W&T Offshore sets 2010 CAPEX at $450 million

W&T Offshore Inc.'s planned 2010 capital expenditure budget has been set at $450 million. The company anticipates fully funding the budget with internally generated cash flow and cash on hand. Currently, the budget includes seven conventional shelf exploration wells. It also includes other capital items such as well recompletions, facilities capital, seismic and leasehold items. W&T anticipates these capital expenditures to cost roughly $150 million. The balance of the budget will be allocated to acquisitions, additional drilling opportunities from the company's prospect inventory and/or new joint ventures offshore on the shelf and deepwater and onshore.

Chesapeake buys into Epsilon's Marcellus property

Epsilon Energy Ltd. has stuck a joint venture agreement with Chesapeake Energy to develop its Highway 706 Prospect in Susquehanna County in the Marcellus. Chesapeake will earn a 50% interest in the 706 by paying $5 million in cash upfront and carrying the first $95 million of Epsilon's 50% share of leasehold, drilling, completing, equipping, and gathering costs attributable to the prospect. The carry obligation is expected to be completed within 30 months after the closing date of February 1, 2010. If monies are allocated to the poly pipeline and the producing reserves, the remainder suggests the

purchase of 11,200 acres for $150 million, or $13,393 per acre.

SGS, Halliburton partner to provide fluid analysis solutions

SGS SA and Halliburton have entered into a Joint Cooperation Agreement combining formation fluid sample acquisition and analysis services. Halliburton will provide a comprehensive suite of solutions for acquiring fluid samples, and SGS' Oil, Gas and Chemicals division will deliver a full range of fluid analysis services. The companies are currently providing the joint fluid sample collection and analysis service to a client offshore Africa.

Triple Point Technology grows with two acquisitions

Triple Point Technology, a provider of multi-market commodity and enterprise risk management software solutions, has acquired two software providers, Softmar, a provider of software solutions for commercial chartering and vessel operations, and Enerbility Software GmbH. The acquisition of Softmar positions Triple Point to optimize freight management in its core markets. All 45 Softmar employees from its chartering and vessel operations business have joined Triple Point, and Softmar co-founder, Michael Lolk Larsen, has been named Triple Point's managing director of chartering and vessel operations. Softmar's other co-founder, David Marais, will retain Softmar's ship brokering business under a new and separate entity. The acquisition of Vienna-based Enerbility extends Triple Point's capability to connect European energy traders with suppliers and customers from trade execution to cash settlement. All employees of Enerbility, including the founders, have joined Triple Point.

Mullen Group earmarks $40M for 2010 growth

Mullen Group Ltd. has approved a $40 million capital expenditure budget for 2010. The company has allocated the budget for growth, most notably in the areas of infrastructure investment, oil sands development and production services. "The company will be deploying new capital to support and capitalize on the increase in multi-frac wells that is occurring in the western Canadian basin," stated Stephen H. Lockwood, president and co-CEO. The company holds $200 million in an undrawn bank facility.

Jefferies launches new energy ETF

Jefferies has launched the Jefferies | TR/J CRB Wildcatters Exploration & Production ETF (WCAT ETF), an exchange-traded fund (ETF) which seeks investment results that replicate as closely as possible, before fees and expenses, the price and yield performance of the recently launched Thomson Reuters/Jefferies CRB Wildcatters Energy E&P Equity Index (CRB WCAT Index). The new ETF began trading January 20th, on NYSE Arca under the ticker symbol WCAT. The CRB WCAT Index, which follows the introduction of the CRB-EQ indices, provides a benchmark for the equities of commodity-related companies, but in particular provides exposure to stocks of oil and gas exploration and production companies based in the US and Canada. Approximately two-thirds of the proved reserves of the Wildcatters Index are natural gas.The CRB WCAT Index is reported under the ticker WCATI. ALPS Advisors Inc. is the investment adviser for the new ETF, and Arrow Investment Advisors LLC is the investment sub-adviser. ALPS Distributors Inc. is the distributor of the ETFs. ALPS Fund Services Inc. will provide administration, compliance, creative services, legal, marketing and tax administration. S-Network Global Indexes LLC is the index provider for the CRB-EQ group of indices. Jefferies and Thomson Reuters are brand licensors for the CRB-EQ indices and for the new ETFs.

Paradigm well log, petrophysical analysis software selected by E&P

Newfield Exploration Co. has selected Paradigm, a provider of enterprise software solutions to the oil and natural gas exploration and production industry, to provide software for well log and petrophysical analysis. The goal of Paradigm Geolog suite's application integration is to improve process time and data integrity preservation by allowing users to migrate datasets across tasks. The suite is designed to handle entire workflows in one integrated environment and enables users to ensure that all available data is analyzed.

Oilsands Quest sells shale assets to private company formed by CEO

Oilsands Quest Inc. (OQI) will sell its oil shale assets located near Pasquia Hills in Saskatchewan to Canshale Corp. for CDN$1 million in cash and 8,000,000 shares of Canshale. The transaction is conditional on Canshale raising a minimum of CDN$12.5 million. Following the initial Canshale financing, OQI will retain an ownership interest of between 10% and 16% in Canshale, a private company formed by Christopher H. Hopkins who serves as the company's chairman, president, and CEO. Effective January 15, 2009, he resigned as president and CEO at Oilsands Quest. Hopkins remains on the board of directors of OQI and is the chair of the Environment, Health and Safety Committee. He is also a member of the Governance Committee of the board. T. Murray Wilson, executive chairman of OQI, will assume the additional roles of president and CEO. OQI has retained the consulting services of Dr. Arthur Hale, an unconventional reservoir expert. Dr. Hale has been with the Royal Dutch Shell Group of companies since 1986 and is currently Senior Adviser to the engineering and research groups. W. Scott Thompson and Thomas Milne resigned from the board of directors of OQI on January 15, 2010 and will join the board of directors of Canshale. Dr. Erdal Yildirim, who has spent the past 18 months leading the exploration and extraction activity at Pasquia hills, will be retiring from OQI on February 1, 2010. Genuity Capital Markets Ltd. is acting as financial advisor to Canshale and TD Securities Inc. is acting as financial advisor to OQI on the transaction.

Talisman sets aside $1.6B for Marcellus, Montney shale drilling in 2010

In North America, Talisman Energy Inc.'s objective is to become a leading, returns based, shale gas producer. For this reason, the company anticipates spending $1.6 billion of the $1.9 billion set aside for North America in 2010 on shale drilling primarily in the Marcellus and Montney shale plays. Worldwide, the company has set a 2010 capital spending budget of $5.2 billion. In the Pennsylvania Marcellus, the company has budgeted close to $1 billion, and plans to increase the rig count to 10 rigs (currently six) over the course of 2010. The plan is to drill 170 net wells in the Marcellus this year (up from 53 in 2009), with about 145 wells completed and tied-in. The company expects to exit 2010 at between 250-300 MMcf/d, up from 65 MMcf/d at the end of 2009. Plans are built on an expected ultimate recovery per well of 3.5 bcf, with 30 day initial production rates of 3 MMcf/d. In the Montney shale, Talisman is moving the Farrell Creek and Greater Cypress areas into commercial development with roughly 25 horizontal development wells expected in 2010 (with plans to complete 17 of these during the year). Additionally, the company expects to drill 10-15 Montney shale pilot wells, including its first multi-lateral. The company will expand from three rigs to as many as nine by the end of the year, spending roughly $550 million. Talisman expects to exit the Montney shale in 2010 at between 40-60 MMcf/d, based on expected ultimate recoveries of around 5 bcf per well and 30 day initial production rates of 4.5 MMcf/d. Talisman will also spend $270 million on conventional properties. The company is currently examining the sale of a significant amount of non-core conventional gas-weighted properties in North America, depending on market conditions. These assets are currently producing approximately 40,000 boe/d.

Gateway buys Barnett shale gathering system

Gateway Energy Corp. has acquired the Hickory Creek Gathering System from Hickory Creek Gathering LP and Range Texas Production LLC for $3.9 million. The gathering system is located in Denton County, Texas, in the core area of the Barnett Shale and currently services two producers. There are currently 15 producing wells connected to the system with throughput of roughly 11,000 MMbtu per day at a fixed gathering fee for each MMbtu transported. The producers have identified up to 18 additional drilling locations within the dedicated leases for future development. The purchase price was paid with a combination of available cash and the company's existing line of credit. Based on projected 2010 production, Gateway expects the Hickory Creek Gathering System to increase its revenue in 2010 by approximately $772,000, assuming no additional wells are placed on the system during 2010.

Ahead of Canadian tax law changes, Enterra Energy Trust to convert to E&P

Taxation changes in Canada have prompted the board of Enterra Energy Trust to approve the conversion of the Trust to a corporation to be named Equal Energy Ltd. The conversion is subject to the approval of the unitholders as well as customary court and regulatory approvals, and is anticipated to be completed on or before May 31, 2010. Equal Energy will continue to pursue the exploration and development of its Oklahoma based Hunton natural gas and NGL resource play. The company will work to further develop opportunities in its Circus, Oklahoma oil play, as well as its oil play in the west central Alberta Cardium formation, and its various other Western Canadian Sedimentary Basin oil and gas prospects. The Canadian government is set to start imposing the new tax on income trusts starting in January 2011.

ExxonMobil Production set to extend life of mature Texas field by 25 years

ExxonMobil Production Company plans to apply advanced technology to the Hawkins Field, a discovery made by the company 100 miles east of Dallas in 1940, in an effort to recover the equivalent of an additional 40 million barrels of oil. The company expects the new technologies to extend the life of the field for another 25 years. Over the past three years, the company has spent over $700 million in Texas. New facilities will be installed at the Hawkins Field to recover and reinject nitrogen and other gases from the field's natural gas production. Construction is expected to begin in the first quarter 2010. Project start-up is anticipated in late 2011.The Hawkins Field, in Wood County, Texas, has produced more than 800 million barrels of oil over the last 70 years.

XTO, Oxy, among group voluntarily relinquishing Montana acreage

Five energy companies, including Occidental, BP, and XTO have relinquished oil and gas leases on roughly 29,000 acres in Montana. The oil and gas leases in the Badger-Two Medicine area of the Lewis and Clark National Forest in Montana's Rocky Mountain Front adjacent to Glacier National Park were returned to the US Bureau of Land Management. They are located in an area withdrawn from future leasing under a law enacted in 2006. The provision permanently protects nearly 111,000 of 152,000 acres of federal mineral leases originally held along the Rocky Mountain Front from oil and gas development. Other companies surrendering acreage in the area are Williams Cos. and Rosewood Resources. All five companies voluntarily relinquished their leases and did not receive any consideration for their actions.

Newfield makes $650M offering, portion to offset TXCO assets acquisition

Newfield has commenced an offering of $650 million of Senior Subordinated Notes due 2020. The company intends to use the net proceeds from the offering to fund its pending tender offer and consent solicitation for its existing 7 5/8% Senior Notes due 2011, to fund its pending acquisition of certain of TXCO Resources Inc.'s assets in the Maverick Basin, to repay outstanding borrowings under its credit agreement and for general corporate purposes, including its 2010 capital program. In January the company partnered with Anadarko Petroleum Co. to purchase TXCO assets. According to the terms of the transaction, Newfield will acquire certain of TXCO's Maverick Basin assets, which include more than 350,000 gross acres (300,000 net acres), for roughly $217 million. Current net production of the assets to be acquired by Newfield is 1,500 boe/d, of which two-thirds is oil.

Stone Energy prices $275M senior notes, earmarks $100M of 2010 CAPEX for Marcellus

At presstime, Lafayette, La.-based Stone Energy Corp. priced an offering of $275 million aggregate principal amount of Senior Notes due 2017 set to bear interest at a rate of 8.625% per annum and will be issued at a price equal to 98.713% of the principal amount thereof, resulting in a yield to maturity of 8.875%. Net proceeds are expected to fund its pending tender offer and consent solicitation for its existing 8 1/4% Senior Subordinated Notes due 2011 and for general corporate purposes. Banc of America Securities LLC and JP Morgan Securities Inc. are acting as joint book-running managers for the offering. Days before, the board authorized a 2010 capital expenditure budget of $400. Roughly 25% of the budget is set to be used for Appalachian drilling and acreage acquisition. The company currently holds roughly 30,000 net acres in northeast Pennsylvania and West Virginia prospective for the Marcellus Shale. In 3Q09 and 4Q09, the company drilled six operated vertical wells in the Marcellus. Four were completed and established, and each tested at an initial rate between 0.5 and 2.0 million cubic feet of gas per day. Stone's working interest is 100% in four of the six wells, and 70% in the other two.

El Paso Pipeline Partners prices public offering

El Paso Pipeline Partners has priced a public offering of 8,750,000 common units at $24.48 per common unit. Net proceeds from the offering, including the general partner's proportionate capital contribution, will be used by El Paso Pipeline Partners for general partnership purposes, including potential future acquisitions and growth capital expenditures. The partnership may apply some or all of the net proceeds to reduce outstanding borrowings under its revolving credit facility. Underwriters were given a 30-day option to purchase up to an aggregate of 1,312,500 additional common units. Citi, BofA Merrill Lynch, Barclays Capital, UBS Investment Bank and Wells Fargo Securities acted as joint book-running managers. Goldman, Sachs & Co., JP Morgan and Morgan Stanley acted as co-managing underwriters.

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