Sinopec pays $3.1B to partner with Apache in Egypt
Apache Corp. plans to form a global upstream partnership with Sinopec International Petroleum Exploration & Production Corp. (Sinopec) to pursue oil and gas projects. As part of the deal, China's Sinopec will pay the Houston independent $3.1 billion cash in exchange for a 33% minority participation in Apache's Egypt oil and gas business, which Apache will continue to operate. Apache currently controls 9.7 million gross acres in Egypt, of which only 18% has been developed. Net production from the company's Egypt operations in 2012 averaged 100,000 b/d of oil and 354 MMcfd of natural gas, which comprised 27% of the company's global production revenue, 20% of its production, and 10% of its year-end 2012 proved reserves. The deal marks Sinopec's first venture into Egypt's upstream and will contribute an additional 130,000 boe/d of production. Analysts at Global Hunter Securities noted that a deal this size appeared improbable given the civil strife characterizing Egypt, and thus, would likely be viewed positively by the market. The purchase price equates to about $63,645/flowing bopd, or $1,000/acre, the analysts estimated, noting that the tax situation in Egypt makes per unit metrics comparisons difficult. Apache recently made seven oil and gas discoveries in Egypt's Western Desert—four in the Faghur basin and one each in the Shushan, Mtruh, and Abu Gharadig basins. This latest deal is part of Apache's previously announced plan to divest $4 billion in assets by year-end 2013. "Were no more asset sales to occur and were these divestitures to close as planned, APA could repurchase the entire 30MM share authorization and retire approximately $4.75B of debt," the analysts concluded.
Anadarko sells portion of offshore Mozambique assets for $2.64B
Anadarko Petroleum Corp. has entered into a definitive agreement with ONGC Videsh Ltd. (OVL), a wholly owned subsidiary of Oil and Natural Gas Corporation Limited, to sell a 10% interest in Mozambique's Offshore Area 1 (Area 1) for $2.64 v billion in cash. Anadarko will remain the operator of Area 1 with a working interest of 26.5%. The deal values Anadarko's pre-transaction interest at more than $9.6 billion. Area 1 is operated by Anadarko Moçambique Area 1 Limitada and is located in Mozambique's deepwater Rovuma Basin. The block contains the Prosperidade and Golfinho/Atum natural gas complexes that combined hold an estimated 35 to 65-plus tcf of recoverable natural gas resources. In cooperation with the Government of Mozambique, Anadarko, its partners, and Eni (as the operator of the adjacent Area 4 block) continue to advance the development of an LNG park with first LNG cargoes expected in 2018. Analysts view the deal positively. According to Stifel analysts, the deal is positive because the sales price puts a higher value on Anadarko's interest than Cove Energy recieved when it sold a 9% stake in the same block for $1.9 billion. The current sales price implies a value of $19/sh for Anadarko's stake. Additionally, the all cash transaction "brings forward the valuation and allows the company to better redeploy the proceeds to accelerate domestic growth options, which the company has laid out as a use of funds," the analysts noted. Analysts at Jefferies LLC also view the deal favorably for Anadarko. "The cash proceeds will reduce the debt ratio to 28% by year-end from 34% in Q2. While the 2014 production growth rate should remain in the 5%-7% range, we expect a shift to onshore liquids basins such as Wattenberg and Permian. Drilling will accelerate the drilling locations while the enhanced liquidity could allow APC to comfortably spend above cash flows, should they choose to. We expect APC will favor short-cycle, high margin liquids projects," they said.
Citec acquires M7 Offshore
Citec has acquired Norwegian engineering company M7 Offshore AS. M7 provides engineering and project management services to the oil and gas industry, including LNG. The focus is on process plants (topsides) as well as floating production, storage and offload units (FPSO). M7 is headquartered in Asker, just outside Oslo, Norway and has an engineering office in Singapore. Citec provides multi-discipline engineering and information management services to the energy and power industry, and other technology-dependent industries. Citec is headquartered in Vaasa, Finland, and has offices in India, Sweden, the UK, France, Germany and Russia.
Cantera buys South TX assets from EP Energy
The Woodlands, TX-based Cantera Energy LLC, an investment portfolio company of Kayne Anderson Energy Funds, has closed on the acquisition of certain South Texas assets from EP Energy (EPE), part of the former El Paso Corp. The assets consist of over 750 producing wells covering 78,000 net acres located in nine counties in Texas. The fund invested $100 million to form Cantera as an oil and gas acquisition and development company in the onshore Gulf Coast and South Texas regions. The privately-held company is run by two former El Paso executives, John Kelly, former vice president of El Paso's southern division and now president and CEO of Cantera, and Nico Garza, former director of El Paso's Haynesville Shale position.
Baker Botts expands with new Rio de Janeiro office
Baker Botts LLP has opened a new office in Rio de Janeiro, the firm's first office in Latin America in almost 50 years. The firm will operate as a foreign legal consultancy in Rio, with resident partners John White and Hannah Longley advising Brazilian clients and assisting foreign companies looking to enter the Brazilian market. White's experience includes the development of floating LNG projects (both liquefaction and regasification), the construction, chartering and financing of LNG vessels, FSRUs, FPSOs and other offshore assets as well as large downstream "gas to" projects. He has worked on the development and operation of LNG projects, downstream gas projects, petrochemical projects, oil and gas pipelines, power, water and infrastructure projects around the world. Longley has also advised on a wide range of upstream oil and gas projects, numerous LNG projects and downstream gas and infrastructure projects. The Rio office is the firm's ninth international office and 15th worldwide.
Intera releases groundwater database in Midland County
INTERA, a provider of risk and uncertainty analysis in the environmental, water resource and waste isolation markets, has released the first comprehensive complementary database of groundwater resources in Midland County, Texas. The new database includes aquifer locations and depths; well yields, quality and trends; locations; and geophysical log correlation, as well as an in-depth summary of Midland County's water source options and characteristics. Interactive digital map PDFs contain embedded well records. The database includes full historical records with drillers' logs, water quality reports and well records to further evaluate wells and inform users of the characteristics of the area's groundwater resources.
Sequel, GE Energy Financial Services, Lucas Capital Sell ND reserves
Denver, CO-based Sequel Energy LLC, GE Energy Financial Services, and Lucas Capital Management LLC have sold their Williston Basin conventional oil and gas reserves in North Dakota to an undisclosed buyer for $210 million. Privately held Sequel, through its ongoing partnership with GE Energy Financial Services and equity investment from Lucas Capital, retained ownership in the Bakken and Three Forks shale, including approximately 4,100 barrels of oil equivalent daily net production and 53,000 net acres of leasehold in North Dakota's Williston Basin. The company will continue to focus on its operated drilling programs in Williams and McKenzie County.
Forest Oil agrees to sell Permian Basin acreage
Forest Oil Corp. has entered into a definitive agreement with an undisclosed buyer to sell a portion of its largely undeveloped acreage position located in the Permian Basin of West Texas for proceeds of approximately $35 million.The transaction includes approximately 58,200 gross acres (52,350 net) located in Crockett County, Texas. The company intends to use proceeds to reduce outstanding borrowings under its bank credit facility. Following closing, Forest will retain its Permian Basin acreage position of approximately 68,250 gross acres (63,500 net) located in Pecos and Reeves Counties, Texas.
EV Energy Partners sell Utica acreage
EV Energy Partners (EVEP), along with certain institutional partnerships managed by EnerVest, has signed an agreement to divest certain acreage in Ohio's Utica Shale for $284.3 million to an undisclosed buyer. The total acreage associated with this sale includes 22,535 acres in Guernsey, Harrison, and Noble counties. Of that total, EVEP is selling 4,345 acres for approximately $56 million, net to its ownership interest. EVEP will retain its overriding royalty interests in these acres. The transaction is expected to close by the end of the third quarter and is subject to customary closing conditions and purchase price adjustments. Jefferies LLC is advising EVEP as it continues to market its Utica acreage.
ConocoPhillips sells Trinidad and Tobago asset
ConocoPhillips closed a transaction with the National Gas Company of Trinidad and Tobago Limited (NGC) for the sale of its wholly owned subsidiary, Trinidad and Tobago Holdings LLC, for a total consideration of $600 million plus customary adjustments. Trinidad and Tobago Holdings LLC holds a 39% interest in Phoenix Park Gas Processors Ltd.(PPGPL). PPGPL operates a gas processing and natural gas liquids fractionation facility located at Point Lisas, Trinidad. For ConocoPhillips, the sale of the non-core midstream assets is progress in focusing its portfolio. ConocoPhillips expects to recognize an after-tax gain of approximately $290 million for the sale. Including this transaction, ConocoPhillips has announced expected proceeds of approximately $14.1 billion from the sale of nonstrategic assets as part of its 2012-13 asset disposition program. Through June 30, 2013, the company has received $3.8 billion in proceeds from completed sales, with the remainder expected by year-end 2013.
Gov. Perry announces TEF investment in Fritz Industries
Mesquite, TX-based Fritz Industries Inc., a manufacturer of products used in drilling and cementing, and stimulation fluids used by oilfield service companies, is opening a manufacturing and office facility in Greenville. With an $800,000 investment from The Texas Enterprise Fund, Fritz Industries becomes part of a deal slated to "create hundreds of jobs in Greenville, pump millions of dollars in capital into the local economy, and further strengthen our state's economy," Texas Governor Rick Perry said August 21, announcing openings. It is expected that Fritz Industries will create 250 jobs and bring $37.5 million in capital investment to the area. The Legislature created the TEF in 2003 and re-appropriated funding in 2005, 2007, 2009, 2011 and 2013 to help ensure the growth of Texas businesses and create more jobs throughout the state. TEF projects must be approved by the governor, lieutenant governor and speaker of the House. To date, the TEF has invested more than $498.9 million and closed the deal on projects generating 69,277 new jobs and more than $20.8 billion in capital investment in the state.
Floatel awards Keppel with accommodation semi contract
Keppel FELS Limited (Keppel FELS) has been awarded a contract worth about US$280 million by Floatel International Ltd (Floatel), to build its fifth accommodation semisubmersible (semi) for delivery in 4Q 2015. Keppel FELS previously delivered the accommodation semis, Floatel Superior and Floatel Reliance, in 2010 and is currently constructing two more - Floatel Victory and Floatel Endurance. The new semi will be a sister vessel to Floatel Victory and will be built to Keppel's proprietary SSAUTM5000NG design.
Able to accommodate up to 500 persons in one- and two-man cabins, the new semi will have state of the art accommodation and recreational facilities which provide increased comfort for its occupants. The new semi will incorporate the latest technology such as Dynamic Positioning (DP) 3 capability and enhanced station-keeping, enabling it to operate securely alongside fixed platforms, floating platforms and Floating Production Storage and Offloading Vessels, with a full complement of deck cranes, large open deck area, workshops and firefighting capabilities.
Greene's Energy Group acquires Testco
Greene's Energy Group LLC, a provider of integrated testing, rentals and specialty services, has acquired Testco Well Services LLC, a provider of well testing, pressure testing and lab services in the Central, South and West Texas markets. Testco, headquartered in Laredo, TX, was established in 2008 with a focus in pressure testing and began its well testing business in October 2010. In August 2012, Testco purchased its sister company, the current lab services business. The combined company of Greene's Well Testing and Testco Well Services will have five locations in Texas serving the Eagle Ford in Laredo, Alice, Pleasanton, Floresville and Cotulla. The businesses will also have locations in Odessa, TX, covering the Permian Basin and also in Imperial, PA, covering the Marcellus and Utica basins. Testco will conduct business as Testco Well Services, a subsidiary of Greene's Energy Group. Martin Aguirre will remain as the general manager of Testco and will report to Randy Winters, vice president and general manager of Greene's Well Testing.
Duma Energy to acquire Hydrocarb
Duma Energy Corp. has signed a Letter of Intent to acquire 100% of the outstanding stock of Houston-based Hydrocarb Corp. In August 2012, Duma purchased a 39% working interest in Hydrocarb's 5.3 million-acre Owambo Basin concession in northern Namibia. As part of its work program, Hydrocarb is currently acquiring a high-resolution aerial gravity magnetics survey over the entire concession. In addition to its large Namibia concession, Hydrocarb is currently in final negotiations for production-sharing contracts with several African nations in the East African Rift play.
Ex-Im Bank financing supports US exports to Pemex
The Export-Import Bank of the US (Ex-Im Bank) has authorized $1.5 billion of export financing in a pair of transactions to support the export of US goods and services to Petroleos Mexicanos (Pemex), Mexico's national oil and gas company.For the second time, Pemex will issue Ex-Im Bank-guaranteed bonds in the capital markets to fund the transactions. In the event the funding cost is prohibitive, Pemex may exercise an option to seek Ex-Im Bank direct loans priced at commercial interest reference rates.Ex-Im Bank's financing will support approximately 6,800 US jobs spread across about 10 states, according to bank estimates derived from Departments of Commerce and Labor data and methodology. The procurement includes oil and gas field drilling services, drilling platforms, equipment rentals, pumps, well-completion services, associated spare parts and chemicals, geophysical services and safety equipment.
Detcon Inc., a small-business that will benefit from the transaction, designs and manufactures a wide range of industrial grade fixed gas detectors, control systems, pipeline analyzers, and wireless technology. The company, which is headquartered in The Woodlands, Texas, employs about 90 people.Since 1998, Ex-Im Bank has approved approximately $13.5 billion in financing to support Pemex's activities.
Team Oil Tools acquires Chancellor Oil Tool
TEAM Oil Tools Inc. has acquired Bakersfield, CA-based Chancellor Oil Tool Inc., a pioneer in the development and commercialization of liner hangers, cement heads and running tools for the oil and gas industry. TEAM is focused on the manufacture, sale and service of downhole completion products. TEAM is funded by Intervale Capital, a private equity firm which invests exclusively in oilfield manufacturing and service companies. Byron Cowart, TEAM's CEO, will oversee the combined business. He has more than 30 years of oilfield service experience managing the liner hanger operations of Weatherford International, Key Energy Services and TIW Corp.
Antero Resources' borrowing base increases to $2 billion
Antero Resources reports that the borrowing base under its bank credit facility has been increased to $2 billion, representing a $250 million increase over its previous borrowing base announced in May. In addition, lender commitments under the facility were increased by $300 million to $1.75 billion. The $1.75 billion commitment can be expanded to the full $2 billion borrowing base upon bank approval. The bank syndicate, which is co-led by JPMorgan Chase Bank NA and Wells Fargo Bank NA, is a diversified group consisting of 10 domestic and seven foreign institutions. As of June 30, Antero had $960 million drawn under the credit facility and $32 million in letters of credit outstanding, resulting in $758 million of available liquidity and over $1 billion of unused borrowing base capacity.
