Silver Run Completes Its Acquisition of Centennial Resource Production, LLC

Silver Run Acquisition Corporation and its affiliate firms which are inclusive of SRAQ, SRAQW, SRAQU recently announced its completion of its acquisition 89% of the controlling interest in Centennial Resource Production, LLC. CRP (Centennial Resource Production) is an independent company dealing with oil and natural gas. It has properties located in the heart of the Southern Delaware Basin. CRP runs on funds that are mainly controlled by the affiliates of NGP Energy Capital Management. The contract was agreed by the board of directors of the two companies at an exceptional conference of Silver Run’s stakeholders on the 7th October 2016. In connection with the transaction, Silver Run was renamed to Centennial Resource Development, Inc. Their common stocks, as well as warrants, will consequently be traded under the symbols ‘CDEV’ and ‘CDEVW’ on NASDAQ.

Silver Run has also expanded the number of its board of directors to eight from the previous four members. This consists of persons such as Maire A. Baldwin, Mark G. Papa, Karl Bandtel, Pierre F. Lapeyre Jr, Jeffrey H. Tepper, Tony R. Weber, David M. Leuschen and Robert M Tichio. In a deal connected with the closing of the transaction, Riverstone and some of its affiliates bought an estimated 810 million dollars’ worth of Silver Run Class A stock. This stock was sold at 10 dollars per share which was inclusive of 175 million dollars from Riverstone Energy Limited. Some funds that are managed by Capital World Investors and Fidelity Management and Research Company also bought an approximated 200 million dollars’ worth of Silver Run Class a common stock at the same price.

The proceeds from the two stock sales were utilized in the funding of a part of the cash consideration for the deal. After the deal closed, Riverstone and its affiliate firms are the single largest stakeholders at Silver Run. The company now owns approximately 51% in ownership interest. However, NGP has retained an interest of 11% in CRP, and also appointed Mr. Tony Weber to serve as the director on the board of trustees at Silver Run. 

At the close of the transaction, CRP additionally entered into the amendment to its credit agreement. This change is meant primarily to permit the operation, revise the borrowing base from $140 million to $200 million, and raise their interest rates to LIBOR with2.25 among other things. CRP is also required by the amendments to have enough liquidity and be able to satisfy a full leverage ratio so as to make dividends. As of October 2016, CRP has no unsettled debt and has an estimated $100 million in cash.