Chesapeake closes revolving bank credit facility expandable from $460M to $750M

Chesapeake has closed a new secured revolving bank credit facility for an affiliate of its unrestricted subsidiary, Chesapeake Midstream Partners LP (CMP). The facility, which matures in October 2013, has initial availability of $460 million and may be expanded up to $750 million at CMP’s option, subject to additional bank participation. CMP plans to utilize the facility to partially fund capital expenditures associated with building additional natural gas gathering and other systems associated with Chesapeake’s drilling program in various plays, including the Barnett, Haynesville, Fayetteville, and Marcellus Shales. Twelve financial institutions participated in the facility that was jointly led by Wells Fargo Bank, National Association and RBS Securities Corp. d/b/a RBS Greenwich Capital. Additionally, Wells Fargo Bank, National Association acted as sole Administrative Agent, The Royal Bank of Scotland plc as sole Syndication Agent and Bank of Montreal as Documentation Agent. CMP’s affiliate, Chesapeake Midstream Operating LLC, is the borrower.

Harding assembles assets from ExxonMobil, sells to Chesapeake

Dallas-based Harding Energy Partners LLC has acquired all core Barnett Shale assets, including those of ExxonMobil, that were held by DDJET Ltd. LLP. Subsequently, the company sold all the holdings to Chesapeake Energy Corp. Operations have been transferred to Chesapeake. The partners in HE Partners have led leasing, permitting, exploration, midstream, and gas marketing activities in the Barnett Shale as well as basins in East and West Texas, Mississippi, and other locations across the country. Assets acquired by Chesapeake and the purchase price were not disclosed.

Northern Offshore draws $122M contract for drillship

Northern Offshore Ltd.’s Singapore-based subsidiary, Jet Holding Ltd. was awarded a contract with the joint operating company, Vietgazprom, a joint venture between Petrovietnam and Gazprom, for the drillship Energy Searcher. The drilling contract of five wells duration is expected to begin between June and September, 2009 and run roughly 365 days, inclusive of a mobilization period. The estimated contract value is approximately US$122 million, which is comprised of US$116 million during the drilling period and US$6 million in mobilization and demobilization fees.

CIT is sole lead arranger in $65M financing for Petro Resources

CIT Group Inc. served as the sole lead arranger in a $65 million financing deal for Petro Resources Corp., a Houston-based independent oil and natural gas company. Financing for the deal was arranged by CIT Energy, a unit of CIT. The deal consists of a $50 million senior secured revolving credit facility and a $15 million second lien term loan. Petro Resources will use the proceeds to retire mezzanine debt incurred in its acquisition of Williston Basin assets, finance the company’s capital program, and for general corporate purposes.

Denbury Resources increases bank commitment to $750M

Denbury Resources Inc. has amended its bank credit facility which increases the company’s current availability under that bank credit line from $350 million to $750 million. The borrowing base remains at $1 billion. Currently, there is nothing drawn on the company’s bank credit line and the company has over $100 million of available cash. Also, to preserve its capital liquidity, it has canceled closing on the $600 million Conroe field. The company forfeits its $30 million deposit. Additionally, the company has purchased 2009 derivative oil collars with a floor price of $75/bbl and a ceiling price of $115/bbl for total consideration of nearly $15.5 million, and trimmed its proposed 2009 capital budget to $825 million (excluding the Barnett Shale) with an additional $300 to $400 million of identified expenditures contingent on favorable commodity prices.

Eagle Rock enters JV funding agreement

To help fund its augmented CAPEX program, Eagle Rock has entered into a joint venture funding agreement with WCSB GORR Income Participation Fund operated by Brickburn Asset Management. The Fund pays certain drilling and completion costs for wells drilled at Beverley, SK and will receive an overriding royalty interest on all production from these wells going forward. No shares or debt are involved.

Delta Petroleum forms JV, gains leasehold in Columbia River Basin

Delta Petroleum Corp. has signed agreements for two separate transactions in the Columbia River Basin of Washington and Oregon. The first is a transaction with EnCana USA Inc., through which Delta has acquired all of EnCana’s net leasehold position and interest in wells in the CRB of Washington. This transaction brings the company’s total leasehold ownership to roughly 844,000 acres. Secondly, the company has entered into a joint venture agreement with a major Canadian energy company to sell a 50% working interest participation in all CRB leasehold and wells. Upon closing of these two transactions, the company’s position in the CRB will be roughly 422,000 net acres.

FERC approves Floridian Natural Gas storage project

On August 29, FERC made way for Floridian Natural Gas Storage Co. LLC (FGS) to construct Florida’s first natural gas storage facility, to be located in Martin County. As opposed to the south and southwestern Gulf Coast production area, which has a robust storage market, the Florida market area is not geologically suitable for underground natural gas storage facilities. FGS commissioned Pace, an energy and carbon management consulting firm, to perform the market power study in support of FGS’s application to sell gas storage services at market-based rates. Pace’s market power study utilized a market area, encompassing both facilities in states contiguous to Florida and facilities with direct access to Florida along the Gulf Coast region. This area of analysis was accepted because the pipelines connecting Florida with the contiguous states have postage stamp rates, so that storage customers pay the same transportation rate regardless of whether the storage facility is located in a state contiguous to Florida or another state in the Gulf region. The study showed that customers in southern Florida have sufficient transportation alternatives to access competitor storage services in those areas, and that the market area was therefore appropriate when evaluating FGS’s proposal.

Mining Oil to acquire Sterling, Yazoo Pipeline

Mining Oil Inc. has entered into a letter of intent which modified prior agreements and provided for the acquisition of 100% of the equity interests of the principal owner of Sterling Exploration & Production Co. LLC, Yazoo Pipeline Co. LP, and Matagorda Operating Co., for an undisclosed sum of cash and restricted common stock of the company. Matagorda Operating Co. is the general partner of Yazoo and the manager of Sterling. These entities will become wholly-owned subsidiaries of the company. The company has retained New Orleans-based Global Hunter Securities LLC as the company’s financial advisor and placement agent for the issuance of debt. The company intends to raise nearly $40 million of debt with the proceeds to be primarily for recompletions and low-risk drilling opportunities on the acquired properties and other acquisitions. Additionally, the company estimates that it will have roughly $24 million in working capital, primarily in the form of cash and cash equivalents, after the close of its acquisitions.

Superior Well Services enters new credit facility

Superior Well Services Inc. has entered into a credit agreement evidencing a new $250 million syndicated credit facility with a syndicate of lenders and financial institutions, including Citizens Bank of Pennsylvania, as administrative agent and RBS Securities Corp. d/b/a/ RBS Greenwich Capital, as sole lead arranger and sole bookrunner. The facility matures on March 31, 2013 and replaces Superior’s $45 million revolving credit facility and $30 million standby term loan facility.

Wavefield lands $170M contract for 3D seismic work

Wavefield Inseis has been awarded a long term contract for 3D seismic services by ONGC. Commencing during the fourth quarter this year, the contract is for a program of 3D surveys offshore India to be acquired each season through to 2011. The total contract value is in excess of $170 million. The first season’s program will be acquired by the Geowave Commander which will be mobilized from Europe.

Rowan reels in contracts from Devon, W&T Offshore, anticipates $165M in revenue

Rowan Companies Inc. has contracted two of it’s Gorilla jackup rigs recently. First, the company received a letter of intent from W&T Offshore Inc. for the Gorilla IV. Rowan expects to earn roughly $30 million over the minimum term of 150 days. The rig is currently drilling for McMoRan. The company estimates that the rig will be available for W&T by early in the first quarter of 2009. In addition, Rowan signed a contract with Devon Energy Corp. for the Gorilla II in the Gulf of Mexico. The two-year commitment should begin in January 2009 and is expected to provide nearly $137 million of drilling revenues. The rig will be performing drilling services as well as assisting Devon with various construction projects.

ExxonMobil to test gasification technology

ExxonMobil has entered into an agreement with Pratt & Whitney Rocketdyne to develop next-generation technology to convert coal, coke, or biomass to synthesis gas (i.e., CO and hydrogen), which could facilitate the use of carbon capture and storage to reduce greenhouse gas emissions from power generation. Work has begun on pilot plants to test the technology at the Gas Technologies Institute in Des Plaines, Illinois, and the Energy and Environmental Research Center in Grand Forks, North Dakota.

Boots & Coots signs $45M safeguard contract for North Africa services

Boots & Coots has signed a new safeguard contract worth $45 million for a term of up to 36 months in North Africa expanding its risk management and prevention services in the country.

PetroFalcon denied approval for Anadarko Venezuela acquisition

PetroFalcon Corp.’s proposed acquisition of 100% of the issued and outstanding shares of Anadarko Venezuela Co. will not come to pass. In April, PetroFalcon signed an agreement for the acquisition of Anadarko Venezuela from Anadarko Petroleum for US$200 million in cash. The agreement was subject to approval by the Venezuelan Ministry of Energy and Petroleum (MEP). Anadarko Venezuela indirectly owns 18% of Petroritupano SA, a joint venture with Petroleos de Venezuela SA (PDVSA) and Petrobras. Ultimately the MEP denied approval for the acquisition because PDVSA intends to acquire Anadarko Petroleum’s interest in Petroritupano. Anadarko will return PetroFalcon’s US$5 million deposit with interest. Lundin Petroleum AB, which indirectly owns 45% of PetroFalcon, provided a guarantee to Anadarko Petroleum for the full purchase price. In consideration for the guarantee, PetroFalcon agreed to issue 17.1 million common shares to Lundin Petroleum or one of its subsidiaries. In April, PetroFalcon issued 7.1 million of these shares to Lundin Petroleum. The initial shares have been expensed by the company as stock-based financing fees over the effective period of the sale and purchase agreement. The remaining 10 million shares were due at closing and, according to the agreement with Lundin Petroleum, will not be issued.

Forbes Energy Services sets $30M private placement

Forbes Energy Services Ltd. has entered into share purchase agreements with two investors pursuant to which the company has agreed to sell in a private placement an aggregate of 7,966,500 common shares of the company for an aggregate price of US$30 million. The company intends to use the net proceeds to reduce existing indebtedness and acquire equipment. Forbes Energy Services is an independent oilfield services contractor that provides a broad range of drilling-related and production-related services to oil and natural gas companies, primarily onshore in Texas.

Addax Petroleum gains Kurdistan region interest

Addax Petroleum Corp. has acquired a 33.33% interest in the Sangaw North Production Sharing Contract. The Sangaw North license area is operated by Sterling Energy plc and is located roughly 80 kilometers southeast of the corporation’s Taq Taq field. The Sangaw North PSC is subject to an assignment to the Korean National Oil Corp. which, when completed, will reduce the corporation’s interest to 26.67%. In addition, the Kurdistan Regional Government has the right to require that at a future date a government nominated entity is assigned 25% which, if exercised, will further reduce the corporation’s interest to 20%.