Encore enters $410M deal for Williston basin properties
Encore Acquisition Co. has entered into an agreement with Howell Petroleum Corp. and Kerr-McGee Oil and Gas Onshore LP, subsidiaries of Anadarko Petroleum Corp., to purchase oil and natural gas properties in the Williston basin in Montana and North Dakota for $410 million in cash. The assets are primarily waterfloods and producing properties with 70,000 net acres in the prolific Bakken play in Montana and North Dakota. Encore plans to enhance the production through drilling, redevelopment, stimulation, and waterflood optimization. Encore has estimated that the properties have total proved reserves of 21MMboe, which are 90% oil and 81% proved developed producing. These properties will be 85% operated by Encore. Encore has purchased put contracts on about 80% of the acquisition’s proved developed producing volumes at an average price of $57.50 per barrel for remainder of 2007 and all of 2008. Encore intends to finance the acquisitions through cash flows from operations and borrowings under one or more credit facilities. Encore intends to divest of certain properties in the Anadarko Basin, Arkoma Basin, and the Barnett Shale in the Fort Worth Basin. Bank of America will provide the financing. Credit Suisse Securities LLC served as financial on the transaction which is expected to close in April of 2007.
Merrill Lynch makes $150MM equity investment in Leor Energy
Leor Exploration & Production LLC, the parent company of Leor Energy LP, has closed a $150,000,000 private placement of equity securities with Merrill Lynch PCG, a proprietary investment group within Merrill Lynch & Co. Inc. The equity placement follows the recent announcement that certain of Leor’s subsidiaries closed a $150,000,000 three-year senior secured, revolving credit facility with JPMorgan Chase Bank NA. Merrill Lynch and Goldman Sachs now own approximately 9% and 6%, respectively, of the company’s common units. At the conclusion of the transaction, Leor’s founders maintain a controlling stake in the company with over 83% of the equity.
“The company anticipates that these funding sources will provide sufficient capital for Leor’s drilling program and operations throughout 2007,” said Leor Energy CEO, Guma Aguiar. “Leor expects to use the bulk of the proceeds from this equity transaction to accelerate ongoing development of our company’s flagship project in the Amoruso Field, and also to continue our exploratory program in the Deep Bossier trend.” Houston-based Leor Energy is one of the fastest-growing privately held oil and gas exploration and production companies in North America.
Apache sells $1.5 billion in notes, S&P assigns A-rating, stable outlook
Apache Corp. priced $1.5 billion of 10- and 30-year notes. Proceeds will be used to reduce existing commercial paper balances and increase committed borrowing capacity in anticipation of funding Apache’s recently announced Anadarko Permian Basin acquisition. Apache sold $500 million of 5.625% coupon notes priced to yield 5.638% maturing on Jan. 15, 2017. Apache also sold $1 billion of 6% coupon notes priced to yield 6.051% maturing on Jan. 15, 2037. Banc of America Securities LLC and JP Morgan Securities Inc. are the joint book-running managers for the offering. Standard & Poor’s assigned its “A-” rating to Apache Corp.’s proposed $500 million senior unsecured notes due 2017 and $1 billion senior unsecured notes due 2037. The outlook is stable. “We expect resulting financial leverage, adjusted for off-balance-sheet obligations and abandonment liabilities, to be at the upper limit for the current rating,” said Standard & Poor’s credit analyst Ben Tsocanos.
Nippon, SK form business, capital partnership
Nippon Oil Corp. and SK Corp. of South Korea have agreed to form a business and capital partnership. The two companies will jointly study exploration and development projects, supplying each other with oil products, build oil and energy facilities, study supplying each other with petrochemical products, and jointly construct petrochemical refining facilities. Nippon Oil would buy 1% of SK and SK would purchase 1% of Nippon Oil.
Halliburton to acquire wireline services firm
Halliburton’s drilling and formation evaluation division has entered into a definitive agreement to acquire all intellectual property, current assets, and existing business associated with Calgary-based Ultraline Services Corp., a division of Savanna Energy Services Corp. Ultraline is a significant provider of wireline services in Canada. Under the terms of the agreement, Halliburton will pay $177 million, subject to adjustment for working capital purposes. The transaction is expected to close in the first quarter of 2007, subject to regulatory approvals. When the acquisition is complete, Ultraline’s nearly 200 employees will transfer to Halliburton.
The Lukoil Group acquires remaining stake in Geoilbent
The Lukoil Group has completed a deal to purchase a 34% stake in OOO Geoilbent. As a result, it has consolidated 100% of the company. The deal won approval from Russia’s Federal Antimonopoly Office on January 12, 2007. Geoilbent develops the Severo-Gubkinskoye, Prisklonovoye, and Yuzhno-Tarasovskoye fields in the Yamal Nenets Autonomous District and undertakes prospecting and exploration on a number of license blocks.
AMEX appoints Morgan Stanley to assist on demutualization plan
The American Stock Exchange has appointed Morgan Stanley to advise it on the preparation and execution of a demutualization plan for the exchange as well as potential strategic future initiatives. A demutualization, if completed, would convert the exchange from a not-for-profit corporation into a for-profit corporation. Amex seat owners would have the opportunity to vote on any proposed demutualization plan, which, if adopted, would convert their seats into shares.
Kit Resources to acquire Summit Energy, GoM assets
Kit Resources Ltd. has signed a definitive agreement to acquire all of the issued and outstanding membership interests of Summit Energy Co. LLC for consideration of $29 million. Summit is a privately held oil and gas company headquartered in Lafayette, La. On the Marsh Island project, over 24 prospects with considerable size potential have been identified on new 3D seismic. The company intends to commence an aggressive drilling program in early 2007. In addition the company has agreed to acquire the Gulf of Mexico assets of Pearl Exploration and Production Ltd. in consideration for 10 million common shares of Kit, each Kit share having a deemed value of Cdn$1.20. Pearl is an Alberta-based issuer, the shares of which are listed for trading on the TSX Venture Exchange.
Drilling on the top prospects is expected to commence in the first half of 2007. The new company will maintain a strategic focus in the GoM. The board of directors of Kit will comprise the following: Keith Hill, chairman; Clinton W. Coldren, president; Gary Guidry; and John Zaozirny. Operational and technical headquarters will be established in New Orleans. Upon closing of the Summit and Pearl transactions, Kit proposes to change its name to Bayou Bend Petroleum Ltd.
Universal Energy signs agreement to acquire energy services company
Universal Energy Corp. has signed a letter of intent to acquire PowerTown Line Construction, a Florida corporation based in St. Petersburg. PowerTown Line Construction provides installation and maintenance of power lines used in the transmission and distribution of energy to end users. Universal Energy Corp. is a diversified energy company currently focused on oil and gas exploration. Universal’s current focus is on the exploration of its land portfolio comprised of a working interest in highly prospective acreage in Alberta, Canada.
New Frontier Energy completes $22MM financing
New Frontier Energy Inc., a natural resource exploration and production company engaged in the exploration, acquisition, and development of oil and gas properties in the US, has completed a private placement of 444.5 investment units at a purchase price of $50,000 per unit for gross proceeds of $22,225,000. Westminster Securities Corp. acted as placement agent for the offering. The company utilized $8,000,000 of the proceeds to acquire the operator of the Slater Dome Field’s 36.66% working interest in 11 gas and one water disposal wells together with 33,949 net acres located along the eastern edge of the Greater Green River basin in northwest Colorado and south central Wyoming. The acquisition resulted in the company owning a 66.66% working interest in the field. In the transaction, the company acquired estimated proved reserves of 8.2bcf of natural gas and became the operator of the field. The remaining proceeds of $13,000,000 will fund a 15 to 25 well drilling program in the summer 2007 and working capital.
Roxar to supply monitoring equipment to Mideast operator
Roxar has signed two multi-million dollar contracts to supply 43 dual downhole gauge systems (Permanent Downhole Monitoring Systems) to a leading Middle Eastern operator. The Roxar downhole HM gauge, which transmits digitized pressure and temperature data to the surface, is scheduled for delivery by October 2007. The Roxar PDMS is robust and reliable for onshore, offshore, and subsea wells and is deployed in production, injection, and observation wells as well as in conjunction with the instrumentation of highly complex multi-zone intelligent wells. Roxar is an international technology solutions provider to the upstream oil and gas industry.
Superior Energy Services acquires Duffy & McGovern
Superior Energy Services has acquired Duffy & McGovern Accommodations Services Ltd. for $47 million in cash. Duffy & McGovern is a global provider of offshore accommodation rentals headquartered in Aberdeen, Scotland. It operates in most major deep water oil and gas territories with major operations in Europe/Africa, the Americas, and South East Asia. The purchase price and any subsequent capital spending related to Duffy & McGovern’s operations are not included in the company’s recently announced 2007 capital expenditure budget of $362 million. Superior Energy Services Inc. is a provider of specialized oilfield services and equipment focused on serving the production-related needs of oil and gas companies primarily in the Gulf of Mexico and the drilling-related needs of oil and gas companies in the GoM and select international market areas.
Oceaneering International ups credit facility by $50MM
Oceaneering International Inc. has amended its $250 million revolving credit agreement. The amendment increases the amount to $300 million and extends the maturity date to January 2012. Participating banks are Wells Fargo Bank NA; DnB NOR Bank ASA; HSBC Bank USA, National Association; JP Morgan Chase Bank NA; The Bank of Tokyo-Mitsubishi UFJ Ltd.; Comerica Bank; Amegy Bank, National Association; and Citibank, NA. The amount available under the credit agreement can be increased to $450 million at any time upon the agreement of Oceaneering and existing or additional lenders. The new facility will be available for general corporate purposes. Oceaneering is a global oilfield provider of engineered services and products primarily to the offshore oil and gas industry, with a focus on deepwater applications.
McMoRan completes new $100MM loan
McMoRan Exploration Co. has completed a new $100 million senior term loan for its wholly-owned subsidiary McMoRan Oil & Gas LLC. The net proceeds of the new 5-year term loan will be used to repay borrowings under MOXY’s existing revolving credit facility, for future drilling activities and other corporate purposes. The loan will bear interest at an annual rate equal to LIBOR plus 7% and will be secured by a second lien on MOXY’s oil and gas properties. JPMorgan Chase Bank NA acted as administrative agent; Toronto-Dominion Securities LLC acted as syndication agent. McMoRan Exploration Co. is an independent public company engaged in the exploration, development, and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area.
Omni to acquire Cypress Energy assets
Carencro, La.-based Omni Energy Services Corp. has executed an Asset Purchase Agreement to acquire certain assets of Houston-based Cypress Consulting Services Inc. for $10.1 million, including $7.1 million in cash and the balance in a 3-year, 5% promissory note. The cash portion will be paid from available working capital under the company’s revolving line of credit. Closing of the acquisition is subject to the approval of OMNI’s senior lenders and the boards of both companies, and is expected to occur during the 1st quarter of 2007. Omni said the acquisition of the assets of Cypress includes the assumption of $20 million of seismic drilling contracts and believes the acquisition of the assets of Cypress will be immediately accretive to its 2007 earnings. Omni’s seismic drilling backlog currently tops $55 million, and combined with Cypress, it will now top $75 million. Omni recently announced that its full year pro forma revenues for 2006, including full year revenues for the acquisition of Preheat Inc., Rig Tools Inc. and Charles Holston Inc., would top $140 million. Omni Energy Services Corp. offers a broad range of integrated services to geophysical companies engaged in the acquisition of on-shore seismic data and to oil and gas companies operating primarily in the Gulf of Mexico.
Bankers partners with Peninsula for Palo Duro program
Bankers Petroleum Ltd. has entered into a letter of understanding with Peninsula Merchant Syndications Corp. to sell 27% of its working interest in its 375,000 net acres in the Palo Duro basin, Tex. Peninsula is a private merchant bank controlled by Sam Magid, a former founding partner of Salman Partners. The total consideration to be paid for the acreage is $19.5 million, of which a minimum of $15 million will be in cash. Bankers will continue as operator for its exploration activities in the Palo Duro basin. The cash received from the sale will be used to fund Bankers’ 2007 US exploration budget in the Palo Duro basin as well as the development program in Oklahoma, where the company anticipates it will have its first natural gas production tied-in by summer. Bankers Petroleum Ltd. is a Canadian-based oil and gas exploration and production company focused on opportunities in unconventional petroleum assets.
Devon to spend $100MM to start up Polvo in July
US independent oil company Devon Energy plans to invest $100MM to complete development of the offshore Polvo field and start production in July, making the company the second foreign offshore oil producer in Brazil. Devon has 60% of Polvo and South Korea’s SK Corp. 40%. Polvo is located in the Campos basin 100km from the Rio de Janeiro coastline at water depths of 300m. The company has been investing in Brazil since 1998, when it assumed a small stake in an offshore block in the northeastern basin of Barreirinhas. Total investment in Polvo is still estimated at $300MM. Polvo, declared commercially feasible in 2005, has estimated reserves of some 50Mb of heavy crude and the plan is to produce for 7 years. Output is expected to peak at 50,000b/d. The floating production, storage, and offloading vessel for Polvo is due to arrive in Brazil in June and will be linked to a fixed platform that is being built at the field for the start of operations.
Key Energy wins $45.8MM contract from Pemex
Key Energy Services’ Mexican subsidiary, Key Energy Services de Mexico S. de RL de CV, has been awarded a 22-month contract valued at $45.8 million by PEMEX to provide field production solutions and well workover services. Key will initially provide 3 well service rigs outfitted with its proprietary KeyView system and will install 2 KeyView systems on PEMEX-owned well service rigs. The contract grants PEMEX the option to call for additional rigs and KeyView systems in the future, although these incremental services are not included in the $45.8 million award. The company anticipates that it will commence operations in Mexico during the second quarter. The current project will cover PEMEX’s North Region assets and will initially focus on oil wells in the Poza Rica, Altamira and Cerro Azul assets. Key Energy Services Inc. provides oilfield services including well servicing, pressure pumping, fishing, electric wireline and rental tools and other oilfield services.
Halliburton recognized for multilateral systems technology
Halliburton’s drilling and formation evaluation division has won the 2007 Offshore Energy Achievement Award in well construction for its Sperry Drilling Services’ ReFlexRite multilateral system. The ReFlexRite system technology is a step toward extending the productive life of existing wells in mature fields in a cost-effective manner. The system makes it possible to convert a simple horizontal well into a multilateral well, while simultaneously maintaining the production from the original wellbore. The ReFlexRite system was recently deployed in Hydro’s Troll West Field in Norway. The Offshore Energy Achievement Awards program is sponsored by Offshore Engineer magazine. A steering committee, made up of technology experts, selects the award winners from more than 100 nominations from around the world.
