DENVER, July 1, 2015 /PRNewswire/ -- FourPoint
Energy, LLC announced today the signing of definitive agreements to
acquire oil and gas assets from Chesapeake Exploration L.L.C.
("CEX") and CHK Cleveland Tonkawa L.L.C., whose preferred interest
owners are funds managed by GSO Capital Partners LP, as well as
other third party investors (collectively the "Preferred Holders"),
and common interest owner CEX in three related transactions for a
combined purchase price of $840
million, with incremental and contingent payments payable to
the Preferred Holders upon certain commodity price and performance
conditions. In addition, the Preferred Holders will receive a
distribution of cash on hand and working capital of CHK Cleveland
Tonkawa L.L.C. The assets to be acquired include an interest
in approximately 1,500 producing wells primarily in the
Cleveland, Tonkawa and Marmaton formations with average
daily net production of approximately 21,500 Boed over the twelve
months ended April 2015. The production mix is 7,000 Bbld of
oil, 5,000 Bbld of natural gas liquids and 57 Mmcfd of natural
gas. The assets cover nearly 250,000 net acres centered in
Roger Mills and Ellis counties, Oklahoma. Approximately ninety-five
percent of the leasehold is held by production. FourPoint
will assume full operations of the assets at closing which is
anticipated to be August 31,
2015.
George Solich, President and CEO
of FourPoint said, "The acquisition complements FourPoint's current
acreage footprint and boosts our inventory by adding a significant
amount of operated, oily locations in formations largely
unrepresented in our current portfolio. Additionally, the
assets to be acquired include a large base of production which
strengthens our cash flow profile in this uncertain commodity price
environment. The acquired assets will be instrumental in our
ongoing efforts to build a world class portfolio of oil and gas
assets in the Western Anadarko
Basin."
The acquisition will be funded by $619
million in FourPoint Holdings equity issued to funds managed
by GSO Capital Partners and cash drawn from existing FourPoint
Energy credit facilities. Tad Herz,
Executive Vice President and CFO said, "The structure of this
transaction strengthens FourPoint's balance sheet and provides
significant liquidity to pursue future development and acquisition
activity. The new equity issued to GSO Capital Partners as
consideration for the transaction allows FourPoint to maintain a
balanced debt to equity capital structure and allows for GSO to
share in future upside potential on the assets."
Kamil Tazi, Executive Vice
President and COO added, "Chesapeake has developed this asset by
drilling and completing over 190 horizontal wells since 2012.
Anticipating this transaction, Chesapeake halted its development plans and
eliminated the active rigs working in this area in the first
quarter of 2015. As FourPoint assumes operations, we plan to
build back up to their previous momentum and continue to reduce
drilling and completion costs while maximizing ultimate
recoveries. FourPoint is eager to leverage the knowledge that
Chesapeake has developed through
their drilling program with our extensive technical expertise in
the area to position the company to grow production and cash
flow."
Pro forma for the acquisition and prior to customary
post-closing adjustments, FourPoint's Western Anadarko footprint will exceed 400,000
net acres with net production estimated at 260 Mmcfed from
approximately 4,600 gross wells, with half of the production coming
from oil and natural gas liquids.
Jefferies LLC acted as financial advisor and Andrews Kurth LLP
acted as legal advisor to FourPoint Energy in connection with the
transactions.
FourPoint Energy is a privately held acquisition, exploration
and production company headquartered in Denver, Colorado. Join our team at
FourPointEnergy.com.
CONTACT:
Jenna
Samek
FourPoint Energy, LLC
303.785.1564
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SOURCE FourPoint Energy, LLC