Industry Briefs

The divested properties are located in the gulf in about 100 fields on 249 offshore blocks in water depths less than 1,000 feet, spanning from near Corpus Christi, Tex., to Mobile, Ala. W&T estimates that there are approximately 362 bcfe of net proved reserves as of the transaction effective date. The company further estimates the properties’ probable and possible reserves to be an additional 650 bcfe.

Tracy W. Krohn, chairman and CEO of W&T Offshore, stated, “Our team has identified more than 95 exploration prospects related to these properties and our review is still in the early stages of evaluation.”

He continues, “As the largest transaction in the history of the company, we believe this will continue to provide us with more opportunity than ever to build value for shareholders.”

W&T expects to finance the transaction with bank debt and cash on hand. The company has received a financing commitment from its agent bank, The Toronto Dominion Bank, for up to a $1.3 billion Senior Secured Credit Facility.

Founded in 1983, W&T Offshore is an independent oil and natural gas company focused in the Gulf of Mexico.

Platinum Energy Resources to acquire Tandem Energy Holdings

Platinum Energy Resources Inc., a special purpose acquisition corporation focused on the energy industry, agreed to acquire Tandem Energy Holdings Inc. for $105 million in cash and fees.

Approximately $42 million of the purchase price will be used to retire long term debt. The remaining $60 million will be paid to Tandem Energy Holdings shareholders. Tandem Energy Holdings has approximately 23.8 million shares outstanding. Under the terms of the agreement, holders of Tandem Energy Holdings’ common stock would receive $2.53 per share. However, the board of directors and officers of Tandem Energy Holdings as a group, who own approximately 85% of the stock, have elected to receive $2.13 per share to allow the shareholders who purchased their stock directly from the company or in the open market to receive $4.50 per share.

Tandem’s producing properties are located primarily in Texas and New Mexico. On September 30, 2005, Tandem’s estimated net proved reserves were 8.849 MMboe, of which approximately 64% were crude oil and 36% were natural gas. Approximately 34.4% of its total reserves were Proven Developed Producing (PDP’s). Preliminary due diligence has revealed expected low-risk probable reserves and “behind pipe” opportunities of an additional 16 MMboe.

Barry Kostiner, CEO of Platinum Energy, stated, “Tandem’s strong producing properties combined with its development opportunity are a perfect foundation on which to execute our business plan of optimizing profit irrespective of the global energy market’s performance. We look forward to building on the attractive value created by Tandem’s management.”

“We are looking forward to working with Platinum Energy throughout the merger process,” said Tim Culp, president and CEO of Tandem Energy Holdings. “Our low-risk oil and gas resources fit very well into Platinum’s stated business strategy.”

James Dorman, executive vice president, geology of Platinum Energy said, “As the head of the geology team, I am extremely excited about the potential of Tandem’s diverse properties. We will have the unique opportunity to build on Tandem’s current proven reserves substantially by utilizing a low-cost drilling program.”

Platinum Energy, based in Montvale, New Jersey, was incorporated in April 2005 to acquire an operating business in the energy industry. Platinum Energy completed its initial public offering on October 24, 2005, receiving net proceeds of approximately $106 million through the sale of 14.4 million units of its securities at $8.00 per unit. Each unit was comprised of one share of Platinum Energy common stock and one redeemable and convertible common stock purchase warrant having an exercise price of $6.00.

Platinum Energy holds over $105 million in a trust account maintained by an independent trustee, which will be released to the company upon the closing of the merger with Tandem (less any amounts returned to Platinum Energy stockholders who elect to convert their shares to cash in accordance with Platinum Energy’s charter).

The closing of the merger is subject to customary closing conditions, including Platinum Energy stockholder approval of the merger. If approved by Platinum Energy stockholders, the transaction is expected to close in the second quarter of 2006.

Tandem Energy Holdings Inc. is an oil and gas exploration and development company based in Midland, Texas. The company’s activities are focused on low- risk properties in Texas and New Mexico.

CanArgo Energy sets up $13 million convertible financing

CanArgo Energy Corp. has set up an agreement in principle on a $13 million private placement of subordinated convertible guaranteed loan notes with a small group of accredited investors.

This transaction is subject to and conditional upon applicable waivers by CanArgo’s senior secured noteholders, receipt of all appropriate regulatory approvals, if any, and subject to preparation, execution, and delivery of mutually acceptable definitive documentation.

The notes will be convertible in whole or in part into CanArgo common stock at a price of $1.37 per share (based on the closing price of CanArgo common stock on the American Stock Exchange on January 20, 2006), subject to certain anti-dilution adjustments, and will mature on September 1, 2009. Subject to the consent of the senior noteholders, CanArgo may call the notes from March 1, 2007 at an initial price of 105% of par, declining 1% every six months.

Interest will be payable in cash at 3% per annum until December 31, 2006, 10% per year thereafter. The notes will be subordinated to CanArgo’s existing issue of senior secured notes and guaranteed on a subordinated basis by CanArgo’s material subsidiaries.

The proceeds are to be used to fund the development of the Kyzyloi Gas Field in the Republic of Kazakhstan and on the commitment exploration programs in Kazakhstan through Tethys Petroleum Investments Ltd., the wholly owned subsidiary of CanArgo which holds CanArgo’s Kazakhstan assets.

Dr. David Robson, CEO of CanArgo, commented, “These funds will go directly into our Kazakhstan assets allowing us to progress the current development program on the Kyzyloi Field and install the infrastructure necessary to achieve first gas and generate cash flow. We look forward to further progressing the Kazakhstan projects which we believe offer good long term value with significant upside.”

CanArgo is an independent oil and gas exploration and production company with its oil and gas operations currently located in the Republic of Georgia and Kazakhstan.

Knightsbridge expands to Houston to support energy clients

Knightsbridge Solutions, a professional services firm exclusively focused on business intelligence and data warehousing, has opened a new office in Houston to support its growing client and employee base.

“Improving decision-making abilities and business optimization is on the forefront of executives’ minds,” said Rod Walker, president and CEO of Knightsbridge. “Trading pressures, market demands and regulatory compliance are forcing energy companies to manage their operations on a real-time basis using accurate and reliable data. Our Houston presence enables us to better help local clients tap the value of their information assets.”

John Ruddy, who joined Knightsbridge from IBM Business Consulting Services (formerly PWC Consulting), heads up the firm’s Houston-based energy practice.

Currently more than 500 people are employed at Knightsbridge, with an estimated 25% growth in 2005.

Knightsbridge is headquartered in Chicago and maintains offices in the greater metro areas of New York, San Francisco, Washington D.C., Los Angeles, and Houston.

Knightsbridge serves clients in financial services, insurance markets, health and life sciences, retail and consumer products, high technology, manufacturing, telecommunications, energy, federal government, and other industries.

Apache completes transaction with Amerada Hess, acquires Pioneer’s Argentina operations for $675 million

Apache Corp. has completed the sale of its 55% interest in the deepwater section of Egypt’s West Mediterranean Concession to Amerada Hess Corp. for $413 million.

Apache also completed its purchase of Amerada Hess’ interests in eight fields located in the Permian Basin of West Texas and New Mexico, six of which are operated, for $269 million.

Apache estimates the acquired interests have proved reserves of 27 million barrels of liquid hydrocarbons and 27 bcf of natural gas equivalent at year-end 2005. The fields have a current net production of 3,000 barrels of oil, 6 MMcf of gas, and 285 barrels of natural gas liquids per day. The number of properties involved in this transaction was reduced as a result of third parties exercising their preferential rights to purchase additional interests in some of the fields.

Apache president and CEO G. Steven Farris said, “These transactions enable Apache to concentrate on our rapidly growing onshore concessions in Egypt’s Western Desert while expanding our production in the United States.”

In addition, Apache will expand its Argentina presence through the negotiated acquisition of Pioneer Natural Resources’ oil and gas operations in that country.

The total purchase price for the assets is $675 million, a significant portion of which is made up of non-operated properties that are subject to preferential rights to purchase by existing owners. The transaction, which broadens Pioneer’s previously announced plan to divest its non-operated Tierra del Fuego assets in southern Argentina, is expected to close during the first quarter or early second quarter. The agreement is subject to customary closing conditions.

“This acquisition is Apache’s first real step in expanding our operations in Argentina, giving us a platform from which to pursue further growth,” said Farris. “The majority of the operated properties are in the Neuquen Basin, where Apache presently is active on a small scale. We have found the rocks in the Neuquen Basin are friendly, and we believe that we can employ the know-how that we have successfully developed in growing our existing core areas to Argentina.”

Pioneer expects to utilize the proceeds from the divestiture to reduce short-term debt.

Production from the Argentina assets was approximately 32,500 boe/d during 2005 and was expected to contribute a similar level in 2006. As of January 1, 2006, the properties’ net proved reserves were estimated to be approximately 101 MMboe.

“The sale of our Argentina assets is consistent with the strategic initiatives announced last September to deliver enhanced value to our shareholders,” said Scott D. Sheffield, chairman and CEO of Pioneer. “It will allow us to reallocate capital to high-return North America development opportunities.”

Apache is a large oil and gas independent with core operations in the United States, Canada, Egypt, Australia, and the United Kingdom sector of the North Sea.

Pioneer is a large independent oil and gas exploration and production company, headquartered in Dallas, with operations in the United States, Canada, and Africa.

NGAS to acquire gas gathering assets from Duke Energy

NGAS Resources Inc.’s subsidiary, NGAS Gathering LLC, has reached an agreement with Duke Energy Gas Services LLC to purchase a 116-mile gas gathering system that NGAS has been operating for the past 14 months. The system spans parts of southeastern Kentucky and southwestern Virginia, and ties into Duke Energy’s East Tennessee Natural Gas pipeline system. Certain aspects of the transaction are subject to FERC approval.

“We are excited to add this key strategic asset to our recently expanded gathering system,” commented William S. Daugherty, president and CEO of NGAS Resources. “Ownership of this system will ensure deliverability from our core properties in the southern Appalachian Basin to major natural gas markets in the eastern United States and further enhance our competitive position in the region. On an annualized basis, we expect to realize up to $3 million in gathering revenues and cost savings from ownership of the system.”

NGAS will pay $18 million for the Duke Energy assets and will fund the acquisition with a portion of the proceeds from its recent convertible note financing. The current through-put of the system is 12,000 mcf per day, of which NGAS controlled gas represents approximately 8,000 mcf per day. The system, as currently configured, has an estimated through-put capacity of 24,000 mcf per day and, with compression upgrades, through-put can be increased to 60,000 mcf per day.

In December 2005, NGAS completed construction of its 23-mile 8” gathering system and 16-mile 6” gathering line that connects with the Duke Energy system.

NGAS Resources is an independent energy company focused on natural gas development drilling and reserve growth with its main operations in the Appalachian Basin, primarily eastern Kentucky.

Vintage Petroleum completes merger with Occidental Petroleum

The stockholders at Tulsa, Okla.-based Vintage Petroleum Inc. have approved the merger agreement between Vintage and Occidental Petroleum Corp.

The proposed transaction was approved with approximately 55.0 million shares, or 99.9% of the shares represented at the meeting, voting in favor of the merger. Vintage had approximately 67.2 million shares outstanding as of the November 30, 2005 record date.

Following completion of the merger, Vintage stockholders of record will receive instructions from Mellon Investor Services LLC pertaining to the exchange of Vintage shares for the merger consideration. Under the terms of the merger, Vintage will be merged into a subsidiary of Occidental and Vintage stockholders will gain the right to receive 0.42 shares of Occidental Petroleum Corp. common stock plus $20 in cash for each share of Vintage common stock they hold.

As a result of this transaction, Occidental will issue approximately 28 million shares of Occidental common stock and pay approximately $1.4 billion in cash to former Vintage stockholders. As previously announced, Occidental plans to implement, from time to time, a stock re-purchase program for 9 million Occidental shares in the open market or otherwise.

The acquisition of Vintage Petroleum will further enhance Occidental’s holdings in its core areas in Latin America, California, and the Middle East. Occidental has classified certain Vintage properties that account for production of approximately 19,000 boe/d and, according to estimates provided by Netherland, Sewell & Associates, Inc., yearend proved reserves of approximately 72 million equivalent barrels of oil as “assets held for sale.”

Occidental expects to close the sale of these assets in the second quarter 2006 and apply the proceeds to reduce the purchase price. Vintage’s December 2005 production averaged more than 75,000 boe/d.

Vintage Petroleum Inc. is an independent energy company engaged in the acquisition, exploitation, exploration, and development of oil and gas properties and the marketing of natural gas and crude oil.

Ingenium Capital to help drill Barnett and Fayetteville properties

Ingenium Capital Corp. has entered into an agreement to participate in the drilling of Barnett shale and Fayetteville shale oil and gas wells. The agreement with REO Energy Ltd., a Fort Worth, Texas-based owner and operator of mineral leases located both in the Barnett Shale play, north of Fort Worth, Tex. and the Fayetteville shale play, east of Little Rock, Ark. REO owns approximately 7,000 acres of mineral leases in the Barnett shale and 5,000 acres in the Fayetteville shale. It also has options to acquire 5,000 additional acres in the Barnett and 15,000 acres in the Fayetteville shale.

The Barnett shale is the largest natural gas play in Texas. It currently produces 900 MMcf of gas per day and is considered one of the largest US domestic natural gas plays with sizable remaining resource potential. Published reports indicate the Barnett shale play is estimated to hold reserves in the non-core area that could be as high as 150 bcf per 1,000 acres.

The Fayetteville shale is the western extension of the Arkoma Basin, one of the most prolific gas basins in the continental US. Current spacing requirements are roughly 40 acres per well.

Fayetteville wells will range in depth between 2,500 feet and 6,500 feet. It is anticipated that these wells will be horizontal completions.

Under the terms of the agreement with REO Energy, Ingenium Capital has the right to participate as a working interest owner in all of the wells REO drills on its acreage in the Barnett and Fayetteville shale plays. Ingenium will also be entitled to earn acreage under this agreement based on well participation.

“This project is the initial step in Ingenium’s program to build a diverse portfolio of promising oil and gas properties and prospects. We plan to continue pursuing other prospects that should help us build long-term value for our shareholders,” says Ted Kozub, CEO of Ingenium Capital Corp.

Private offering of $500 million senior notes for Chesapeake Energy

Chesapeake Energy Corp. is commencing a private placement offering to eligible purchasers of an additional $500 million of its existing 6.5% senior notes due 2017. The notes issued in this offering will be issued under the indenture dated as of August 16, 2005. The notes are expected to be eligible for resale under Rule 144A.

The private offering, which is subject to market and other conditions, will be made within the United States only to qualified institutional buyers and outside the United States only to non-U.S. investors under Regulation S of the Securities Act of 1933.

Chesapeake intends to use the net proceeds from the offering to repay debt under its secured bank credit facility.

Chesapeake Energy Corp. is a large independent producer of natural gas in the US. Headquartered in Oklahoma City, the company’s operations are focused on exploratory and developmental drilling and corporate and property acquisitions in the Mid-Continent, Permian Basin, South Texas, Texas Gulf Coast, Barnett Shale, Ark-La-Tex, and Appalachian Basin regions of the United States.

Total acquires additional stake in Victoria discovery

Total announces that its wholly owned subsidiary, Total E&P Norge, has signed a sale and purchase agreement with ExxonMobil Exploration and Production Norway to acquire their entire 30% interest in the PL211 license. This license, located in the Norwegian Sea 200 kilometers offshore in water depths of around 400 meters, holds the Victoria discovery. The acquisition is subject to the approval of the Norwegian authorities. It will raise Total’s participation in the Victoria discovery to 50%.

Total E&P Norge plans to propose its candidature as operator to the other partners on the PL211 license, Statoil (30%) and Eni Norge (20%).

As part of this transaction Total will transfer to ExxonMobil 5% of the Tyrihans field (6.29% of the PL073 license). Following this transfer, Total’s stake in the Tyrihans field will go from 26.51% to 21.51%.

Total is a global, multi-energy provider with operations in more than 130 countries. Through this investment, Total aims at increasing the volume and lifespan of its hydrocarbon reserves in Norway.

Halliburton receives $33 million to provide field development in Siberia

Halliburton International Inc., Russia had been awarded a $33 million contract by TNK-BP to provide a full range of services for the Ust-Vakh field development in Western Siberia, Russia. Under this new contract, Halliburton will provide integrated services from its Fluid Systems Drilling and Formation Evaluation divisions. Halliburton began work in the Ust-Vakh field in 2005, providing services on eight rigs and drilling a total of 85 wells.

“For many years, Halliburton has been delivering multiple products and services to TNK-BP, and the award of this contract validates the performance success we have had working together,” said Rick Tompkins, vice president, Halliburton International Inc., Russia.

Halliburton, founded in 1919, is one of the world’s largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services Group and KBR.

Cal Dive signs agreement with Remington for $1.4 billion

Cal Dive International Inc. and Remington Oil and Gas Corp. have signed an agreement under which Cal Dive will acquire Remington in a transaction valued at approximately $1.4 billion.

Under the terms of the agreement, Remington stockholders will receive in the merger $27.00 in cash and 0.436 shares of Cal Dive common stock for each Remington share they own. This represents a transaction value of approximately $46.33 per share, based on the closing price of Cal Dive shares on Friday, January 20, 2006. At closing the total net cost to Cal Dive will be reduced by the approximate $2 per share of cash Remington is expected to have on its balance sheet at that time.

The acquisition is conditioned upon, among other things, the approval of Remington stockholders and customary regulatory approvals. The transaction is expected to be completed in the second quarter.

Remington is a generator of prospective oil and gas properties in the Gulf of Mexico with an increasing focus on the deepwater. At the end of 2005 Remington had around 280 bcfe of proved reserves (unaudited) and identified prospects with risked reserves of over 1,100 bcfe. Remington has around thirty personnel in Dallas, Tex. This office will be maintained and all key management and operations personnel will become employees of Cal Dive at closing of the transaction.

Owen Kratz, chairman and CEO, stated, “The acquisition of Remington is the next key step in the evolution of Cal Dive’s unique production contracting based business model. Access to both deepwater hydrocarbon prospects and the available means to exploit them, as an operator, should lead to the continuation of our differentiated long term earnings growth.”

Cal Dive International Inc., headquartered in Houston, is an energy service company that provides alternate solutions to the oil and gas industry worldwide for marginal field development, alternative development plans, field life extension and abandonment, with service lines including subsea intervention, reservoir management, facilities ownership, and oil and gas production.