M&A and capital markets activity picked up this past week, with 100 Texas lawyers working on 12 transactions worth around $6.57 billion.
The transactions involved everything from asset sales to corporate acquisitions to new company formations to equity and debt offerings. The oil and gas sector continued to be active – particularly in the midstream, or infrastructure, space – while oil and gas properties continued to change hands. The highlights are below.
Locke Lord assists Medallion on sale to GIP for $1.8B
The Houston office of Locke Lord worked on a whopper of a deal this past week, counseling Medallion Gathering & Processing LLC on its sale Oct. 2 to an affiliate of Global Infrastructure Partners for $1.8 billion.
Owned by the Energy & Minerals Group (51 percent) and Laredo Petroleum Inc. (49 percent), Medallion controls the largest privately held crude oil transportation system in West Texas’ Midland Basin.
Locke Lord partners Kevin Peter and Michael Blankenship led the Houston-based deal team, which included partners Derrick Carson, Jerry Higdon, Eric Larson, Phil Lau, Tammi Niven, Ed Razim, Bill Swanstrom and Mitch Tiras; senior counsel Mechelle Smith and Max Stubbs; and associates Devon Cox, Laura Ferguson, Emily Hejl, Iliana Ivanova, Nick Moore, Kerstie Moran and Ben Smolij. Partners Van Jolas and Neil Rajan and associate Danielle Marr also pitched in from Dallas and a few lawyers helped out from its West Palm Beach, Fla., office.
Akin Gump Strauss Hauer & Feld’s Houston office advised longtime client Laredo, including partner Christine LaFollette, who heads the office; associate Erik Shoemaker; and partners William Morris and Michael Byrd and counsel Stephen Boone. The firm’s Washington, D.C., office also assisted on antitrust matters.
White & Case assisted GIP. Jefferies and Wells Fargo Securities were Medallion’s financial advisers.
Raymond James analyst James Freeman said the sale came in below expectations, with many estimating the system was worth as much as $2.5 billion.
No Texas lawyers on Office Depot’s $1B CompuCom purchase
Another big deal this past week — Office Depot Inc.’s $1 billion purchase of Thomas H. Lee Partners-backed CompuCom Systems Inc. of Plano on Oct. 3 — didn’t involve any lawyers in the state.
Both companies went with big corporate law firms in New York for outside counsel, with Office Depot using Wachtell, Lipton, Rosen & Katz and CompuCom tapping Weil, Gotshal & Manges. And even though CompuCom is based in Texas, its general counsel, Paul Gagnier, is in its Charlotte, N.C., office. He told the Texas Lawbook that no lawyers in the state worked on the sale.
Thomas H. Lee bought CompuCom from Court Square Capital Partners LP in 2013 for $1.1 billion, which implies a $100 million loss on the sale.
The deal provides a way for Office Depot to expand into business and technology services after the Federal Trade Commission blocked its $6.3 billion purchase by Staples Inc. last year. Shareholders weren’t impressed with its new offspring: They sent its stock down 17.6 percent on the first trading day after the transaction was announced.
V&E aids Omega Protein on $500M Cooke acquisition
Vinson & Elkins worked on a non-energy deal this week, announcing Oct. 6 that it counseled nutritional product provider Omega Protein Corp. on its acquisition by Canadian seafood giant, Cooke Inc., for $22 per share in cash, or about $500 million.
The V&E team was led by partner Jeff Floyd, senior associate Brittany Sakowitz and associate Mike Marek with assistance from associates C.J. Murray and Key Hemyari, all of Houston.
Also advising were partner Jason McIntosh in Houston and associates Brian Russell in Dallas and Curt Wimberly in Houston on tax matters; partner Stephen Jacobson in Houston and associates Gina Hancock in Dallas and Kristy Fields in Houston on executive compensation/benefits; partner Sean Becker and associate Paul Knettel, both of Houston, on labor/employment; partner Larry Nettles and senior associate Matt Dobbins in Houston on environmental; and partner Devika Kornbacher and associate Sean Hill in Houston on intellectual property.
Lawyers from the firm’s Washington, D.C., and New York offices pitched in on antitrust and finance matters.
BMO Capital Markets, Kelley Drye & Warren and Deloitte advised Cooke on the deal. Jones Day counseled BMO and Morgan, Lewis & Bockius represented Cooke on the financing. J.P. Morgan Securities advised Omega Protein.
Kirkland, Sidley advise on $200M Linn Energy asset sale to Exaro
Onetime bankrupt Linn Energy announced it shed another $200 million in oil and gas properties on Oct. 4, this time 163,000 net acres in Wyoming’s Washakie field. The Houston offices of Kirkland & Ellis and Sidley Austin got to bill some hours because of it.
The company didn’t disclose the buyer, but filings with the U.S. Securities and Exchange Commission show that it was Houston-based Exaro Energy. The company is backed by its management team, which is led by CEO Chris Beato, along with Jefferies Capital Partners, Contango Oil & Gas, Sageview Capital LP, UnionBanCal Equities Inc. and Wells Fargo Energy Capital.
Kirkland advised Linn on the deal, including partners Anthony Speier and Rahul Vashi in Houston. Sidley partner Joe Flack in Houston assisted Exaro. Jefferies provided financial advice.
Assistant general counsel Holly Anderson managed the deal at Houston-based Linn, according to Linn general counsel Candice Wells.
Wells has been in charge of the company’s legal matters through some ups and downs, joining during the go-go days of 2013 (when it bought Berry Petroleum for $4.3 billion) through its debt-related distress after oil prices tanked in 2014 through its bankruptcy filing in May of last year and its emergence in February. She cut her teeth at Fulbright & Jaworski (now Norton Rose Fulbright) after law school at the University of Houston. She was senior counsel at EOG Resources before joining Linn.
Willkie, HayBoo advise on Carrizo, Reliance asset sale to Kalnin for $210M
Willkie Farr & Gallagher and Haynes & Boone also saw a little asset sale action in the oil patch this week, working on the sale of natural gas properties in Pennsylvania’s Marcellus Shale by Carrizo Oil & Gas Inc. and Reliance Industries Ltd. for $210 million.
Willkie advised the buyer, Kalnin Ventures’ BKV Oil and Gas Capital Partners, whose fund is backed by Thailand coal mining and power generation company Banpu PcL. It’s the fund’s fifth acquisition of properties in the Marcellus over the last two years, bringing its total to $417 million. It is now one of the top 20 natural gas producers in the state, where it expects to expand.
The Willkie team was led by partner Michael De Voe Piazza and associate David Aaronson but also included Will Thanheiser and Lynn Abell, all of Houston. The team had assistance from the firm’s asset management group in New York.
HayBoo associates Austin Elam and Ellen Conley in Houston assisted Reliance, which is led by Indian billionaire Mukesh Ambani. Houston-based Carrizo handled the deal in-house with a team led by general counsel and business development chief Gerry Morton. Morton previously spent 15 years at Pogo Producing Co., most recently as VP of law.
The Oct. 6 sale represents a big loss for Reliance, mostly due to persistently low natural gas prices. It bought its stake in the properties in 2010 for $392 million and sold them for $126 million.
Analysts at Seaport Global Securities said the sale marks Carrizo’s exit from Appalachia and brings proceeds from its divestitures to $146 million, including the $62 million sale of its Utica position announced on Sept. 5. The company is currently marketing its properties in the DJ Basin that could bring in another $300 million later this quarter, they said.
Kirkland advises Blackstone on purchase of stake in Targa pipeline
Kirkland & Ellis landed another asset deal this past week, counseling Blackstone Energy Partners on its purchase of a 25 percent joint venture interest in the Grand Prix natural gas liquids pipeline project from Targa Resources Corp. for an undisclosed sum. Targa announced the deal Oct. 4.
The Kirkland team was led by corporate partners Rhett Van Syoc and Andy Calder in Houston. Targa’s general counsel is Paul Chung, who worked at Royal Dutch Shell, Coral Energy, Tejas Gas and Vinson & Elkins before joining Targa at its formation in 2005.
The $1.3 billion pipeline is expected to stretch from West Texas’ Permian Basin to Mont Belvieu in southeast Texas. Houston-based Targa and Blackstone portfolio company EagleClaw Midstream Ventures of Midland, Texas, also executed a raw product purchase agreement for transportation and fractionation services related to the pipeline.
T&K advised AMID committee on $125M Delta House purchase from ArcLight
Thompson & Knight won work advising the conflicts committee of American Midstream Partners on its purchase of an additional 15.5 percent stake in Delta House from affiliates of private equity firm ArcLight Capital Partners for $125.4 million. AMID announced the deal Oct. 2.
The T&K deal team was led by partner Jeremiah Mayfield in Dallas and included of counsel Alan Baden in Houston and tax partner Dean Hinderliter and associate Courtney Roane in Dallas.
Robert W. Baird provided financial advice to AMID’s committee. Simmons & Co. International assisted ArcLight’s investment committee.
Delta House is a fee-based, semi-submersible floating production and processing system in the Gulf of Mexico. ArcLight controls AMID’s general partner.
Lilis Energy picks up Delaware Basin oil and gas properties for $45.6M
Small San Antonio oil and gas explorer Lilis Energy said Oct. 4 it agreed to buy 4,000 acres on the eastern side of its acreage block in the Delaware Basin from an undisclosed private seller for $45.6 million in cash.
The company plans to fund the deal at its November closing by drawing down the $45 million of availability remaining under its second-lien term loan with Vӓrde Partners Inc.
Lilis’ legal advisers on the deal were Thompson & Knight associates Cole Bredthauer in Dallas and Kelli Sims in Houston. Bracewell assisted on the transaction’s financing as well as disclosure and other corporate matters, including Houston partner Charles Still Jr. Sill also advised Lilis on the term loan with Vӓrde, which used Kirkland partners Lucas Spivey, Justin Fitzgerald Hoffman and Chad McCormick and associates Ryan Copeland, John Zarbock, Christopher Fox and Joe Tobias, all of Houston).
Williams Capital Group analyst Gabriele Sorbara thinks Lilis got the properties for cheap at $11,400 per undeveloped acre, versus the going rate of around $22,400 on average. He said the deal boosts the company’s net acreage to around 15,250 net acres, achieving its year-end target of more than 15,000 net acres.
Lilis hasn’t had it easy. In August, its CEO, Avi Mirman, resigned from the company after the U.S. Securities and Exchange Commission sued him for alleged securities fraud in a penny stock scheme involving Liberty Silver Corp. in 2012 (B.G. Capital Group Ltd. and its chairman, Robert Donald Bruce Genovese, were also charged). Lilis president James Linville was named to succeed him.
V&E, T&K aid on Culberson Midstream creation by Charger, Producers
Charger Shale Oil Co. and Producers Midstream LP said Oct. 4 they formed Culberson Midstream to install a new natural gas gathering system and processing capacity in the Delaware Basin — and V&E and Thompson & Knight are benefiting from it.
V&E advised Oaktree Capital Management-backed Charger, including partners John Grand and David Peck, senior associate Thomas Laughlin and associate Abby Branigan, all of Dallas. Lawyers from its New York and Washington, D.C., offices also helped, along with David Smith with Davis Gerald & Cremer in Midland.
T&K assisted Tailwater Capital-backed Producers, including partners J. Holt Foster and Jessica Hammons, associate Cole Bredthauer, senior counsel Arthur Wright, associate Courtney Roane and partner Kurt Summers, all out of the Dallas office.
V&E has advised Los Angeles-based Oaktree before, including a $200 million investment in and a strategic relationship with NGL Energy Partners LP last year. And T&K’s Foster has assisted Tailwater previously, including its $150 million commitment to Valiant Midstream LLC in August.
Baker Botts represents underwriters in $115M Höegh LNG offering
Baker Botts booked more securities work this past week, announcing Oct. 2 that it represented the underwriters in Höegh LNG Partners LP’s $115 million offering of preferred units.
The offering priced Sept. 28 and closed Oct 5. The underwriters included Morgan Stanley, UBS Securities, Stifel and ABN AMRO.
The Baker Botts team included partners Josh Davidson and A.J. Ericksen in Houston, senior associate John Kaercher in Austin, associate Chelsea Gaw in Houston and associate Sunil Jamal in Houston.
Partner Jon Lobb and associate David Morris worked on the tax aspects from Houston, while partner Aileen Hooks and Samia Broadaway assisted on the environmental aspects out of Austin and partner Mark Bodron aided on the employee benefits aspects from Houston. Regulatory and employee benefits attorneys in its Washington, D.C., office also worked on the offering.
Vinson & Elkins counseled Höegh with attorneys out of its Washington office.
AKK and Latham assist on Sunoco Logistics’ $2.25B debt offering
Andrews Kurth Kenyon and Latham & Watkins also brought in some big securities work, announcing Oct. 2 that it advised the underwriters on a $2.25 billion debt offering by Sunoco Logistics Partners Operations. The underwriters included Deutsche Bank Securities Inc., PNC Capital Markets, U.S. Bancorp Investments and Wells Fargo Securities.
The AKK team was led by partners Bill Cooper (who offices out of Houston and Washington), Jordan Hirsch (Houston), Rob Taylor (Houston), Robert McNamara (Houston), Lisa Shelton (Austin) and O’Banion Williams (Houston). Associates on the deal were Phil Haines, Mike Hoffman, Chris Adcock, Brooke Milbauer, Jerry Chandapillai and Jocelyn Tau, all of Houston. Other lawyers assisted out of the firm’s Washington office.
Lawyers from Latham in Houston represented Sunoco. They included partners Debbie Yee and Bill Finnegan and associates Chad MacDonald, Jayne Wabeke and Madeleine Neet; partner Tim Fenn and associate Bryant Lee on tax matters; and partner Joel Mack and associate Josh Marnitz on environmental. A partner from its Los Angeles office also pitched in.
V&E, Latham advise CrownRock on $1B private debt offering
V&E and Latham & Watkins also logged work on a debt offering, a private one by CrownRock LP for $1 billion. CrownRock is a joint venture between CrownQuest Operating and private equity firm Lime Rock Partners.
V&E’s corporate team was led by partner Robert Kimball in Dallas with assistance from Mike Harrington of Houston, counsel Dan Spelkin of Houston and associates Desi Baca and Grace Ann Whiteside, both of Dallas. Also advising were partners Jim Meyer and Wendy Salinas in Dallas on tax and counsel Larry Pechacek in Houston on environmental. Other attorneys helped out from New York.
Latham served as underwriters’ counsel with a team in Houston that included partners David Miller and Michael Chambers and associates Trevor Lavelle, Eric Schoppe and Madeleine Neet. Credit Suisse Securities (USA) was the exclusive dealer manager of the offering.