Newpek LLC on Aug. 18 divested all of its assets in Texas, including all wells and leases in the Eagle Ford Shale and Edwards Shale.
The transaction has an implied value of $88 million for Newpek, resulting from the cancellation of its obligations in joint venture and operating contracts.
Newpek’s exit from the Lone Star State is part of a strategy being pursued by its parent company, Mexican conglomerate Alfa, to unlock value via its fully independent subsidiaries through the divestiture of oil and gas assets outside Mexico.
In a release on Aug. 18, Alfa said Newpek transferred its assets in Texas to Ensign Operating LLC and Reliance Eagleford Upstream Holding in exchange for a complete cancellation of its obligations. Further details of the agreement were not disclosed.
Sidley Austin LLP lawyers led by Tim Chandler represented Houston-based Ensign Natural Resources LLC in its acquisition of Eagle Ford Shale and Edwards acreage from Newpek and a concurrent renegotiation of its gathering and other midstream agreements with Ensign’s primary midstream provider.
Newpek also closed its administrative office in Irving, Texas, and moved remaining functions to Monterrey, Mexico, according to the company release.
Alfa added it will recognize an extraordinary gain of $58 million in third-quarter 2020 EBITDA as a result of the transaction.
Recommended Reading
Forty Under 40: Dane Karras, Noble Royalties Inc.
Today’s featured Forty Under 40 honoree is Dane Karras, senior vice president of operations and corporate development at Noble Royalties where he focuses on deploying the remaining capital for the company joint venture with Apollo.
EQT CEO Toby Rice Promotes Massive M&A in Appalachia
A year into remodeling EQT into an efficiency powerhouse, Toby Rice hangs out a “we buy Marcellus” placard with consolidation the goal.
Exxon Mobil to Focus on Guyana, Permian Assets Following $20 Billion Impairment Charge
Exxon Mobil will focus on Guyana, where it discovered up to 8 billion barrels of oil, offshore Brazil, and the Permian Basin oil field, the company said.