© 2012 The Texas Lawbook.
By Natalie Posgate
Staff Writer for The Texas Lawbook
It’s been a busy week for Jeff Schlegel. The Jones Day Houston energy M&A partner is leading two significant midstream transactions, both of which were announced earlier this week.
One is the $2.16 billion deal between Oklahoma City-based companies Access Midstream Partners LP and Chesapeake Energy Corporation. Jones Day is advising Access in its acquisition of Chesapeake Midstream Operating, LLC – a wholly owned subsidiary of Chesapeake Midstream Development, LLC.
While Schlegel is leading the Jones Day team’s transactional side, Houston capital markets partner Darrell Taylor is in charge of the finance side of the deal. Other Jones Day lawyers involved with the transaction include Houston partners Joshua Fuchs, Mark Temple and Todd Wallace; Dallas of counsel Gary Short; and Houston associate Omar Samji.
Bracewell & Giuliani is advising Chesapeake in the deal. Texas lawyers who are involved include Houston partners G. Alan Rafte, Gray Muzzy, Michael Telle and Bruce Jocz; Dallas partner Connie Stamets and Austin partner Tim Wilkins. Ray Lees at the Oklahoma City firm Commercial Law Group PC is also assisting in the transaction.
New York firm Wachtell Lipton Rosen & Katz is advising Chesapeake’s board of directors
Access’ acquisition includes natural gas gathering and processing assets in the Eagle Ford, Utica and Niobrara plays, expanding Access’ presence in the Haynesville and Marcellus shales. These assets allow the midstream natural gas services provider to have well-established footprints in virtually all of the major unconventional basins in the U.S.
The deal is expected to close by the end of 2012.
Along with closing the acquisition, Jones Day is advising Access on the transactional aspect of its sale of 50 percent of its general partner to The Williams Companies, Inc. Williams is also acquiring 34.5 percent of Access’ subordinated limited partner units from New York-based private equity fund Global Infrastructure Partners.
Latham & Watkins is representing GIP, with Houston partners Jeffrey Munoz, Charles Carpenter, Tim Fenn, Craig Kornreich, Catherine Ozdogan, Ryan Maierson and Joel Mack assisting in the deal. Maierson is also advising Access on its capital raise, with Baker Botts as the underwriters.
Gibson Dunn & Crutcher is representing Williams. The underwriters – who are led by Citigroup – are represented by Latham.
Schlegel is also leading the Jones day team in its advising to Bellaire, Texas-based Chevron Pipe Line Company’s sale of its Northwest Products System to San Antonio-based Tesoro Logistics LP for $400 million.
Co-leading with Schlegel is antitrust partner Bruce McDonald, who works in both Jones Day Washington, D.C. and Houston offices. Other Texas Jones Day attorneys assisting in the deal include Houston associate Omar Samji and Dallas associate Isaac Griesbaum.
McGuire Woods is representing Tesoro. The transaction is expected to close during the first quarter of 2013.
The Northwest Products system contains the Northwest Product Pipeline, a 760-mile Federal Energy Regulatory Commission-regulated common carrier products pipeline that extends from Salt Lake City, Utah to Spokane, Wash.
It also consists of a separate five-mile jet fuel pipeline to the Salt Lake City International Airport and Northwest Terminalling Company consisting of the Boise and Pocatello, Idaho and Pasco, Wash. refined products terminals, which are not subject to FERC regulation.
Schlegel, who has worked with both Chevron and Access in previous matters, said that it is no coincidence that both of these deals involve midstream assets. According to Schlegel, it is common for companies to only have interest in upstream and downstream production, which leads them to sell their midstream assets.
While the Chevron-Tesoro deal looks small compared to the $2.16 billion Access-Chesapeake deal, Schlegel said the mid-sized deals will remain just as abundant and significant as the big transactions in the year to come.
“There’s just continued demand for these kinds of deals,” he said. “There’s just as much activity in the mid-sized deal range as the big stuff and it doesn’t seem to be fading. We expect to continue to be busy for a while.”
Schlegel said his current workload involves “much more than two big deals at once.” The Jones Day energy practice group is currently trying to close seven big transactions by the end of the year.
“We’re doing a number of different things at the same time,” he said.
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