The deal, introduced by the 2 corporations on Tuesday, is the most recent in a string of mergers and acquisitions as a vaccination-led restoration in demand has boosted oil and fuel costs.
Each Independence, constructed and managed by personal fairness KKR’s Power Actual Property staff, and Contango have producing belongings throughout Rockies in Colarado, Permian in Texas and Mid-Continent basins.
Independence shareholders will personal about 76% and Contango buyers will personal the remainder of the mixed firm after the deal, which is predicted to shut within the third quarter or early fourth quarter.
The brand new firm is predicted to provide 108,000 to 114,000 barrels of oil equal per day in 2022, with adjusted core earnings between $750 million and $800 million.
Primarily based on Contango’s closing inventory worth of $5.62 on Monday, the mixed firm could have an preliminary fairness market capitalization of about $4.8 billion.
The mixed enterprise will likely be managed by KKR’s Power Actual Property staff and David Rockecharlie, head of KKR Power Actual Property, will function the chief government.
Contango’s chairman and largest shareholder, John Goff, would be the chairman of the mixed firm, which will likely be headquartered in Houston.
It expects to function below a brand new identify and a brand new ticker image and plans to record on the New York Inventory Change.
KKR will obtain a particular class of non-economic most well-liked inventory that gives it with the authority to nominate all board members in addition to some consent rights over actions reminiscent of debt incurrence, officer adjustments, mergers, acquisitions and divestitures.