The proceeds of the Vermilion Cliffs loan were used to acquire a 30-well package in the Permian Basin, Anvil Capital said. (Source: Hart Energy/Shutterstock.com)
Vermilion Cliffs Partners closed a multimillion-dollar financing to fund an acquisition in the Permian Basin, where the Fort Worth, Texas-based company’s position is focused.
The financing was comprised of an $11 million senior loan facility provided by Anvil Capital Partners. The New York-based private lender announced the loan on Aug. 12 along with the closing of a $35 million financing provided to Samson Oil & Gas Ltd.
An ongoing mandate by E&P investors for greater capital discipline has increasingly allowed Anvil to step in to provide producers with a possible capital solution, according to James Avery, a partner with the private credit special situations lending firm.
“We are excited to help our new customers meet their continued and increasing demand for stretch-[reserve-based lending] structures in this capital-constrained environment,” Avery said in a statement on Aug. 12. “We look to solve the gap between bank lenders, which have largely pulled back from the micro- and mid-cap market, and the typically more expensive mezzanine and preferred equity providers.”
The proceeds of the Vermilion Cliffs loan were used to acquire a 30-well package with an ancillary development tranche for future drilling. Founded by seasoned industry veterans Jeff Cook and Toby Darden, Vermilion Cliffs holds a 78,000-acre position in the Permian Basin, according to the company’s website.
Meanwhile, Anvil said the Samson transaction refinanced a $24 million outstanding reserve-based lending facility. The remaining $9.5 million from the financing will go toward balance sheet and asset development by the North Dakota operator based in Australia.
The financings, worth a combined $46 million, were invested out of the firm’s initial $150 million Anvil Energy Partners I fund. Anvil continues to seek strong sponsor partners with deep knowledge in the upstream E&P space who require acquisition, refinance and development capital for producing assets, according to Avery.
“We believe our ability to stretch lend up to 100% of PDP PV-10 makes us an extremely competitive alternative to other sources of capital while maintaining a comfortable pricing level for the company tailoring the cost to fit production and cash flows as we did with Samson and [Vermilion Cliffs],” he said.
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