© 2015 The Texas Lawbook.
By Natalie Posgate
(Feb. 12) – Houston-based Terra Energy Partners announced earlier this week that it will purchase Tulsa-based WPX Energy’s Colorado subsidiary, WPX Energy Rocky Mountain, for $910 million in cash.
Texas-based lawyers from Kirkland & Ellis, Latham & Watkins and DLA Piper were all involved in the transaction.
In addition to the WPX subsidiary, which has significant acreage in Colorado’s Piceance Basin, Terra will receive natural gas hedges with a current in-the-money value of more than $90 million that will be used to support cash flow in 2016 and 2017.
Terra also issued a debt offering underwritten by J.P. Morgan, BMO Capital Markets and Wells Fargo to fund the acquisition.
Terra is an exploration and production company that was formed last year by former Occidental Petroleum CEO Michael S. Land. Since its inception, Terra has been backed by private investor Kanye Private Energy Income Fund. As part of this week’s transaction, Kanye increased its equity commitment and a new investor, Warburg Pincus, got involved. Terra’s aggregate equity commitment now totals $800 million.
A Houston-based corporate team from DLA Piper led the WPX subsidiary acquisition for Terra. The deal team was led by partner Jack Langlois and included partners Drew Baldinger and Glenn Reigman, as well as associates Jibin Luke, Laura Vartivarian, Jason Nolingberg, Taylor Randazzo and Ani Avagyan.
Attorneys from DLA Piper’s New York, San Francisco, Los Angeles and Washington, D.C. offices advised Terra on tax, ERISA, employment, FERC and antitrust matters.
Denver law firm Holland & Hart advised WPX in the transaction.
Latham led Warburg Pincus’ role in the deal, with Houston corporate partners Ryan Maierson and Thom Brandt as the lead attorneys. They received assistance from Houston associate Charles Wang.
Attorneys from Kirkland’s New York office advised Warburg Pincus and Kanye Anderson on tax matters and the hedging aspect of the deal.
Kirkland also represented Terra in the debt offering, which was for an undisclosed amount. Houston partner Will Bos co-led the offering with New York partner Jason Kanner, and they received assistance from associates in the firm’s New York office.
Terra and WPX anticipate to close their transaction in the second quarter.
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