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Apollo-backed Northwood Energy Acquires SM Energy Powder River Property For $500 Million

Announced Date
January 10,2018
Deal Value $
500,000,000
Net Acres
112,000
Transaction Type
Property
Buyer
Northwoods Energy LLC
Seller
SM Energy Company
Source Documents:
   Source Link
   Source Link
Location
Region
Rockies - Powder River Basin

Country
United States

State
Wyoming

County
Converse ,Johnson ,Campbell

Play
Powder River Basin


Production & Reserves
Production
2,200 Boe/d

Production Mix
50 % Oil

Reserves
4.2 MMboe (1P)


Multiples
Production ($/boe/d)
227,273

$Price/Net Acre
4,464

$Price/Adj. Net Acre
3,777

$1P Boe
119

Adj. $/acre is based on production @35,000 Boe/d

Transaction Details: 

[Summary:SM Energy is selling its 112,000 net acres powder river asset for $500 million to Apollo-backed Northwood Energy LLC.

This deal closed on March 27, 2018.

Northwoods is led by Chief Executive Officer Tom Tyree, who has extensive experience in the acquisition and development of upstream oil and gas properties in the Rocky Mountains, Marcellus Shale, and Barnett Shale. Mr. Tyree was Co-Founder, President, and CFO of Vantage Energy from 2006 to 2016.

He is currently on the board of directors of Bonanza Creek Energy and served as CFO of Bill Barrett Corporation prior to Vantage Energy. The Apollo funds, including Apollo Investment Fund VIII and Apollo Natural Resources Partners II, have committed to invest up to an aggregate of $850 million in Northwoods.

Mr. Tyree said, “Northwoods is excited to be working with Apollo to build a leading Powder River Basin-focused independent E&P business. We believe the basin has some of the best geology of any play in the Lower 48 and that Northwoods has a tremendous opportunity to develop this highly contiguous, core acreage position.”

SM Energy reported some good wells with IP 30 of 1,657 - 2,337 Boe/d (80% oil) from the Frontier formation in december of last year though JV program.

EOG has also reported some 30-day ip rates of 1000 bopd.

Transaction Details

  • Land : 112,000 Net Acres
  • Production : 2,200 boe/d (50% oil)
  • Reserves   : 4.2 MMBOE (1P)
  • Formations : Shannon, Frontier, Niobrara

 

SM Energy (Yellow)

]

 

 

 

ORIGINAL RELEASE

NORTHWOOD ENERGY

Northwoods Energy LLC (“Northwoods” or the “Company”) (formerly known as Converse Energy), a portfolio company of certain funds managed by affiliates of Apollo Global Management, LLC (NYSE:APO) (“Apollo”), today announced it has agreed to acquire SM Energy’s core Powder River Basin assets. The acquisition is comprised of over 112,200 predominantly contiguous net acres of leasehold in Converse, Campbell, and Johnson counties in Wyoming.

Northwoods is led by Chief Executive Officer Tom Tyree, who has extensive experience in the acquisition and development of upstream oil and gas properties in the Rocky Mountains, Marcellus Shale, and Barnett Shale. Mr. Tyree was Co-Founder, President, and CFO of Vantage Energy from 2006 to 2016. He is currently on the board of directors of Bonanza Creek Energy and served as CFO of Bill Barrett Corporation prior to Vantage Energy. The Apollo funds, including Apollo Investment Fund VIII and Apollo Natural Resources Partners II, have committed to invest up to an aggregate of $850 million in Northwoods.

Mr. Tyree said, “Northwoods is excited to be working with Apollo to build a leading Powder River Basin-focused independent E&P business. We believe the basin has some of the best geology of any play in the Lower 48 and that Northwoods has a tremendous opportunity to develop this highly contiguous, core acreage position.”

Geoff Strong, Senior Partner at Apollo, said, “We look forward to working with Tom as Northwoods seeks to become a best-in-class Powder River Basin operator. Northwoods’ acreage position creates a solid foundation from which the Company can build significant scale in the region.”

Tudor, Pickering, Holt & Co. advised the buyer. Vinson & Elkins acted as legal advisor to the buyer.

About Northwoods Energy LLC

Northwoods Energy LLC is an upstream oil & gas company based in Denver, CO and focused on the Powder River Basin. Northwoods is backed by investment funds affiliated with Apollo Global Management and the Northwoods management team, and is led by Chairman and Chief Executive Officer Tom Tyree.

ORIGINAL RELEASE

 SM ENERGY

SM Energy Company (the "Company") (NYSE: SM) today announced that it has entered into a definitive agreement for the sale of a majority of the Company's Powder River Basin assets for a cash purchase price of $500 million (subject to customary closing price adjustments).

President and Chief Executive Officer Jay Ottoson comments: "We are very pleased to announce the signing of this agreement. Divestiture of these assets is consistent with our strategy of focusing on development of our top tier Midland Basin and Eagle Ford assets and improving our balance sheet by reducing debt. Pro forma for this transaction, as of the end of the third quarter 2017, net debt is reduced by approximately 20% and net debt:EBITDAX is reduced to less than 3 times."(1)

The assets to be sold include approximately 112,200 predominantly contiguous net acres located in northwest Converse County and portions of southeast Johnson and southwest Campbell Counties, Wyoming. These assets represent approximately 80% of the Company's current Powder River Basin acreage position. Net production as of December 2017 was approximately 2,200 Boe/d (51% oil, 18% NGLs and 31% natural gas) and preliminary estimates of proved reserves for year-end 2017 are 4.2 MMBoe (82% PDP). The transaction is expected to close in the first quarter of 2018, with an effective date of October 1, 2017. The purchase price will be subject to certain closing price adjustments. The transaction is subject to the satisfaction of required closing conditions, and there can be no assurance that the transaction will close on time or at all. The Company plans to use the expected sale proceeds for general corporate purposes, including debt reduction.

 

 

Rockies - Powder River Basin Deal Activity In Last 12 Months



Related Rockies - Powder River Basin Region's Deals



Announced DateBuyerSellerDeal Value($mm)LocationCategory
Jan-31-2018 Mid-Con Energy Partners Lp  - Click here   E&P
Jan-02-2018 Impact Exploration and Production LLC  - Click here Wyoming  E&P
Nov-01-2017 ATX Energy Partners  - Click here Wyoming  E&P
Jul-14-2017 Not Disclosed  - Click here Wyoming  E&P
Nov-08-2016 Not Disclosed  - Click here Wyoming  E&P

Price History



Date Deal Headline Price$/acre
May-09-2018 Samson Resources II Sells/Swaps Powder River Basin Property $44.00  Million 6,286
Jan-31-2018 Mid-Con Acquires Powder River Basin Position; 31,400 Acres $9.60  Million 170
Nov-01-2017 ATX Energy Acquires Rockies Assets From Blackhills $28.00  Million 352

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