Industry Briefs

FMC Technologies chosen to supply subsea systems for Chevron’s Frade project

FMC Technologies has been chosen by Chevron Frade LLC, a subsidiary of Chevron, to supply subsea systems for its Frade project, offshore Brazil. The contract has a value of $130 million in revenue to FMC Technologies. FMC Technologies’ scope of supply for the Frade project includes 19 enhanced horizontal subsea trees (EHXT), wellheads, pipeline end manifolds with associated structures, production control systems, and other related equipment. Deliveries will be completed from FMC Technologies’ Rio de Janeiro facility. The Frade discovery is located in the North Campos basin, approximately 110 km off the Brazilian coast and 215 km North East of Macae at a water depth of about 4,000 feet.

Schlumberger acquires technology from Quorum Business Solutions

Schlumberger Information Solutions (SIS) has acquired the rights to the Quorum Volume Management (QVM) software from Quorum Business Solutions. Earlier in the month, Schlumberger acquired the rights to market, sell, and develop products and solutions using Aspen Asset Builder from Aspen Technology. In a separate agreement, Schlumberger was granted the rights to develop, include, or embed Aspen Operations Manager as a technology component in products it develops for upstream oil and gas. In the latest agreement with Quorom, SIS acquired, QVM, a field operations data management application with multiple heavy oil volume management installations in North America and a large scale brownfield installation in Asia. Under the terms of the agreement, SIS acquires all rights to the QVM software solution as well as key development personnel. SIS will develop its next-generation production volumes management solution upon the QVM technology foundation and will partner with Quorum to integrate with accounting workflows.

EnCap closes funds worth $1.5 billion

EnCap Investments has closed its 12th institutional oil and gas investment fund, and 6th private equity fund, with total capital commitments of $1.5 billion. Nearly 100 major institutions have invested in EnCap Energy Capital Fund VI. The company is a source of private equity capital to the independent sector of the oil and gas industry.

Whiting Petroleum buys Oklahoma pipeline for $5 million

Whiting Petroleum Corp. has acquired for $5 million the oil gathering system within the company’s Postle field, located in Texas County, Okla., plus the oil transportation line extending from the eastern side of Postle field. The pipeline moves the company’s oil production to a connection point with an interstate oil pipeline. The acquisition was from an unnamed seller.

Roxar signs contracts with Vietnamese companies

Roxar will provide its flagship reservoir simulation solution, Tempest, to Hoan Vu Joint Operating Co. and Hoang Long Joint Operating Co. - both in Vietnam. These fields are Vietnam’s offshore blocks 9-2 (operated by Hoan Vu) and 16-1 (operated by Hoang Long). Roxar’s Tempest software suite is a reservoir simulation tool for reservoir engineers making field development and reservoir management decisions.

The company has also adjusted their 3D reservoir modeling software, IRAP RMS, to operate on the Windows 64-bit platform, allowing for increased data volumes, faster speeds, and lower operating costs. Finally, earlier in the month, Roxar signed a letter of intent with Vetco Gray to supply 10 subsea multiphase meters to a field offshore Angola and 7 wet gas meters to a field offshore South Africa.

ATP reduces interest rate, expands credit facility

ATP Oil & Gas Corp. has expanded and improved the terms of its senior secured credit facility by increasing the credit facility size from $350 million to $525 million and reducing the interest rate from LIBOR plus 5.5% to LIBOR plus 3.25%. In addition, it inserted provisions that allow ATP to repurchase its own shares in the open market should it chose to do so. Finally, ATP amended covenants within the credit facility to give itself additional flexibility.

Canadian Oil Sands enters agreement to acquire Canada Southern Petroleum

Canadian Oil Sands Ltd., a subsidiary of Canadian Oil Sands Trust, has agreed to make an offer to purchase all of the outstanding common shares of Canada Southern Petroleum Ltd. for cash consideration of $9.75 per common share. CSP is estimated to have Arctic Island marketable natural gas interests of approximately 927 bcfe, net to CSP, based on available information and CSP’s internal estimates. CSP also holds conventional natural gas reserves in southern Yukon and northern BC currently producing 6 MMcfd, which Canadian Oil Sands intends to sell. The value of these conventional gas reserves, together with CSP’s working capital of about $20 million, represent approximately half of the company’s value, resulting in a net cost for the acquisition of the Arctic gas resource of about $0.10 per tcf. Canadian Oil Sands presently intends to finance the acquisition entirely with bank debt and funds from operations.

Chevron, Anadarko swap assets in Indonesia

The Indonesian units of energy firms Chevron Corp. and Anadarko Petroleum Corp. have signed a deal to exchange their stakes in several oil and gas blocks in Indonesia. A Chevron spokesperson said that Chevron will take a 40% stake in the northeast Madura III block from Anadarko. In return, Anadarko Indonesia Co. will receive Chevron’s stakes in three blocks and some of its stakes in two other blocks, all located in east Kalimantan. Chevron will transfer its 33% stake in Bukat, another 33% in Ambalat, and 50% in Muara Bakau, to Anadarko. The three blocks are run by Italy’s Eni SPA. Chevron will also hand over a 24% stake in the Popodi and Papalang blocks in which Chevron is still the operator.

Mariner awarded nine blocks in lease sale 198

Mariner Energy was awarded nine blocks in the March 15th Minerals Management Service OCS oil and gas lease sale 198. The blocks awarded include the block on which Mariner made its highest bid and two blocks located in the deepwater areas of the Gulf of Mexico. The net cost for the blocks is $16.5 million.

Hercules Offshore increases credit facility to $75 MM

Houston-based Hercules Offshore Inc. increased its revolving credit facility to $75,000,000 from $25,000,000, reduced the interest rate by 1% per year, and extended the maturity by two years to June 29, 2010. The facility is led by Comerica Bank and also includes JPMorgan Chase Bank NA and Amegy Bank National Association as lenders. In addition to the increase, the amendment provides for, among other things, the removal of the dollar limits on investments, capital expenditures and transfers of assets to and other investments in Hercules’ subsidiaries that are not guarantors under the credit agreement.

Kinder Morgan investing in new crude oil storage facility

Kinder Morgan Energy Partners LP, through its Kinder Morgan Terminals Canada ULC subsidiary, will begin construction this summer on a new crude oil tank farm in Edmonton, Alberta. The company has entered into long-term contracts with customers for all of the available capacity at the facility, with options to extend the agreements beyond the original terms. The new facility will have nine tanks with a storage capacity of nearly 2.2 million barrels. One of the outbound pipelines is Kinder Morgan Canada’s 710-mile Trans Mountain Pipeline system. The contract to build the new tank farm has been awarded to a Canadian subsidiary of CB&I. Service is expected to begin in the third quarter of 2007.

Veritas DGC to sell land seismic acquisition business

Veritas DGC Inc. has signed a letter of intent with Matco Capital Ltd. to sell its land seismic acquisition business for an undisclosed amount. In 2005, the business generated about $140 million of revenue. The closing is expected to occur in the summer of 2006 and is subject to regulatory approvals. Peters & Co. Ltd. is acting as financial advisor to Veritas in the transaction.

PanOcean Energy arranges $85 million senior debt facility

Pan-Ocean Energy Corp. Ltd. has arranged an $85 million five-year senior debt facility with a syndicate of international banks led by Standard Chartered Bank. The facility is in the form of a senior amortizing borrowing base term loan, secured against a portion of the company’s oil and gas assets, which facility can be drawn down as required in accordance with certain criteria related to the asset base and financial performance of the company. The purpose of the facility is to supplement the funding of PanOcean’s 2006 capital program.

Offshore Rig Services inks deal with National Oilwell Varco

Offshore Rig Services ASA has signed two contracts with National Oilwell Varco for two drilling packages for rigs under construction at Yantai Raffles Shipyard, China. The first package is due March 2008, and the second September 2008.

Foothills Resources to acquire producing fields for $62 million

Bakersfield, Calif.-based Foothills Resources Inc. has entered into an agreement with TARH E&P Holdings LP, to acquire the company’s interests in four oil fields in southeastern Texas for about $62 million, comprised of a cash payment of about $57.5 and the issuance of $4.5 million of Foothills’ common stock. The company plans to fund most of the cash portion through senior and mezzanine debt to be secured by the properties.

Sempra Generation to sell energy production company

Sempra Generation, a unit of Sempra Energy, has agreed to sell its exploration and production subsidiary, Sempra Energy Production Co., to PEC Minerals LP for about $225 million in cash. Sempra Energy expects an after-tax gain of about $110 million on the sale as part of discontinued operations. The cash proceeds will be used to help fund Sempra Energy’s projects such as liquefied natural gas receipt terminals, new interstate natural gas transmission pipelines, and natural gas storage facilities.