Ward acquires significant stake in Riata to become chairman, CEO
Amarillo-based Riata Energy Inc. has closed on a deal that involved Tom L. Ward purchasing approximately 29 million shares of common stock from the company’s founder, Malone Mitchell III and other existing shareholders for $500 million at $17.25 per share. The purchase makes Ward the company’s largest shareholder. He has joined the company as chairman and CEO. He was previously president, COO and a director of Chesapeake Energy Corp. from its founding in 1989 until February 2006. Mitchell will retain approximately 22 million shares and will continue to serve as president, COO and as a member of the board.
Weatherford signs three-year agreement with Statoil for new fiber-optic technology
Weatherford International Ltd. has signed a three-year technology development cooperation agreement with Statoil ASA to develop new fiber-optic based sensing and communication systems to extend the life of oil and gas fields.
This agreement is part of the ongoing Statoil Subsea Increased Oil Recovery (SIOR) initiative, which aims to increase oil recovery and accelerate daily production rates. The primary goal of the project is to provide and deliver reservoir, wellbore and subsea data to shore through an integrated fiber-optic communications network.
The two companies will focus on both the development of new downhole optical sensing systems and an integrated fiberoptic subsea communication system. The agreement also calls for field testing in both existing Statoil “brown field” as well as new “green field” assets. Statoil will identify and execute pilots on the Norwegian continental shelf where new technologies will be tested and deployed.
“The goal of the project is to develop smart sensors and subsea communication infrastructure to improve our overall reservoir and production management. This is the latest in a series of collaborative development projects involving Statoil and Weatherford, and will build on the past successes shared by the two companies,” said Rolf H. Utseth, vice president of research and technology, Subsea Increased Oil Recovery, Statoil.
The communication infrastructure will enable Statoil to implement an entire range of new solutions that require a high and secure bandwidth. Weatherford has reached agreements with both FMC Kongsberg Subsea and Nexans Norway to work on this communication system initiative.
Dharmesh Mehta, vice president of production optimization for Weatherford stated, “This project allows Weatherford to further increase its optical sensing portfolio plus integrate all of these sensors into a new generation subsea communications architecture. Given the projected growth of the subsea segment in our industry, the timing of this joint development project is strategically very important for all the participants. The role it plays in delivering the digital oilfield vision - shared by so many in our industry - is very transparent.”
Apache closes on $845 million deal for BP’s GoM shelf assets
Apache Corp. has closed the previously announced acquisition of BP’s remaining producing properties on the outer continental shelf of the Gulf of Mexico for approximately $845 million.
The properties-13 fields, 9 of them operated-have net proved reserves of about 19.5 million barrels of liquid hydrocarbons and 148 bcf of natural gas. Apache has identified 50 drilling locations on the properties and another 4 million barrels of liquids and 26 bcf of natural gas in probable and possible reserves. Approximately 97% of the production will be operated by Apache.
The company has hedged essentially all of the production volumes through 2008 at prices that protect its acquisition economics, while preserving upside potential from higher prices. Apache financed the purchase with commercial paper; with the acquisition, the company’s debt-to-capitalization ratio remains below 23%.
Energy-focused Lime Rock Partners invests in Bridge Energy and Ukrainian land rig manufacturer
Lime Rock Partners has made two new significant investments in Europe. The first investment was made June 13. The firm agreed to invest up to $50 million in Bridge Energy AS, a Billingstad, Norway-based E&P company focused on the Norwegian continental shelf.
The second of the European investments was made July 11 when Lime Rock completed its investment in a Ukrainian manufacturer of land drilling rigs and rig components. The manufacturer is now a core operation of the newly-formed, Europe-based IDM Group, which together with Houston-based IDM Equipment Co. Inc. provides capital equipment to the global oil and gas industry. Lime Rock Partners invested in IDM Equipment Co. in March 2006.
Bridge Energy will focus on the exploration and development of mature areas of the Norwegian continental shelf. It has applied for prequalification as a license holder in Norway in order to participate in the APA 2006 licensing round.
The recently acquired Ukrainian land rig manufacturing facility is one of the longest standing drilling rig manufacturers in the world. Its operations were reconstituted in 2005 under the leadership of the Nadra Group, the largest oil service company in Ukraine.
Tom Bates, a Houston-based managing director of Lime Rock Partners, stated, “Lime Rock Partners has been very impressed by the energy and capabilities of the Ukrainian plant’s facilities, management, and employees. Lime Rock continues to look throughout the global oil and gas capital equipment sector to add other operations to this strong base.”
Gray Energy Services makes acquisitions to expand presence in cased-hole wireline industry
Gray Wireline Service Inc., a subsidiary of Gray Energy Services LLC, has acquired Master Wireline LP. Master provides cased-hole wireline services in the Barnett shale region of northern Texas.
Master operates a fleet of electric line trucks from its facilities in Wichita Falls and Granbury, Tex., as well tools, equipment, and related vehicles.
According to Gray’s CEO Larry Cavanna, the Wichita Falls and Granbury locations will serve as important new operating locations for Gray. Jeff Lindeman, Ken Luig, and Perry Luig will each retain an ownership position in the company and will remain active in the management of the area.
In May, Gray Wireline Service acquired Oilfield Pro-Log Services, which also provides cased-hole wireline services, but in the Permian Basin region of West Texas.
Pro-Log, which was founded in 1973 by Bill Flippin, operates a fleet of nine electric line trucks and three slickline trucks from its facilities in Denver City, Levelland, and Midland/ Odessa, Tex., as well as a comprehensive array of tools, equipment, and related vehicles.
According to Cavanna, the Denver City location will serve as an important new operating location for Gray. Flippin will retain an ownership position in the company and remain active in the management of the region, reporting to Steve Gray, vice president of Gray’s Permian Basin operations.
Plains All American to acquire Pacific Energy Partners LP for $2.4 billion
Plains All American Pipeline LP has executed definitive agreements to acquire Pacific Energy Partners LP for a total value of $2.4 billion, including the assumption of debt and estimated transaction costs. It is expected to close near the end of 2006 and is subject to unitholders and other regulatory approvals.
Plains plans to fund at least 50% of the acquisition with equity. Approximately $1 billion, or 88%, of the equity funding required to meet the minimum equity funding objective, will be done with the unit-for-unit exchange feature of the transaction and contemporaneous capital contribution by the general partner. The remaining $1.2 billion will be funded with debt. The remaining $770 million of acquisition-related debt capital will initially be provided by either Plains’ existing revolving credit facility or short-term credit facilities.
Simmons & Co. International provided financial advice to Plains, while Petrie Parkman & Co. advised the conflicts committee of the board of the managing general partner of Pacific Energy. Lehman Brothers provided advice for LB Pacific LP and Pacific Energy. Vinson & Elkins LLP and Prickett, Jones & Elliott PA provided legal counsel for Plains; Richards Layton & Finger PA provided advice for the conflicts committee of the board of the managing general partner of Pacific Energy; Andrews Kurth LLP provided legal counsel for Pacific Energy; and Baker Botts LLP and Morris, Nichols, Arsht & Tunnell LLP provided counsel for LB Pacific LP.
Standard & Poor’s currently lists Plains as BBB-/Negative.
