Copano Energy raises $300M for Eagle Ford growth

Copano Energy LLC has issued $300 million of convertible preferred equity to an affiliate of private investment firm TPG Capital to support its Eagle Ford shale expansion and other growth initiatives in Texas and Oklahoma. The Series A preferred units were priced at $29.05 per unit, a 10% premium to the 30-day volume weighted average price of Copano's common units as of July 19, 2010. The preferred units are entitled to in-kind quarterly distributions of $0.72625 per unit for the first three years, and are generally convertible into common units on a one-for-one basis after July 21, 2013. In connection with the equity issuance, Copano has expanded its board from seven to eight members and has appointed Michael G. MacDougall, a TPG partner, as a director. BofA Merrill Lynch acted as exclusive placement agent to Copano in connection with the transaction. Morgan Stanley acted as exclusive financial advisor to Copano.

Oasis Petroleum completes $396M IPO

Houston-based Oasis Petroleum Inc. completed its initial public offering of 42,000,000 common shares (48,300,000 including the exercised overallotment option) at $14.00 per common share. Including the exercise of the overallotment option, 30,370,000 primary shares and 17,930,000 secondary shares were sold in the offering. Net proceeds were roughly $396 million. Oasis has become the holding company for Oasis Petroleum LLC, a Delaware limited liability company formed in 2007 by EnCap Investments LP and former senior management members of Burlington Resources. Oasis has assembled a 300,000 net acreage position within the Bakken Shale in North Dakota and Montana and as of December 31, 2009, Oasis Petroleum LLC had estimated proved reserves of 13.3 MMboe (93% oil; 42% developed). Simmons & Co. served as co-lead manager to Oasis Petroleum Inc. with respect to its initial public offering.

LINN Energy to acquire East Texas properties for $95M

LINN Energy LLC has agreed to acquire oil and natural gas properties located in the East Texas Oil Field in Gregg and Rusk Counties for $95 million. The company anticipates the acquisition will close on or before October 1, 2010, and will be financed with internally generated cash flow and proceeds from borrowings under its revolving credit facility. The acquired properties have a reserve life of more than 25 years and an approximate 5% decline rate. Current net production of the properties is roughly 900 boe (93% oil), with proved reserves of approximately 8 million boe. The properties include more than 350 operated producing wells; and more than 95 proved low-risk workover opportunities.

Quicksilver Resources to sell Quicksilver Gas Services in $1B transaction

Quicksilver Resources Inc. has agreed to sell all of its interests in Quicksilver Gas Services to Crestwood Midstream Partners II LLC, a portfolio company of First Reserve Corp., along with the subordinated note receivable from Quicksilver Gas Services LP, for $701 million in cash at closing plus up to $72 million in additional earn-out payments and the resulting elimination of $228 million of consolidated debt associated with Quicksilver Gas Services LP. The sale includes 469,944 general partner units representing 100% of the general partner membership interests, 5,696,752 common units, 11,513,625 subordinated units and the note receivable from Quicksilver Gas Services LP, which had a balance of nearly $57 million as of June 30, 2010. The transaction is expected to close in October. Upon closing, Quicksilver expects to repay all outstanding borrowings under its $1 billion senior secured credit facility, of which approximately $528 million is currently outstanding. UBS Financial Services acted as financial advisor to Quicksilver and Davis Polk & Wardwell LLP acted as legal counsel to Quicksilver in connection with the transaction.

Continental Resources ups US shale play spending to $1.3B

Continental Resources Inc. has increased its 2010 capital expenditure budget to from $850 million to $1.3 billion to accelerate its drilling program and to increase its acreage positions in strategic US shale plays. Continental now expects production growth in a range of 15% to 17% (up from previous growth guidance of 13%) for 2010 and stronger growth in 2011. The company is operating a total of 26 rigs, 18 of those in the Bakken where it holds 806,576 net acres leased. The company is operating three rigs in the Anadarko Woodford, where it holds 233,321 net acres and plans to increase the rig count by year-end. Continental has leased 59,071 net acres in the Niobrara and plans to spud its first well in the play by year-end 2010. The company has entered into an amended and restated credit agreement with Union Bank NA and the other lenders. The banks agreed to increase the maximum size of the credit facility to $2.5 billion from $750 million; maintain aggregate commitments under the credit facility at $750 million; increase the borrowing base from $1.0 billion to $1.3 billion; and extend the maturity of the credit facility from April 12, 2011 to July 1, 2015.

Eagle Ford Gathering executes gas services agreement with SM Energy

Eagle Ford Gathering LLC, a 50/50 joint venture between Kinder Morgan Energy Partners LP and Copano Energy LLC, has executed a definitive long-term gas services agreement with SM Energy Co. SM Energy will commit up to 200,000 MMbtu/d of Eagle Ford Shale natural gas production over a 10-year term from LaSalle, Dimmit, and Webb counties in Texas. Eagle Ford Gathering will provide gathering, transportation, and processing services and will construct roughly 85 miles of 24- and 30-inch pipeline from SM Energy's acreage in the western Eagle Ford Shale play to Kinder Morgan's Freer compressor station in Duval County, Tex. The pipeline is expected to begin service during the summer of 2011. Kinder Morgan and Copano will invest roughly $137 million in Phase 1 of the project and have each committed 375,000 MMbtu/d of capacity to Eagle Ford Gathering for transportation on Kinder Morgan's intrastate pipeline from Laredo-to-Katy and for processing at Copano's Houston Central processing plant. Copano serves as operator and managing member of Eagle Ford Gathering.

Westmont Resources acquires wells in Chattanooga shale

Westmont Resources Inc. acquired 92 wells in the Chattanooga Shale region in the northern tier of Tennessee from Domestic Energy Corp. Preliminary estimates indicate that the value of the reserves for these wells could amount to nearly $200 million. The company is currently soliciting bids from independent oil industry geologists to provide a true bankable reserve assessment.

Trans Energy, Republic Energy Ventures partner in Marcellus

Trans Energy Inc. has expanded its joint venture with Republic Energy Ventures LLC. Trans Energy sold Republic a 50% interest in approximately 5,000 net acres in Marion County and approximately 2,600 net acres in Tyler County and a small overriding royalty position on over 6,000 net acres in Wetzel County for cash proceeds of $23,500,000 and drilling credits of $3,500,000. Trans Energy Inc. repaid $15,000,000 on its senior credit facility and intends to use the balance of the proceeds for working capital to develop its position in the Marcellus shale and for general corporate purposes. Rodman and Renshaw LLC acted as financial advisor to Trans Energy in the deal.

Houston American Energy to list on NYSE Amex

Houston American Energy Corp. has been authorized to list its shares of common stock on the NYSE Amex stock exchange under its current symbol "HUSA." Houston-based Houston American Energy Corp. is an independent energy company with interests in oil and natural gas wells and prospects in Colombia, Texas, and Louisiana.

Select Energy services enters new $150M credit facility

Oil service company Select Energy Services has entered into a new $150 million three year credit facility with a group of banks led by Wells Fargo Bank NA (Co-lead Arranger and Sole Bookrunner) and Amegy Bank, NA (Co-lead Arranger). Participants included Bank of America NA, Comerica Bank, Regions Bank, and Encore Bank. The facility consists of an $80 million term loan, a $30 million capital expenditure line and a $40 million revolving credit line. The term loan will be used to refinance existing debt and the capital expenditure line and revolving line will be available for future needs. SES Holdings LLC is based in Gainesville, TX with operations in the Barnett, Haynesville, Fayetteville, Woodford, Eagle Ford, and Marcellus shale formations.

Dynamic Offshore Resources adds to GoM shelf properties

Privately held Dynamic Offshore Resources LLC has acquired additional Gulf of Mexico Shelf properties from a private seller. The acquisition adds eight fields to Dynamic's asset base, the most prominent of which includes a 100% interest in Vermillion Block 272 Field and a 50% interest in High Island Block 52 Field. Current net production from the properties is approximately 4,500 boe per day, 60% of which is oil. Dynamic will operate over 67% of the newly acquired reserves. These newly acquired properties comprise interests in 16 federal and state blocks encompassing over 22,000 net acres, the majority of which is held by production. The acquisition includes interests in 32 producing wells and nine platforms in water depths ranging from 30' to 175'. Houston-based Dynamic Offshore Resources was formed in January 2008 with equity contributions from Riverstone Holdings LLC and management.

BlueStone adds South TX properties with aid of new $175M bank facility

Tulsa-based BlueStone Natural Resources LLC has closed on four transactions with another transaction pending. With this activity, BlueStone has increased its net production to near 20 MMcfd and net proved reserves to over 100 bcfe. The acquired properties are located in South Texas and are nearly 100% operated. The acquisition activity has increased BlueStone's operated well count to approximately 500. Financing for the activity was largely provided through a new $175 million credit facility underwritten by Wells Fargo Bank NA. BlueStone recently retained Tudor, Pickering and Holt as agent to aid in the divestment of its holdings in the Eagle Ford. BlueStone currently holds more than 10,500 net contiguous acres in La Salle and McMullen counties in Texas. BlueStone was formed in 2006 utilizing funds from the management team and Natural Gas Partners.

Ithaca signs $140M facility agreement

Ithaca Energy Inc. and its wholly owned subsidiary Ithaca Energy (UK) Ltd. has signed and completed a five year Senior Secured Borrowing Base Facility agreement for up to US$140 million with the Bank of Scotland Plc, part of Lloyds Banking Group, as Lead Arranger.

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