Tapstone Energy agrees to $419M acquisition
Tapstone Energy, a private oil and gas operator that owns/operates thousands of wells in Oklahoma with mineral rights on 750,000 acres, will be acquired by out-of-state owners for $419 million.
Details of the acquisition were announced this week by Birmingham, Alabama-based Diversified Energy Co. and an investor it previously has worked with to acquire other midcontinent assets across Oklahoma and north Texas.
Tapstone employs about 135 Oklahomans, including 50 in its Oklahoma City office.
Diversified and its partner, Oaktree Capital Management, have been acquiring assets from other mid-continent operators throughout the year, including the assets of Tanos Energy Holdings III, Blackbeard Operating and Indigo Minerals.
Diversified is an independent operator that started in the U.S. Appalachian Basin and produces, markets and transports primarily natural gas, officials said.
As for Tapstone’s assets that will change hands, Tapstone Executive Chairman James Bennett said they include 3,900 wells where it owns mineral interests (about 1,500 of which are operated by Tapstone).
Tapstone has about 750,000 acres of mineral rights under contract and operates wells within 30 of the state’s 77 counties, Bennett said.
The Tapstone assets Diversified is acquiring produced about 25,000 barrels of oil (equivalent) daily in August, with about 80% of that natural gas and natural gas liquids.
Diversified officials believe the deal will strengthen their presence as operator in the mid-continent region.
The officials also stated they intend to retain Tapstone personnel to help it optimize the performance of its midcontinent assets.
Deal changes Oklahoma’s energy scene again
Tapstone Energy was launched by Tom Ward, a co-founder of Chesapeake Energy and a former CEO of SandRidge Energy, in 2013.
In October 2015, it moved its operations into renovated space inside the 96-year-old Mideke Building in Bricktown.
At the end of 2016, Ward left Tapstone to begin a new venture and Steve Dixon, previously an executive at Chesapeake, was selected to take over as Tapstone’s CEO.
In April 2017, Tapstone announced plans to take itself public, but that never happened.
In May 2020, Tapstone Energy completed a financial restructuring deal involving Kennedy Lewis Investment Management to reduce its long-term debt and interest expenses. In November of the same year, it won an auction held as part of Chesapeake Energy’s bankruptcy case to acquire the bankrupt company’s mid-continent assets for $130.5 million.
Dixon recently departed the company, which also has moved out of its Bricktown home into offices at Leadership Square.
Its day-to-day executive duties have been handled by David Edwards, the company’s president and chief financial officer, while Bennett, the company’s board chairman, has helped when needed.
Bennett, who led SandRidge Energy as CEO for five years until 2018 when his board’s growth plans for the company aggravated activist investor Carl Icahn, will resign as a Tapstone board member once Diversified closes its purchase before the end of this year.
However, Bennett continues to serve locally as a director on Oklahoma Citybased KimRay’s board, and said he expects to have other opportunities to continue to work with Oklahoma-based oil and gas operators in the future.
“I think I will stay busy in the industry,” he said. “My goal is to work with good people and talented teams and assist where I can.”