OGFJ100P company update

John S. Herold Inc., the independent research firm, has provided OGFJ with updated production data for our periodic ranking of US-based private E&P companies. The rankings provided by Herold are based on operated production only within the US.

This installment of OGFJ100P breaks down company production numbers into liquids production and gas production.

Acquisitions

Since the July installment of OGFJ100P, numerous private companies have added to their portfolios.

Privately-held Antero Resources won Marcellus Shale natural gas drilling rights on roughly 205,000 Appalachian Basin net acres from Dominion Energy for $552 million, resulting in after-tax proceeds of roughly $325 million.

Dominion will receive a 7.5% royalty interest on future natural gas production from the assigned acreage, will retain the drilling rights in traditional formations both above and below the Marcellus Shale interval, and will continue its conventional drilling program on the acreage. The acreage is principally in western Pennsylvania and West Virginia.

Denver-based Antero is focused on acquiring and developing unconventional natural gas resources, primarily in fractured shale and tight sand reservoirs. Antero was an early developer of the Barnett Shale in Texas, becoming one of its largest producers until selling its Barnett Shale business in 2005.

In August 2007 Antero shareholders, including Warburg Pincus, Yorktown Partners, and Lehman Brothers Merchant Banking, committed $1 billion of equity to support Antero’s growth.

In another move, privately-held Chaparral Energy Inc., entered into a merger agreement with publicly-traded Edge Petroleum Corp. Chaparral will acquire Edge in an all-stock transaction. Through the merger, Chaparral will become a publicly-traded company.

Chaparral stockholders will own nearly 86% of the outstanding common stock of the combined company and Edge stockholders will own the remaining approximate 14%. The common stock of the combined company is expected to begin trading under the symbol “CPR” pending transaction closing and listing approval from the New York Stock Exchange.

Mark Fischer will continue as the chairman, CEO, and president. Joseph Evans will continue his role as CFO and executive vice president and corporate treasurer, and Robert Kelly will continue as senior vice president, general counsel and corporate secretary. The company’s headquarters will remain in Oklahoma City, and the company will maintain a Gulf Coast presence utilizing Edge’s headquarters as a regional office in Houston.

Another privately-held company making a big move this issue was Houston-based Dynamic Offshore Resources LLC. The company acquired 100% of the stock of Northstar Exploration and Production Inc. and its wholly-owned operating subsidiary Northstar GOM LLC for $235 million. The transaction represents the second acquisition by Dynamic since receiving a $500 million equity commitment from Riverstone Holdings LLC and management in January 2008.

Effective at closing, the Northstar GOM LLC name will be changed to Dynamic Offshore Resources NS LLC. Dynamic will operate the acquired companies as wholly-owned subsidiaries.

Divestitures

While some private companies were busy buying assets, others were selling off properties.

Various private parties, including Chief Resources LP, Hillwood Oil & Gas LP, and Collins and Young LLC sold off producing and non-producing leasehold, royalty, and midstream assets associated with the Barnett Shale in northern Tarrant and southern Denton counties of Texas to Quicksilver Resources. Total consideration is estimated at $1 billion in cash and 10,400,468 shares of Quicksilver common stock.

The purchase includes 13,000 net acres in the Fort Worth Basin. Quicksilver estimates the properties contain more than 1 tcf of recoverable natural gas resources including roughly 350 bcf of proved reserves, of which nearly 40% are proved developed. Current production from the properties is approximately 50 MMcf/d of natural gas.

In August of this year, Denver-based and privately-held Cordillera Energy Partners II LLC, Cordillera Texas LP, and Cordillera Energy Canada ULC sold assets in Texas and Oklahoma and all of its stock in a wholly-owned Canadian subsidiary.

One of the purchasers was publicly-traded and Denver-based Forest Oil Corp. The company agreed to purchase producing assets, including roughly 118,000 gross acres in the Greater Buffalo Wallow and East Texas/North Louisiana area.

Forest will pay about $708 million in cash and deliver 3.5 million shares of Forest’s common stock (subject to a collar mechanism) to the seller for a total transaction value of nearly $892 million.

Tristone Capital LLC and JP Morgan Securities Inc. provided financial advisory services to Cordillera for the US transactions and CB Securities for the Canadian transaction.

Cordillera Energy Partners III will continue its acquisition, exploration, and development program in its core areas of the Texas Panhandle where Cordillera III has over 140,000 acres and in East Texas where it has 23,000 acres.

“Cordillera III plans to grow production and reserves through an active acquisition program and drilling program,” said Tad R. Herz, executive vice president and CFO of Cordillera.

George H. Solich, president and CEO of Cordillera Energy Partners II and III remarked “the Cordillera II divestitures fit perfectly in our strategy to deliver excellent returns to our shareholders while keeping our exceptional franchise together to continue to build Cordillera III.”

In another transaction, privately-held Aspect Abundant Shale LP, along with other parties, has sold interests in north Texas’ Barnett Shale for roughly $166 million in cash to Williams. The assets represent an estimated 175 bcfe of proved, probable, and possible reserves on about 10,000 net acres located primarily in Tarrant, Johnson, and Hood counties.

To round out the list, privately-held Crimson Energy Partners LP has sold oil and natural gas interests in Dimmit County in South Texas for $47 million to Houston-based Swift Energy. The interests in Crimson’s Briscoe “A” lease and wells are located on 5,140 acres adjacent to existing Swift Energy production in its Cotulla area.

Swift currently estimates that total reserves of the purchased properties are approximately 13 bcfe of proved reserves and 3 bcfe of probable reserves. Approximately 70% of the proved reserves are classified proved developed.

OGFJ and John S. Herold will continue to update the information as new production figures become availiable. Future issues of OGFJ will present news and relevant information regarding individuals companies.

Click here to download a .pdf of the 2007 Total production ranked by BOE - gas, liquids breakdown