Independence Energy’s All-Stock Merger with Contango

Vinson & Elkins LLP advised Independence Energy, LLC on the deal.

Independence Energy, LLC and Contango Oil & Gas Company (NYSE American: MCF) announced that they have entered into a definitive agreement to combine in an all-stock transaction. The combination, which was unanimously approved by both companies’ Boards of Directors, will create a premier, diversified and low leverage U.S. independent oil and gas company focused on consolidation.  

Independence is a diversified, well-capitalized upstream oil and gas business built and managed by KKR’s Energy Real Assets team with a scaled portfolio of low-decline, producing assets with meaningful reinvestment opportunities for low-risk growth across the Eagle Ford, Rockies, Permian and Mid-Continent. Since 2011, KKR’s Energy Real Assets team has been executing on a consistent cash flow and risk-based strategy, complemented by deep industry expertise, responsible investment practices and the broader capabilities of KKR’s global platform. KKR is a leading global investment firm investing in a diverse range of energy sources and committed to investing in a stable energy transition, one that supports the energy needs of today in a responsible manner while also contributing to a cleaner tomorrow.

Contango is a Fort Worth, Texas based, independent oil and gas company whose business is to maximize production and cash flow from its portfolio of low-decline, producing assets primarily in the Mid-Continent, Permian, and Rockies areas. Contango has a proven track record of complementing that production and cash flow via acquisitions, having completed four significant acquisitions in the last 18 months.

Upon completion of the transaction, Independence shareholders will own approximately 76 percent and Contango shareholders will own approximately 24 percent of the combined company. Based on Contango’s closing stock price of $5.62 on June 7, 2021, and pursuant to the terms of the proposed transaction, the combined company will have an initial equity market capitalization of approximately $4.8 billion and enterprise value of approximately $5.7 billion.

Jefferies LLC is serving as lead financial advisor to Contango, and Gibson, Dunn & Crutcher LLP is serving as legal counsel. Wells Fargo Securities LLC is serving as financial advisor to Independence, and Vinson & Elkins LLP is serving as legal counsel.

The V&E corporate team was led by partners Doug McWilliams (Picture) and Keith Fullenweider and senior associate Robert Hughes with assistance from senior associate Jackson O’Maley and associate Jordan Fossee. Also advising were associates Alex Lewis, Markeya Brown, Breanna Kelly, Mary Busse and Chase Browndorf; partner David D’Alessandro, counsel Dario Mendoza and associate Maddison Riddick; partners John Lynch and Lina Dimachkieh and associates Curt Wimberly and Lauren Nieman; partner Bryan Loocke, counsel Joclynn Townsend and senior associate Cesar Leyva; partner Sean Becker and associate Annie Blanc; partner Matt Dobbins, counsel Larry Pechacek and associate Kevin Moscon; and counsel Sarah Mitchell.

Involved fees earner: Sean Becker – Vinson & Elkins LLP; Markeya Brown – Vinson & Elkins LLP; Chase Browndorf – Vinson & Elkins LLP; Mary Busse – Vinson & Elkins LLP; David D’Alessandro – Vinson & Elkins LLP; Lina Dimachkieh – Vinson & Elkins LLP; Matthew Dobbins – Vinson & Elkins LLP; Jordan Fossee – Vinson & Elkins LLP; Keith Fullenweider – Vinson & Elkins LLP; Robert Hughes – Vinson & Elkins LLP; Breanna Kelly – Vinson & Elkins LLP; Alexandra Lewis – Vinson & Elkins LLP; Cesar Leyva – Vinson & Elkins LLP; Bryan Loocke – Vinson & Elkins LLP; John Lynch – Vinson & Elkins LLP; Douglas McWilliams – Vinson & Elkins LLP; Dario Mendoza – Vinson & Elkins LLP; Sarah Mitchell – Vinson & Elkins LLP; Lauren Nieman – Vinson & Elkins LLP; Jackson O’Maley – Vinson & Elkins LLP; Larry Pechacek – Vinson & Elkins LLP; Maddison Riddick – Vinson & Elkins LLP; Joclynn Townsend – Vinson & Elkins LLP; Curt Wimberly – Vinson & Elkins LLP;

Law Firms: Vinson & Elkins LLP;

Clients: Independence Energy, LLC;

Author: Martina Bellini