This week’s buyers: Whiting Petroleum, Exterran Partners, Global Infrastructure, Rosneft, Silver Lake, Cardinal Energy, Exterran Partners

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Whiting Petroleum Corporation buys Kodiak Oil & Gas Corp.

Whiting Petroleum Corporation (NYSE: WLL) and Kodiak Oil & Gas Corp. (NYSE: KOG) entered an agreement on 13 July according to which Whiting will acquire Kodiak in an all-stock transaction valued at $6.0 billion, based on the closing price of Whiting on July 11, 2014, and including Kodiak’s net debt of $2.2 billion as of March 31, 2014.

The transaction will create the largest Bakken/Three Forks producer with over 107,000 barrels of oil equivalent per day of production in the first quarter of 2014, 855,000 combined net acres and an inventory of 3,460 net future drilling locations.

The combined company’s leading oil-weighted platform will drive meaningful production and operational synergies through complementary acreage positions, the application of technological expertise and greater access to capital to accelerate drilling. In addition, the transaction materially enhances the combined company’s scale, providing a stronger credit profile and greater financial flexibility. The all-stock transaction will allow both Whiting and Kodiak shareholders to participate in the substantial upside potential inherent in the combination.

Under the definitive agreement, Kodiak shareholders will receive .177 of a share of Whiting stock in exchange for each share of Kodiak common stock they hold, representing consideration to each Kodiak shareholder of $13.90 per share based on the closing price of Whiting common stock on July 11, 2014. This represents a premium of approximately 5.1% to the volume weighted average price of Kodiak for the last 60 trading days. Following the transaction, shareholders of Whiting are expected to own approximately 71% of the combined company on a fully diluted basis, and shareholders of Kodiak are expected to own approximately 29%.

The Whiting senior management team will lead the combined company. Lynn A. Peterson and James E. Catlin will join the Board of Directors of the combined company at closing of the transaction.

Whiting has secured underwritten financing to increase its borrowing base to $4.5 billion with commitments totaling $3.5 billion. This amount is sufficient to provide for all current drawings under Kodiak’s credit facility and fund the combined company’s ongoing liquidity needs.

Exterran Partners buys MidCon Compression.

On 14 July, Exterran Partners has entered into an agreement to acquire natural gas compression assets from MidCon Compression, L.L.C., a subsidiary of Chesapeake Energy Corporation (NYSE:CHK), for approximately $135 million. The assets to be acquired include 162 compression units, with a total horsepower of approximately 110,000.

The majority of the units currently are being used to provide compression services to BHP Billiton Petroleum in Arkansas’ Fayetteville Shale. In connection with the acquisition, the contract operations services agreement with BHP Billiton Petroleum will be assigned to Exterran Partners effective as of the closing.

Exterran Partners and Exterran Holdings do not expect that the Omnibus Agreement between Exterran Partners and Exterran Holdings will be amended to adjust the caps on operating costs or selling, general and administrative costs as a result of this transaction.

The acquisition, which is expected to be financed using credit available under Exterran Partners’ revolving credit facility, is subject to closing conditions and is expected to close in the third quarter 2014.

Global Infrastructure Partners buys an equity interest in Freeport LNG Development, L.P.

Global Infrastructure Partners (GIP), an independent global infrastructure investor, announced on 14 July that its second fund, Global Infrastructure Partners II, has agreed to acquire from a consortium of institutional investors managed by Hastings Funds Management (USA), Inc. and Zachry American Infrastructure, LLC (the Sellers) an equity interest in Freeport LNG Development, L.P.

Freeport LNG is currently anticipated to be 25% at closing with no further ownership in Freeport LNG by the Sellers. The purchase price for the transaction is $850 million, subject to certain milestones and purchase price adjustments.

Freeport LNG is developing a three-train liquefied natural gas (LNG) export facility at its existing LNG receiving and regasification facility on Quintana Island, near Freeport, Texas. The transaction is expected to close in the fourth quarter of 2014 (following financial closing for Trains 1 and 2 of the Freeport LNG facility).

Rosneft buys Wetherford’s operations in Russia and Venezuela.

Weatherford International plc (NYSE: WFT) entered into agreements with Rosneft for the sale of the Company’s land drilling and workover operations in Russia and Venezuela.

The consideration is $500 million in cash. The Russian rig operations include 61 land drilling crews and a fleet of workover rigs, essentially pulling units while the Venezuela operations include 6 land drilling rigs. The rig staffing is approximately 7,800 in Russia and 375 in Venezuela and will be transferred to Rosneft at closing.

The agreement is another step in Weatherford’s previously announced plan to divest the Company’s non-core businesses. These rig operations generate roughly half of Weatherford’s total existing revenue in Russia and approximately one-third of Weatherford’s business in Venezuela. The remaining balance consists of Weatherford’s core product lines, which have in both markets consistently produced over time, good margins and strong capital attributes. The Company expects its core product line business in Russia to be developed further with joint commitments from Rosneft and Weatherford.

The sale is subject to customary closing conditions and regulatory approvals and is expected to close in the third quarter of 2014.

Silver Lake Partners buys Quorum Business Solutions.

Silver Lake Partners, the global leader in technology investing, and Silver Lake Kraftwerk, the firm’s energy and resource innovation strategy, announced on 14 July that they have agreed to acquire Quorum Business Solutions (Quorum) from funds managed by The Carlyle Group’s middle-market buyout team and Riverstone Holdings. Key Quorum management will also participate as equity partners in the new ownership structure. Quorum is the leading provider of software and services to manage operational, administrative, financial and transactional business processes for energy, renewables and natural resource industry segments.

The deal marks the first joint investment between Silver Lake Partners and Silver Lake Kraftwerk, as well as Partners’ first investment in the technology-enabled sectors of the oil and gas industry. Silver Lake’s capital investment will support Quorum’s continued growth and market leadership, including strategic acquisitions to enhance its functional capabilities and scope of products and services. Terms of the transaction were not disclosed.

Quorum provides software – including financial accounting, transaction systems, land & property management and trading & risk management, among others – for a diverse range of companies operating within the oil and gas supply chain, including the upstream, midstream and pipeline verticals. Since the company’s inception in 1998, Quorum has experienced continued growth through the deployment of efficient, cost effective solutions that help businesses meet vital performance goals. Quorum has completed over 975 successful energy information technology projects and provides ongoing support to over 185 energy industry clients.

The rapid growth of Quorum’s business has been accompanied by a significant rise in U.S. oil and gas production. During the current ‘Shale Revolution,’ the United States has recorded a 25 percent rise in natural gas production since 2010 and has overtaken Russia as the world’s largest producer of natural gas. According to the International Energy Agency, the U.S. also became the largest producer of crude oil and natural gas liquids earlier this year, surpassing Saudi Arabia.

The transaction is expected to close following the satisfaction of customary closing conditions and approvals.

The company was advised in the transaction by Credit Suisse, Hogan Lovells US LLP and Latham & Watkins LLP. Silver Lake was advised by Kirkland & Ellis LLP. RBC Capital Markets is providing debt financing for the transaction.

Cardinal Energy to buy acreage in Eagle Ford Shale.

Cardinal Energy Group, Inc. (OTCQB: CEGX) has announced the signing of a Term Sheet laying out the specific terms and conditions precedent to a final Purchase & Sale Agreement to acquire oil and gas lease interests on approximately 2,800 net acres, located in the Eagle Ford Shale formation underlying Gonzales and Wilson Counties in the central portion of the State of Texas.

The acquisition includes operating interests in ten producing wells, one salt water disposal well, production equipment, leases and drilling permits, together with all transferable intellectual assets held by Nordic Oil USA 1 LLLP necessary to the operation of the wells and leases.

Gonzales and Wilson counties are in the northern expansion area of the Eagle Ford Shale formation. The industry has been moving north into these areas and is having impressive results with some IP’s (Initial Production Rates) of 3,000 to 4,000 BOPD. The area also has other potential formations including the Austin Chalk and Buda.

Exterran Partners buys natural gas compression assets from MidCon Compression.

Exterran Partners has entered into an agreement to acquire natural gas compression assets from MidCon Compression, L.L.C., a subsidiary of Chesapeake Energy Corporation (NYSE:CHK), for approximately $135 million. The assets to be acquired include 162 compression units, with a total horsepower of approximately 110,000.

The majority of the units currently are being used to provide compression services to BHP Billiton Petroleum in Arkansas’ Fayetteville Shale. In connection with the acquisition, the contract operations services agreement with BHP Billiton Petroleum will be assigned to Exterran Partners effective as of the closing.

Exterran Partners and Exterran Holdings do not expect that the Omnibus Agreement between Exterran Partners and Exterran Holdings will be amended to adjust the caps on operating costs or selling, general and administrative costs as a result of this transaction.

The acquisition, which is expected to be financed using credit available under Exterran Partners’ revolving credit facility, is subject to closing conditions and is expected to close in the third quarter 2014.

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