(July 27) – Two long-awaited deals in the oil industry finally surfaced Thursday, and seven Texas law firms played a part.
Australian mining giant BHP Billiton announced it sold its U.S. shale properties for $10.8 billion in cash.
The buyers were BP, which picked up BHP’s Eagle Ford, Haynesville and Permian properties under unit Petrohawk Energy for $10.5 billion; and Merit Energy, whose unit MMGJ Hugoton III agreed to acquire BHP’s Fayetteville Shale assets for $300 million.
Baker Botts said a Houston-based team represented BHP Billiton, with partner Erin Hopkins leading the Petrohawk sale and partner Craig Vogelsang heading the Fayetteville sale.
Other team members were partners Jon Lobb, Jason Bennett, Scott Janoe and Rob Fowler; senior associates Lindsey Swiger, Luke Burns and Kasyn Stevenson; and associates Alia Heintz, Kyle Doherty, Katie McEvilly, Tiffany Sumrall, Joyce Banks, Justin Clune, Marcella Lunn, Taylor Lopez and Munir Saadi.
Tim Spear, a partner at Foley Gardere in Houston, advised BP. He previously was an associate at Baker Botts.
Locke Lord counseled Merit with a team that included partners Van Jolas and Jason Schumacher in Dallas; counsel Bryan Bishop (Dallas); and partners Will Becker (Dallas), Ed Razim (Houston), Paul Nason (Dallas), Jerry Higdon (Houston), Michelle Earley (Austin) and Geoff Polma (Dallas).
The associates were Henry Benton, Nathan Crow and Stephanie McDermott, all of Dallas.
Merit Energy’s general counsel is Chris Hagge and its corporate counsel is Kathryn “Kat” Lyles.
The divestitures need to clear regulators but are expected to close by the end of October.
The other deal was Chesapeake Energy’s sale of its Utica Shale oil and gas assets in Ohio to Encino Acquisition Partners for $2 billion.
Gibson, Dunn & Crutcher represented Encino with a deal team led by partner Justin Stolte in Houston along with a partner the firm’s Denver office.
The team included Texas associates Dave Cias, Matt Savage, Jordan Silverman, Graham Valenta and Eric Haitz. Houston partner James Chenoweth assisted on tax matters and attorneys in Washington, D.C., New York and San Francisco helped on matters involving benefits, the Committee on Foreign Investment in the U.S., known as CFIUS, and environmental matters.
Kirkland & Ellis counseled Encino on underwritten financing from a syndicate of financial institutions. That team was led by debt finance partners Will Bos and Andy Veit and associate Chad Nichols as well as capital markets partner Matt Pacey.
Latham & Watkins represented the banks, including partner Michael Chambers.
Shearman & Sterling counseled Chesapeake, with Houston partner Jeremy Kennedy thought to be involved (he worked on deals for the natural gas producer when he was at Baker Botts). Kennedy did not respond to a request for comment.
Canada Pension Plan Investment Board and Encino Energy formed Encino Acquisition Partners, or EAP, in 2017 to acquire large, high-margin oil and gas production and development assets in the lower 48 states.
CPPIB will invest about $1 billion in EAP and will own 98 percent of the partnership. Houston-based Encino, led by Hardy Murchison, will invest in EAP alongside CPPIB and operate the acquired assets.
That transaction is expected to close in the fourth quarter.
The sale of BHP Billiton’s U.S. shale assets has long been expected, but reports in June said the divestiture might be delayed until next year.
The bidders were thought to include Royal Dutch Shell partnering with the Blackstone Group; Chevron partnered with Warburg Pincus; and Apollo Global Management.
Oklahoma City-based Chesapeake also has been paring assets to pay down its heavy debt load, which was accumulated under the late CEO Aubrey McClendon as part of his expansion drive.
BP said the BHP purchase was a “transformational” deal that reinforces its position as the top onshore oil and gas producer in the U.S.
Chesapeake’s CEO is Doug Lawler while the head of BP’s lower 48 unit is his younger brother David Lawler.