Rushing to complete deals before the holidays, Texas lawyers punched the accelerator this week and the results were impressive. Sixteen transactions worth $13.8 billion involving 16 different law firms and 164 Texas lawyers are the most since the CDT Round-Up began running in October.
This high point may have been skewed by Marathon Petroleum’s $10.1 billion share exchange with affiliate MPLX, but there was still a lot of action: a $946 million acquisition by Oasis Petroleum; a joint venture led by Noble Midstream to purchase Saddle Butte Rockies Midstream; a $525 million oilfield services acquisition; three private equity firm investments in the energy industry plus an Austin technology deal.
Hark, the week’s deals.
V&E, AKK, Baker Botts work on $10.1B Marathon Petroleum/MPLX deal
Findlay, Ohio, refiner Marathon Petroleum Corp. announced a mammoth deal involving its affiliate MPLX — and Vinson & Elkins, Andrews Kurth Kenyon and Baker Botts all worked on it.
Marathon said Dec. 15 it agreed to exchange its general partner economic interests in MPLX, including incentive distribution rights, for 275 million newly issued MPLX common units valued at $10.1 billion. MPLX’s units dropped 4.82 percent on the news to $36.11 per unit.
Andrews Kurth Kenyon partner Mike O’Leary led the team counseling MPLX’s independent conflicts committee. Others included associates Warren Knull, Garrett Hughey and Oliver Fankhauser and tax partner Tom Ford and associate Jocelyn Tau, all of Houston.
Vinson & Elkins is representing Marathon, including corporate partner David Oelman and tax partner Ryan Carney, senior associate James Brown and associate Crosby Scofield, all of Houston. Senior associate Laura Gieseke and its Washington, D.C. office provided advice on tax matters. Marathon Petroleum used Citi for financial advice.
The transaction is expected to close Feb. 1 after the closing of Marathon’s previously announced dropdown of refining logistics assets and fuels distribution services. Marathon will continue to control MPLX through its ownership of an non-economic general partner interest and will own 64 percent of MPLX’s outstanding common units.
Marathon said the exchange simplifies its corporate structure and provides a clear valuation for its general partner economic interests in MPLX. It also eliminates MPLX’s general partner cash distribution requirements and is expected to be accretive to common unitholders in the third quarter and all of next year.
V&E, DLA Piper, T&K work on $946M Oasis Petroleum acquisition
As the Texas Lawbook reported on last week, Vinson & Elkins, DLA Piper and Thompson Knight worked on a big M&A deal, Oasis Petroleum Inc.’s agreement Dec. 11 to buy 20,300 net acres in West Texas’ Delaware Basin from EnCap Investments- and Pine Brook Partners-backed Forge Energy for $946 million.
V&E advised Houston-based Oasis with a team led by partner John B. Connally IV in Houston. The firm also worked on a related equity raise led by partner David Oelman, also of Houston.
Counseling Forge was DLA Piper attorney Steven Torello. Thompson & Knight represented EnCap with a team that included partner Sarah McLean, who offices out of Austin and Houston, and Houston partner Todd Lowther; partner Jesse Betts of Dallas; tax partner Roger Askamit of Houston; associates Stephen Grant of Houston and Jessica Kirk of Dallas; and attorney Sarah Nealis of Austin.
Oasis general counsel Niko Lorentzatos said the in-house lawyers leading the transactions were managing counsel Natara Williams and senior counsel Jonathan Lancton on the asset acquisition and senior counsel Melissa Buce on the equity deal.
V&E, T&K, Reed Smith, LL work on $625M Noble Midstream deal
Vinson & Elkins and Thompson & Knight also counseled on a good-sized midstream deal last week, Noble Midstream Partners’ formation of Black Diamond Gathering with EnCap Flatrock Midstream-backed Greenfield Midstream and Black Diamond’s agreement to acquire Saddle Butte Rockies Midstream and affiliates for $625 million.
The deal was announced Dec. 12 and is expected to close next month. Noble Midstream will fund 50 percent of the purchase price and own 54.4 percent of the joint venture through its unit Laramie River DevCo. while Greenfield will own 45.6 percent.
The V&E team advising Noble Midstream on the acquisition was led by partner Bryan Loocke, senior associate Brittany Sakowitz and associates Megan Menniti, Kyrie Hayden and Caroline McDonald, all of Houston. The joint venture formation was led by partner Doug Bland and associates Ali Choate and Jordan Fossee, also all of Houston.
Also advising were partner Sean Becker and senior associate Christie Alcala of Houston (labor/employment); senior associate Matt Dobbins in Houston and associate Rachel Comeskey in Austin (environmental); partners Todd Way in Dallas and Ryan Carney in Houston and associates Julia Pashin in Dallas, Amy Benford in Houston and Christine Mainguy in Houston (tax); and partner Stephen Jacobson in Houston (executive compensation/benefits). The firm also had regulatory and antitrust help from lawyers in its Washington, D.C. office.
T&K represented EnCap Flatrock Midstream with a team that included partners Sarah McLean, Todd Lowther and Doug Pedigo, all of Houston; attorney Sarah Nealis (Austin); and associate Jessica Kirk (Dallas).
Reed Smith represented Greenfield with a team that included Houston partners Gary C. Johnson and Todd Culwell and associate James M. Pappenfus with tax assistance from its Pittsburgh office.
Locke Lord partners Kevin Peter and Michael Blankenship of Houston represented Saddle Butte. They had assistance from partners Bill Swanstrom, Jerry Higdon, Ed Razim, Buddy Sanders and Mitch Tiras, senior counsel Mechelle Smith, associates Devon Cox, Sarah Lozano, Jennie Simmons and Max Stubbs of Houston, partners Van Jolas and Geoff Polma of Dallas and its West Palm Beach office.
Saddle Butte general counsel Greg Ward worked the deal as well.
Providing financial advice were Deutsche Bank for Noble Midstream and Baird for Greenfield.
The Saddle Butte assets include a large-scale integrated crude oil gathering system in the Denver Julesburg Basin consisting of 160 miles of pipeline in operation, 300,000 barrels per day of delivery capacity and 210,000 barrels of crude oil storage capacity. Noble Midstream expects the deal to be accretive to its distributable cash flow per unit in the first year.
Baker Botts, Strasburger, Morgan Lewis work on Oil States’ $525M GEODynamics purchase
Oil States International Inc. announced Dec. 12 it agreed to buy Lime Rock Partners-backed GEODynamics Inc. for $525 million.
The price includes $300 million in cash, which will be paid for through Oil States’ amended revolver; the issuance of Oil States shares valued at $200 million; and a $25 million unsecured promissory note payable to the sellers. The sellers will pay the target’s $24 million in debt at closing with proceeds from the transaction.
The transaction must clear regulators but should close in the first quarter.
Partner Ron Scharnberg and associate Katie McEvilly assisted on tax matters; partner Scott Janoe and associate Kim Tuthill White helped on environmental; partner Rob Fowler and associate Krisa Benskin pitched in on employee benefits; and partner Robinson Vu aided on intellectual property. All are in Houston.
Strasburger & Price advised Oil States with a team that included partners Garney Griggs, Debra Hatter and Steve Rubin and associate Joe Struble, tax partner Crawford Moorefield, real estate partner Richard Crow, environmental partner Pat Larkin, intellectual property partner John Tang and ERISA partner Boniita Hatchett-Bodle. All are in Houston except for Struble, who is in San Antonio.
IP partner Erik Hawes at Morgan, Lewis and Bockius in Houston also worked on the deal.
Oil States’ chief legal officer is Lias “Jeff” Steen, who has been at the company for almost 10 years. A native of Cuero, Texas, Steen has been involved in the energy service business in various capacities since 1978, starting his career as a petroleum landman. He previously spent 10 years with Camco International Inc. as assistant general counsel and general counsel, five years as the general counsel for North America at Schlumberger and five years as vice president of legal at Grant Prideco.
GEODynamics, which Lime Rock invested in beginning in 2011, provides oil and gas perforation systems and downhole tools for completion, intervention, wireline and well abandonment operations.
Oil States CEO Cindy Taylor said in a statement that the transaction will provide meaningful growth potential that combines downhole technology with consumable products used in complex well completions. It plans to sell GEODynamics’ products through its global sales and service network.
AKK, V&E aid on FourPoint’s $525M investment, acquisition
Denver-based FourPoint Energy announced Dec. 14 a new equity financing and the closing of a strategic upstream and midstream acquisition in the Anadarko Basin – and two Texas law firms benefited from the work around it.
Quantum Energy Partners agreed to invest $489 million in common equity in FourPoint while existing equity holders plowed in another $36 million, bringing the total to $525 million. Funds managed by GSO Capital Partners LP and Quantum are now controlling members.
Andrews Kurth Kenyon advised FourPoint with a team that included partners Mike O’Leary and Courtney Cochran Butler and associates Warren Knull, Erin Juvenal, Leslie Slaughter and Oliver Fankhauser. Assisting them were tax partner Allison Mantor and oil and gas 2018 partner-elect Ashley Muehlberger and associate Ming Lei. All were in Houston.
Jefferies was FourPoint’s financial adviser.
The acquisition included oil and gas properties in Wheeler and Hemphill Counties, from an undisclosed seller for $188 million, which Four Point said added production, upside acreage and control of a fully integrated midstream system to its top position in the Western Anadarko Basin.
V&E advises Noble Energy on Cone Gathering sale to CNX for $305M
Vinson & Elkins said Dec. 15 it also advised Noble Energy Inc. on the sale of its 50% interest in Cone Gathering to CNX Resources Corp for $305 million.
Partner Ramey Layne led the deal team, which included senior associate James Brown and associates Ali Choate and Mariam Boxwala, all of Houston. Also advising were partners Ryan Carney in Houston (tax) and Michael Holmes in Dallas (litigation) and senior associate Marisa Secco in Austin (litigation).
Cone Gathering owns the general partner of Cone Midstream Partners. Noble is keeping its 21.7 million common limited partner units and plans to maximize value through the sale of the units over the next few years.
Noble said the agreement with CNX also settles any and all claims between the two parties. Closing of the transaction is anticipated in early 2018.
In association with the transaction, Noble has terminated its previous agreement to sell its entire Marcellus midstream holdings to Wheeling Creek Midstream, a portfolio company of Quantum Energy Partners.
Kelly Hart, T&K work on EnCap’s $300M equity commitment to Pegasus
Fort Worth mineral and royalty company Pegasus Resources said Dec. 11 it received a $300 million commitment from EnCap Investments with Kelly Hart & Hallman advising it.
The KH team included partners Tom Hegi, David Cook and Todd Spake, and associate Drew Neill, all of Fort Worth.
Pegasus is led by a team of veteran energy executives led by CEO George M. Young Jr., who most recently was CEO of Silverback Exploration, which EnCap also backed (its oil and gas properties in the Delaware Basin were sold to Centennial Resource Development last year for $855 million).
Pegasus plans to focus on acquiring and managing mineral and royalty properties in the core of established and rapidly emerging resource plays, primarily West Texas’ Permian Basin. Tilden Capital, which has a long track record of sourcing mineral and royalty acquisitions across various basins, will assist it.
Baker Botts, V&E aid on $250M Tallgrass Energy notes offering
Baker Botts said Dec. 12 it counseled Tallgrass Energy Partners on a $250 million notes private offering that will help it repay outstanding borrowings under its credit facility. The offering closed Dec. 11.
The team included partners Mollie Duckworth in Austin and Dan Tristan in Houston, senior associate Courtney Fore in Austin and associates Jennifer Wu, Allison Lancaster and Leah Davis, all of Austin. Houston partner Mike Bresson, Austin partner Jon Nelsen and Houston associate Leah Patrick assisted on tax matters.
Vinson & Elkins assisted the initial purchasers, including partner Sarah Morgan with counsel Dan Spelkin, senior associate Doug Lionberger and associates Sean Roberts, Greg Henson and Ximena Kuri, all of Houston.
Kirkland & Ellis counsels EIG on $250M investments in Rosehill entities
Kirkland & Ellis said Dec. 15 it advised EIG Global Energy Partners on its $100 million senior secured second lien investment in Rosehill Operating Co. and $150 million preferred equity investment in publicly traded Rosehill Resources Inc. with the possibility of up to $50 million in investment more down the road.
Some of the proceeds are going toward Rosehill Resources’ purchase of 4,565 net acres and certain producing oil and gas properties in the Southern Delaware Basin for $78 million, which will double the company’s total to 9,200 net acres.
The Kirkland team was led by corporate partner Cyril Jones and associates David Thompson and David Moore; debt finance partners Will Bos and Mary Kogut and associate Chad Nichols; and capital markets partner (and recent hire) Julian Seiguer. The firm had tax assistance from lawyers in its New York office.
Vinson & Elkins represented Rosehill on the acquisition, which was previously reported by the Texas Lawbook last month, and related financing. Haynes & Boone counseled the company in connection with related revolving credit facility matters, including partner Buddy Clark and associate Kim Mai in Houston.
The KLR Group provided financial advise to Rosehill.
Locke Lord advises Carrizo on sale of Eagle Ford assets for $245M
Locke Lord said Dec. 13 it advised Houston-based Carrizo Oil & Gas Inc. on its sale of oil and gas properties in South Texas’ Eagle Ford shale for $245 million.
The deal, which brings proceeds from Carrizo’s divestiture program to $530 million, is expected to close by the end of January. Analysts generally thought the deal came at a very good price for Carrizo and would help it shore up its balance sheet.
The team was led by Houston partner Terry Radney and included partners Hunter Summerford, Jerry Higdon and Buddy Sanders and associate Max Stubbs, all of Houston. General counsel Gerry Morton led the deal in-house.
Akin Gump Strauss Hauer & Feld partner David Sweeney in Houston aided the undisclosed buyer.
V&E advises Clearlake on Knight Energy recap, cutting $175M in debt
Clearlake Capital Group said Dec. 13 it completed its recapitalization of bankrupt Knight Energy Holdings with its management team, the Knight family and other stakeholders, reducing more than $175 million of the company’s debt.
Vinson & Elkins counseled Clearlake with a team led by partners Paul Heath in Dallas and Matt Strock in Houston. Heller, Draper, Patrick, Horn & Dabney in Louisiana represented Lafayette-based Knight.
Knight Oil Tools’ predecessor, Knight Specialties, originated in Morgan City, La., out of the trunk of founder Eddy Knight’s car. It now claims to be one of the largest privately owned oilfield rental tool companies in the world.
Santa Monica, Calif.-based Clearlake is led by founder José E. Feliciano and has more than $3.5 billion of assets under management.
Gibson Dunn, V&E advise on American Midstream’s $125M senior notes offering
Gibson, Dunn & Crutcher said Dec. 14 it advised Houston-based American Midstream Partners on its offering of $125 million in senior notes, the proceeds from which will be used to reduce borrowings under its credit facility.
The Gibson Dunn team includes partners Hillary Holmes of Houston and Doug Rayburn of Dallas, associate Justine Robinson (Houston) and tax partner James Chenoweth (Houston) with help from its Denver and San Francisco offices.
Wilson Sonsini counsels GenXComm on $7M investment led by Intel
GenXComm, an Austin company commercializing technology to improve the performance and capacity of communications networks, announced Dec. 12 the initial closing of a $7 million Series A investment round from a group led by Intel Capital.
The Austin office of Wilson Sonsini Goodrich & Rosati counseled GenXComm, including partner Robert Suffoletta and associates Kate McCabe and J.D. Peters. Intel used internal counsel and Perkins Coie in Palo Alto, Calif.
Other investors included Azure Capital Partners, Bandgap Ventures, Capital Factory, FAM Capital Partners, Lip-Bu Tan, UT Horizon Fund and WS Investment Co.
The Series A round, which could have additional investors join in a secondary closing, will be used to expand the company’s R&D team focused on simultaneous self-interference cancellation technology. Sriram Vishwanath is co-founder and CEO and Hardik Jain is co-founder and inventor.
Jones Day announces work on two deals earlier this year
Last week Jones Day announced work by its Texas lawyers on two deals last summer that weren’t previously announced.
On Dec. 11 the firm said Houston partner Arthur Nathan advised the undisclosed acquirer of South Texas Valve & Repair. Terms weren’t disclosed. The deal closed July 20.
On Dec. 15 it said Dallas partner Susan Cox counseled Dallas-based Mill Creek Residential on its purchase the Dakota Springs Apartments in Austin for an undisclosed sum. That deal closed July 31.