Two private E&P giants are joining forces to form a pure-play Midland Basin company with more than 70,000 acres in the basin’s core. Double Eagle Energy Holdings III LLC and FourPoint Energy will form the new company named DoublePoint Energy LLC, the companies said in a joint press release on June 5.
DoublePoint’s position will focus on acreage in the core areas of the oil-rich, multipay zones in Midland, Glasscock, Martin, Howard, Upton and Reagan counties, Texas. The assets are a combination of Double Eagle’s existing Midland Basin acreage and production, along with additional assets that were recently acquired from undisclosed sellers.
Double Eagle, based in Fort Worth, Texas, was formed last year with backing from Apollo Global Management LLC, Magnetar Capital and management. FourPoint Permian, LLC was formed with equity from Quantum Energy Partners, FourPoint Energy, funds managed by GSO Capital Partners LP, and other investors. Double Eagle’s founders, John Sellers and Cody Campbell, will serve as co-CEOs of DoublePoint and George Solich, CEO and president of Denver-based FourPoint, will serve as DoublePoint’s executive chairman.
DoublePoint plans to continue to consolidate its position in its core areas through bolt-on acreage acquisitions and acreage trades while investing additional capital in an active drilling program. Currently, Double Eagle has one rig running, and as field and drilling operations are transitioned to the combined company, DoublePoint plans to increase drilling and development activity over its footprint, which has been largely undeveloped to date, according to a press release.
“Pulling from the strengths of both companies, we believe DoublePoint will be a dynamic player in the Midland Basin focused on acreage acquisitions, acreage trades, and the development of our low risk, multipay resource,” Sellers said in a statement.
With Solich running the show, FourPoint already boasts a significant position in the Western Anadarko Basin with interests in about 2.2 million gross (800,000 net) acres. The acreage spreads across 13 Oklahoma counties and crosses into the northeast corner of the Texas Panhandle. Solich believes FourPoint’s partnership will be a prosperous one. “By augmenting Double Eagle’s best-in-class Midland Basin expertise with FourPoint’s strong technical and operational proficiencies, we are confident this partnership will yield an unprecedented opportunity to quickly and efficiently grow production and cash flow,” he said in a statement, also adding “We are excited to be partnering with one of the top management teams in the Permian Basin. John, Cody and their team are the best in the business when it comes to putting together what is often a complex land picture to ultimately maximize long-lateral drillable units.
“We believe this unique structure and the strong capitalization from our equity partners have provided the foundation for DoublePoint to consolidate and develop one of the top acreage positions in the Midland Basin,” said Cody Campbell, Co-CEO of Double Eagle and DoublePoint.
This partnership may come as a surprise to some, but with the increase of partnerships and buyouts across the major plays in Texas and Oklahoma this may just be the tip of the iceberg.