Steven Cohen (Trades, Portfolio), founder of Point72 Asset Management, on Wednesday announced a purchase of 8,549,782 shares of Alta Mesa Resources (AMR, Financial), an oil and gas company that formed and began public trading in February.
Cohen paid roughly $8 per share for the shares on the date of purchase, March 9, for a total value around $68.4 million. The holding gives him a 5% stake in the company. Energy is the third-largest sector represented in the investor’s portfolio at 10.8% of the 876 stocks worth $23.2 billion.
Blank-check company Silver Run Acquisition acquired Alta Mesa Holdings and Kingfisher Midstream LLC in a deal completed Feb. 9, changing its name to Alta Mesa Resources. Founded in 1987, Alta Mesa was an independent exploration and production company focused in the Anadarko Basin. Kingfisher, founded in 2015, engages in midstream gas processing activities. Both operate in the Sooner Trend Anadarko Basin Canadian and Kingfisher County (STACK) region of Oklahoma.
After more than a decade drilling vertical wells, Alta Mesa in 2012 turned to drilling horizontally and plans to continue further development.
On Feb. 27, the company completed a proved reserves and upstream operational update for the year ended Dec. 31. Alta Mesa found natural gas and natural gas liquids reserves of 176.2 million barrels of oil equivalent, versus 129.6 million barrels of oil equivalent at Dec. 31, 2016. It also confirmed 71.9 million barrels of oil, 36.1 million barrels and 409 billion cubic feet of natural gas.
The company’s five-year compound annual growth rate for reserves was 80%.
Production also ramped up. For the full-year, it increased 52% for oil, 17% for natural gas liquids and 31% for natural gas. Total barrels of oil equivalent of 21,000 represented a 50% increase from the previous year.
"The drilling and completion activity Alta Mesa has executed in the oil window of the STACK during 2017, coupled with leasehold acquisitions, has set the stage for a deliberate program of multi-well pattern development," Alta Mesa CEO Hal Chappelle said.
"Our capital and operating cost structure and production mix have continued to foster economic returns on capital for our investors. With the planned increased level of activity in our 2018 program, we expect to capitalize upon the efficiency gains and execution success we had last year, resulting in what we believe will be continued long-term corporate-level returns and value creation,” he said.
Alta Mesa Resources traded for around $8.44 Wednesday after gaining 0.24%. The stock dropped 2% since it began trading as Alta Mesa Resources on Feb. 12.
Cohen founded Point72, a family office, in 2014 after closing his S.A.C. Capital Advisors following an insider trading investigation. It invests using long, short, marco and systematic strategies.
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