SM Energy Shares Rise on Rock Oil Holdings Purchase

Congruent with forces of consolidation in the oil and gas industry, Riverstone Holdings, Power Fund V and other minority interests have agreed to sell Rock Oil Holdings to SM Energy Company. Riverstone is headquartered in Houston, and SM Energy is a Denver-based oil and gas company. Rock Oil Holdings has interests that are focused in the Permian Basin, which is an area in the Western part of Texas and the Southeastern part of New Mexico. This area saw its first commercial well, which was started in 1921, and this area is regarded as one of the most productive oil and gas regions in the country.

Often referred to as oil’s hottest zip code, the Permian Basin deal involving Rock Oil and SM Energy led to a spike in bids for SM Engery’s stock. They are paying nearly $35,000 per acre for the rights to drill in the Permian Basin. The Rock Oil CEO, Kyle Miller, has quite a successful track record in the oil exploration and production space, and it is no accident, but more like the byproduct of an overall well-executed strategy, that Rock Oil has built a nice position for themselves in this lucrative basin where they are well-known producers of oil in this region.

This basin is really a goldmine of oil-discovering opportunities. Riverstone and Rock Oil put together a world-class team to establish their position in this oil-rich area in Western Texas. Since 2000, which is the year Riverstone was founded, this drilling and producing powerhouse has been doing M&A transactions in the oil and gas industry, and quite steadily at that. They have also had explosive growth during this time, which also led to them opening up additional offices in Mexico City, New York and London. They also have major projects underway in North America, Latin American, Asia, Africa and Europe.

There were financial advisors for both parties on this deal. The lead advisor to Rock Oil and Riverstone Holdings was Jefferies, and Petrie Partners provided an additional team of financial advisors for Rock Oil. There was a world-class legal team, provided by the firm Latham and Watkins LLP, guiding Rock Oil and Riverstone to a successful completion of this deal. The more diligent drilling outfits we have unearthing more natural resources in this country, the less we will need to rely on procuring those resources from other countries, a solid win-win situation for all parties. Riverstone was founded by David Leuschen and Pierre Lapeyre.