Denver-based Centennial Resource Development Inc., (NASDAQ: CDEV) announced Nov. 28 it has agreed to acquire 100 percent of the leasehold interests and related upstream assets in Reeves County, Texas from Silverback Exploration LLC. Centennial Resource Development will pay $855 million in cash for the assets, according to the company’s press release.
The interests are currently producing 3.5 MBOEPD and has estimated undeveloped resource potential of over 600 MMBOE from the Wolfcamp A and Wolfcamp B formations with additional upside potential from the Wolfcamp C, Avalon and Bone Spring formations.
On November 21, an affiliate of Riverstone Holdings LLC entered into a purchase agreement with Silverback to acquire 100 percent of its leasehold interests and related upstream assets in Reeves County for an aggregate purchase price of $855 million in cash, subject to certain adjustments. On November 27,Riverstone and Centennial entered into an agreement to assign, under which the Riverstone affiliate has agreed to assign, and Centennial has agreed to assume, Riverstone’s right to purchase such Silverback assets, subject to the satisfaction of certain conditions. The acquisition is expected to close on December 30, 2016.
Weil, Gotshal & Manges LLP acted as legal counsel to Centennial. Latham & Watkins LLP acted as legal counsel to Riverstone. Tudor, Pickering, Holt & Co. acted as financial advisor to Silverback in connection with the transaction. Kelly Hart & Hallman LLP acted as legal advisor to Silverback.