Deals are starting to heat up in Texas now that summer is officially over, from asset sales to private equity investments to IPO’s to debt offerings, all in the energy sector.
In all, there were eight M&A and private equity transactions with a total combined deal value of more than $4 billion. Seventy-nine Texas lawyers from eight different law firms worked on those deals.
The three securities offerings – one IPO and two debt offerings – raised about $770 million. Thirteen lawyers from three law firms were involved.
Below are some notable transactions announced recently.
Sidley, Latham, V&E advise on Phillips 66 transactions
The biggest deal of the week was Phillips 66 Partners’ purchase of some pipeline and processing assets on Sept. 22 from parent Phillips 66 Co. for $2.4 billion. Phillips 66 Partners will pay for the deal in part through a $1.05 billion investment by Stonepeak Infrastructure Partners, First Reserve and Tortoise Capital Advisors.
Sidley Austin advised Stonepeak with a team led by partner Tim Chandler in Houston. He was assisted by M&A associate Ryan Scofield in Dallas, partner Angela Fontana in Dallas and tax counsel Zack Pullin in Houston. The firm also had assistance from capital markets partner Rob Ryan in New York.
Chandler has advised Stonepeak in at least half a dozen energy investment arrangements over the past few years, including MPLX (with Scofield and Houston partner Troy Hunt), Dominion Midstream Partners (with Scofield), Targa (with Houston partner Cliff Vrielink and Houston associate Jeff Kinney) and Plains All American Pipeline.
Latham & Watkins advised Phillips 66 with a Houston-based team that included partners Thom Brandt and Bill Finnegan and associates Monica White, Jayne Wabeke and Dan Harrist. Partner Tim Fenn and associate Bryant Lee, both of Houston, weighed in on tax matters.
Paula Johnson has been general counsel of Phillips 66 since 2012. Before that the University of Oklahoma trained lawyer worked for 10 years at ConocoPhillips, where she worked her way up from senior counsel, litigation, to managing counsel, litigation, to deputy general counsel, corporate, and chief compliance officer.
Vinson & Elkins represented the conflicts committee of the board of Phillips 66 Partners’ general partner with a team led by partner Alan Bogdanow, senior associate Peter Marshall and associates Zach Spencer and Austin Elder, all of Dallas (Bogdanow, Marshall and Spencer worked with the entity on its last “dropdown” from its parent in October for $1.3 billion).
Other V&E lawyers in Texas who helped out included partners Jim Meyer and Wendy Salinas in Dallas (tax); senior associate Brandon Tuck in Houston (environmental); counsel Scot Dixon in Houston and associate Victoria Short in Dallas (real estate); partner John Michael in Houston (energy transactions/projects); and partner Craig Zieminski in Dallas (litigation).
Norton Rose Fulbright counsels Elk on Resolute asset deal
Several asset sales in the energy sector have been announced over the last several weeks and Texas law firms were able to grab a piece.
Norton Rose Fulbright counseled Australia’s Elk Petroleum on its purchase of interests in the Aneth field in southeastern Utah’s Paradox Basin on Sept. 14 from Denver’s Resolute Energy for $195 million.
The team included M&A/securities partner Brett Todd, energy transactions senior associate Jorge Gutierrez, tax partner Bill Bowers and employment/benefits partner Alex Clark, all of Dallas; and environmental law counsel Bob Greenslade of Houston and Denver. Other lawyers from the firm’s Denver and Washington, D.C., offices assisted.
Advising Resolute were attorneys from Arnold & Porter Kaye Scholer in Denver, including Ron Levine, who joined the firm in February after 28 years at crosstown law firm Davis Graham & Stubbs. Its financial advisers included Jon Hughes, Andy Rapp and Pete Williams from Petrie Partners in Denver and Steve Almrud from Barclays in Houston. The deal will help Resolute pay down debt and become a pure-play Delaware Basin producer in West Texas.
Halcón handles Bakken sale in-house with assist from T&K
Onetime bankrupt Halcón Resources of Houston also made progress on asset sales, announcing Sept. 20 that it had shed its remaining non-operated properties in the Rockies’ Bakken Shale to an unnamed buyer for $104 million.
The sale makes the company a pure-play Delaware Basin operator with around 41,500 acres under its control and $773 million in liquidity, according to analysts at Seaport Global Securities.
Halcón chief legal officer David Elkouri said the company handled most of the details in-house, with associate general Kason Kerr and corporate counsel Jason Payne assisting him. But he did say he tapped Hunter White, partner and energy industry group chair at Thompson & Knight in Houston, as an additional resource.
Elkouri is a longtime counselor to Halcón founder, chairman and CEO Floyd Wilson, having worked with him at Petrohawk Energy before it was sold to Australia’s BHP Billiton in 2011 for $12 billion. Elkouri co-founded Kansas-based Hinkle Law Firm, where he practiced for 20 years before Floyd convinced him to join Petrohawk.
AKK assists BP on pipeline stake sale to ArcLight’s SeaPort
Andrews Kurth Kenyon also worked on an asset sale, including advising BP on Arco Midcon’s sale of 30% of its interests in Olympic Pipe Line Co. to ArcLight Capital-backed SeaPort Pipeline Holdings for an undisclosed sum.
The Houston group that worked on it included partners Jordan Hirsch, Rob Taylor, Tom Ford and Angela Richards and associates Phil Haines, Kayleigh McNelis, Brett Reamer and Jocelyn Tau.
Orrick, Herrington & Sutcliffe assisted SeaPort/ArcLight with a Houston team that included partners Blake Winburne, Brad Gathright and Darrell Thomas, managing associates Adam Kowis and Puia Parekh and associates Grace Lentz. They received assistance from lawyers in the firm’s Washington, D.C., New York and San Francisco offices.
Winburne, global co-head of the firm’s energy and infrastructure group, has been a longtime adviser to ArcLight on deals, including its $11 billion natural gas joint venture with CenterPoint Energy Inc. and OGE Energy Corp. in 2013. More recently, he led the team that represented the private equity firm on its acquisition of Chevron Alberta Gas Storage from Chevron Corp. in April of last year.
Winburne joined Orrick’s new Houston office in February of last year from McDermott Will & Emery, where he was global head of the energy practice (Gathright came with him). Before McDermott he was a partner at Baker Botts in Houston for four years and worked stints with Paul Hastings and Hunton & Williams in Washington, D.C. (the University of Texas graduate has his JD from George Mason and his LLM from Georgetown).
Bracewell aids Enbridge on sale of St. Lawrence Gas
Bracewell got involved in a utility asset deal, announcing Sept. 11 it represented Enbridge Gas Distribution on its sale of St. Lawrence Gas Co. to Liberty Utilities Co., a unit of Algonquin Power & Utilities Corp., for $70 million.
The team included partners Jason M. Jean, Scott C. Sanders and Rebecca L. Baker in Houston; partner Timothy A. Wilkins in Austin; counsel Tamara L. McKinzie in Houston; and associates Lytch T. Gutmann, W. Jared Berg and Ryan Davis, all of Houston. The firm also tapped attorneys from its New York office for support.
Orrick, Bracewell advise on GIP’s investment in Caprock
Orrick and Bracewell scored some billable hours on another deal announced recently, Caprock Midstream attracting a $250 million preferred equity investment from Global Infrastructure Partners Capital Solutions Fund. The transaction closed Sept. 13.
Spectrum Energy Partners VII-backed Caprock plans to use the funds to develop its natural gas gathering and processing assets in the Delaware Basin, where a big increase in production is continuing to drive expansion of midstream infrastructure.
Orrick’s team was led by corporate/capital markets partner David Ronn and included M&A/private equity/capital markets senior associate Ryan Giggs, tax partner Barbara de Marigny, M&A/private equity partner William Parish and oil and gas/M&A/private equity associate Allesandra Grace, all of Houston, with some support from its New York office.
Ronn has done work for Caprock before, including advising it in April on its $120 million senior secured term loan facility through AB Private Credit Investors and Goldman Sachs Specialty Lending Group (along with de Marigny and Griggs). Ronn also joined Orrick’s Houston office when it formed in February of last year after five years at McGuireWoods. Before that the University of Houston-trained lawyer had stints at GreenbergTraurig, Mayer Brown and Bracewell, where he began his legal career.
Bracewell advised the Global Infrastructure Partners Capital Solutions Fund, which is part of the $40 billion (assets under management) Global Infrastructure Partners.
The Houston team included partners Thomas M. Tomlinson, Timothy C. Langenkamp, Heather Palmer, Rebecca L. Baker, Tony L. Visage, William A. Wood III, Gary W. Orloff and W. Cleland Dade; senior counsel Allison K. Perry and Edmund W. Robb; counsel Tamara L. McKinzie; and associates Kathy Witty Medford, Tyler C. Lohse, Hobie Temple, Jonathan L. Seliger, Emily A. Banse, Caitlyn N. Dockendorf and Andrew W. Monk. Attorneys in Bracewell’s New York and Washington, D.C., offices assisted.
V&E, TK assists Apollo & Double Eagle III on Company Creation
New York-based private equity firm Apollo Global Management is having another go with management of Fort Worth-based Double Eagle Development — including co-CEO’s John Sellers and Cody Campbell — and created Double Eagle Energy Holdings III late last month. And Vinson & Elkins and Thompson & Knight benefited from the renewed relationship.
Vinson & Elkins advised Apollo with a team led by attorneys in V&E’s New York office (partners Jim Fox and Dan Komarek and associate Xiaotang Wang) but had support from several Texas lawyers, including labor/employment partner Sean Becker and executive compensation/benefits partner Stephen Jacobson in Houston and tax partner David Peck and tax associates Alex Farr and Austin Light in Dallas.
Thompson & Knight counseled Double Eagle, including Dallas corporate and securities practice leader Wesley Williams and associate Christina Sanders, both in Dallas.
The agreement follows the sale of Double Eagle Energy Permian to Parsley Energy Inc. in February for $2.8 billion. Double Eagle III plans to pursue a similar strategy — acquiring properties in the Midland Basin as well as the Delaware and Central Basin Platform — but on a much larger scale and with a bigger upfront commitment from Apollo along with the management team.
The size of that commitment wasn’t disclosed and Double Eagle CFO Joshua Gregg didn’t respond to requests for additional information. The first Double Eagle sold its properties in the Anadarko and Ardmore basins in Oklahoma to Aubrey McClendon’s American Energy in 2014 for $251 million, which is thought to have represented a four-fold return on Apollo’s investment.
Oasis Midstream begins trading with V&E, Kirkland advising
Oasis Midstream Partners debuted its units on the New York Stock Exchange Sept. 21, raising an estimated $120 million, and some Houston lawyers were able to bill some hours as a result of it.
Vinson & Elkins partners David Oelman and Thomas Zentner advised Oasis Midstream on the initial public offering while Kirkland & Ellis partners Matthew R. Pacey and Eric M. Willis assisted the underwriters, which included Morgan Stanley, Citigroup and Wells Fargo.
The IPO priced at $17 per unit, 15% lower than the mid-point of its expected $19 to $21 range. Seaport Global Securities thought the reason was investor concern that its parent, Oasis Petroleum Inc., is lacking a developed bench of assets to drop down into its new fundraising vehicle, which will limited its growth. Oasis Midstream’s shares closed 25 cents below their offering price on Sept. 21.
BB, V&E, Akin advise on Tallgrass, Wildhorse debt issues
There were two more debt offerings in the energy sector this month, proving that the capital markets haven’t cooled on oil and gas.
Baker Botts represented Tallgrass Energy Partners on its $500 million senior notes offering, which closed Sept. 15. The team included partner Mollie Duckworth in Austin, partner Dan Tristan in Houston, senior associate Courtney Fare in Austin, associate David Nimmons in Houston and associate Allison Lancaster in Austin. Vinson & Elkins assisted the purchasers.
Vinson & Elkins also counseled WildHorse Resource Development on its $150 million debt offering, which launched Sept. 22. Doug McWilliams, Dan Spelkin and Brett Riesenfeld worked on the issue while Akin Gump Strauss Hauer & Feld’s John Goodgame assisted the purchasers.