The raise of up to $2 billion is offering units for $20 each.
Aubrey McClendon has partnered with REIT-fund managers to offer units in a new oil- and gas-acquisition and exploitation company, American Energy Capital Partners LP. The raise of up to $2 billion is to purchase producing and non-producing properties onshore the U.S.
Units are to be priced at $20 each and won’t be publicly traded, according to the S-1 filing with the SEC on Friday.
In brief, the partnership is managed in a services contract by McClendon’s Oklahoma City-based AECP Management LLC, which he formed in July after leaving shale-play leader Chesapeake Energy Corp., which he co-founded in 1989.
The general partner, American Energy Capital Partners GP LLC, is led by Nicholas Schorsch and Bill Kahane, whose American Realty Capital Trust Inc. has led the formation of six public and five non-public REITs beginning in 2007 and merged with Realty Income Corp. this past January. The general partner also owns the new company’s limited partner.
Schorsch and Kahane also control the offering’s marketer, Realty Capital Securities LLC. Edward Weil Jr., Nicholas Radesca and Peter Budko, three former officers of the pair’s REITs, will be executive officers of the new E&P company.
American Energy aims to buy working, leasehold, royalty, overriding royalty, production-payment and other interests in oil and gas properties. “We have not identified any oil and gas properties we will acquire at this time,” it reported Friday.
The S-1 mentions McClendon’s personal oil and gas interests in Chesapeake’s Founders Well Participation Program in a glossary of definitions but does not mention how these will be relevant to the new company.
Distributions of $1.20 a year per unit, paid monthly, are targeted. Assets accumulated are to be divested within five to seven years of the raise with net proceeds paid to unit-holders.
As manager, McClendon’s company will be responsible for procuring acquisition candidates, financing, operating properties, divesting, hedging and other traditional E&P responsibilities for a monthly fee equivalent to 3.5% of the equity raise on an annualized basis until the offering and 4% annually after in addition to fees for buying and selling properties and procuring financing. The general manager is to be paid 1% monthly, annualized.
Offering costs are expected to be 11.5% of the total raised with 7% paid in sales commissions and 3% to the dealer-manager, plus 1% to the general partner and 0.5% to McClendon for their fees and expenses related to the offering.
McClendon’s new company has 125 employees to date.
–Nissa Darbonne, Editor-at-Large, Oil and Gas Investor, OilandGasInvestor.com, Oil and Gas Investor This Week, A&D Watch, A-Dcenter.com, UGcenter.com. Contact Nissa at ndarbonne@hartenergy.com.
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