Evolve Transition Infrastructure LP

Evolve Transition Infrastructure LP deregistered its securities, ending its obligation to file reports with the SEC.

listing compliance notice

This final amendment reports that on February 16, 2024 the general partner completed the buyout begun in January, purchasing all common units not already held by it or its controlled affiliates at $1.389285 per unit in cash. The general partner and its controlled affiliates now own all of Evolve's economic interests, trading on the NYSE American was suspended on February 16, 2024, and the exchange filed a Form 25 that day to withdraw the units from listing and registration. Evolve intends to file a Form 15 on February 26, 2024 to suspend its SEC reporting obligations. This resolves the call right thread and ends public unitholders' position.

business combination

Evolve Transition Infrastructure LP's exchange filed to remove a class of its securities from listing.

listing compliance notice

Amendment No. 1 reports that the call right was exercised. The general partner and its controlled affiliates, after Stonepeak transferred the right to them, held 6,824,812 common units (about 81.6%) of 8,361,032 outstanding. On January 8, 2024 the general partner exercised the right to buy all other common units at $1.389285 per unit, an average of 20 trading-day closing prices on the NYSE American to January 4, 2024. This reverses the 'does not anticipate' statement in the November 2022 filing and ends public unitholders' position. The unit counts are small compared with 2022, which is consistent with the 1-for-30 reverse split in the running context (an inference).

business combination

The end: the general partner, holding over 80% of the units, exercised its contractual right to buy every remaining public unit for $1.389285 in cash and take the partnership private. Adjusted for the one-for-thirty reverse split seven months earlier, that is about 4.6 cents against pre-split units - the terminal value of an entity that was Constellation Energy Partners in 2006, Sanchez Production Partners in 2015 and Evolve Transition Infrastructure in 2021. No vote was required; the formula did the work.

listing compliance notice

Evolve sold its half of Carnero G&P to Targa for $27 million plus a share of a future award. It had committed roughly $125 million for the Carnero interests in 2016, cash and assumed construction commitments together. This was the last significant asset sale before the public unitholders were bought out.

material agreement

Evolve formally requested a review of the NYSE's delisting determination, which stayed the delisting while the trading suspension stayed in place and the units traded over-the-counter. The one-for-thirty reverse split date was also moved because FINRA had to review it.

listing compliance notice

The HOBO renewable diesel venture was terminated, filed alongside another listing notice. The first of Evolve's two energy-transition bets ended with nothing built.

listing compliance notice

The Catarina gathering agreement was assigned as Mesquite's Catarina position changed hands again - Evolve's revenue now depends on a third owner of the same acreage in eight years.

material agreement

Evolve announced a one-for-thirty reverse split of its common units, expected to take effect after the market closed on June 13, 2023. Units were to trade split-adjusted from June 14, with cash paid in place of fractional units and holders' relative rights unchanged.

security holder rights change

NYSE American found Evolve below the listing standards again, on both partners' equity and losses. The same deficiency that first appeared in April 2020, never actually cured.

listing compliance notice

Stonepeak filed a Schedule 13E-3 on its November 2020 arrangement to take common units instead of preferred distributions. On October 28, 2022 it elected to take 27,442,638 common units for Q3 2022, lifting its stake from about 75.3% to 78.2% (80.3% with the warrant), and the filing says it did not currently anticipate exercising the limited call right.

business combination

The reason for the settlement, stated plainly: Mesquite had been short-paying its invoices, using the cheaper western Catarina tariff for eastern Catarina volumes. Evolve's single customer had simply been paying it less than the contract required.

material agreement

Evolve settled its disputes with Mesquite Energy - the post-bankruptcy Sanchez Energy - and restated the Catarina gathering agreement. The 2015 contract that made the partnership worth owning had to be renegotiated with a counterparty that no longer accepted its terms.

material agreement

Evolve agreed to fund development of HOBO Renewable Diesel's first project, a 9,000 barrel-a-day renewable fuels facility. A second energy-transition venture in three months, funded by a partnership that had just cut its equity programme to $7 million.

director officer appointment

Stonepeak and the partnership withdrew the going-private statement (Amendment No. 3, marked as the final amendment). They say that further common unit issuances under the partnership's at-the-market offering and a higher unit price mean they no longer expect Stonepeak to get enough units to trigger the call right before December 31, 2022. This reverses the early-2021 expectation of a buyout as soon as Q1 2021, though it is a postponement, not a waiver, of the right. The partnership is now named Evolve Transition Infrastructure LP.

business combination

Royal Bank of Canada agreed to buy out the other lenders' positions at par and become the sole lender. A syndicate collapsing to one bank means the others wanted out; whether that is a rescue or a wind-down depends entirely on what the remaining bank chooses to do.

material agreement

Evolve's pivot became concrete: it formed Levo Mobility with Nuvve and Stonepeak to finance and deploy electric school-bus fleets and charging infrastructure. A gas gathering partnership funding electric vehicle infrastructure alongside the same investor that holds its preferred - the "transition" in the new name, and a business with no revenue history at all.

material agreement

Mesquite Energy, formerly Sanchez Energy, gave notice on June 24, 2021 that it was terminating the June 2020 Settlement Agreement, so the Catarina acreage dedication, the Seco transportation agreements and the releases never took effect. Existing gathering and gas lift agreements were unchanged, and Evolve raised its Western Catarina tariff for interruptible volumes outside the dedicated acreage.

material agreement termination

Evolve sold the Palmetto wellbores - the assets it bought from Sanchez Energy for $85 million in 2015 - to Westhoff for about $11.5 million, and disclosed a further listing deficiency in the same filing. A six-year round trip from $85 million to $11.5 million.

listing compliance notice

Amendment No. 2 to Stonepeak's going-private disclosure updates the numbers: on February 1, 2021 Stonepeak received 22,274,869 common units as payment of its Q3 2020 preferred distribution, and on January 28, 2021 it elected to take 12,445,491 more for Q4 2020. Outstanding common units were 42,228,749, of which Stonepeak held 27,318,599 (about 64.7%). After the Q4 payment it would hold 39,764,090 (about 72.7%, or 75.5% if it exercised its warrant). The filing says the 80% threshold for the forced buyout of public holders could be reached as early as Q1 2021. The illustrative $0.62 per unit price is unchanged, and Stonepeak had not exercised the warrant or the call right.

business combination

On February 1, 2021, the partnership issued 22,274,869 common units to Stonepeak as its Class C preferred distribution for the third quarter of 2020, instead of cash or more preferred units. On January 28, 2021 Stonepeak also elected to take 12,445,491 common units for the fourth quarter.

capital raising announcement

Stonepeak Catarina and affiliates, with the partnership (now Sanchez Midstream Partners LP) and its general partner, filed a going-private disclosure on an agreement dated November 16, 2020, letting Stonepeak take its Class C preferred distributions in common units. Stonepeak owns 5,043,730 of 19,953,880 common units (about 25.3%) and would hold about 64.7% after the third-quarter 2020 payment in units. Stonepeak could pass 80% as early as Q1 2021, which would let it have the general partner buy all remaining common units under the limited call right; the filing's illustrative price is $0.62 per unit (about $9.2 million for the rest). No call has been exercised yet. This puts the eventual forced buyout of public holders on the table and links back to the Stonepeak preferred funding from 2015 and its 2019 restructuring.

business combination

As Sanchez Oil & Gas wound down its role, the partnership took a licence over the seismic and geological data it had been relying on, and reshaped its board and governing documents. The Sanchez family's grip was being unwound; Stonepeak's was tightening.

director officer appointment

After the bankruptcy court approved the settlement on June 30, 2020, the parties signed amended gathering agreements and new Seco Pipeline transport agreements, which take effect once closing conditions are met. The amendments removed Sanchez's minimum volume commitments and expanded the dedicated acreage, and Sanchez emerged as privately held Mesquite Energy.

material agreement

On 14 June 2020 the partnership and the other parties amended the 6 June settlement. The Carnero and Catarina gathering agreements would be deemed assumed once the court approved the settlement, and closing would require court orders approving assumption of the related agreements.

material agreement

The partnership settled with Sanchez Energy's bankruptcy estate over the gathering contracts that are its entire business - the fifteen-year Catarina agreement signed in 2015 could otherwise have been rejected in the Chapter 11 and left the partnership with pipelines and no volumes. The single most dangerous moment in its history.

material agreement

NYSE American warned the partnership it was below the listing standards, having reported partners' capital under $2 million at the end of 2019 alongside continuing losses. Its accumulated equity had been wiped out by impairments and by the preferred sitting above it.

listing compliance notice

With its main customer in Chapter 11, the partnership pushed its credit facility maturity out to September 2021 and cut the commitment to $20 million. A facility that small is no longer a growth tool; it is working capital for a business waiting to find out whether it still has a counterparty.

debt financing

On 2 August 2019 Stonepeak swapped its Class B preferred units for new Class C preferred units plus a warrant over 10% of the partnership's junior securities. It also gained the right to name up to two directors, under a standstill that bars it from buying more securities.

director officer appointment

The partnership settled a dispute with Stonepeak over how its preferred units were being adjusted, issuing more units to close it. Fourteen months in, the terms of the preferred were already contested - a preview of a relationship that dominated the next seven years.

capital raising announcement

The partnership closed its purchase of 50% of Carnero Processing from Sanchez Energy, paying about $55.5 million in cash and assuming about $24.5 million of remaining commitments. It also closed the Eagle Ford and Palmetto Field wells purchase for $25.6 million in cash after $1.4 million of adjustments.

asset acquisition disposition

The partnership sold 6.55 million units publicly at $11.00 to help pay for the Carnero processing stake - its only genuine public equity raise under Sanchez ownership.

capital raising announcement

Amended filing for three agreements dated October 6, 2016, all with Sanchez Energy affiliates, continuing the pattern of buying assets from Sanchez Energy. The partnership agreed to buy Sanchez Energy's 50% of Carnero Processing, LLC (a gas processing plant under construction in La Salle County, Texas; the other 50% is owned by Targa) for about $47.7 million plus about $32.3 million of remaining capital commitments. It also agreed to buy oil and gas properties for $27.0 million ($24.9 million cash after $2.1 million of adjustments): working interests in 23 Eagle Ford wells and 11 Palmetto Field wells, expected to add about 700 Boe/d in 2017, with Sanchez Energy's own estimate of about 1,800 MBoe of proved reserves under SEC rules. It also obtained an option on a ground lease at Point Comfort, Texas for $1.00 if exercised, plus $250,000 if a marine crude storage terminal is built. Both purchases depend on the partnership obtaining financing and were expected to close in Q4 2016. The amendment only adds reserve information and updates the expected closing date.

material agreement

The partnership agreed to buy half of Carnero Processing - a cryogenic gas plant under construction in La Salle County - from Sanchez Energy for $47.7 million plus $32.3 million of remaining construction commitments. A third midstream purchase from the same related seller inside eighteen months.

material agreement

The sale of substantially all operated Oklahoma and Kansas wells to Gateway closed on July 15, 2016 for $7,120, with the buyer taking on the plugging and abandonment costs. The partnership kept its operated Osage County assets and its non-operated interests in Oklahoma and Kansas.

asset acquisition disposition

Another purchase from its controlling shareholder: Carnero Gathering bought from Sanchez Energy for about $37 million plus $7.4 million of assumed commitments. The partnership keeps buying midstream from the company that also supplies its volumes.

asset acquisition disposition

The partnership agreed to sell substantially all its operated Oklahoma and Kansas wells - the old Cherokee Basin business - to Gateway Resources for $7,120. Not a typo: the assets were worth less than the liabilities attached to them, and the buyer was effectively paid to take the plugging obligations away.

material agreement

Catarina Midstream closed, together with a fifteen-year agreement under which Sanchez Energy must send all its Catarina production through the system. Stonepeak got two board seats, the right to appoint all three independent directors if its preferred is not redeemed by the end of 2021, and standstill protections. Both halves matter: the partnership's revenue now depends on one customer, and its governance now depends on one preferred holder.

asset acquisition disposition

The transformative deal: the partnership agreed to buy the Catarina gathering system from Sanchez Energy for $345.8 million, funded almost entirely by selling $350 million of new Class B preferred units to a single institutional buyer, Stonepeak. It converts the partnership from a marginal producer into a midstream business - and hands an infrastructure fund a claim ahead of every common unitholder.

capital raising announcement

On April 15, 2015, the partnership privately sold 234,375 newly created Class A Preferred Units at $1.60 each, for gross proceeds of $375,000 to be used for general working capital. It also agreed to register the resale of the underlying common units, with liquidated damages if registration was late.

capital raising announcement

The first related-party purchase under Sanchez control: the partnership bought working interests in 59 Palmetto wellbores from Sanchez Energy for $85 million, paying $81.6 million cash and just over a million units, funded with a new credit agreement and a new class of preferred. Money flowing from the partnership to its controlling shareholder's other listed company, on terms no outside buyer negotiated.

asset acquisition disposition

Evolve Transition Infrastructure LP terminated the registration of a class of securities, ending its reporting obligation for them.

listing compliance notice

Evolve Transition Infrastructure LP's exchange filed to remove a class of its securities from listing.

listing compliance notice

The conversion into Sanchez Production Partners LP was completed on March 6, 2015, after the press release says all classes of unitholders approved it at a special meeting that day. This resolves the long-pending vote. Each common unit became one unit of the new partnership, trading under the same SPP ticker on the NYSE MKT from March 9, 2015. A Sanchez-owned general partner now manages the partnership, with its board appointed by SP Holdings, and the filing reports a change in control. SP Holdings received all incentive distribution rights and holds 59,562 common units (0.2%), while Sanchez Energy Partners I holds 5,951,800 common units (20.3%) after its Class A units converted and its Class Z unit was cancelled. No consideration was paid by the Sanchez parties. The 2009 incentive plan was restated as the Sanchez Production Partners LP Long-Term Incentive Plan, covering up to 15% of outstanding common units.

business combination

Constellation Energy Partners LLC filed a registration statement to convert itself into a limited partnership called Sanchez Production Partners LP, under a plan dated August 25, 2014. Each common unit becomes one unit of the new partnership (29,322,146 units registered), Class A units become common units equal to 2% of the total, and the Class Z unit is cancelled. An affiliate of Sanchez Oil & Gas becomes general partner and another affiliate gets incentive distribution rights. Unitholders must vote to approve it. This formalises the Sanchez takeover of control that began with the 2014 shared services agreement.

business combination

The partnership handed its entire operation to SP Holdings, a Sanchez Oil & Gas affiliate, under a shared services agreement paying a quarterly fee based on asset value - the same external-management structure Sanchez Energy uses. The partnership no longer runs itself, and the manager is paid on size rather than returns.

director officer appointment

Sanchez Energy Partners I sold Texas and Louisiana oil and gas properties to the partnership for $20.1 million in cash, 4.7 million common units, 1.13 million Class A units and one non-voting-in-practice Class Z unit. As holder of 70% of the Class A units, it then replaced the two Class A managers with Antonio R. Sanchez III and Gary Wellinger.

director officer appointment

The Robinson's Bend sale closed at $63 million plus adjustments. The partnership is now a Cherokee Basin and Woodford gas producer with cash and a much smaller borrowing base, and no obvious reason for anyone to own it.

asset acquisition disposition

The partnership agreed to sell Robinson's Bend - the Alabama coalbed methane field it was built around - to Castleton Commodities for $63 million. Selling the founding asset is the clearest statement that the original business no longer worked at prevailing gas prices.

material agreement

Evolve Transition Infrastructure LP's securities were notified for removal from listing and registration on its exchange.

listing compliance notice

the New York Stock Exchange certified Evolve Transition Infrastructure LP's securities for listing, clearing them to begin trading.

listing compliance notice

The units closed at $1.96 against NYSE Arca's $3.00 minimum, having been below it for over thirty days. The exchange waived the requirement this time - the first listing problem in what became more than a decade of them.

listing compliance notice

The partnership consolidated its borrowings into a single $350 million reserve-based facility led by Royal Bank of Scotland, maturing in 2012. Reserve-based means the banks re-test the collateral twice a year - which is how a gas producer with falling prices loses its credit without missing a payment.

debt financing

The partnership signed direct employment agreements with its four senior executives - chief executive Stephen Brunner, finance chief Charles Ward, general counsel Lisa Mellencamp and controller Michael Hiney - through its own services subsidiary. With the sponsor's future uncertain, the partnership was making its management its own rather than borrowed.

director officer appointment

The partnership's sponsor, Constellation Energy Group, agreed to be taken over by MidAmerican in the middle of the 2008 financial crisis, and had to publicly reaffirm that it would keep providing management services. When a managed partnership's manager is itself in play, its stability is no longer its own to guarantee.

business combination

The CoLa acquisition closed, funded by drawing on the credit facility. The partnership now holds coalbed methane in Alabama's Robinson's Bend field, gas in the Cherokee Basin, and this new Woodford position - all bought with borrowed money against a fixed distribution.

asset acquisition disposition

Then called Constellation Energy Partners, the partnership agreed to pay CoLa Resources about $53.4 million for interests in 83 non-operated Woodford Shale wells in Oklahoma, adding 13.1 billion cubic feet of proved producing gas reserves. A yield vehicle buying producing assets to support its distribution - the model it followed until gas prices broke it.

material agreement