 202212$2,937101279$6923$2,245
May 28, 20229$3,197.611869$3,197.600
May 21, 202214$7,284.51218511$6,6093$675.5
May 14, 202211$306.698010$306.61$225
May 7, 202216$10,451.751210812$1,8274$8,624.75
April 30, 202216$2,296.51615712$895.54$1,401
April 23, 202210$2,24111588$16412$600
April 16, 202211$6,64371568$2,3593$4,284
April 9, 202217$4,4291418411$1,6906$2,739
April 2, 202213$1,75588410$1,1453$610
March 26, 202211$3,2058656$2005$3,005
March 19, 202213$2,239.17910613$2,239.1700
March 12, 202218$12,0161123915$11,9652$51.35
March 5, 202217$6,7861313713$5,1614$1,625
February 26, 202212$5,09581499$4,437.53$658
February 19, 202217$22,2291717414$21,3543$875
February 12, 202212$2,344.710738$641.74$1,703
February 5, 202211$2,50389911$2,50300
January 29, 202211$3,8721210112$3,87200
January 22, 202213$5,143.5109912$4,842.51$301
January 15, 202212$7,60591559$6,4803$1,025
January 8, 202213$8,256.21110213$8,256.200
January 1, 20229$1,273.86509$1,273.800
December 25, 202121$4,734.751117616$3,4105$1,324.75
December 18, 202126$7,325.21519318$3,640.28$3,685.2
December 11, 202116$5,0171010913$1,4173$3,600
December 4, 202114$2,3108868$2,3106$1,882.05
November 27, 20219$3.460.1101016$1,7583$1,702.6
November 20, 202120$22,7921515712$18,864.58$3,928
November 13, 202121$26,7291217813$11,8228$14,907
November 6, 202112$8,3031315710$6,6823$1,621
October 30, 202121$10,3681521815$9,24.46$1,103.
October 23, 202121$18.783.11522211$12,31410$6,468.6
October 16, 202115$3,8681111815$2,2932$1,575
October 9, 202120$8,6101617516$7,7954$815
October 2, 202114$6,2501113710$5,2004$1,050
September 25, 202111$11,4609937$10,2004$1,250
September 18, 202111$16,6038998$15,0843$1,519
September 11, 202117$10,6531110313$8,5034$2,150
September 4, 202113$7,222108911$6,7152$507
August 28, 202112$76396311$6631$100
August 21, 202112$29,65977911$29,5791$80
August 14, 202122$17,8451119912$12,80510$5,04
August 7, 202117$13,6701213915$11,7662$1,904
July 31, 202121$8,1601113410$3,57410$4,586
July 24,202121$6,3671113915$3,7126$2,655
July 17, 202114$4,0091112412$2,0152$1,994
July 10, 202116$3,9971314311$1,5974$2,4
July 3, 202124$7,492139416$3,7698$3,722
June 26, 202110$4,9957858$3,8472$1,148
June 19, 202128$16,83082289$1,86119$14,968
June 12, 202126$27,2381520919$25,6027$1,636
June 5, 202115$15,5391310013$14,7092$600
May 29, 202135$20,2791114528$18,647$1,639
May 22, 202124$53,2081417417$51,0477$2,161
May 15, 202118$10,6201322011$5,8707$4,809
May 8, 202117$10,4001115615$8,3862$2,500
May 1, 202121$7,2001611512$3,8089$3,392
April 24, 20218$20,2009318$20,20000
April 17, 202114$6,270810211$4,01803$2,260
April 10, 202115$8,9401312914$7,9901$950
April 3, 202118$19,5131015112$16,9236$2,590
March 27, 202127$13,9421524414$4,30013$9,633.5
March 20, 202111$2,04641023$2708$1,776
March 13, 202115$3,27091096$5389$2,732
March 6, 202124$13,6171019613$10,39511$3,222
February 27, 202119$8,1051213915$4,9704$3,135
February 20, 20219$8,82091538$8,5201$300
February 13, 202112$4,852.678172,7665$2,086.6
February 6, 202118$9,7521315314$5,2224$4,530
January 30, 202118$9,449918215$8753.83$695.3
January 23, 202114$8,15081186$4,0008$4,150
January 16, 202117$6,7831313811$2,4006$4,382.9
January 9, 202122$6,8291413518$3,139.34$3,690
January 2, 20217$1,4667607$1,46600
December 26, 202018$15,9001216316$5,3001$600
December 19, 202018$9,7691411014$8,4264$1,343
December 12, 202010$7,20091009$3,3251$3,830
December 5, 202015$4,26191229$2,7806$1,481
November 28, 202019$7,7581011013$4,0036$3,755
November 14, 202014$864.11415712$289.12$575
November 7, 202013$6,33291299$2,483.54$3,849
October 31, 202010$3,995.881036$3,231.14$754.7
October 24, 20206$18,1006585$17,7091$350
October 17, 20208$351.95558$351.900
October 10, 20207$5,2293504$7353$4,494
October 3, 202014$21,42891739$17,5355$3,893
September 26, 202010$12,7708935$10,3005$2,470
September 19, 202014$8,36591016$1,0208$7,345
September 12, 20206$4,4068593$1,2703$3,136
September 5, 202011$5,19181179$4,0612$1,130
August 29, 202011$2,5319945$1,1306$1,401
August 22, 202018$6,574121407$1,93011$4,644
August 15, 202013$4,99110977$1,2166$3,775
August 8, 202012$32,092111129$30,4573$1,635
August 1, 20207$5,2878765$3,6872$1,600
July 25, 20209$18,7516677$18,4032$348
July 18, 20206$1,982.55504$1,407.52$575
July 11, 202011$565.1127510$65.11$500
July 4, 202010$8,8898989$8,7881$100.3
June 27, 20208$6,87410505$4,972.53$2,081.5
June 20, 202012$4,44491157$2,8295$1,615
June 13, 20206$3,5824372$3504$3,232
June 6, 202011$3,213.78657$4704$2,743.7
May 30, 20208$7,3357486$4,6392$2,697
May 23, 20204$432.44343$432.410
May 16, 20206$3106345$31010
May 9, 202018$5,6301612414$3,1804$2,450
May 2, 20201510,40010908$1,9007$,8,500
April 25, 20208$3,4009365$1,0003$2,450
April 18, 202019$9,50014928$185.711$9,360
April 11, 202012$6,0009405$1907$5,800
April 4, 202014$8,200116810$2,2004$6,000
March 28, 202016$6,500139610$3,7006$2,800
March 21, 202011$11,9107337$2,2504$9,960
March 14, 20207809.86346684.81125
March 7, 202016$2,500157013$6693$1,400
February 29, 202013$15,2601312811$11,7602$3,500
February 22, 202012$3,700109210$2,5602$1,130
February 15, 202016$1,250108412$354$1,222
February 8, 202018$6,0801412314$2,5954$3,485
February 1, 202021$20,9001210114$17,8607$3,060
January 25, 202013$7,430136212$6,4301$1,000
January 18, 202023$9,5801512019$6,5804$3,000
January 11, 202021$14,2001819916$1,0205$13,200
January 4, 202022$6,4001111916$3,2046$3,245
December 28, 201922$7,1501917518$6,8004$327.4
December 14, 201924$36,3002316719$9,5005$26,800
December 7, 201911$10,40011557$1,0824$9,370
November 30. 201914$2,4501212612$1,7602$692.5
November 23, 201916$1,995104111$6155$1,380
November 16, 201915$3,8201313511$2,5004$1,271
November 9, 201925$12,9001718223$12,2002$575
November 2, 201910$2,470126192,4503$22
October 26, 201912$5,560147011$3,8601$1,700
October 19, 20198$6,60081388$6,60000
October 12, 201919$4,300145516$3,8003$500
October 5, 201918$14,5001916615$11,1003$3,400
September 28, 201919$8,1001813218$7,5601$550
September 21, 201914$6,300166611$2,1603$4,170
September 14, 201915$23,800125611$21,2504$2,570
September 7, 201917$3,500159814$1,9003$1,600
August 31, 20195$8,7006505$8,70000
August 24, 201916$10,000148215$4,2501$5,750
August 16, 201910$1,6805527$6503$950
August 9, 201917$17,700156814$3,9003$13,800
August 2, 201913$5,7601210813$5,760NANA
July 27, 201911$7,30013768$6,5703$730
July 20, 201913$11,8001312511$5,3002$6,500
July 13, 201910$7757468$542.52$233
July 6, 20197$2,5009857$2,50000
June 29, 201923$8,2901515417$2,3006$5,970
June 22, 201917$10,7001013914$7,7003$3,000
June 15, 201911$13,5001416011$13,500NANA
June 8, 201913$2,870175511$1,5702$1,300
June 1, 201910$4,46011608$4,1402$315
May 25, 201917$4,360147914$3,7003$612
May 18, 201922$9,0001715016$3,4006$5,600
May 11, 201918$19,8001717715$18,3003$1,500
May 4, 201910$7,0756328$6,9002$175
April 27, 201915$3,2001411714$3,1601$40
April 20, 201913$13,50010909$12,2004$1,300
April 13, 201916$38,900149114$37,8002$1,100
April 6, 201912$6,870119410$6,7302$50
March 30, 201915$6,470128410$7,91.55$5,677
March 23, 201918$6,450149114$5,0424$1,408
March 16, 201914$10,1801211511$8,8003$1,300
March 9, 20199$1,8006498$1,3001$500
March 2, 201920$3,0331610714$1,8176$1,262
February 23, 201912$2,0408699$614.63$1,430
February 16, 201916$9,970187716$9,97000
February 9, 201914$6,4001011014$6,40000
February 2, 201918$6,740159916$5,7202$950
January 26, 201913$2,770116711$918.952$1,850
January 19, 201915$3,819167612$2,5943$1,225
January 12, 201918$7,283149215$1,6833$5,600
January 5, 201910$529125010$52900
December 22, 201817$2,570138714$9413$1,629
December 15, 201810$2,8608268$2642$2,600
December 8, 201815$1,819166512$5523$1,267
December 1, 201812$7,50010909$1,2003$6,200
November 28, 201815$4,5001110714$4,0001$500
November 19, 201818$6,137139813$2,1425$3,995
November 14, 201818$9,2001315215$8,5003$694
November 6, 201816$17,3001618314$16,3612$950
October 29, 201814$14,4001812717$13,8001$600
October 24, 201813$6,1401312611$5,1222$1,018
October 17, 201818$18,3901512514$12,2924$6,098
October 10, 201829$3,1491810420$1,6479$819
October 2, 201818$9,300116714$7,3004$2,000
September 25, 201813$7,000117510$6,0003$995
September 18, 20189$3,5707449$3,57000
September 11, 201813$5,9001013213$5,90000
September 7, 201814$5,000158611$4,0003$1,000
August 29, 201815$20,700147913$4,7002$16,000
August 20, 201810$12,40011538$11,3803$1,057
August 14, 201812$19,900121329$18,8893$1,011
August 7, 201816$68,6001110613$67,2593$1,340
July 31, 201815$15,100159511$13,0604$2,060
July 23, 201813$2,130156010$1,8043$1,100
July 17, 201814$5,37017989$4,3105$1,100
July 9, 201816$11,200157410$11,0806$862
July 3, 201813$7,00078112$6,3301$750
June 25, 201815$8,80013979$4,9706$3,930
June 18, 201813$14,20014807$2216$14,290
June 11, 201812$6,3008968$5,9104$803
June 6, 201813$14,50010888$14,1545$579
May 31, 201811$4,89010638$3,2403$1,790
May 22, 201815$20,40011639$19,8086$885
May 15, 201815$4,7001510610$3,9005$643
May 9, 201811$1,40013889$1,3002$560
May 1, 20188$14,2507887$13,4001$450
April 24, 201812$5,30066111$4,4701$800
April 17, 20189$1,80010447$2,3302$1,434
April 11, 201811$2,5008326$1,6905$809
April 3, 201815$13,400111219$12,0206$1,090
March 28, 201810$4,00010927$3,8703$215
March 19, 201817$5,800135110$5907$5,165
March 12, 201815$3,130114311$2,3604$788
March 6, 201819$5,4001311610$1,5309$4,860
February 27, 201820$6,600136914$5,5306$1,030
February 19, 201815$5,5001411110$3,9906$1,980
February 12, 201823$10,9001715712$7,11011$3,840
February 5, 201816$8,600131007$1,3309$7,800
January 30, 201811$12,60011685$7,3006$4,982
January 24, 201819$9,400151295$2,01014$7,337
January 18, 201810$6,2808492$2,1008$4,188
January 9, 201812$16,50012929$15,8903$475
January 3, 201810$2,5009478$2,3502$150
December 27, 201715$9,000151139$7,5686$1,784
December 18, 201715$13,800161649$13,0107$1,118
December 11, 201714$9,7001012612$2,9404$8,500
December 4, 20176$1,8006315$1,5101$300
November 28, 20177$3,8508764$3,2603$285
November 16, 201710$2,70010486$1,8404$856
November 8, 201715$2,380179110$1,8605$516
November 1, 201712$4,70017949$3,4004$1,300
October 23, 201715$10,500106710$9,7804$1,530
October 18, 20176$2,000373$2253$1,820
October 10, 201712$6,5701009$3,8803$3,360
October 2, 20178$3,10011193$1,6305$1,750
September 25, 20178$4,8808795$2,6605$2,070
September 18, 20179$4,7703$3006$4,470
September 12, 201711$4,4308$2,0303$2,400
September 1, 20174$1,3103$3171$1,000
August 23, 201711$13,64098$11,8403$1,800

The week was a welcome improvement over the 7 deals worth $5.1 billion reported the week before and quite comparable to the 17 deals worth $17.7 billion this time last year.

M&A/Venture Capital/PE Funding

Morgan Lewis, Locke Lord, Latham Advise on JV Agreement between MPLX, WhiteWater Midstream and West Texas Gas

MPLX LP announced that it has entered into a joint venture agreement with WhiteWater Midstream and West Texas Gas to purchase an undivided (and undisclosed) percentage in EPIC’s NGL pipeline in Texas.

The agreement facilitates the transfer of NGL products from processing plants in the Permian Basin operated by MPLX and West Texas Gas to the NGL fractionation hub in Sweeny, TX.

Morgan Lewis advised MPLX and its in-house team in Denver with a Houston-based team led by partner Sameer Mohan with support from M&A associates Tara McElhiney and Clara Betancourt, as well as Houston real estate associate Melissa Brown. Lawyers from the firm’s Philadelphia and New York offices pitched in.

Latham represented WhiteWater Midstream deal team on the JV, acquisition and equity investments with a team led by New York corporate partner Christopher Cross along with Houston partners Thomas Brandt and Robin Fredrickson.

The team was backed by Houston associates Alice Parker, Rebecca Kendall, Sarah Dunn and Katie Walker. Further support by associate Michael Sellner on commercial agreements; partner Bryant Lee and associates Jared Grimley and Michael Rowe on tax matter, all out of the Houston office. Environmental, regulatory, compensation, finance and antitrust matters were handled outside Texas.

Locke Lord advised Austin-based WhiteWater on the associated purchase and transportation agreements. The Locke Lord team was led by partner John Arnold of Houston with assistance from associates Pat Beaton, Max Stubbs and Hunter Summerford, all of Houston. Tom Knight in the firm’s Washington, D.C. offices advised on energy regulatory issues.

In June 2019 MPLX and WhiteWater joined Stonepeak Infrastructure in a similar joint venture to construct the Whistler Pipeline, a 450-mile greenfield project connecting natural gas producers in West Texas to the Gulf Coast.

Austin-based WhiteWater Midstream is a management-owned midstream company backed by, among others, Charlotte-based Ridgemont Equity Partners, Denham Capital Management, First Infrastructure Capital and the Ontario Power Generation Inc. Pension Plan.

WhiteWater GC Nathan Murphy is a graduate of NYU Law School, but with early Texas connections as a Texas A&M undergrad. Murphy is a veteran of Texas energy ventures with time spent at ConocoPhillips, Reliant Energy and Rosetta Resources, a company acquired by Noble Energy in 2015.

West Texas Gas, headquartered in Midland, has operated as a family of related natural gas midstream and downstream entities since 1976. It distributes natural gas products to more than 25,000 customers in more than 90 counties in Texas and Oklahoma.

MPLX is a diversified, large-cap master limited partnership formed by Marathon Petroleum in 2012 to own and operates midstream energy infrastructure and logistics assets. MPLX’s assets include a network of crude oil and refined product pipelines and terminals. The company also owns crude oil and natural gas gathering systems and pipelines as well as natural gas and NGL processing and fractionation facilities in key U.S. supply basins.

Akin Gump Advises 7-Eleven on $21B Purchase of Speedway Stores

As previously noted in The Lawbook, Japanese-owned convenience chain 7-Eleven announced Aug. 2 it had purchased the Speedway chain from Marathon Petroleum Corp. for $21 billion in cash — dwarfing Chevron’s $13.6 billion purchase last week of Noble Energy.

Dallas-headquartered 7-Eleven was advised by a Dallas-led team from Akin Gump Strauss Hauer and Feld and by the Nishimura & Asahi firm in Tokyo.

Corporate partners Tom Yang and Nicholas Houpt led the team advising 7-Eleven, along with counsel Ashton Butcher and associates Kathryn Betts, Penelope Shumway and Trevor Vega, all of the corporate practice.

In addition, a team of Akin Gump lawyers from across the firm advised on the deal, including Houston tax partners Alison Chen and Jocelyn Tau; New York partner Rolf Zaiss, counsel Stephanie Bollheimer and associate Aaron Farovitch, executive compensation and employee benefits; and partner Lauren Leyden, counsel Dustin Stark and associate Grace O’Donnell, labor and employment, all of whom office in New York.

“This acquisition is the largest in our company’s history and will allow us to continue to grow and diversify our presence in the U.S., particularly in the Midwest and East Coast,” said Joe DePinto, President and CEO of 7-Eleven. “By adding these quality locations to our portfolio, 7-Eleven will have the opportunity to bring convenience to more customers than ever before.”

Handling the in-house aspects of the deal was company’s GC Rankin Gasaway, a graduate of Texas Tech Law School and a 25-year veteran at the company. He was assisted by company senior counsel Dawud Crooms, a Michigan Law graduate and former M&A specialist in Dallas at Haynes and Boone.

Owned since 2005 by Seven & i Holdings, 7-Eleven currently has over 9,800 stores in the United States and Canada. The addition of Speedway’s 3,900 stores will bring 7-Eleven’s total number of stores to approximately 14,000 across the two countries.

Following the transaction, 7-Eleven will have stores in 47 of the top 50 most populated metro areas in the U.S.

On a pro forma basis, the transaction reflects an EBITDA multiple of 7.1x after taking into account expected impacts from the transaction, including $475 million to $575 million of run-rate synergies, $3 billion of tax benefits and $5 billion of net sale leaseback proceeds.

The transaction is expected to produce compound annual growth in 7–Eleven’s operating income and EBITDA of over 15% through the first three years following the close of the acquisition. 7-Eleven says it expects to reduce its debt-to-EBITDA ratio to less than 3.0x within two years following the close of the acquisition. 

Latham & Watkins Counsels on Conflicts in MPLX/Marathon $340M Redemption Deal

In another deal announced in the wake of the spectacular Chevron/Speedway purchase, Marathon Petroleum Corp. unit MPLX LP agreed to transfer to MPC the wholesale distribution business it acquired in last year’s acquisition of Andeavor Logistics.

In exchange, MPLX redeemed $340 million of its own common units held by MPC. The transaction closed on July 31. The transaction leaves MPLX with the fuels distribution it received from MPC in 2018.

Latham & Watkins advised the conflicts committee of MPLX GP LLC, the general partner of MPLX. The Latham team was led by Houston partners Bill Finnegan and Thomas Brandt, with associates Daniel Harrist and Lexi Udeh.  Advice was also provided on tax matters by Houston partners Bryant Lee and Tim Fenn, along with associate Mike Rowe. 

Winston & Strawn Represents John Eagle Dealerships in Sale to Lithia Motors

A team led by Winston & Strawn partners Billie Ellis and Matt Stockstill advised four John Eagle dealerships in Dallas and Austin to expansion-minded Lithia Motors Inc., a Fortune 500 company.

The dealerships sold include: John Eagle Honda and John Eagle Sports City Toyota, both of Dallas, Honda Cars of Rockwall and Howdy Honda of Austin.

The Winston team also included Jeff Smith, a partner in Houston, as well as Dallas associates Lauren Lieberman and Victoria Acuff.

Lithia said the $500 million per year in revenues represented by the John Eagle units brings to $1 billion the yearly revenue added thus far in 2020.

Based in Medford, Oregon, Lithia was founded in 1946 by Walt DeBoer as a single car dealership and is currently one of the largest dealership owners in the U.S. In 1996 it became listed on the New York Stock Exchange.

Baker Botts Advises Calumet Specialty Products in Private $200M Exchange

Indianapolis-based Calumet Specialty Products announced August 5 announced that it had completed a private exchange offer of the company’s 2022 senior notes.

Baker Botts said it advised Calumet on the transaction with a Houston-based team led by corporate partners Justin Hoffman and A.J. Ericksen. They were backed by senior associate Eileen Boyce and corporate associates Gita Pathak and Daniel Jung, all of Houston.

On finance issues partners Andrew Thomison and Dan Tristan pitched in with senior associate Clint Culpepper. Special counsel Chuck Campbell advised on tax; associate Harrison Reback on environmental issues, and partner Connie Simmons Taylor and associate Emily Quiros counseled on real estate. All are in the Houston office except Culpepper, who offices in Austin.

The company accepted tenders of $200 million in outstanding 7.625% Senior Notes due 2022 in exchange for newly issued 9.25% Senior Secured First Lien Notes due 2024. To do so they received consent from holders of their outstanding 11.00% Senior Notes due 2025 by offering a cash payment $2.50 per $1,000. After the exchange, approximately $150 million of the 2022 notes remained outstanding.

Last October Hoffman and Ericksen advised Calumet in a $550 million private placement of those 2025 Senior Notes.

Calumet processes crude oil and other feedstocks into lubricating oils, solvents and waxes used in consumer, industrial and automotive products and produces fuel products including gasoline, diesel and jet fuel. It has 10 manufacturing facilities in northwest Louisiana, northern Montana, western Pennsylvania, Texas, New Jersey and eastern Missouri.

Kirkland, Bracewell, K&L Gates Advise as Castleton Resources Acquires $245M in O&G Assets from Range Resources

Castleton Resources announced Aug. 3 that it is acquiring the Northern Louisiana shale assets of Fort Worth-based Range Resources for $245 million plus contingency payments based on commodity pricing that could amount to as much as $90 million.

Castleton is owned jointly by Castleton Commodities International and Tokyo Gas America. And along with their announcement of the Louisiana acquisition, Tokyo Gas American also announced that it is increasing its share in Castleton from 46% to 70%, with Castleton Commodities retaining the remaining interest. The company plans a name change to TG Natural Resources by early 2021.

Kirkland & Ellis represented Castleton Resources, Bracewell advised Castleton Commodities and K&L Gates advised Tokyo Gas America.

The Kirkland team was led by Houston corporate partners Chad Smith and Adam Larson along with associates William Eiland and associate Abbey Zuech in Dallas, as well as associate Isaac Bate in Houston.

Also pitching in: partner Lane Morgan and associate Ryan Phelps on tax; partner Jonathan Kidwell and associate Ty’Meka Reeves-Sobers on environmental issues, and lawyers derivatives partner Drue Santora, as well as lawyers from Washington, New York and Chicago.

Though potentially worth $345 million, the deal marks the recognition by Range Resources their $4.4 billion acquisition of Memorial Resource Development, which included $1.1 billion in debt, hasn’t yielded the volume or value they had hoped.

In January, Range announced a $3.3 billion charge against the properties for the fourth quarter of 2019 and, according to Reuters, promised a $520 million reduction in capital expenses. The company’s desire to sell the properties was well known.

For the buyers, the acquisition — at a maximum of six cents on each Range Resources dollar — reflects the power of well-funded companies to pick up producing assets on the cheap.

“We are very pleased to be able to purchase quality assets at a low-point in the commodity-price cycle,” said Craig Jarchow, president and CEO of Castleton Resources in their announcement of the deal. “The Company is well-positioned to enhance the value of these assets through further operational enhancements, among other activities.”

The reaction from Range Resources was less enthused. There was no comment from Range about the deal in the announcement, and no mention of the deal on their website — even a week later.

Baker Botts Advises GCI Liberty in $8B Merger with Liberty Broadband

Liberty Broadband Corporation announced today that they have entered into a definitive merger agreement under which Liberty Broadband has agreed to acquire GCI Liberty in a stock-for-stock merger.

The companies expect the Combination to close in the first half of 2021 subject to certain customary conditions. The transaction represents $8.7b equity value for GCI Liberty. 

Baker Botts advised GCI with a cross-firm team led by Dallas corporate partner Samantha Crispin and New York corporate partner Nicole Perez. Texas lawyers on the team include corporate associates Jennifer Ybarra (Dallas) and Emilie Heck (Austin); on finance, senior associate Taylor Courtade (Dallas) and partner Josh Mandell (Dallas) on tax.

Liberty Broadband’s businesses consist of its interest in Charter Communications, Inc. and its subsidiary Skyhook.

GCI Liberty’s principal assets consist of its subsidiary GCI Holdings, LLC and non-controlling interests in Liberty Broadband, Charter Communications, Inc., and LendingTree, Inc.

Winston Advises NexPoint Investors in $900M Jernigan Acquisition

Jernigan Capital, a publicly-traded nationwide investor in self-storage facilities, announced Aug. 3 that it is merging with Dallas-based NexPoint Advisors in a deal valued at $900 million, including debt.

The Memphis-based REIT funds developers and operators storage with an eye to owning the facilities they sponsor.

A Winston & Strawn team led from Dallas by partner Charlie Haag advised NexPoint in the transaction. The team also included fellow Dallas partners Andrew Betaque and Chip Gage, along with associates Ben Chrisman and Patrick Luthern. Associate Angel Torres in the Houston office also pitched in. Raymond James and KeyBanc Capital Markets served as financial advisors to NexPoint.

King & Spalding advised Jernigan Capital with Jefferies serving as financial advisors.

Under the terms of the agreement, holders of Jernigan’s common stock and holders of units of operating company interests in Jernigan Capital Operating Company, LLC will receive $17.30 per share/unit in cash, a 23% over the July 31 closing share price. Holders of the Jernigan Series B preferred stock will receive $25.00 per share plus any dividends accrued before closing.

NexPoint is headed by Highland Capital co-founder Jim Dondero, who has been on the board of Jernigan since 2016. Negotiations were conducted by a transaction team that included all the Jernigan board members except Dondero.

Said Dondero of the deal: “NexPoint has long admired and supported Jernigan Capital’s unique self-storage business model and platform. We plan to build on this vision as a private company, maintaining unparalleled asset quality and continuing the current growth trajectory.”

Kirkland Advises PropTech SPAC in $573M Merger with Porch.com

PropTech Acquisition Corporation, a NASDAQ-listed SPAC, announced that it is merging with Porch.com with the intention of taking the company public.

Based in Seattle, Porch.com is a real estate-focused software platform for home inspection and home improvement services.

The deal is valued at $523 million, and is expected to close in the fourth quarter of 2020, subject to regulatory and stockholder approvals, and other customary closing conditions. The terms also call for Porch.com to receive $150 million in cash proceeds from a private-investment-in-public-equity issuance.

The Kirkland team was led out of New York by corporate partners Douglas Ryder and Abhishek Kolay. Houston-based capital markets partner Brooks Antweil was Kirkland’s only Texas lawyer on the deal.

CAPITAL MARKETS

Bracewell, HuntonAK Advise on $1.25B Kinder Morgan Offerings

Houston-based midstream Kinder Morgan announced Aug. 5 that it had closed its offerings of $1.25 billion in senior notes. The company plans to use the issues for an early payoff of nearly $1 billion due later this year.

The offering comes in two issues: a $750 million in 2.0% senior unsecured notes due 2031 and $500 million in 3.25% in senior unsecured notes due 2050.

Bracewell advised Kinder Morgan and Hunton Andrews Kurth advised the underwriters.

The Bracewell team was led by Houston corporate partners Troy Harder and Gary Orloff, with assistance from associates Kathy Witty Medford, Jay N. Larry and Sarah Ashley Byrd, likewise from Houston.

The mostly Houston-based team from HuntonAK was led by Houston partners Mike O’Leary and Taylor Landry with associates Mike Hoffman, Erin Jennings and Casey Shaw. Partner Robert McNamara and associate Tim Strother handled Tax matters. Austin-based partner Lisa Shelton handled environmental matters, and Shemin Proctor, who divides her time between Houston and Washington, D.C., handled FERC matters. 

US Bank National Association is serving as the trustee.

BofA Securities, J.P. Morgan, MUFG, RBC Capital Markets, Barclays, BMO Capital Markets, Mizuho Securities, Scotiabank, Société Générale and TD Securities served as joint book-running managers in the transaction.

In-house duties were handled by Kinder Morgan managing counsel Eric McCord and assistant general counsel Angela Teer.

Vanderbilt law grad McCord and Teer, a product of LSU’s Hebert Law School, also teamed with Bracewell on last year’s $3.3 billion sale to Pembina Pipeline of Kinder Morgan Canada’s interest in the Cochin Pipeline.

V&E Aids Riverstone in $70M Pipestone Energy Funding

Pipestone Energy announced Aug. 5 that subsidiaries of Riverstone Holding and GMT Capital have funded $70 million of the company’s convertible preferred shares.

Vinson & Elkins advised Riverstone and Riverstone V EMEA Holdings Cooperatief U.A. with a team led by partner Dan Komarek in New York and senior associate Crosby Scofield in Houston. They were backed by finance associate Luke Thomas in Houston, tax partners David Peck in Dallas and Jason McIntosh in Houston.

Riverstone V EMEA Holdings Cooperatief U.A. is a Riverstone investment fund based in Amsterdam. GMT Exploration, with offices in Denver and Calgary, is an independent energy firm chaired by Thomas Claugus since the firm was founded in 1991.

Pipestone, based in Calgary, is an oil and gas exploration and production company focused on pure-play condensate-rich assets in the Pipestone region of Alberta.

The 70,000 shares, carrying a preferred liquidation value of $70 million, were sold to the Riverstone and GMT entities for $970 per share, entitling an annual dividend of 6.5% per year, payable after two years. Pipestone netted $67 million at closing.

The CP shares are not expected to be listed on any stock exchange, but Pipestone has applied to list the underlying common shares, upon conversion, on the TSX Venture Exchange.

Kirkland Advises Forum Energy Technologies on $315 Million Exchange Offer

Houston-based Forum Energy announced Aug. 3 that it had completed its second liability management transaction of the year, an exchange of previously issued securities in exchange for 9.00% convertible secured notes due 2025.

The deal, which yielded $315,489,000 from more than 96% of the company’s ABL lenders was advised by a Kirkland & Ellis team led by Houston-based transactional partners Julian Seiguer and Bryan Flannery. with associates Christopher Fox, Logan Weissler, Maggie Hoffman, Erin Eberle and Mike Bassi, and included debt finance partners Kimberly Perdue and Will Bos, and transactional partner Adam Larson. All are based in Houston, except Weissler and Perdue who office in Dallas.

The exchange offer was the second liability management transaction led by Mr. Seiguer, Mr. Flannery this year for Forum, a Houston-based energy services company focusing on subsea operations, drilling and infrastructure.

Allen Pusey

Allen Pusey is a senior editor and writer at The Texas Lawbook.

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