This week’s buyers: Warwick Partners, Williams, Ares Management

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Warwick Partners buys R/C Sugarkane

Warwick Partners II, LLC, an affiliate of Warwick Energy Group (“Warwick”), an Oklahoma City-based oil and gas company, announced last month the closing of its acquisition of R/C Sugarkane, LLC from Riverstone Holdings, LLC (“Riverstone”) by Warwick Partners II, LLC. The transaction will be funded by an ArcLight Capital Partners led consortium of equity investors which includes Prudential Capital Group, Kramlich Investment Company, Serengeti Asset Management, the Freeman Group and Kyle Bass with Hayman Partners.

R/C Sugarkane is a private upstream oil and gas company that owns 7,300 net acres in the core, liquids-rich window of the Eagle Ford Shale in South Texas as well as associated gathering and related midstream infrastructure. The company is currently producing approximately 2,400 net barrels a day of oil equivalent in Live Oak, Atascosa and Karnes counties.

Katherine Richard, CEO of Warwick, said: “The Eagle Ford Shale is a world class, liquids-rich resource play and through this acquisition we have acquired a multi-year drilling inventory that is both substantially de-risked and held by production. There has been extensive drilling and production on our acreage and we are exceedingly encouraged by the downspacing results and optimizations being achieved by our operators, ConocoPhillips, Marathon and BHP Billiton.”
“We’re excited about our relationship with Warwick Energy and the prospects of this partnership,” said Mark Bisso, Principal at ArcLight. “Kate has assembled a top tier management team and the company is well-positioned to leverage its established production and infrastructure as it enters into a systematic development program.”

Williams buys Access Midstream Partners

Williams (NYSE:WMB) today announced that it has agreed to acquire the 50 percent general partner interest and 55.1 million limited partner units in Oklahoma City-based Access Midstream Partners L.P. (NYSE:ACMP) held by Global Infrastructure Partners II (“GIP”) for $5.995 billion in cash.

At the close of trading on Friday, June 13, the 55.1 million LP units had a market value of $3.6 billion. Upon closing, Williams will own 100 percent of the general partner and 50 percent of the limited partner interests in Access Midstream Partners. This transaction follows Williams’ acquisition of its 50 percent GP interest and 23 percent LP interest in Access Midstream Partners in December 2012. Williams expects the acquisition to close in the third quarter of 2014. Following the closing of the acquisition, Williams plans to increase its third-quarter 2014 dividend by 32 percent to $0.56 per share.

Williams also today announced a proposal to merge Williams Partners L.P. (NYSE:WPZ) with and into Access Midstream Partners.

“Today, we’re announcing a series of steps designed to amplify the benefits of our existing relationship with Access Midstream Partners, an increase in our dividend and the acceleration of Williams’ move to a pure-play GP holding company of two leading master limited partnerships,” said Alan Armstrong, Williams’ chief executive officer.

“The proposed merger of Williams Partners and Access Midstream Partners, if consummated, would create an industry-leading, large-scale MLP with substantial positions across the midstream business – spanning natural gas gathering and processing, natural gas transmission pipelines, and NGL and petchem services. Our positions in these businesses provide clearly identified growth for the foreseeable future,” Armstrong said.

Ares Management buys BlackBrush Oil & Gas

Ares Management, L.P. (NYSE:ARES) announced today that its Private Equity Group has signed definitive agreements to acquire BBOG II Guarantor, L.P. (BlackBrush) from EIG Management Company, LLC and Tailwater Capital, LLC, on behalf of their respective managed funds.

BlackBrush has a successful history of acquiring and developing oil and gas assets across South Texas, which is one of the most productive oil and gas basins in the U.S. With new capital provided in conjunction with the transaction, BlackBrush plans to further develop its more than 160,000 net (360,000 gross) acre position. The transaction is expected to close in the third quarter of 2014 and is subject to customary closing conditions.

“We are excited to partner with the BlackBrush management team that has more than 30 years of operating experience and a proven track record in South Texas,” said Nate Walton, Principal in the Private Equity Group of Ares Management. “BlackBrush is a unique opportunity consistent with our strategy of investing in best-in-class management and high quality basins as part of the growth in domestic energy production.”

BlackBrush will continue to be led by its Co-Founder and Chief Executive Officer, Scott Martin. Co-Founder Phil Mezey will also remain involved as an advisor to BlackBrush.

“Partnering with the Ares private equity team provides us the capital to continue developing and growing our large asset base,” said Scott Martin, CEO of BlackBrush.

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