The father-son management team that developed and flipped a Permian Basin asset package to Ring Energy Inc. last year for $465 million has established a new venture with a similar playbook.
Executive Chairman Steve Weatherl and his son, CEO Caleb Weatherl, on Monday announced the founding of Garrison Energy Holdings.
Based in Midland, TX, and backed by a $500 million line of equity financing from an institutional investor, Garrison “intends to develop a scaled oil and gas exploration and production company by acquiring assets in the Permian Basin,” the Weatherls said.
The company is interested in evaluating opportunities in the Permian’s Delaware and Midland sub-basins, Central Basin Platform and Northwest Shelf.
“The Company is targeting assets with a significant inventory of horizontal locations, vertical locations, or recompletion opportunities,” management said.
The Weatherls in mid-2022 sold the Permian assets of previous ventures Stronghold Energy II Operating LLC and Stronghold Energy II Royalties LP to Ring in a transaction that boosted Ring’s proven reserves by over 80%.
"Our team has built our careers on our understanding and familiarity with the Permian Basin, which continues to prove to be the most prolific oil and natural gas-producing region in the United States," said the elder Weatherl. "There is an abundance of opportunity in the region, and we are already evaluating deals ranging from as small as a section with high quality inventory to as large as upwards of $1 billion, given our investor's ability to add additional equity capital for the right opportunity."
Caleb Weatherl added, "With decades of experience in the region and a track record of bringing value forward for assets of all sizes, we are excited to connect with the opportunities available in the Permian Basin — whether those are horizontal or vertical drilling locations or recompletions.”
Lower 48 merger and acquisition activity has been heating up in recent weeks, an encouraging sign for private equity-backed asset developers such as Garrison.
Chevron Corp. this week announced a $6.3 billion all-stock acquisition of Denver-based PDC Energy Inc.
Other noteworthy deals include the $540 million joint acquisition by Vital Energy Inc. and Northern Oil and Gas Inc. (NOG) of Permian-focused Forge Energy II Delaware LLC, and a $4.3 billion acquisition by Ovintiv Inc. of 65,000 net acres in the Permian Midland.
The assets acquired by Vital/NOG and Ovintiv all were bought from companies managed by EnCap Investments LP.
The Lower 48 rig count, meanwhile, dipped by 2% sequentially and 1% year/year for the week ended Friday (May 19), according to Baker Hughes Co. data. The decline included a four-unit week/week drop in the Permian. The Energy Information Administration (EIA) is forecasting Lower 48 natural gas production from seven key producing regions to grow by 256 MMcf/d sequentially to surpass 97 Bcf/d in June.
