Maverick Acquires Western Anadarko Basin Operator FourPoint Energy
Privately-held E&P companies Maverick Natural Resources LLC and FourPoint Energy LLC entered into an agreement whereby FourPoint and its Western Anadarko basin assets will be renamed ‘Unbridled Resources LLC’ and merged with a subsidiary of Maverick. The financial terms of the all-equity transaction have not been disclosed.
Both Maverick and FourPoint are majority-owned by funds managed by EIG Global Energy Partners LLC. The deal also includes the acquisition of two former FourPoint subsidiaries, MidPoint Midstream LLC and Wheeler Midstream LLC, which provide midstream services in the Western Anadarko basin.
FourPoint stated that over the course of several months, it had been in negotiations with its key stakeholders to reduce its debt and to restructure its balance sheet. The efforts culminated in a consensual restructuring between the company and its debt holders earlier this summer. As a result of the restructuring, EIG, the previous holder of FourPoint’s senior secured notes, exchanged the notes for a majority equity ownership stake in the company.
Subsequently in November, as the controlling equity owner, EIG made the decision, with approval from the newly appointed FourPoint Energy Board of Managers and Maverick Natural Resources Board of Directors, to rename FourPoint and to merge it with a subsidiary of Maverick.
Denver-based FourPoint Energy was originally formed with equity investments from funds managed by Quantum Energy Partners, GSO Capital Partners LP, and other investors. The company is focused on acquiring and developing assets in the Western Anadarko basin, and currently holds interests in approximately 700,000 acres in the Granite Wash and Cleveland Sand plays in Oklahoma and Texas. Production from these assets currently averages approximately 50,000 net barrels of oil equivalent per day (boe/d), of which 47% is liquids.
The team at FourPoint is expected to work through 2020 to transition the assets. Following the transition, the core management team and key members of the FourPoint organization plan to launch their next venture while continuing to manage the assets of LongPoint Minerals LLC, LongPoint Minerals II LLC, and executing responsibilities relative to the master service agreement it retains with FourPoint Permian LLC. The organization intends to retain its company name and existing office headquarters in Denver.
“By renaming FourPoint Energy to Unbridled Resources, we are signaling a shift from the traditional shale model to Maverick’s margin-focused operational strategy. These assets add to Maverick’s substantial portfolio of long-lived assets. Further, the all-equity transaction ensures the combined Company will retain a healthy financial position with a 2020 pro forma debt to EBITDA ratio of approximately 0.5x,” said Maverick’s CEO, Chris Heinson.
Based in Houston, Maverick Natural Resources is focused on the development and production of oil & gas assets across the Midwest, Ark-La-Tex, Rockies, California, Permian, Southeast, and the Mid-Continent regions of the United States. The company is the successor to BreitBurn Energy Partners LP, which filed for Chapter 11 bankruptcy protection in mid 2016.