Industry Briefs

Range sells Gulf of Mexico properties to private company for $155 million

Range Resources Corp. has sold its Gulf of Mexico properties to a private company for $155 million. The properties included Range’s interests in 37 platforms in water depths ranging from 11 to 240 feet. None of the properties are operated by Range. At year-end 2006, Range estimated that the properties contained proved reserves of about 40 Bcfe, representing 2% of its total proved reserves. As a result of the sale, Range will record a pre-tax gain of approximately $100 million in the first quarter of 2007. This sale, along with the February sale of Austin Chalk properties has generated $237 million of aggregate proceeds. Range Resources is an independent oil and gas company operating in the Southwestern, Appalachian, and Gulf Coast regions of the US.

Imperial Energy secures $200M bank facility

Imperial Energy Corp. PLC has entered into an agreement for a $200 million bank facility with ABN AMRO Bank NV. The bank facility of $200 million is secured by way of share pledges given by certain companies within the Imperial group. The group will use the funds for its capital and exploration expenditure, operating costs, and general corporate expenditure across all its operations. The facility bears interest at 3.25% over Libor for the first 6 months, increasing to 3.75% for the second 6 months and 4.75% for the remainder of the term. Until 6,000 b/d production is attained there is an additional increment of 1% in the margin. The facility is for a term of 19 months, but Imperial plans to refinance it before the expiration date, and accordingly ABN AMRO Bank NV has agreed not to impose an early redemption penalty.

Cameron acquires subsea tech provider

Cameron has acquired DES Operations Ltd., an Aberdeen, UK-based supplier of production enhancement technology for the oil and gas industry. The acquisition provides Cameron with DES’ unique MARS (Multiple Application Re-injection System) technology, which enables the installation of multiple processing technologies directly onto the subsea completion. DES is expected to provide Cameron increased capability to support customers by simplifying subsea processing for both on and off the wellhead applications. Cameron is a provider of flow equipment products, systems, and services to worldwide oil, gas, and process industries.

IHS acquires RapiData

IHS Inc. has acquired the RapiData product, known for its comprehensive well test, pressure and completions data for the Western Canadian Sedimentary Basin. IHS purchased RapiData from Rapid Technology Corp. of Calgary, Alberta, Canada. IHS has been a partner with Rapid since 2003. Rapid Technology Corp. is a privately-held company that provides integrated software, data, and engineering solutions for the oil and gas industry. Following the sale of its product line to IHS, Rapid Technology Corp. will be a holding company with an investment interest in Rapid Solutions Corp. which is unaffected by the sale. IHS is a provider of technical information, decision-support tools, and related services to customers around the world.

Venoco to acquire fields in Texas, California

Venoco Inc. recently signed two purchase and sale agreements for acreage in California and Texas. The acquisitions include the West Montalvo field in Ventura County, Calif., and several Texas Gulf Coast fields, including the Manvel field in Brazoria County. The combined total proved reserves of the two acquisitions are estimated to be 9.7MMboe and proved plus unproved conventional reserves are estimated to be 14.7MMboe. The combined net acquisition costs are about $106 million. There are about 75 wells in the combined acquisitions. Closing of each transaction is subject to the satisfaction of customary conditions. Denver-based Venoco is an independent energy company primarily engaged in the acquisition, exploitation, and development of oil and natural gas properties in California and Texas.

Toreador enters $45M private placement deal

Toreador Resources Corp. has entered into definitive agreements with a small group of institutional investors on a $45 million private placement of equity. Proceeds from the placement will help fund the company’s 2007 exploration and development activities. The company will issue 2,710,843 shares of common stock, at a per share price of $16.60 which is equal to an approximate 17.5% discount to the volume weighted average share price on the Nasdaq Global Market on the pricing date. The shares are to be sold at a discount since the issuance of the shares will not be registered immediately under the Securities Act of 1933. Toreador Resources Corp. is an independent international energy company engaged in the acquisition, development, exploration and production of natural gas, crude oil and other income-producing minerals.

Superior Offshore wins Gulf of Mexico diving contracts

Superior Offshore International has been chosen by Heerema Marine Contractors (HMC), for work on both the Independence Hub and the Neptune tension leg platform. On the Independence Hub, located in Mississippi Canyon 920, Superior Offshore will perform the installation of 8 spool pieces associated with the steel cantenary risers in water depths of 105-120 feet. On the Neptune project, Superior Offshore will be providing diving support services associated with the installation of the TLP’s mooring system and general diving support as required by HMC’s installation vessel.

Oilex extends, adds financing for Cambay development

Oilex Ltd. has reached an agreement with LinQ Resources Fund for the extension of the term of the existing A$5M mezzanine finance and for the provision of an additional A$5 million mezzanine finance facility to assist Oilex in funding the development of its Indian production interests, including the drilling of wells in the Cambay field. The term of the existing facility has been extended by 12 months, with the additional A$5M facility to be repaid in 2 years.

Petrobras to invest $1.5B in Santos business unit

Brazil’s federal energy company Petrobras has set aside $1.5 billion for investments in 2007 in its Santos business unit, which includes E&P assets in the Santos basin. The Santos basin includes the development of the Mexilhao natural gas field and a plan to increase production at the Merluza field as well as the initial development of the Caravela and Cavalo Marinho fields for the start of production in 2010.

Omni expands Barnett shale presence with new contract

Omni Energy Services Corp.’s wholly-owned subsidiary, Rig Tools Inc., has been awarded a long-term contract to provide certain rental equipment and related services to a large independent oil and gas company operating in the Barnett Shale area of Texas. RTI, acquired by Omni in November 2006, owns a fleet of specialized rental equipment used by oil and gas companies operating principally in Texas and Louisiana. In addition, Omni’s newly acquired subsidiary, Charles Holston Inc., is close to completing the delivery and installation of 110 frac tanks leased to a large independent oil and gas company under a long-term rental agreement. CHI, acquired by Omni in March 2007, engages in the transportation of non-hazardous oilfield waste by-products from its main facility in Jennings, Louisiana. Headquartered in Carencro, La., Omni Energy Services Corp. offers a broad range of integrated services to geophysical companies engaged in the acquisition of onshore seismic data and to oil and gas companies operating primarily in the Gulf of Mexico.

Elixir, Gawler agree to merge E&P businesses

London-based Elixir Petroleum Ltd., and Perth-based Gawler Resources Ltd., have agreed to merge their oil and gas exploration and production businesses in a stock deal. Elixir will be the continuing company, and its headquarters will be in Perth with an office in London. The value of the overall transaction was not finalized. Elixir shareholders will represent 52% of the resulting company, and Gawler shareholders the remaining 48%. The merged group will combine Gawler’s Gulf of Mexico production with Elixir’s North Sea exploration. The combined company will include Gawler’s 30% working interest in the High Island A268 oil and gas development project in shallow water off Texas. The project is scheduled to come on stream in September at gross rates of 20 MMcfd. Elixir’s exploration assets are interests in 9 UK North Sea exploration licenses comprising nine blocks or part-blocks.

Entek completes loan facility

Entek Energy has completed a loan facility of $1,250,000 for a 6 month period. The loan will be interest free and will be secured by a fixed and floating charge over the assets of the company. Entek has agreed to issue 12,500,000 options expiring on December 31, 2009 to the Lenders. The options are exercisable at 20 cents each and are on the same terms and conditions as the existing options expiring on the same date. The loan facility will provide finance for Entek’s development costs for the High Island 24-L Block, exploration activities, administration expenses, and working capital for a short period pending the commencement of revenue from Entek’s existing discoveries in the Gulf of Mexico and Australia.

Lukoil obtains $250M refinancing facility

OAO Lukoil has mandated ABN AMRO and Calyon to arrange an unsecured $250 million term loan facility. The facility is priced at LIBOR plus 0.40% per annum and has a 5-year maturity. The facility has been arranged to refinance the remaining part of the company’s syndicated pre-export facility obtained in 2003. At that time the company obtained a $765 million facility secured on export receivables. Thus, Lukoil plans to restructure a part of its debt by replacing a relatively expensive secured facility with a less expensive unsecured one.

Technip wins contract for Ursa, Princess developments

Technip has been awarded a contract by Shell for the installation of the water injection flowlines and the risers for the development of the Ursa and Princess fields. These fields are located in the Gulf of Mexico, about 140 miles southeast of New Orleans. This project consists in the tie-back of four subsea water injection wells to the Ursa platform, anchored in the Mississippi Canyon block at a water depth of nearly 3,780 feet. The contract covers project management, engineering, fabrication, and installation of flowlines and steel catenary risers, and installation of pipeline end terminations. Offshore installation is scheduled for the fourth quarter 2007.

Baker Botts opens shop in Beijing

Baker Botts LLP has opened an office in Beijing; establishing its second China office to complement its Asian regional hub in Hong Kong. Baker Botts now has 11 offices worldwide. Libin Zhang, a partner resident in Beijing, will assist in introducing Baker Botts’ global technology and litigation practices in China. Zhang has been advising clients on trading with and investing in China for more than 15 years. “Our Beijing office includes practitioners with a range of expertise,” Zhang said. “In addition to assisting multinational clients with their business in China, we will also continue to assist Chinese companies with international interests and aspirations.” Baker Botts is an international law firm with approximately 750 lawyers, and provides a full range of legal services to regional, national, and international clients.

Sterling completes $145M acquisition of Whittier

Sterling Energy PLC, has completed its $145 million cash acquisition of all of the issued and to be issued share capital of Whittier, an onshore US Gulf Coast exploration and production company, which was conditionally announced in January. With a program of over 40 low-risk wells already planned for the next 12 months on the Whittier assets, together with Sterling’s current drilling schedule, further significant US exploration and development opportunities will be pursued. Following the closing and payment of related costs, Sterling expects to have current cash balances of near $30 million, undrawn bank facilities of $13 million, and bank debt of roughly $141 million.

Kinder Morgan sells retail gas operations to GE, Alinda Investments

Kinder Morgan Inc. has sold its US natural gas retail distribution and related operations to GE Energy Financial Services and Alinda Investments LLC for $710 million plus working capital. The retail business serves residential, commercial, agricultural, and industrial customers through more than 11,900 miles of distribution and transmission pipelines, underground storage fields, and related facilities. The previously announced transaction has received all required regulatory approvals. Alinda Investments LLC is an affiliate of Alinda Capital Partners LLC, a privately-held firm that invests in infrastructure assets that provide essential services, and is a 50% owner with GE Energy Financial Services. The retail gas distribution business’ headquarters will continue to be in Lakewood, Colo., and Dan Watson will remain president. The business will launch its new identity this month.

Wah Seong and Dialog form new oil and gas JV

Two of Malaysia’s oil and gas players, Wah Seong Corp. Berhad and Kuala Lumpur-based Dialog Group Berhad, are pooling their resources via a 50-50 joint venture company. The new JV to be incorporated in Hong Kong, will promote and market the entire range of oil and gas services and products offered by both parties. It will also explore and develop fresh business opportunities worldwide.

Acergy wins $28M contract from Shell

Acergy has been awarded a contract by A/S Norske Shell for installation work on the Shell Draugen D3-E3 development project. The contract, valued at $28 million, is for the installation of flexible pipe and umbilical, together with well control umbilicals and various other structures. The work will be carried out on the Garn West and Rogn South fields in the Draugen area in water depths of near 300 meters. Acergy will undertake all tie-in and testing work to hook up the new subsea wells. Project management activity and engineering will be carried out from Acergy’s office in Stavanger. Offshore installation work is scheduled to take place in summer 2008.

Trican acquires CBM Solutions

Calgary-based Trican Well Service Ltd. has purchased all shares of CBM Solutions Ltd., a privately-owned Calgary-based company that operates throughout western Canada and the Rocky Mountain region of the US. CBM Solutions specializes in the provision of geological and engineering services for unconventional gas wells, including gas content analysis, reservoir characterization and consulting services for coalbed methane and shale gas wells. The transaction will allow Trican to develop unconventional gas pumping service technology for use in its operations in Western Canada and the US. All of the principals and key management of CBM Solutions will remain with the company. Trican provides an array of specialized products, equipment, and services used during exploration and development of oil and gas reserves.