Industry Briefs
Eni to buy Dominion’s gulf assets for $4.76 billion
Eni Petroleum Co. Inc. has agreed to buy Dominion’s oil and gas interests in the Gulf of Mexico for $4.757 billion. The deal, scheduled to close July 1, will raise Eni Petroleum’s equity production in the gulf to 110,000 boe/d from 36,000 boe/d at present. It covers proved and probable reserves of 222 million boe. The Eni subsidiary said average production from the acquired leases, about 60% of them operated, will be 75,000 boe/d during 2007-10. The purchase includes interests in producing Devils Tower, Triton, Goldfinger, and Front Runner fields and in San Jacinto, Q, Spiderman, and Thunderhawk fields under development. The properties also include exploratory leases.
EV to acquire Texas properties from Anadarko
EV Energy Partners LP, along with certain institutional partnerships managed by EnerVest Management Partners Ltd., has signed an agreement to acquire oil and natural gas properties in Central and East Texas from Anadarko Petroleum Corp. for $100 million. The acquisition is expected to close by the end of June 2007 and is subject to customary closing conditions and purchase price adjustments. EVEP plans to initially finance the acquisition with bank borrowings and expects to refinance a portion of the borrowings through the issuance of additional equity during the second or third quarter of 2007. The acquisition is comprised of wells producing primarily from the Austin Chalk formation in 10 counties in Texas. EVEP intends to enter into arrangements to hedge a substantial portion of the acquired production volumes at or prior to closing. EV Energy Partners LP, is a master limited partnership engaged in acquiring, producing, and developing oil and gas properties.
Keppel wins $305M Floatel contract
Keppel FELS Ltd. has secured a $305 million contract to construct a 440-man North Sea accommodation semisubmersible for Floatel International. The new-generation floatel will be built to the DSS20NS DP3 design, co-developed by Keppel’s R&D arm, Deepwater Technology Group and Marine Structure Consultants. Upon delivery in the second quarter of 2010, the new floatel will meet stringent rules and regulations for worldwide operation including the Norwegian North Sea sector with accommodation for 440 men. It will be the first floatel to be equipped with DP3 (Dynamic Positioning 3) capabilities. Floatel International Ltd. was established 2006 and is incorporated under the laws of Bermuda. Floatel International builds and acquires offshore accommodation vessels to support the oil and gas industry. Keppel FELS is a wholly-owned subsidiary of Keppel Corp., through Keppel O&M. The group provides solutions for the offshore and marine industry. The contract is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corp. for the financial year ending December 31, 2007.
Arrow Seismic accepts $125M secured facility
Arrow Seismic ASA, a 54% owned subsidiary of GC Rieber Shipping ASA, has accepted an offer for a $125 million secured facility to be entered into between Arrow Seismic and DnB NOR Bank ASA as mandated lead arranger, underwriter, and bookrunner. The purpose of the facility is to refinance the vessel “CGG Laurentian” and part-finance the purchases and planned conversions of the three 2D/source vessels. The facility will be secured with first priority mortgages in the vessels and a parent company guarantee provided by Arrow Seismic ASA. The facility has a margin of 0.70% - 0.80% over USD LIBOR, pending on charter period of the vessels, and will have a term near 7 years. Further, Arrow Seismic ASA has issued a NOK$275 million commercial paper as a bridge to equity financing. The commercial paper is senior unsecured, carries a coupon of 7.00% and has final maturity date of October 16, 2007. The commercial paper was arranged by DnB NOR Bank ASA.
Halliburton to acquire PSL
Halliburton has entered into a definitive agreement to purchase the entire share capital of PSL Energy Services Ltd. This agreement is subject to receipt of necessary regulatory approvals. PSLES is an Eastern Hemisphere provider of process, pipeline and well intervention services, including flange management and bolting, leak testing, pre-commissioning services, hydrotesting, hydraulic workover, coiled tubing, slickline and wireline, and pumping services. The company, headquartered in the United Kingdom, has approximately 1,000 employees and operational bases in the UK, Norway, Middle East, Azerbaijan, Algeria, and Asia-Pacific locations.
Fortune Oil secures $50M loan facility
Fortune Oil PLC has signed a $50 million loan facility for Fortune Oil PRC Holdings Ltd., its principal holding company in Hong Kong. The facility is a dual-currency (US dollars and Hong Kong dollars) term loan with a term of 3 years and a margin of 1.1% above LIBOR or HIBOR. The mandated lead arrangers are Industrial and Commercial International Capital Ltd. and Oversea-Chinese Banking Corp. Ltd. with OCBC Hong Kong Branch as agent. A total of 18 international and regional banks participated in the transaction. The proceeds will be used to finance Fortune Oil’s investment requirements in the China energy sector including further development of the Liulin CBM block, new opportunities in relation to the recovery and utilization of methane gas in Shanxi Province, new downstream gas projects and acquisitions, and new investments in the supply of refined products.
Dujour to acquire Endeavor Energy
Dujour Products Inc. has signed a letter of intent with Calgary-based Endeavor Energy Corp. to purchase 100% of the common shares of Endeavor for $8 million. Endeavor is an operating oil and gas production company with operating assets consisting of 31 sections of land under direct ownership and 80 sections held under farm-in agreements with 6 producing gas wells together with pipeline and infrastructure collection facilities. The cash portion of the purchase price will be used by Endeavor to satisfy certain outstanding secured debt obligations. The proposed purchase is subject to certain conditions and agreements. It is anticipated that Cameron King, the current president of Endeavor, will join Dujour as an officer and director upon closing of the transaction.
Sasol Technology, Avantium partner for strategic research
Sasol Technology and Avantium Technologies will collaborate in the area of Fischer-Tropsch chemistry to convert coal and natural gas to liquid fuels. Scientists of Sasol and Avantium Technologies will work together to develop new catalyst technologies to optimize Sasol’s production of liquid fuels from coal or natural gas. Avantium specializes in experimental methodologies that enable scientists to conduct parallel experiments on a very small scale and at a very high speed. This increases productivity and allows scientists to explore and compare a myriad of experimental conditions. Sasol is an integrated oil and gas company with chemical interests. Avantium Technologies is a privately-held, research and technology company located in Amsterdam, the Netherlands.
Equitable, Range agree to development plan for Appalachian gas field
Equitable Resources Inc. and Range Resources Corp. have agreed to a development plan for the Nora field, a gas field located in Southwestern Virginia. Nora field encompasses about 1,600 producing wells and more than 300,000 gross acres under lease. Equitable and Range will equalize their interests in the Nora field, including the producing wells, undrilled acreage, and gathering system. Range will pay to Equitable and a newly formed gathering joint venture between the companies an aggregate of $315 million, subject to customary adjustments. Equitable will continue to operate the producing wells, manage the drilling operations of all future coal bed methane wells, and manage the gathering system. Range will oversee the drilling of formations below the coal bed methane formation, including the tight gas sand formations, shales, and deeper formations. Equitable Resources is an integrated energy company with emphasis on Appalachian area natural gas supply, transmission, and distribution. Range Resources Corp. is an independent oil and gas company operating in the Southwestern, Appalachian, and Gulf Coast regions of the US.
GeoResources completes mergers with Southern Bay, Chandler Energy
GeoResources Inc. has closed the mergers with Southern Bay Oil & Gas LP and Denver-based Chandler Energy LLC after receiving all required shareholder approvals. The combined entity has assets in the Gulf Coast, Rocky Mountains, and Williston basin. Houston-based Southern Bay made capital contributions of about $19.4 million. Pro-forma proved reserves are currently estimated at nearly 8.2MMboe, 61% oil and 74% proved developed. GeoResources’ common stock was approved for listing on the Nasdaq Global Market, and the GeoResources board was reconstituted to include a total of 7 directors comprised principally of parties appointed by Southern Bay and Chandler. The directors of GeoResources are now: Frank Lodzinski, Collis Chandler, III, Christopher Hunt, Jay Joliat, Scott Stevens, Michael Vlasic, and Nick Voller. The executive officers are: Frank Lodzinski, president and CEO; Collis Chandler, III, executive VP and COO Northern Region; Francis Mury, executive VP and COO Southern Region; Jeffrey Vickers, VP, Williston basin exploration and development; Robert Anderson, VP business development, acquisitions and divestitures; Howard Ehler, VP and CFO; and Cathy Kruse, corporate secretary. Corporate headquarters will be relocated to Houston. Southern Bay Oil & Gas LP and its subsidiaries own and operate producing oil and gas properties on the Texas and Louisiana Gulf Coast, and in the Permian Basin in Texas. GeoResources Inc., a Williston, North Dakota-based natural resources company, is engaged primarily in oil and gas exploration, production, and drilling. Chandler Energy LLC is an oil and gas exploration and production company with operations in the Rocky Mountains and Michigan.
Dune agrees to acquire Goldking Energy for $320.5 million
Dune Energy Inc. has entered into a definitive Stock Purchase and Sale Agreement to acquire all of the outstanding capital stock of Goldking Energy Corp., for total consideration of $320.5 million. Such consideration will consist of $302.5 million in cash and $18 million of newly issued common shares. Based on a 2006 year-end third party engineering report, Dune will acquire 112 bcfe of proved reserves as well as an existing 3-D seismic data inventory. Dune delivered a $15 million earnest money deposit to the selling shareholder of Goldking, which will be credited against the purchase price at closing. The proposed acquisition is subject to customary closing conditions. Dune intends to utilize a combination of debt and equity to fund the acquisition. Dune entered into a credit agreement with Jefferies Funding LLC for $65 million. The proceeds were used to purchase outstanding loans under Dune’s prior credit facility, to pay the $15 million earnest money deposit, to fund Dune’s current development, and for general working capital.
Transmeridian retains advisor to review options
Transmeridian Exploration Inc. has retained Jefferies Randall & Dewey, a division of Jefferies & Co. Inc., as its financial advisor in connection with the company’s review of strategic alternatives for its South Alibek field in Western Kazakhstan. The alternatives being reviewed by Transmeridian include the sale of a partial or complete interest in the South Alibek field or a sale of the company in its entirety. The company, with the assistance of Jefferies Randall & Dewey, is preparing a comprehensive technical evaluation. Transmeridian Exploration Inc. is an independent energy company established to acquire and develop oil reserves in the Caspian Sea region of the former Soviet Union.
PXP enters agreement with private company to buy properties
Plains Exploration & Production Co. (PXP) has entered into a definitive agreement to acquire from a private company all of its interests in oil and gas producing properties, covering over 60,000 gross/55,000 net acres, over 200 wells and over 3,000 potential drilling locations in the Mesaverde geologic section of the Piceance basin in Colorado, plus associated midstream assets. Merrill Lynch Petrie Divestiture Advisors advised the seller in this transaction. PXP will pay $900 million in cash and issue one million shares of PXP common stock. The transaction is valued at $946 million, based on PXP’s closing price on April 17, 2007. The properties currently produce nearly 6,000 boe/d of which nearly 97% is natural gas. PXP estimates proved reserves are near 64MMboe with an additional 295MMboe of unproven resource potential.
Pryme secures large updip Tuscaloosa project
Pryme Oil and Gas Ltd.’s first high-impact deep exploration project, Atocha, will be drilled to 17,700 feet in the prolific Tuscaloosa trend in Central Louisiana. The well is scheduled to be drilled late in 2007 and will target thick Tuscaloosa sands that offset an existing well drilled in the early 1980s that is believed to have 125 feet of bypassed gas. Prospective reserves for the project exceed 1 trillion cubic feet. The Atocha Prospect is located updip in the prolific Tuscaloosa trend that has produced in excess of 2.5tcf of natural gas to date.
Dana makes strategic acquisition in Egypt
Dana Petroleum’s wholly-owned subsidiary, Dana Petroleum (E&P) Ltd., has signed an agreement with Devon Energy Corp. to acquire Devon’s entire upstream petroleum stake for $375 million. Dana will also gain nearly $67 million of working capital in Devon Egypt. Dana will pay the net consideration of about $308 million in cash via a newly arranged banking facility with ABN AMRO Bank. During 2006, Devon Egypt had working interest production of nearly 12,300 b/d, and USGAAP operating profits of about $53 million. At the end of 2006 gross assets were about $242 million.
AGR Group acquires upstream petroleum engineering group
AGR Group has acquired F.J. Brown & Associates. The deal, involving a cash transaction at closing, is valued at US$20 million. F.J. Brown, based in Houston, provides drilling completion engineering support and well project management services to offshore oil and gas operators, both in the Gulf of Mexico and internationally. The F.J. Brown business will become part of AGR Americas. Francis Brown, president of F.J. Brown, is to join the board of AGR Americas and lead AGR Petroleum Services’ well management operations on the North and South American continents. The other 3 executive owners of F.J. Brown - Alfred S. Arcache, Ralph D. Doughty, and Gerald J. Bologna - will continue in their current capacities. CIBC World Markets acted as exclusive financial advisors to AGR and Paragon Advising acted as exclusive financial advisors to F.J. Brown & Associates.
Fugro acquires Improv
Fugro NV has agreed to acquire Improv Ltd. (Aberdeen, UK) and its subsidiary Improv Inc. (Houston) for about GBP 5.8 million. The acquisition is expected to be earning enhancing to Fugro from second quarter 2007 onwards. Improv is an independent provider of specialized integrated tooling packages and tooling services to the subsea oil and gas industry. Improv will be renamed Fugro Improv Ltd. and will form part of the survey division of Fugro as an independent operating company under its existing management.
Ziebel AS acquires Knowledge Reservoir
Stavanger-based wellbore technology company Ziebel AS, will merge with Houston-based upstream energy services company Knowledge Reservoir. Ziebel’s focus areas are completions, downhole artificial lift, wellbore monitoring, well intervention and flow assurance, all aimed at optimizing reservoir drainage.
Pride wins more contracts from Pemex
Three of Pride International’s 200 foot, mat-cantilever jackup rigs, the Pride Alabama, Pride Colorado, and Pride Mississippi, have been awarded one-year contracts by PEMEX Exploracion y Produccion for drilling operations in Mexican waters of the Gulf of Mexico. The contracts for the Pride Alabama and Pride Colorado are expected to commence in May 2007 and July 2007, respectively, in direct continuation of existing contract commitments. Both rigs are currently operating in Mexican waters of the Gulf of Mexico for PEMEX. The contract for the Pride Mississippi is expected to begin in September 2007, following the completion of current contract commitments and mobilization of the rig from the US Gulf of Mexico. Possible aggregate revenues from the 3 contract awards are near $106.8 million, excluding revenues from mobilization, demobilization, and customer reimburseables. Each contract provides for a fixed dayrate throughout the primary term of the contract.
Roxar supplies wetgas meters to FMC Technologies for use in Statoil gas fields
Roxar, a technology solutions provider to the upstream oil and gas industry, has signed a deal to supply its Roxar subsea Wetgas meters to FMC Technologies for several Statoil gas fields in the Norwegian Continental Shelf, including the Alve field. The Roxar subsea Wetgas meter provides real-time, accurate measurement of hydrocarbon flow rates and water production as well as online detection of formation water breakthrough. The Alve field is a gas/condensate/oil field, which lies 16 kilometers south-west of the Norne field in water depths of 390 meters, and will be developed as a satellite tie-back to the existing Norne FPSO vessel. Recoverable reserves are estimated to be 6.78 billion cubic meters of gas and 8.3 million barrels of condensate with output expected to commence in December 2008. The Roxar subsea Wetgas meter is a compact meter for the inline measurement of wet gas flow and is designed for installation in wells with GVF > 95% volume. Performance tests have shown the meter is able to detect changes in the water production with sensitivity better than +0.005% volume while the absolute accuracy is +0.1% volume in high GVF (> 98.5%) cases.