Houston, TX – September 12, 2016 – Bayou City Energy (“Bayou City” or BCE”) today announced its affiliate, BCE-MESA Holdings LLC (“BCE-MESA”) completed the purchase of preferred stock in High Mesa, Inc. (“High Mesa”). High Mesa is a privately held Delaware corporation, of which the common stock is owned by management of High Mesa, and the preferred stock is owned by BCE-MESA and HPS Investment Partners, LLC (“HPS”). High Mesa has interests in oil and gas assets, most notably Alta Mesa Holdings, LP (the “Company”, “Alta Mesa”, or “AMH”). BCE-MESA, which is managed by BCE, includes an investment from affiliates of Intervale Capital, a middle-market energy services private equity firm. In connection with this investment, High Mesa appointed BCE Founding Partner, William McMullen, to its board of directors.
Alta Mesa was founded in 1987 and has a multi-decade track-record of creating value across multiple conventional and unconventional basins. Since drilling its first horizontal STACK well in 2012, the Company has emerged as a leading operator in the prolific STACK oil window of Kingfisher County, Oklahoma. Within Kingfisher County, Alta Mesa has over 95,000 net acres, is currently producing approximately 16,000 BOE per day and is currently operating four rigs across its position.
William McMullen said, “Through their continuous technical refinement and diligent approach to thoroughly understanding the STACK, AMH continues to execute on its operational objectives. We initiated our relationship with AMH and HPS in January through a drilling JV, and completion of this preferred equity investment is based on management’s demonstrated success and bright outlook. We are thrilled to further strengthen our relationship with High Mesa, its management team and HPS.”
AMH’s CEO, Hal Chappelle, added, “We value our relationship with Bayou City Energy, and we believe their team is the ideal partner to invest alongside our existing partner, HPS, and to help our company continue to achieve its objectives in the STACK.”
“HPS is excited for AMH to expand its relationship with BCE beyond the drilling JV and welcomes BCE as an additional preferred investor at High Mesa,” said Don Dimitrievich, a Managing Director at HPS. “BCE, like HPS, shares management’s vision and understands the tremendous growth potential and value of AMH.”
Intervale Capital Managing Partner, Charles Cherington, said, “Intervale is truly excited to partner with BCE-MESA, AMH and HPS, and to assist with the growth of their already meaningful enterprise. This upstream investment, which represents an enhancement to Intervale’s core focus on energy services, reflects the compelling results, team and assets AMH has assembled. Through the BCE-MESA investment, we can collectively leverage the operational efficiencies, technical expertise, and learning curve AMH has created to progressively expand their platform and advance their development program.”
About Bayou City Energy
Bayou City Energy is a private equity firm focused on making investments in the North American upstream oil & gas sector. Bayou City targets privately negotiated investments through two complementary strategies: Providing buyout and growth equity capital for operators with current production and identified upside, and partnering with leading operators to provide dedicated drilling capital in off-balance sheet structures.
About HPS Investment Partners, LLC
HPS is a leading global investment firm with a focus on non-investment grade credit. Established in 2007, HPS currently has 94 investment professionals and is headquartered in New York with ten offices globally. HPS was originally formed as a unit of Highbridge Capital Management, LLC (“HCM”), a subsidiary of J.P. Morgan Asset Management. In March 2016, the principals of HPS acquired the firm from J.P. Morgan, which retained HCM’s hedge fund strategies. As of August 2016, HPS has over $31 billion of assets under management and has invested over $3 billion in the energy and power industries since inception.
About Alta Mesa Holdings, LP
Alta Mesa is a privately-held company engaged in onshore oil and gas acquisition, exploitation and production with a seasoned management team, whose mission is to maximize the profitability of its assets in a safe and environmentally sound manner. The Company applies advanced engineering analyses and enhanced geological techniques to under-developed or over-looked conventional resource areas to create value. The Company employs disciplined management processes and have the flexibility to respond to the market. Alta Mesa has a large, long-lived and diversified reserve base, with a substantial inventory of low risk development projects. The portfolio of assets has large components of liquids-rich gas and oil reservoirs. The core producing assets are located in the Oklahoma Sooner Trend and in South Louisiana.
For more information about Alta Mesa, please visit www.altamesa.net.
About Intervale Capital
Intervale Capital is an energy-focused private equity firm with offices in Houston and Boston. Intervale invests primarily in middle-market energy services and manufacturing companies and related technologies. The firm has raised $1.3 billion of committed capital since its inception in 2006 and is currently investing from its third fund.
Intervale portfolio companies include Tier 1 Energy Solutions (wireline and completions in Canada), TEAM Oil Tools (completions equipment and services), Aegis Chemical Solutions (oilfield chemicals, water treatment and water transfer), Certus Energy Solutions (diversified oilfield rental equipment), Antelope Oil Tool (casing and cementing products) and Epic Lift Systems (artificial lift and compression), among others.
For more information about Intervale Capital, please visit www.intervalecapital.com.