Energy deals keep on coming, with two billion-dollar-plus transactions announced recently — and Vinson & Elkins was involved with both of them.
Riverstone-backed Hammerhead Energy Inc. announced Nov. 6 it agreed to be sold to Crescent Point Energy Corp. for C$2.55 billion ($1.86 billion), including net debt. And Enbridge (US) Inc. announced Nov. 3 it purchased seven operating U.S. landfill gas-to-renewable natural gas (RNG) facilities from Morrow Renewables for $1.2 billion.
In the Riverstone deal, each Hammerhead share will be exchanged for C$15.50 in cash and C$5.50 in common shares of Crescent Point based on the offering price of the concurrent equity offering that Crescent Point announced. The price represents a 17 percent premium over the five-day volume weighted average trading price of the Hammerhead shares based on the close of markets Nov. 3.
Bennett Jones and Vinson & Elkins were counsel to Riverstone, which owns 82 percent of Hammerhead. The V&E team was led from New York by partner Stancell Haigwood with assistance from senior associate Rob Nicholls and associate Layla Wehbe. Also advising were Houston tax partner Jason McIntosh, Dallas associate Patrick Darby, senior associate Ryan Will of Houston and associate Adam Thomas, also of Houston.
Riverstone first invested in Hammerhead in 2014 as a small producer and plowed additional capital over the last nine years.
The deal is expected to close in late December if it clears Hammerhead shareholders and regulators.
The transaction will create the seventh largest exploration and production company in Canada whose production is expected to total over 200,000 barrel of oil equivalent per day in 2024, with drilling inventory in place to deliver additional long-term organic growth, Crescent Point said.
The company will become the largest owner of land in the volatile oil fairway in the Alberta Montney in addition to already controlling the largest amount of land in the condensate-rich Kaybob Duvernay play.
The increased scale is expected to allow Crescent Point to continue to improve its cost of capital.
CIBC Capital Markets was financial advisor to Hammerhead and CIBC also provided a verbal fairness opinion to Hammerhead’s board.
Burnet Duckworth & Palmer was Canadian counsel to Hammerhead and Paul, Weiss, Rifkind, Wharton & Garrison was U.S. counsel to Hammerhead. ATB Capital Markets and Stifel Canada were strategic advisors to Hammerhead.
Peters & Co. Ltd. was financial advisor to the special committee of Hammerhead’s board and Peters also provided a verbal opinion to the special committee. Blake, Cassels & Graydon was counsel to the special committee.
Enbridge claims the transaction with Morrow Renewables positions the company as a major North American RNG midstream operator and fortifies its energy transition leadership.
The Morrow facilities deliver RNG from municipal landfills in six Texas locations — Edinburg, Hinton, Tyler, Melissa, Longview, and Alvarado — in addition to Fort Smith, Ark.
The portfolio establishes Enbridge’s RNG business as a North American midstream leader by volume. Enbridge said the carbon-neutral fuel will play a critical role in society’s cleaner energy future and the assets complement its recent moves to expand North America’s volumes of RNG made from food waste and farm waste.