Add-on Acquisition • Oil/Gas Exploration

Surge Energy Acquires Grenadier Energy Partners II

On January 31, 2021, Surge Energy acquired oil/gas exploration company Grenadier Energy Partners II from EnCap Investments and Kayne Anderson Capital Advisors

Acquisition Context
  • This is Surge Energy’s 3rd transaction in the Oil/Gas Exploration sector.
  • This is Surge Energy’s 1st transaction in the United States.
  • This is Surge Energy’s 1st transaction in Texas.

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M&A Deal Summary

Date January 31, 2021
Target Grenadier Energy Partners II
Sector Oil/Gas Exploration
Buyer(s) Surge Energy
Sellers(s) EnCap Investments
Kayne Anderson Capital Advisors
Deal Type Add-on Acquisition

Target Company

Grenadier Energy Partners II

The Woodlands, Texas, United States
Grenadier Energy Partners II is a private exploration and production company that focuses on a balanced strategy of lease and drill opportunities with significant resource potential, as well as acquisitions with identifiable exploitation and development upside. Grenadier Energy Partners II was founded in 2012 and is based in The Woodlands, Texas.
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Buyer Overview 1

Buyer

Surge Energy

Calgary, Alberta, Canada

Category Company
Sector Oil/Gas Exploration
DESCRIPTION

Surge Energy Inc. was created by the recapitalization of Zapata Energy Corporation, a publicly traded junior oil and gas company listed on the TSX Venture Exchange. The company has operations throughout Alberta and southwest Manitoba.


Deal Context for Buyer #
Overall 4 of 4
Sector: Oil/Gas Exploration 3 of 3
Type: Add-on Acquisition 3 of 3
State: Texas 1 of 1
Country: United States 1 of 1
Year: 2021 1 of 1
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2013-11-01 Flagstone Energy

Calgary, Alberta, Canada

Flagstone is a tightly-held private company focusing on high-productivity horizontal oil wells in southern Saskatchewan. Flagstone’s management team has a grassroots, drill-bit-driven approach to growth, with unrelenting attention to costs and fundamental project economics. Flagstone’s primary asset is in the Viking oil trend in southern Saskatchewan, where it was one of the earliest companies to pursue the play

Buy -

Seller Profiles 2

SELLER

EnCap Investments

Houston, Texas, United States

Investor Investor Investor Investor Investor


Category Growth Capital Firm
Founded 1988
PE ASSETS 47.0B USD
Size Mega
Type Sector Focused
DESCRIPTION

EnCap Investments is a private equity firm focused on the US energy sector. EnCap specifically looks for upstream and midstream opportunities within the oil and gas industry. EnCap generally partners with seasoned management when pursuing investments. EnCap Investments has offices in Dallas and Houston.


Deal Context for Seller #
Overall 45 of 60
Sector: Oil/Gas Exploration 44 of 56
Type: Add-on Acquisition 26 of 38
State: Texas 33 of 45
Country: United States 44 of 59
Year: 2021 1 of 3
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2021-01-01 Pegasus Resources II

Fort Worth, Texas, United States

Pegasus Resources II is focused on acquiring mineral and royalty interests in proven oil and gas resource plays, specifically the Permian Basin. Pegasus Resources II is based in Fort Worth, Texas.

Buy -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2021-05-09 Sabalo Energy

Corpus Christi, Texas, United States

Sabalo Energy is an independent oil and gas company focused on the exploration and exploitation of oil and gas properties in various onshore U.S. basins. Sabalo Energy is based in Corpus Christi, Texas.

Sell $715M
SELLER

Kayne Anderson Capital Advisors

Los Angeles, California, United States

Investor Investor Investor Investor Investor


Category Asset Manager
Founded 1984
PE ASSETS 36.0B USD
Size Mega
Type Sector Agnostic
DESCRIPTION

Kayne Anderson Capital Advisors is an alternative investment management firm focused on hedge funds, public funds, energy private equity, growth private equity, real estate private equity, and mezzanine finance opportunities. Kayne's energy private equity group focuses on $20 to $100 million investments in high-growth exploration and production, midstream and oilfield service companies. The energy group considers both majority or minority stakes in public and private businesses. Kayne's growth private equity practice involves structured investments in public and private companies looking for capital to finance expansion. This group will also consider middle-market leveraged transactions and management buyouts. Kayne's real estate private equity group invests in established, cash-flow generating projects. Areas of interest include student housing and campus-oriented retail properties, amongst other opportunistic investments. The Group looks for acquisitions of $25 to $100 million. Kayne's mezzanine team looks to provide $20 to $35 million of capital for mid-market businesses with $100 to $500 million of sales and $10 to $50 million of EBITDA. Kayne Capital Advisors was formed in 1984 and is based in Los Angeles with additional offices in Armonk, New York; New York City, and Houston.


Deal Context for Seller #
Overall 71 of 85
Sector: Oil/Gas Exploration 39 of 43
Type: Add-on Acquisition 28 of 34
State: Texas 30 of 32
Country: United States 61 of 73
Year: 2021 1 of 7
PREVIOUS DEAL
DATE TARGET DEAL TYPE VALUE
2020-12-30 Think Research

Toronto, Ontario, Canada

Think Research is a provider in delivering integrated digital healthcare solutions. The Company's focused mission is to organize the world's health knowledge so everyone gets the best care. Its evidence-based healthcare technology solutions support the clinical decision-making process, standardize care, and improve patient outcomes. Think Research was founded in 2006 and is based in Toronto, Ontario.

Sell -
FOLLOWING DEAL
DATE TARGET DEAL TYPE VALUE
2021-03-02 Azalea Health

Atlanta, Georgia, United States

Azalea Health is a provider of fully integrated, technology-enabled healthcare solutions and Revenue Cycle Enhancement services for practices of all sizes and most specialties. Azalea’s comprehensive portfolio includes integrated electronic health records, practice management, electronic prescribing, interoperability services, personal health records, patient portal, telehealth, Azalea M mobile platform integrated with Apple® HealthKit, as well as Revenue Cycle Performance services. Azalea Health is based in Atlanta, Georgia.

Sell -