Leor Energy
Encyclopedia
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 prolific Amoruso Field) to a subsidiary of EnCana Corporation
for $2.55 billion. This acquisition marked the culmination of Leor's highly successful exploration program in the Deep Bossier in which it saw, in just over 24 months, production from the Amoruso Field grow from zero to more than 240 million gross cubic feet per day.
and Guma Aguiar
founded Leor in 2003, as the focus of their strategy to invest in grassroots
exploration. They developed this strategy based on their conviction that the fundamental energy market trend
s unequivocally pointed to supply/demand disequilibrium with demand far outpacing supply.
In 2003, Leor entered into a joint venture arrangement with Legends Exploration to pursue unconventional North American
oil and gas plays including the Deep Bossier in Robertson County, Texas. Over the ensuing two years, being managed by a company in The Woodlands Texas by the name of Pettigrew & Pettigrew Land Services (land management outsourcing firm) and the brokerage firm Genesis Land and Minerals, Leor entered into leases covering approximately 38000 acres (153.8 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 provides EnCana an opportunity to earn 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. These two financings, along with existing cash and revenue from operations, gave Leor ample capital to fund its development and drive shareholder value.
In July 2006, Leor sold approximately 3360 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 going forward. After the transaction Leor held a 23725 acres (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 includes provisions that allow 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 will 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 holds a two-thirds working interest in approximately 15000 acres (60.7 km²) gross of Deep Bossier land in Robertson County, Texas. Navasota's land is adjacent to Leor's Amoruso Prospect.
In November 2007, Leor sold its Deep Bossier natural gas and land interests (including its 50% stake in the prolific Amoruso Field) to a subsidiary of EnCana Corporation for $2.55 billion. In the span of two years, Leor initiated a successful exploration and production program in Amoruso Field which yielded more than 30 wells, gross production of over 240000000 cuft/d, and an extensive inventory of highly prospective well locations in the prolific Deep Bossier trend which is quickly emerging as one of the leading resource plays in North America. In recognition of Mr. Aguiar’s management and leadership in connection with Leor’s sale to EnCana Corporation, he was recognized by Oil and Gas Investor magazine as its 2007 Executive of the Year.
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
exploration
Exploration
Exploration is the act of searching or traveling around a terrain for the purpose of discovery of resources or information. Exploration occurs in all non-sessile animal species, including humans...
company
Company
A company is a form of business organization. It is an association or collection of individual real persons and/or other companies, who each provide some form of capital. This group has a common purpose or focus and an aim of gaining profits. This collection, group or association of persons can be...
focused primarily on unconventional gas in North America
North America
North America is a continent wholly within the Northern Hemisphere and almost wholly within the Western Hemisphere. It is also considered a northern subcontinent of the Americas...
. In November 2007, Leor sold its Deep Bossier natural gas and land interests (including its 50% stake in the prolific Amoruso Field) to a subsidiary of EnCana Corporation
EnCana Corporation
Encana Corporation is one of North America's largest natural gas producers, with about 95 percent of its production being natural gas. Its strategy is to be the lowest-cost, highest-growth senior natural gas producer in North America. The company produced approximately of natural gas in 2010.The...
for $2.55 billion. This acquisition marked the culmination of Leor's highly successful exploration program in the Deep Bossier in which it saw, in just over 24 months, production from the Amoruso Field grow from zero to more than 240 million gross cubic feet per day.
History
Thomas KaplanThomas Kaplan
Thomas S. Kaplan is an American entrepreneur, natural resources investor, philanthropist and art collector. He is the Founder and Principal of Tigris Group and the Chairman and Chief Investment Officer of The Electrum Group LLC, a New York City-based investment, advisory and asset management firm...
and Guma Aguiar
Guma Aguiar
Guma L. Aguiar is a Brazilian-born energy industrialist and millionaire businessperson who splits his time living between the United States and Israel. Guma Aguiar is recognized as a leading philanthropist who has supported a variety of Jewish causes including Nefesh B'Nefesh and the March of the...
founded Leor in 2003, as the focus of their strategy to invest in grassroots
Grassroots
A grassroots movement is one driven by the politics of a community. The term implies that the creation of the movement and the group supporting it are natural and spontaneous, highlighting the differences between this and a movement that is orchestrated by traditional power structures...
exploration. They developed this strategy based on their conviction that the fundamental energy market trend
Market trend
A market trend is a putative tendency of a financial market to move in a particular direction over time. These trends are classified as secular for long time frames, primary for medium time frames, and secondary for short time frames...
s unequivocally pointed to supply/demand disequilibrium with demand far outpacing supply.
In 2003, Leor entered into a joint venture arrangement with Legends Exploration to pursue unconventional North American
North American
North American generally refers to an entity, people, group, or attribute of North America, especially of the United States and Canada together.-Culture:*North American English, a collective term used to describe American English and Canadian English...
oil and gas plays including the Deep Bossier in Robertson County, Texas. Over the ensuing two years, being managed by a company in The Woodlands Texas by the name of Pettigrew & Pettigrew Land Services (land management outsourcing firm) and the brokerage firm Genesis Land and Minerals, Leor entered into leases covering approximately 38000 acres (153.8 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 provides EnCana an opportunity to earn 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
Hedge fund
A hedge fund is a private pool of capital actively managed by an investment adviser. Hedge funds are only open for investment to a limited number of accredited or qualified investors who meet criteria set by regulators. These investors can be institutions, such as pension funds, university...
. In January 2006, Leor closed a $45.0 million private placement
Private placement
Private placement is a funding round of securities which are sold without an initial public offering, usually to a small number of chosen private investors...
of equity securities with Goldman Sachs & Co. These two financings, along with existing cash and revenue from operations, gave Leor ample capital to fund its development and drive shareholder value.
In July 2006, Leor sold approximately 3360 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 going forward. After the transaction Leor held a 23725 acres (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
Revolving credit
Revolving credit is a type of credit that does not have a fixed number of payments, in contrast to installment credit. Examples of revolving credits used by consumers include credit cards. Corporate revolving credit facilities are typically used to provide liquidity for a company's day-to-day...
facility with JPMorgan Chase Bank as lead agent. In March 2007, Leor and JPMorgan amended the credit facility, adding BNP Paribas
BNP Paribas
BNP Paribas S.A. is a global banking group, headquartered in Paris, with its second global headquarters in London. In October 2010 BNP Paribas was ranked by Bloomberg and Forbes as the largest bank and largest company in the world by assets with over $3.1 trillion. It was formed through the merger...
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 includes provisions that allow 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
Merrill Lynch
Merrill Lynch is the wealth management division of Bank of America. With over 15,000 financial advisors and $2.2 trillion in client assets it is the world's largest brokerage. Formerly known as Merrill Lynch & Co., Inc., prior to 2009 the firm was publicly owned and traded on the New York...
PCG, a proprietary investment group within Merrill Lynch & Co., Inc. Proceeds from the JPMorgan credit facility and the Merrill Lynch equity investment will 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 holds a two-thirds working interest in approximately 15000 acres (60.7 km²) gross of Deep Bossier land in Robertson County, Texas. Navasota's land is adjacent to Leor's Amoruso Prospect.
In November 2007, Leor sold its Deep Bossier natural gas and land interests (including its 50% stake in the prolific Amoruso Field) to a subsidiary of EnCana Corporation for $2.55 billion. In the span of two years, Leor initiated a successful exploration and production program in Amoruso Field which yielded more than 30 wells, gross production of over 240000000 cuft/d, and an extensive inventory of highly prospective well locations in the prolific Deep Bossier trend which is quickly emerging as one of the leading resource plays in North America. In recognition of Mr. Aguiar’s management and leadership in connection with Leor’s sale to EnCana Corporation, he was recognized by Oil and Gas Investor magazine as its 2007 Executive of the Year.