Two Private Permian Players Merge

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Privately held Colgate Energy Partners III is acquiring Luxe Energy in an all-stock deal in the Permian Basin designed to create one of the play’s largest private producers. Executives signed and closed the deal Jun. 1, said Will Hickey, Co-CEO of Colgate. Transactions between different private equity funds are typically difficult, Hickey said. But the pair have a common investor in NGP, a firm that “believes in both the corporate execution story and the benefits of scale.” “This one made too much sense,” he said. Luxe assets include 22,000 net acres adjacent to Colgate’s existing position in Texas’ Reeves and Ward counties, with current average net daily production at 17,000 boe/d. Luxe has one rig currently running, in Ward County. The pro forma company will comprise 57,000 net acres with production at 45,000 boe/d and four rigs. Under terms of the all-stock deal, Luxe investors will own 27.5% of the company with Colgate holding the remaining 72.5%. US private crude producers have ramped up M&A activity in recent months, along with production plans as they capitalize on higher crude prices to make up for pandemic-related losses (OD May14'21).

Shale, Corporate Strategy , M&A
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