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    AEU and AEM close Utica and Marcellus acquisitions

    American Energy Partners LP

    American Energy – Utica LLC (AEU), an affiliate of American Energy Partners LP (AELP), has closed on its acquisition of 27,000 net acres of leasehold in Monroe County, Ohio, from East Resources Inc. and an unnamed private company for $475 million. 

    AEU has raised $1.206 billion in private equity capital since its inception in September 2013, of which approximately 71% was provided by lead investor The Energy & Minerals Group (EMG), which also holds a majority of the AEU Board seats. Additional equity capital was provided by First Reserve, AEU's management team, and others. The transactions completed Aug. 5 bring the total capital raised by AEU to approximately $3.156 billion.

    In addition, a separate AELP platform company, American Energy – Marcellus LLC (AEM), has closed on its acquisition of 48,000 net acres of leasehold in Doddridge, Harrison, Marion, Tyler and Wetzel counties, West Virginia, also from the sellers, for $1.275 billion.

    Concurrently, AEM closed its offering of $750 million and $450 million of senior secured first and second lien term loans due 2020 and 2021, respectively. A portion of the net proceeds from the term loans was used to consummate the acquisition, while the remaining net proceeds will be used to fund capital expenditures to develop the acreage and for general corporate purposes. 

    The acquisition was also partially financed by funding $425 million of private equity commitments totaling $600 million, of which 72% was provided by lead investor EMG, which also holds a majority of the AEM board seats. Additional equity capital was provided by First Reserve, AEM's management team, and others. The transactions completed Aug. 5 bring the total capital raised by AEM to $1.8 billion.

    Citigroup Global Markets Inc. and Goldman, Sachs & Co. acted as financial advisors to AEU and AEM on the acquisitions. Sullivan & Cromwell LLP, Commercial Law Group PC, and Porter Hedges LLP acted as legal advisors to AEU and AEM on the acquisitions. Jefferies LLC acted as exclusive financial advisor to the sellers, and Baker Botts LLP and Kirkland & Ellis LLP acted as legal advisors to the sellers.

    Citigroup Global Markets Inc., Credit Suisse, and Jefferies Finance were joint lead arrangers for the AEM term loans. Sullivan & Cromwell LLP acted as legal advisor to AEM in connection with the term loans, and Latham & Watkins LLP acted as legal advisor to the term loan underwriters.

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