Vortus Investment Advisors LLC said April 19 it has formed Stateline Operating LLC, an operating and development joint venture (JV) focused in the Permian Basin between Vortus and Flat Creek Resources LLC.

Headquartered in Fort Worth, Texas, the Stateline JV will be managed by Flat Creek with an initial focus on the development of its existing oil-rich assets in New Mexico’s Eddy County in the Delaware Basin. Terms of the JV transaction weren’t disclosed.

In a statement commenting on the partnership, Stateline CEO Mike McCracken said, “We are excited to partner with Vortus to develop one of the most economic plays in the United States with a focus on environmentally responsible operations.”

McCracken helped launch Flat Creek Resources in 2018 with an initial capital commitment of $400 million from EnCap Investment LP to focus on the consolidation and exploitation of core acreage in proven, economic basins initially within the Permian Basin in West Texas and New Mexico, according to a company release.

Prior to founding Flat Creek, McCracken served as COO for Black Mountain Oil and Gas where he oversaw A&D transactions, including the $700 million sale of its Delaware Basin assets to Marathon Oil Corp. in 2017. The remaining members of the founding Flat Creek management team include CFO Chandler Quisenberry, Vice President of Geology Rebecca Harrington and Vice President of Land Mike Gregory.

Both Harrington and Gregory joined Flat Creek from XTO Energy where they helped to oversee the development of the company’s Midland Basin asset. Quisenberry was previously principal at Avista Capital Partners, a $6 billion private equity firm with offices in Houston and New York.

“We are excited to partner with this management team, which has proven expertise and demonstrated success in this region,” Jeff Miller, managing partner at Vortus, said in a statement. “This partnership further demonstrates our focus on strong investor alignment.”

Also based in Fort Worth, Vortus is a private equity firm focused on the lower middle market upstream energy industry in North America. The company’s asset-based investment strategy targets privately negotiated transactions in the lower to middle market requiring approximately $25 million to $100 million of equity capital.

Brian Crumley, managing partner at Vortus, added, “Looking to the future, Vortus will continue to evaluate additional partnership opportunities with the Flat Creek team in the Permian Basin, as well as other attractive domestic oil and gas resource plays across the country.”

Kirkland & Ellis LLP served as legal counsel to Vortus for the JV transaction with a team led by Dallas partner Thomas Laughlin and Houston partner Shubi Arora. Meanwhile, Shearman & Sterling LLP provided legal counsel to Stateline with a team led by Houston partner Sarah McLean.

Comments