Osprey Energy Acquisition Corp. announced today that it has reached a definitive agreement to acquire assets held by Royal Resources, a Blackstone owned entity, in exchange for $400 million cash and an ownership stake representing 47% of the outstanding common stock.
The acquired assets from Royal Resources represent 100% of Blackstone’s mineral interests in the Eagle Ford Shale.
The newly formed company will be called Falcon Minerals Corporation and has been valued at approximately $894 million. The company will be led by Osprey’s management team—Jonathan Cohen, Edward Cohen, Daniel Herz. It will be structured as a C-corporation.
The Board of Directors will be comprised of:
- 6 Blackstone appointed directors
- 2 appointed by the holder of Ospreys founder shares
- 3 Independent directors
Blackstone may earn an additional 10 million common units of Falcon Minerals Operating Partnership (together with an equivalent number of Class C common stock of Falcon Minerals Corporation) if the Falcon Minerals Class A common stock trades above $12.50 per share for 30 days on a volume-weighted average basis, as well as an additional 10 million common units of Falcon Minerals Operating Partnership (together with an equivalent number of Class C common stock of Falcon Minerals Corporation) if the Falcon Minerals Class A common stock trades above $15.00 per share for 30 days on a volume-weighted average basis. These stipulations are still subject to change as per the definitive agreement.
Falcon Minerals by the numbers
- 251,000 gross unit mineral acres where royalties are held
- Net production 1st quarter 2018: 4,764 BOE/day
- New wells coming online are approaching 7,000 BOE/day
- Currently 1,789 producing wells
- 3 Largest operators: ConocoPhillips, EOG and BHP/Devon
- 3,000+ locations each with an IRR of greater than 100% to the operator across Karnes, DeWitt and Gonzales counties
- Expects to generate cash margins of 90% +
Financing
Osprey has entered into agreements to sell approximately 11.5 million shares of its class A common stock at $10.00/share in a private placement. Investors included will be leading financial institutions and Osprey Management. Additionally, Osprey has received contractual commitment from the investors of the private placement, who hold approximately $75 million in Osprey common stock, that they will retain their shares through closing. The private placement is expected to close concurrently with the Royal transaction.
Osprey has also entered into a debt commitment agreement, where lenders have committed to Osprey upon closing a $500 million revolving credit facility with an initial $115 million borrowing base. Once the transaction has been completed Falcon Mineral’s Class A common stock will be listed on the New York Stock Exchange.
