M&As this week: Chesapeake, Denbury Resources, Park Energy

Chesapeake Energy has entered an agreement with WildHorse Resource Development to acquire the latter for $3.9bn.

The transaction also includes the assumption of WildHorse’s debt of $930m.

WildHorse shareholders will either get 5.989 shares of Chesapeake’s common stock or 5.336 shares of common stock, along with $3 in cash in exchange for each share held by them.

Chesapeake and Wildhorse shareholders will respectively own 55% and 45% interests in the combined company.

The acquisition will strengthen Chesapeake’s position in the Eagle Ford Shale and Austin Chalk formations in south-east Texas, US. It will also increase its production capacity from 160,000 barrels per day (bpd) to 170,000bpd by 2020.

Chesapeake is a petroleum and gas exploration and production company, while Wildhorse is an oil and natural gas company. Both firms are based in the US.

Denbury Resources has entered a deal to acquire Penn Virginia for $1.7bn.

Denbury will pay $400m in cash and issue 191.6 million shares, under the agreement. Shareholders of Penn Virginia will get 12.4 common stock shares of Denbury and $25.86 for each share held.

Shareholders of Denbury and Penn Virginia will respectively hold 71% and 29% interests in the combined company.

The acquisition will enable Denbury Resources to utilise Penn Virginia’s expertise in developing its Eagle Ford shale assets.

Denbury Resources and Penn Virginia are US-based oil and gas companies.

Park Energy has acquired Chesapeake Energy subsidiary Midcon Compression.

The acquired assets include a gas facility, natural gas compressors installed in artificial lift, wellhead compression, and gathering facilities.

The acquisition will enable Park Energy to establish a strategic position in the Midcontinent and South Texas regions by increasing its compression capacity by 150,000hp.

Regions Bank and BMO Harris Bank provided debt financing for the transaction and Winston & Strawn acted as legal transaction advisers.

Park Energy is a provider of wellhead compression, vapour recovery, and production monitoring services and a portfolio company of Rock Hill Capital, while Midcon Compression is a provider of natural gas compressors, equipment and services.

Surge Energy has completed the acquisition of Mount Bastion Oil and Gas(MBOG) for $320m.

MBOG was paid $145m in cash and 75.4 million in Surge’s common shares, under the transaction.

Macquarie Capital Markets Canada was the financial adviser for Surge Energy, while McCarthy Tétrault was the legal adviser and National Bank Financial was the financial adviser for MBOG.

Surge and MBOG are both onshore oil and gas companies based in Canada.