Denver’s BKV Corp. received a $100 million investment from Los Angeles-based Oaktree Capital Management to help the Colorado company in its $570 million acquisition of Devon Energy assets in the Barnett shale of North Texas.
Part of the deal by Oaktree was an agreement to make a future $600 million investment in “mutually agreed upon opportunities in natural gas,” according to a report by the Los Angeles Business Journal.
“The acquisition of Devon’s assets is especially attractive to Oaktree given their proximity to key, in-demand markets, and the opportunity to optimize the cash flow of Devon through consolidation. We view this collectively as a recipe for success,” said Oaktree Vice President Robert LaRoche.
Oaktree’s Managing Director Brook Hinchman said BKV’s “demonstrated strategy to consolidate U.S. natural gas assets” had attracted his firm to the company.
The closing of the Devon Energy sale was in October and Devon already received a payment from BKV, known also as Banpu Kalnin Ventures. Devon’s assets, now in the hands of BKV included more than 4,200 producing wells over 320,000 acres.
The original payment was $320 million but was adjusted to include a $170 million deposit received last spring. Devon could possible received more including another $260 million which is dependent on future commodity prices.
The acquisition is considered to be BKV’s first venture into the Barnett Shale. It is also the company’s largest deal to date. Five years ago, BKV was a startup company but has transgressed into one of the top 20 natural gas companies in the U.S. producing 700 million cubic feet of natural gas a day net.
Source: Los Angeles Business Journal