Energy Deals Keep Texas M&A Lawyers Busy in Q1

By Mark Curriden
The three months of 2012 were not good in the world of mergers and acquisitions law in the U.S. – unless you were an energy lawyer in Texas.
Mergermarket reports that M&A activity in Q1 of 2012 across the U.S. was down 53.8 percent from the first quarter of 2011. The number of new deals announced dropped 37.6 percent from the fourth quarter of 2011.
The number of energy deals also slowed during Q1, but much less so in Texas, according to Mergermarket. And the larger billion-dollar-plus energy deals were plentiful.
Lawyers in Texas say they witnessed a significant uptick in new M&A work during the past six weeks.
Four of the 10 largest U.S. deals announced during the first quarter involved energy companies, and Texas corporate and M&A lawyers did nearly all the legal work on those transactions.

The largest deal was Apollo Global Management and Riverstone Holdings $7.15 billion purchase of oil and gas exploration business from El Paso on Feb. 24. Several firms, led by Vinson & Elkins, Weil Gotshal & Manges, and Locke, Lord, Bissell & Liddell, are handling the legal work.
Mergermarket reports that V&E represented 16 Texas-based companies announcing new transactions during the first quarter. Those deals had a total value of $13.1 billion. Haynes and Boone was involved in six deals, while Bracewell & Giuliani, Andrews Kurth, and Latham & Watkins each participated in five transactions.
“We had a very good first quarter,” said V&E partner Keith Fullenweider, who leads the firm’s M&A practice. “A lot of what drives our business is deal count. We represent a lot of private equity firms seeking to invest in Texas.
“But we also represent several traditional energy companies and public energy companies,” said Fullenweider, who was part of the team representing TPG Capital in its $1.25 billion purchase of equity ownership in Chesapeake Energy, which was announced this week.
Andrews Kurth Corporate and Securities Practice co-chair Mike O’Leary says many of the deals are happening because natural gas prices have plummeted, causing companies invested in the oil patch to raise much needed capital. At the same time, institutional investors and private equity firms “are trying to take advantage of this buyer’s market.”

“Last year was so busy, so active,” said O’Leary. “But it took a few weeks in 2012 for the M&A market to get its feet under it. The pace has picked up markedly during the past six weeks.”
O’Leary represented Cordillera Energy in its $2.85 billion merger with Apache earlier this year.
Weil Gotshal M&A partners in Dallas, including Rodney Moore, not only represent El Paso in its $7.15 billion deal with the private equity firms, but they also are handling Kinder Morgan’s $37 billion purchase of El Paso, which is expected to close next month.
While Fulbright’s M&A numbers are down, one major transaction is missing. The firm is representing Chinese-based SINOPEC in its $2.5 billion investment in Oklahoma-based Devon Energy. V&E is representing Devon in that transaction.
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