Chesapeake makes public senior notes offering of $1.4B

Chesapeake Energy Corp. priced its previously announced public offering of $425 million aggregate principal amount of 9.50% Senior Notes due 2015. The notes were priced at 97.75% of par to yield 10.0%. The offering was originally $300 million. Net proceeds are expected to be used to repay debt under its revolving bank credit facility and for general corporate purposes. The notes are being offered as additional debt securities after the company previously issued $1 billion of its 9.50% senior notes due 2015. Banc of America Securities LLC and Deutsche Bank Securities Inc. acted as joint book—running managers for the offering.

Forest Oil prices privateoffering at $600 million

Denver—based Forest Oil Corp. has priced its private offering to eligible purchasers of $600 million principal amount of 8.5% senior notes due 2014. The notes mature on February 15, 2014 and are priced at 95.15% of the principal amount to yield 9.75% to maturity. Forest intends to use the net proceeds from the offering to repay a portion of the outstanding borrowings under its bank credit facilities.

Halliburton wins $600M in contracts from BP

Halliburton has been awarded long—term high—value contracts by BP Angola. BP’s Angola Program covers up to four developments, to be based on a standardized design, and drilling activity is scheduled to commence in 2010. The first development in Block 31 lies in water depths of between 1,500 and 2,500 meters. The Plutao, Saturno, Venus, and Marte fields lie in the north east sector of Block 31, in a water depth of approximately 2000m, some 400 kilometers north west of Luanda. First oil for these fields is planned in 2011 and is expected to build to a plateau of about 150,000 b/s by 2012. The contracts encompass the key elements of well completions including upper and lower completions equipment and downhole flow control. Halliburton has also been awarded the drilling and completions fluids business for these wells. If all four developments are sanctioned, the contracts are estimated to be worth over $600 million.

Petrohawk Energy private placement priced at $600M

Houston—based Petrohawk Energy Corp. has priced its private placement offering to eligible purchasers of an aggregate principal amount of $600 million 10 1/2% senior notes due August 1, 2014. The notes are priced at 91.279% of the face value to yield 12 3/4% to maturity. Net proceeds will be used to repay all outstanding borrowings on Petrohawk’s senior revolving credit facility, which will provide additional financial flexibility to fund a portion of its 2009 capital budget, to fund potential acquisitions, to provide for further infrastructure expansion, and for general corporate purposes.

El Paso prices $500Mof 8.25% senior notes

El Paso Corp. has priced its pubic offering of $500 million of senior notes due February 15, 2016 with a coupon of 8.25%, issued at a discount generating a yield of 9.125%. Net proceeds are expected to be reach $472.5 million. El Paso plans to use the proceeds together with the $438 million of net proceeds from its December 2008 offering of 12% notes, for general corporate purposes and to pay debts maturing during 2009 including $539 million of 7.125% notes due May 6 and $413 million 6.75% notes due May 15. The company repaid $112 million aggregate principal amount of its 6.375% notes that came due February 1.

XTO reduces ‘09 development budget to $2.75 billion

Fort Worth, Tex.—based XTO Energy Inc. has reduced its 2009 capital budget for development and exploration expenditures from $3.3 billion to $2.75 billion. With this, the company has decreased its allocation for the construction of pipeline infrastructure, compression and processing facilities from $500 million to $450 million. XTO plans to increase ‘09 production volumes by 14% over 2008 levels. During the year, the Eastern Region will be allocated $875M. The Barnett Shale Region will utilize about $725M. The Arkoma Basin and Mid—Continent properties will be allocated $375M. The Bakken, Gulf Coast, and offshore areas will be allocated $250M. Programs in the Permian District are expected to utilize another $275M. The San Juan, Raton, Uinta, and Piceance basins combined will be allocated $175M. Finally, the company will target $75M for exploration events.

South Texas Oil restructures debt, exchanges assets

To improve its balance sheet, South Texas Oil Co. entered into agreements with The Longview Fund LP to restructure $26.1 million of senior secured debt (plus accrued interest). The debt restructuring includes the exchange of $16.3 million in principal for shares of Series A Convertible Preferred Stock and a debt—non—core asset exchange valued at $9.8 million. South Texas Oil will issue to Longview roughly 1.6 million shares of stock in exchange for the surrender and cancellation of nearly $16.3 million of the company’s senior secured debt held by Longview. The company has also agreed to sell its Colorado DJ Basin properties and its Unit U34 Single Drum Draw—works drilling rig and associated assets to the Fund for a combined total of $9.8 million. Upon closing, South Texas Oil will convey the assets to Longview in exchange for Longview’s discharge and satisfaction of $9.8 million in debt. The Colorado property disposition includes the company’s entire 37.5% non—operated working interest in 23,111 gross acres and include roughly 217,000 boe of proved reserves and an estimated 18 boe/d of net production located in Logan County, Colo.

Black Stone snaps up private company, workinginterests in 5,700 wells

Black Stone has acquired a privately—held company owning working interests in over 5,700 wells throughout Oklahoma, Texas, Louisiana, New Mexico, and other states for $150 million. Several of Black Stone’s investment affiliates, including Black Stone Acquisition Partners III LP, joined in the acquisition. Black Stone estimates the acquired interests represent proved reserves of 88.9 bcf of gas or gas equivalents, with current production of roughly 25 MMcfd.

St. Mary drills first horizontal Haynesville well, decreases rig count

As of this writing, St. Mary Land & Exploration Co. anticipated having seven operated dilling rigs running. This is a decrease from the peak of 16 rigs reached in mid—2008. Two operated rigs will focus on drilling horizontal Woodford shale and deep Springer wells in the Arkoma and Anadarko basins, respectively, and one operated rig is scheduled for the Rocky Mountain region. The Permian Basin region will have one operated rig running intermittently throughout 2009. One to two operated rigs will rotate between the Haynesville shale, the Eagle Ford shale, and the Marcellus shale programs. The company plans to invest at or within its cash flow for exploration and development activities, with current capital investment tagged at $341 million. In the Haynesville shale, St. Mary has reached total depth on it first operated horizontal Haynesville well. The Johnson Trust 1—2 well (90% WI), located in the Spider Field in De Soto Parish, La., was drilled to an approximate measured depth of 15,100 feet and has a lateral length of roughly 3,300 feet. The next planned well in the Haynesville is expected to be in Shelby County, Tex.

Hess sells $250M 5—year notes, $1B 10—year notes

Hess has sold $250 million of five year notes with a 7% coupon maturing on February 15, 2014 and $1 billion of 10 year notes with a 8.125% coupon maturing on February 15, 2019 in a registered public offering led by Goldman, Sachs & Co., J.P. Morgan, and RBS Greenwich Capital. Net proceeds are expected to be used primarily for repayment of revolving credit and short—term debt, and for working capital and other corporate purposes.

Parallel signs Barnett farmout with Chesapeake

Midland, Tex.—based Parallel Petroleum Corp. has entered into a farmout agreement with Chesapeake Energy and revised its 2009 capital investment budget. Parallel and Chesapeake entered into a farmout agreement related to Parallel’s approximate 35% interest in their Barnett Shale gas project. Under the farmout agreement, for all wells drilled on Parallel’s Barnett Shale leasehold from November 1, 2008 through December 31, 2016, Parallel will assign Chesapeake 100% of its interest within the subject unit or lease, reserving and retaining a 50% reversionary interest that will vest after Chesapeake recovers 150% of its costs for a particular payout period. Until that time, Chesapeake will fund 100% of the costs for drilling, completing, and operating those wells during the payout period. Upon reaching the 150% payout level for a given project, 50% of the interest assigned to Chesapeake will revert back to Parallel. After 150% project payout, Parallel will pay all costs and receive all revenues attributable to its 50% reversionary interest in each project.

CyrusOne expands in Texas

CyrusOne, a provider of high density data center services, is expanding its business in Texas. The company is expanding its Dallas—area data center by adding 81,000 square feet to its existing 80,000 square foot Lewisville facility. At the same time, CyrusOne has commissioned two new data halls totaling 25,000 square feet in its existing 125,000 square foot Houston campus. Upon completion, CyrusOne will occupy approximately 310,000 square feet of data center space in Texas between five facilities, including two in Houston and three in Dallas.

CGGVeritas, BP sign two seismic acquisition contracts

CGGVeritas has been awarded two long—term seismic acquisition contracts by BP to undertake multiple high—end marine 3D, wide—azimuth and 4D seismic surveys. For BP, the first contract encompasses an Arctic Ocean exploration 3D survey in the Canadian Beaufort Sea. This project, with an option to extend for a second season, is expected to commence in the summer of 2009. The second long—term contract comprises multiple wide—azimuth and 4D reservoir management surveys in the Gulf of Mexico. This program is expected to begin early in 2009, with part of the program being acquired in 2010 and includes options for further extensions. The total value of these new BP contracts, not including optional extensions, is expected to be roughly $130 million.

Boots & Coots closes $54.4Mbank facility, buys John Wright

Boots & Coots has entered into a new $54.4 million syndicated credit facility led by Wells Fargo & Co. Included in this facility are a three—year term debt facility of $34.4 million and a three—year revolving line of credit of up to $20 million. Both replace the company’s existing facilities. The company intends to use proceeds to pay off $21.2 million of senior subordinated notes held by Oil States International and for working capital requirements. Additionally, the company has purchased John Wright Co. (JWC) for roughly $10 million in a combination of cash and subordinated debt. Houston—based JWC provides relief well drilling and risk management services to the oil and gas industry worldwide. Boots & Coots will integrate the company’s proprietary technology into its Safeguard program. John Wright, president and founder of JWC, has accepted the position of senior vice president of technology for Boots & Coots.

McJunkin Red Man opens executive offices in Houston

McJunkin Red Man Corp. (MRC) has opened new executive offices in Houston. Andrew Lane, McJunkin Red Man Corp.’s president and CEO, along with other MRC senior executives, will divide their time between the offices in Houston, Tulsa, and Charleston, W. Va. McJunkin Red Man is a large distributor of pipe, valves and fittings and related products and services to the energy industry.

Cal Dive to buy back stock

Houston—based Cal Dive International Inc. has entered into a definitive stock repurchase agreement with Helix Energy Solutions Group Inc., its majority stockholder, to repurchase 13,564,669 shares of common stock for $86 million or $6.34 per share. The repurchase represents 12.6% of the company’s common stock outstanding and will reduce Helix’s ownership interest in the company from roughly 57% to 51%. The company will use borrowings under its $300 million revolving credit facility to purchase the stock. The five year credit facility expires in December 2012.

FMC snags subsea system orders for BP’s GoM projects

FMC Technologies has received orders from BP for the manufacture and supply of additional subsea systems for their projects in the Gulf of Mexico. The awards, valued at roughly $82 million, are call—offs from a frame agreement signed in November 2006. FMC’s scope of supply will consist of nine subsea trees including controls, an installation and workover control system and other related equipment. Deliveries will begin in mid—2009 and will continue through 2011.