HOUSTON, May 5, 2022 /PRNewswire/ -- TEXEGY LLC ("TEXEGY"), a Texas-based oil and gas venture, and Chato Energy LLC ("Chato"), an affiliate of Fortify Energy ("Fortify"), today announced the closing of a transaction whereby TEXEGY has sold to Chato all of its leasehold in the South Bearhead Creek ("SBC"), Raccoon Bend and AWP fields, as well as a non-operating interest in the South Burr Ferry field for an undisclosed amount.
Following the transaction, TEXEGY has retained an 18-month exclusive farmout over SBC. The transaction is in line with its strategy to focus on its the upside potential of the undeveloped proven reserves in SBC. TEXEGY Royalty LLC ("TEXEGY Royalty") holds full mineral ownership over approximately 80,000 acres, 50,000 of which are contiguous unleased acres in the Austin Chalk.
"We view Chato as a great fit for our divested assets and look forward to partnering with them on the SBC farm-out. Through this transaction, we can sharpen our focus on exploiting our substantial mineral position in Austin Chalk of over 50,000 unleased contiguous acres, utilizing technical studies including fully processed 3D seismic that was shot recently over the entire footprint. Such a unique and a serious position in the Austin Chalk deserves our full attention," said Sherif Wadood, Co-Founder of TEXEGY group.
The TEXEGY assets add meaningful production and cash flow to Fortify's existing portfolio of conventional, low decline assets, while also providing exposure to high quality, low risk recompletion opportunities and additional upside via the South Bearhead Creek farmout agreement." The acquisition of the TEXEGY assets fits well into Fortify's strategy of acquiring low risk producing properties, and their proximity to our existing operations along the Gulf Coast provide the opportunity for further operational efficiencies. Fortify is creating value via accretive acquisitions, current production optimization and exposure to high-quality, low-risk recompletion opportunities. We look forward to continuing this growth strategy with the acquisition of the TEXEGY assets," said Tony Schnur, CEO of Fortify Energy.
Energy Advisors Group served as exclusive financial advisor to TEXEGY, and Branscomb PLLC acted as legal counsel to TEXEGY for the transaction.
Seaport Global Securities served as financial advisor to Fortify, and R. Reese & Associates, PLLC acted as legal counsel to Fortify for the transaction.
TEXEGY was formed in late 2014 and has made a series of acquisitions of leaseholds across Texas and Louisiana. TEXEGY Royalty LLC owns full mineral rights of over 80,000 acres in the Austin Chalk. Additional information about TEXEGY can be found on the website at www.texegy.com.
Kindly direct all inquiries to Youssef Shoukry, CFO, at [email protected].
About Chato Energy
Chato Energy was formed in 2020 as an affiliated entity of Arena Investors managed by Fortify Energy. Fortify is a private oil & gas merchant company acquiring and managing assets across Texas, Louisiana, Utah and Colorado with a focus on low risk producing properties. Arena Investors, LP is an institutional asset manager founded in partnership with The Westaim Corporation (TSXV: WED). With $3.4 billion of committed assets under management as of March 1, 2022, and a team of over 100 employees in offices globally, Arena provides creative solutions for those seeking capital in special situations.
Inquiries can be directed to Tony Schnur, CEO, at [email protected].
SOURCE Arena Investors