Concho Resources (CXO) Update - April 3

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dan_s
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Joined: Fri Apr 23, 2010 8:22 am

Concho Resources (CXO) Update - April 3

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Houston-based private equity firms and other owners are selling their stake in two related portfolio companies, Midland, Texas-based Oryx Southern Delaware Holdings LLC and Oryx Delaware Holdings LLC, in a $3.6 billion deal.

New York-based Stonepeak Infrastructure Partners, which has an office in Houston, is the buyer, according to an April 2 press release. Sellers include affiliates of Houston-based Post Oak Energy Capital, Houston-based Quantum Energy Partners, Midland-based Concho Resources Inc. (NYSE: CXO), Oklahoma-based WPX Energy Inc. (NYSE: WPX) and other investors.

Oryx will retain its name, leadership team and headquarters in Midland. The largest privately owned midstream crude company in the Permian Basin, Oryx owns and operates a 1,200-mile network of pipelines and 2.1 million barrels of storage, according to the press release.

Post Oak, Quantum and a handful of other investors made their initial $300 million investment in Oryx in 2014, according to an archived version of Oryx’s website. The backers then reinvested in Oryx, creating the second company, in 2017, according to Post Oak's website.

Post Oak and Quantum generally invest in companies early in their life cycle, backing leadership teams trying to establish new companies.

Stonepeak, meanwhile, tends to invest in businesses that already have established assets and market positions, according to the company’s website.

“We look forward to the operational and capital support (Stonepeak) will provide our team as we continue to aggressively grow our footprint in the Permian Basin,” Brett Wiggs, Oryx’s CEO, said in the press release.

A Barclays-led group led, which includes Goldman Sachs, RBC Capital Markets and Jefferies LLC, is providing a $1.5 billion Term Loan B in support of the deal, according to the press release. The loan includes refinancing an existing Oryx credit facility and consolidating the two Oryx entities into a single borrower, according to the release.

Barclays, acting through its investment bank, also advised Stonepeak Infrastructure Partners on the deal. Sidley Austin LLP and Hunton Andrews Kurth LLP represented Stonepeak in the deal along with Simpson Thatcher & Bartlett LLP, Stonepeak's fund counsel.

Jefferies LLC and Citi were the financial advisers for Oryx and the sellers. Shearman and Sterling LLP and Vinson & Elkins LLP served as legal counsel to Oryx.
Dan Steffens
Energy Prospectus Group
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