Double Eagle announces $ 6.4 billion divestment in Midland Basin
FORT WORTH, Texas – (COMMERCIAL THREAD) – Double Eagle III Midco 2 LLC (the “Company” or “Double Eagle”), 100% owned by DoublePoint Energy, LLC (“DoublePoint”), announced that it has entered into a definitive purchase agreement for sell all leasehold interests, subsidiaries and related assets to Pioneer Natural Resources Company (NYSE: PXD) (“Pioneer”). This transaction is valued at approximately $ 6.4 billion as of April 1, 2021, comprising approximately 27.2 million Pioneer common shares, $ 1 billion in cash and approximately $ 0.9 billion in debt and liabilities. The transaction has been unanimously approved by each company’s board of directors and is expected to close in the second quarter of 2021, subject to customary closing conditions and regulatory approvals. Double Eagle is supported by equity commitments of funds managed by subsidiaries of Apollo Global Management, Inc. (NYSE: APO), Quantum Energy Partners, Magnetar Capital and Blackstone Credit.
Pioneer will issue approximately 27.2 million common shares as part of the transaction with an additional $ 1 billion in cash. After closing, the existing shareholders of Pioneer will own approximately 89% of the combined company and the current owners of DoublePoint will own approximately 11% of the combined company. Pioneer plans to fund the cash portion of the purchase price with a combination of available cash and existing borrowing capacity under its revolving credit facility.
The transaction is structured as the acquisition by a subsidiary of Pioneer of 100% of the limited liability company interests of DoublePoint’s wholly owned subsidiary, Double Eagle III Midco 1 LLC.
Cody Campbell and John Sellers, Co-CEO of DoublePoint, said, “We are proud and appreciate the work our team has done to build a business and asset base of unmatched quality that truly cannot be. reproduced. We are honored to have the opportunity to combine our business with Pioneer, whom we have long admired and consider to be the premier operator in the Midland Basin. The fit and synergies are clear, and we look forward to working with Pioneer to continue to create value.
Geoffrey Strong, Senior Partner and Co-Head of Infrastructure and Natural Resources at Apollo, said: “The combination of Pioneer and DoublePoint is compelling from a financial and operational perspective and is a perfect fit for DoublePoint. This acquisition continues the trend of consolidation in the prolific Permian basin, combining two complementary footprints in a transaction with synergies both in terms of turnover and profit.
Dheeraj Verma, President of Quantum Energy Partners, added, “Quantum feels very fortunate to have had the opportunity to partner with John, Cody, Josh, Blake, Garrett and their team. Double Eagle has built a world-class business through solid execution and unmatched creativity. In addition, we are delighted to be shareholders of Pioneer because we strongly believe in their strategy of generating free cash flow which allows a competitive base and a solid variable dividend. ”
JP Morgan Securities LLC acts as principal financial advisor to Double Eagle and its sponsors, with Citi and RBC Capital Markets also acting as financial advisers. Vinson & Elkins LLP and Alston & Bird LLP are legal advisers to Double Eagle.
DoublePoint is a Fort Worth, Texas-based upstream oil and gas company led by the Double Eagle management team in partnership with FourPoint Energy. DoublePoint is supported by equity commitments of funds managed by affiliates of Apollo Global Management, Inc., Quantum Energy Partners, Magnetar Capital and Blackstone Credit.
About Apollo Global Management, Inc.
Apollo is a leading global alternative investment manager with offices in New York, San Diego, London, Houston, Bethesda, Los Angeles, Frankfurt, Luxembourg, Madrid, Singapore, Hong Kong, Tokyo, Shanghai, Delhi and Mumbai . Apollo had approximately $ 455 billion in assets under management as of December 31, 2020 in its various affiliated private equity, credit and real estate funds. For more information on Apollo, please visit www.apollo.com.
About Quantum Energy Partners
Founded in 1998, Quantum Energy Partners is a leading provider of private capital to the global energy industry, having managed with its subsidiaries more than $ 17 billion in equity commitments since its inception. For more information on Quantum, please visit www.quantumep.com. For Investor Relations, please contact Michael Dalton at (713) 452-2000.
About Magnetar Capital
Founded in 2005, Magnetar is a leading alternative asset manager with approximately $ 12.9 billion in assets under management as of January 2021. Magnetar’s Energy and Infrastructure group actively invests in the North American industry. energy and infrastructure for over 15 years and has committed over $ 6 billion. through more than 60 private investments in energy, infrastructure and renewable energies. The company is headquartered in Evanston, Illinois, with offices in London and Houston.
This press release contains forward-looking statements based on Double Eagle’s current expectations that involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and may include words such as “believes”, “will”, “expects”, “anticipate”, “intend” or similar words or phrases. Forward-looking statements contained in this press release include, without limitation, statements regarding the proposed offer and the intended use of the product. No forward-looking statement can be guaranteed. Many risks, uncertainties and other factors can cause actual results to differ materially from those expressed in any forward-looking statement.