KKR-Led Investor Group Makes $7.2 Billion Play For Tulsa’s Samson
To buy company with interests in more than 10,000 wells & positions in Bakken, Powder River, Green River, Granite Wash, Cana Woodford, Cotton Valley, Haynesville and Bossier plays.
Private-equity juggernaut Kohlberg Kravis Roberts & Co. LP, leading a consortium of financial partners including Natural Gas Partners, Crestview Partners and Itochu Corp., is set to acquire 40-year-old, privately held Tulsa, Okla. producer Samson Investment Co. for $7.2 billion.
The investor group will acquire all of Samson’s assets excluding onshore Gulf Coast and offshore deep-water Gulf of Mexico assets, which will be retained by the Schusterman family, the owners of Samson.
Further terms of the deal were not disclosed, but earlier media reports had KKR owning 60%, with Itochu holding a 25% interest.
Samson, founded in 1971 by Charles Schusterman and one of the largest private E&Ps in the U.S., owns interests in more than 10,000 wells and operates some 4,000 across 18 states. It holds positions in the Bakken, Powder River, Green River, Granite Wash, Cana Woodford, Cotton Valley, Haynesville and Bossier plays. It has 1,200 employees with offices in Houston, Denver and Midland, Texas. Annual capex exceeds $1 billion.
“We are very excited to support the continued growth of Samson,” says Henry Kravis, KKR co-founder and co-CEO as well as a Tulsa native. “The Schusterman family has built a remarkable company with an extraordinary culture. We feel very fortunate to have the opportunity to carry on their commitment to employees, to communities and to the safe and profitable development of domestic energy resources.”
Investment bank Jefferies & Co. was chosen several months ago to seek a partner or buyer, with Korea National Oil Corp. and two independent E&Ps, one U.S. based and the other European, reportedly vying for Samson before KKR rose to the top, according to TheDeal.com.
Samson CEO Stacy Schusterman, daughter of the founder, says the company specifically sought a partner that would value both the company’s assets and people. “This group demonstrated its commitment to both. They recognize that maintaining our culture will best enable Samson to retain and build the strong team we have and thereby continue to profitably grow our asset base.”
The buyer group will keep company headquarters in Tulsa. Current Samson chief operating officer David Adams will become CEO, and the company will be renamed Samson Resources.
Adams says, “While Samson's employees and management will most certainly miss working with Stacy and Lynn Schusterman, we are very pleased that KKR, NGP, Crestview and Itochu are the partners that Stacy chose. Throughout this process, they have consistently demonstrated that they value the culture and the team that we created. I am confident that with their partnership, Samson will continue to prosper, provide rewarding careers and be an outstanding corporate citizen in each of the communities in which we work.”
KKR has also hired Claire Scobee Farley and David Rockecharlie as managing directors of oil and gas investments. Farley and Rockecharlie, both formerly with Jefferies and with E&P backgrounds, formed RPM Energy LLC to match energy investors with investments, and had backing from KKR.
Bank of America Merrill Lynch, Barclays Capital Inc., BMO Capital Markets, Citigroup Global Capital Markets Inc., Credit Suisse, RBC Capital Markets, Tudor, Pickering, Holt & Co. LLC; and Wells Fargo Securities LLC are financial advisors to KKR, NGP and Crestview. Mizuho and Evercore Partners are financial advisor to Itochu Corp. Jefferies & Co. Inc. is financial advisor to Samson. Simpson Thacher & Bartlett LLP are legal counsel to the investor group. Dallas-based Jones Day is legal counsel to Samson.
The deal is expected to close by year-end.