Leor Energy

Leor Energy is a Houston-based natural gas exploration company focused primarily on unconventional gas in North America. In November 2007, Leor sold its Deep Bossier natural gas and land interests (including its 50% stake in the Amoruso Field) to a subsidiary of EnCana Corporation for $2.55 billion. This was Leor's first exploration program in the Deep Bossier during which time, in 24 months, production from the Amoruso Field grew from zero to more than 240 million gross cubic feet per day.[1]

History

Thomas Kaplan and Guma Aguiar founded Leor in 2003.[2]

In 2003, Leor entered into a joint venture with Legends Exploration to pursue North American oil and gas exploration including the Deep Bossier in Robertson County, Texas. Over the following two years, managed by Pettigrew & Pettigrew Land Services, a land management outsourcing firm in The Woodlands, Texas, and the brokerage firm Genesis Land & Mineral Resources led by Donald E. Huebner, Leor entered into leases covering approximately 38,000 acres (150 km2) gross in Robertson County. In July 2005, Leor and a U.S. subsidiary of EnCana Corporation entered into an agreement to explore and develop Leor's Amoruso Prospect in Robertson County, Texas pursuant to an arrangement that provided EnCana with a working interest in Leor's land by drilling and completing a certain number of wells at EnCana’s cost.

Subsequent to the closing of the EnCana JV, Leor embarked on a capital-raising program to fund future operations. In November 2005, Leor closed a $30.0 million senior secured note financing with a multi-strategy hedge fund. In January 2006, Leor closed a $45.0 million private placement of equity securities with Goldman Sachs & Co.

In July 2006, Leor sold approximately 3,360 acres (14 km2) net in its holdings in the Amoruso Prospect to its joint-venture partner, EnCana, for $242.9 million. The transaction resulted in Leor and EnCana each having a 50% stake in the prospect. After the transaction Leor held a 23,725-acre (96 km2) net position in the prospect. Leor used part of the proceeds to redeem its $30.0 million Senior Secured Note.

In December 2006, Leor entered into a $150.0 million three-year senior secured, revolving credit facility with JPMorgan Chase Bank as lead agent. In March 2007, Leor and JPMorgan amended the credit facility, adding BNP Paribas as a lender. While to date there has been no draw-down of the facility, Leor currently has the ability to draw $50.0 million of the $150.0 million revolving credit facility. The new credit facility included provisions that allowed Leor, subject to certain restrictions and lender approval over its term, to increase the revolving credit commitment borrowing base.

In January 2007, Leor closed a $150.0 million private placement of equity securities with Merrill Lynch PCG, a proprietary investment group within Merrill Lynch & Co., Inc. Proceeds from the JPMorgan credit facility and the Merrill Lynch equity investment were planned to be used to fund the company’s working interest share of its drilling activities in the Deep Bossier and possibly for strategic transactions.

In May 2007, Leor increased its footprint in the Deep Bossier by making an equity investment in Navasota Resources Ltd., LLP for over $100.0 million. Navasota held a two-thirds working interest in approximately 15,000 acres (61 km2) gross of Deep Bossier land in Robertson County, Texas. Navasota's land is adjacent to Leor's Amoruso Prospect.[3]

In November 2007, Leor sold its Deep Bossier natural gas and land interests (including its 50% stake in the Amoruso Field) to a subsidiary of EnCana Corporation for $2.55 billion. Over two years, Leor initiated an exploration and production program in Amoruso Field which yielded more than 30 wells, gross production of over 240×10^6 cu ft/d (6,800,000 m3/d), and an inventory of well locations in the Deep Bossier trend. Aguiar was recognized by Oil and Gas Investor magazine as its 2007 Executive of the Year.[4]

Founders

Thomas S. Kaplan and Guma L. Aguiar co-founded the company jointly in 2003. Kaplan, Aguiar's uncle, took the role of Chairman, a position he had previously held at Apex Silver Mines Inc. before resigning in 2003. Aguiar serves as the CEO and Vice Chairman of Leor and manages most of the day-to day activities of the business.

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References
  1. EnCana Corporation Investor Relations, Monday, November 5, 2007 Archived February 9, 2008, at the Wayback Machine
  2. "The Tragedy Of Guma Aguiar And A $2 Billion Texas Gas Fortune". Forbes. 28 June 2012. Retrieved 24 October 2016.
  3. Oil & Gas Journal, June 5, 2007
  4. Oil and Gas Investor, January 22, 2008 Archived May 14, 2008, at the Wayback Machine
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