ATP Oil & Gas Corp. and its wholly-owned subsidiary ATP Oil & Gas (UK) Ltd. have closed the sale and purchase agreement for GBP 265 million (roughly US$365M) with EDF Production UK Ltd. (EDF), a subsidiary of EDF International of France, for certain of ATP’s UK assets in the North Sea. The agreement transfers 80% of ATP’s UK interest in its Tors (a 68% working interest) and Wenlock (an 80% working interest) properties to EDF. EDF has the option for a period of 60 days to acquire the remaining ATP interests on similar terms. Pending the decision by EDF for the remaining 20%, ATP UK will remain as operator of both Tors and Wenlock. ATP will use 75% of the net proceeds to reduce its debt. ATP will use the remaining proceeds to further its 2008 and 2009 development program and for other corporate purposes.
Marathon Oil to sell Irish subsidiary
Marathon Oil Corp. has entered into an agreement with Star Energy Group, a wholly-owned subsidiary of Petroliam Nasional Berhad (Petronas), under which Star Energy Group will purchase Marathon’s wholly-owned subsidiary, Marathon Oil Ireland Ltd. for $180 million, excluding any purchase price adjustments at closing. This agreement does not include Marathon’s 18.5% interest in the Corrib natural gas development. Star Energy will retain the 61 Marathon Oil Ireland Ltd. employees in Ireland.
Comstock to spend $450M for ‘09 E&D
Frisco, Tex.-based Comstock Resources Inc. plans to spend $450 million in 2009 for development and exploration activities. The company expects to drill 76 (55.9 net) wells in 2009. While it will drill fewer wells than in 2008, the drilling program will be focused on higher return opportunities, including its acreage position in the Haynesville Shale. Comstock’s East Texas/North Louisiana operating region accounts for the largest portion of the 2009 budget with forecasted expenditures of $399 million. Comstock has budgeted to drill 66 (49.1 net) development wells in this region in 2009, which includes 43 (32 net) Haynesville Shale horizontal wells and five (4.5 net) Cotton Valley horizontal wells. Comstock expects to spend $51 million in its South Texas region to drill 10 (6.8 net) wells in 2009.
Primary Natural Resources III formed to acquire, exploit Mid-Continent, Permian areas
G.R. Talley, Mark Sheehan, and Jack Fritts have formed Primary Natural Resources III LLC to acquire and exploit oil and gas properties in the Mid-Continent, Oklahoma/Texas Panhandle and Permian Basin. Primary III is an investment portfolio company of Quantum Energy Partners with initial equity commitments from Quantum Energy Partners IV and the management team in excess of $100 million. Prior to forming the company, Talley founded and sold Primary I and II. Sheehan was president of Vintage Oil Argentina before becoming VP of Engineering at Primary II. Fritts was operations manager of the Greater Prudhoe Bay Field for BP Alaska before coming to Primary II to serve as VP of operations.
Carrizo adds $27.5M to credit facility with additionof Union Bank of California
Carrizo Oil & Gas Inc. has added Union Bank of California NA to its banking syndicate. With the addition of the seventh bank comes an increase of commitments under its credit facility to $250 million from $222.5 million. Carrizo CEO S. P. “Chip” Johnson stated, “While we have no current plans to make use of this increase in borrowing capability in our projected 2009 capital expenditure budget, we welcome the additional capital flexibility. As we recently announced, we plan to reduce 2009 capital expenditure levels to be equivalent to anticipated 2009 cash flow. Under our proposed 2009 budget, we believe we will still be able to increase production 70% from 2008 to 2009.”
Venoco reduces ‘09 CAPEX
Venoco Inc. has further reduced its capital expenditure plans for 2009 to $150 million; however, 2009 production guidance remains at 19,000 boe/d. The company has restructured its hedging arrangements to secure floors on 100% of 2009 forecast production, and floors on over 80% of 2010 anticipated production volumes. The sale of the Hastings Complex to Denbury is expected to reduce the company’s net debt by roughly $150 million. The company’s year-end 2007 reserves for Hastings were 14.4 million boe. Venoco’s net production from Hastings for full-year 2008 is estimated to be 2,580 boe/d. The company’s debt includes $150 million of senior notes due in December 2011, a $500 million term loan due in September of 2011, and a revolving credit agreement due, unless refinanced, in March 2011.
Baker Hughes purchases North East Mud Services
Baker Hughes Drilling Fluids has bought the assets of Clarksburg, W. Va.-based North East Mud Services Co. LLC (NEMSco). NEMSco is a supplier of drilling fluids and solids control equipment in the northeast US. Baker Huges will retain the NEMSco name because of its strong track record in the Marcellus Shale and throughout the northeast. Simmons & Company International served as exclusive financial advisor to NEMSco.
Cimarex completes cash offer to repurchase convertible notes
Denver-based Cimarex Energy Co. has completed its cash offer for any and all of its outstanding $125 million floating rate convertible senior notes due 2023 that were originally issued by Magnum Hunter Resources Inc. The offer was made to satisfy Cimarex’s contractual obligation under the indenture that provides that each holder has the right to require Cimarex to repurchase the notes as of December 15, 2008. The company was advised by Deutsche Bank Trust Company Americas, the depositary for the offer, that $105.6 million of the notes had been tendered. Cimarex will fund the $105.6 million repurchase from borrowings under its bank-credit facility. Cimarex’s bank group reaffirmed the company’s $1 billion borrowing base amount related to its bank-credit facility on November 14, 2008. Cimarex elected to maintain its commitments from the banks at $500 million.
Caesar Systems, Decision Frameworks form alliance
Caesar Systems and Decision Frameworks have joined forces to provide education, training, and consulting services for decision making in the upstream oil and gas industry using the PetroVR Toolsuite from Caesar Systems and DTrio decision analysis workflow software from Decision Frameworks.
Keppel scraps MPU Heavy Lifter project
Keppel Verolme BV, a wholly-owned subsidiary of Keppel Offshore and Marine Ltd., has decided to terminate the MPU Heavy Lifter project and commence the scrapping process of the concrete hull. The project was contracted with MPU Offshore Lift ASA in December 2006 at EUR 140 million for the construction of a floating heavy lifter (with a concrete hull) for the decommissioning of offshore structures. Keppel Verolme ceased work on the project after MPU Offshore Lift filed for bankruptcy in July 2008.
Wellpoint releases new software
WellPoint Systems Inc., a provider of software and related solutions to the energy industry, has released WellPoint Integrated Suite (WIS) 4.1, an integrated oil and gas software application suite powered by Microsoft Dynamics AX. Version 4.1 integrates the WellPoint Energy Broker (ENB) and the WellPoint Energy Financial Management (EFM) solutions in a single package. The software is aimed at operational efficiency, international financial management, and business analysis for marketing and pipeline operations.
