Presidio Petroleum continued its expansion in the Anadarko Basin with the acquisition on Aug. 6 of Templar Energy LLC’s assets through a bankruptcy auction.

Templar Energy, backed by Ares Management LLC, had about 273,000 net acres located within the western Anadarko Basin of the Midcontinent region. The company’s acreage spans Texas and Oklahoma, including into the STACK play of central Oklahoma.

Facing about $426 million outstanding debt, Templar filed for Chapter 11 bankruptcy on June 1 seeking the sale of its assets through a 363 sale. The company had previously completed a comprehensive restructuring in 2016. 

The acquisition of Templar Energy’s assets by Presidio Petroleum was worth about $91 million, according to BMO Capital Markets. The company’s bid overtook a $65 million stalking horse bid made earlier by Tapstone Energy LLC.

The Templar transaction represents the second add-on acquisition for Presidio since Morgan Stanley Energy Partners’ initial investment in the company in 2018 as well as its expansion into the STACK play.

Headquartered in Fort Worth, Texas, Presidio has assets located in the Western Anadarko Basin of Texas, Oklahoma and Kansas. The company was formed in 2016 by industry veterans Chris Hammack (formerly of Trinity River) and Will Ulrich (formerly of Atlas Energy).

Ulrich, who serves as co-CEO of Presidio alongside Hammack, said Presidio was founded with a differentiated strategy of pursuing attractive risk-adjusted returns through operational excellence and capital-efficient growth via acquisition, not drilling activity.

“At Presidio, we view ourselves as the leading custodians of mature, long-lived oil and gas properties in the U.S., and we are confident in our ability to serve as responsible stewards while also achieving our financial and operational objectives,” he said in a statement.

Presidio entered the Anadarko Basin in 2018 through the acquisition of Midstates Petroleum Co. Inc.’s position for about $58 million. Last year, the company bolstered the position with the multimillion-dollar acquisition of Apache Corp.’s western Anadarko assets.

According to a statement by Hammack, this extensive asset base, further enhanced by the Templar acquisition, makes Presidio the “logical consolidator of the Anadarko Basin.”

“This acquisition is a logical extension of the asset optimization strategy we established upon founding Presidio, and we are excited to apply the knowledge gained from our previous two acquisitions in the basin and decades of operational experience to unlock value responsibly from the Templar assets,” he said.

The Templar acquisition includes substantially all of the oil and natural gas producing properties of Templar Energy and certain affiliates in the Anadarko Basin. Certain employees from Templar will also join the Presidio team.

Concurrent with the Templar transaction, Morgan Stanley Energy Partners made a second follow-on investment in Presidio Petroleum, which Robert Lee, the firm’s managing director, said supports the further strategic consolidation in the Anadarko Basin by Presidio.

“We believe Presidio’s prudent operational and risk management philosophy dating back to its inception has put the company on solid footing to continue to execute on acquisitions in a highly dislocated energy market,” Lee said in a statement.

Morgan Stanley Energy Partners is the energy-focused private equity business of Morgan Stanley Investment Management. Morgan Stanley Investment Management together with its investment advisory affiliates has more than 700 investment professionals around the world and $665 billion in assets under management or supervision as of June 30, according to the company release.

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