Riverstone Holdings has announced the sale of 100% of its shares at Rock Holdings to SM Energy Company. The company, which is based in Dallas, Texas, was sold for $980 million, according to reliable sources within Riverstone Holdings.
Riverstone Holdings expect to realize cash proceeds amounting to $237 million from the sale. Upon the announcement, SM Energy Company’s shares increased by five percent in the stock market. Riverstone Energy shares also increased by a similar margin before the close of Monday’s trading.
According to Rock Holdings’ chairman and CEO Kyle Miller, the sale is a huge boost to SM Energy since it is inheriting high-quality assets. Miller is hopeful that the new work relationship with SM Energy will provide feasible means to increase sales and expand market dominance across the country. He adds that the company is composed of a team of experts who have the drive to build and develop a concentrated position in the challenging commodity environment associated with oil and gas exploration.
Rock Holdings has enjoyed a strong position in Texas’ Midland Basin for decades. The company has a deep wealth of industrial relationships and technical strength making it a potentially lucrative investment for SM Energy. Rock Holdings was founded in 2014 to explore and provide technical solutions in the development and purchase of assets in America’s vast oil industry. The company has made several acquisitions since its inception with a lot of assets under its control. The company also owns a 24,000-acre land asset in Midland Basin. According to statisticians, Rock Holdings currently produces about 4,900 barrels in Texas.
Riverstone’s Managing Director John Lancaster acknowledged the huge impact Rock Holdings has made on the company, especially in enhancing the exploration of rock oil. Riverstone was founded by Pierre Lapeyre and David Leuschen.
Several parties served as financial advisers for Rock Oil and Riverstone in the purchase. They include Jefferies who acted as the senior financial adviser. Other advisers were Watkins LLP and Petrie Partners.
This sale is one of the many acquisitions made by oil companies in Texas. About seven deals have been made in this region over a period of one year. Texas region holds one of the biggest oil fields in the United States. The move by companies to restructure themselves is seen as a counteractive measure to mitigate the effects of low oil prices. People are watching whether these moves will produce any significant change in the commodity price.