INDEPENDENT RESEARCH FIRM IHS Markit has provided OGFJ with updated production data for the OGFJ100P periodic ranking of US-based private E&P companies. The rankings are based on operated production only within the US.
Top 10
This installment of the OGFJ100P ranking begins the 2017 data coverage. With that comes some changes in the Top 10. Since the July 2017 installment, Indigo Minerals LLC has moved up in the Top 10 gas producers listing to No. 4 from its previous spot at No. 9. The second biggest mover in the gas space is Jonah Energy Inc., moving down three spots from No. 3 to No. 6, and down to No. 8 by overall BOE from its previous position at No. 6. The biggest movers in the Top 10 liquids producers list are Mewbourne Oil Co. and Citation Oil & Gas Corp. Mewbourne sits at the No. 2 seat in liquids production, up from its previous No. 5, and moves up two seats to the No. 5 producer by overall BOE. Citation falls to the No. 9 spot in liquids production, down from its No. 6 spot in July. Sheridan Production dropped out of the Top 10 liquids producers list for October, having previously rounded out the list in the No. 10 spot.
And, while Indigo Minerals moved up four spots from July's No. 11 spot to No. 7 for this installment by overall BOE-it's top-rated Hilcorp that appears to have the largest jump in production-most likely from the $2.7 billion acquisition of ConocoPhillips assets that closed in July. We noted the deal in the July installment, but production reports hadn't yet been calculated. Now, No. 1 Hilcorp's production of 52,421,482 BOE at presstime has more than doubled the 24,879,181 BOE of No. 2 Chief Oil & Gas LLC. With the deal between Hilcorp San Juan LP, a partnership between Hilcorp Energy Co. and The Carlyle Group, the company added 1.3 million net acres in the San Juan Basin with production of nearly 120,000 boe/d, placing it among the top producers in the area.
M&A
In other private company transaction news, Bakersfield, CA-based Berry Petroleum Company LLC closed on the sale of its interests in the Hugoton natural gas field, located primarily in Kansas, effective July 31, 2017. Berry Petroleum used the proceeds from the Hugoton sale to close the previously announced purchase of the Kern County, California, South Belridge Hill asset, also effective July 31, 2017. With the close, Berry owns a 100% working interest in the Hill.
Berry CEO Trem Smith said, "We are pleased to have completed the disposition of this non-core asset as it provides Berry with numerous opportunities for growing our western United States asset base, as exemplified by the Hill acquisition. In addition, the simultaneous closings allowed Berry to complete the transaction as a 1031 tax-deferred exchange permitting Berry to leverage its cash flow."
At the time, Berry Petroleum entered into a new $1.5 billion reserve based facility with an initial borrowing base of $500 million, effective July 31, 2017. The facility replaced the company's previous facility. The maturity date of the new facility will be July 29, 2022.
Also selling off assets in recent months was Samson Resources II LLC. The Tulsa, OK-based company closed on the sale of its assets in East Texas and North Louisiana for a cash purchase price of $504 million (after after giving effect to contractual purchase price adjustments to the $525 million purchase price announced on August 1) to an affiliate of Rockcliff Energy II LLC, a privately held company headquartered in Houston, Texas. The deal closed September 29.
The agreement with Rockcliff Energy consists of approximately 210,000 net acres across East Texas and North Louisiana, producing approximately 90 MMCFe/d of production, net to the company's interest.
Samson will repay approximately $214 million in outstanding borrowings under its $280 million senior credit facility. In addition, the board has declared a distribution totaling $250,250,000 ($11.00/Class A Unit) to be paid on October 31, 2017 to unitholders of record as of the close of business on October 17, 2017.
The sale of the East Texas assets comes after the company acquired substantially all of the assets of Samson Resources Corp. upon its emergence from Chapter 11 bankruptcy on March 1, 2017. In addition to this sale, the company has closed on approximately $14 million of additional company-wide non-core asset and equipment sales since March 1, 2017.
Going forward, Samson Resources II LLC intends to focus its efforts on developing assets in the Powder River and the Green River Basins of Wyoming. The company owns approximately 146,000 net acres in the Powder River Basin and approximately 59,000 net acres in the Green River Basin. On September 11, the company board approved the start of a program to drill five operated wells on the company's Fort Union property in Sweetwater County, Wyoming, as well as an accelerated permitting program in the Powder River Basin of Wyoming.
The drilling program at the Fort Union property will entail using two rigs to drill five operated wells in the Fort Union formation with expected results of 3.7 Bcfe per well (45% liquids expected) at a cost of $2.9 million per well.
On September 12, Sabinal Energy LLC and the Kayne Private Energy Income Fund LP noted the closing of the purchase of certain producing oil and natural gas assets owned by Chevron USA Inc. in the Central Basin Platform and Northern Shelf of West Texas. The acquired assets produce approximately 7,500 barrels of oil equivalent per day across a roughly 66,500 net acre position in Hockley, Terry, and Gaines Counties.
Founded in 2016, Sabinal is a privately held oil and natural gas exploration and production company based in The Woodlands, Texas.
Capital
In early August, Post Oak Energy Capital LP led a $100 million equity commitment to Nadel and Gussman NV LLC (NGNV). Affiliates of Nadel and Gussman LLC and the management team will co-invest alongside Post Oak. NGNV is a Tulsa-based exploration and production company with an initial focus on the acquisition and development of oil and gas properties in the Haynesville Shale. NGNV is also evaluating additional resource shale plays throughout the United States.
Irving, TX-based District 5 Investments LP, a private equity firm formed in 2016 and focused on investing in middle-market oil and gas and oilfield services companies, made a growth equity investment into newly formed Pathfinder Resources LLC. Based in Dallas, Texas, Pathfinder was formed to acquire North American mineral and royalty interests, with an initial focus on the Marcellus and Utica Shale plays in Pennsylvania, Ohio, and West Virginia. This is D5's third Fund I platform investment. The firm is actively seeking opportunities across the energy sector. Investment sizes range from $5 million to $35 million.
