Sale of Rock Oil Holdings LLC to SM Energy Company

Riverstone Holdings LLC (owned and managed by Riverstone Energy Limited) recently announced the complete sale of Rock Oil Holdings LLC to SM Energy Company after signing off a definitive agreement pursuant for an estimated $980 million in cash.  As per reports the transaction is subject to customary closing conditions which will be drawn to a close in early October. Riverstone was founded by David Leuschen and Pierre Lapeyre.

Under the terms, Riverstone will realize the gross cash proceeds from the sale approximating to $237 million, representing a gross multiple of invested capital on the company’s investment of $114 million. The company’s gross profit at the end of the sale is expected to be around $123 million which will be subject to tax and performance fee upon its closing.

As per a statement issued by SM Energy, this deal will increase the assets of the company in the Midland Basin in Texas to 46,750 acres and add to the net production of 4900 barrels of oil on a daily basis. SM Energy’s President and CEO Jay Ottoson said that the company has separate plans on running one rig in the acquired acreage in the fourth quarter of 2016 increasing it to a further two rigs by 2017.

SM’s energy shares were slightly up on the New York Stock Exchange in the early trading after being down by 5.1% before the opening bell on Monday. Riverstone Energy Shares were up by 2.7% on the London Stock exchange standing at 1068 pence at 1255 GMT.

Rock Oil Holdings LLC was formed in March 2014. This is a Houston and Denver-Based company. The idea behind forming the company was to apply the strategy of using its land and technical expertise in the North American region. The company has since then entered in many acquisitions to establish themselves firmly in the Midland Basin.

Leading the Rock Oil Corporation is chairman and CEO Kyle R Miller alongside President Jason Cansler who between themselves have a combined experience of more than 15 years in the oil industry.