Tall City Exploration Announces Closing of $803 Million Purchase and Sale Agreement with Moss Creek Resources
Sale of rights to approximately 71,000 leased acres and interest
in 40 producing wells in the Midland Basin brings cumulative sales
proceeds for Tall City to more than $1.2 billion, when combined with
proceeds from prior transaction completed in 2014
Tall City Exploration LLC (“Tall City”) announced today that it has
closed an agreement with Moss Creek Resources, LLC (“Moss Creek”) to
sell substantially all of its exploration and production (“E&P”) assets
for $803 million (subject to typical closing adjustments). Tall City’s
E&P assets are comprised of the oil and gas rights to leases on
approximately 71,000 acres in Howard and Borden Counties, Texas and
interest in 34 horizontal and six vertical wells which produce
approximately 3,750 barrels of oil equivalent per day (boepd).
“When we formed Tall City Exploration in 2012, we believed in the
opportunity the Permian Basin had to offer our team and investors,” said
Tall City Chief Executive Officer Mike Oestmann. “We’re pleased to have
successfully executed our strategy to the benefit of all parties
involved. We anticipate that, through this transaction, our active
drilling program will be maintained despite the market’s recent downturn
and that it will continue providing jobs, tax and royalty income to the
local, state and national economy.”
Curtis Newstrom, President and Chief Executive Officer of Moss Creek
Resources, remarked, “I am extremely pleased with this transaction as it
places Moss Creek in what we believe to be highly prolific acreage in
the core of the Northern Midland Basin.”
Tall City was formed in 2012 with a $300 million equity commitment from
Denham Capital, a leading energy and resources-focused global private
equity firm.
“Our team’s on-the-ground experience and local relationships within the
Permian helped us build and realize an unconventional opportunity set we
believed was only beginning to be exploited when we started this
company,” added Tall City President Joseph Magoto.
In addition to the transaction with Moss Creek, in November 2014, Tall
City sold approximately 15,000 acres and 1,400 boepd of current
production in Reagan and Crockett Counties, Texas to American Energy –
Permian Basin, LLC for approximately $440 million. The two transactions
bring cumulative sales proceeds for Tall City to more than $1.2 billion.
“Denham has greatly enjoyed the collaborative partnership we’ve had with
Tall City these past three years,” said Jordan Marye, Partner of Denham
Capital. “Mike, Joe and their team have created a highly capable and
successful organization, a remarkable feat in today’s competitive
marketplace. We are excited to continue our relationship with Tall City
and build on the Company’s considerable success.”
RBC Richardson Barr acted as the exclusive financial advisor to Tall
City for this transaction and Bracewell & Giuliani acted as legal
counsel.
About Tall City
Tall City Exploration LLC is a Denham Capital-backed exploration and
production oil and gas company headquartered in Midland, Texas with an
additional office in Houston. The company’s primary activities include
the pursuit of acquisitions and the exploration and development of
upstream oil and gas assets in the Permian Basin of West Texas.
About 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. For more
information about Denham Capital, visit www.denhamcapital.com.
About Moss Creek Resources
Moss Creek Resources, LLC was a recently formed entity by Blue Whale
Energy North America Corporation for the purposes of this transaction.
Blue Whale is a US subsidiary of Blue Whale Energy Limited, an energy
investment company based in Beijing, China. Blue Whale is engaged in the
acquisition of upstream oil and gas properties in the United States and
Canada. For more information about Moss Creek Resources or Blue Whale,
visit www.bluewhalena.com.
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