Acon in Milagro Holdings Investment

November 30, 2007

Cleary Gottlieb represented Acon Investments LLC in its investment in Milagro Holdings, LLC, which closed November 30. Milagro is an oil and gas exploration and production company based in Houston, Texas. Milagro used the proceeds of Acon’s investment, together with equity from private equity firms Knowledge Universe Limited and Guggenheim Partners and debt financing, to purchase $825 million of exploration and production assets from Petrohawk Energy Corporation.

The debt financing is comprised of an up to $750 million revolving credit facility secured by a first priority lien on substantially all assets of Milagro and its subsidiaries, and a $350 million term credit facility, secured by a second priority lien on the same assets. Wells Fargo Bank, N.A. acted as arranger and sole bookrunner for the revolving credit facility. Wells Fargo and Guggenheim Corporate Funding, LLC acted as co-lead arrangers and Wells Fargo acted as sole bookrunner for the term credit facility. In addition, the acquisition is financed in part by a senior subordinated unsecured note payable to Petrohawk by Milagro Mezz, LLC, Milagro’s direct parent company.