April 10, 2012 6:52 PM
VE, Thompson Knight Advise on Penn Virginia’s $1 Billion Pipeline Deal
Posted by Tom Huddleston Jr.
Penn Virginia Resource Partners said Tuesday that it will pay $1 billion to acquire pipeline company Chief Gathering to expand its own operations in the natural gas-producing Marcellus Shale formation in the northeast U.S.
Radnor, Pennsylvania-based Penn Virginia plans to buy Chief Gathering from parent Chief ED Holdings of Dallas with cash and $200 million in newly issued Penn Virginia stock.
Chief Gathering draws natural gas from 300,000 acres in northeastern Pennsylvania and West Virginia. Penn Virginia currently has operations covering a little more than 50,000 acres in two locations in Pennsylvania, with work on a third operation underway.
Riverstone Global Energy and Power Fund V and a group of investors led by Kayne Anderson Capital Advisors and Magnetar Capital will help finance the cash portion of the transaction in exchange for Penn Virginia stock. Royal Bank of Canada agreed to loan as much as $220 million to Penn Virginia.
The transaction is expected to close in the second quarter of 2012, pending regulatory approval.
Vinson Elkins is advising Penn Virginia on the purchase, with a corporate team based in New York and Houston. Corporate partners Caroline Blitzer, Allan Reiss, E. Ramey Layne, Brenda Lenahan, and Michael McKay worked on the deal for VE. Bruce Davis, Jr. is Penn Virginia’s general counsel.
Kirkland Ellis corporate partners Stephen Fraidin and William Sorabella are advising RBC Capital Markets in its role as financial adviser to Penn Virginia.
Chief turned to Thompson Knight oil and gas partner Arthur Wright to handle the transaction. Chief’s president and chief executive, Trevor Rees-Jones, is a former Thompson Knight oil and gas attorney who left the firm in 1984 to pursue energy investments before forming Chief in 1994.
Thompson Knight’s team also includes corporate and securities partners Wesley Williams and Jessica Hammons, as well as oil and gas partners Debra Villarreal and Gaye White, and oil and gas counsel Ron Fry. Partners R. David Wheat and Shelly Youree are advising on tax matters, while partner Anthony Campiti is working on labor and employment law matters.
Latham Watkins is advising Riverstone on its stock purchase, while Baker Botts is representing the Kayne Anderson and Magnetar-led group of investors. Finance partner Laura Tyson and tax partner Michael Bresson led Baker Botts’ team.
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