Tulsa, OK-based Samson Resources II LLC has approved the sale of the company’s assets in East Texas and North Louisiana for a cash purchase price of $525 million, subject to customary purchase price adjustments, to an affiliate of privately-held Rockcliff Energy II LLC.
As previously disclosed, on May 8, 2017, Samson announced that it engaged investment banks Jefferies LLC and Houlihan Lokey Capital Inc. to sell substantially all of the company’s East Texas and North Louisiana assets. The agreement with Rockcliff Energy is for the sale of these marketed assets, which consists of approximately 210,000 net acres across East Texas and North Louisiana, producing approximately 90 MMCFe/d of production, net to the company’s interest.
Samson intends to use the proceeds upon closing to pay down all the outstanding debt (estimated to be between $210 million - $215 million as of September 1, 2017) remaining under its $280 million senior secured revolving credit facility (due September 1, 2019), and fees associated with the transaction, with the remaining proceeds used to fund the company’s capital needs in 2018 along with a possible distribution to its equity investors.
The sale of the East Texas assets comes after the company acquired substantially all of the assets of Samson Resources Corp. upon its emergence from Chapter 11 bankruptcy on March 1, 2017. In addition to this sale, the company has closed on approximately $14 million of additional company-wide non-core asset and equipment sales since March 1, 2017.
Upon closing the sale of the East Texas and North Louisiana assets, the company will focus its efforts on developing its oil and gas assets located in the Powder River and the Green River Basins of Wyoming. The company owns approximately 146,000 net acres in the Powder River Basin and approximately 59,000 net acres in the Green River Basin.
Jefferies LLC and Houlihan Lokey Capital Inc. provided financial advice to Samson for the sales process. Legal advice was provided by Willkie Farr & Gallagher LLP. Rockcliff Energy was represented by Locke Lord LLP.
The sale is expected to close on September 29, 2017, with an effective date of August 1, 2017.
Houston, TX-based Rockcliff Energy is currently active in the ArkLaTex region, the Delaware Basin and the San Andres horizontal play. In addition to management’s investment and ownership, the company’s outside investor group is led by Quantum Energy Partners.