Silver Run Acquisition Corp., Houston, has agreed to acquire a controlling interest in Centennial Resources Production LLC and expects to be renamed Centennial Resource Development Corp.
Centennial, formed in 2013 by an affiliate of NGP Energy Capital Management LLC of Irving, Tex., has producing acreage in the Delaware basin of Texas.
Silver Run’s acquisition, subject to conditions including approval by its shareholders, will occur under an assignment from Riverstone Holdings LLC, which on July 6 agreed to buy an 89% interest in Centennial from funds controlled by NGP.
Riverstone will buy Silver Run Class A common stock for about $810 million. Funds managed by Capital World Investors and by Fidelity Management & Research Co. will buy $200 million of Silver Run stock.
Proceeds of those stock sales will fund part of the cash consideration in the Centennial acquisition.
After closing, Riverstone and affiliates will own about 51% of Silver run. NGP will retain an equity stake of about 11%.
Mark Papa, a Riverstone partner who was chairman and chief executive officer of EOG Resources Inc. during 1999-2013, will lead Centennial after the transaction.
Centennial holds 42,500 net acres, mainly in Reeves and Ward counties and produces about 7,200 boe/d net to its interests. It estimates net proved reserves at 48.6 million boe.
The company has identified 1,357 gross potential locations for horizontal drilling.
Silver Run estimates the initial enterprise value of the combined company at $1.735 billion and the equity value after closing of $1.835 billion.