M&A

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    EQT/Rice Shareholders Make it Official – Merger Happens Nov 13

    Next Monday the largest natural gas-producing company in the these United States will be born–from the merger of EQT and Rice Energy, based in Pittsburgh. Yesterday the shareholders for both EQT and Rice voted to approve the merger/deal by overwhelming majorities. The megadeal was first announced back in June (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). Evil corporate raider Jana Partners tried to stop the deal–but failed, as they acknowledged earlier this week (see Corp Raider Jana Partners Admits Defeat Ahead of EQT/Rice Vote). Next Monday the transaction will be complete and the new EQT will produce more natural gas in the Lower 48 States than Chesapeake Energy, the current reigning champ. Some 84% of the EQT shareholders who voted, voted to approve the deal, and 74% of voting Rice shareholders voted in favor of the deal. What happens next? After the consummation of the merger on Monday, EQT CEO Steve Schlotterbeck said the company will immediately appoint a committee to look into…splitting the company. Yes, you read that right. Not splitting it back into EQT and Rice, but splitting it into upstream (drilling) and midstream (pipelines). Two companies will become one and then become two again. Go figure. A recommendation and decision about whether to proceed with a split will happen, according to Schlotterbeck, by “the end of the first quarter 2018.” There’s little doubt the decision will be “yes” on a split…
    Read More “EQT/Rice Shareholders Make it Official – Merger Happens Nov 13”

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    Corp Raider Jana Partners Admits Defeat Ahead of EQT/Rice Vote

    The guy who runs the investment firm Jana Partners, Barry Rosenstein, is a corporate raider. He invests millions in a company he’s targeted in order to get one or two people elected to the board of directors. Those people then agitate and force the company to lay off hundreds or thousands of employees, and sell off assets, in a bid to make the stock price jump. When the price does jump, corporate raiders like Rosenstein then sell their shares, making a profit on the new/higher price (buy low sell high). It may be legal, but we consider it immoral. In June, EQT, one of the biggest drillers in the Marcellus/Utica, announced a deal to buyout and merge in Rice Energy, another sizable M-U driller (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). A few weeks later Jana targeted EQT in an attempt to stop the deal (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Jana believes it could make a whole lot more money if the deal doesn’t go through, and instead if EQT splits itself in two–one half a drilling company, the other half a pipeline company (firing a bunch of people along the way). So Jana went on a smear campaign, making all sorts of wild accusations against EQT, including calling EQT management’s compensation structure “perverse,” and accusing the company of using “deceptive” maps of EQT and Rice acreage positions (see Corp Raider Continues to Trash Talk EQT/Rice Merger, Vote Set Nov 9). All the trash-talking and bullying didn’t worked. The deal will happen–this week–and Jana is now officially throwing in the towel. They will still vote against the deal with their shares, but they have withdrawn their proxy fight to enlist enough other shares to vote down the deal…
    Read More “Corp Raider Jana Partners Admits Defeat Ahead of EQT/Rice Vote”

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    Corp Raider Supports EQT/Rice Merger, but Lawsuit Still Looms

    In something of a good omen ahead of a vote on Nov. 9 by shareholders of EQT and Rice Energy to approve a merger, one of two EQT-shareholding corporate raiders, D.E. Shaw, supports the merger. In point of fact, Shaw has not opposed the merger since it was announced in June. Shaw’s “issue” has been that the merged EQT/Rice should immediately split itself in two–into upstream (drilling) and midstream (pipelines). Shaw’s pressure seems to be one of the (main?) reasons why EQT moved up the timing to consider such a split (see Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.). Last week EQT CEO Steve Schlotterbeck all but confirmed the company will split in two after a special committee formed to explore that option makes its final recommendation (see EQT CEO Signals Company Likely to Split in Two After Rice Merger). Evil corporate raider Jana Partners is still opposed to the merger and is fighting it tooth and nail. Jana may have some help. A flurry of lawsuits have been filed by shareholders opposing the merger–most of them going nowhere. However, one of the lawsuits, filed in Allegheny County Court, will go before a judge three days before the Nov. 9 vote. That lawsuit requests an emergency injunction against the vote. It’s possible the county judge could block the vote, giving Jana more time to whip up opposition…
    Read More “Corp Raider Supports EQT/Rice Merger, but Lawsuit Still Looms”

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    UGI Buys NatGas Pipeline Gathering System in NE PA

    UGI is a major utility company in Pennsylvania, providing natural gas and electric service to 700,000 Pennsylvania residents across the state. UGI, via its Energy Services subsidiary, operates natural gas storage facilities, compressor stations, LNG plants and local pipeline gathering systems. UGI operates several gathering systems in northeastern PA. Yesterday the company announced is has purchased an existing gathering system from Rockdale Marcellus for an undisclosed sum. The Rockdale gathering system consists of 60 miles of gathering lines–along with dehydration and compression facilities–located in Tioga, Lycoming and Bradford counties in northeast PA. The system was purchased, on paper, by UGI subsidiary Texas Creek, so the gathering system has been rebranded UGI Texas Creek. MDN has a map of the new system below…
    Read More “UGI Buys NatGas Pipeline Gathering System in NE PA”

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    TX Newpark Resources Buys Pittsburgh Well Services Group for $75M

    Texas-based Newpark Resources, a drilling fluids and specialty services company for the oil and gas industry, announced yesterday it is buying Well Service Group located in Robinson Township, near Pittsburgh, for $75 million. Well Service Group, a containment and well site service company, was founded in 2012 and has sold and serviced equipment for Newpark from the beginning. So it seems like a natural marriage. It is one company (Newpark) buying out one of its best distributors (Well Service Group). No word on potential layoffs due to the buyout, but we doubt there will be any. This is a relatively small deal as deals go in the oil patch…
    Read More “TX Newpark Resources Buys Pittsburgh Well Services Group for $75M”

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    US DOJ Demands Payments from GE re Unsold Water Biz

    In July, GE Oil & Gas completed its merger/buyout of oilfield services giant Baker Hughes (see Baker Hughes and GE Complete Merger, World’s 1st Fullstream Co.). As is typical in these kinds of megamergers, governmental agencies that review the deal make the deal contingent on certain requirements. In the case of GE/Baker Hughes, the U.S. Dept. of Justice demanded GE sell its Water & Process Technologies business. GE agreed, and lined up a buyer (Suez, a French waste and water group). However, the deal has not happened (yet), and because there is a delay in making it happen due to “various administrative challenges,” the DOJ is demanding GE make DAILY payments–to the DOJ–as an “incentive” to get the deal done. The amount of the payments is unspecified. Where will all that money go? We don’t know, but we can certainly imagine. What do swamp-dwellers do with free money?…
    Read More “US DOJ Demands Payments from GE re Unsold Water Biz”

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    Corp Raider Continues to Trash Talk EQT/Rice Merger, Vote Set Nov 9

    The disgusting corporate raiders at Jana Partners are fighting to the bitter end in their attempt to stop the merger/takeover of Rice Energy by EQT. In June EQT and Rice Energy announced that EQT will buy out and merge in Rice Energy, to create (in EQT) the largest natural gas-producing company in the United States (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). A few weeks later, so-called “activist investor” (i.e. corporate raider) Jana Partners, in league with the Cohen family (Atlas Energy) started a proxy fight to block EQT’s takover/merger with Rice (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Jana is the same company that recently helped Amazon in its hostile takeover of grocery company Whole Foods. Unfortunately (for Jana), their strategy isn’t working this time around. Over the past few weeks Jana has sent a couple of nasty letters to EQT’s board, making some rather wild claims. The tone of Jana’s communication is becoming more shrill as time goes on, as desperation sets in and a vote by EQT shareholders on the deal draws near (Nov. 9). The problem is the financial press picks up on these wild claims and repeats them, so yesterday EQT felt it necessary to (once again) respond and set the record straight–to debunk the lies Jana is spreading about the deal and about EQT’s past performance…
    Read More “Corp Raider Continues to Trash Talk EQT/Rice Merger, Vote Set Nov 9”

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    Pathfinder Resources Completes First Marcellus Deal

    Less than three weeks ago MDN told you about District 5 Investments, an energy-focused private equity firm based in Texas, which has formed a new subsidiary called Pathfinder Resources in order to invest in the Marcellus/Utica region (see Texas Private Equity Firm Forms to Invest in Marcellus/Utica). According to the initial announcement, Pathfinder will focus on acquiring “producing and non-producing oil and gas mineral interests, royalty interests and non-operated working interested” across the U.S., but with a keen interest in the Marcellus/Utica. The company has not wasted any time. According to the Pittsburgh Business Times, Pathfinder Resources has just closed its first deal in our region…
    Read More “Pathfinder Resources Completes First Marcellus Deal”

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    India’s RIL, Carrizo Sell NEPA Marcellus Assets for $210M

    Reliance Industries Limited (RIL) is the single largest company in India, and one of the largest energy companies in the world. RIL invested $3.5 billion in a Marcellus joint venture with Atlas Energy in 2010, and later battled Chevron to buy Atlas–but Chevron won, so RIL became a jv partner with Chevron. RIL currently has 3 U.S. shale joint ventures: the Chevron jv in the Marcellus (owns 40% of that acreage), a jv with Carrizo Oil & Gas in the northeast PA Marcellus (owns 60% of that acreage), and a jv with Pioneer Natural Resources in the Texas Eagle Ford (owns 45% of that acreage). Back in 2015, RIL signaled they are looking to dump all of their U.S. shale assets (see Indian Giant RIL Looking to Dump its Marcellus Joint Ventures). It took a few years, but earlier today Banpu, Thailand’s largest coal producer, announced that is has purchased all of the RIL/Carrizo jv (from both RIL and Carrizo) in northeastern PA–for $210 million. Does Banpu sound familiar? It should. This is the fifth investment Banpu, via its American subsidiary Kalnin Ventures, has made in the northeast Marcellus…
    Read More “India’s RIL, Carrizo Sell NEPA Marcellus Assets for $210M”

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    EQT Raises $3B in IOUs as Down Payment for Rice Energy Purchase

    On Wednesday, EQT announced the company has floated $3 billion (yikes!) of IOUs–called “notes” in the financial industry–with various due dates and interest rates payable, in order to make a cash payment due as part of their purchase of Rice Energy. The total deal is worth $8.2 billion, with EQT paying $6.7 billion and assuming Rice’s existing debt of $1.5 billion (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). This deal is moving ahead, over the objections of two different corporate raiders who own a considerable amount of EQT stock (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal and Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.). In addition to raising $3 billion in cash from IOUs, EQT is also tapping into its line of credit and the money it has socked away in its checking account to get this deal done…
    Read More “EQT Raises $3B in IOUs as Down Payment for Rice Energy Purchase”

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    Sprague Expands Fueling Footprint in Marc/Utica, Buys Coen Energy

    Here’s a business you might not think about nor associate with Marcellus/Utica drilling–fuel deliveries. If you own a home and live outside of an urban area, you know all about fuel deliveries, because you likely either burn fuel oil or propane to heat your home. What you may not know is that drilling operations need a similar service–diesel fuel deliveries (mostly) at drill pads, to run the engines that generate electricity to run drilling and fracking operations. And fuel deliveries to trucking fleets, to keep the trucks moving. Perhaps an unglamorous part of the business–but vital nonetheless. Fuel deliveries run 24/7 in the oilfield, just like every other activity associated with drilling wells. Sprague Resources, founded in 1870 (not a typo!), is one of the largest independent suppliers of energy and materials handling services in the Northeast with products including home heating oil, diesel fuels, residual fuels, gasoline and natural gas. Sprague has just bought out Coen Energy, headquartered in Washington, PA. Coen pretty much does the same thing, but specializes in servicing the fueling (and storage) needs of Marcellus/Utica drillers. No financial details were included in the announcement, other than Sprague expects the addition of Coen to its company will result in an extra $7-$8 million of revenue per year. Here’s the news about one competitor gobbling up another in order to expand its presence in the Marcellus/Utica…
    Read More “Sprague Expands Fueling Footprint in Marc/Utica, Buys Coen Energy”

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    Select Energy, Rockwater Energy Merger Delayed 2 Months

    Rockwater Energy Solutions is a “leading provider of comprehensive water management solutions to the North American unconventional oil and gas industry” and the only company that provides complementary chemistry products and expertise in connection with its water solutions. Rockwater operates in the Marcellus/Utica region, among other shale plays. Select Energy Services is a billion dollar oilfield services company with three main divisions: water services, rentals, and wellsite completions. They operate in every major shale play in the country, including the Marcellus/Utica. In July the two companies announced they are merging in an all stock swap deal (see Select Energy, Rockwater Merge to Create Huge Shale Water Provider). They originally thought the merger would be completed by Nov. 1st, however, the date has now been pushed back to Dec. 31st…
    Read More “Select Energy, Rockwater Energy Merger Delayed 2 Months”

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    Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.

    A second corporate raider is now making trouble for EQT and its planned purchase of/merger with with Rice Energy. In June, EQT and Rice Energy announced that EQT will buy out and merge in Rice Energy, to create (in EQT) the largest natural gas-producing company in the United States (see EQT Buys Rice Energy in $8.2B Deal, Becomes #1 Gas Producer in US). A few weeks after the announced merger, so-called “activist investor” (i.e. corporate raider) Jana Partners, in league with the Cohen family (Atlas Energy) started a proxy fight to block EQT’s takover/merger with Rice Energy (see Proxy Fight: Jana Partners, Atlas Tries to Stop EQT/Rice Deal). Instead of buying Rice, Jana is demanding that EQT split itself into two companies–upstream (drilling) and midstream (pipelines). Jana is now joined by a second group, a group that holds 4% of EQT’s outstanding stock–D.E. Shaw Group. Shaw is headed up by former Elliott Management head and corporate raider Quentin Koffey. As a reminder, raiders buy enough stock to get themselves a seat or two on the board of directors, so they can force a company to sell assets and fire people to drive up the price of the stock, lining their pockets because the raiders then sell the stock after the price goes up, moving on to the next target. Disgusting. And now Shaw, perhaps in league with Jana, is ganging up on EQT. So it’s no surprise that EQT has had to respond by issuing a statement that they’ve “accelerated” the timeline to explore the issue both Jana and Shaw are demanding–that the company split itself in two–upstream (drilling) and midstream (pipelines). That will, according to the money-grubbing raiders, “unlock shareholder value” (i.e. make them rich). Below we have EQT’s announcement, which came a day before Shaw sent the company a letter and a presentation (also below) that supposedly outlines how splitting EQT in two is best for everyone. At least Shaw is not demanding EQT pull out of the Rice Energy deal, as Jana is doing…
    Read More “Under Pressure, EQT Moves Up Timeline to Explore Splitting Co.”

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    Ridgetop Capital Raises $200M to Invest in Marcellus/Utica Leases

    Ridgetop Capital Partners, founded in 2007 and headquartered in the Pittsburgh area, is a private institutional investment firm focused mainly on the oil and gas space. That is, they raise money from rich people (and businesses) and invest that money in projects which they closely watch and influence, hoping to make their money back with a generous interest rate. A LOT of private money funds oil and gas development–there is nothing new or novel about Ridgetop. However, what is new and novel is that the company has just closed on another round of fundraising–chasing $200 million through the door–which they will now use to buy natural gas mineral rights (i.e. leases) in the Marcellus/Utica. The company previously invested ~$130 million in our region’s shale, snapping up ownership in over 30,000 acres (most, perhaps all of it, in joint ventures with major M-U drillers). Where will Ridgetop likely invest to buy new acreage? They’ve given us a big clue…
    Read More “Ridgetop Capital Raises $200M to Invest in Marcellus/Utica Leases”

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    Patterson-UTI Buying Directional Driller MS Energy for ~$222M

    Patterson-UTI Energy, an oilfield services company with major operations in the northeast, has just cut a deal to buy out a second company in a deal worth roughly $220 million. The company getting bought is MS Energy Services, a leading provider of directional drilling services in most U.S. shale plays, including a big presence in both the Marcellus and Utica Shale. It was only April of this year that Patterson completed a buyout of Seventy Seven Energy (SSE) in an all-stock deal worth $1.76 billion (see Patterson-UTI Energy Completes Merger with Seventy Seven Energy). SSE is the former Chesapeake Oilfield Operating company, the oilfield services subsidiary of Chesapeake Energy that Chessy spun out into its own company in July 2014 after it couldn’t find anyone to buy it. Since then, Patterson has absorbed and put to work SSE’s large drilling rig fleet. MS Energy is a much smaller competitor–with a specialization in directional drilling. The MS deal is similar to the SSE deal in that most of it is a stock swap. Patterson is giving MS Energy 8.8 million shares of stock worth (at yesterday’s opening value of $16.65 per share), $146.5 million. The deal also calls for an additional $75 million in cash. Add it together, and you get roughly $221.5 million. MS Energy’s CEO and COO are both getting jobs at Patterson as part of the deal. Here’s the lowdown on Patterson’s latest acquisition…
    Read More “Patterson-UTI Buying Directional Driller MS Energy for ~$222M”

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    Sale of Cabot’s WV-OH-VA Assets to Carbon NG Closing Sept 29

    Exactly one week ago MDN brought you the exclusive news of WHO is selling a bunch of conventional wells and leases (and pipelines) located in West Virginia, Ohio and Virginia to Carbon Natural Resources (see Carbon Natural Gas Buys Cabot’s Conventional Wells in WV-OH-VA). MDN was the only news source to identify Cabot Oil & Gas as the seller. The press release from Carbon Natural refused to identify the seller. Another news source has finally stepped forward to confirm what you read here a week ago. Argus Media has done some of their own sleuthing and found via pipeline filings with the Federal Energy Regulatory Commission, that indeed Cabot is the seller. Argus also includes some facts not in the original release–that the sale includes 780,000 acres of leases. Yikes! That’s more than 3/4 of a million acres! But just a reminder–it’s conventional (not shale) acreage. At least as far as we can tell. Finally, another new tidbit from Argus: the deal is expected to close on September 29th…
    Read More “Sale of Cabot’s WV-OH-VA Assets to Carbon NG Closing Sept 29”