GE Oil & Gas is expanding its subsea manufacturing and services portfolio with the $1.3 billion acquisition of Wellstream Holdings. The move also expands the company's presence in the deepwater production regions of Africa, Asia and Brazil. The acquisition allows GE Oil & Gas to grow in the floating production, storage, and offloading offshore segment of deepwater oil and gas production and includes the acquisition of Wellstream's manufacturing facility in Niterói.
$2.85B Holly, Frontier merger creates large US refiner
Holly Corp. and Frontier Oil Corp. have agreed to merge in an all-stock transaction. Based on the closing market prices on Feb. 18 and debt levels as of Dec. 31, the new company would have an enterprise value of $7 billion. The acquisition agreement involves a total transaction valued at roughly $2.85 billion in which Frontier Oil shareholders will receive a fixed ratio of 0.4811 shares of Holly common stock for each share of Frontier Oil/FTO common stock they hold. The new company, HollyFrontier Corp. will boast a refining capacity in excess of 440,000 b/d across five refineries serving the Mid-Continent, Rocky Mountain and Southwest refining markets with access to growing regional domestic and Canadian crude oil supplies. Headquartered in Dallas, the new company will be lead by Mike Jennings, current chairman, president and CEO of Frontier, who will serve as president and CEO. Matt Clifton, current Holly chairman and CEO, will serve as executive chairman. Following the transaction's close, the board of the new company will consist of the seven current Frontier board members and the seven current Holly board members. Holly shareholders are expected to own roughly 51% of the new company, and Frontier shareholders will own approximately 49%. The companies expect the merger to create an annual cost savings of at least $30 million. Deutsche Bank Securities Inc. and Morgan Stanley & Co. Inc. are acting as financial advisors to Holly and Vinson & Elkins is acting as its legal advisor. Citi and Credit Suisse Securities (USA) LLC are acting as financial advisors to Frontier and Andrews Kurth LLP is acting as its legal advisor.
ConocoPhillips awards Aker Solutions $983M Eldfisk EPC contract
Norway's Aker Solutions has signed an EPC contract with Houston-based ConocoPhillips to deliver the topside and bridges of the production platform for the Eldfisk 2/7 S in the North Sea. The contract value is approximately NOK 5.5 billion (US $983.4 million). The contract award is subject to Norwegian authorities' approval of the plan for development and operation (PDO). The Eldfisk topside consists of one combined living quarter and utility module and a combined process and wellhead module, with a total weight of 15,500 tons. In addition, the contract includes the fabrication of two bridges, one bridge support modules and a flare. Aker Solutions will begin the detail engineering instantly, while fabrication is expected to commence early 2012. The topside will be delivered from Aker Solutions yard at Stord in early 2014.
El Paso Pipeline Partners to acquire interest in SNG
El Paso Pipeline Partners LP has agreed to acquire an additional 22% interest in Southern Natural Gas Co. (SNG) from El Paso Corp. for $587 million. The acquisition will increase El Paso Pipeline Partners' interest in SNG to 82%. El Paso Corp. has granted El Paso Pipeline Partners a 45-day option to purchase up to an additional 3% interest in SNG at a price of approximately $26.7 million per 1% interest purchased. El Paso Pipeline Partners may finance the transaction with debt from its revolving credit facility, the issuance of public securities and the issuance of a promissory note to El Paso Corp.
Focused on Marcellus assets, Seneca sells GoM properties
Houston-based Seneca Resources, a subsidiary of Williamsville, New York-based National Fuel Gas Co., has agreed to sell its offshore Gulf of Mexico oil and natural gas producing properties for $70 million. The company reached a milestone in the Marcellus Shale with a daily net production rate of more than 100 MMcf/d. As of March 7, 2011, Marcellus net production was approximately 120 MMcf/d from 32 operated and 27 non-operated Marcellus wells. The company is adjusting its fiscal year 2011 production forecast due to the Gulf of Mexico sale and the increased production from the Marcellus to a new range between 64 and 71 bcfe, as compared to the previous range of 65 to 75 bcfe. This range includes 33 to 37 bcfe from the Marcellus. The company's capital spending in the E&P segment for fiscal 2011 is now expected to be between $600 to $655 million, up from the previously announced $485 to $560 million.
Haynesville leapfrogs Barnett as leading shale play
Louisiana's Haynesville Shale is now the nation's highest-producing shale gas play, surpassing the Barnett Shale in Texas, said the US Energy Information Administration (EIA) March 18, citing reported pipeline flows. Long the country's premier shale gas producer, the Barnett was overshadowed by the Louisiana section of the Haynesville in February when, even after its recovery from the winter's well freeze-offs, natural gas production from the Louisiana Haynesville surpassed its volumes. Several factors come into play. Gas-directed drilling in the newer Haynesville is on the rise, while flattening somewhat in the Barnett. "As gas-directed drilling in the Barnett slows and natural gas prices remain relatively low, operators are turning their attention to the more liquids-rich areas of the play, thereby reducing the emphasis on gas," noted the EIA. Technology and experience also plays a large role. Reported pipeline flows show nearly a decade of shale-focused drilling to reach 5 billion cubic feet (bcf) per day in the Barnett. Haynesville operators now use the experience gained from those early horizontal drilling programs to more rapidly ramp up natural gas production. That same 5 bcf/d benchmark took only three years to surpass in the Haynesville. Regional infrastructure is also a key factor as its expansion helps to accommodate the Haynesville's rising natural gas production. Pipeline capacity expansions were recently completed on the Regency, Midcon Express, and Gulf Crossing systems, each of which transports Haynesville gas.
Oceaneering grows subsea services with NCA acquisition
Oceaneering agreed to buy Norse Cutting & Abandonment AS (NCA), for approximately $60 million. NCA is an oilfield technology company that specializes in providing subsea tooling services used in the plugging, abandonment, and decommissioning of offshore oil and gas production platforms and subsea wellheads. In addition, NCA performs specialized maintenance and repair services on Norwegian offshore production platforms. For the year 2010, NCA generated total revenue of approximately $56 million, split almost evenly between the North Sea and the US Gulf of Mexico.
Swift Energy enters South Texas midstream agreement
Houston-based Swift Energy has entered a long-term agreement for natural gas gathering, processing and transportation services in the area with Southcross Energy GP LLC and its affiliates. The s agreement calls for the construction of a new pipeline to Swift's AWP operating area in McMullen County, TX. Swift Energy will have up to 90 MMcfd of firm capacity for those services. The company currently expects the new pipeline to be in service by mid-2011. Swift has also executed a long term sales contract with Southcross Marketing Ltd. for the NGLs extracted during processing and a portion of the residue gas that is indexed to market.
Knowledge Reservoir, Quest Offshore Resources form alliance
Knowledge Reservoir, a global energy consulting company, and Quest Offshore Resources, a specialized market intelligence and strategic consulting company, have formed an alliance to provide joint consulting services and integrated reservoir, production, facilities, and costing data solutions to the upstream industry. The combination of Knowledge Reservoir's ReservoirKBSM product and Quest's field development infrastructure data and analysis will provide for detailed analysis of reservoir performance, field design, economic viability projections, key equipment availability and complete offshore field evaluation asset modeling including: field/reservoir performance projections; field layout, design and project planning; field development cost projections; field-by-field economic viability; real-time "field development" asset tracking (MODUs, Marine Construction vessels); and regional economic analysis.
Gastar, Antinum acquire additional Marcellus acreage
Gastar Exploration Ltd., together with its joint venture partner, Atinum Marcellus I LLC, has leased an additional approximate 3,300 gross acres in Marshall County, West Virginia to develop the liquids-rich Marcellus Shale formation. Under the joint venture agreement, Gastar will pay 45% of the lease acquisition cost for a 50% interest. Initial drilling and completion activities on the acreage will be eligible for the drilling carry that is a part of the previously announced joint venture between Gastar and Atinum. The acreage is located at PPG Industries' Natrium, West Virginia chemicals site along the Ohio River and provides access to water and natural gas infrastructure. As operator, Gastar expects to begin drilling during the second half of 2011 and has identified as many as 30 locations to be drilled over the next several years.
VAALCO acquires lease in Granite Wash, secures rig
VAALCO Energy Inc. recently acquired a 640 acre lease in the Granite Wash formation in Hemphill County, Texas and secured a drilling rig. VAALCO expects to drill an initial well in the formation in the second quarter of 2011 and is developing plans to drill a further two wells during 2011, if the initial well is successful.
MarkWest Liberty, Statoil sign Marcellus agreement
MarkWest Liberty Midstream & Resources LLC, a partnership between MarkWest Energy Partners LP and The Energy & Minerals Group, has executed a long-term agreement with Statoil Natural Gas LLC to provide additional natural gas midstream services for Statoil's Marcellus acreage in northern West Virginia. MarkWest Liberty will provide the midstream services at its Majorsville, West Virginia processing complex, which is operating near capacity. MarkWest Liberty is near completion of an expansion of its cryogenic processing capacity at Majorsville, and is evaluating additional expansions to serve increasing production of liquids-rich natural gas in northern West Virginia.
Continental Resources to relocate headquarters
Continental Resources plans to move its corporate headquarters from Enid, Okla., to Oklahoma City. Enid is about 85 miles north-northwest of Oklahoma City. The transition is slated to be completed by the second half of 2012.
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