Ajax Resources, LLC and Kelso & Company Partner to Acquire Permian Basin Assets from W&T Offshore, Inc.
Ajax Resources, LLC ("Ajax" or the "Company") and affiliates of Kelso & Company ("Kelso") announced that they have entered into a definitive agreement with W&T Offshore, Inc. ("W&T"; NYSE:WTI) to acquire W&T's interest in the Yellow Rose field in the Permian Basin of West Texas for $376.1 million, subject to customary closing adjustments. W&T will retain a one to four percent sliding scale residual overriding royalty interest in the field. The transaction is expected to close during the third quarter of 2015, with an effective date of January 1, 2015.
W&T's Permian Basin assets include approximately 25,800 highly contiguous net acres in Andrews, Martin, Gaines and Dawson counties in West Texas. For the month of July 2015, net production from the field averaged approximately 3,000 barrels of oil equivalent per day. The acreage position is ~90% held by production with substantial in-place infrastructure to support operations. Significant resource potential exists through multiple stacked pay horizontal drilling zones, and Ajax will benefit from extensive well control with over 200 vertical and horizontal wells drilled and currently producing across the property.
Forrest Wylie, Executive Chairman and investor in Ajax, stated: "Ajax will be my tenth energy transaction with the Kelso team, as they have been my partner for over a decade. I am excited to continue our successful relationship in pursuing this opportunity alongside the impressive Ajax management team we have assembled. This investment positions us with a substantial acreage footprint in one of the most prolific and low-cost oil basins in the U.S."
Ajax is a newly-formed, Houston-based oil and gas company backed by Kelso, established to acquire W&T's Permian Basin assets. Ajax is well-capitalized with a substantial equity commitment from Kelso. Kelso has a long-term perspective on the assets and has designed a flexible capital structure with substantial dry powder to optimally develop the acreage.
Kelso has assembled a best-in-class management team consisting of industry executives with significant operating experience in the Permian Basin. Ajax will be led by Executive Chairman Forrest Wylie and Chief Executive Officer Harvey Klingensmith, both of whom have built and led companies in the energy space. Mr. Wylie has 26 years of experience in the energy sector working for public E&P, offshore drilling, energy marketing and midstream businesses, and has served as CEO, Chairman or Board Member for multiple Kelso portfolio companies over the past 12 years. Mr. Klingensmith has over 40 years of operating experience in the oil and gas industry, and has drilled over 800 wells over the course of his career.
Jefferies LLC acted as sole M&A advisor and lead financial advisor for Kelso and Ajax, respectively. Tudor, Pickering, Holt & Co. also served as a financial advisor to Kelso as part of the transaction. Kirkland & Ellis LLP and Debevoise & Plimpton LLP served as legal advisors to Kelso. Thompson & Knight LLP served as legal advisor to Ajax.
About Kelso & Company
Kelso & Company is one of the oldest and most established firms specializing in private equity. Kelso differentiates itself from its peers given its successful 35-year investment track record, a long-tenured and stable investing team, a reputation as a preferred partner to management teams and strategics, and a significant alignment of interest with all of our partners. Since 1980, Kelso has raised a total of eight private equity funds, representing $9.8 billion of capital, and has made over 110 investments. Over the last 12 years, Kelso has invested over $2.0 billion in the energy sector. Representative Kelso energy investments include: Venari Resources, Tallgrass Development, Hunt Marcellus, Buckeye Partners, CVR Energy, and Optigas.
Kara Brickman, 212-729-2443