Cordillera Energy Partners was founded in February 2000 and incorporated as a Limited Liability Company formed in the state of Texas. The company was formed by George Solich, President and CEO, and his Management Team. CEP’s major equity partner is EnCap Investments. The company employed the “acquire/exploit” strategy-buying producing assets and underdeveloped assets in two or three core areas and enhancing production, cash flow, and reserves through a combination of drilling and lowering the cost structure, while adding additional “bolt-on” acquisitions.
Cordillera Energy Partners I, LLC, core areas were the Anadarko Basin, the Delaware Basin and the San Juan Basin. Through a combination of acquisitions and drilling, CEP I grew its production to 30 Mmcfed, annual cash flow to $35 million, and proved reserves to 250 Bcfe by mid 2003. In October 2003, CEP I sold its assets to Patina Oil & Gas for cash and warrants to purchase Patina stock valued at $247 million.
Upon completion of the CEP I sale, the core Management Team formed Cordillera Energy Partners II, LLC, again with EnCap Investments, along with seven other institutional investors and management. In March of 2004, the company was capitalized with a $200 million private equity investment and a $300 million credit facility from six banks led by JP Morgan Chase. CEP II added to its management team ranks and set out to chart the same “acquire/exploit” strategy that had been so successful in CEP I.
Again through a combination of focused acquisitions and vertical and horizontal drilling, CEP II grew quickly in both size and value. By mid 2008 CEP II was producing close to 50 Mmcfed from 600 wells (97% operated with annual cash flow exceeding $200 million and proved reserves of 725 Bcfe.) These high-quality natural gas assets were concentrated in the Texas Panhandle (Douglas, Cleveland, Granite Wash, Atoka, and Morrow), West Central Anadarko Basin, and the East Texas Basin (Cotton Valley Sand, Cotton Valley Lime, Hosston, Pettet, and Travis Peak).
In September of 2008 CEP II sold all the assets of the company in three separate transactions for total consideration in cash and stock valued at $1.023 billion. The Texas Panhandle and East Texas assets were sold to Forest Oil, the Oklahoma assets to Merit Energy, and the Deep Woodford assets to Devon Energy.
Prior to the sale of CEP II, the Management Team and CEP’s equity investors elected to form Cordillera Energy Partners III, LLC, while still managing and operating CEP II so as not to lose momentum, opportunities, or human talent. In March of 2007, CEP III was formed with a $500 million equity investment from EnCap Investments, along-side institutional investors and management. CEP III also entered into a $600 million, six bank credit facility again led by JP Morgan Chase.
With the Management Team from CEP II intact, CEP III is active again in three core areas. CEP III holds assets and operations in the Texas Panhandle, Western Oklahoma, and the East Texas Basin. CEP III is also actively pursuing opportunities to enter into the Marcellus Shale Play in the Appalachian Basin. As of the 2nd quarter of 2010, CEP III has production approaching 28 Mmcfed with over 3,800 low risk, high quality, vertical and horizontal locations to be drilled in the Granite Wash, Tonkawa, Cleveland, Marmaton, Douglas, Atoka, and Morrow.
Cordillera is celebrating its 10th year in business and making plans to form its fourth enterprise centered around the “acquire/exploit” strategy. During this 10-year period, the Cordillera Management Team has executed on both small and large producing property and acreage acquisitions totaling over $740 million and has drilled over 280 wells (vertical and horizontal) investing over $335 million.
Since its inception, Cordillera Energy Partners has been blessed with dedicated employees, top-quality equity and debt partners, and high-quality assets to pursue investment of acquisition and drilling dollars. The culture focuses on creating value for the shareholders with a hard-working, loyal, and technically advanced team of professionals while dealing with constituents, landowners, communities, vendors, and competitors with respect and integrity. The goal is to be the buyer of choice, lessee of choice, driller of choice, investment of choice, and eventually seller of choice.
