Equatorial Guinea state oil concern GEPetrol reported acquiring assets in Equatorial Guinea from Devon Energy Corp. for $2.2 billion.
In other recent company news:
- XTO Energy Inc. agreed to acquire producing properties, pipeline, and leasehold acreage from Linn Energy LLC for $600 million.
- A trio of major oil companies agreed to sell their 200,000 b/d Rainbow oil pipeline in northern Alberta to a subsidiary of Plains All American Pipeline LP for $540 million (Can.).
- PetroFalcon Corp. plans to acquire Anadarko Venezuela Co. from Anadarko Petroleum Corp. for $200 million.
- Oil Search Ltd., Sydney, has sold a number of its Middle East and North African division assets to Kuwait Energy Co. for $200 million plus working capital to enable the company to focus its attention on the Papua New Guinea LNG joint venture operated by ExxonMobil Corp.
- British Gas owner Centrica is to expand its presence in Canada with the purchase of TransGlobe Energy Corp.’s Canadian assets for $56.7 million (Can.).
- Rowan Cos. Inc. reported it intends to “monetize,” through an initial public offering or a private sale, its wholly owned manufacturing subsidiary LeTourneau Technologies Inc. (LTI).
- Parker Drilling Co. plans to sell its 50% interest in a Saudi Arabian joint venture, Al-Rushaid Parker Drilling Co. Ltd., to an affiliate of Al-Rushaid Investment Co., the Saudi firm owning the other 50% stake.
- Australian engineering firm WorleyParsons Ltd. plans to acquire Intec Engineering BV from Heerema Group for $108.5 million.
- Green Dragon Gas Ltd. has signed a conditional agreement with Pacific Asia China Energy Inc. (PACE) through its wholly owned subsidiary Greka China Ltd. to acquire PACE for $35.18 million (Can.).
- Brazil’s state-owned Petroleo Brasileiro SA (Petrobras) plans to resume negotiations with Valero Energy Corp. for the acquisition of the San Antonio-based company’s 275,000 b/d Aruba refinery.
- Royal Dutch Shell PLC is to cut 180 jobs at its offices in Aberdeen because of rising oil recovery costs from its assets in the UK North Sea.
GEPetrol in Equatorial Guinea
GEPetrol has acquired a 23.75% participating interest in offshore Zafiro oil field on Block B, where proved reserves were estimated at 55 million bbl of oil at yearend 2007. Devon’s share of production from Zafiro is 20,000 b/d.
The other assets are Devon’s interests in undeveloped offshore Blocks C and P.
Devon is selling its interests in African acreage as it wants to concentrate on its North American operations instead.
The transaction took effect from Jan. 1 and is expected to close on or before May 30.
Devon estimates its aftertax proceeds will be $1.7 billion and said that this transaction represents the largest piece of its African divestiture program.
XTO acquires Marcellus shale
XTO’s acquisition includes 152,000 net acres of Marcellus shale leasehold in western Pennsylvania and West Virginia. XTO estimates proved reserves to be 145 bcfd of gas equivalent from the shallow Mississippian and Devonian reservoirs.
The acquisition will add 25 MMcfd to XTO’s production base. The pipeline and gathering facilities included in the transaction are valued at $50 million.
The acquisition is scheduled to close on or before July 1.
Plains buys Rainbow line
Imperial Oil Ltd., ExxonMobil Corp., and Royal Dutch Shell PLC each own a third of the pipeline that extends 781 km from Zama in northwest Alberta to Edmonton, connecting to the major oil artery between Canada and the US Midwest operated by Enbridge Inc. It’s also linked to Kinder Morgan Canada’s TransMountain line to the West Coast and refineries in the Edmonton region.
The deal is expected to close during the second quarter, subject to regulatory approval. Plains All American expects the acquisition to boost cash flow within 6 months of closing. The Houston oil transportation company also will buy 1.1 million bbl of oil line fill at a cost based on market prices at closing. That acquisition would be worth $120 million (Can.) at current prices.
PetroFalcon-Anadarko deal
PetroFalcon’s agreement is subject to the approval of the Venezuelan Ministry of Energy and Petroleum. PetroFalcon is a Canadian company operating in Venezuela.
Anadarko Venezuela indirectly owns 18% of Petroritupano SA, a joint venture of Petroleos de Venezuela SA and Brazil’s Petroleo Brasileiro SA (Petrobras). Anadarko Venezuela’s working interest production from Petroritupano is 7,440 boe/d before royalties. Petroritupano has exclusive rights to explore, develop, and produce oil and gas through 2025 from the Oritupano-Leona Block.
Juan Francisco Clerico, PetroFalcon’s chairman and chief executive officer, said the acquisition will multiply the firm’s daily oil production by almost eight times and more than double its proved and probable reserves.
Petroritupano’s business plan calls for the drilling of 90 infill wells and 147 recompletions over the next 16 years.
Oil Search’s divestiture
Oil Search’s Egyptian assets include a 70% interest in Area A in the Eastern Desert next to the Gulf of Suez, a 49.5% interest in East Ras Qattara concession, and a 30% interest in Block 6 in Mesaha.
The Yemen assets sold include 35% of Block 15, 32.5% of Block 35, 42.33% of Block 49, 34% of Block 74, and 28.33% of Block 43 in the Hadraumat region of the country’s southeast.
The transaction took place at the end of February, but completion is not expected until midyear because the deal is subject to government and joint venture partner approvals.
Peter Botten, Oil Search’s managing director, said, while the company had successfully built a diversified portfolio in the Middle East and North Africa, a number of the licenses were not material in the context of Oil Search’s growing gas portfolio.
Botten added that the sale of these assets would provide cash and reduce near-term capital requirements, freeing up funds to go towards Oil Search’s share of the proposed Papua New Guinea LNG project, which aims to establish an LNG plant near Port Moresby based on gas reserves in the central highlands fields.
Oil Search has retained some interests in the Middle East and North Africa, namely Blocks 3 and 7 in Yemen, Area 18 off Libya, and the recently acquired Tajerouine and Le Kef permits in Tunisia plus the Bina Bawi concession in Kurdistan.
Centrica expands in Canada
Centrica’s purchase, conducted through Centrica unit Direct Energy, gives the company access to reserves of at least 15 bcf of gas equivalent, the company said.
The assets are in Alberta, next to Direct Energy’s current gas portfolio. In addition to a production base of 8.7 MMcfd of gas equivalent, of which 75% is gas, the acquisition also includes 50,000 acres of land with development potential, said Direct Energy parent Centrica. The deal is expected to close by the beginning of May and is not subject to shareholder approval. It will become effective from Jan. 1.
Direct Energy said that it is looking to make more deals, and TransGlobe will focus on its plays in Egypt and Yemen after reducing its debt.
Rowan monetizes LTI
Rowan’s LTI division manufactures offshore rigs, mud pumps, and large mobile equipment used in the forestry, mining, and transportation businesses and has designed or constructed all of the Rowan-operated jack ups.
Rowan said it plans to use at least $400 million of the proceeds to repurchase shares.
“LTI’s leading market positions in its operating segments have enabled it to generate significant returns for Rowan over time,” said Daniel F. McNease, Rowan chairman and chief executive officer. “Given LTI’s record performance in 2007 and strength heading into 2008, we believe that now is the appropriate time for Rowan to crystallize the value we have created in LTI for the benefit of our stockholders.”
Parker divestiture
Al-Rushaid Investment’s affiliate is Abdullah Rasheed Al-Rushaid Co. for Drilling Oil & Gas Ltd. (OGJ, Mar. 3, 2006, Newsletter). Subject to finalization of financing details and approval by the Saudi Arabian government, closing is expected on or before Apr. 14.
The divestiture will result in aggregate payments of $2 million to Parker. The Houston-based drilling contractor expects to report a $1.5 million net loss from the joint venture.
Parker Drilling Chairman and Chief Executive Officer Robert L. Parker Jr. said his company decided to sell its joint venture stake because it “was not the best organizational structure for applying our project management expertise and disciplined processes.”
The company believes the North Africa and Middle East market hold long-term growth potential and plans to continue offering drilling services in this region, he said.
WorleyParsons to buy Intec
WorleyParsons’ Intec acquisition will provide the firm with expertise on deepwater projects and also with experience in arctic developments, WorleyParsons said. Intec is based in Houston.
WorleyParsons Chief Executive Officer John Grill said the world’s remaining oil reserves are being found in areas that are difficult for oil companies to reach. “The acquisition of Intec completes the missing link in our hydrocarbons business,” he said.
The transaction will not affect projects under existing or pending contracts involving Intec, Heerema Group, and third parties, the companies said.
Green Dragon to buy PACE
PACE, listed in Vancouver, BC, has operations exclusively in China focused on coalbed methane through a production-sharing contract covering a 946-sq-km block in Guizhou province. The company also has a 50% interest in a joint venture drilling service company with exclusive rights to utilize Mitchell Drilling’s Dymaxion horizontal drilling technology in China for degassing coal mines and exploiting CBM.
Green Dragon said PACE’s board unanimously approved the transaction. Pace’s offices in Vancouver will be shut following completion of the deal and its Beijing offices will be consolidated with Greka China.
Randeep S. Grewal, Green Dragon’s chairman and chief executive, said the buyout would boost the company’s CBM acreage in China. It also would increase the company’s PSC acreage to 7,566 sq km, making it the largest foreign CBM operator in China. Additionally, the PACE-Mitchell JV adds two Schramm rigs to the fleet of five ordered by Greka Technical Services, providing commonality within rigs while enhancing the capability to drill horizontal wells.
Petrobras still eyeing Aruba
Petrobras said a January fire at the refinery damaged the facility’s vacuum distillation unit, which is being repaired.
Recently Petrobras has been expanding its refinery network either through expansion or acquisition. It recently bought a refinery in Okinawa, Japan, and is expanding its refinery in Pasadena, Tex.
In addition, it has bid on ExxonMobil Corp.’s Esso-brand network of retail outlets in Brazil, and plans to start negotiations to buy the Esso networks in Chile and Uruguay.
Shell’s Aberdeen cuts
Shell union leaders have criticized Shell’s move to cut the Aberdeen positions. The company hopes to avoid compulsory redundancies, saying it needs to cut the jobs by 2010 to maintain its long-term competitiveness. Its North Sea operational costs have leapt by as much as 60% over the last 3 years, it said.
The cuts will affect office-based posts. Shell employs more than 2,000 workers—including contractors—in Aberdeen. About 7% of the workforce will be affected.
The decision was taken after the company carried out a cost and efficiency study. Last June Shell dropped plans to build a £25 million headquarters in Aberdeen and has put up part of its operations in the UK North Sea for sale.
Shell’s actions follow a similar move by BP PLC that will cut its onshore North Sea workforce by almost 20%—a loss of 350 jobs. Both companies have insisted that they remain dedicated to the area.
