© 2018 The Texas Lawbook.
By Claire Poole
(Jan. 18) – Texas lawyers were fully back to work the second week of January, with 49 attorneys from eight firms and in-house teams working on 10 transactions worth $6.28 billion.
That compared with 12 transactions worth $16.5 billion the previous week, whose value was skewed by Dominion Energy’s $14.6 billion purchase of Scana.
The week’s highlights included asset sales, initial public offerings and debt offerings. Most of the activity was in the oil and gas sector, which is looking up with higher oil prices. Check out the week’s deals.
V&E, T&K, Kirkland, Latham, Simpson work on $1.6B Lucid deal
San Antonio private equity firm EnCap Flatrock Midstream announced a big exit last week, saying Jan. 8 it agreed to sell Lucid Energy Group II to a joint venture controlled by Riverstone Global Energy and Power Fund VI for $1.6 billion.
EnCap Flatrock Midstream managing director Morriss Hurt said the deal is the realization of the largest acquisition in the private equity firm’s nine-year history.
The buyer is managed by Riverstone Holdings and investment funds managed by Goldman Sachs’ merchant banking unit.
Vinson & Elkins advised EnCap Flatrock Midstream-backed Lucid Energy Group II with a team led by partners Bryan Loocke and James Garrett with primary assistance from partners Jason McIntosh, David Cole and Ryan Carney on tax and associates Connor Long and Jonathan Sapp. All of the attorneys are based in Houston.
Thompson & Knight represented EnCap Flatrock Midstream with a team led by long-time counselor Sarah McLean, a partner who offices in Austin and Houston. Others who weighed in were partners Todd Lowther and Roger Aksamit, attorney Sarah Nealis and associates Lisa Thompkins, Mitchell Griffith, Murtuza Hussain, Jana Benson and Jackson Oliver.
All of the lawyers were all in Houston except for Nealis, who is in Austin, and Griffith, Benson and Oliver, who are in Dallas.
Kirkland & Ellis counseled Lucid II management, including corporate partners Adam Larson and Mark Ramzy and tax partner Mark Dundon in Houston with help from the firm’s New York office on executive compensation.
Latham & Watkins assisted Riverstone, including partner Robin Fredrickson, associates Kevin Richardson, Jayne Wabeke and Alice Parker and tax associate Jim Cole, all of Houston. Attorneys in the firm’s New York and Washington, D.C. offices weighed in on corporate matters as well as benefits and compensation issues.
Fried, Frank, Harris, Shriver & Jacobson out of New York advised Goldman Sachs. Simpson Thacher & Bartlett advised as financing counsel to Riverstone and Goldman Sachs. The team was led by an attorney in its Washington, D.C office with associates Jason Hwang and Andrew Lanius in Houston weighing in.
A separate Kirkland & Ellis team served as financing counsel to Lucid II’s financial adviser Jefferies in connection with the debt financing. The team included debt finance partners Will Bos and Andy Veit, as well as associate Eugenio Cardenas and capital markets partner Justin Hoffman and associate Samantha Blons.
The parties involved in the deal expect it to close this quarter with Lucid II management staying on.
Formed in December 2015, Lucid II owns natural gas gathering and processing systems in the northern Delaware Basin in New Mexico with more under construction and set to be in service by mid-year. Its customers include the region’s leading super major and independent oil and gas producers.
EnCap Flatrock backed Lucid II’s management in 2011 and will continue owning Lucid Energy Group I, which operates in West Texas’ Midland Basin.
Baran Tekkora led the deal from Riverstone and Scott Lebovitz did so from Goldman Sachs. Peter Bowden was the lead investment banker from Jefferies in Houston.
Baker Botts aids buyers of $800M in Spectra Energy Partners notes
Baker Botts said Jan. 8 it advised the initial purchasers of $800 million in notes from Texas Eastern Transmission, a unit of Houston-based Spectra Energy Partners.
The Baker Botts lawyers involved included partners Josh Davidson, Natasha Khan and Travis Wofford and associates Heath DeJean and Mitch Athey, all of Houston.
Patrick Hester is vice president of law at Spectra Energy Partners. Hester was deputy general counsel at Spectra Energy Corp. before it merged with Enbridge last year in a deal valued at $28 billion.
Texas Eastern plans to use part of the net proceeds to fund expansion projects and capital expenditures on the pipeline and reimburse Spectra Energy Partners for funds used to repay its 6 percent senior notes due 2017.
Spectra Energy Partners expects to use the proceeds to repay its commercial paper debt, which was incurred primarily to fund Texas Eastern’s capital expenditures and those of its other U.S. units.
Vinson & Elkins advises buyer of SM Energy assets for $500M
Denver-based SM Energy said Jan. 9 that it has entered into an agreement to sell most of its Powder River Basin assets in Wyoming for $500 million, which is above analyst expectations of $400 million, moving it closer to becoming a pure-play Texas oil and gas explorer.
The seller didn’t release the name of the buyer in the press release, but Northwoods Energy announced Jan. 10 that it was the buyer after receiving an $850 million equity commitment from private equity firm Apollo Global Management.
SM Energy general counsel David Copeland in Denver said the company handled the deal in-house. But Vinson & Elkins said Jan. 10 it advised Northwoods, formerly known as Converse Energy.
The V&E team was led by partners in the firm’s New York office as well as partner Shay Kuperman in Houston and senior associate Elena Sauber in Dallas. Also advising were associate Michael LeFevre, counsel Larry Pechacek and associate Erin Mitchell, all of Houston.
Northwoods tapped Tudor, Pickering, Holt managing director Jeff Knupp in Denver as its financial adviser.
Northwoods is led by CEO Tom Tyree, the co-founder and president of Lime Rock Partners-backed Vantage Energy, which was acquired by Rice Energy in 2016 for $2.7 billion. He said in a statement that Northwoods aims to built a top Powder River Basin-focused exploration and production business. Geoff Strong led the deal from Apollo out of New York.
Analysts say the sale will help SM Energy focus on its assets in the core of West Texas’ Midland Basin (around 89,000 net acres) and South Texas’ Eagle Ford shale (around 165,000 net acres). It still has non-core properties in the Bakken and Eagle Ford it could sell to further pay down debt.
V&E, Baker Botts, Willkie advise on $200M Liberty Oilfield IPO
After postponing its initial public offering in May, Liberty Oilfield Services launched an upsized $200 million issue last week with the help of Vinson & Elkins, Baker Botts and Willkie Farr & Gallagher.
As detailed in The Texas Lawbook on Jan. 12, the V&E team was led by partners David Oelman and Ramey Layne in Houston. Others include counsel James Brown and associates Crosby Scofield, Anne Peetz and Jane Ehinmoro; partners John Lynch and Lina Dimachkieh and associate Neil Clausen on tax; partner Stephen Jacobson and associate Gina Hancock on executive compensation/benefits; and counsel Larry Pechacek on environmental. All are in Houston except for Hancock, who is in Dallas.
Baker Botts counseled the underwriters on the IPO with a group of attorneys led by partner Joshua Davidson in Houston. Others included Dallas partner Jonathan Platt; associates Heath DeJean and Sunil Jamal in Houston; and Dallas partner Stephen Marcus and Houston associate Jared Meier on tax.
The underwriters are Morgan Stanley, Goldman Sachs, Wells Fargo Securities, Citi, J.P. Morgan and Evercore ISI.
Willkie Farr & Gallagher advised the selling shareholder, an affiliate of Riverstone and Carlyle which had backed the company. That team included partner Bruce Herzog, who offices in Houston and New York, and associate Adam Lyons in Houston. Other attorneys in the firm’s New York office assisted on corporate and tax matters.
Sean Elliot is general counsel of San Antonio-based Liberty, having previously been assistant general counsel at USAA Real Estate Co., which is part of the USAA organization that serves the U.S. military and their families.
Before joining USAA, the UT Law graduate practiced law in the San Antonio office of Haynes and Boone and was general counsel of publicly traded Carbo Ceramics of Houston and assistant general counsel at Dallas-based Aviall, which was purchased by Boeing in 2006 for $1.7 billion.
V&E, Kirkland advise on $138M proposed Nine Energy IPO
SCF Partners-backed Nine Energy Services also emerged this past week with plans for a $138 million IPO.
V&E partner Sarah Morgan in Houston and counsel Lanchi Huynh in Dallas are leading that one for Houston-based Nine Energy.
Kirkland & Ellis Houston partners Matt Pacey and Justin Hoffman – who joined from Simpson Thacher & Bartlett in 2016 – is counseling the underwriters, which include J.P. Morgan, Goldman Sachs, and Wells Fargo.
Latham aids on $2.9B in debt offerings by Patterson-UTI, Sunoco, Lonestar
Latham & Watkins announced Jan. 11 its work on three different notes offerings worth $2.9 billion.
The first was representing the underwriters on Patterson-UTI Energy’s private debt offering worth $525 million.
The notes priced Jan. 10 and the offering is expected to close Jan. 19. The Houston company intends to use the net proceeds to repay amounts outstanding under its credit agreement and for general corporate purposes.
Ryan Maierson was lead partner on the team, which included associates Ryan Lynch, Lance Hancock, Clayton Heery and Caroline Ellerbe, all of whom are in Houston. Houston associate Jim Cole provided tax advice along with a partner in the firm’s Los Angeles office.
In the second matter, Latham represented Dallas-based Sunoco LP on a private senior notes offering for $2.2 billion. Partner Debbie Yee in Houston was the lead partner.
The offering priced on Jan. 9 and is expected to settle on Jan. 23. Sunoco plans to use the proceeds to redeem other notes.
The third matter involved Lonestar Resources Americas, a unit of Lonestar Resources U.S., on its $250 million offering of senior unsecured notes.
David Miller and Michael Chambers of Houston were the lead partners on the offering, which was announced Dec. 19 and closed Jan. 9. Proceeds will be used to retire other notes and reduce borrowings under its senior secured credit facility.
Moody’s Investors Service said the issuance of the new notes will improve the company’s liquidity by extending the maturity of its long-term debt and increasing the available borrowing capacity under the revolving credit facility.
Fort Worth-based Lonestar explores for and produces oil and gas in Texas’ Eagle Ford Shale.
AKK counsels Ashford Hospitality on two offerings worth $150M
Andrews Kurth Kenyon said Jan. 10 it advised Dallas real estate investment trust Ashford Hospitality on two at-the-market equity programs, one with an offering price that could be worth as much as $100 million of common stock and the other valued at $50 million.
The sales agents for the $100 million offering included UBS Securities, Morgan Stanley, B. Riley FBR, Robert W. Baird, D.A. Davidson, Deutsche Bank Securities and Janney Montgomery Scott. The agents for the $50 million offering included Morgan Stanley and UBS Securities.
The AKK team on both offerings, which closed Dec. 11, included partner Brooks Antweil in Houston, counsel Tom Popplewell in Dallas and Houston associates Brooke Milbauer and Audra Herrera and Dallas associate Stephanie McDermott.
AKK has advised Ashford on other issues recently, including a $135 million offering of preferred stock in November and a $95 million offering of preferred stock in August.
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