Covey Park Gas LLC, a subsidiary of Dallas-based Covey Park Energy LLC, agreed to acquire EP Energy Corp.’s (NYSE: EPE) assets in the Haynesville and Bossier shales, located on the border of Texas and Louisiana, for $420 million.
Covey Park is a portfolio company of leading private equity firm Denham Capital.
EP Energy, formerly El Paso Exploration & Production Company, went public in 2014, after being acquired for $7.15 billion in 2012 by a private equity group led by Leon Black’s Apollo Global Management LLC (NYSE: APO). The other PE investors included Riverstone Holdings LLC, tycoon Leonard Blavatnik’s Access Industries Inc. and Korea National Oil Corp. EP Energy has recently expanded its presence in the Eagle Ford Shale.
The assets, primarily located in Louisiana’s DeSoto and Bossier Parishes, consist of approximately 52,933 gross (34,167 net) acres with Q4 2015 average production of 113 mmcf/d.
At closing, Covey Park will own approximately 196,000 gross (137,000 net) acres of leasehold in Texas and Louisiana. Daily net production will increase to approximately 200mmcf/day. Total proved reserves will be approximately 2 TCF.
The deal is expected to close in the second quarter of 2016, subject to customary closing conditions.
Los Angeles-based Latham & Watkins LLP represented Covey Park in the transaction.
Covey Park Energy is an independent oil and gas exploration and production company headquartered in Dallas, Texas. The company is primarily focused on the acquisition and exploitation of long-life reserves in the Ark-La-Tex and Mid-Continent regions. Covey Park was formed in June 2013 with a $300 million equity commitment from Denham Capital.
Denham Capital is a leading energy and resources-focused global private equity firm with more than $8.4 billion of invested and committed capital across eight fund vehicles and offices in Houston, London, Boston, São Paulo and Perth. The firm makes direct investments in the energy and resources sectors, including businesses involving oil and gas, power generation and mining, across the globe and all stages of the corporate lifecycle. Denham’s investment professionals apply deep operational and industry experience and work in partnership with management teams to achieve long-term investment objectives.