Pakistan soon plans to invite expressions of interest for the sale of 51% of its state-owned exploration and production company, Oil & Gas Development Co. Ltd. (OGDCL), to a strategic buyer or buyers.
In other recent company news:
- MarkWest Hydrocarbon Inc., Denver, has agreed to sell its wholly owned subsidiary, MarkWest Resources Canada Corp., to Advantage Energy Income Fund, a Calgary-based royalty trust, for $102.5 million (Can.).
- Vintage Petroleum Inc., Tulsa, plans to acquire producing oil and natural gas properties in the Uinta basin of Utah from various subsidiaries of El Paso Corp., Houston, for $52.5 million.
OGDCL privatization
Pakistan's sale of its interest in OGDCL will follow on the heels of an initial public offering Nov. 10-14 of 107.5 million shares of OGDCL at 32 rupees/share (about 45¢/share) issued through the Karachi, Lahore, and Islamabad Stock Exchanges. The IPO represents 2.5% of the company, along with an option for an additional 2.5% in case of oversubscription (OGJ Online, Nov. 17, 2003).
Financial and technical prequalification has begun for sale of the 51% interest, and an official of the privatization commission said the government is still entertaining fresh interest by prospective investors.
OGDCL, the largest E&P firm in Pakistan's oil and gas sector, owns developed and producing fields comprising 35 operated fields, including 4 major developed gas fields, and 15 nonoperated interests, the privatization commission said. As of June 30, proven and probable reserves of its operated portfolio were 9.228 tcf of raw gas and 164.25 million bbl of oil.
MarkWest to sell Canadian unit
MarkWest said the sale price of its Canadian unit might be increased by as much as $2.5 million if certain lands are retained through additional drilling before yearend. Closing is expected by Jan. 1.
MarkWest Hydrocarbon continues to evaluate options for its wholly owned subsidiary, MarkWest Canadian Midstream Services Inc., which holds natural gas exploration assets in the Bigstone-Berland River area of Alberta.
Vintage to acquire Utah assets
Vintage's agreement calls for the company to acquire 80% operated working interest in fields primarily in Duchesne and Uintah counties. The properties cover more than 200,000 net acres.
Subject to customary closing adjustments, the transaction's effective date is slated to be retroactive to June 1.
Current net production attributable to the properties is estimated at 2,000 b/d of oil and natural gas liquids and 920 Mcfd of gas from the Green River and Wasatch formations. Vintage said the properties offer workover, drilling, and waterflood potential.
In addition to the producing properties, Vintage is to acquire majority interest and operational control of three gas plants. "We are excited about operating in the Rockies and its potential to become a significant producing area for us," said Vintage CEO S. Craig George.
As a result of this acquisition, Vintage increased its 2004 targets for cash flow from continuing operations to $230 million from $214 million. The 2004 production target was increased by nearly 1 million boe to 27.8 million boe.
The capital spending budget increase of $15 million will be allocated to US exploitation spending, bringing the firm's 2004 capital budget to $240 million. The revised 2004 targets are based on average prices of $27/bbl for crude oil futures and $5/MMbtu for natural gas futures on the New York Mercantile Exchange, the company said.
