Triple Team: Silver Run, Alta Mesa, Kingfisher Close $3.8 Billion Stack Merger

Editor’s note: This is a breaking news article. The article has been updated to clarify single-well RORs and to correct that ARM Energy Holdings’s compensation includes $550 million worth of Silver Run stock.

The architects of a long-brewing merger of Jim Hackett’s Silver Run Acquisition Corp. II (NASDAQ: SRUNU), Kingfisher Midstream LLC and Alta Mesa Holdings LP, led by CEO Hal Chappelle, are ready to hoist a pint.

The companies said Feb. 9 they closed a deal uniting Silver Run’s financing, Alta Mesa’s 130,000-acre Stack position and a tailor-made midstream company into a single, public pure-play Stack company called Alta Mesa Resources Inc.

At $10 per share, Alta Mesa Resources is expected to have a market capitalization of about $3.8 billion, the same value the companies expected when the deal was announced last August. Since then, the E&P and midstream units have continued to improve. Alta Mesa has added another 10,000 net acres in the Stack, and Kingfisher Midstream has significantly expanded its infrastructure and gathering system.

The deal includes cash and stock from Silver Run and funding from private-equity firms that will likely eclipse $1.6 billion. On Feb. 5, Silver Run reported it held more than $1.04 billion in its trust account to complete the combination.

Hackett said Alta Mesa Resources’ finances “will be strong and consistent with our announcement of the transaction last year.” On Feb. 6, more than 98% of Silver Run II’s shareholders approved the deal.

“We are excited to take the final step toward closing the transaction,” Hackett said on Feb. 5.