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Midstates Petroleum announces deal to merge with Houston-based energy company

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Midstates Petroleum, a company that came to Oklahoma when it acquired another firm’s Mississippian Lime holdings in Oklahoma and Kansas in 2012, likely will return to its previous home.

On Monday, the Tulsa company announced it has agreed to merge with Houston-based Amplify Energy Corp. in an all-stock deal.

The agreement proposes to give an Amplify stockholder 0.933 share of newly issued Midstates Common stock for each share of Amplify stock the holder owns when the deal closes, likely in the third quarter of this year.

Once it closes, officials said Amplify and Midstates stockholders will each own 50% of the outstanding shares of the combined company.

The proposed deal would create a company headquartered in Houston, which is where Midstates was located before coming to Oklahoma about seven years ago.

They also said that Ken Mariani, Amplify’s president and CEO, will lead the combined company, which will be overseen by a roster of directors from each respective company’s current board.

Amplify acquires, explores and develops oil and natural gas properties in the Rockies, offshore California, east Texas and north Louisiana and south Texas.

Midstates, meanwhile, produces primarily from the Mississippian Lime play in northern Oklahoma.

Mariani said he believes both companies are positioned to generate significant free cash flow from proved, developed producing assets.

“We believe that stockholders of both companies will benefit from the reduced costs and enhanced scale achieved by this transaction,” he said.

David Sambrooks, Midstates’ president and CEO, said the proposed merger fits what the company has been looking for since it announced it was undertaking a strategic review of its options earlier this year.

“Ken and the Amplify management team have a demonstrated focus on capital discipline and capital returns to stockholders, while operating safely and efficiently,” Sambrooks said. “(They) are well suited to run the combined company.”

In 2012, Midstates spent $650 million in cash and stock to acquire Eagle Energy’s Mississippian Lime assets after horizontal drilling unlocked new oil reserves that had attracted the attention of various companies, including Apache, Chesapeake, SandRidge, Devon Energy and Repsol.

However, after oil prices collapsed at the end of 2014, the area no longer was economic to produce.

Midstates declared bankruptcy in May 2016, emerging from that process about a half year later, eliminating $2 billion in debt and more than $185 million in interest expenses.

It wasn’t alone, as SandRidge Energy, another major operator in the play, also took that route to continue forward.

Midstates and SandRidge’s similarities prompted additional interaction between the two in 2018, when Midstates proposed an all-stock merger with SandRidge as a “friendly transaction.”

Together, the combined companies would have controlled more than 450,000 net acres in the Mississippi Lime production and more than 53,000 barrels of oil equivalent per day and about 75,000 net acres of the northwest STACK.

But SandRidge, which was under pressure from activist investor Carl Icahn and other investors, didn’t agree to that deal, leaving Midstates to embark upon its strategic alternatives review announced in February.

On Monday, both Midstates and Amplify stated the merger agreement had been unanimously approved by participating directors on both boards, noting greater than 50% of Amplify and about 36% of Midstates stockholders agreed to support the deal as part of those approvals.

Officials said plans are for the combined companies’ stock to be traded on the New York Stock Exchange under the ticker AMPY.

Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›

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