Oil & Gas News

Private-equity backed group acquires Hawkwood Energy, LLC

Mineral Buyer, private-equity

By: Greg Avery – Denver Business Journal – A private equity-backed business has acquired a Denver-based oil and gas company with thousands of acres of mineral rights and hundreds of wells in south Texas.

Houston-based WildFire Energy I LLC struck a deal that will leave it owning half of Denver-based Hawkwood Energy LLC and operating the oil and gas exploration business. The transaction values Hawkwood Energy at about $650 million, the companies said.

Hawkwood shareholders will own half the post-transaction business, while WildFire Energy management and Kayne Anderson, a private equity company, will own the rest. WildFire Energy executives, led by CEO Anthony Bahr, President and COO Steve Habachy, and CFO Drew Cozby, will run the business.

Hawkwood, formed in 2012 and later with financing from Warburg Pincus and the Ontario Teachers’ Pension Plan, built up 160,000 acres of mineral rights and assets in the Eagle Ford oil and gas fields of southern Texas through more than 30 transactions, the company says.

It produces about 15,000 barrels of oil and liquids equivalent per day. In 2019, it ranked as the third-highest producing private company in the Eagle Ford, the company said.

“We are proud of what Hawkwood has accomplished since entering the Eagle Ford and believe that joining with WildFire is the next logical step in our evolution,” said Jim Addison, CEO of Hawkwood. “We are impressed by the team’s extensive knowledge of and experience in this basin and are excited for the opportunities that lay ahead.”

The equity investment from Kayne Anderson and WildFire Energy’s management will significantly cut the company’s debt and position it to grow by drilling more wells or through future mergers and acquisitions, said Mark Teshoian, managing partner at Kayne Anderson, in a statement.

The transaction is expected to close in the third quarter of this year, the companies said.

It’s the latest example of deals and consolidation reshaping the oil and gas industry as it emerges from the historic lows of 2020, a year that saw layoffs and bankruptcies sweep the industry because of the Covid-19 pandemic.

Another Denver company, Ovintiv (NYSE: OVV), struck a deal earlier this year to sell its assets in the Eagle Ford for $880 million to a new local company formed for acquisitions.

The executives behind WildFire Energy previously were involved in building up WildHorse Resource Development Corp., an Oklahoma-based company developing oil and gas in the Eagle Ford and in Louisiana prior to selling to Chesapeake Energy in 2019 for nearly $4 billion.

They announced a line-of-equity financing deal with private equity funds affiliated with Warburg Pinus and Kayne Anderson in 2019.

“We look forward to leveraging our prior experience as neighbors to Hawkwood to continue the team’s track record of efficient, profitable operations,” said Anthony Bahr, CEO of WildFire. “The improving environment for oil and gas presents exciting opportunities for WildFire and we are pleased to have the backing of our sponsors to go pursue them.”

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