Vinson & Elkins has been doing energy work since it was founded more than 100 years ago, but the breadth of its practice today is owed to a deliberate expansion to include energy transition work, firm leaders say.
Data seems to bear that assertion out. Lawyers from the Houston-founded Am Law 100 firm handled 560 transactions across the energy sector valued at $344 billion over the two-year period ending in June 2024.
Vinson & Elkins chair Keith Fullenweider called energy transactions and projects partner Kaam Sahely the “architect” of the firm’s intentional shift in focus to significantly commit resources in and around renewables, specifically in top-end tax capability.
“The major change we made several years ago [was] the tax-equity-related capability. We got a little bit lucky, of course. The IRA [Inflation Reduction Act] passed,” said Sahely, co-head of the firm’s corporate practice group and a member of the management committee.
The Inflation Reduction Act of 2022 provides incentives for infrastructure and clean energy projects, and has led to increased demand for firms with corporate practices and tax expertise.
Fullenweider noted how the energy sector definition has changed significantly.
“Seven or eight years ago, you would have been talking about oil and gas and pipelines,” he said, noting that it includes a lot of areas downstream, such as power, wind, solar, electric transmission, utilities, and even cleaner aviation fuel.
The firm is doing more work, for instance, for private equity funds in the infrastructure arena, he said, and in one example, Dallas-headquartered Southwest Airlines has become a steady client on transactions for sustainable aviation fuel, which involves tax credits.
About 30% of the Houston-founded firm’s lawyers do energy work.
In 2022 and 2023, the firm handled 486 traditional energy matters valued at a total of $365 billion, and during the first half of 2024, traditional energy work accounted for about 100 matters with a combined value of more than $66 billion. On the renewable energy side, the firm handled 188 matters valued at about $100 billion in total during 2022 and 2023, and upward of 30 more during the first half of 2024, with a deal value of more than $6 billion in total.
Leverating the tax incentives provided by the IRA, the firm worked on more than 30 tax equity financings in 2022 and 2023, with financing amounts totaling over $3 billion. Since the summer of 2023—when the government announced preliminary rules for tax credit transfers—the firm closed on 11 tax credit transfer transactions valued at nearly $1 billion, according to statistics provided by the firm.
On the traditional energy side, Vinson & Elkins represented Endeavor Energy in its $26 billion merger with Diamondback Energy, a deal that closed in September; advised Chord Energy in its $11 billion merger with Enerplus Corp., a deal completed in May; and represented Sunoco in its $7.3 billion acquisition of NuStar Energy, which also closed in May, as well as its $1 billion sale of 204 Stripes convenience stores, a deal that closed in April.
On the energy transition side, the firm represented Stonepeak in two recent wind energy projects—an agreement with Dominion Energy to acquire a 50% interest in its Coastal Virginia Offshore Wind project, which is expected to become the largest offshore wind farm in the U.S., and acquisition of a portfolio of four U.S. onshore wind farms from Orsted.
Other significant energy transition work includes advising Denbury, a developer of carbon storage solutions and enhanced oil recovery, in its $4.9 billion sale to Exxon Mobil, which closed in November 2023; and representing Swift Current Energy on two major solar projects that closed in 2023—its $779 million project financing for the Double Black Diamond Solar project, which is expected to be the second-largest single-phase solar project in the U.S., and project financing with ING Capital and tax equity commitment from Morgan Stanley Renewables for the Tres Bahias Solar project in Southeast Texas.
The Am Law 100 firm isn’t sitting pat, Sahely said, and is constantly evaluating its energy practice focus.
“We’re just trying to see where is there going to be more activity,” he said. “Are we constantly seeing the right deals?”