Simpson Thacher recently represented Midstates Petroleum Company, Inc. (“Midstates”) and Midstates Petroleum Company LLC in connection with the financing of its acquisition (the “Acquisition”) of certain interests in producing oil and natural gas assets, unevaluated leasehold acreage and related hedging instruments from Eagle Energy Production LLC (“Eagle”) for $650 million in cash and stock. Eagle is an independent energy company focused on exploration and development of oil and natural gas properties, with a focus on the Mississippian Lime formation in northwestern Oklahoma and southern Kansas.
The financing arrangements consisted of $600 million of Rule 144A/Regulation S 10.75% Senior Notes due 2020, $500 million of senior unsecured bridge commitments, which were replaced by the notes, and amendments to Midstates’ revolving credit facility to, among other things, provide for $35 million of interim non-conforming borrowing base loans prior to the close of the Acquisition and increase the borrowing base to $250 million after the Acquisition. In connection with the Acquisition, Midstates also issued 325,000 shares of its Series A Preferred Stock with an initial liquidation preference of $1,000 per share. The transaction closed on October 1, 2012.
Midstates is an independent oil and gas exploration and production company currently focused on the application of modern drilling and completion techniques to oil-prone resources in previously discovered yet underdeveloped hydrocarbon trends. First Reserve Management, LP (together with its affiliates, “First Reserve”), a leading private equity firm specializing in the energy industry, making both private equity and infrastructure investments throughout the energy value chain, owns a significant equity position in Midstates. Midstates is headquartered in Houston, Texas.
The Simpson Thacher team included Ed Tolley, David Azarkh and Amy Ward (Capital Markets) and Robert Rabalais, Richard Sitton, Matthew Einbinder, Erland Modesto and Peter Raish (Credit).
