DENVER, Oct. 20, 2022 – Jonah Energy LLC ("Jonah"), one of the leading sustainable natural gas producers in the U.S., has successfully closed its inaugural securitized financing transaction. The transaction comprised the offering by an affiliate of Jonah of $750 million fully amortizing notes backed by a portion of Jonah's producing assets.
The offering was a combination of $275 million Series 2022-1 7.200% Class A-1 Oil and Gas Asset-Backed Notes offered and sold pursuant to Rule 144A (the "Class A1 Notes") and $475 million of Series 2022-1 7.800% Class A-2 Oil & Gas Asset-Backed Notes offered and sold as a private placement pursuant to Section 4(a)(2) (the "Class A2 Notes" and, together with the Class A1 Notes, the "Notes"), with $425 million of Class A2 Notes issued on the date hereof and an additional $50 million of Class A2 Notes committed and expected to be issued in January 2023. The Class A1 Notes obtained an "A-" rating and the Class A2 Notes were rated "BBB+" by Fitch. Jonah intends to use the proceeds from the transaction to repay all outstanding borrowings under its existing credit facility and for general corporate purposes.
Guggenheim Securities, LLC ("Guggenheim") served as sole structuring advisor, sole book-running manager and sole placement agent in connection with the offering.
Jonah's assets and operations are located within the Greater Green River Basin in Sublette County, WY, and consist of over 2,400 producing wells and over 130,000 net acres located in the Jonah Field and surrounding area. Jonah's location in the upper Green River Basin combined with strong Western gas market fundamentals have historically driven high realized prices. Combined with Jonah's efficiency-minded operating philosophy, this has created a high-margin operation enabling consistent reinvestment in its business.
"I'm pleased to have completed a long-term financing transaction that completely pays down our RBL, which positions us with a strong balance sheet to pursue the significant drilling opportunities that we have on our acreage and strategic opportunities that may come our way. We look forward to maintaining our leading role in producing the sustainable and differentiated natural gas the world needs," said Tom Hart, Jonah's President and CEO.
"Guggenheim Securities congratulates Jonah on the closing of its inaugural 144A securitization, which will support its focus on producing natural gas in an environmentally responsible manner," said Anuj Bhartiya, Senior Managing Director in Guggenheim's Structured Products Origination team. "This ABS transaction, which represents the largest PDP securitization completed to-date and the third 144A that Guggenheim Securities has structured for the energy sector, reflects the confidence of industry leaders and market participants in the suitability of energy-related ABS in the market."
The Class A1 Notes were offered in a private offering to qualified institutional buyers ("QIBs") pursuant to Rule 144A ("Rule 144A") under the Securities Act of 1933, as amended (the "Securities Act"), and to certain non-U.S. persons in offshore transactions in reliance on the safe harbor provided by Regulation S under the Securities Act and the Class A2 Notes were offered in privately negotiated transactions with certain accredited investors and QIBs pursuant to an exemption under Section 4(a)(2) ("Section 4(a)(2)") of the Securities Act. The Notes have not been, and will not be, registered under the Securities Act or any state securities laws and may not be offered or sold in the United States or to, or for the benefit of, U.S. persons absent registration under, or an applicable exemption from, the registration requirements of the Securities Act and applicable state securities laws.
This press release does not constitute an offer to sell or the solicitation of an offer to buy the Notes or any other security and shall not constitute an offer, solicitation or sale in any jurisdiction in which, or to any persons to whom, such offering, solicitation or sale would be unlawful. Ratings are not a recommendation to purchase, hold or sell the Notes and may be subject to review, revision, suspension, reduction or withdrawal at any time. Each rating should be evaluated independently of any other rating.
About Jonah Energy LLC
Jonah Energy is an oil and gas exploration and development company headquartered in Denver, Colorado and operating in the Jonah and Pinedale Fields in Sublette County, Wyoming. The company is one of the largest privately held natural gas producers in the US and focuses on producing natural gas in an environmentally responsible manner.
Jonah Energy became the first U.S. operator to sign onto and to achieve the gold standard rating for low emissions from the United Nations' Oil and Gas Methane Partnership 2.0, the only comprehensive, measurement-based framework specifically designed for the oil and gas industry. The company is also a member of ONE Future, an organization comprised of 53 companies, representing the entire US natural gas value chain, committed to a performance-based approach to reducing methane emissions.