In a rare natural gas deal, a private investor group led by family offices has taken ownership of Wyoming-focused PureWest Energy in a blockbuster acquisition.
The Rocky Mountain natural gas producer merged with an entity sponsored by the private consortium of investors called PW Consortium in a $1.84 billion cash transaction.
Denver-based PureWest Energy LLC’s existing management team and employees will remain in place and the company’s board will be reformed with PW Consortium representatives following the closing of the deal.
In a news release, PureWest CEO Chris Valdez said the private investor group’s backing will further strengthen the company’s natural gas platform in Wyoming’s Green River Basin.
“Our team has successfully consolidated operations on the Pinedale Anticline, showcasing a sustainable inventory runway,” Valdez said. “Moreover, we have positioned our brand as a prominent market leader in low methane certified gas and earned recognition as the best workplace in Denver.”
PureWest has amassed more than 110,000 net acres in and around the gassy Pinedale and Jonah Fields in Sublette County, Wyoming.
As of May 1, PureWest averaged equivalent gross production of 650 MMcf/d from approximately 3,400 operated wells in the Green River Basin, according to the company’s website.
Following the merger, PureWest “plans to increase its high-margin production through development,” company President and CFO Ty Harrison said.
E&Ps have announced several oil-focused transactions in the Lower 48 this year, but volatility in U.S. natural gas prices has slowed the M&A market for gas-focused deals.
Henry Hub natural gas prices are expected to average $2.66/MMBtu in 2023, down more than 58% from an average of $6.42/MMBtu last year, according to the latest estimates published by the U.S. Energy Information Administration on June 6.
RELATED: Oil, Gas Price Volatility Slows Upstream M&A Market
Family office interest
Harrison said that the unique capital structure of the deal, which includes family office equity and securitized debt, positions the company for long-term value creation.
The company closed on a third asset-backed securitization as part of the transaction, which included offering and selling $200 million worth of notes through a private placement.
PW Consortium members include A.G. Hill Partners LLC, Cain Capital LLC, Eaglebine Capital Partners LP, Fortress Investment Group, HF Capital LLC, Petro-Hunt LLC and Wincoram Asset Management, according to the release.
PureWest also divested some producing wellbores to investment vehicles managed by Wincoram as part of the deal.
PureWest was represented by Evercore as exclusive financial adviser and Vinson & Elkins as legal counsel. PW Consortium was represented by Guggenheim Securities as sole financial adviser and O'Melveny & Myers LLP, David B. Denechaud PLLC and Jackson Walker LLP as legal counsel.
Guggenheim also served as the sole book-running manager and placement agent for the debt offering.
RELATED: Wyoming-Focused PureWest Grows Market for Certified Gas through New Partnership
Recommended Reading
Burgum: Yes to US Power Supply, Reliability; No on Sage Grouse
2025-01-16 - Interior Secretary nominee Doug Burgum said the sage grouse is neither endangered nor threatened; he'll hold federal leases as scheduled; and worries the U.S. is short of electric power and at risk of losing the “AI arms race” to China and other adversaries.
VanLoh: US Energy Security Needs ‘Manhattan Project’ Intensity
2025-02-06 - Quantum Capital Group Founder and CEO Wil VanLoh says oil and gas investment, a modernized electric grid and critical minerals are needed to meet an all of the above energy strategy.
Chevron’s Wirth: Rapid Transitions in Energy Strategy ‘Not the Right Policy Approach’
2025-03-10 - Relying on the president, whoever it is, leads to a wildly inconsistent energy policy in the U.S., Chevron CEO Mike Wirth said at CERAWeek by S&P Global.
Corrolytics Diagnoses Corrosive Microbes Before Symptoms Appear
2025-03-18 - Cleveland startup Corrolytics offers a solution to detect microbial corrosion rates on site and in near-real time—and head off a problem that costs trillions of dollars to industrial assets worldwide.
Hamm: Interior, DOE Leadership is a ‘Dream Team’
2025-02-06 - Harold Hamm, U.S. energy policy influencer and founder of wildcatter Continental Resources, said his top choices of Interior Secretary Doug Burgum and newly confirmed Energy Secretary Chris Wright will be a “dream team of unimaginable proportions.”
Comments
Add new comment
This conversation is moderated according to Hart Energy community rules. Please read the rules before joining the discussion. If you’re experiencing any technical problems, please contact our customer care team.