Houston-based TPG Pace Energy Holdings Corp., an energy-focused special purpose acquisition entity led by former Occidental Petroleum Corp. CEO Steve Chazen, on Tuesday said first quarter production from the Giddings field in South Texas exceeded forecasts.

The holding company last month secured agreements to acquire the assets in the Eagle Ford Shale and Austin Chalk from EnerVest Ltd., which it plans to use to form Magnolia Oil & Gas Corp. The estimated $2.66 billion transaction would create a publicly traded independent using EverVest’s 360,000 net acres.

Production from Giddings during the first quarter averaged 45,700 boe/d, 62% weighted to oil and 78% liquids-rich. Free cash flow from the assets was estimated at $66.3 million on operating revenue of $193.3 million. Pro forma earnings were estimated at $152.2 million. Capital expenditures totaled $85,894.

“These strong results were above our expectations for production and realized prices in the first quarter of 2018 and confirm that the Magnolia assets are an excellent match with our desire to build a large scale company that can generate steady production growth, strong pre-tax margins and significant free cash flow,” Chazen said.

The proposed transaction would give TPG substantially all of EnerVest’s South Texas division. EnerVest in turn would receive a combination of cash and shares of Magnolia’s common stock and retain a significant ownership stake.

TPG shareholders have approved the transaction and all other closing conditions have been met, management said. Once completed, Magnolia’s Class A common stock is expected to trade on the New York Stock Exchange under “MGY.” The transaction is structured as an asset purchase with an effective date of Jan. 1.

Chazen, who retired in 2016, is to be chairman, president and CEO of Magnolia. Last year he helped to form TPG Pace Energy, which was created as a special purpose acquisition company designed to secure oil and gas investments. Joining Magnolia as CFO is Christopher Stavros, the former financial chief at Occidental.