Chisholm Oil & Gas LLC and Apollo Global Management LLC (NYSE: APO) formed a strategic partnership as the E&P closed on 53,000 acres in Kingfisher County, Okla., in the Stack Play, the companies said March 29. The STACK, which stands for Sooner Trend Anadarko Basin Canadian and Kingfisher Counties play, lies in the Anadarko basin.
Apollo invested in Chisholm’s acquisition and “has the opportunity” to invest a total of $900 million in the company to develop its existing assets and bolt-on deals. Chisholm management is also backing the venture.
Chisholm’s deal includes 53,000 acres in and around Kingfisher County with average production of 3,000 barrels of oil equivalent per day of current production. The nature of the acreage, including reserves, purchase price and seller were not disclosed.
Robert Zinke, CEO of Chisholm, said in a statement that the company is “excited to be working with Apollo’s managed funds to build a premier, STACK-focused independent E&P business.”
Robert Zinke, has a highly accomplished executive team possessing an average of 34 years of industry experience across all major onshore U.S. basins. Members of the Chisholm team, all of whom were previously affiliated with Zenergy, Inc., were among the first upstream operators to apply horizontal drilling in the Williston Basin – including the Mission Canyon, Poe and East Fork fields – becoming a first mover in the North Dakota Bakken / Three Forks play. The team was active on both sides of the Nesson Anticline, ultimately drilling more than 200 horizontal wells.
Since 2003, Mr. Zinke and his team have managed $1.15 billion in equity capital across six major projects, netting investors in these projects an aggregate multiple of 3.5 times invested capital (MOIC) generating more than $2.8 billion in total profits.
Mr. Zinke said, “We are excited to be working with Apollo’s managed funds to build a premier, STACK-focused independent E&P business. We believe the STACK has some of the best geology of any shale play in the U.S., and Chisholm has tremendous growth potential given the multiple oil-weighted target formations, repeatable results and high single-well economics.”
Geoff Strong, Senior Partner at Apollo, said, “We look forward to working with Bob and the rest of his team as Chisholm seeks to expand its business through the drill-bit and through add-on acquisitions. We’re confident that Chisholm will execute its strategy given the team’s long history of successful operations in the basin. We are delighted Apollo’s managed funds have the opportunity to invest alongside Bob and his team.”
One of the largest private equity companies in the world, Apollo had assets under management of about $192 billion as of the end of December.
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Compiled and Published by GIB KNIGHT
Gib Knight is a private oil and gas investor and consultant, providing clients advanced analytics and building innovative visual business intelligence solutions to visualize the results, across a broad spectrum of regulatory filings and production data in Oklahoma and Texas. He is the founder of OklahomaMinerals.com, an online resource designed for mineral owners in Oklahoma.