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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

CDT Roundup: 8 Deals, 10 Firms, 50 Lawyers, $6.9B

June 29, 2020 Allen Pusey

It’s not exactly news that the Texas oil & gas industry could use some good news. But that may have come Friday with the emerging possibility that the benchmarking of Texas oil may actually start happening in Texas.

Explain, you say.

April 20 was the day oil prices went south. They didn’t just drop, they plummeted, with the May WTI contract ending that day at -$37.63 bbl.

The proximate cause was the collapse of worldwide demand packed with the collapse of an agreement on scaled-back production levels between OPEC+ and Russia. But some analysts believed at the time that the real problem with the breathtaking negative benchmark was the way West Texas crude oil is priced in the first place.

Low in sulfur and viscosity, West Texas oil is highly valued because it is so easily refined. But its price is not set in West Texas; it’s set in Cushing, Oklahoma, the hub of a host of pipelines, terminals and storage tank facilities — so many that Cushing refers to itself as “The Pipeline Crossroads of the World.” And in 1983, the New York Mercantile Exchange (NYMEX) agreed and chose Cushing as the physical point benchmarking nearly all oil futures produced in North America.

But in the last decade or so, analysts have complained about the “landlocked” nature of the current WTI benchmark. The problem is that the WTI pricing floor is ultimately dependent on Cushing storage capacity: If demand is up, the oil moves out of Cushing; if demand drops, what’s piped to Cushing stays in Cushing. Once capacity is reached, the nearest alternative sits 500 miles south along the Texas Gulf Coast where international tankers await to potentially absorb and transport excess supply to international points of demand.

So, on Friday without a great deal of fanfare, two major price reporting agencies, S&P Global Platts and Argus Media launched their own benchmarks for West Texas crude, both based on pricing at the Texas Gulf Coast and both angling to avoid the shortcomings of the WTI.

The new Platts American GulfCoast Select (AGS) benchmark will represent the value of waterborne light, sweet crude delivered from the Permian by various pipelines (Midland-to-ECHO I & II, Gray Oak, Longhorn, BridgeTex, etc.) and loaded from various Texas ports FOB 15 to 45 days from the day of assessment.

In essence, it’s much like the Brent benchmark which prices waterborne North Sea oil at the Brent Complex in the Shetland Islands.

“Platts AGS at last brings the U.S. market a Brent of its own,” said Vera Blei, global director of oil at S&P Global Platts. “This new benchmark reflects the value of US crude oil that is on the water, internationally connected and free from the distortions of domestic infrastructure economics.”

Argus Media also launched their new benchmark called American GulfCoast Select. The concept is a similar effort to free oil pricing from the confines of Cushing, but the pricing sources are not as broad as the Platt and its methodology will include a differential tethered to Cushing prices to make it hedge-friendly on the NYMEX. 

Other attempts have been made to benchmark Texas oil outside Cushing, but they never really caught on. But both S&P Global and Argus arrive with “Black April” still fresh in market memories — and timing, after all, is everything.

Texas deal-making last week remained a close fit with these complicated times, with only eight new deals worth $6.9 billion.

The week before last there were 12 deals worth $4.4 billion. And this time last year, there were 23 deals worth $8.3 billion involving 15 firms and 154 Texas lawyers.

But even the biggest deal this past week was a discounted reboot of a merger announced last December. Two other deals involved bankruptcy or the prospect of bankruptcy. And several others involved exchanges that rescheduled or extended debt.

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
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

Still, the week meant work for 50 Texas lawyers at 10 different firms. The transactions included five deals on the M&A/Funding side worth $4.8 billion and three deals involving capital markets worth $2.1 billion.

M&A/FUNDING/VENTURE CAPITAL

Waste Management, Advanced Disposal Reboot Merger at $4.6B

Houston-based industry giant Waste Management, Inc. announced June 24 that it had agreed with Advanced Disposal Services Inc. to adjust the price of their proposed merger from $4.9 billion to $4.6 billion.

The two companies also agreed to sell an estimated $835 million in assets to a Canadian waste removal firm as part of a divestiture agreement designed to secure antitrust clearance for their massive merger from the Department of Justice.

The merger, first announced in April 2019, had been seen as a potential casualty of the COVID-19 pandemic when it failed to close as anticipated during the first quarter of 2020. As part of the new agreement, Waste Management and Advanced Disposal agreed to a new walkaway date of Sept. 30, 2020 with a pre-approved postponement to Nov. 30 if DOJ antitrust approval is still in process.

Simpson Thacher counseled Waste Management on the revised agreement, including seven lawyers from the firm’s Houston office: M&A partner Chris May and associates Jacqui Bogucki, Nate Bascom, Hunter Hampton, and Braxton Pitts (M&A), along with capital markets partner Brian Rosenzweig and associate Brian Mathes.

Vedder Price is also advising Waste Management, while Centerview Partners is its exclusive financial advisor. UBS Investment Bank is serving as exclusive financial advisor to Advanced Disposal, and Shearman & Sterling and Mayer Brown are serving as Advanced Disposal’s legal counsel.

Under terms of the new agreement, Waste Management will acquire Advanced Disposal for $30.30 per share in cash, reducing the price of the original agreement of $33.15. The $4.6 billion value of the new agreement includes the assumption of approximately $1.8 billion debt, slightly less than the estimated $1.9 billion debt assumption that was part of the original agreement.

As part of the new agreement, the companies also announced that Canada-based GFL Environmental has agreed to acquire a combination of Advanced Disposal and Waste Management assets for $835 million. At least $300 million of those assets represent anticipated divestures required for federal approval of the deal.

Waste Management is the largest solid waste company in the U.S. Advanced Disposal, based in Ponte Vedra, Florida, is the fourth largest.

V&E Advises Talos Energy on $65M Asset Acquisition

Talos Energy announced June 22 the acquisition of 16 assets from Castex Energy 2005 for a total of $65 million, including an issuance of shares and $6.5 million in cash. Though the transaction is effective April 1, closing is not expected until the third quarter.

Vinson & Elkins advised an affiliate of Houston-based Talos with a team led by partners John Grand and Lande Spottswood. The team also included counsel Tan Lu and associates Erin Mitchell and Helen Xiang. Also advising were partners Ramey Layne (corporate); Jason McIntosh and David Peck (tax); Larry Nettles and Matthew Dobbins (environmental); and Brian Moss and Guy Gribov (finance).

Intrepid Partners advised Castex Energy 2005 in the transaction.

The bulk of the $65 million bolt-on transaction price is to be paid through the issuance of approximately 4.95 million Talos Energy common shares at closing.

Talos also announced that its borrowing base has been reduced 14%, from $1.15 billion to $985 million. As of May 31, Talos had approximately $121 million in cash on hand and $650 million drawn on the $985 million borrowing base.

The newly acquired assets are familiar to Talos, an independent exploration and production company specializing in offshore properties. They include operatorship of at least 11 of fields already acquired in February, and most were originally discovered or operated by current Talos management.

The company says that it plans to hedge “a significant portion” of the volumes obtained from the new assets to secure more favorable pricing of their output. The company said the new assets generated approximately $31.2 million over the year ending March 31.

Talos president and CEO Timothy S. Duncan commented: “We are very pleased with the continuing strong support we’ve received from our bank group considering the historic dislocation in our industry in recent months.”

Kirkland Represents KKR in Acquisition of Environmental Dynamics International Inc.

XPV, a wastewater treatment platform backed by KKR and XPV Water Partners, announced June 23 that it had acquired a Missouri-based company that specializes in researching and developing waste-treatment technologies.

Nexus Water Holdings, a joint venture between KKR and XPV, acquired Environmental Dynamics International, headquartered in Columbia, Missouri. Terms were not disclosed.

Nexus Water was advised by a Kirkland & Ellis team led out of the firm’s Houston office by John Pitts and Kyle Watson. Pitching in were associates Zach Savrick and Maggie Hoffman.

Nexus Water Holdings was established last year for the acquisition of two water treatment companies, Environmental Operating Solutions, Inc. and Nexom, Inc. The new entity, EDI, will be absorbed by Nexom, headquartered in Winnipeg.

EDI specializes in aeration and biological treatment solutions for municipal and industrial wastewater in the form of diffuser aeration systems used in over 7,000 installations across 100 countries.

Vinson & Elkins Advises OJO Labs on Movoto Acquisition

Austin-based AI startup OJO Labs announced June 26 that it had not only acquired Movoto, a tech-driven interactive residential real estate site, but it had attracted $62.5 million in funding to do so.

Vinson & Elkins advised OJO Labs on the acquisition with a team led by Austin venture capital partner Wes Jones with help from Austin associates Kate Rainey Willson and Chris Kirby. Also advising were partner Todd Way, senior associate Brian Russell and associate David Gilbert (tax); partner Devika Kornbacher and senior associate Ben Cukerbaum (technology/IP); partner Shane Tucker and associate Austin Light (executive compensation/benefits); and partner Sean Becker and senior associate Alex Bluebond (labor/employment).

Founded in 2015 by John Berkowitz and David Rubin, OJO Labs specializes in the use of artificial intelligence in tech platforms for brokers, agents and loan officers. The company said the acquisition of Movoto enables OJO Labs to expand its platform with scalable personalized technology for homebuyers and sellers.

In connection with the acquisition, OJO Labs also announced that it had closed on $62.5 million in a funding round led by Wafra with participation from Breyer Capital, LiveOak Venture Partners, Royal Bank of Canada and Northwestern Mutual Future Ventures.

“The way people buy and sell homes is changing,” said Jim Breyer, Founder and CEO of Breyer Capital, a former Facebook and Walmart board member. “This evolution has been expedited by recent events, and the real estate industry is on the cusp of something new in the wake of COVID-19. With a clear vision for the future and the technology to back it up, I believe OJO Labs is poised to be a leader in the next era of the home buying industry.”

Akin Gump Advises Tapstone in $65M Bid for Templar Assets

Tapstone Energy LLC, recently emergent from bankruptcy, has announced it is making a $65 million stalking horse bid for substantially all the assets of cross-town Oklahoma City producer Templar Energy.

Templar, whose assets are primarily in the Anadarko Basin, filed for Chapter 11 protection June 1. Tapstone emerged from bankruptcy in April.

Akin Gump announced June 25 that it is representing Tapstone in its bid for Templar. Leading the team are New York partner Dan Fisher, head of Akin Gump’s integrated special situations group, along with restructuring partner Sarah Schultz of Dallas.

The Templar bid caps the completion of Tapstone’s restructuring plan in which its lenders agreed to exchange secured debt for common equity and a four-year $145 million loan. In addition, nearly all (99.5%) of the company’s 9.75% 2022 senior noteholders likewise agreed to exchange their existing notes into common equity and a new four-year $5 million unsecured term loan.

Key in the Templar bid, however, was a $50 million preferred equity investment by Kennedy Lewis Investment Management ear-marked by management for acquisitions.

By wiping out $450 million of principle debt, Tapstone was left with over $60 million in liquidity and a vastly deleveraged balance sheet.

“The outcome of this process establishes Tapstone as an entity ready to consolidate assets in the Mid-Continent,” CEO Steve C. Dixon said in a written statement at the time. “We are eager to turn our focus on acquiring producing properties and evaluating merger candidates.”   

By contrast, Templar has a history of high-dollar troubles since its founding in 2012 by David Le Norman, current chairman of the Oklahoma Petroleum Alliance. Le Norman stepped down as its chairman last year.

Backed by Ares Management and Bain Capital, Templar has revealed in filings that top lenders of approximately $426 million can expect to receive no more than 21 cents on the dollar, according to the Wall Street Journal.

Just four years ago, Templar negotiated the elimination of $1.45 billion in debt as part of an out-of-court restructuring.

Beginning in February, Templar had been openly shopping its Anadarko assets, but decided to file for bankruptcy in Delaware after the market was rocked by an oil and gas price collapse. In a statement the company said it had secured DIP loans of $25 million to keep it operating.

Paul, Weiss, Rifkind, Wharton & Garrison is advising Templar in the bankruptcy. Guggenheim Securities is acting as the Company’s investment banker, with Alvarez & Marsal North America, LLC is acting as financial advisor.

CAPITAL MARKETS/RESTRUCTURING

Martin Midstream Partners Announces $323M Restructuring Support Agreement

Martin Midstream Partners announced June 26 that it had entered into a restructuring support agreement with its major noteholders, an agreement that includes the possibility of a Chapter 11 filing if an anticipated change of notes fails to take place.

Akin Gump Strauss Hauer & Feld is outside counsel for Martin Midstream and its subsidiaries, and Stephens Inc. is serving as the company’s financial advisor.

Skadden Arps is representing the note holders with a team from New York and Washington, D.C.

Headquartered in Kilgore, Martin Midstream Partners provides terminalling, storage and packaging for petroleum products, including land and marine transportation services on the Texas Gulf Coast. The company also manufactures specialty products sulfur-based products and fertilizer and liquid natural gas.

The agreement includes Martin Midstream’s general partner, Martin Midstream GP, as well as its subsidiaries: Martin Midstream Finance Corp., Martin Operating GP, Martin Operating Partnership LP, Redbird Gas Storage, Talen’s Marine & Fuel, and Martin Transport, Inc.

The agreement is with note holders that that beneficially own over 62% of the company’s 7.25% Unsecured Notes due 2021.

The company contemplates an out-of-court offer to exchange the existing notes for a combination of cash, 11.50% Senior Secured Second Lien Notes due 2025 and rights to acquire 10.00% Senior Secured 1.5 Lien Notes due 2024. In addition, the company will attempt to renegotiate some of the restrictive covenants in the existing notes. Aside for those changes in documentation, closing is also contingent on a tender of at least 95% of the existing notes in the exchange. If the closing doesn’t take place, the company said it will proceed to file for bankruptcy protection under Chapter 11.

Ruben Martin, president and CEO of Martin Midstream, said the agreement, “Demonstrates the confidence our bondholders have in our leadership team and the vision we have for the Company.” He said the transactions would increase the company’s financial flexibility.

“In these times of both macroeconomic and social challenges, we are appreciative of the support of the bondholders for our long-term success,” Martin said.

Baker Botts Represents Sunnova in Securitization of Solar Loans

Sunnova Energy International Inc., the Houston-headquartered residential solar energy service provider, announced June 22 that it had securitized two tranches of solar loans totaling $158.5 million.

The company said the transactions included its sixth residential solar securitization. As it has in previous securitizations, Sunnova was advised by Baker Botts.

The Baker Botts team was led by Houston partner Travis Wofford and partner Martin Toulouse in New York. Tax advice was provided by Houston partners Michael Bresson and Renn Neilson, as well as Austin partner Jon Nelsen. Kris Benskin in Houston provided ERISA support, while Houston-based partner Danny David provided additional advice.

Latham & Watkins Advises Total S.A. in $1.6 Billion Bond Offering

Latham & Watkins said June 25 that its Houston office is advising Paris-based Total S.A. in two note offerings worth $1.6 billion.

The broad-based energy conglomerate, active in 130 countries, is offering $800 million of 2.986% Guaranteed Notes Due 2041 and $800 million of 3.386% Guaranteed Notes Due 2060, in each case to be issued by Total Capital International and guaranteed by Total S.A.  

The Latham team advising Total S.A. in the offering is led by Houston partner Ryan Maierson, along with Houston associates Ryan Lynch and Katie Walker. Tax advice was provided by Houston partners Tim Fenn and Bryant Lee, with Houston associates Jared Grimley and Marianne Standley. Lawyers from Latham’s Paris office also assisted.

Allen Pusey

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

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