[Context: On December 14, GSO and EIG-backed FourPoint Energy adds Quantum Energy as a new investor. Quantum is putting in $489m while existing equity holders added $36m. On December 12, OilGasEquity.com reported that Quantum was likely the most recent investor. FourPoint also announced a $188m acquisition. Further details and related links are below.]
FourPoint Energy Announces New Equity Financing with Quantum Energy Partners and Closes the Acquisition of Jointly Owned Properties in the Texas Panhandle
DENVER, Dec. 14, 2017 /PRNewswire/ — FourPoint Energy, LLC announced today a new equity financing and the closing of a strategic upstream and midstream acquisition in the Anadarko Basin. Quantum Energy Partners has agreed to invest $489 million in common equity in FourPoint making it one of the largest unit holders. Existing equity holders have also invested an additional $36 million bringing the total of new equity raised to $525 million. Funds managed by GSO Capital Partners LP (“GSO”) together with Quantum are now controlling members. “This new equity provides significant liquidity for the company to continue to grow through strategic acquisitions in the Anadarko and Permian Basins while executing on our active drilling program in the Anadarko Basin,” said George Solich, President and CEO of FourPoint.
“Pro forma with the closing of this new equity and existing debt capacity, FourPoint has in excess of $900 million in liquidity for future growth,” remarked Tad Herz, Executive Vice President and CFO of FourPoint.
“We are excited about partnering with George Solich and the FourPoint management team. We believe they have built an impressive company over the last few years and demonstrated the increased profitability and potential of the Western Anadarko Basin through their strong emphasis on technical and operating excellence. We look forward to partnering with the existing investors to help the company execute on its strategic objectives,” said Dheeraj Verma, President of Quantum Energy Partners.
“FourPoint has used the market downturn to build a world class team and the market leading position in the Western Anadarko Basin. We are thrilled to have Quantum as a partner in the business and look forward to working together in the years ahead,” said Dwight Scott, Senior Managing Director and President of GSO.
Simultaneous with this new financing, FourPoint has closed the acquisition of jointly owned properties in Wheeler and Hemphill Counties, Texas from an undisclosed seller for $188 million after customary closing adjustments. These assets include over 800 wells of which 610 will be operated by FourPoint. “Once we integrate these upstream and midstream assets into our already robust Anadarko position, FourPoint is poised to accelerate its drilling program exploiting 21 separate targets over more than 6,000 feet of column on our over 2 million gross acre footprint,” said Kamil Tazi, Executive Vice President and COO.
This acquisition adds existing production, upside acreage, and control of a fully integrated midstream system to FourPoint’s leading position in the Western Anadarko Basin. Pro forma, FourPoint will operate over 530 Mmcfed, control 300 miles of pipe, and have over 10,000 upside locations over its predominantly HBP acreage. Fueled by a prolific inventory of diverse stacked targets, FourPoint remains active in the Western Anadarko Basin with five rigs drilling standard length lateral wells. With the recent passage of the Oklahoma Energy Jobs Act of 2017 that allows for drilling long lateral horizontal wells in non-shale formations, FourPoint anticipates the use of long lateral development will make the basin’s drilling economics among the best in the lower 48. The planned drilling will also employ the use of the latest drilling and completion technologies that have somewhat lagged in comparison to other basins employing more stages and bigger fracs.
The debt and equity securities have not been and will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
Jefferies LLC acted as financial advisor and Andrews Kurth LLP acted as legal advisor to FourPoint Energy in connection with the transaction.
About FourPoint Energy
FourPoint Energy is a privately held acquisition, exploration and production company headquartered in Denver, Colorado. Join our team at FourPointEnergy.com.
About Quantum Energy Partners
Founded in 1998, Quantum Energy Partners is a leading provider of private equity capital to the global energy industry, having managed together with its affiliates more than $15 billion in equity commitments since inception.