Independence Energy, L.L.C. entered into a definitive agreement to acquire Contango Oil & Gas Company (NYSEAM:MCF) for approximately $220 million in a reverse merger transaction on June 7, 2021. Contango shareholders will receive Class A common stock representing voting and economic rights in the new parent company while Independence's owners will receive Class B common stock representing voting rights in the new parent company and corresponding limited liability company units representing economic interests in the new company. As part of the transaction, KKR will receive a special class of non-economic preferred stock. On completion, Independence shareholders will own 76% and Contango stockholders will own 24% of the combined company. Also, KKR will own approximately 17% of the combined company when it will forfeit the preferred stock if its retained common stock in the business drops below 50% of this initial ownership, subject to certain performance thresholds after the company's third annual shareholders meeting. The new company at closing will have an “Up-C” structure. In a related transaction, the combined company will enter into a management services agreement with a newly formed KKR subsidiary to become the manager of the combined company. The combined company will be headquartered in Houston and expects to operate under a new name and ticker symbol and will seek a listing on the New York Stock Exchange. Contango Oil & Gas Company will pay a termination fee of $33.4 million.

The combined business will be managed by KKR's Energy Real Assets team and led by David Rockecharlie, Head of KKR Energy Real Assets, who will serve as Chief Executive Officer, Brandi Kendall will be Chief Financial Officer, Todd Falk will be Chief Administrative Officer, Ben Conner and Clay Rynd will be Executive Vice Presidents and Claire Farley will be a Board member. Contango's Chairman and largest shareholder, John Goff, will be Chairman of the Board of Directors of the combined company. Contango's senior leadership, including Chief Executive Officer, Wilkie Colyer and President Farley Dakan, will continue managing Contango as an operating subsidiary of the combined company. The Board of Directors of the combined company will be designated by KKR as the holder of the preferred stock and will consist of nine directors with two directors designated by Contango and seven directors designated by KKR. The combined company will be headquartered in Huston, Texas. As of July 29, 2021, Independence Energy, L.L.C. filed a registration statement on Form S-4.

The merger is subject to the approval of Contango shareholders, certain regulatory approvals, waiting period applicable to the transactions under the HSR Act will have been terminated or will have expired, the registration statement of which this document forms a part will have been declared effective by the SEC under the Securities Act, the shares of New PubCo Class A common stock issuable to the holders of shares of Contango common stock pursuant to the transaction agreement will have been authorized for listing on a nationally recognized stock exchange, upon official notice of issuance and satisfaction of other customary closing conditions. The merger was unanimously approved by both companies' Boards of Directors. The transaction is expected to close late in the third quarter or early in the fourth quarter of 2021. As of July 26, 2021, the transaction is expected to close in second half of 2021. As of November 3, 2021, the transaction is expected to close on or about December 7, 2021, subject to approval of the business combination by Contango's shareholders and the satisfaction of other customary closing conditions. Contango Oil & Gas Company shareholders meeting is scheduled to be held on December 6, 2021. The deal to be expected to be accretive to Contango's cash flow per share by about 15% in 2021 and about 50% in 2022.

Following completion of the business combination, New PubCo is expected to be renamed Crescent Energy Company with its Class A common stock expected to be listed on the NYSE under the symbol “CRGY.”

Jefferies LLC is serving as lead financial advisor to Contango, and Gibson, Dunn & Crutcher LLP is serving as legal counsel. Wells Fargo Securities LLC is serving as financial advisor to Independence, and Keith Fullenweider, Douglas McWilliams, David D'Alessandro, John Lynch, Lina Dimachkieh, Bryan Loocke, Sean Becker and Matt Dobbins of Vinson & Elkins LLP is serving as legal counsels. Innisfree M&A Incorporated acted as information agent to Contango. Innisfree M&A Incorporated will receive an estimated advisory fee of $0.03 million. The engagement letter between Contango and Jefferies provides for a transaction fee of $13 million, approximately $10 million of which is contingent upon consummation of the Contango Merger. No portion of the opinion fee was contingent on the conclusion expressed in Jefferies' opinion.

Independence Energy, L.L.C. completed the acquisition of Contango Oil & Gas Company (NYSEAM:MCF) in a reverse merger transaction on December 7, 2021.