FourPoint Energy, LLC announced a new equity financing agreement and the closing of a strategic upstream and midstream acquisition in the Anadarko Basin.
Quantum Energy Partners has agreed to invest $489 million in common equity in FourPoint, making it one of the largest unit holders. Existing equity holders have also invested an additional $36 million bringing the total of new equity raised to $525 million. Funds managed by GSO Capital Partners LP (“GSO”) together with Quantum are now controlling members.
“This new equity provides significant liquidity for the company to continue to grow through strategic acquisitions in the Anadarko and Permian Basins while executing on our active drilling program in the Anadarko Basin,” said FourPoint Energy President and CEO George Solich.
“Pro forma with the closing of this new equity and existing debt capacity, FourPoint has in excess of $900 million in liquidity for future growth,” said FourPoint Energy Executive VP and CFO Tad Herz.
Acquisition in Wheeler and Hemphill Counties
Simultaneous with this new financing, FourPoint has closed the acquisition of jointly owned properties in Wheeler and Hemphill Counties, Texas from an undisclosed seller for $188 million after customary closing adjustments. These assets include over 800 wells of which 610 will be operated by FourPoint.
“Once we integrate these upstream and midstream assets into our Anadarko position, FourPoint is poised to accelerate its drilling program, exploiting 21 separate targets over more than 6,000 feet of column(s) on our 2 million gross acre footprint,” said FourPoint Energy Executive VP and COO Kamil Tazi.
This acquisition adds existing production, upside acreage, and control of a fully integrated midstream system to FourPoint’s position in the Western Anadarko Basin. Pro forma, FourPoint will operate over 530 MMcfe/d, control 300 miles of pipe, and have over 10,000 upside locations over its predominantly HBP acreage.
FourPoint remains active in the Western Anadarko Basin with five rigs drilling standard length lateral wells. With the recent passage of the Oklahoma Energy Jobs Act of 2017, a law that allows for drilling long lateral horizontal wells in non-shale formations, FourPoint anticipates the use of long lateral development will make the basin’s drilling economics among the best in the lower 48.
The planned drilling will also employ the use of the latest drilling and completion technologies that have somewhat lagged in comparison to other basins employing more stages and bigger fracs.
