Latest news with #EdwardGeiser
Yahoo
16-06-2025
- Business
- Yahoo
Money Talks: Juniper Capital Carves Own Momentum Amid Volatility
Energy-focused private equity firms have closed on more than $28 billion worth of capital commitments during the last eight months, a staggering sum compared to the anemic annual totals raised since the pandemic. Still, it's a fraction of the fundraising peak in 2017, when firms pooled some $73 billion for oil and gas enterprises, according to Buyouts, a research firm that tracks middle-market funds in the U.S. But while closing the largest of the recent funds raised by Quantum Capital Group and EnCap Investments took about twice as long as it did to hit a target during the 2010s, it seems momentum could be growing in favor of private equity. During the first half of 2025, a steady stream of private equity news reveals a growing pile of dry powder. Suffice to say, it's a good time to engage with these financiers. Oil and Gas Investor reached out to a variety of private equity firms that have remained committed to growing the industry throughout its peaks and troughs. In this first installment of a multi-part series, Edward Geiser, executive managing partner at Houston-based Juniper Capital, shares his perspective on the consolidation trend and private equity's ability to pivot along with the cyclical oil and gas industry. Deon Daugherty, editor-in-chief, : Where are the opportunities—and challenges—for investment following the upstream consolidation trend? Edward Geiser, executive managing partner, Juniper Capital: The trend toward consolidation in the oil and gas industry is part of a larger theme in the space, which is focused on maximizing the long-term cash value to investors. You can see this with companies becoming more efficient in developing their assets through reduced rig and completion time as well as recompleting older wells and trying newer approaches such as U-shaped wells and lateral lengths over 3 miles long. Relating to consolidation, companies are seeking to maximize their intrinsic value by acquiring assets which allow them to be more efficient, thereby generating more cash per barrel or Mcf produced, and to lengthen the duration of that cash flow by adding inventory. For upstream private equity, the goal is to create and grow businesses that offer what potential buyers will want in the future. That means companies that operate efficiently, generating strong cash flow per unit produced, and that have significant running room for future development. To that end, opportunities I see in the current market include acquiring non-core assets of companies that have completed acquisitions over the past few years. Many of the consolidating companies have assessed their current portfolios and concluded that some of their assets are unlikely to receive much capital or focus in the next several years, and therefore, they are seeking to exit those assets. In many cases, the assets will be more valuable with private ownership because of the additional focus and development capital. One of the key challenges I see in the current market is that the quantity of potential buyers with sufficient financial wherewithal is materially smaller than it was 10 years ago. The number of publicly traded oil and gas companies has shrunk and is likely to continue to shrink as consolidation continues, and the IPO market remains challenging. Additionally, the aggregate amount of private equity capital and the number of firms focused on investing in oil and gas is also smaller. This translates into generally longer investment timeframes than in the past, and it requires private equity to build and manage companies that can generate returns from operational cash flow instead of relying upon a quick sale at an attractive value. RELATED Money Talks: UMB Bank on Impacts of Upstream Consolidation DD: How will dealmaking take shape this year? EG: Given the number of very large transactions that were announced and closed the past few years, it was inevitable that the total dollar value of oil and gas deals would eventually decline, and we have been seeing that decline in aggregate transaction value over the past few quarters. In the first quarter of 2025, it appeared that there would be a healthy number of smaller transactions as public companies sought to monetize non-core assets and many private companies sought an exit. With the volatility in oil prices since the beginning of the second quarter, many planned sale processes have been paused, which I think will push overall transaction volume lower for at least the next few months. That being said, there are still a number of meaningful transactions being discussed, which could be announced soon, and I think the market for natural gas assets remains relatively strong. Overall, assuming we get some stability in oil and gas prices later this year, I think 2025 will be a moderate year for oil and gas dealmaking, with at least a couple corporate-level transactions that will further change the playing field as well as a number of smaller assets sold from public and private sellers. DD: How will the current market volatility influence your firm's investment strategies during the next 12 to 18 months? EG: While our strategy remains consistent, we tend to be more active during periods of heightened market volatility as the need for capital is greater. Our strategy continues to be to invest transformational equity capital into high-quality U.S. oil and gas assets in partnership with experienced management teams. In terms of the types of assets we are seeing as opportunities in the current environment, our last two investments were acquisitions from private equity portfolio companies and included producing wells along with development potential in the Permian Basin. Prior to that we made investments in both the Permian and Eagle Ford where public companies were the sellers. I think we will continue to see a mix of asset types and seller types across virtually all the major basins, and our focus will be to distill a large opportunity set to those that we feel offer the best risk-adjusted return, even if the current volatility in commodity prices continues. DD: How has your investor group evolved? How might market volatility influence their engagement? EG: We have smart, experienced investors and many of them have remained consistent over the last 10 years. With our most recent fund, some of our new investors included large pension plans and several family offices. Some of our investors in earlier funds were not able to participate in our most recent funds due to their restrictions related to investing in fossil fuel activities, but we maintain good relationships with those groups, and I think it's possible their investment policies change over time. All along, though, we have had a diverse mix of investor types including pensions, endowments, foundations and family offices and that has remained relatively consistent. Since most of our investors have been investing in traditional energy for many years, they are experienced with the ups and downs of investing in oil and gas. With their experience, they tend to be very consistent and supportive whether oil and gas prices are high or low. DD: Which exit strategies make the most sense in this environment and why? EG: The optimal exit strategy in the current environment really depends on the location and characteristics of the asset base one is seeking to exit. In my opinion, the current market requires more thoughtfulness and creativity than the market in the past because there are fewer buyers and those potential buyers that remain are very selective. For relatively large assets with significant drilling inventory located proximal to large acquisitive public companies, a sale for cash at a reasonable value is achievable. For large assets in one of the major natural gas regions, like the Marcellus or Haynesville, a sale for cash or even an IPO is a potentially viable option, as we saw recently demonstrated with the IPO of Infinity Natural Resources. For other assets, either in a basin with less current activity or with less perceived inventory value, a sale for cash in the current market is unlikely to include significant value for future development potential. Some of the options a potential seller has in those situations include continuing to hold the assets and generating returns from free cash flow over time or to pursue a strategic combination with a public or private company. Neither of these approaches result in a final exit; however, they may offer the best route for maximizing long-term value and returns. DD: To what extent is access to capital a challenge for private oil and gas companies? EG: In my view, access to either debt or equity capital is significantly more challenging than it was 10 years ago; however, it has improved over the past few years. Relating to equity capital, there are fewer private equity sponsors focused on the oil and gas space as compared to a decade ago and the aggregate amount of capital raised by those sponsors is materially less. Over the past couple of years, we have seen an increase in aggregate capital raised by private equity firms relative to a few years ago, and new investors, like large family offices, have increased their participation in providing capital directly to private oil and gas companies. For debt capital, putting in place a traditional reserve backed loan remains an option, and a number of groups are also available to provide loans that do not fit into a traditional bank loan structure. That being said, the number of banks participating in traditional RBLs is smaller than in the past and generally covenants and restrictions for any debt instrument are much tighter than a decade ago. So overall, access to capital remains challenging, but it is achievable for many private oil and gas companies with attractive assets. DD: What will be the net effects of crude oil rangebound in the $50s? EG: If WTI oil prices remain below $60 per barrel for a significant period, I expect U.S. oil production to begin to decline. While the dip below $60 [in April] is the first time WTI has gone below that threshold in over four years, many large producers with some of the best remaining drilling inventory in North America have already announced reduced capital spending in 2025. One can also see the reduction in activity with the declining oil rig count and frac spread count over the past several months. It typically takes at least a couple of months before reduced development activity shows up in overall oil production, so I think we will begin to see a slight decline in U.S. crude oil production in the second half of this year. I think the reduced activity level is likely to keep oilfield service and equipment pricing relatively low with the notable exception of casing, which has increased in pricing due to tariffs. I also think a reduced level of growth in associated natural gas production across the U.S. is likely to be supportive of generally higher natural gas prices, particularly as new LNG and power generation facilities become operational over the next few years. Finally, I think we could see additional consolidation if oil prices remain relatively low. While oil well economics are obviously better when oil prices are high, lower oil prices could encourage companies to become more acquisitive. Potential sellers generally do not want to transact during a perceived low in the commodity price, but I think the use of a mix of cash and equity consideration has the potential to address valuation concerns. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
15-04-2025
- Business
- Yahoo
Amplify Energy Revises Merger Terms With Juniper Capital, Adds $10M Cash Injection
Amplify Energy Corp. (AMPY, Financials) amended its merger agreement with Juniper Capital to include an additional $10 million in cash from Juniper, the company said Tuesday. The revision aims to reduce pro forma net debt and address shareholder feedback ahead of a special meeting scheduled for April 23. Warning! GuruFocus has detected 3 Warning Signs with AMPY. Under the revised deal, Juniper will contribute the added capital while Amplify will issue approximately 26.7 million shares and assume $133 million in net debt. Amplify said it plans to file updated proxy materials with the U.S. Securities and Exchange Commission in the coming days to reflect the amended agreement. Amplify President and Chief Executive Officer Martyn Willsher said the new terms demonstrate both companies' commitment to shareholder engagement and long-term value creation. Juniper Managing Partner Edward Geiser said the cash contribution was justified given recent market volatility, adding that the combined business offers strong free cash flow potential in various commodity price environments. In response to shareholder concerns over oil price declines since the original January announcement, Amplify released updated hedging data. As of April 15, the company has hedged between 80% and 85% of its 2025 oil output and 40% to 45% for 2026. Juniper's hedge coverage stands at 65% to 70% for 2025 and 50% to 55% for 2026. Amplify said the present value of its hedge book is approximately $25 million, while Juniper's stands at $14 million. Amplify also disclosed updated reserve valuations for Juniper's assets. Based on flat pricing of $60 per barrel for oil and $3.50 per million British thermal units for gas, Juniper's proved reserves hold a PV-10 value of $356 million. The PV-10 metric reflects the discounted present value of future cash flows and excludes income taxes. The combined PV-10 value of Juniper's proved developed reserves and hedge book is $244 million, against an estimated pro forma debt of $123 million after the additional cash infusion. The company emphasized the flexibility of the merged entity to scale capital projects according to commodity price shifts, noting the benefit of Juniper's held-by-production lease structures. Amplify said shareholders who have already voted do not need to take further action unless they wish to change their votes. The record date for the vote remains March 3. Amplify, based in Houston, is an independent oil and gas producer with assets across Oklahoma, the Rockies, offshore Southern California, East Texas, and the Eagle Ford Shale. This article first appeared on GuruFocus.
Yahoo
15-04-2025
- Business
- Yahoo
Amplify Energy and Juniper Capital Announce Amendment to the Merger Agreement
Juniper to Contribute Incremental $10 Million in Cash Updates Oil and Gas Hedge Positions and Juniper Reserve Values HOUSTON, April 15, 2025 (GLOBE NEWSWIRE) -- Amplify Energy Corp. (NYSE: AMPY) ('Amplify' or the 'Company') today announced an amendment to the existing terms of its previously disclosed Agreement and Plan of Merger with Juniper Capital's ('Juniper') upstream Rocky Mountain portfolio companies. The amended agreement will now provide for Juniper to contribute an incremental $10 million of cash to further reduce the net debt of the combined companies. This amendment follows shareholder engagement and reflects Juniper's strong belief in the merits of the combination and focus on a strong pro forma company. As previously announced, at closing Amplify plans to issue Juniper approximately 26.7 million shares of Amplify common stock and assume approximately $133 million in net debt(1). Such incremental contribution was agreed to in Amendment No. 1 to the Agreement and Plan of Merger, dated April 14, 2025 (the 'Amendment'). Amplify intends to file supplemental proxy materials with the Securities and Exchange Commission (the 'SEC') in the coming days reflecting the Amendment. Martyn Willsher, Amplify's President and Chief Executive Officer, said, 'These amended terms reflect each party's belief in the long-term value creation of this proposed transaction and our commitment to shareholder engagement. This transaction has been thoroughly considered alongside a wide range of options by our board of directors, and we continue to believe that this combination is the best path for shareholders to realize the value they deserve.' Edward Geiser, Juniper's Managing Partner, added, 'In recognition of the recent market volatility, we believe the additional cash investment is justified to bolster the strength and liquidity of the combined company. We continue to believe that the combination of our Rockies assets with Amplify's existing operations offers investors a unique opportunity, which is capable of delivering significant shareholder value and free cash flow in a low or high commodity price environment. This increased capital investment reflects our continued confidence in the long-term value creation of the combined company and the top quality of the Amplify management team.' Updated Hedge Positions In response to shareholder concerns regarding the recent reduction in oil prices, Amplify is providing updated information regarding the current oil and gas hedge positions at both Amplify and Juniper. Mr. Willsher commented, 'Though oil prices have dropped considerably since we announced the transaction in January, Amplify and Juniper have taken significant steps to minimize the impact of commodity price volatility through their active hedging programs. As a percentage of proved developed producing reserves, Amplify has 80-85% of oil hedged in 2025 and 40-45% hedged in 2026, while Juniper has 65-70% of oil hedged in 2025 and 50-55% hedged in 2026. At current strip prices, Amplify's hedges have a present worth of approximately $25 million, while Juniper's hedges have a present worth of approximately $14 million.' As illustrated in the tables below (as of April 15, 2025), both Amplify and Juniper have meaningfully protected against downside commodity risk by hedging a significant portion of their forecasted PDP volumes. Amplify standalone hedge book: 2025 2026 2027 Natural Gas Swaps: Average Monthly Volume (MMBtu) 585,000 500,000 137,500 Weighted Average Fixed Price ($) $ 3.75 $ 3.79 $ 4.01 Natural Gas Collars: Two-way collars Average Monthly Volume (MMBtu) 500,000 517,500 437,500 Weighted Average Ceiling Price ($) $ 3.90 $ 4.11 $ 4.45 Weighted Average Floor Price ($) $ 3.50 $ 3.58 $ 3.56 Oil Swaps: Average Monthly Volume (Bbls) 128,583 90,500 9,000 Weighted Average Fixed Price ($) $ 70.85 $ 68.43 $ 63.65 Oil Collars: Two-way collars Average Monthly Volume (Bbls) 59,500 Weighted Average Ceiling Price ($) $ 80.20 Weighted Average Floor Price ($) $ 70.00 Juniper standalone hedge book: 2025 2026 2027 Oil Swaps: Average Monthly Volume (Bbls) 68,750 38,500 Weighted Average Fixed Price ($) $ 71.83 $ 66.79 Oil Collars: Two-way collars Average Monthly Volume (Bbls) 31,292 16,625 1,708 Weighted Average Ceiling Price ($) $ 75.26 $ 74.84 $ 76.15 Weighted Average Floor Price ($) $ 65.57 $ 63.12 $ 65.00 Updated Juniper Audited Reserves Amplify is also providing updated information regarding the audited reserve value associated with Juniper's assets. Assuming WTI oil prices at $60 per barrel held flat and Henry Hub gas prices at $3.50 per mmbtu held flat, the total proved reserve PV-10(2) value of Juniper's audited reserves is $356 million. Mr. Willsher commented, 'Combining Juniper's proved developed PV-10(2) value of $230 million with the value of Juniper's current hedge book ($14 million) generates total value of $244 million. Comparing this value to the pro forma debt of approximately $123 million (after Juniper's $10 million cash contribution), demonstrates the substantial equity value of the Juniper assets even in a sustained low oil price environment. Furthermore, as we've previously noted, we believe the Juniper assets have considerable incremental value provided by the extensive development potential, much of which is located on held-by-production leases, which would allow the combined company the flexibility to slow development during low commodity prices but capitalize on higher prices to the benefit of our investors.' Mr. Willsher concluded, 'We believe the merger provides numerous benefits to shareholders, including the scale and flexibility to weather commodity cycles like we are currently experiencing. Amplify's low-decline asset base complements Juniper's high margin assets, which are then further supported by our strong combined hedge positions. With substantial flexibility to defer discretionary capital projects, and our ongoing focus on delivering value to investors in any environment, we continue to expect we will generate strong free cash flow in 2025 and in the years ahead.' The details of Juniper's Audited Reserves are provided in the table below: Estimated Net Reserves Proved Developed Proved Undeveloped Total Proved Oil | Natural Gas Price PV-10 PV-10 PV-10 (in millions) $70 | $3.50 $335 $280 $615 $60 | $3.50 230 126 356 Special Meeting of Stockholders The Special Meeting of Stockholders (the 'Special Meeting') to approve the proposals is scheduled to be reconvened on April 23, 2025, at 9:00 a.m. Central Time (and the meeting will be held virtually via the internet at The record date for the Special Meeting, March 3, 2025, is unchanged and applies to the reconvened Special Meeting. Stockholders who have already cast their votes do not need to take any action, unless they wish to change or revoke their prior proxy or voting instructions, and their votes will be counted at the reconvened Special Meeting. For stockholders who have not yet cast their votes, we urge them to vote their shares now, so they can be tabulated prior to the reconvened Special Meeting. For more information on how to vote, please call the Company's proxy solicitor, Sodali & Co, on their toll-free number (800) 662-5200 or email AMPY@ The Company's Board of Directors continues to recommend that shareholders vote 'FOR' the two proposals regarding the merger and identified in the Company's definitive proxy statement. About Amplify Energy Amplify Energy Corp. is an independent oil and natural gas company engaged in the acquisition, development, exploitation and production of oil and natural gas properties. Amplify's operations are focused in Oklahoma, the Rockies (Bairoil), federal waters offshore Southern California (Beta), East Texas / North Louisiana, and the Eagle Ford (Non-op). For more information, visit Forward-Looking Statements This press release includes 'forward-looking statements.' All statements, other than statements of historical fact, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Terminology such as 'could,' 'believe,' 'anticipate,' 'intend,' 'estimate,' 'expect,' 'may,' 'continue,' 'predict,' 'potential,' 'project' and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve risks and uncertainties and other factors that could cause the Company's actual results or financial condition to differ materially from those expressed or implied by forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the statements about the Company's expectations of plans, goals, strategies (including measures to implement strategies), objectives and anticipated results with respect thereto and the expected timing of the reconvened Special Meeting. Please read the Company's filings with the SEC, including 'Risk Factors' in the Company's Annual Report on Form 10-K, and if applicable, the Company's Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, which are available on the Company's Investor Relations website at or on the SEC's website at for a discussion of risks and uncertainties that could cause actual results to differ from those in such forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements in this press release are qualified in their entirety by these cautionary statements. Except as required by law, the Company undertakes no obligation and does not intend to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise. Footnotes 1) Net debt at announcement consisted of $140 million outstanding as of 12/31/2024 less $2 million of cash and pro forma of $5 million of cash to be contributed by Juniper before the closing date. 2) The estimated net reserves are based on 2024 Year End reserves and are evaluated at flat pricing. PV-10 is a non-GAAP financial measure that represents the present value of estimated future cash inflows from proved oil and natural gas reserves that are calculated using the unweighted arithmetic average first-day-of-the-month prices for the prior 12 months, less future development and operating costs, discounted at 10% per annum to reflect the timing of future cash flows. The most directly comparable GAAP measure to PV-10 is standardized measure. PV-10 differs from standardized measure in its treatment of estimated future income taxes, which are excluded from PV-10. Amplify believes the presentation of PV-10 provides useful information because it is widely used by investors in evaluating oil and natural gas companies without regard to specific income tax characteristics of such entities. PV-10 is not intended to represent the current market value of the estimated proved reserves. PV-10 should not be considered in isolation or as a substitute for the standardized measure as defined under GAAP. As GAAP does not prescribe a comparable GAAP measure for PV-10 of reserves adjusted for pricing sensitives, it is not practicable for us to reconcile PV-10 to a standardized measure or any other GAAP measure. Contacts Amplify Energy Jim Frew -- Senior Vice President and Chief Financial Officer(832) Michael Jordan -- Director, Finance and Treasurer(832) Sodali & Co. Michael Verrechia / Eric Kamback / Christopher Rice(800) 662-5200AMPY@ FTI Consulting Tanner Kaufman / Brandon Elliott / Rose Zuamplifyenergy@ in to access your portfolio
