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Osprey Energy Acquisition Corporation

Osprey Energy Acquisition Corporation

Oct 19, 2020 by Roman Developer

PROPOSED BUSINESS COMBINATION

ESTIMATED CURRENT FUNDS in TRUST: $276.7 Million
CURRENT PER SHARE REDEMPTION PRICE:  (Not Disclosed as of June 4, 2018)
ENTERPRISE VALUE: $894 Million

Osprey Energy Acquisition Corp., an energy-focused SPAC, proposes to acquire the assets of Royal Resources, an entity owned by funds managed by Blackstone Energy Partners and Blackstone Capital Partners. The acquired Royal assets represent the entirety of Blackstone’s mineral interests in the Eagle Ford Shale, and the transaction will create a company with a total enterprise value of approximately $894 million.

Highlights

  • Combination to create the first public minerals company with oil-weighted assets concentrated in the core-of-the-core Eagle Ford Shale
  • Falcon Minerals will be led by the experienced Osprey Energy management team in partnership with Blackstone and structured as a C-corporation
  • Transaction includes a $115 million PIPE investment commitment completed pre-signing for new common stock ($10.00 per share) and from leading investment firm
  • Existing Osprey investors representing approximately $75 million of additional common stock are committed to retaining shares through closing and not redeeming their shares
  • 251,000 gross acres to which royalty applies
  • Over 3,000 locations each with an IRR of greater than 100% to the operator across Karnes, DeWitt and Gonzales counties
  • Net production in the first quarter of 4,764 boe per day, recently approaching 7,000 boe per day from new wells coming on line
  • Consistent cash margins in excess of ~90%, high free cash flow conversion, and a cost structure with no capital expenditures or direct operating expense
  • 2019 free cash flow1 of approximately $100 million based on a $60/bbl oil price, implying a ~28% discount to the 2019 peer group average, and representing an 8.3x enterprise value to 2019 EBITDA
  • 2019 free cash flow yield2 expected of approximately 11.6% at $10.00 per share
  • 2018 free cash flow of approximately $80 million based on a $60/bbl oil price, implying a ~17% discount to the peer group average

1 Osprey defines free cash flow as EBITDA less capital expenditures.
2 Osprey defines free cash flow yield as EBITDA less capital expenditures less interest divided by market capitalization at $10.00 per share.

 

Osprey Energy Acquisition

Credit Suisse Securities (USA) LLC acted as capital markets advisors to Osprey and sole placement agent on the PIPE; Wachtell, Lipton, Rosen & Katz acted as legal counsel to Osprey; Paul Hastings LLP and Ledgewood PC acted as Oil and Gas counsel to Osprey. Citi acted as financial advisor and capital markets advisor to Blackstone and is acting as Lead Arranger and Administrative Agent on the fully underwritten RBL Facility; Kirkland & Ellis LLP acted as legal counsel to Blackstone.

 

MANAGEMENT & BOARD

Executive Officers

Jonathan Z. Cohen, 46
CEO and Director

Mr. Cohen is Chairman, CEO and Founder of HEPCO Capital Management, an investment firm, making control investments in middle market companies and real estate. Previously, Mr. Cohen was CEO and President of Resource America, Inc, a $21 Billion asset manager investing in real estate, financial services and credit until its sale to C-III Capital Partners in 2016. He co-founded both Atlas Pipeline Partners, LP, a midstream energy company that was sold to Targa Resources, Inc. for $7.5 billion in 2015, and Atlas Energy, Inc., an exploration and production company that was sold to Chevron for $4.3 billion in 2011. He is Chairman and co-founder of Lightfoot Capital, the general partner of Arc Logistics Partners LP (NYSE: ARCX), founder of Castine Capital Management, LLC, a hedge fund specializing in financial services, and founder of Resource Capital (NYSE: RSO), a commercial mortgage REIT. He also currently serves as Vice Chairman of Titan Energy, LLC (OTCQX: TTEN), Executive Vice Chairman of Atlas Growth Partners, L.P. and Executive Chairman of Atlas Energy Group, LLC (OTCQX: ATLS), managing approximately $1 Billion of energy producing assets. From August 2015 to September 2016, Mr. Cohen was also Executive Vice Chairman of Titan Energy’s predecessor, Atlas Resource Partners, L.P. Atlas Resource Partners and subsidiaries filed a voluntary pre-packaged plan under Chapter 11 in July 2016, which was confirmed and the companies emerged from Chapter 11 in September 2016. Mr. Cohen’s philanthropic endeavors include his role as Chairman of the Executive Committee of Lincoln Center Theater, a Trustee of The American School of Classical Studies in Athens, Greece and Trustee of Arete Foundation, a private family foundation.

Daniel C. Herz, 40
President

Mr. Herz has been President of Atlas Energy Group, LLC (OTCQX: ATLS) since April 2015. Mr. Herz has served as Titan Energy, LLC’s (OTCQX: TTEN) Chief Executive Officer and a Class A Director since September 2016, and before that was Chief Executive Officer of Titan’s predecessor, Atlas Resource Partners, L.P., since August 2015. Mr. Herz has also served as President and a director of the general partner of Atlas Growth Partners, L.P. since its inception in 2013. Mr. Herz served as Senior Vice President of Corporate Development and Strategy of the general partner of Atlas Resource Partners, L.P. from March 2012 to April 2015. Mr. Herz served as Senior Vice President of Corporate Development and Strategy of the general partner of Atlas Energy, L.P. from February 2011 until February 2015. Mr. Herz was also Senior Vice President of Corporate Development of Atlas Pipeline Partners GP, LLC from August 2007 until February 2015. From August 2015 to September 2016, Mr. Herz was also Chief Executive Officer of Titan Energy’s predecessor, Atlas Resource Partners, L.P. Atlas Resource Partners and subsidiaries filed a voluntary pre-packaged plan under Chapter 11 in July 2016, which was confirmed and the companies emerged from Chapter 11 in September 2016. He was also Senior Vice President of Corporate Development of Atlas Energy, Inc. and Atlas Energy Resources, LLC from August 2007 until February 2011. Before that, Mr. Herz was Vice President of Corporate Development of Atlas Energy, Inc. and Atlas Pipeline Partners GP, LLC from December 2004 until August 2007.

Jeffrey F. Brotman, 54
CFO, Chief Legal Officer and Secretary

Mr. Brotman has been Vice Chairman and Chief Operating Officer of Hepco Capital Management, LLC since its formation in September 2016. Hepco is a private investment firm that sponsors principal capital investments in diverse business sectors. Mr. Brotman was Chief Operating Officer and Executive Vice President at Resource America, Inc., formerly a publicly-traded specialized asset management company, until September 2016. He joined Resource America in 2007, and while at Resource America also served as Executive Vice President of Resource Capital Corp. (NYSE: RSO), a publicly-traded real estate investment trust, Chairman of the Board of Directors of Primary Capital Mortgage, Director of Leaf Commercial Capital and sat on various investment committees across all product lines. Mr. Brotman was the President and Chief Executive Officer of Access to Money, Inc. (f/k/a TRM Corp.), one of the world’s largest non-bank ATM operators, from March 2006 to June 2007, and served as the Chairman of its Board of Directors from September 2006 through September 2008. Mr. Brotman was a co-founder, and served as Managing Member, of Ledgewood, PC, a Philadelphia based business law firm, from June 1992 to March 2006, and was of counsel until June 2007. He was a Trustee of Resource Real Estate Diversified Income Fund from its inception in March 2013 until September 2016 and served as a Director of Turnaround Fund from its inception in 2003 until March 2006. He has been an adjunct Professor of Law at the University of Pennsylvania Law School since 1990, where he has taught courses in accounting and lending transactions. He is also a Certified Public Accountant (currently inactive) and a licensed Real Estate Broker.

Board of Directors

Edward E. Cohen, 78
Executive Chairman

Mr. Cohen has been Chief Executive Officer of Atlas Energy Group, LLC (OTCQX: ATLS) since February 2015 and President from February 2015 to April 2015, and before that was Chairman and Chief Executive Officer since February 2012. Mr. Cohen has been Executive Chairman and a Class A Director of Titan Energy, LLC (OTCQX: TTEN) since September 2016. He has also served as Chairman of the board of directors and Chief Executive Officer of the general partner of Atlas Growth Partners, L.P. since its inception in 2013. Mr. Cohen was the Chairman of the board of directors of the general partner of Atlas Energy, L.P. from its formation in January 2006 until February 2011, when he became its Chief Executive Officer and President until February 2015. Mr. Cohen served as the Chief Executive Officer of Atlas Energy’s general partner from its formation in January 2006 until February 2009. Mr. Cohen served on the executive committee of Atlas Energy’s general partner from 2006 until February 2015. From August 2015 to September 2016, Mr. Cohen was also Executive Chairman of Titan Energy’s predecessor, Atlas Resource Partners, L.P. Atlas Resource Partners and subsidiaries filed a voluntary pre-packaged plan under Chapter 11 in July 2016, which was confirmed and the companies emerged from Chapter 11 in September 2016. Mr. Cohen also was the Chairman of the board of directors and Chief Executive Officer of Atlas Energy, Inc. (formerly known as Atlas America, Inc.) from its organization in 2000 until February 2011, and also served as its President from September 2000 to October 2009. Mr. Cohen was the Executive Chair of the managing board of Atlas Pipeline Partners GP, LLC from its formation in 1999 until February 2015. Mr. Cohen was the Chief Executive Officer of Atlas Pipeline GP from 1999 to January 2009. Mr. Cohen was the Chairman of the Board and Chief Executive Officer of Atlas Energy Resources, LLC and its manager, Atlas Energy Management, Inc., from their formation in June 2006 until February 2011. In addition, Mr. Cohen was: a director of Resource America, Inc. (formerly a publicly traded specialized asset management company) from 1988 until September 2016 and its Chairman of the board of directors from 1990 until September 2016, and was its Chief Executive Officer from 1988 until 2004 and President from 2000 until 2003; Chairman of the board of Resource Capital Corp. (NYSE: RSO) (a publicly traded real estate investment trust) from its formation in 2005 until November 2009 and served on its board until September 2016; and Chairman of the board of directors of Brandywine Construction & Management, Inc. (a property management company) since 1994. Mr. Cohen is the father of Jonathan Z. Cohen.

Brian L. Frank, 43
Director

From October 2008 to January 2017, Mr. Frank served as a Portfolio Manager of MSD Capital, LP, the family office of Michael Dell, investing in private and public securities in the energy sector. Beginning in 2011, Mr. Frank served as a portfolio manager of MSD Partners, LP, a registered investment advisor investing for Michael Dell and other clients. He was a Partner of both entities beginning in 2012. Prior to that, from 2005 to September 2008, Mr. Frank served as Partner and Portfolio Manager of Cumberland Associates, an investment firm, focusing on investments in the energy and industrials sectors. In 2004, Mr. Frank served as Director of Special Projects and Business Development of Harman International, a company specializing in automotive technology and consumer electronics. Prior to that, from 1999 to 2003, he served as a Private Equity Principal of WR Hambrecht +Co, an investment banking company and from 1995 to 1997, he served as an Investment Banking Analyst for Lazard Freres, a financial advisory and asset management firm. Since August 2016, Mr. Frank has served as a director of Viagogo, a privately held international secondary ticketing company.

William D. Anderson, 64
Director

Mr. Anderson has since 2012 been the founding member and Managing Partner of Anderson King Energy Consultants, LLC (“AK”). Mr. Anderson is also member of the board of directors of Royal Resources GP L.L.C. (“Royal GP”), the general partner of Royal Resources L.P. (“Royal LP” and, together with Royal GP, “Royal”). In 2005 and prior to the formation of AK, Mr. Anderson formed Anderson O&G, Inc. (“AOG”), a boutique energy sector advisory and consulting business oriented towards acquisition and divestiture activities. Prior to forming AOG, Mr. Anderson served as the Executive Vice President and Chief Operating Officer for Wynn-Crosby Energy, Inc. Mr. Anderson is a registered petroleum engineer and is a former Senior Vice President and Partner of Netherland, Sewell & Associates, Inc. At Netherland Sewell he served as team leader for major projects in the Mid-Continent, Permian, North & South Louisiana, and South Texas basins, as well as for projects in Europe, SE Asia, and Africa. Prior to joining Netherland Sewell in 1983, Mr. Anderson held several positions with Exxon Company U.S.A. including Supervising Reservoir Engineer managing five large offshore fields. Mr. Anderson received a B.S. in civil engineering from the University of Connecticut, an M.S. in civil engineering from Columbia University and a Master of Engineering in Petroleum Engineering from Tulane University.

ByRoman Developer