Riverstone portfolio company Fieldwood Energy has acquired entities comprising SandRidge Energy, Inc.’s Gulf of Mexico and Gulf Coast business unit for $750 million. As part of the transaction, SandRidge will retain a 2.0% overriding royalty interest in two identified exploration prospects.
Fieldwood Energy LLC (“Fieldwood”) announced today the acquisition of entities comprising SandRidge Energy, Inc.’s (“SandRidge”) Gulf of Mexico and Gulf Coast business unit for $750 million, based on an effective date of December 1, 2013 and subject to customary purchase price adjustments. As part of the transaction, SandRidge will retain a 2.0% overriding royalty interest in two identified exploration prospects.
According to a Netherland, Sewell & Associates reserve report as of December 1, 2013, total proved reserves attributable to the acquired entities’ assets were 57.2 Mmboe, of which 51% is oil and 72% is developed. Additionally, probable reserves were 11.4 Mmboe and possible reserves were 9.0 Mmboe, resulting in total 3P reserves of 77.5 Mmboe. Current daily production exceeds 25,000 boe and is approximately 90% Company operated.
The acquisition further enhances Fieldwood’s position as the owner of the largest asset base on the Gulf of Mexico Shelf with a pro forma leasehold comprising more than 650 blocks and net production of approximately 125,000 boepd, which is 54% oil.
Matt McCarroll, President and Chief Executive Officer of Fieldwood, commented, “This transaction, coming only three months after the closing of our inaugural acquisition from Apache, demonstrates Fieldwood’s continued commitment to our acquire and develop strategy in the Gulf of Mexico. Additionally, the acquisition adds further geographic and geologic diversity by expanding our business to include an onshore Gulf Coast division as well as the deepwater Bullwinkle field.”
“Given our substantial footprint across the Gulf of Mexico, which includes over 50 blocks with common interests between Fieldwood and SandRidge, I am confident that we will be able to achieve meaningful operational synergies and cost efficiencies with this combined asset base,” Mr. McCarroll added. “Furthermore, the acquired assets add a number of near-term, high-quality drilling prospects to our existing drilling inventory. Most importantly, this transaction enhances the financial strength of the Company by providing additional liquidity, significant cash flow and further opportunities for growth.”
Fieldwood has obtained underwritten committed financing for the transaction from Citigroup Global Markets Inc., J.P. Morgan, Deutsche Bank AG New York Branch, BofA Merrill Lynch and Goldman Sachs Bank USA.
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About Fieldwood Energy LLC
Fieldwood is a Houston-based portfolio company of Riverstone Holdings LLC. Fieldwood is focused on the acquisition and development of conventional oil and gas assets on the Gulf Coast and Gulf of Mexico. Fieldwood is led by CEO Matt McCarroll and other former senior executives of Dynamic Offshore Resources and Apache Corporation.
About Riverstone Holdings LLC
Riverstone is an energy and power-focused private investment firm founded in 2000 by David M. Leuschen and Pierre F. Lapeyre, Jr. with approximately $27 billion of equity capital raised. Riverstone conducts buyout and growth capital investments in the exploration & production, midstream, oilfield services, power and renewable sectors of the energy industry. With offices in New York, London and Houston, the firm has committed approximately $24.9 billion to 105 investments in North America, Latin America, Europe, Africa and Asia.