Page 7 - NorthAmOil Week 23 2022
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NorthAmOil INVESTMENT NorthAmOil
Desert Peak, Falcon merge to form Sitio
US DENVER-HEADQUARTERED Desert Peak stock on June 3 and formally rebranded as Sitio
Minerals announced this week that it had suc- Royalties. The firm’s Class A common stock
cessfully merged with New York-based Falcon and warrants will initially continue trading on
Minerals to form Sitio Royalties. The deal aims the Nasdaq under the ticker symbols ‘STR’ and
to create a shareholder returns-driven mineral ‘STRDW’.
and royalty consolidation company and gives Upon closing the merger, Sitio entered into
the firm a $1.9bn valuation. a new credit facility with a $300mn borrowing
Combined, Sitio will own over 140,000 net base.
royalty acres (567 square km), normalised to a Sitio will be managed by the legacy Desert
1/8th royalty equivalent. Over 105,000 of the net Peak management team headed by CEO Chris-
royalty acres (425 square km) are located in the topher Conoscenti, while Noam Lockshin, a
Permian Basin in West Texas and south-east- partner at Sitio’s largest equity holder Kim-
ern New Mexico. The company will also have a meridge, will serve as chairman of the board
significant footprint in the Eagle Ford shale in of directors. The firm will be headquartered in
Texas. Denver.
Sitio is projected to produce about 13,500- “Sitio is guided by its commitments to best-
14,500 barrels of oil equivalent per day (boepd) in-class leadership and governance standards,
in the first half of 2022 on a combined basis. capital discipline and a thoughtful approach to
Crude is expected to account for 50-53% of this, value-maximising M&A,” stated Conoscenti.
with three-quarters anticipated to come from “Sitio’s distinguished profile as a leading con-
the Permian Basin. Altogether, the company will solidator in the minerals and royalties space will
own more than 10,750 wells. only continue to strengthen over time with the
Prior to the finalisation of the merger, Falcon execution of our proven strategy, focusing on
effected a four-to-one reverse stock split of its large-scale accretive acquisitions across diversi-
Class A common stock and Class C common fied operators.”
POLICY
US reportedly loosening Venezuelan sanctions
further by allowing Eni, Repsol to export oil
US-VENEZUELA THE US government appears to be moving for- source said, however, that the volumes deliv-
ward with steps to loosen sanctions on Venezue- ered to Europe were not likely to be significant
la’s oil and gas sector, according to information enough to have any noticeable effect on world
from a Reuters report. crude markets.
The restrictions that Washington has Both Eni and Repsol did not respond to
imposed on Caracas penalise many forms of Reuters’ requests for comment. But Venezue-
collaboration with Venezuela’s national oil lan President Nicolas Maduro sought to con-
company (NOC) PdVSA, including trade in firm reports of a resumption in oil shipments to
Venezuelan crude oil or petroleum products or Europe. He did not do so directly, though he did
involvement in transactions that support such say in a televised address on June 4 that Washing-
trade. As such, most European companies have ton had given Eni and Repsol, as well as the US
exited Venezuela since 2019, when US author- major Chevron, permission to resume upstream
ities began tightening the sanctions regime to activities in Venezuela.
target the oil and gas sector. “Steps are being taken, the first steps,” he said.
The only two exceptions have been Spain’s “About a week ago, the United States took small
Repsol and Italy’s Eni, which have maintained a but significant steps by granting licences to the
presence in the South American country. How- US company Chevron, the Italian company Eni
ever, the two companies were forced to halt oil- and Repsol.”
for-debt swap deals with PdVSA in 2020. Maduro’s statements were not strictly
Now, though, these two companies are accurate. US authorities recently extended a
reportedly on track to resume shipments of waiver that allows Chevron, along with four
Venezuelan crude in the near future. Deliveries US-based oilfield service providers (OSPs), to
may begin as early as next month, five sources maintain token presences in Venezuela, but
familiar with the matter told Reuters. the waiver does not permit any of the compa-
The sources did not provide any specific nies to engage in upstream activities or sup-
details as to the amount of oil involved. One porting operations.
Week 23 09•June•2022 www. NEWSBASE .com P7
