A group led by private equity firm KKR & Co. has made a deal to purchase Samson Investment Co., one of the largest private exploration and production companies in the United States, for $7.2 billion, the private equity giant announced Nov. 23.
Under the terms of the agreement, the investor group will acquire all of Samson's assets with the exception of its onshore Gulf Coast and offshore deep water Gulf of Mexico assets, which will continue to be owned by the Schusterman family. The investor group consists of KKR, Irving-based Natural Gas Partners, New York-based Crestview Partners and Japan’s Itochu Corp.
"We are very excited to support the continued growth of Samson. The Schusterman family has built a remarkable company with an extraordinary culture. We feel very fortunate to have the opportunity to carry on their commitment to employees, to communities, and to the safe and profitable development of domestic energy resources," said Henry Kravis, co-founder and co-CEO of KKR in a news release.
Kravis, a Tulsa native, said Samson will remain headquartered in the Oklahoma city.
"For Samson, Tulsa is home. It has always been a Tulsa company, and it will remain a Tulsa company,” he said.
Founded in 1971 by the late Charles Schusterman, Samson owns interests in over 10,000 wells of which it operates over 4,000 wells in the United States, with key positions in oil and liquids-rich plays such as the Bakken, Powder River, Green River, Granite Wash, Cana Woodford and Cotton Valley as well as in the Haynesville and Bossier gas shales.
The deal ranks as the second-largest global private equity transaction of the year, behind Blackstone Group's $9.4 billion purchase of Australia’s Centro Properties. In January, KKR acquired Barnett Shale assets from ConocoPhillips containing 93 billion cubic feet equivalent of total proved reserves.
Upon completion of the sale, Samson COO David Adams will be named CEO of Samson and the company will be renamed Samson Resources.
The agreement is subject to regulatory approval and customary closing conditions and is expected to be completed by the end of the fourth quarter 2011.
Bank of America Merrill Lynch; Barclays Capital Inc; BMO Capital Markets; Citigroup Global Capital Markets Inc; Credit Suisse; RBC Capital Markets; Tudor, Pickering, Holt & Co. LLC; and Wells Fargo Securities LLC acted as financial advisors to KKR, NGP and Crestview.
Mizuho and Evercore Partners acted as financial advisor to Itochu Corp.
Jefferies & Company, Inc. acted as financial advisor to Samson in connection with the sale of Samson.
Simpson Thacher & Bartlett LLP served as legal counsel to the Investor Group and the Dallas office of Jones Day served as legal counsel to Samson.