Fieldwood acquires more Gulf of Mexico assets

Riverstone’s portfolio company consolidates its position in the Gulf of Mexico Shelf with the $750m acquisition of SandRidge Energy’s Gulf of Mexico and Gulf Coast businesses.

Houston-based Fieldwood Energy, a portfolio company of private equity firm Riverstone Holdings, has acquired the Gulf of Mexico and Gulf Coast business unit of Oklahoma-based oil and natural gas company SandRidge Energy for $750 million, the company said in a statement.

The acquisition comes just three months after Fieldwood became the owner of the largest operated asset base on the Gulf of Mexico Shelf when it acquired Apache Corporation’s assets in October for $3.75 billion.

The SandRidge assets acquisition consolidates Fieldwood’s position with a pro forma leasehold comprising more than 650 blocks and net production of approximately 125,000 barrels of oil equivalent per day (boepd) from 500 blocks and 100,000 boepd previously.

As part of the transaction, which has an effective date of December 1, 2013, SandRidge will retain a 2 percent overriding royalty interest in two exploration projects, which according to SandRidge, are prospects in Green Canyon 65 (Bullwinkle area) and South Pass 60 blocks.

“This transaction […] demonstrates Fieldwood’s continued commitment to our acquire and develop strategy in the Gulf of Mexico,” Fieldwood president and chief executive Matt McCarroll said. “Additionally, the acquisition adds further geographic and geologic diversity by expanding our business to include an onshore Gulf Coast division as well as the deepwater Bullwinkle field.”

SandRidge decided to sell its Gulf of Mexico and Gulf Coast business unit in order to focus on its Mid-Continent growth strategy, according to a statement the Oklahoma company issued separately.

“This transaction provides us with pro-forma liquidity of over $2.0 billion, while maintaining a leverage ratio under 3.0x,” SandRidge’s president and chief executive James Bennett said. “Our growing cash flow plus the availability of additional reserves based borrowings are envisioned to fund our growth strategy,” he added.

The transaction is expected to close in the first quarter of 2014.

Founded by Matt McCarroll in late 2012, Fieldwood focuses on the acquisition and development of conventional oil and gas assets on the Gulf Coast and Gulf of Mexico. It is the second venture between McCarroll and Riverstone Holdings.

Riverstone Holdings had also invested in Dynamic Offshore Resources, a company McCarroll founded in 2008, which became one of the largest operators on the Gulf of Mexico Shelf. The company was sold to SandRidge Energy in 2012 for approximately $1.3 billion, according to the Fieldwood website.

Based in New York, Riverstone Holdings is a private equity firm focusing on energy and power with approximately $27 billion of equity capital raised. The firm conducts buyout and growth capital investments in the exploration and production, midstream, oilfield services, power and renewable sectors of the energy industry. It has committed approximately $24.9 billion to 105 investments in North America, Latin America, Europe, Africa and Asia.