Industry Briefs

BHP Billiton, Petrohawk acquisition complete

Australia-based BHP Billiton has completed its acquisition of Petrohawk Energy Corp. through a short-form merger under Delaware law of its wholly owned subsidiary with and into Petrohawk, with Petrohawk being the surviving corporation as a wholly owned subsidiary of BHP Billiton. The merger was the final step of the acquisition process and follows the previously announced completion of the tender offer by BHP Billiton to acquire all outstanding shares of common stock of Petrohawk.

Archer expands services with Great White acquisition

Oilfield service company Archer has signed an agreement to acquire Great White Energy Services for US$742 million on a cash and debt free basis. The deal gives Archer an entry point into the frac market and effectively doubles its coil tubing and directional drilling capacity in the US. Great White, formed by Wexford Capital LP, operates 13 service centers located around the unconventional plays in Michigan, Oklahoma, Texas, West Virginia, Colorado, Arkansas and Wyoming. Archer's new pressure pumping division and its expanded pressure control divisions will be headquartered in Oklahoma City. Archer will complete a private placement for approximately 30 million shares prior to closing the Great White acquisition. The issue price will be a minimum NOK 35 per share and the issue will be fully underwritten by shareholders Seadrill and Lime Rock Partners. Archer has also received indicative proposals from its existing bank syndicate for long-term debt financing of up to US$400 million and short term bridge facilities.

Morgan Stanley Private Equity, Sterling Energy form partnership

Morgan Stanley Private Equity and Denver-based Sterling Energy Co. have entered into a strategic partnership whereby Morgan Stanley Private Equity has made a majority equity investment in a newly formed company called Sterling Investment Holdings LLC (Sterling Energy) to support the growth of Sterling Energy's midstream business in Colorado and North Dakota. Terms of the transaction were not disclosed. Sterling Energy provides natural gas gathering and processing infrastructure and related services for oil and gas production companies through its two gathering systems – the Yenter System, serving Denver-Julesburg (DJ) and Niobrara production in northeast Colorado, and the Ambrose System, serving Williston and Bakken/Three Forks production in Divide County, North Dakota. Sterling Energy has begun a multi-year construction project to extend and expand its Yenter System into the Pony Area of the Niobrara Field to meet recently contracted, long-term commitments with multiple producers.

Squire Sanders, Minter Ellison partnership approved

The global partnership of Squire, Sanders & Dempsey has approved the proposed combination with Minter Ellison Perth. Partners at the firm in Western Australia voted to join Squire Sanders' global legal practice. The combination will take effect by October. Approximately 80 lawyers in Perth, including 14 partners, will join Squire Sanders, bringing the practice's global total to more than 1,300 lawyers in 36 offices and 17 countries. The combination gives Squire Sanders a strengthened Asia Pacific presence and additional practice capabilities in key areas such as corporate finance, labor and employment, litigation and international dispute resolution, intellectual property and technology, competition and regulatory, planning, environmental and real estate. In addition, the combination complements and expands Squire Sanders' global industry expertise in key sectors including energy and natural resources, major projects, and engineering and construction.

El Paso takes another step towards E&P spin-off

El Paso Corp. has advanced its plans to spin-off its E&P business before year-end 2011. On August 11, the natural gas and related energy products provider filed its initial Form 10 with the US Securities and Exchange Commission. The new company, EP Energy Corp., will be listed on the NASDAQ stock exchange under the ticker symbol EPE. Brent Smolik will become president and CEO of EP Energy. El Paso Corp. and EP Energy will move forward with two boards made up of existing El Paso board members. Doug Foshee will serve as chairman of the El Paso Corp. board and non-executive chairman of EP Energy Corp. J. Michael Talbert will serve as lead director of the board of El Paso Corp.

Leaving Bakken, Anschutz exits Williston Basin

The Anschutz Exploration Corp. (AEC) closed the sale of its remaining operated and non-operated producing properties and undeveloped acreage in the Williston Basin of Montana and North Dakota to an undisclosed Canadian oil company for $115M. The assets consist of current oil and gas production and undeveloped acres. AEC president Bill Miller said "With this sale, AEC has now exited the Williston Basin after a successful Bakken and Mission Canyon program that began in 2004. Our continuing focus is on emerging shale oil plays in the US on AEC leasehold of over one million net acres, located primarily in Texas, Montana, Colorado and New York." In December 2010, Anschutz sold its principal Dunn County acreage position in the Williston Basin to Occidental for $1.4B and sold its Appalachian Basin position in Ohio and Pennsylvania to Chesapeake for $850M and retained its acreage and production in New York. Bank of America Merrill Lynch advised AEC on these transactions.

Penn Virginia to sell Arkoma Basin properties

Penn Virginia Corp. has agreed to sell substantially all of its Arkoma Basin properties, together with certain other Mid-Continent properties, to an undisclosed buyer for $30.5 million in cash. The properties being sold include the Hartshorne coalbed methane and Woodford Shale formations, as well as a number of conventional natural gas play types. The properties are currently producing, on a net basis, nearly 7.8MMcfe/d, approximately 97% of which is natural gas. As a result of the divestiture, PVA's 2011 production will decrease by an estimated 0.9 billion cubic feet of natural gas equivalent (bcfe). Estimated proved reserves associated with the divested properties, as determined by PVA's third party engineers at year-end 2010, were 42.5 bcfe, 78% of which were proved developed. PVA intends to use the net proceeds of the sale to fund, in part, its 2011 capital expenditure plan, as well as for general corporate purposes.

CCS expands operations with Bakken acquisition

Calgary, Alberta-based CCS Corp. continues to expand into the US with the acquisition of KT Hot Oil Co. (KT) of Watford City, North Dakota. This is the second acquisition in the Bakken region shale play in August for the privately held, integrated oil and gas environmental services company. Financial details were not disclosed. KT operates in four key segments: frac water heating, hot oiler services, fluid hauling and salt water disposal wells. KT's 53 employees will join the CCS team. Expanding in the Bakken and Permian plays, CCS acquired Venture Oilfield Service Inc. and Odessa, TX-based Southwest Disposal Service. The Venture Oilfield acquisition strengthens CCS's position as a provider of frac water heating and hot oil services in North Dakota. The Southwest Disposal Service acquisition allows CCS to enter the Permian Basin market with waste treatment services and an exploration and production waste landfill.

Hunting to acquire Titan Specialties for $775M

Energy services provider Hunting PLC has agreed to acquire Titan Specialties Ltd. for a total consideration of $775 million. Based in Pampa, Texas, Titan is a provider of perforating gun systems, shaped charges, well logging instrumentation, perforating gun switches and other engineered hardware used in the drilling, completion and maintenance of oil and gas wells. Simmons & Co. International served as financial advisor to Hunting PLC.

SandRidge, Atinum form $500M Mississippi Lime JV

SandRidge Energy has entered into a joint venture with an affiliate of Atinum Partners Co. Ltd., a private investment firm located in the Republic of Korea. Oklahoma City-based SandRidge will transfer a 13.2% non-working interest in about 860,000 acres, or approximately 113,000 net acres to Atinum, for a total transaction value to SandRidge of $500 million. Atinum will pay $250 million in cash at closing and the remainder in the form of a drilling carry. The JV area of mutual interest (AMI) covers nearly all of SandRidge's original Mississippian play area, located in northern Oklahoma and southern Kansas other than wells and acreage within the associated spacing units spudded prior to the effective date and all wells associated with SandRidge Mississippian Trust I. Atinum has committed to a drilling carry obligation to pay 13.2% of SandRidge's share of drilling and completion costs for wells drilled in the AMI up to $250 million, which is expected to occur over a three-year period. SandRidge was advised by Tudor, Pickering, Holt & Co. and Vinson & Elkins LLP. Atinum was advised by Barclays Capital and Skadden, Arps, Slate, Meagher, & Flom LLP in the transaction.

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