Merger to combine companies in STACK play

Silver Run Acquisition Corp. II has agreed to merge with privately held Alta Mesa Holdings LP, Houston, and Kingfisher Midstream LLC, forming a company valued at $3.8 billion with operations in Oklahoma’s STACK play.

Silver Run Acquisition Corp. II has agreed to merge with privately held Alta Mesa Holdings LP, Houston, and Kingfisher Midstream LLC, forming a company valued at $3.8 billion with operations in Oklahoma’s STACK play.

Alta Mesa holds 120,000 contiguous net acres with about 4,200 gross identified drilling locations in the eastern Anadarko basin play. Since 2012, it has drilled 205 horizontal wells to total depth in the updip STACK oil window.

It expects estimated ultimate recovery at yearend to exceed 650,000 boe/well, about 140 boe/ft of lateral hole.

Alta Mesa is Kingfisher Midstream’s anchor producer. Kingfisher owns more than 300 miles of pipeline, 50,000 bbl of crude storage capacity, and 60 MMcfd of gas-processing capacity. A cryogenic-plant expansion will add 200 MMcfd of processing capacity in the fourth quarter.

The midstream company, owned and operated by ARM Energy Holdings LLC, has 300,000 gross dedicated acres from Alta Mesa and other third-party customers.

James T. Hackett, chairman and chief executive officer of Silver Run II, will be executive chairman of the combined company, to be renamed Alta Mesa Resources Inc. He’s a former chairman and chief executive officer of Anadarko Petroleum Corp. who earlier served as president and chief operating officer of Devon Energy Corp.

Hackett is a partner in Riverstone Holdings LLC, which formed Silver Run II to acquire and develop energy businesses.

Top managers of Alta Mesa will remain in place. They are Harlan H. Chappelle, chief executive officer; Michael E. Ellis, chief operating officer; and Michael A. McCabe, chief financial officer.

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