FourPoint Energy LLC has signed definitive agreements to acquire oil and gas assets from Chesapeake Exploration LLC (CEX) and CHK Cleveland Tonkawa LLC, whose preferred interest owners are funds managed by GSO Capital Partners LP, as well as other third-party investors (collectively, the preferred holders), and common interest owner CEX in three related transactions for a combined purchase price of $840 million, with incremental and contingent payments payable to the preferred holders upon certain commodity price and performance conditions. In addition, the preferred holders will receive a distribution of cash on hand and working capital of CHK Cleveland Tonkawa LLC.
The assets to be acquired include an interest in approximately 1,500 producing wells primarily in the Cleveland, Tonkawa, and Marmaton formations with average daily net production of approximately 21,500 boe/d over the 12 months ending in April.
The production mix is 7,000 bbl/d of oil, 5,000 bbl/d of natural gas liquids and 57 MMcf/d of natural gas. The assets cover nearly 250,000 net acres centered in Roger Mills and Ellis counties, Oklahoma. Approximately 95% of the leasehold is held by production.
FourPoint will assume full operations of the assets at closing, which is anticipated to be Aug. 31. The acquisition will be funded by $619 million in FourPoint Holdings equity issued to funds managed by GSO Capital Partners and cash drawn from existing FourPoint Energy credit facilities.
Pro forma for the acquisition and prior to customary post-closing adjustments, FourPoint's Western Anadarko footprint will exceed 400,000 net acres with net production estimated at 260 MMcfe/d from approximately 4,600 gross wells, with half of the production coming from oil and natural gas liquids.
Jefferies LLC acted as financial advisor and Andrews Kurth LLP acted as legal advisor to FourPoint Energy in connection with the transactions.