Industry Briefs

El Paso Corp. plans a spinoff to separate the company into two publicly traded businesses by year end 2011. Following the completion, El Paso Corp. will be comprised of El Paso's Pipeline Group, its Midstream Group, and its general and limited partner interests in El Paso Pipeline Partners LP. The plan is subject to market, regulatory, tax, final approval by the company's board of directors and other customary conditions. Doug Foshee is expected to remain chairman and CEO of El Paso Corp. Brent Smolik will be named CEO and Dane Whitehead will become CFO. Foshee will serve as non-executive chairman. The spinoff of the E&P company will be structured as a pro rata distribution of the shares of the exploration and production company to the El Paso shareholders of record. The transaction will not require shareholder approval. El Paso plans to seek a tax ruling from the Internal Revenue Service regarding the tax-free nature of the spinoff for both the company and its shareholders. Goldman, Sachs & Co. is serving as the financial advisor to El Paso, and Wachtell, Lipton, Rosen & Katz is serving as El Paso's legal advisor.

Crossroads Energy LP and its affiliated companies recently contributed substantially all of its assets and liabilities into newly formed Crossroads Energy Partners LLC. In conjunction, Crossroads obtained financing from D.E. Shaw Direct Capital Portfolios LLC comprised of a $30 million senior secured first lien note facility, governed by an initial borrowing base of $15 million, and $5 million of equity. Proceeds were used by the company to repay roughly $9 million of outstanding debt and will provide liquidity for production and development. Rivington Capital Advisors LLC, and its affiliate, Rivington Securities LLC, acted as exclusive financial advisor to Houston-based Crossroads.

Midland, Texas-based Basic Energy Services Inc. said June 2 that it has signed a letter of intent to purchase the outstanding equity interests of the Maverick group of companies for $180 million subject to certain working capital adjustments. Maverick provides a full range of fracturing and stimulation services with a fleet of approximately 60,000 hydraulic horsepower and comprehensive coil tubing services, including seven coil tubing units, nitrogen and other related equipment. Maverick's operating area includes the Rocky Mountain oil and gas market with major service facilities located in Fort Morgan and Grand Junction, Colo., and depots in Aztec, NM, Trinidad, Colo., Vernal, Utah, and Bartlesville, Okla. Maverick's operations will be incorporated into Basic's completion and remedial services business segment.

Bill Barrett Corp. has closed its previously announced acquisition of the owner and operator of a Uinta Basin oil property and related assets, which the company has named East Bluebell. The acquisition includes an estimated 5 MMboe net proved reserves, an estimated 25 MMBoe net proved, probable and possible reserves, approximately 750 boe/d net production, associated gathering and transportation infrastructure and 20,155 net acres of mineral leasehold. The acquired properties currently have 25 producing wells, and the company has identified more than 200 drilling locations for vertical, oil development wells. The properties are located roughly 35 miles east-northeast of the company's Blacktail Ridge-Lake Canyon project and eight miles from the regional office in Roosevelt. The East Bluebell acquisition was completed for approximately $120 million, subject to post-closing adjustments. The company plans to initiate development of the property in 2011 with a one-rig, 10-well program beginning in July, increasing the number of oil directed rigs in the combined project area from two to three. As a result, the company is increasing its planned development capital expenditures by up to $25 million for the full year.

Fountain Quail Water Management LLC, a wholly owned subsidiary of Calgary-based Aqua-Pure Ventures Inc., said June 21 that it has received a five-year operating permit from the Railroad Commission of Texas to recycle wastewater in the Eagle Ford Shale. The permit is effective immediately. Fountain Quail has developed and refined its patented technology for recycling flowback and produced water over the past seven years in North Texas' Barnett Shale. During that time, the company has recycled more than 700 million gallons of shale gas wastewater. The company's technology is also currently being utilized in the Marcellus Shale.

American Eagle Energy Inc., its proposed merger partner Eternal Energy, and a third party signed two related Purchase and Sale Agreements for the sale by American Eagle and Eternal Energy of half of their respective interests in the Spyglass Project located in Divide County, North Dakota. The first transaction relates to the sale of an undivided 50% interest in approximately 8,188 net acres for nearly $7.165 million to be divided equally between American Eagle and Eternal Energy. Up to an additional undivided 50% interest in 714 net acres may be sold to the third party on the same terms and conditions. The closing of the second agreement is scheduled for late July and relates to the potential sale of an undivided 50% interest in approximately 1,096 additional net acres for roughly $959,000 to be divided equally between American Eagle and Eternal Energy. American Eagle and Eternal Energy have recently sought approval for six 1,280 acre spacing units in an area of the Spyglass Project in which they expect to operate and currently plan to drill two horizontal wells in the near term. Eternal Energy will retain operatorship.

Goodrich Petroleum Corp. has purchased leases totaling approximately 74,000 net acres in the Tuscaloosa Marine Shale oil trend in Louisiana and Mississippi. The company paid approximately $13 million, or an average of $175 per net acre, for the acreage. According to a June 13 report from Jefferies & Co. Inc., the acreage is located in Wilkinson, Amite, and Pike (Mississippi) as well as in East Feliciana, St. Helena, West Feliciana and Washington (Louisiana)—considered the high resistivity part of the play, with the base of the shale ranging at depths between 10,500 and 16,500 feet.

Targa Resources Partners LP, through its wholly owned subsidiary, Coast Energy Group LLC, has acquired Flex Tank Systems, a refined petroleum products and crude oil storage and terminaling facility in Channelview, Texas. The transaction was paid entirely with cash funded through borrowings under Targa's senior secured revolving credit facility. Total value of the transaction is below the Hart-Scott-Rodino Act minimum. Flex Tank Systems has approximately 544,000 barrels of storage capacity and contains blending and heating capabilities, tanker truck and barge loading and unloading infrastructure. Currently, the capacity is 100% leased.

Investment Technology Group Inc., an agency research broker and financial technology firm, has acquired Ross Smith Energy Group Ltd. (RSEG), a Calgary-based independent provider of research on the oil and gas industry, for US$38.5 million in cash. RSEG will be rebranded as ITG Investment Research. With the addition of RSEG, ITG Investment Research will provide differentiated views into the E&P activities of North American and international energy companies. RSEG, a privately held firm, was founded in Calgary, Alberta in 1998. RSEG revenues for the trailing 12 months ending April 2011 were roughly US$15 million. ITG also announced that it entered into a $25.5 million, four-year term loan secured by certain fixed assets following the acquisition.

Marathon Oil Corp. has completed its spin-off from Marathon Petroleum Corp., making Marathon Oil an independent upstream company. Marathon Oil shareholders received one share of MPC common stock for every two shares of Marathon Oil common stock held on the record date of June 27, 2011. Clarence P. Cazalot Jr. now serves as chairman of Marathon Oil Corp. in addition to his responsibilities as president and CEO. David E. Roberts Jr. serves as executive vice president and COO. Janet F. Clark continues as executive vice president and CFO.

Independent certified public accounting firm Weaver has merged with the Midland office of Killman, Murrell & Co. PC, effective July 1, 2011. Founded in 1987 in Odessa, Killman, Murrell & Co. is a regional accounting firm that provides audit, accounting, tax planning and preparation, advisory and due diligence services. Wayne Murrell joins the firm as a partner in Weaver's Tax and Strategic Business Services practice.

Data Foundry's Texas 1 data center is now fully powered by dual feeds from two separate substations on the Texas power grid. The dual feeds from Austin Energy include a dedicated, end-to-end underground feed, offering full redundancy and high availability. Texas 1 is the first data center constructed at the Data Ranch, a master-planned data center development in Austin. The 40-acre Data Ranch is designed for multiple data centers and will deliver over 100 megawatts of power to the facilities.

A new provider of thru-tubing milling and fishing services – ICON Oilfield Services – has been established with headquarters in Dallas. The company is establishing an office in San Antonio to service the Eagle Ford Shale play. ICON specializes in removing composite and cast-iron frac plugs after isolated zones have been fracture stimulated. The company's downhole motors and mills then remove each zone's frac plug to bring a well online and maximize its production rate. Jim Kerr, president and CEO of ICON, has more than 35 years of experience in the energy service industry. Prior to ICON, he served as the COO of Intrepid Directional Drilling Specialists Ltd.

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