TAQA to acquire Pioneer Canada
The Abu Dhabi National Energy Company PJSC has purchased Pioneer Canada, a subsidiary of Pioneer Natural Resources Co. for US$540 million. When finalized, the Pioneer deal will provide TAQA with an additional 59 million barrels of (gross) WI P+P oil and gas reserves, more than 10,000 barrels of energy per day, and add to TAQA’s exploration and production team with newly-acquired expertise in coalbed methane exploration and production.
Calgary-based Pioneer Canada Ltd. is an oil and gas exploration company with operations in the Western Canadian Sedimentary basin. The Pioneer transaction is expected to close during the fourth quarter of 2007 and is subject to regulatory approval and other customary closing conditions.
“The Pioneer business is a great addition to TAQA’s existing operations in Canada. The acquisition provides further scale and efficiencies to our existing businesses by adding 27% to daily production, increasing 2P reserves by 35%, and providing a reserve life index in excess of 17 years,” said Peter Barker-Homek, CEO of TAQA.
In August, TAQA announced that it will own and operate TAQA North Ltd., following the completion of the acquisition of Northrock Resources Ltd., a subsidiary of Pogo Producing Co. for US$2 billion.
The new entity, TAQA North, is set to provide TAQA with an additional 142 million barrels of proven oil and gas reserves and more than 37,000 boe/d (gross).
TAQA carries Aa2 and AA- credit ratings.
Vantage Energy acquiresOffshore Group, jackup rigs
Vantage Energy Services has signed a definitive share purchase agreement to acquire all shares of common stock of Offshore Group Investments Ltd., a Cayman Islands registered company and wholly-owned subsidiary of F3 Fund. F3 Fund is affiliated with TMT Global, a Cayman Islands registered company. Four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs are being constructed in Singapore for delivery and sale to OGIL. Vantage will change its domicile from Delaware to the Cayman Islands.
F3 Fund will receive consideration of nearly $331 million at closing, consisting of about $56 million in cash and $275 million in units. As part of the transaction, Vantage will assume roughly $517 million in payments owed under certain contracts for the construction and delivery of the four ultra-premium jackup drilling rigs, and incur nearly $40 million in rig outfitting costs. Vantage will also acquire an option to purchase an ultra-deepwater drillship currently under development.
A European bank has provided Vantage an indicative term sheet providing for debt financing for completion of the jackup rigs of nearly $440 million.
Vantage was formed for the specific purpose of consummating a business combination in the oilfield services industry. In May 2007, Vantage raised nearly $276 million in its initial public offering. Ellenoff Grossman & Schole LLP acted as legal advisor to Vantage.
Paul A. Bragg, chairman and CEO of Vantage, stated, “The all-in cost of the units, approximately $220 million each, is very attractive and will position us to make excellent returns for our shareholders. The drillship option will be in force for six months beyond the closing of the jackup acquisition and provide us with an exceptional opportunity to enter into the ultra-deepwater sector of the market, which has the strongest rig demand and longest potential contract visibility.”
TMT is a privately-owned shipping company with operating headquarters in Taiwan.
E&A activity in NW Europe attracts renewed interest
Dr. Rhodri Thomas, Europe upstream research manager for Wood Mackenzie, recently made a presentation on exploration and appraisal activity in northwest Europe. “Exploration and appraisal activity in north west Europe has attracted renewed interest which is illustrated by a number of factors. Firstly E & A drilling could reach a ten year high in both the UK and Norway in 2007. Secondly the number of companies holding acreage has increased by over 50% to over 200 in the last five years and licensed acreage itself has increased by 40% during the same period. Furthermore, nearly 50 new discoveries were made during 2005 and 2006 alone,” said Thomas.
E & A expenditure in the region has more than doubled in the last three years as companies have ramped up investment with the increase in oil and gas prices. This has been assisted by the arrival of new companies and the need to replace reserves. In a global context, Thomas says that the region is accounting for a higher percentage of global E & A spend, up 5% to 15% over the last three years.
Thomas says; “The volume of reserves discovered in NW Europe has stabilized in the last couple of years following a long term decline, although this has required investment and overall reserve replacement is running at only 30%.” Wood Mackenzie says that during the period 2002 to 2006, exploration added a total of 3.5 billion boe across the region, with 45% of this volume in the Norway CNS/NNS and Mid Norway regions.
Finding costs in NW Europe have risen but the region as a whole remains competitive in a global context, where finding costs have also increased. Thomas says; “Finding costs over the last three years have averaged $2.5/boe, up 40%.” Thomas continues; “Finding costs in the frontier areas have been significantly but the lack of infrastructure has hampered rapid development.”
The company concludes that, overall, exploration in North West Europe has been successful with $22 billion of value being created in the last ten years. However, rising costs and a drop in the volume of reserves discovered means that only 25% of this has occurred in the last five years and there are significant variations by region.
Noble Denton acquires Lowe Offshore International
Noble Denton Group, a global offshore and marine consulting firm, has acquired Lowe Offshore International Ltd. (LOI). The move increases the Group’s annual turnover to over $100 million.
In April, the Group acquired the Oslo-based engineering firm Indec and in July it acquired consultancy firm Poseidon Maritime. The acquisition of Lowe Offshore will double the size of the group’s operations in Houston.
Personnel from Noble Denton’s project management and engineering subsidiary, Offshore Dynamics, will move into Lowe Offshore’s existing premises in Houston to create a new specialist offshore project management and engineering alliance. All staff from both companies will be retained and an active recruitment campaign will be initiated.
Earlier this year, the group consolidated Offshore Dynamics Inc. as a separate division by setting up new associated companies in Houston and Sharjah to complement existing entities in London and Singapore.
Lowe Offshore International Ltd. provides project management services to the oil and gas industry.
Michael Lowe, president of Lowe Offshore International said, “The combination of our companies is an ideal opportunity because there is no overlap in services offered by Lowe Offshore and the Noble Denton companies. This will allow us to strengthen our project management skills and systems to offer the industry a total package of services for FPSO and deepwater projects. Noble Denton has established international offices which eases the burden to enter those markets. Our current Gulf of Mexico and International markets will remain a key part of our business plan with the enhanced services.”
GoM lease sale 204 attracts $289 million; regional drilling activity hits new high
Western Gulf of Mexico oil and gas lease sale 204, held in New Orleans by the US Department of the Interior’s Minerals Management Service (MMS), attracted $289,953,066 in high bids. A total of 47 companies participated in the lease sale, in which MMS received 358 bids on 282 tracts. The sum of all bids received totaled $369,496,840. The sale offered 3,338 tracts comprising nearly 18 million acres offshore Texas.
“The success of this lease sale once again demonstrates industry’s commitment and interest in the Gulf,” said MMS director Randall Luthi. “The bidding in this sale is an indicator that the Gulf of Mexico will continue to be a strong source for the nation’s energy production in the future.”
The high bid for each block will go through a strict evaluation process to ensure the public receives fair market value before a lease is awarded.
A record number of drilling rigs are currently working in ultra-deepwater in the Gulf of Mexico. “For the first time, 15 rigs are drilling for oil and gas in 5,000 feet of water or greater in the Gulf,” Luthi said.
According to the Minerals Management Service, while drilling activity in deepwater remains strong, advances in production have also been made. In July 2007, gas production started on Anadarko-owned Independence Hub, a semi-submersible platform located in 8,000 feet of water. Before that, the production facility in the deepest water depth was the Na KiKa located in 6,340 feet of water and operated by Shell and BP. As of April 2007, the Gulf’s daily production was estimated at 1.3 MMboe and 7.7 bcfd.
With new technology will come new rigs. Soon the Independence Hub will no longer be the deepest production platform. Rigs currently under construction range from drill ships to semi-submersibles and will be capable of operating in water depths up to 12,000 feet. Some may be available as early as summer 2008.
