Silver Hill Energy Partners Enters Bakken with Acquisition from Liberty Resources II
Silver Hill Energy Partners, LP announced today that it has signed definitive agreements with Liberty Resources II, LLC, a privately-held, Denver-based oil and gas company, to acquire Liberty's interests in oil and gas properties, rights and related assets in North Dakota and 100% of Liberty Midstream Solutions, LLC, a midstream oil and gas company with gas gathering, gas processing and produced water logistics assets in North Dakota. The acquisition is expected to close March 14, 2024.
Acquisition Highlights
- December net production of approximately 13,000 boe/d (76% oil, 86% liquids)
- PDP reserves of approximately 16 million boe
- One rig currently running in Mountrail County with 12 additional wells expected to be completed during Q1 2024
- 84,000 net acres in the Williston Basin Bakken and Three Forks play in Mountrail, Burke, Williams and Divide Counties, North Dakota (approximately 80% held by production)
- Over 300 gross operated drilling locations
- Integrated midstream system with approximately 33 miles of gas gathering lines, 22 miles of water gathering lines, a 30 MMcf/d gas processing plant, five saltwater disposal wells with roughly 60,000 bbl/d of disposal capacity, 99,000 dedicated acres and ample expansion capacity
Financing and Go-Forward Plan
Silver Hill plans to fund the acquisition with a combination of equity from Silver Hill Energy Partners III, LP ("SHEP III") and another Silver Hill-sponsored partnership as well as senior bank debt from each partnership's credit facilities. Consistent with Silver Hill's track record in its current and historical operating areas, it intends to use this initial transaction as a springboard for future growth in the area through additional bolt-on acquisitions and related investments in upstream, midstream, minerals and royalties.
"After years of considering various opportunities for entry points into the Bakken, we are thrilled to be acquiring what we believe is an ideal initial upstream and midstream development platform for us in the play," said Silver Hill Founder and CEO Kyle D. Miller. "Liberty's assets represent not only an attractive operating footprint with immediate scale and runway but also a uniquely situated natural gas and water infrastructure system that provides a meaningful uplift to our drilling economics. We have enjoyed working with the Liberty team throughout this transaction and are excited to harness our teams' combined knowledge and experience as we continue developing and growing this new Bakken position as well as our sizable existing Haynesville business."
Advisors
Willkie Farr & Gallagher LLP is serving as legal counsel for Silver Hill.
Piper Sandler is serving as financial advisor and Latham & Watkins LLP is serving as legal counsel for Sellers.
About Silver Hill Energy Partners III, LP
Silver Hill Energy Partners III, LP is Silver Hill's third partnership and first institutional private equity fund with $1.02 billion of capital commitments from a diverse group of institutional partners. SHEP III is focused on the direct acquisition and development of operated oil, natural gas and related infrastructure assets in premier basins across the onshore U.S. Since its activation in August 2021, the fund has closed six sizable upstream acquisitions in the North Louisiana/East Texas Haynesville Shale play and the South Texas Eagle Ford Shale and Austin Chalk play. Silver Hill's in-house operating team has actively developed these assets through the drill bit and further supplemented them through accretive leasehold acquisitions/trades, minerals acquisitions and midstream projects, including a 36-mile, 1.2 Bcf/d pipeline providing Haynesville Shale operators with access to preferred natural gas markets. Following a successful sale of its South Texas upstream assets in April 2023, SHEP III's current upstream portfolio resides entirely in the Haynesville and comprises approximately 300 MMcf/d (net) of dry natural gas production from 151 producing wells and over 300 gross drilling locations across approximately 52,000 net acres.
About Silver Hill Energy Partners
Silver Hill Energy Partners is based in Dallas and was founded in 2011 by Kyle D. Miller to provide a long-term vehicle for profitable energy development across the U.S. From 2011 through 2017, Mr. Miller and his team assembled what was, at the time, the largest privately held contiguous acreage position in the Delaware Basin of West Texas through multiple operating companies and strategic joint ventures that successfully acquired, developed and ultimately sold large-scale unconventional oil, natural gas and related infrastructure assets. Silver Hill I & II generated strong risk-adjusted returns across cycles for a diversified base of investors, including private equity, institutions and family offices. The formation of Silver Hill III followed the successful merger of Silver Hill I & II's upstream assets into RSP Permian, Inc. for $2.5 billion in cash and stock. For more information, please visit silverhillenergy.com.
About Liberty Resources II, LLC
Liberty Resources II LLC ("Liberty II") is a Denver-based upstream operator focused on the acquisition and development of oil and gas assets. The company is led by members of the team of Liberty Resources LLC, a successful Riverstone Global Energy and Power Fund IV E&P company operating in the Bakken Shale of North Dakota. Similar to the strategy employed by Liberty Resources in the Bakken Shale, Liberty II applies the management team's expertise in well completion design and execution to a proved and primarily undeveloped resource play.
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