EnerVest, TPGE enter $2.66-billion combination with South Texas assets

EnerVest Ltd. has agreed to sell its Eagle Ford and Austin Chalk assets to TPG Pace Energy Holdings, an energy-focused special purpose acquisition entity led by former Occidental Petroleum Corp. Chief Executive Officer Steve Chazen, for $2.66 billion in cash and stock.

EnerVest Ltd., Houston, has agreed to sell its Eagle Ford and Austin Chalk assets to TPG Pace Energy Holdings (TPGE), an energy-focused special purpose acquisition entity led by former Occidental Petroleum Corp. Chief Executive Officer Steve Chazen, for $2.66 billion in cash and stock.

TPGE and EnerVest will create a new company, Magnolia Oil & Gas Corp., led by Chazen as chairman, president, and CEO. Magnolia will acquire EnerVest’s 360,000 total net acres in South Texas, consisting of 14,000 net acres in Karnes County and 345,000 net acres in Giddings field. Current production is 40,000 boe/d (62% oil, 78% liquids).

EnerVest Operating LLC will continue to operate the assets under a long-term arrangement, and EnerVest Ltd. will provide certain additional corporate services to Magnolia. Upon closing, Magnolia will trade on the New York Stock Exchange under a new ticker, and EnerVest will receive $1.2 billion in cash and will retain roughly 120 million shares of common stock.

The transaction is expected to close late in this year’s second quarter.

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