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    AEPB closes acquisition and notes offering

    American Energy Partners LP

    American Energy – Permian Basin LLC (AEPB), an affiliate of American Energy Partners LP (AELP), has closed on its acquisition of 63,000 net acres of leasehold in the southern Permian Basin, primarily in Reagan, Irion and Crockett counties, Texas, and associated gathering assets from affiliates of Denver, Colorado-based Enduring Resources II LLC for $2.5 billion. 

    Concurrently, AEPB has closed on its offering of $350 million of floating rate senior unsecured notes due 2019, $650 million of 7.125% senior unsecured notes due 2020, and $600 million of 7.375% senior unsecured notes due 2021, which priced on July 16. 

    A portion of the net proceeds from the senior notes offering was used to consummate the acquisition, while the remaining net proceeds will be used for general corporate purposes.

    AEPB has also entered into a reserves-based revolving credit facility as borrower with, among others, Bank of America NA, as administrative agent and collateral agent, Goldman Sachs Bank USA as lender and syndication agent, Wells Fargo Bank, National Association, as technical agent and co-documentation agent, and other lenders party thereto. The revolving credit facility provides AEPB with a credit limit subject to a borrowing base, determined by reference to the value of AEPB's oil and gas properties. 

    The initial borrowing base under the revolving credit facility is $500 million, which will remain in effect until the first regularly scheduled borrowing base redetermination in October. AEPB intends to use the borrowings under the revolving credit facility to fund ongoing capital expenditures and working capital requirements and for general corporate purposes.

    AEPB has also raised $1.145 billion in private equity capital, of which 75% was provided by lead investor The Energy & Minerals Group, which also holds a majority of the AEPB board seats. Additional equity capital was provided by First Reserve, AEPB's management team, and others. The transactions completed July 31 bring the total capital raised by AEPB to $3.25 billion, including borrowings available under the revolving credit facility.

    Goldman, Sachs & Co., Tudor, Pickering, Holt & Co., and Citi acted as financial advisors to AEPB on the acquisition. Sullivan & Cromwell LLP, Commercial Law Group PC, and Porter Hedges LLP acted as legal advisors to AEPB on the acquisition. Jefferies LLC acted as financial advisor to Enduring, and Latham & Watkins LLP acted as legal advisor to Enduring on the acquisition.

    Goldman, Sachs & Co. was the sole book-running manager for the notes offering. Sullivan & Cromwell LLP acted as legal advisor to AEPB in connection with the notes offering, and Simpson Thacher & Bartlett LLP acted as legal advisor to the initial purchasers.

     

     

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