Riverstone-Backed Driller Pays $855 Million for Texas Oil Fieldsby
Energy-focused buyout firm Riverstone Holdings LLC agreed to acquire oil-field assets in West Texas from Silverback Exploration LLC for about $855 million in cash.
The purchase in the coveted Permian Basin oil region is expected to close on Dec. 30. The deal includes about 35,000 net acres and is being made through Riverstone-controlled Centennial Resource Development Inc., Denver-based Centennial said in a statement Monday. The land is next to the oil explorer’s existing acreage in Reeves County.
"While we did not expect to make such a significant acquisition so quickly, we could not pass up the opportunity to accretively add core acreage offsetting our existing Centennial assets at such a compelling price," Centennial Chief Executive Officer Mark Papa said in the statement.
More than $100 billion has been raised since mid-2014 for energy equity and debt investments, according to research firm Preqin Ltd., as dealmakers seek to take advantage of a two-year slide in oil prices by buying assets on the cheap. Riverstone finished gathering $7.7 billion for its fifth global energy and power private equity fund in 2013. Since then the firm has added executives dedicated to energy credit and capital markets.
Silverback is an oil and natural gas exploration company formed in 2013 with the backing of EnCap Investments LP, which was said to be seeking a buyer for the driller. Silverback, which operates in West Texas’ prolific Permian Basin, is said to be worth about $1 billion.
Undisclosed third parties will have the option to buy as many as 8,000 acres of the 35,000 in the deal at the same price Centennial pays, according to the statement. Centennial rose 9.8 percent to $16.81 at 10:09 a.m. in New York trading.