COMPANY NEWS: Santos to acquire Delhi ,increase Cooper basin stake

July 24, 2006
Santos Ltd. agreed to buy Delhi Petroleum Pty. Ltd. for $474 million (Aus.) in equity and debt. The acquisition is part of the Adelaide-based firm’s efforts to increase its stake in oil and gas fields in the Cooper basin.

Santos Ltd. agreed to buy Delhi Petroleum Pty. Ltd. for $474 million (Aus.) in equity and debt. The acquisition is part of the Adelaide-based firm’s efforts to increase its stake in oil and gas fields in the Cooper basin.

In other recent company news:

  • Noble Energy Cameroon Ltd. will become operator of the PH-77 license off Cameroon by acquiring ConocoPhillips’s 50% participating interest.
  • Penn Virginia Corp., Radnor, Pa., on June 13 closed its $71.5 million acquisition of Crow Creek Holding Corp., a private Tulsa company formerly held by Natural Gas Partners, Dallas.
  • XTO Energy Inc. plans to buy privately held Peak Energy Resources Inc., a Barnett shale producer, for $105 million in stock.

Santos-Delhi

Santos’s acquisition of Delhi will increase Santos’s interest in the Cooper basin joint venture to 85% from 63% and add 67 MMboe of proved and probable reserves as of Dec. 31, 2005.

Santos already planned to spend $160 million to drill 100 wells in the Cooper and Eromanga basins. After more than 40 years since its first gas discovery in the Cooper basin, Santo announced it would spend another $900 million in a $1.3 billion program to renew its reserve base (OGJ, June 26, 2006, p. 51).

Noble in Cameroon

The PH-77 license off Cameroon covers 1.125 million acres between the coast and the country’s border with Equatorial Guinea. It is contiguous with Equatorial Guinea Blocks O and I off Bioko Island, for which Noble Energy is technical operator. Last year the company tested 24 MMcfd of gas and 1,225 b/d of condensate in its O-1 well on a Block O prospect it has designated Belinda (OGJ Online, Oct. 20, 2005).

Noble Energy Chairman Charles Davidson said the Cameroon license area “has a number of prospects that are seismically similar to our Belinda discovery and other prospects soon to be tested on Blocks O and I.”

Petronas Carigali Overseas Sdn. Bhd. has a 50% participating interest in the PH-77 license. State-owned Ste. Nat. des Hydrocarbures (SNH) may assume a 50% participating interest upon a commercial discovery.

Penn Virginia-Crow Creek

Crow Creek has operations primarily in the Oklahoma portions of the Arkoma and Anadarko basins. As of the transaction’s effective date of Apr. 1, Penn Virginia estimates Crow Creek had net proved reserves of 42.7 bcf of gas equivalent, about 85% of which is gas.

Of the reserves, 61% of the estimated proved reserves are proved developed. About 33% of the proved reserves are coal bed methane associated with Hartshorne coal seams in the Arkoma basin. Crow Creek’s net production is 6.2 MMcfd.

XTO-Peak Energy

XTO’s purchase of Peak Energy will boost its Barnett shale holdings to nearly 200,000 net acres.

The properties are in Hood, Parker, and eastern Erath counties of Texas.

The transaction involves estimated proved gas reserves of 64 bcf, of which 14% is proved developed. Production from those properties is expected to reach 10 MMcfd by yearend and 25 MMcfd in 2007, XTO said.

Development costs for proved undeveloped reserves are estimated at $1.30/Mcf, based upon new wells spaced at 100 acres, said XTO. It reports potential of more than 200 bcf from the Peak Energy properties.