Penn Virginia’s $370 Million Acquisition of Lonestar Resources

Evercore, BofA Securities, and RBC Capital Markets, LLC are serving as financial advisors to Penn Virginia. Kirkland & Ellis LLP is serving as Penn Virginia’s legal advisor. Barclays Capital is serving as financial advisor to Lonestar. Vinson & Elkins LLP is serving as Lonestar’s legal advisor.

Penn Virginia Corporation (NASDAQ: PVAC) and Lonestar Resources US Inc. (OTCQX: LONE) announced that they have entered into a definitive merger agreement under which Penn Virginia will acquire Lonestar in an all-stock transaction. Under the terms of the agreement, Lonestar shareholders will receive 0.51 shares of common stock of Penn Virginia for each share of common stock of Lonestar outstanding. The transaction, which is expected to close in the second half of 2021, has been unanimously approved by the boards of directors of both companies. The closing of the transaction is subject to customary closing conditions, including the approval of Penn Virginia and Lonestar shareholders.   Shareholders holding approximately 80% of the voting power of Lonestar, and approximately 60% of the voting power of Penn Virginia, have executed binding support agreements committing them to vUnder the terms of the merger agreement, Lonestar shareholders will receive 0.51 shares of Penn Virginia for each Lonestar share. The transaction is valued at approximately $370 million as of July 9, 2021, composed of approximately 5.9 million shares of Penn Virginia common stock and the assumption of approximately $236 million of Net Debt(5). The transaction is expected to close in the second half of 2021, subject to the satisfaction of customary closing conditions, including obtaining the requisite shareholder and regulatory approvals. The transaction has been unanimously approved by the Boards of Directors of both companies. In addition, following the execution of the merger agreement, Lonestar shareholders holding approximately 80% of the voting power of Lonestar and Penn Virginia shareholders holding approximately 60% of the voting power of Penn Virginia signed binding support agreements obligating them to vote in favor of the transaction. Upon completion of the transaction, Penn Virginia shareholders will own approximately 87% of the combined company, and Lonestar will own approximately 13% of the combined company.ote their shares for the transaction.

Penn Virginia Corporation is a pure-play independent oil and gas company engaged in the development and production of oil, NGLs, and natural gas, with operations in the Eagle Ford shale in south Texas.

Lonestar is an independent oil and natural gas company based in Fort Worth, Texas, focused on the development, production, and acquisition of unconventional oil, NGLs, and natural gas properties in the Eagle Ford Shale in Texas.

The V&E corporate team was led by partners Mark Kelly (Picture) and Lande Spottswood, with assistance from senior associate Alex Robertson and associates Bobbi Ingram, Mary Busse and Walt Baker. Also advising were partners John Lynch and Lina Dimachkieh, senior associate Paige Anderson and associate Maddie Brown; partner David D’Alessandro, counsel Dario Mendoza and associate Maddison Riddick; partner Sean Becker and associate Peter Goetschel; partner Hill Wellford and senior associate Evan Miller; counsel Sarah Mitchell; partner John Grand and counsel Elena Sauber; partner Darin Schultz and senior associate Alex Cross; and partner Larry Nettles.

The Kirkland team was led by corporate partners Sean Wheeler, Debbie Yee and Enoch Varner; tax partner David Wheat; and debt finance partner Rachael Lichman.

Involved fees earner: Rachael Lichman – Kirkland & Ellis; Enoch Varner – Kirkland & Ellis; David Wheat – Kirkland & Ellis; Sean Wheeler – Kirkland & Ellis; Debbie Yee – Kirkland & Ellis; Paige Anderson – Vinson & Elkins LLP; Walt Baker – Vinson & Elkins LLP; Sean Becker – Vinson & Elkins LLP; Maddie Brown – Vinson & Elkins LLP; Mary Busse – Vinson & Elkins LLP; Alex Cross – Vinson & Elkins LLP; Lina Dimachkieh – Vinson & Elkins LLP; David D’Alessandro – Vinson & Elkins LLP; Peter Goetschel – Vinson & Elkins LLP; John Grand – Vinson & Elkins LLP; Bobbi Ingram – Vinson & Elkins LLP; T. Mark Kelly – Vinson & Elkins LLP; John Lynch – Vinson & Elkins LLP; Dario Mendoza – Vinson & Elkins LLP; Sarah Mitchell – Vinson & Elkins LLP; Larry Nettles – Vinson & Elkins LLP; Maddison Riddick – Vinson & Elkins LLP; Alex Robertson – Vinson & Elkins LLP; Elena Sauber – Vinson & Elkins LLP; Darin Schultz – Vinson & Elkins LLP; Lande Alexandra Spottswood – Vinson & Elkins LLP; Hill Wellford – Vinson & Elkins LLP;

Law Firms: Kirkland & Ellis; Vinson & Elkins LLP;

Clients: Lonestar Resources US Inc.; Penn Virginia Corporation;

Martina Bellini

Author: Martina Bellini