Two privately held operators, Tulsa-based Chisholm Oil and Gas LLC and Houston’s Gastar Exploration LLC, have agreed to merge, creating an Oklahoma-centered explorer with net production of 20,000 boe/d and 165,000 net acres, primarily in Kingfisher County.
Financial details were not disclosed; the merger is expected to be completed by the end of September.
Chisholm is focused on acquiring and developing oil and gas assets throughout the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties, aka STACK. It has assets also in Blaine, Logan and Major counties.
Gastar, which emerged from bankruptcy early this year as a private operator, became a STACK pure-play in 2016. It has assets within the Hunton Limestone, Meramec Shale/Mississippian Lime, Woodford Shale and Osage/Oswego formations.
Chisholm, which now is running three rigs and with one dedicated fracture crew, expects the Gastar assets will be synergistic to upstream operations. Among other things, Chisholm plans to use the merger to leverage its ownership stakes in Great Salt Plains Midstream Holdings LLC and salt water disposal subsidiary Cottonmouth SWD LLC.
Chisholm was formed in 2017 in part with private equity (PE) funds managed by affiliates of Apollo Global Management LLC. Gastar is sponsored by PE funds affiliated with Ares Management Corp.
For Chisholm, Citigroup Inc. was financial adviser, while legal advisers were Vinson & Elkins LLP and Paul, Weiss, Rifkind, Wharton & Garrison. Evercore ISI and Tudor Pickering Holt & Co. provided financial advisory services to Gastar, while Kirkland & Ellis served as legal adviser.