Status:  Withdrawn; Abandoned & Restructured

Acquirer:  IDG Energy Investment Group Limited (Bermuda; Hong Kong SAR, China)

Acquired:  Assets from Stonegate Production Company, LLC (US)

Value:  Approximately US$278 million

Industry:  Oil & Gas

On November 21, 2016, IDG Energy Investment Group Limited, a Hong Kong publicly traded (HKEX code 650) investment company entered an asset purchase agreement with Texas based exploration and production company Stonegate Production Company, LLC, and its affiliates Stonegate Dimmit Properties, LLC and/or Dimmit/La Salle Saltwater Disposal Company, LLC, to acquire certain oil assets located in South Texas Eagle Ford shale basin in the US through a wholly owned US subsidiary, Rockgate Production Company LLC.   (IDG Energy Investment Group Ltd. 2017 Annual Report.)  CFIUS approval was a condition for closing the transaction.  (See IDG Energy Investment Group Ltd., Acquisition Of Oil And Gas Producing Assets in the US, Mar. 9, 2017, HKEX filing.)  The initial close was set for May 4, 2017, however, “to accommodate the additional time needed for CFIUS to evaluate and approve the [a]cquisition,” the parties entered into an amendment to change the end date for closing to July 18, 2017.  (IDG Energy Investment Group Ltd., Announcement Update to Acquisition Of Oil And Gas Producing Assets in the US, Apr. 28, 2017, HKEX filing.)  The end date was later moved to August 2017, and the CFIUS Approval condition was the only outstanding condition.  (See IDG Energy Investment Group Ltd., Announcement of Termination of Acquisition, Aug. 3, 2017, HKEX filing.)  On August 3, 2017, the parties agreed to terminate the asset purchase agreement.  (Id.)  The parties entered into negotiations for “an alternative transaction regarding assets of the Sellers (the ‘‘Alternative Transaction’’), which, if materialised, as advised by the legal advisers advising the Company on CFIUS matters, will be a non-covered transaction for CFIUS purpose.” (Id.)

August 14, 2017, Stonehold, a company wholly owned and solely controlled by Breyer Capital, entered into an agreement with Stonegate Production to acquire certain assets (“Target Assets”) from Stonehold.  (See IDG Energy Investment Group Ltd., Announcement of Credit Agreement, Aug. 15, 2017, HKEX filing.)  “The Target Assets form part of the assets of the Sellers originally agreed to be purchased by the [IDG Energy Investment Group] under the Previous Transaction.  All Target Assets are non-operated oil and gas assets of Stonegate.” (Id.)  IDG Energy Investment Group then “entered into the Credit Agreement with Stonehold, pursuant to which, [IDG Energy Investment Group] and Think Excel have conditionally agreed to grant the Term Loan to Stonehold.” (Id.)  “The management and operation of Stonehold are solely controlled by Breyer Capital.”  (Id.)