Executive Of The Year: Leor Energy’s Guma Aguiar
And the winners are…! The 2007 Oil and Gas Investor Excellence Award winners are here. The five-year-old recognition program seeks to identify stand-out executives, M&A deals and financings, wildcatting, field rejuvenation, investor relations and corporate citizenship. The category winners are announced here.
Congratulations to the oil and gas industry’s thousands of tireless risk-takers. The following individual and companies are representative of the odds all have overcome and improved in this business, for their investors, employees and security of American energy supply, and the betterment of communities in which they work.
Executive of the Year – Guma Aguiar, co-founder of privately held Leor Energy LP, which was formed in 2003 as an East Texas/Deep Bossier wildcatter and sold in November to EnCana Corp. for $2.55 billion. The company proved Amoruso Field in Robertson County and, in some 24 months, grew production from zero to 240 million gross cubic feet per day.
This was achieved while not overleveraging. Fund-raising consisted of a $30-million senior secured note in 2005 with a multi-strategy hedge fun, a $45-million equity placement from Goldman Sachs & Co. in early 2006, a $243-million sale of some interest in Amoruso to EnCana in mid-2006 (some proceeds redeeming the $30-million note), a $150-million three-year senior secured, revolving credit facility led by JPMorgan Chase Bank in late 2006 and amended in early 2007 to include BNP Paribas (yet was undrawn at the time of the exit to EnCana in November), and a $150-million private equity placement from Merrill Lynch PCG in early 2007, which partially funded Leor’s new partnership with another Deep Bossier player, Navasota Resources.
M&A Deal of the Year – BreitBurn Energy Partners LP’s acquisition of Michigan, Indiana and Kentucky assets from Quicksilver Resources Inc. that employed some 50% cash and 50% locked-up BreitBurn units, and has transformed the portfolios of each company. As a result of the deal, BreitBurn has increased its natural gas exposure; Quicksilver has increased its exposure to crude oil by virtue of its new, roughly 32% stake in BreitBurn units.
Additionally, Quicksilver has an interest now in an MLP, taking dividends rather than forming and running one. And, the deal was achieved after the PIPE market, which had been funding upstream MLPs’ acquisitions, retreated to deal with credit-market issues.
BreitBurn doubled the size of its market capitalization from approximately $900 million to some $2 billion, becoming the third largest E&P MLP. BreitBurn units were up 20% in 2007 near year-end; Quicksilver shares were up some 50%.
J.P. Morgan Securities was financial advisor to Quicksilver and Credit Suisse was financial advisor to BreitBurn.
Financing of the Year — Privately held Milagro Exploration LLC’s raise of some $825 million to purchase Gulf Coast assets from Petrohawk Energy Corp. Milagro was represented by UBS Investment Bank; Petrohawk was represented by Merrill Lynch Petrie Divestiture Advisors.
In approximately six weeks this fall, $40-million Milagro first received $10 million from its largest investor, Plainfield Asset Management, as a non-refundable deposit on the deal; approximately $250 million in private equity from Acon Investments, Guggenheim Investment Management and West Coast Energy Partners; received a $320-million senior credit facility led by Wells Fargo and involving 11 banks; signed a second-lien facility co-led by Wells Fargo Energy Capital and Guggenheim Investment Management; hedged 80% of production for four years to secure the credit facility; and closed the hole with a $125-million seller’s note from Petrohawk.
Discovery of the Year — Contango Oil & Gas Co.’s field discovery in Eugene Island Block 10 offshore Louisiana in the shallow Gulf of Mexico. Alone, Mary Rose #1 in 11 feet of water added 154 billion cubic feet equivalent to Contango’s proved reserves, a 68% increase. The company’s Dutch #1, #2 and #3 wells are each producing some 35 million cubic equivalent per day. Mary Rose #2 and #3 wells are under way.
Best Field Rejuvenation ATP Oil & Gas Corp.’s redevelopment in Mississippi Canyon 711 in the deepwater Gulf of Mexico. Many consider the deepwater Gulf to be nascent, but some fields are already in rejuvenation mode. ATP obtained Gomez, an oil and gas discovery in 3,000 feet of water in MC 711, 30 days before the lease was to expire in 2003.
ATP had the Rowan Midland semisubmersible converted to a floating production facility, enabling a tie-back of subsea wells to the floating facility to an existing deepwater pipeline infrastructure.
When acquired, Gomez was a marginal property with a single subsea well that
was expected to produce approximately 59 Bcfe. Today, Gomez is a six-block multi-hundred Bcfe project estimated to produce over the next five to 10 years.
Best IR Program Range Resources Corp. In the past five years, as the company’s production and earnings have grown, it’s gotten the message out. The number of analysts covering Range has increased from four to 20, and attendance on analyst conference calls has tripled. In 2007, the company made presentations at more than 25 investor conferences, and in the latter half of the year, it began to attract major media attention.
Best Corporate Citizen Southwestern Energy Co. has established a formal corporate giving program in the Fayetteville shale area in central Arkansas that involves several multi-year initiatives, including a scholarship and petroleum technology program with the University of Arkansas Community College at Morrilton, a partnership with Junior Achievement to bring an energy curriculum to high school students in Arkansas, and creation of the Damascus Bobwhite Quail Habitat Project with public entities to create, restore and maintain habitat for bobwhite quail.
For information on Past Year winners, see “Are You Excellent?” Click on Latest News on the left.