© 2014 The Texas Lawbook.
By Mark Curriden, JD
Senior Writer for The Texas Lawbook
(March 12) – The gusher of large oil and gas deals keeps coming.
Energy XXI, a Bermuda-based energy company that has its headquarters in Houston, is purchasing Houston-based EPL Oil & Gas for $2.3 billion, which includes an assumption of EPL’s existing debt.
The transaction makes Energy XXI the largest publicly traded independent oil and gas producer on the Gulf of Mexico shelf. Nearly two-thirds of the purchase will be paid by Energy XXI in cash and the rest through Energy XXI common shares.
Energy XXI has been very aggressive in accumulating new assets through acquisition. Bo Boyd, the Energy XXI vice president for law, turned to Vinson & Elkins for this project and other previous transactions to handle the legal work.
V&E global chair T. Mark Kelly leads the legal team advising Energy XXI on this transaction, along with Houston M&A partner Stephen Gill. Kelly also represented Energy XXI three years ago in a $1 billion acquisition of assets from ExxonMobil.
“This is a deal that came together pretty quickly,” said Kelly, who thinks this transaction is evidence that upstream M&A oil and gas deals will see an uptick in 2014. “We continue to see companies get more oily because the long-term expectation for prices remain strong.
“And I think people are continuing to rationalize their assets and increasingly focus on their core business, which will lead to more acquisitions and more divestitures,” he said.
EPL Oil chose Sidley Austin corporate partners Mark Metts and Ana Ha in Houston to advise it in the deal.
Metts has represented EPL on a handful of transactional matters over the years, but initially came to know EPL’s leadership when he advised a competitor across the table.
“When I was at my prior firm, we had represented a group of noteholders that owned a large portion of EPL’s publicly-traded bonds,” Metts said. “Anna Ha worked with me to do the corporate and securities work relating to both the pre-bankruptcy activities and the bankruptcy reorganization itself.
“After EPL emerged from bankruptcy in September 2009, our clients owned control of the company and we started doing their securities law and corporate governance work,” he said. “So it was not a typical approach to business development.”
Other Sidley M&A lawyers involved in the transaction are Houston associates Katy Lukaszewski, Tommer Yoked, Chris Folmsbee and Troy Hunt. The rest of the Sidley team consists of tax law partner Tim Devetski and tax associate Lindsay Heyen in Houston, as well as Kelly Dybala, a partner in Sidley’s private equity and corporate finance practice in Dallas.
Metts and Kelly said it was enjoyable working with each other again.
“Mark Kelly and I grew up together in the old corporate and securities group over there, and Steve Gill was also part of that group,” Metts said. “As a result, there was a high level of trust between the lawyers, even though we both fought very hard for our clients.”
Other V&E lawyers advising Energy XXI are M&A associates Kai Liekefett and Adam Law and finance partner David Wicklund. Tax law partner Gary Huffman, capital markets partners David Stone and Sarah Morgan, employee benefits partner Shane Tucker, antitrust law partner Billy Vigdor, environmental law partner Larry Nettles, labor and employment law partner Tom Wilson and IP partner Peter Mims also were part of the team.
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