INDUSTRY BRIEFS
Invictus Energy receives $150M equity commitment from Kayne Anderson
Invictus Energy LLC has received a $150 million equity commitment from Kayne Anderson Energy Funds and members of the management team. The Invictus management team is led by Kevin Green, president and CEO; Elliott Hough, COO; Robert Estrada, CFO; and Jon Moreland, vice president of land. Prior to forming Invictus, members of management most recently served in senior leadership positions at both Rosetta Resources and ConocoPhillips. Headquartered in Houston, Texas, Invictus will pursue leasehold opportunities with scalable development upside. The company will consider opportunities throughout select North American basins with an initial focus on the Eagle Ford and Permian Basin. Kayne Anderson Capital Advisors LP is an independent alternative investment management firm focused on niche investing in upstream oil and gas companies, energy infrastructure, specialized real estate, middle market credit, growth private equity and distressed municipal opportunities. Through Kayne Anderson Energy Funds, the firm has raised over $5 billion of committed capital dedicated to energy private equity investments, primarily in upstream and midstream oil and gas companies.
NP Resources acquires Bakken assets
NP Resources LLC (NPR), a venture between NPR Management Holdings LLC (NPM) of Denver, Colorado and private equity firm Vortus Investments of Fort Worth, Texas has acquired certain assets from an undisclosed seller in Billings, Golden Valley, and McKenzie Counties, North Dakota. The Williston Basin acquisition includes 89,500 net acres with an 81.5% average working interest; 72,250 net acres held by production for development and 17,339 undeveloped net acres, as well as 53 operated and seven non-operated wells with an 85% average net revenue interest; 1,050 boe/d net production from the Bakken/Three Forks, and 173 high quality undeveloped drilling locations. NP Resources LLC is a newly formed company organized and managed by the principals, founders and management of North Plains Energy, LLC entities along with its private equity partner, Vortus Investment Advisors LLC. NPR Management Holdings LLC is a privately held company headquartered in Denver, Colorado formed by the founders, principals, and management of North Plains Energy LLC. (NPE). NPE sold its prior joint venture holdings and wholly owned leasehold including production and net undeveloped acreage in 2012 for over $700 million.
Quicksilver approves $245M bid for assets in bankruptcy-related auction
Quicksilver Resources Inc. and its US subsidiaries have completed a Bankruptcy Court-approved auction for their US oil and gas assets located primarily in the Barnett Shale in the Fort Worth basin of North Texas as well as assets in the Delaware basin in West Texas, which are concentrated in Pecos County, Texas and to a lesser extent Crockett and Upton Counties, Texas. Marketing of the assets began in September 2015. At the auction, held January 20 and 21, 2016, Quicksilver and its US subsidiaries declared the $245 million, all-cash bid from BlueStone Natural Resources II LLC as the highest or otherwise best bid for the oil and gas assets. Quicksilver and BlueStone executed the asset purchase agreement for the sale of the oil and gas assets on January 22, 2016. A request for final approval of the sale was submitted to the US Bankruptcy Court for the District of Delaware on January 27, 2016. Quicksilver and its US subsidiaries filed voluntary petitions under Chapter 11 of title 11 of the United States Code on March 17, 2015. Quicksilver's Canadian subsidiaries were not included in the Chapter 11 filing and are not subject to the requirements of the Bankruptcy Code. The assets of Quicksilver's Canadian subsidiaries are not included in this sale, and the sale process for those assets remains ongoing. The company's legal advisors are Akin Gump Strauss Hauer & Feld LLP in the US and Bennett Jones LLP in Canada. Houlihan Lokey Capital Inc. is serving as financial advisor.
Orrick opens Houston office
Orrick, Herrington & Sutcliffe has opened its office in Houston, Texas. The firm's 25th office worldwide will have a founding team of approximately 20 partners and will focus on serving the energy and infrastructure, technology and finance sectors
Penn Virginia exploring strategic alternatives
On January 12, 2016, the New York Stock Exchange (NYSE) suspended trading of Radnor, PA-based Penn Virginia Corp., determining that the company's common stock was no longer suitable for listing based on "abnormally low" price levels. The NYSE stated its intent to apply to the Securities and Exchange Commission (SEC) to delist the company's common stock upon completion of all applicable procedures. Penn Virginia does not intend to appeal the delisting determination. Penn Virginia common stock is trading on the OTC Pink under the symbol "PVAH". On January 15, the company noted the hiring of
Jefferies LLC and legal advisors Kirkland & Ellis LLP to advise management and the Board of Directors on strategic alternatives related to its capital structure. The company does not intend to make further announcements about the process unless and until it determines that disclosures are necessary or appropriate.
Sky-Futures conducts drone inspection in GOM
In mid-January, London-based Sky-Futures, a provider of drone inspection services for the oil and gas industry, completed what it said was the first-ever oil and gas inspection by drone in the Gulf of Mexico for a global oil and gas service and drilling company. Sky-Futures received the 46th Section 333 Federal Aviation Authority (FAA) Exemption Certificate to operate drones in the US, and opened its first North America office in Houston, Texas in March 2015. The inspection scope requested by the client included a derrick, a heli-deck, and four cranes on a drillship and was completed in two days.
SSE receives noncompliance notice from NYSE
Seventy Seven Energy Inc. received notice from the New York Stock Exchange (NYSE) of noncompliance with the NYSE continued listing standard that requires the average closing price of the company's common stock to be not less than $1 per share over a period of 30 consecutive trading days. SSE notified the NYSE of its intent to cure the deficiency and return to compliance with the NYSE's continued listing requirements. Subject to SSE's compliance with other continued listing requirements, the company's common stock will continue to be traded on the NYSE during the cure period. Headquartered in Oklahoma City, Oklahoma, SSE provides a range of wellsite services and equipment to US land-based exploration and production customers.
Cheniere engages joint lead arrangers to arrange refinancing of project debt
Cheniere Energy Partners LP has engaged 13 financial institutions to act as joint lead arrangers, mandated lead arrangers, and other participants to assist in the structuring and arranging of senior secured credit facilities in an aggregate principal amount of up to approximately $2.8 billion. Proceeds from these new credit facilities are intended to be used by Cheniere Partners to prepay the $400 million senior secured term loan at Cheniere Creole Trail Pipeline LP (CCTP), redeem or repay the approximately $1.7 billion senior secured notes due 2016 and the $420 million senior secured notes due 2020 that were issued by Sabine Pass LNG LP (SPLNG), pay associated transaction fees, expenses, and make-whole amounts, if applicable, and for general business purposes of Cheniere Partners and its subsidiaries. SPLNG and CCTP are both wholly owned subsidiaries of Cheniere Partners. The 13 arrangers and other participants are The Bank of Tokyo-Mitsubishi UFJ Ltd., ABN AMRO Capital USA LLC, Société Générale, Industrial and Commercial Bank of China Ltd., New York Branch, Intesa Sanpaolo SPA New York Branch, JPMorgan Chase Bank NA, Mizuho Bank Ltd., Sumitomo Mitsui Banking Corp., Morgan Stanley Senior Funding Inc., Bank of America NA, Credit Suisse, HSBC Bank USA NA, and Commonwealth Bank of Australia.
Sanchez sees borrowing base reduction
Sanchez Energy noted a reduction in its borrowing base in January, down to $425 million from $500 million with commitments unchanged at $300 million. An amendment to its credit facility allows for $400 million in second lien debt. Despite the borrowing base reduction, liquidity remains strong for the company and analysts with Seaport Global Securities gave the company a Buy rating. "Despite the reduced borrowing base, liquidity remains strong at $860MM ($435MM cash, $425MM undrawn revolver)," the analysts said, noting "the ability to tack on second lien debt further cements SN's ability to manage through the commodity cycle," supporting its upgrade of the company last week. Noting management's plan to fund its 2016 capital program ($200MM-$250MM) from operating cash flows and cash on hand, the analysts expect an "untapped revolver through YE17 at Strip prices."
WPX Energy increases hedge position
WPX Energy has added more hedges to protect cash flows and repurchased a portion of notes that are due in early 2017. Approximately three-fourths of WPX's 2016 anticipated oil volumes are hedged well above current prices. The company now has 29,380 barrels of oil per day hedged at $60.85 per barrel in 2016. This includes another 2,000 b/d added since the company's most recent quarterly report. Roughly two-thirds of WPX's anticipated 2016 natural gas production is hedged at $3.63 per MMbtu. For 2017, WPX has 9,304 b/d of oil hedged at $61.66 per barrel and 92,500 MMbtu per day of natural gas hedged at $3.22. Over the past two months, WPX reduced its long-term debt by repurchasing approximately $68 million in notes - or 17% - of a $400 million maturity due in early 2017 at a discount to par.
Keane Group to acquire US assets of Trican Well Service
Keane Group, a privately held US-based well completion services company, has agreed to acquire the majority of Canada-based Trican Well Service Ltd.'s US assets for US$247 million, comprising US$200 million in cash plus a minority interest stake in Keane Group. With the acquisition, Keane will triple its frac capacity, acquire access to proprietary technology, add applied engineering capabilities, and further expand its service offerings and geographic reach in the US. The transaction is expected to close before mid-March 2016, following the completion of customary approvals. Houlihan Lokey acted as financial advisors, and Schulte Roth & Zabel acted as legal advisors to Keane in the transaction.
Fluid Delivery Solutions acquires Water Transfer
Fluid Delivery Solutions LLC (FDS), a provider of oilfield water management services in the Permian, Eagle Ford, Marcellus, and Utica basins, has acquired Water Transfer LLC, a water transfer and equipment rental business focused on the Permian Basin. Based in Midland, Texas, Water Transfer was founded in 2013. Post-acquisition, the company will relocate all personnel to FDS's Midland office. The Water Transfer team members will retain their roles within the expanded organization. FDS is a portfolio company of Trilantic North America, a private equity firm.