MLPs in the Mid-ContentFollows is a list of MLPs I have researched who have operations in Oklahoma, I am also posting their Ebitda multiples to give a quick idea on whether acquiring EQU with their stock at $5+ would be accretive to them:
Mid-Content Energy Partners (MCEP) – Ebitda 14.48 (accretive)
Atlas Resource Partners (ARP) – Ebitda 12.29 (accretive)
LRR Energy (LRE) – Ebitda 4.06 (not accretive)
Vanguard Natural Resoucres (VNR) – Ebitda 7.43 (accretive)
Linn Energy (LINE) – Ebitda 7.64 (accretive)
Legacy Reserves (LGCY) – Ebitda 5.71 (not accretive)
EV Energy Partners (EVEP) – Ebitda 9.48 (accretive)
There might be others, but those are the most prominent that I could find, there is of course a number of large private companies who operate in the Mid-Content; the 5th most active operator in Oklahoma last year (60 wells) was New Dominion, they are focused exclusively on the Hunton (https://www.ogs.ou.edu/OilGas/pdf/2011DrillingHighlights.pdf) There is also a large number of private equity firms focusing on the area such as Riverstone (the backers of Eagle Energy), also several of the MLPs above are backed by private equity firms.
As I have mentioned in the past, Canadian investors are not aware of the dynamics of the M&A market in the US, they look at failed strategic reviews of companies with mainly resource style assets in Canada and they conclude that EQU review would fail because others in Canada have failed. Equal Hunton and Mississippian assets are a different animal, they appeal to MLPs and private equity, most of the MLPs I mentioned above are “actively” searching to acquire more assets, the market for MLPs is hot in the US right now due their yield characteristics, 3 of the 7 MLPs I highlighted above came public less than 12 months ago.
Scotia Waterous is one of the most the most prominent M&A houses in the oil and gas sector in the US; just like investors, they make the most money if they secure the best deal, I am glad they are on our side and working actively to promote our assets to the above class of buyers among others.
Regards,
Nawar