Acquisitions

SM Energy’s wraps up $500 million deal on Wyoming Assets

The Denver Business Journal reports that Denver based SM Energy Co. has finalized a $500 million deal to sell the majority of its assets in Wyoming’s Powder River Basin to a new Denver company run by an industry veteran.

SM said it will use the money to pay down debt and other general purposes. The deal was previously announced in January.

SM Energy sold about 112,200 largely contagious net acres in Converse, Johnson and Campbell counties, Wyo., or 80% of its Powder River acreage position, including the Frontier Formation. The company retains about 27,985 net acres, though the remaining leasehold is more scattered.

The buyer is Northwoods Operating LLC, a new company led by veteran Denver-area oilman Tom Tyree, who was co-founder, president and CFO of Arapahoe County-based Vantage Energy from 2006 to 2016 and before that was CFO of Bill Barrett Corp.

Northwoods in January said Apollo funds had committed to invest up to $850 million in the company.

SM CEO Jay Ottoson said in January the company was selling the Wyoming acreage to focus on its “top tier” assets in Texas. After the sale, SM expects its debt will be reduced from $2.5 billion to $2 billion.

SM Energy secured a strong price for its undeveloped acreage, said Brian T. Velie, a Capital One Securities analyst.

The price equates to “about 9% of SM’s enterprise value. The volumes sold represent about 2% of SM’s total third-quarter 2017 production,” he said. Velie estimated the properties will generate about $16 million of EBITDA at $50 oil and $3 gas pricing during the next 12 months.

SM Energy History

The company was founded in 1908 and incorporated in 1915.

In 1992, the company became a public company via an initial public offering.

In 2003, the company sold its assets in the Fort Chadbourne field for $17 million.

In 2008, the company sold assets to Abraxas Petroleum Corporation for $131.6 million.

In January 2010, the company sold assets in the Rocky Mountains for $267 million.

In May 2010, the company changed its name from St. Mary Land & Exploration Company to SM Energy.

In 2011, the company sold a partial interest in its holdings in the Eagle Ford to Mitsui & Co..

In 2013, the company sold its assets in the Anadarko Basin for $329 million.

In 2014, the company acquired 66,000 acres in the Bakken Formation for $330 million.

In June 2015, the company sold its assets in the Arkoma Basin of Oklahoma for $270 million.

In July 2015, the company sold its 76,300 net acres of Ark-La-Tex assets to Aethon Energy and RedBird Capital.

In August 2016, the company acquired Rock Oil Holdings LLC, which owned 24,783 net acres in Howard County, Texas, from Riverstone Holdings for $980 million.

On October 18, 2016, the company announced the purchase of assets in West Texas for $1.6 billion from an affiliate of EnCap Investments and the sale of assets in the Williston Basin for $0.8 billion to Oasis Petroleum.

In 2017, the company sold assets in the Eagle Ford for $800 million.

 

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.

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