Vortus Investment-backed SND Operating buys assets from Chesapeake Energy


Vortus Investment-backed SND Operating, LLC has acquired natural gas producing assets in east Texas and north Louisiana from Chesapeake Energy Corporation and Morgan Stanley for $129 million in cash, subject to closing adjustments. The assets include 182,395 net acres, 73 percent operated by Chesapeake. As a result of the deal, SND now holds about 225,000 net acres of production.

Press Release

SND Operating, LLC (“SND” or the “Company”) today announced the acquisition of assets on behalf of an affiliated partnership in east Texas and north Louisiana from Chesapeake Energy Corporation (NYSE: CHK) and Morgan Stanley (NYSE: MS) for $129 million in cash, subject to closing adjustments.

East Texas and North Louisiana Acquisition Highlights:

 182,395 net acres, 73% operated by Chesapeake

 Net production of approximately 49 MMcfe/d

 Net proved developed producing (PDP) reserves of 189.6 Bcfe (96% natural gas)

 Multi‐stacked pay potential

 Assets overlap existing SND assets

As a result of this acquisition, SND holds approximately 225,000 net acres with approximately 60 MMcfe/d of production, establishing the Company as one of the leading producers in the region.

“This transformative acquisition enhances our company’s production and cash flow growth by providing numerous drilling and low cost recompletion opportunities,” says L. Ali Sheikh, President of SND. “Our team has significant operating expertise in the region and has already identified opportunities to immediately increase operational efficiencies by utilizing SND’s low operating costs and existing infrastructure in the region. Most importantly, the held‐by‐production nature of the assets will give us time to put together a meaningful development plan that maximizes the returns on our invested capital.”

Messrs. Jeffrey Miller and Brian Crumley, the Co‐Founding Partners of Vortus Investment Advisors, LLC (“Vortus Investments”), SND’s partner in the transaction, commented, “The SND team has many years of operational experience with a focus on low‐cost conventional natural gas production in East Texas and North Louisiana.  The Chesapeake and Morgan Stanley acquisitions will fit directly into the Company’s portfolio given the geographic overlap.  We are proud of the hard work SND has put into closing this deal and are excited to strengthen our partnership.”

About SND Operating

SND Operating is a privately held company headquartered in Dallas, Texas.  SND, together with its affiliated companies, is a domestic onshore upstream company with operations focused in gas fields in East Texas and North Louisiana.  In July 2014, SND formed a partnership with Vortus Investments for development drilling on the Company’s assets and to pursue
potential add‐on acquisitions.

About Vortus Investments
Vortus Investments was founded by Jeffrey W. Miller and Brian C. Crumley and is headquartered in Fort Worth, Texas.
Vortus is an energy private equity firm focused on partnering with successful owner/operators to provide development
capital in the lower middle market onshore U.S. upstream sector. For more information, visit www.vortus.com.