Mineral Rights & Royalties

Antero Closes US$402 Million Overriding Royalty Divestiture

By Deepak Sharma
June 16, 2020
2 minutes read
Oil & Gas Rig

Denver-based E&P independent Antero Resources Corp. has sold certain overriding royalty interests (ORRIs) across its existing Appalachian basin asset base in West Virginia and Ohio to San Francisco-headquartered asset manager Sixth Street Partners LLC, as part of its strategy to pay down debt through asset sales.

The deal with Sixth Street Partners, which manages assets worth over US$34 billion globally, will result in Antero receiving up to US$402 million in payments, comprised of an initial US$300 million at the closing, plus additional payments of up to US$102 million over the next 12 months. The contingent payments are linked to volume thresholds relating to the expected cumulative production net to the ORRIs.

The transaction includes a 1.25% ORRI in Antero’s working interest in all of its proved operated developed properties in the Appalachian basin, subject to certain excluded wells (the Initial PDP Override), and an ORRI of 3.75% in Antero’s working interest in all of its undeveloped properties (the Development Override).

Paul Rady, Chairman & CEO of Antero said, “The ORRI transaction addresses over half of our $650 million to $900 million asset sale goal for 2020 and allows us to pay down debt, while importantly retaining the long-term upside of our core acreage position.”

Antero also stated that it repurchased its Senior Notes due 2021 during Q2 2020 and that US$540 million of such notes still remain outstanding.

“Pro forma for the initial proceeds from the proposed royalty interest transaction and the repurchase of senior notes during the quarter, the company has approximately US$745 million drawn on its revolving credit facility and $1.2 billion in liquidity under its credit facility as of March 31, 2020,” Antero said in a statement.

Credit Suisse Securities acted as the sole financial advisor, and Vinson & Elkins LLP acted as legal counsel to Antero on the deal. White & Case LLP acted as legal counsel to Sixth Street Partners.

Share
More news
Access our Global Upstream Oil & Gas M&A, Financing and Corporate Database
Quick registration, online payment and instant access
View pricing