Energen buys SandRidge Permian acreage for $110M

Energen Corp.'s oil and gas exploration and production company, Energen Resources Corp., has purchased 40,000 acres in the Permian Basin from SandRidge Energy Inc. for $110 million. Based on 320-acre spacing, the company has identified 62 net potential drilling locations in the 3rd Bone Spring play on 21,300 net acres in Loving, Reeves, Ward, and Winkler counties. Unproved Bone Spring reserves (net unrisked) are estimated to exceed 21 MMboe (78% oil, 22% natural gas). The company expects to invest $465 million to develop the acreage. A horizontal drilling play targeting the 3rd Bone Spring Sands at a vertical depth of 10,500-11,500 feet, the typical Bone Spring well has estimated ultimate recovery of 400,000-500,000 boe; Energen Resources estimates that drilling and completion costs are nearly $7.5 million per well. This acquisition brings Energen's total acreage position in the 3rd Bone Spring play to more than 33,000 net undeveloped acres. Together with existing acreage, this acquisition brings the company's total Avalon potential to more than 60,000 net undeveloped acres and more than 180 drilling locations.

Global Hunter Securities said Dec. 13 it has closed five separate transactions for four different clients at the end of November, totaling $418.8 million. The deals represent a cross section of GHS' portfolio of expertise, with both debt and equity offerings for public and private companies in GHS' core-focus sectors of global energy and China. The largest of the deals was a $150 million senior secured notes offering for Black Elk Energy. This was GHS' second deal of this size for a private GoM E&P company within the last two months, the first having been closed for RAAM Global Energy in September. GHS acted as left joint book runner on both transactions. On Nov. 18, Global Hunter acted as a co-manager on offerings of convertible senior notes and common stock for PDC Energy. The convertible senior notes offering of $115 million priced at 3.25% and will mature in 2016. The common stock offering was increased in size from the originally announced 3,000,000 shares of common stock to 4,140,000 shares and priced at $32 per share, for total gross proceeds of $132.48 million. These energy transactions were followed by a $13.5 million common stock offering for a China-based firm, Shengkai Innovations Inc. GHS acted as left joint book runner in this transaction, which consisted of 2,456,800 shares priced at $5.50 on November 19. Prior to that transaction, GHS acted as lead placement agent on a $7.9 million private placement for Zoom Technologies of China. Zoom sold 2,113,664 units at a price of $3.75 per unit. Each unit is comprised of one share of common stock of Zoom and warrants to purchase three-quarters of one common stock.

Apache Corp. has selected OGN Group, a UK-based oil and gas engineering and fabrication contractor, to build a new satellite oil production platform for the UK Forties field. The new platform will be bridge-linked to the existing Forties Alpha installation in the Apache-operated field, located on the UK continental shelf. The contract is worth in excess of $240 million. Onshore construction is expected to be complete by mid-year 2012. Apache holds an approximate 97% working interest in the Forties field.

New York-based Hess Corp. has agreed to acquire 167,000 net acres in the Bakken oil shale play in North Dakota from TRZ Energy LLC for $1.05 billion in cash. The properties being acquired are located near Hess' existing acreage and have current net production of roughly 4,400 boe/d.

Chevron Corp. announced a $26 billion capital and exploratory spending program for 2011. Included in the 2011 program are $2 billion of expenditures by affiliates, which do not require cash outlays by Chevron. Acquisition costs associated with the recently announced purchase of Atlas Energy Inc. are not included. Roughly 85% ($22.6 billion) of the spending program is for upstream oil and gas exploration and production projects worldwide. Another 10% is associated with the company's downstream businesses. Major capital investments include development of the vast natural gas resources in Western Australia and development opportunities in the deepwater US Gulf of Mexico, Western Africa, and the Gulf of Thailand. Capital spending will also be directed towards existing assets throughout the world to improve oil and gas recovery, and reduce natural field decline.

Marathon Oil Corp. has completed an agreement with Denali Oil & Gas for entry into the Eagle Ford Shale formation in Wilson and Atascosa counties, Texas. Marathon will pay Denali $10 million as well as drill and complete four wells to earn approximately 17,000 net acres with the option to purchase Denali's remaining 58,000 net acres in the play in the two counties. If executed, the full 75,000 net acres, including the initial payment, carried well interest and lease extensions, will cost approximately $2,800 per acre or roughly $209 million. If Marathon does not exercise its purchase option, Denali has the option to sell the remaining 58,000 acres to Marathon. Total cost under this option, including the initial payment, carried well interest and lease extensions, would be $92 million or approximately $1,225 per acre. This agreement covers all of Denali's acreage in Wilson and Atascosa counties but excludes Denali's 25,000 acres in Gonzales and Fayette counties.

ATP Oil & Gas has entered the second round of financing related to the ATP Titan in the amount of $100 million. As noted in a research report by Global Hunter Securities LLC dated December 7, 2010, the company has now borrowed $250 million of the $350 million term loan facility. The first installment of $150 million was made in September. The facility is secured by the company's floating production facility at the Telemark Hub, the ATP Titan. Funding is provided by Beal Bank Nevada, an affiliate of CLG Energy Finance.

Antero Resources has acquired privately held Bluestone Energy Partners. The Bluestone assets include producing properties with 19 MMcfd of gross operated production (13 MMcfd net including non-operated production) from 93 operated vertical and 3 operated horizontal wells, gathering and compression assets and approximately 40,000 net acres in the Marcellus Shale play in West Virginia and Pennsylvania. Roughly 96% of the leasehold is located in West Virginia and 54% is held by production. Antero expects to add nearly 20 bcfe of proved developed producing reserves by year-end 2010 as a result. The assets also include 11 bcf net of index fixed price natural gas hedges for production through December 2013 at a NYMEX-equivalent price of $7.21 per MMbtu. Closing consideration included $93 million of cash and the assumption of $25 million of subordinated debt due 2013. Antero also issued roughly 3.8 million units in the transaction.

GlobaLogix, a Houston-based oilfield control and automation company, has opened a new operations center in Aledo, Texas to support oil and gas producers operating within the Barnett shale play. The new location will enable GlobaLogix to provide SCADA, network design, system engineering, PLC integration and programming, equipment installation and support services to various shale projects in the area. GlobaLogix has satellite offices in Pinedale, Wyoming; Denver, Colorado; Canonsburg, Pennsylvania; and Fairfield, McCook and Carthage, Texas.

American Standard Energy Corp. has executed a Purchase Agreement to acquire additional Bakken and Three Forks acreage including partial interest in 26 additional gross wells, of which 15 are currently producing, 10 completing and one drilling. The additional 367 plus net mineral acres acquired in the transaction are located within the Williston Basin of North Dakota. The newly acquired wells have a current production sum of nearly 2,900 boe/d. The completed acquisition brings American Standard's Bakken footprint to over 6,000 net acres.

EXCO Resources plans to spend $768.9 million on drilling and completions in 2011 as part of a $976.2 million total budget. The plan contemplates 22 operated drilling rigs running in the Haynesville Shale play, split between north Louisiana (15 rigs) and the Shelby Trough area (7 rigs) in east Texas, 4 rigs drilling in the company's Appalachian JV, and 2 rigs drilling in the Permian. The Haynesville drilling program is expected to satisfy the company's lease obligations during 2011. No detailed production guidance is given but the company cites a 40% production growth target.

Calfrac Well Services Ltd. has set its 2011 capital budget at $280 million. The capital program will focus on further bolstering Calfrac's fracturing, coiled tubing and cementing capacity, infrastructure and logistical capabilities as it continues to expand its presence in the emerging North American unconventional oil and gas markets.

Dune Energy Inc. has replaced its $40 million revolving credit facility with Wells Fargo Capital Finance LLC with a new $40 million term loan facility from Wayzata Opportunities Fund II LP. The new facility will mature on March 15, 2012. Major terms of the new facility are that Wells Fargo Capital Finance LLC will remain agent for the facility, the $8.5 million of standby Letters of Credit for P&A bonds will now be cash collateralized through the bonding agent, the June 2011 bond interest payment of $15.75 million will be held in escrow until due. The primary negative covenant of the term loan is that the total present value of future net revenues discounted at 10%, or PV-10%, of the proved developed reserves must be greater than two (2) times the value of the face amount of the term loan. The mid-year, June 30, 2010 unaudited internally prepared reserve report PV-10 using SEC price assumptions was $149.9 million or 3.7 times the value of the revolver.

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