HOUSTON, March 20, 2018 (GLOBE NEWSWIRE) -- EnerVest, Ltd., on behalf of certain institutional partnerships, announced today it has entered into definitive agreements to sell its Eagle Ford and Austin Chalk assets to TPG Pace Energy Holdings (NYSE:TPGE) (NYSE:TPGE.U) (NYSE:TPGE.WS), an energy-focused special purpose acquisition entity led by former Occidental Petroleum Corporation CEO Steve Chazen, for approximately $2.66 billion in cash and stock. As part of the transaction, TPGE and EnerVest are partnering to create Magnolia Oil & Gas Corporation, a new company led by Chazen who will serve as Magnolia’s full-time Chairman, President and CEO. The transaction is expected to close late in the second quarter of 2018.
EnerVest Operating, L.L.C., will continue to operate the assets under a long-term arrangement, and EnerVest, Ltd., will provide certain additional corporate services to Magnolia. Upon closing, Magnolia will trade on the NYSE under a new ticker, and EnerVest will receive approximately $1.2 billion in cash and will retain roughly 120 million shares of common stock.
“EnerVest’s strategy always has been to optimize returns for our investors and to leverage the strengths of our operating company to advance that strategy,” said John B. Walker, EnerVest founder and CEO. “I have known Steve for more than 20 years and I cannot think of a better executive to lead Magnolia. The playbook he perfected at OXY is a great match for the outstanding acreage we have assembled in South Texas over the last 10 years. All of us at EnerVest look forward to partnering with Steve as he builds Magnolia going forward.”
“In creating Magnolia, we have a unique opportunity to build a new company anchored by what we consider to be some of the highest quality oil producing acreage in the country,” said Chazen. “We believe Magnolia’s acreage in Karnes County has some of the best economics in the United States and, when coupled with the upside in the Giddings Field, is a great fit with our criteria. Our objective is to maximize shareholder returns by generating steady production growth, strong pre-tax margins in excess of industry norms and significant free cash flow. Assuming moderate commodity prices, we plan to invest less than 60% of cash flow to fund a drilling program that consistently delivers more than 10% annual production growth. I look forward to leading this rigorous capital allocation process at Magnolia for the benefit of our shareholders and employees.”
About EnerVest
Houston-based EnerVest, founded in 1992, acquires, develops and operates oil and gas fields in 14 states on behalf of its investors. More information about EnerVest is available at www.enervest.net.
About Magnolia Oil & Gas Corporation
Following completion of the transaction, Magnolia Oil & Gas Corporation will be a publicly traded oil and gas exploration and production company with South Texas operations in the core of the Eagle Ford. Magnolia will focus on generating value for shareholders through steady production growth and free cash flow. For more information, visit www.magnoliaoilgas.com.
About TPG Pace Group and TPG Pace Energy Holdings
TPG Pace Group is TPG’s dedicated permanent capital platform. Led by TPG partner Karl Peterson, the platform was created in 2015 with the objective of sponsoring special purpose acquisition companies and other permanent capital solutions for companies. TPG Pace Group has a long-term, patient, and highly flexible investor base, allowing it to seek compelling opportunities that will thrive in the public markets with its sponsorship. TPG Pace Group has sponsored three SPACs and has raised roughly $2 billion since 2015. The first of these vehicles was used to sponsor the public listing of Playa Hotels and Resorts in March of 2017 (NASDAQ:PLYA).
TPG Pace Holdings (NYSE:TPGH) (NYSE:TPGH.U) (NYSE:TPGH.WS) raised $450 million in its June 2017, IPO and is currently seeking targets for a business combination that are suited to generate strong returns in a public market environment while benefitting from the broader operational knowledge, resources and private equity heritage of its team and TPG. For more information, visit www.tpg.com/tpg-pace-holdings.
TPG Pace Energy Holdings Corp. is a $650 million special purpose acquisition company formed by TPG Pace Group and Oxy Veteran Steve Chazen that went public on the NYSE in May of 2017. TPGE was formed with the intent to build a large scale, focused oil and gas business with a meaningful production base, strong free cash flow and a disciplined financial return philosophy. Following its IPO, TPGE began its search for attractive assets that would fit with Chazen’s operating approach and succeed as a public company with low leverage. For more information, visit www.tpg.com/pace-energy.
