Gaz de France (GdF) and the energy and environmental services conglomerate Suez, both of Paris, have agreed to merge.
Boards of the companies have approved a friendly merger via an exchange of stock and payment of an exceptional dividend of €1.25 billion by Suez to its shareholders, forming a company with total revenue of €64 billion/year. The exchange ratio after the dividend will be 1:1, representing a premium to GdF shareholders of 3.9% as of Feb. 24, the companies said.
Both companies have growing LNG businesses.
In other recent company news:
• Marubeni Offshore Production (USA) Inc., agreed to buy deepwater Gulf of Mexico assets from Pioneer Natural Resources Co. for $1.3 billion.
• Forest Oil Corp. agreed to acquire producing assets, primarily in the Cotton Valley tight gas play in East Texas, from six private entities for $255 million total.
• Repsol YPF SA agreed to purchase 10% interest in West Siberian Resources (WSR; formerly Vostok Oil Ltd.), a Swedish oil and gas firm active in Russia.
• Petrohawk Energy Corp. agreed to sell nearly all its Gulf of Mexico properties to a private company for $52.5 million. It also closed a purchase of producing properties in North Louisiana.
• Mitsui & Co. Ltd. will increase its ownership to 35% from 12.5% in the Tui development project off New Zealand.
• TransCanada Corp. plans to sell its 17.5% general partner interest in Northern Border Partners LP to a Oneok Inc. subsidiary for $30 million and become operator of Northern Border Pipeline (NBPL) in early 2007.
• Sunwing Energy Ltd. acquired in exchange for stock in parent Ivanhoe Energy Inc. a 40% interest in the Kongnan development project in China’s Dagang oil field from CITIC Resources, a subsidiary of CITIC Group (formerly China International Trust & Investment Corp.).
• Linn Energy LLC, Pittsburgh, which floated a $223 million public offering in January 2006, paid $12.7 million for three acquisitions of further working interests in wells the company operates in Pennsylvania and West Virginia.
• Indian refiner Nagarjuna Oil Corp. Ltd. (NOCL), a subsidiary of Nagarjuna Fertilizers & Chemicals, has offered to sell a 26% equity stake to Taiwan’s state-owned Chinese Petroleum Corp. (CPC).
• A Talisman Energy Inc. subsidiary entered exclusive negotiations with Shell UK Ltd. and Esso Exploration & Production UK Ltd. to acquire the companies’ interests in Fulmar oil field and 100% interest in Auk oil field, both in the central North Sea.
• Quest Oil Corp. signed a memorandum to acquire Longleaf Petroleum LLC, L-Texx Production LP, and L-Texx Management LLC of Arlington, Tex., for $6.5 million in stock and cash.
GdF-Suez
Suez operates LNG terminals at Zeebrugge, Belgium, and Everett, Mass. Its expansion plans include a deepwater LNG terminal off Massachusetts and a Bahamas terminal with a pipeline to Florida.
At the end of 2004, it owned seven LNG carriers with combined capacity of 882,000 cu m.
At that time it also had 53 Gw of electrical generating capacity installed and under construction worldwide, 25% of it in Belgium, 31% elsewhere in Europe, 11% in North America, 20% in South America, and 13% in the rest of the world.
GdF operates LNG terminals at Fos-sur-Mer and Montoir-de-Bretagne, France, with regasification capacity totaling 15.5 billion cu m/year.
In France, it operates a gas transmission network with more than 31,000 km of pipeline, a distribution system with 170,000 km of mainlines, and storage with working gas capacity of 10 billion cu m.
It also owns interests in gas transmission networks elsewhere in Europe, mainly in Austria, Belgium, Germany, and Slovakia and in distribution networks in Germany, Italy, Hungary, Portugal, and Slovakia.
Outside Europe, GdF has a strategic partnership with Petronet LNG in India for construction of an LNG receiving terminal. It also has transmission and distribution interests in Mexico and distribution and storage interests in Quebec.
GdF holds oil and gas reserves totaling 670 million boe at yearend 2003, mostly in the North Sea and Germany.
Marubeni acquisition
The gulf assets being acquired by Marubeni include interests in three producing projects: Falcon Corridor, Devils Tower, and Canyon Express.
The deal also includes two potential development projects (Ozona Deep and Thunder Hawk) and 88 exploration blocks.
Closing is expected this month or in April. Pioneer said that it is retaining its 55% operated interest in Green Canyon Blocks 299 and 300.
Forest Oil acquisition
The producing assets being acquired by Forest hold estimated proved reserves of 110 bcf of gas equivalent, with 43% proved developed and 90% gas. The Denver independent identified 300 drilling locations on 26,000 net acres being acquired. Closing is expected on Mar. 31.
H. Craig Clark, Forest’s president and chief executive officer, said Cotton Valley wells require completion techniques similar to Forest’s existing operations in Buffalo Wallow field of the Texas Panhandle and the Wild River area of Canada.
“Our plan is to continue a two-rig program in this area during 2006 and increase the work level to a four-rig program in 2007,” Clark said.
Repsol YPF-WSR
Repsol YPF will pay $90 million for the interest. WSR will use proceeds to fund its recently announced $140 million acquisition of ZAO Saneco, the company said (OGJ Online, Jan. 24, 2006).
Repsol YPF said the agreement “contemplates an industrial partnership for the development of exploration projects in Russia.”
Petrohawk sale
The Houston independent did not identify the buyer of its Gulf of Mexico interests, which produce about 10 MMcfd of gas equivalent from internally estimated reserves as of Dec. 31, 2005, of 26 bcf of gas equivalent-70% gas, 59% proved developed, and 27% operated. The transaction is expected to close in March.
Petrohawk acquired the North Louisiana gas properties from two sellers for $262 million. In December, it said the properties, in Elm Grove and Caspiana fields, produced about 16 MMcfd of gas equivalent from proved reserves of 106 bcf, of which 29% was proved developed.
Mitsui’s Tui interest
Mitsui will pay about $50 million to buy 22.5% out of New Zealand Overseas Petroleum Ltd.’s 45% interest.
Wholly owned subsidiary Mitsui E&P New Zealand Ltd. will spend $140 million, including the cost of the additional interest, to help put Tui area oil fields on production in mid-2007.
The Tui-Amokura-Pateke fields have estimated reserves of 27 million bbl of oil and are expected to produce 50,000 b/d at peak from subsea wells tied back to a floating production, storage, and offloading vessel (OGJ Online, Oct. 29, 2004).
NBPL interests
The transactions are subject to closing conditions and regulatory approvals. Also, TC PipeLines LP, in which TransCanada holds a 13.4% interest, will acquire an additional 20% interest in NBPL from Northern Border Partners. This will increase TC PipeLine’s total general partnership interest in NBPL to 50%.
The 1,249-mile NBPL carries as much as 2.4 bcfd of natural gas from the Montana-Saskatchewan border, where it connects with TransCanada’s Foothills System, to interconnecting pipelines in the US Midwest.
Sunwing in China
After closing of a transaction valued at $27 million, CITIC will hold 3.7% of Ivanhoe stock. Sunwing will own 100% of the working interest in the Kongang project.
Sunwing and CITIC formed an initial partnership in October 2002 to explore and develop oil, natural gas, coal, LNG, and gas-to-liquid projects in China. They formed a strategic alliance in 2003 (OGJ, May 19, 2003, p. 39).
Sunwing operates the Kongang project under a 30-year production-sharing contract with China National Petroleum Corp. A total of 36 Kongang wells are producing 34º gravity sweet crude from six blocks covering 22,400 gross acres.
Ivanhoe said the transaction increases Sunwing’s total production in China by 67% to more than 2,050 b/d gross, 1,681 b/d net.
Linn Energy acquisitions
Acquisitions since Linn Energy’s inception in March 2003 now total 12. The company averaged 21.6 MMcfe/d from 2,105 wells at Nov. 30, 2005.
Linn Energy’s proved reserves were 189.6 bcfe, 99% gas, on Sept. 30, 2005, and it had identified 362 proved undeveloped drilling locations and more than 500 other locations.
The company held 140,000 net acres in the Appalachian basin, mostly in Pennsylvania, West Virginia, New York, and Virginia.
CPC in India
This deal would be CPC’s first investment in an overseas refiner.
If the proposal receives approval from the Taiwanese cabinet and parliament, CPC will allocate funds for the project when NOCL starts commercial production in 2008. NOCL has a capital outlay of $1.1 billion.
Talisman in North Sea
Talisman Energy (UK) Ltd. said it hopes to become operator this year of Fulmar and Auk fields, pending a final agreement.
The transaction would remain subject to agreement by a partner and UK government approvals.
Fulmar field is on Blocks 30/11b and 30/16s. Auk field is on Blocks 30/16n and 30/16t. Talisman has a 12.7% interest in Fulmar field.
In the same area, Talisman holds a 95% interest in Clyde oil field and a 93.7% interest in Orion oil field, both of which, along with Auk and Gannet fields, produce through Fulmar facilities.
Quest-Longleaf
Longleaf owns 3,500 acres in Harrison County, 10 miles from Waskom, Tex., with 52 producing wells, 8 water disposal wells, and 47 idle wells, of which 38 could become producers. Production is about 200 boe/d net to Longleaf.
The acquisition would include a 7.5 mile gas gathering line.
At closing, the acquisition would increase Quest’s production to 450 boe/d. ✦