Energy Partners Ltd., a New Orleans independent producer, has proposed to buy Stone Energy Corp., Lafayette, La., for $1.43 billion in a cash-stock offer plus the assumption of $563 million of debt for a total transaction value of $2 billion.
In other recent company news:
- Austrian lawmakers have nixed a proposed merger between OMV AG and power company Verbund. The Vienna companies had announced plans for a cash-and-stock transaction valued at $16.6 billion.
- Kinder Morgan Inc. (KMI) senior managers and investors have proposed buying the company and taking it private in a transaction that values the firm at $13.4 billion.
- Chesapeake Energy Corp., Oklahoma City, has agreed to acquire Barnett shale assets totaling 67,000 acres containing 1.5 tcf of proved and unproved reserves and 30 MMcfd of natural gas production for $932 million. The transactions are expected to close July 31.
- Noble Energy Inc., Houston, has agreed to sell essentially all of its Gulf of Mexico shelf assets to Coldren Resources LP for $625 million.
- Endeavour International Corp., Houston, plans to buy a package of UK North Sea oil and gas assets from Calgary independent Talisman Energy Inc. for $414 million.
- A unit of Plains All American Pipeline LP agreed to acquire interests in three Gulf Coast crude oil pipeline systems from BP Oil Pipeline Co. for $133.5 million. The total pipeline mileage is 320 miles.
Energy Partners-Stone
In April, Plains Exploration & Production Co. offered $977 million in a stock transaction for Stone plus the assumption of $483 million in debt for a total transaction value of $1.46 billion (OGJ, May 8, 2006, p. 33).
The boards of both Plains E&P and Stone approved the earlier merger agreement and agreed to recommend it to their stockholders for approval. That agreement called for Stone stockholders to own 30% of the combined company.
Energy Partners offered Stone Energy shareholders 1.21 of its shares and $26 in cash for each Stone Energy share, which works out to $51.49/share based on May 25 closing prices.
OMV-Verbund deal nixed
The proposal failed to garner approval from a required two-thirds majority of the Austrian Parliament in order to transfer the 51% stake in Verbund owned by the Republic to OMV Verbund (OGJ Online, May 11, 2006).
Terms had called for a 60-40 merger in which OMV planned to offer Verbund shareholders a choice of 6.5 shares of OMV stock/share of Verbund or €425/share in cash.
KMI mulls going private
KMI and affiliates own 40,000 miles of gas and oil pipelines and 150 terminals in the US and Canada, serve 1.1 million gas distribution customers, and operate a carbon dioxide transportation and distribution system that supplies enhanced recovery operations in the Permian basin.
Chief Executive Officer Richard Kinder said May 29 that he and other senior managers are interested in acquiring outstanding stock for $100/share. The executives have the backing of an investor group including Goldman Sachs Capital Partners, American International Group Inc., the Carlyle Group, and Riverstone Holdings LLC.
The board formed a special committee of independent directors to consider the proposal. There can be no assurance that any definitive offer will be made or that any agreement will be reached, the board said.
Kinder said the proposed acquisition would be in the form of a merger of the company with a new acquisition vehicle to be formed. If the company goes private, he plans to continue as its chairman and chief executive officer.
Chesapeake acquisitions
For $845 million in cash, Chesapeake acquired 39,000 acres of Barnett shale leases, 30 MMcfd of gas production, and $55 million in midstream gas assets from Four Sevens Oil Co. Ltd. and Sinclair Oil Corp.
Of these leases, 26,000 acres are in Johnson and Tarrant counties, Tex., where Chesapeake has identified 500 potential drillsites. Chesapeake expects to increase gas production from the Four Sevens-Sinclair assets to at least 45-50 MMcfd by yearend and to 80-100 MMcfd by yearend 2007.
In transactions with other sellers, Chesapeake also paid $87 million for 28,000 acres, primarily in Johnson and Tarrant counties, which will provide 400 additional drillsites and estimated unproved reserves of 650 bcf of gas.
Chesapeake plans to increase its current Barnett shale drilling rig count to 24 by yearend from 12 and to drill 350-400 Barnett shale wells/year.
In separate transactions, Chesapeake has acquired or agreed to acquire 150,000 acres in Brewster, Pecos, and Reeves counties in the West Texas Barnett and Woodford shale plays and has completed its first commercial production from the Barnett shale in West Texas and the Fayetteville shale in Arkansas
Chesapeake will conduct a 3D seismic and drilling program to determine the potential of these assets. In this West Texas area, the Barnett shale is 400-950 ft thick (compared with 100-400 ft in the Fort Worth basin) and the deeper Woodford shale is 400-500 ft thick (compared with 150-250 ft thick in southeastern Oklahoma).
Noble sells most gulf assets
Coldren Resources is a subsidiary of Coldren Oil & Gas Co. LP, New Orleans, formed last August by the private equity firm First Reserve Corp. “to pursue low-risk, drill-to-earn opportunities on the Gulf of Mexico shelf.”
Noble Energy will retain its interest in the Main Pass area, where facilities damaged by hurricanes in 2004 and 2005 are under repair. The company plans to continue exploration and production in the deepwater gulf and onshore Gulf Coast areas.
Net production to Noble Energy from the assets being sold totals 5,000 b/d of oil and 90 MMcfd of natural gas. On Mar. 1, Noble Energy’s proved reserves for those assets totaled 7 million bbl of oil and 120 bcf of gas.
The sale is expected to close by June 30 with an effective date of Mar. 1.
After-tax cash proceeds should be $525 million. The company expects a pretax gain of $270 million from the sale, which officials said would be more than offset by the noncash items included a pretax charge of $390 million related to cash flow hedges, and a net tax benefit of $5 million.
In other action, Noble Energy’s directors authorized the purchase of $500 million of the company’s common stock.
Endeavor buys UK assets
Closing of Endeavor’s acquisition is expected during the fourth quarter, subject to government and third-party approvals.
The sale involves the divestiture of Talisman Expro Ltd., which holds interests in several fields acquired in Talisman’s acquisition of UK producer Paladin Resources PLC (OGJ, Nov. 21, 2005, p. 35).
The assets produced 9,200 boe/d and had proved reserves of 12.8 million boe on Dec. 31, 2005. Producing fields and interests are Goldeneye 7.5%; Bittern 2.42%; Alba 2.25%; Caledonia 2.83%; Rob Roy, Ivanhoe, and Hamish 23.455%; Renee 77.5%; and Rubie 40.78%.
Nonproducing assets include a 55.62% interest in the Rochelle discovery near Renee and Rubie fields.
Plains to buy gulf lines
Plains’s transaction is expected to close on June 30, subject to regulatory approvals and customary closing conditions as well as the expiration of preferential purchase rights.
The assets consist of a 100% interest in the Bay Marchand-to-Ostrica-to-Alliance Pipeline (BOA), a 64.35% interest in a segment of the Clovelly-to-Meraux Pipeline (CAM), and various interests in segments of the High Island Pipeline System (HIPS).
BOA and CAM are the two primary suppliers of Conoco- Phillips’s 247,000-b/cd Alliance refinery in Belle Chasse, La. HIPS is a network of offshore gathering pipeline systems that delivers crude oil to various points in or around Texas City, Tex.