New Source Energy Partners LP (NSLP), a Delaware limited partnership, confirms that 2100 Energy LLC, an entity owned by Larry Lee, has acquired an 18.4% interest in New Source Energy GP LLC (NSGP) from Deylau LLC, an entity owned by Kristian B. Kos, chairman and CEO of the Partnership's general partner.
The sale includes an option for 2100 Energy to acquire the remaining 51% of NSGP owned by Deylau LLC. The option is exercisable at such time that the Partnership acquires an aggregate of at least $150 million of oil and gas properties sourced by 2100 Energy.
Any oil and gas acquisition consummated by NSLP that was sourced by 2100 Energy, or any sale of assets from 2100 Energy or Lee to NSLP, will occur in a new, wholly owned subsidiary of NSLP that will have its own set of incentive rights (subsidiary IDRs) that will be owned by 2100 Energy or Lee. The subsidiary IDRs were created to induce Lee and 2100 Energy to assist in the growth of NSLP's distribution. Upon exercise of the option, Lee and his team will assume full responsibility for the E&P activities of NSLP.
Robert W. Baird & Co. Inc. and UBS Investment Bank acted as financial advisors to NSGP and NSLP, and Stifel acted as financial advisor to 2100 Energy LLC on the transaction. Vinson & Elkins LLP acted as legal advisor to NSLP. Richards, Layton & Finger PA acted as legal counsel to the Conflicts Committee of the NSGP board of directors. Deylau LLC and Kos were advised by Covington & Burling LLP, and Lee and 2100 Energy LLC were advised by McAfee & Taft A Professional Corp.