US oil producers Chisholm and Gastar sign merger agreement

Oklahoma-based Chisholm Oil and Gas (Chisholm) and Texas-based Gastar Exploration (Gastar) have signed a definitive agreement for their merger.

The combined entity will operate as Chisholm Oil and Gas and be headquartered in Tulsa, Oklahoma.

It will have a net production capacity of around 20,000 barrels of oil equivalent per day (boe/d) and approximately 165,000 net acres, predominantly in Kingfisher County, Oklahoma.

The two companies consider Gaster’s assets to be synergistic to their upstream operations, in addition to Chisholm’s stake in Great Salt Plains Midstream Holdings and a fully owned saltwater disposal subsidiary Cottonmouth SWD.

Chisholm currently operates three rigs on its property and a frac crew.

Established in 2017, Chisholm is supported by funds managed by some affiliates of the investment firm Apollo Global Management and management.

Gastar is owned through private equity funds affiliated with asset manager Ares Management.

Citigroup served as the financial adviser to Chisholm, and Vinson & Elkins and Paul, Weiss, Rifkind, Wharton & Garrison as legal advisers for the transaction.

Evercore and Tudor Pickering Holt acted as the financial adviser while Kirkland & Ellis served as legal adviser to Gastar for the merger transaction.

Chisholm is an exploration and production company focused on the development of oil and gas assets while Gastar is a developer and producer of oil, condensate, natural gas and natural gas liquids.

Expected to close in the third quarter this year, the transaction is subject to customary closing conditions.