OGFJ100P company update
IHS 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 are based on operated production only within the US. In this installment, the data provided is year-to-date 2008 production data.
Since the last installment of the OGFJ100P in the April issue, there are a few items of note that occurred in the industry’s private sector.
Effective June 1, Rodney Gray became CFO and executive vice president of privately-held Cobalt International Energy LP. He previously served as VP and CFO of Colonial Pipeline.
Prior to the management change, the Houston-based company combined certain exploratory lease holdings with TOTAL E&P USA Inc. Cobalt will generally hold a 60% interest, and TOTAL a 40% interest, across 214 joint Gulf of Mexico deepwater leases in which they currently have varying working interests. Cobalt is designated as operator.
Cobalt’s financial sponsors include Goldman Sachs, Carlyle/Riverstone, First Reserve Corp., KERN Partners, and management.
The deal was one of numerous agreements that took place in recent months. In April, Houston-based, privately-held, Houston Energy LP entered into an oil and gas participation agreement with US Energy Corp. US Energy agreed to acquire an 11.11% working interest in a prospect located in Southeast Texas.
US Energy paid sunk land costs and a prospect fee of roughly $12,900 and will be responsible for 11.11% of the costs to drill an initial test well to earn an 8.33% after casing point working interest (6.1% net revenue interest). The initial commitment is roughly $96,000 to the casing point.
Two deals penned in April by privately-held Escondido Resources II LLC, an EnCap Investments LP financed company, increased the company’s presence in South Texas. One involved the acquisition of 17 producing wells in northern Webb County from Kaiser-Francis Oil Co. The other was an acquisition of 40,000 gross acres in Webb, La Salle, and McMullen Counties. Both acquisitions are prospective in the Olmos and Escondido formations.
Privately-held, Houston-based Dynamic Offshore Resources LLC acquired substantially all of Bayou Bend Petroleum’s US oil and gas properties for $12.5 million cash. The agreement includes a deferred payment of up to $8 million that may be made on April 1, 2011, based upon the increase in proved oil and gas reserves attributable to the purchased interests as at December 31, 2010 above a specified threshold, at a rate of $0.20 per Mcfe.
One particularly large transaction involved Denbury Resources Inc. and privately-held Talon Oil & Gas LLC. In an effort to repay some of the company’s outstanding bank debt, Denbury agreed to sell 60% of its Barnett Shale natural gas assets to Talon for $270 million. Talon will operate the properties after a transition period following closing. Production from the assets averaged 45.7 MMcfe/d (77% natural gas) for during 2008.
An anticipated deal that did not take place was that between privately-held Puckett Land Co. (PLC) and Teton Energy Corp. In May, Puckett informed Teton of its plans to terminate the agreement with Teton Energy and its wholly-owned subsidiary Teton Piceance LLC for the purchase of Teton’s 12.5% non-operated working interest position in the Piceance Basin in western Colorado for $10.3 million.
According to Matt Wurtzbacher, PLC’s president, the company is still looking to acquire high-quality assets and develop its existing Piceance Basin assets using its recent $120 million credit facility. The company is engaged in the acquisition, exploration, development, and production of natural gas and liquids in North America, with its principal reserves and producing properties located in Garfield and Rio Blanco Counties, Colorado.
In the divestiture arena, privately-held Ky-Tenn Oil Inc. sold certain assets to Miller Petroleum Inc. (doing business as Miller Energy Resources LLC). The cash and stock transaction includes roughly 35,325 leased acres located on the Chattanooga shale and 173 natural gas and oil producing wells.
According to Scott Boruff, Miller CEO, the operations are located in Fentress, Morgan, and Scott Counties, in Tennessee, near other Miller operations. “KTO has a strong management team and field staff that has agreed to remain and grow with Miller as we continue building the company,” Boruff added.
Finally, in the production arena, Colorado Springs, Co.-based American Energy Resources discovered a secondary oil reserve in Lane County, KS and is currently planning to drill the well, known as Doyle’s Dome #7. Donald H. Allen, president and founder of the privately-held company, expects the discovery to produce over 200 barrels a day and remain active for 25 years or longer. The independent oil and gas company manages roughly 47,000 leased acres in the Denver Julesberg Basin and holds over 10,140 acres of mineral rights in the Kansas Uplift Basin.
