Nexen Inc., Calgary, is finalizing agreements to sell conventional oil and natural gas properties in southeast Saskatchewan, northwest Saskatchewan, northeast British Columbia, and the Alberta foothills for $946 million.
In other recent company news:
• ConocoPhillips and OAO Lukoil jointly announced the June 30 finalization of their OOO Naryanmarneftegaz joint venture to develop Lukoil’s reserves in the northern Timan-Pechora area.
• Ashland Inc. shareholders approved an agreement in which Marathon Oil Corp. plans to acquire Ashland’s 38% interest in Marathon Ashland Petroleum LLC (MAP).
• XTO Energy Inc., Fort Worth, Tex., bought producing properties in the Permian basin from ExxonMobil Corp. for $215 million with a transaction effective date of Jan. 1, 2005.
• Arsenal Energy Inc. signed an agreement to acquire Quadra Resources Corp. with closing by Aug. 15. Both are Calgary independents.
• Whittier Energy Corp. completed the acquisition of private RIMCO Production Co. Inc. for $56 million. Both are Houston companies.
Nexen sells assets
Nexen declined to disclose the identity or the number of buyers. The transactions are expected to close this summer.
As of Dec. 31, 2004, the properties to be sold had combined proved reserves of 49 million boe and proved plus probable reserves of 64 million boe. In the first quarter of 2005, the properties produced 18,300 boe/d.
ConocoPhillips-Lukoil JV
ConocoPhillips invested $500 million for its 30% interest in the JV. Lukoil holds 70% interest.
The JV, to be governed equally by Lukoil and ConocoPhillips, is expected to produce and market 200,000 boe/d of oil at its peak, expected in 2008. Production will be transported via pipeline to a terminal at Varandey Bay on the Barents Sea.
Lukoil plans to expand the terminal’s capacity to 240,000 boe/d of oil in 2007 with ConocoPhillips participating in the design and financing the expansion.
Naryanmarneftegaz is part of a larger strategic alliance between ConocoPhillips and Lukoil that was formed last year (OGJ Online, Sept. 29, 2004). Through this alliance, ConocoPhillips acquired an 11.3% ownership of Lukoil’s ordinary shares, and it has an option to increase its total Lukoil ownership stake to 20%.
Marathon-MAP
The total value of Marathon’s purchase of Ashland’s interest in MAP, which includes other complementary Ashland businesses, is $3.7 billion. Closing was expected on June 30.
Marathon of Houston announced plans to buy all interest in MAP from Ashland of Covington, Ky., last year (OGJ Online, Mar. 19, 2004).
XTO Energy
XTO Energy estimates that the properties it is acquiring hold 21.1 million boe proved reserves, 75% being proved developed. The acquisition is expected to initially add 3,800 boe/d, of which 83% is oil. The company is targeting a 25% production rate increase in 2 years.
Significant producing properties in the acquisition package include Vacuum field of Lea County, NM, and Cordona Lake field in Crane County, Tex. Other producing fields in the package include Goldsmith in Ector County, Tex., St. Lawrence in Glassock County, Tex., and Blanco in Rio Arriba County, NM.
Arsenal-Quadra Resources
The completion of Arsenal’s deal requires Quadra interest holder and regulatory approvals. Quadra’s main asset is the 7.5 million acre Nuqra oil and gas concession in the Kom Ombo basin near Luxor in Egypt’s southern Nile Valley south of 28° N. Lat. Quadra farmed out the block to TransGlobe Energy Corp., Calgary, in mid-2004.
Quadra also owns Chase Energy BV, a private Netherlands company, which has a protocol agreement with Ukraine’s state Uzbekneftegaz.
Quadra relinquished the 256,030-acre Iraca Association Contract area in Colombia in May after two wells found gas in the Cretaceous La Luna and Maracas formations with permeability too low to permit commercial flow rates. Arsenal also operates in Alberta, Saskatchewan, and North Dakota.
Whittier-RIMCO
Whittier’s acquisition of RIMCO consisted of working interests in 116 active wells and one unit in 18 producing fields in Texas, Louisiana, Alabama, and the Permian basin. Acquired reserves are 24.6 bcfe of proved reserves, 8.4 MMcfed of production, and significant undeveloped acreage with multiple prospects.
The main properties acquired are Tom East field, Esperson Dome field, and Windham field in Midland County, Tex., and in Louisiana West Coffee Bay field in Lafourche Parish, Vinton Dome field in Calcasieu Parish, and the greater Duson area in Lafayette Parish.
RIMCO, founded in 1988, has a geological and geophysical staff and almost 400 sq miles of proprietary 3D seismic data with access to another 500 sq miles of licensed 3D data. ✦