Karnes County, Giddings Field Results Good, Chazen Company Says Ready To Form Magnolia Oil & Gas

May 16, 2018


Results from exploration in the Giddings Field and Karnes County look good, according to TPG Pace Energy Holdings Corp., which released its quarterly earnings report on Tuesday.

TPGE is a special purpose acquisition company that has definitive agreements to purchase portions of the two fields (called the “Magnolia Assets“) from affiliates of EnerVest Ltd., which represent almost all of EnerVest’s South Texas holdings, for a combination of cash and common stock.
Q1 highlights from the TPGE report:

  • Operating revenue of $193.3 million
  • Pro forma EBITDA(2) of $152.2 million
  • Free cash flow(3) of $66.3 million
  • Average daily net production of 45.7 Mboe/d (62% oil, 78% liquids)

TPGE is led by former Occidental Petroleum CEO Steve Chazen, who commented that the “strong results were above our expectations for production and realized prices in the first quarter of 2018 and confirm that the Magnolia Assets are an excellent match with our desire to build a large scale company that can generate steady production growth, strong pre-tax margins and significant free cash flow.”

When TPGE closes on the Magnolia Assets, it expects to create the Magnolia Oil and Gas Corporation, in which EnerVest will retain a significant ownership stake.

Once the deal closes, Magnolia’s Class A common stock and warrants are expected to trade on the NYSE under the ticker symbols “MGY” and “MGY.WS,” respectively.