2009-09-24-2009-09-15-2009-11-30

Acquired company with interests in TX Permian Basin, Barnett shale, NM, UT & CO, gaining 33.2 MMBOE proved, 6,744 BOE/d.

In its continued quest to acquire oily assets, private-equity investment company Apollo Global Management LLC has closed its acquisition of Midland, Texas-based producer Parallel Petroleum Corp. (Nasdaq: PLLL) in a deal valued at approximately $483 million in cash and debt assumption. Apollo paid $3.15 per Parallel share in cash for total consideration of approximately $132 million, representing a premium of 56% over Parallel's average closing share price during the previous 30 days prior to the offer and 63% over Parallel's average closing share price during the previous 60 days. Apollo assumed approximately $351 million of Parallel debt. The deal was done via PLLL Holdings LLC, an entity formed specifically to acquire Parallel Petroleum, with Parallel surviving the merger. Parallel's stock is no longer listed. Parallel's primary areas of operation are the Permian Basin of West Texas and New Mexico, the North Texas Barnett shale, the onshore Gulf Coast of South Texas, East Texas and Utah and Colorado. Total proved reserves as of June 30 were approximately 33.2 million barrels of oil equivalent (60% proved developed producing; 4% proved developed nonproducing; 36% proved undeveloped; 72% oil). Net daily production for the second quarter averaged 6,744 barrels of oil per day equivalent. Apollo partner Sam Oh says, "We believe Parallel's high-quality assets and its outstanding management team will be a positive addition to our investment portfolio and we look forward to working with the company." Larry Oldham, Parallel president and chief executive, says, "Apollo's interest in the company is a clear recognition of the attractiveness of Parallel, its business plan and the success that has been achieved. Apollo has a strong track record of growing businesses. Under its ownership, Parallel will be better capitalized to execute its current business plan and develop new opportunities for growth." Apollo attempted to buy Permian producer Legacy Reserves LP in April before the offer was ultimately rejected. Bank of America Merrill Lynch Securities, Jefferies & Co. Inc., Stonington Corp. and Sunrise Securities Corp. were financial advisors to Parallel. RBC Richardson Barr and BNP Paribas were financial advisors to Apollo.