Market Overview

Ajax Resources Announces Execution of Definitive Agreement to Sell Midland Basin Assets to Diamondback Energy


On July 22, 2018, Ajax Resources, LLC ("Ajax") entered into a purchase
and sale agreement with Diamondback Energy, Inc. (NASDAQ "FANG") for the
sale of its northern Midland Basin assets for $900 million in cash and
2.58 million shares of Diamondback common stock, subject to certain
closing adjustments. Execution of the PSA comes less than three years
after acquiring the Yellow Rose field from W&T Offshore. The sale to
Diamondback is expected to close on October 31, 2018, and includes:

  • 25,493 net leasehold acres
  • Current average net production of ~12,000 boe/d (88% oil)
  • 367 net identified potential horizontal drilling locations with an
    average lateral length of over 9,500 feet
  • Meaningful saltwater disposal and fresh water access infrastructure

Rich Little, Ajax CEO commented: "This transaction represents a logical
transition for the Ajax asset base, as it complements Diamondback's
acreage position very well and further consolidates the Northern Midland
Basin. With the strong sponsorship and support of our private equity
partner, Kelso, we were able to deploy the necessary resources and
capital to delineate and strategically develop an underexploited asset
base. We look forward to partnering with Kelso again on our next
acquisition opportunity."

Forrest Wylie, Executive Chairman of Ajax, noted: "Ajax Resources
acquired the asset in 2015 at a time when our acreage was viewed by the
industry as the northernmost edge of the basin and only the Lower
Spraberry was considered prospective. I am proud of Ajax's ability to
prove up and execute on a very successful multi-zone program delivering
repeatable, highly economic well results that compete favorably anywhere
in the basin."

Frank Loverro, Kelso co-CEO added: "I would like to thank our
exceptional management team and staff. Their strategic vision and
operational execution delivered outstanding returns for all


Jefferies LLC acted as sole financial advisor to Ajax and Thompson &
Knight LLP served as legal advisor to Ajax.

About Ajax

Ajax is an exploration and production company focused on oil and gas
development in the Permian Basin. The Company was formed in 2015
specifically to acquire certain Permian assets from W&T Offshore. Upon
closing of the Diamondback transaction, Ajax intends to continue to
pursue new acquisition and development opportunities. For more
information, please see

About Kelso

Kelso is one of the oldest and most established firms specializing in
private equity investing. Since 1980, Kelso has invested over $13
billion of equity capital in 124 transactions. Kelso was founded by the
inventor of the Employee Stock Ownership Plan ("ESOP") and, as a result,
the principles of partnership and alignment of interest serve as the
foundation of the firm's investment philosophy. Kelso benefits from a
successful investment track record, deep sector expertise, a
long-tenured investing team, and a reputation as a preferred partner to
management teams and corporates. The firm is based in New York, New
York. For more information, please visit

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