April 19, 2017 • Volume 10, No. 06 CAPITALMARKETS Serving the marketplace with news, analysis and business opportunities Vantage Energy Acquisition on target to raise over $550MM NuStar raises $644 million, Third SPAC IPO this year, following Silver Run II & Kayne buying Navigator Vantage Energy Acquisition Corp. priced its April 11 initial public offering of 48 NuStar Energy LP sold 12.5 million million units at $10 each, grossing $480 million. A 45-day overallotment option for an common units at $46.35 each for gross additional 7.2 million units would bring the blank check company’s gross proceeds up to $552 proceeds of about $579 million. UBS million. The company, sponsored by NGP Vantage Energy LLC, will Securities led the syndicate, which focus on identifying a suitable business in the energy sector with which it also took up the could combine. Vantage is the third special partnership’s entire Units consist of one common share and purpose acquisition company to transact 1.875 million common one-third common purchase warrant. an IPO this year, following Riverstone units in the greenshoe, bringing total Holdings’ Silver Run Acquisition II and Kayne Anderson Acquisition Corp. (see below). net proceeds raised to about $644.2 The size of Vantage’s IPO was increased from initial thoughts of 40 million units. million. NuStar, which trades on NYSE The SPAC’s units started trading on Nasdaq on April 11 under the symbol VEACU. under the symbol NS, will have more Each unit comprises one Class A common share and one-third of a warrant to buy than 93 million units outstanding with another Class A common share at $11.50 each. Continues On Pg 4 the greenshoe exercised in full. The Blackstone-backed Vine Resources plans a $500MM IPO Increased from initial 10.5MM unit offering, Greehey buying $15MM. Another Blackstone vehicle, Tapstone Energy, also registers for offering Vine Resources Inc., a pure-play natural gas company developing the Haynesville partnership increased its offering from and Mid-Bossier shale plays, registered $500 million of Class A common shares on 10.5 million units. William E. Greehey, April 10 that it intends to sell to the public through underwriters Credit Suisse and chairman of general partner NuStar GP, Morgan Stanley. The Plano, Texas company plans to list its common LLC, bought $15 million worth of the stock on NYSE under MLP’s common units in the offering, and the symbol VRI. No pricing terms Blackstone formed Vine to buy Shell the GP increased its stake to maintain the assets in Haynesville three years ago. were disclosed. required 2% interest. Continues On Pg 13 Vine will take a holding company structure following the offering, with its sole material asset being membership interests in Vine Resources Holdings LLC, which DEALS FOR SALE will own all the limited partnership stakes in operating subsidiary Vine Oil & Gas LP, a partnership formed by Blackstone Energy Partners and some of its affiliated funds. NORTH LOUISIANA SALE PKG The holding LLC will also own all of the outstanding equity in the LP’s general partner 2-Packages. Vine Oil & Gas GP LLC. Continues On Pg 18 HAYNESVILLE SHALE PP COTTON VALLEY & HOSSTON Refrac & Recompletion Upside. ~750 Elliott wants BHP to spin off US oil biz, make other changes Operated & NonOperated WI Available BOED Current Net Production: ~750 BOED Activist investor likes some completed streamlining efforts, wants more FLEXIBLE SELLER (OP OR NONOP) Activist shareholder Elliott Management Corp., which owns 4.1% of BHP Billiton PP 9049PKG Plc, wants to separate the company’s $22 billion oil and gas business from the rest of the operations. It proposed this action along with ending the company’s dual-listing SOUTHEAST TEXAS NONOPERATED status, keeping London trading and switching off its listing 51-Active Wells. 15,722-Gross Acres. BRAZOS COUNTY on the Australian EAGLEBINE & AUSTIN CHALK BHP's Nasser leaving this year, Stock Exchange, in its home country. Stable PDP Component. company unlikely to do act before then. PP Elliott’s letter to BHP management was Inventory Of Repeatable PUD Locations. made public April 10, along with a disclosure by BHP that it had been discussing Contiguous Acreage Is >98% HBP. ~125 10% NonOperated WI; 7.5% NRI BOED options with Elliott for months and a statement from the company explaining that risks Net Production: 108 BOPD & 118 MCFD and expenses related to the proposals surpassed any benefit it could see. Avg Net Cash Flow: ~$119,000/Month BHP’s oil and gas portfolio, which is managed in Houston, produces about 660,000 Est Net Proved Reserves: ~1.5 MMBOE boe/d. The company is the largest overseas owner of US oil and gas assets. Elliott said OFFERS DUE: APRIL 28, 2017 that the portfolio has been detrimental to the company during the oil slump, and that its PP 9980DV suggestions could help increase shareholder value by about 50%. PLS tracks thousands of deals Elliott agreed with BHP's 2015 spinoff of South32 Ltd., taking metal, coal and some for sale www.plsx.com/listings oil assets with it and streamlining BHP to 19 core assets from 40. Continues On Pg 17 All Standard Disclaimers & Seller Rights Apply. CAPITALMARKETS 2 April 19, 2017 Capitalize Equity 2017 IPO activity up on strength of SPACs, Capitalize tracks ■ Abilene, Texas-based E&P Cardinal Companies with assets could take the lead anytime this year Energy Group, Inc. placed 4.6 million Five upstream IPOs so far this year have attracted an aggregate of nearly $2.3 5% Series D preferred shares privately at billion in investor funds, as the market rebounds from two dismal years of almost no $1.00 each with EOI Eagle Operating, IPO activity. While it’s too early to tell just how the trajectory for 2017 will play out, Inc. on April 12. The even at just five, IPO activity in the upstream sector YTD surpasses all of last year’s by dividend is cumulative one deal and 46% more in equity sold, according to data compiled by PLS’ Capitalize. and may be paid or Three of the five companies that conducted IPOs, though, have no accrued at Cardinal’s discretion. The assets, at least not yet. They’re special purpose acquisition companies- shares convert into 55% of the 83.4 -Silver Run Acquisition II, Kayne Anderson Acquisition Corp. and the latest, Vantage million issued and outstanding common Energy Acquisition Corp., which have promised investors who poured in a combined shares of the company. Cardinal will $1.73 billion combinations with compelling upstream opportunities or their money back. use proceeds to retire convertible notes, SPACs generally have two years to deliver on the promise of a business acquire EOI Eagle Operating assets, combination after raising the funds without a specific business target disclosed. They further develop existing properties and issue units containing a share and either a whole or part of a warrant. The low IPO rate new oil and gas leases. Capital City the past few years created an environment conducive to SPACs as bankers capitalize Securities brokered the placement. on investors’ appetites for new deals. The rate of SPAC formation in a more IPO- ■ Basic Energy Services, Inc. filed friendly environment will likely diminish, if history is any indication. an SEC Form S-1 registration covering Jagged Peak Energy started the year off in January with a $474 million IPO raise. $1.0 billion in securities to be offered The company hit the market at $15 a share but was trading at $13.04 at the end of Q1. from time to time in one or more offerings. In February, Kimbell Royalty Partners debuted at $18 a unit to raise $90 million The shelf registration covers common and and was trading at $19.05 at the end of Q1. Jagged Peak owns physical assets while preferred stock, senior and subordinated Kimbell owns royalties, as its name suggests. debt securities, warrants, units and Last year’s IPOs: WildHorse Resource Development Corp. went off at $15 last guarantees on behalf of the company and December and traded at $12.44 at the end of Q1 while Extraction Oil & Gas ended Q1 at 27 co-registrants. $18.55 a share after IPOing at $19 last October. Two SPACs that both hit the market at $10 a unit—Silver Run Acquisition and KLR Acquisition—Silver Run has combined with ABOUT PLS Centennial Resource Development and traded at $18.23 at the end of Q1, while KLR is in the midst of combining with Tema Oil & Gas and traded at $10.31 at the end of Q1. CapitalMarkets is published every three weeks by PLS Inc. The IPO market will continue to be affected by oil prices, world events and industry activity, same as it always has been. Generally, though, investor confidence is up and PLS CapitalMarkets covers the energy finance sector with information & analysis with it, the appetite for IPOs, the new and deferred. of budgets, spending, financial performance and tracking trends in available capital from Upstream IPOs YTD 2017 vs. FY16 commercial banks and other providers. In addition the Capital report has deals for Net Price Value Proceeds Shares per sale, coded alpha-numerically. Date Company Ticker ($MM) ($MM) (in MM) Share To obtain additional PLS product details, Vantage Energy drill www.plsx.com/publications. 4/12/17 VEAC $480.00 $453.60 48 $10.00 Acquisition Corp* PLS Inc. Kayne Anderson 3/30/17 KAACU $350.00 $330.75 35 $10.00 One Riverway, Ste 2500 Acquisition Corp* Houston, Texas 77056 3/24/17 Silver Run Acquisition Corp II* SRUNU $900.00 $850.50 90 $10.00 2/6/17 Kimbell Royalty Partners LP KRP $90.00 $84.38 5 $18.00 713-650-1212 (Main) 1/30/17 Jagged Peak Energy Inc JAG $473.99 $447.92 31.6 $15.00 713-658-1922 (Facsimile) Total $2,293.99 $2,167.15 To obtain additional listing info, contact us Wildhorse Resource 12/15/16 WRD $412.50 $390.33 27.5 $15.00 at 713-650-1212 or [email protected] Development Corp with the listing code.