Stone Energy Corp. will acquire Bois d’Arc Energy Inc. The transaction has an aggregate value of roughly $1.8 billion. Stone expects to fund the transaction utilizing existing cash on its balance sheet, borrowings from a proposed new $700 million credit facility underwritten by Bank of America NA, and the issuance of roughly 11.3 million shares of Stone common stock. The transaction is expected to close in the third quarter of 2008. Stone stockholders will own roughly 72% of the combined company, and the Bois d’Arc stockholders will own the remaining 28%. Concurrent with the execution of the merger agreement, Comstock Resources Inc., which holds approximately 49% of the outstanding shares of Bois d’Arc, has agreed to vote in favor of the merger. In addition, Gary Blackie (a director and the CEO of Bois d’Arc) and Wayne Laufer (a director and the former CEO of Bois d’Arc), who own roughly 8% and 10%, respectively, of the outstanding shares of Bois d’Arc common stock, also agreed to vote in favor of the merger. Scotia Waterous (USA) Inc. and Raymond James & Associates Inc. acted as financial advisors to Bois d’Arc, and Raymond James & Associates Inc. provided a fairness opinion to the board. Tudor, Pickering, Holt & Co. acted as financial advisor to Stone and provided a fairness opinion to the board. Moody’s Investors Service has affirmed Stone Energy Corp.’s ‘B3’ corporate family rating and ‘Caa1’ senior subordinated note rating following the news of the acquisition.
Transocean wins multi-year contract for newbuild drillship
A subsidiary of Transocean Inc. has been awarded a five-year drilling contract for another enhanced Enterprise-class design newbuild drillship. The five-year drilling contract is expected to commence during the fourth quarter of 2010. The estimated contract revenues over the five-year, seven-year, and 10-year contract terms are roughly $1.01 billion, $1.35 billion, and $1.85 billion, respectively. Houston-based Transocean reported net income of $1.2 billion on revenue of $3.1 billion, for the three months ended March 31, 2008. That compared with net income of $553 million on revenue of $1.3 billion, for the same quarter a year earlier. The 2008 results were the first full quarterly results since Transocean acquired GlobalSantaFe in November.
Whiting Petroleum to acquire Unita Basin properties for $365M
Whiting Petroleum Corp. has agreed to purchase interests in producing gas wells and development acreage in the Flat Rock Natural Gas Field in Uintah County, Utah from Chicago Energy Associates LLC. The acquisition also includes gas gathering facilities. The purchase price is $365 million. Whiting will finance the acquisition with borrowings under its existing bank credit facility. As a result of its recent $220 million debt retirement with the proceeds of the Whiting USA Trust I, Whiting expects its debt to total capitalization to be roughly 41% after the acquisition is closed. Merrill Lynch Petrie Divestiture Advisors acted as exclusive advisor to Chicago Energy on this transaction.
First Reserve to buy CHC for C$3.7B in largest ever oilfield services buyout
CHC Helicopter Corp., a provider of helicopter services to the global offshore oil and gas industry, has entered into an agreement with a fund managed by First Reserve Corp., to be acquired. The all-cash transaction, valued at roughly C$3.7 billion, is the largest-ever buyout in the oilfield services industry. CHC’s headquarters will remain in Vancouver. Merrill Lynch Canada Inc. and Scotia Capital are financial advisors to CHC. Ogilvy Renault LLP and DLA Piper USA LLP are legal counsel to CHC. Simpson Thacher & Bartlett LLP, Blake, Cassels & Graydon LLP and Slaughter and May are legal counsel to the First Reserve fund. The transaction will be financed through a combination of equity committed by the First Reserve Fund and debt financing committed by Morgan Stanley International and affiliates.
Cameron awarded $235M contract for subsea equipment
Cameron has been awarded a contract worth roughly $235 million to engineer, construct, and provide installation support for subsea systems for the North Amethyst project, a tieback development that is part of the White Rose oil field offshore Newfoundland and Labrador, Canada. Initial equipment deliveries are slated to begin in the first quarter of 2009, with installation to be completed by year-end 2009.
Sevan signs agreement for $300M bank facility
Sevan Marine’s affiliate Sevan Pte Ltd. has signed an agreement for a $300 million senior debt project finance facility for the Sevan Voyageur with mandated lead arrangers GE Energy Financial Services and GE Transportation Finance. GE Capital Markets will syndicate the facility, fully underwritten by the lead arrangers, to a limited group of international banks. Norway’s export credit agency, GIEK, has partially guaranteed the facility. Eksportfinans funded GIEK’s portion of the facility.
Legacy Reserves closes acquisition, receives $48M increase to borrowing base
Midland, Tex.-based Legacy Reserves LP has closed the acquisition of primarily Permian Basin and Mid-continent properties for $50.6 million cash and 1,345,291 newly issued units representing limited partner interests in Legacy Reserves LP to the seller. Legacy’s credit facility was increased to $320 million from the previous $272 million. Legacy has in excess of $140 million of borrowing capacity available under its credit facility.
Grey Wolf, Basic Energy combine in ‘merger of equals’
Grey Wolf Inc. and Basic Energy Services Inc. have agreed to merge. Grey Wolf’s Tom Richards will be chairman, Basic’s Ken Huseman will be CEO, Grey Wolf’s David Crowley will be president and COO, and Basic’s Alan Krenek will be executive vice president and CFO. The estimated enterprise value of the combined company will be roughly $2.9 billion. The company will have its corporate offices in Houston. UBS Investment Bank is exclusive financial advisor to Grey Wolf and Goldman, Sachs & Co. is exclusive financial advisor to Basic Energy. Simmons & Co. International provided a fairness opinion to Grey Wolf. Tudor, Pickering, Holt & Co. provided a fairness opinion to Basic Energy. Porter & Hedges LLP and Gardere Wynne & Sewell LLP are legal counsel to Grey Wolf, and Davis Polk & Wardwell and Andrews Kurth LLP are legal counsel to Basic Energy.
Siemens expands US energy finance offering
Siemens Financial Services Inc. is expanding its energy finance platform to include junior capital financing solutions. The company is adding second lien financing and mezzanine debt to its existing secured first lien offering to serve its customers in the energy and natural resources sectors more effectively. The team is also establishing offices in Houston and Canada.
Harvest Natural Resources forms US Gulf Coast AMI
Harvest Natural Resources Inc. has entered into an area of mutual interest with a private company to explore and develop oil and natural gas along the Texas and Louisiana Upper Gulf Coast. The AMI, including state waters, stretches from Nueces County, Tex. to Cameron Parish, La. and includes roughly 40 counties. Harvest will fund the first $20 million of new lease acquisitions, G&G studies, seismic reprocessing and drilling costs. Harvest has a 55% operated interest within the AMI and will provide drilling, engineering, and operational expertise. The private company has contributed two prospects, including the leases and proprietary 3-D data sets.
Halliburton acquires Knowledge Systems
Landmark, a product service line of Halliburton’s Drilling and Evaluation Division, has acquired all intellectual property, assets, and existing business of Knowledge Systems Inc. Knowledge Systems provides combined geopressure and geomechanical analysis software and services.
Newfield Exploration prices $600M of senior subordinated notes
Newfield Exploration Co. has priced $600 million of senior subordinated notes due 2018, which will carry an annual interest rate of 7.125%. The company intends to use the net proceeds from the offering for general corporate purposes, including to fund a portion of its 2008 capital program, and to repay outstanding borrowings under its credit facility.
Parker Drilling receives contract for two newbuild Alaskan drilling rigs
A subsidiary of BP PLC has issued a letter of intent to a Parker Drilling Co. subsidiary for a drilling contract that will require two newbuild land rigs for a development drilling program in Alaska. Revenues related to the project are expected to be in excess of $250 million during the initial five-year term, including mobilization fees and customer-reimbursed equipment. The company anticipates financing a portion of the cost with a new senior credit facility that will provide for an $80 million revolving credit facility and a new $50 million term loan.
Range Resources increases capital budget
Range Resources Corp. has approved an increase in the 2008 capital expenditure budget by $200 million to $1.27 billion. The increase is primarily associated with expanding the leasehold position in the Marcellus Shale play in Appalachia. Additionally, the company increased its 2008 production growth target from 15% to 19%. Range Resources is an independent oil and gas company operating in the Southwestern, Appalachian, and Gulf Coast regions of the US.
GasRock Capital invests $87M in three companies
GasRock Capital has recently made debt and equity investments in three companies totaling $87 million. The company invested $12 million in Rancher Energy Corp. An equity investment of $25.4 million went to Genesis Oil & Gas LLC to recapitalize the company and develop properties in the Rocky Mountains. The largest investment of the bunch, $50 million, went to Natural Resources Production Co. LLC. The advanced credit facility is set to fund the acquisition and development of oil properties in the Permian basin.
Rancher Energy signs with two development parties for financing
Rancher Energy Corp. has entered into a new letter of intent with two development partners for financing to support Rancher Energy’s enhanced oil recovery program in Wyoming’s Powder River basin. Under terms of the new proposed financing arrangements, in return for an $83.5 million investment, the partners will earn up to a 55% working interest in Rancher Energy’s three fields in the Powder River basin. Approximately $71 million will be used to fund CO2 operations, while approximately $12.5 million will be used to retire Rancher Energy’s note to GasRock Capital.
