EnerVest, on behalf of certain institutional partnerships, has entered into definitive agreements to sell its Eagle Ford and Austin Chalk assets to TPG Pace Energy Holdings ('TPGE'), an energy-focused special purpose acquisition entity led by former Occidental Petroleum CEO Steve Chazen, for approx. $2.66 billion in cash and stock. As part of the transaction, TPGE and EnerVest are partnering to create Magnolia Oil & Gas Corp, a new company led by Chazen who will serve as Magnoliaâs full-time Chairman, President and CEO. The transaction is expected to close late in the second quarter of 2018.EnerVest Operating, will continue to operate the assets under a long-term arrangement, and EnerVest will provide certain additional corporate services to Magnolia.Â  Upon closing, Magnolia will trade on the NYSE under a new ticker, and EnerVest will receive approx. $1.2 billion in cash and will retain roughly 120 million shares of common stock.'EnerVestâs strategy always has been to optimize returns for our investors and to leverage the strengths of our operating company to advance that strategy,' said John B. Walker, EnerVest founder and CEO. 'âI have known Steve for more than 20 years andÂ IÂ cannot think of a better executive to lead Magnolia. The playbook he perfected at OXY is a great match for theÂ outstandingÂ acreage we have assembled in South Texas over the last 10 years.Â  All of us at EnerVest look forward to partnering with Steve as he builds Magnolia going forward.''In creating Magnolia, we have a uniqueÂ opportunity toÂ build a new company anchored by what we consider to be some of the highest quality oil producing acreage in the country,' said Chazen.Â  'We believe MagnoliaâsÂ acreage in Karnes CountyÂ has some of the bestÂ economicsÂ in the United StatesÂ and,Â when coupled with theÂ upside in theÂ Giddings Field, isÂ a great fit with our criteria.Â  OurÂ objectiveÂ isÂ to maximize shareholder returnsÂ by generatingÂ steady production growth,Â strong pre-tax margins in excess of industry norms and significantÂ free cash flow.Â  AssumingÂ  moderate commodity prices, weÂ  plan to invest less than 60% of cash flow to fund a drilling program that consistently delivers more than 10% annual production growth.Â  I look forward to leading this rigorous capital allocation process at Magnolia for the benefit of our shareholders and employees.'Original article linkSource: EnerVest
United States (Sigsbee Sub-basin (DWGoM B.)) Magnolia