Crestwood, Inergy to form $7B midstream energy partnership

Crestwood Midstream Partners LP and Crestwood Holdings LLC and Inergy LP and Inergy Midstream LP have signed definitive agreements to create a fully integrated midstream partnership with a total enterprise value of approximately $7 billion. The combination of Crestwood and Under the terms of the agreements, the combination will be implemented through a series of transactions, which will result in Crestwood Holdings acquiring the general partner, and thus control, of Inergy LP. Crestwood’s chairman, president, and CEO, Robert G. Phillips, will lead Inergy LP following completion of the transactions, and will serve as chairman, president, and CEO of the combined company. The terms of the agreements are as follows: Crestwood Holdings will acquire the general partner of Inergy LP and will contribute the general partner and incentive distribution rights of Crestwood Midstream to Inergy LP in exchange for Inergy LP common units. Separately, Crestwood Midstream will be merged with a subsidiary of Inergy Midstream.Crestwood Midstream unitholders will receive 1.070 common units of Inergy Midstream for each unit of Crestwood Midstream they own, representing a 5% premium to the 20-day volume weighted average price of Crestwood Midstream’s common units. All Crestwood Midstream public unitholders other than Crestwood Holdings will receive a one-time cash payment at closing of the merger of approximately $35 million in the aggregate, or $1.03 per unit, $25 million of which will be payable by Inergy Midstream and approximately $10 million of which will be payable by Crestwood Holdings. Inergy Midstream and Inergy LP will continue to be listed on the NYSE under the ticker symbols NRGM and NRGY, respectively.

EnerVest to purchase Anadarko Basin assets from Laredo Petroleum

Laredo Petroleum Holdings Inc. has signed an agreement with various affiliates of EnerVest Ltd. to sell all of Laredo’s interests in properties and assets in the Anadarko Basin. Under the agreement, EnerVest will acquire approximately 104,000 net acres of leasehold held by Laredo in the Anadarko Basin of Western Oklahoma and the Texas Panhandle and associated infrastructure. At closing, EnerVest will pay $438 million in cash to Laredo, before normal closing adjustments. The transaction is expected to close during the third quarter of 2013. During the first quarter of 2013, Laredo’s production from the Anadarko Basin was approximately 4.9 billion cubic feet of liquids-rich natural gas and approximately 49.6 thousand barrels of crude oil and condensate. As of December 31, 2012, Laredo’s reported estimated proved reserves included approximately 162 billion cubic feet of natural gas and approximately 1.5 million barrels of crude oil and condensate associated with the assets being sold. Laredo plans to redeploy capital from the transaction into its Permian Basin activities. Upon completing the transaction, Laredo anticipates adding two horizontal rigs to its Permian-Garden City development program, bringing the total to six horizontal rigs drilling multi-well pads by year-end 2013. Wells Fargo Securities LLC served as financial advisor and Akin Gump Strauss Hauer & Feld LLP served as legal advisor to Laredo on the transaction.

Waypoint secures $375M equity investment

Waypoint Holdings Ltd., the holding company for Waypoint Leasing (Ireland) Ltd., a helicopter leasing company, has secured $375 million of equity growth capital from funds affiliated with MSD Capital LP, Soros Fund Management LLC, and Cartesian Capital Group. The investments will be used to drive the expansion of Waypoint’s helicopter leasing operations worldwide as the demand for helicopter services among oil and gas producers increases. Lazard Freres & Co. LLC acted as sole Placement Agent and Investment Banker for the transaction and Fox Rothschild LLP served as legal advisors to Waypoint. Willkie Farr & Gallagher LLP served as legal advisors to the investor group.

Petrobras sells bonds to the tune of $11B

On May 20, Petrobras completed its 2013 offer of securities on the international capitals market (Global Notes) in the amount of $11 billion. The transaction, priced on May 13, 2013, consisted of the issuance of notes due in 2016, 2019, 2023, and 2043 at fixed rates, and also in 2016 and 2019 with floating rates. The transaction was carried out on a single day, and demand was in excess of $42 billion, resulting in over 2,000 orders from investors. The average weighted cost of the issuance was 3.79%, and average weighted maturity was 10.37 years. This issuance was the largest corporate debt issuance in Dollars of emerging markets, the 5th largest corporate debt issuance in Dollars in history, and the 2nd largest corporate debt issuance in Dollars this year.The final allocation was as follows: United States (73%), Europe (17%), and Asia (7%), and most investors are dedicated to fixed income market of investment grade corporations. Issuance ratings were A3 (Moody’s), BBB (Standard & Poor’s) and BBB (Fitch), and the proceeds will be used to fund our investments and for general corporate use. BB Securities Ltd., Citigroup Global Markets Inc., HSBC Securities (USA) Inc., Itau BBA USA Securities Inc., JP Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Inc., and Morgan Stanley & Co. as the leading coordinators conducted the transaction, which counted on the participation of Mitsubishi UFJ Securities (USA) Inc. and Standard Chartered Bank as co-managers.

Tailwater Capital spins out of HM Capital with $425M fund

Tailwater Capital, a newly formed Dallas-based energy private equity firm, has partnered with Landmark Partners to complete the secondary purchase of oil and gas investments from HM Capital. HM Capital’s Jason Downie and Edward Herring will serve as managing partners and lead a team dedicated to investing in the energy industry with a primary focus on investments within the midstream and upstream sectors. Tailwater will manage a portfolio that includes BlackBrush Oil & Gas, TexStar Midstream Services and SunTerra Well Services. Tailwater and HM Capital were represented by a team from Weil, Gotshal & Manges LLP led by partner Rodney Moore and Landmark Partners was represented by a team from Kirkland & Ellis LLP led by partner Michael Belsley.

MarkWest acquires Granite Wash assets from Chesapeake

MarkWest Energy Partners LP has agreed to acquire 100% of the ownership interests of certain midstream assets in the Anadarko Basin from a wholly owned subsidiary of Chesapeake Energy Corp., for $245 million in cash. The acquired assets consist of a 200 million cubic feet per day (MMcf/d) cryogenic gas processing plant (Buffalo Creek Plant) and 22 miles of gas gathering pipeline in Hemphill County, Texas, and approximately 30 miles of rights-of-way associated with the future construction of a high-pressure trunk line. Additional assets consist of an amine treating facility and a 5 mile gas gathering pipeline in Washita County, Oklahoma. The high-recovery Buffalo Creek Plant and associated trunk line are currently under construction and are expected to be placed into service in early 2014. Producing formations in the Anadarko Basin associated with these assets include the Granite Wash and Hogshooter formations. In conjunction with the acquisition, MarkWest has executed long-term, fee-based agreements with Chesapeake for gas gathering, compression, treating, and processing services. As part of the gas processing agreement, Chesapeake has dedicated approximately 130,000 acres throughout the Anadarko Basin. MarkWest anticipates initial gas volumes from Chesapeake of approximately 50 MMcf/d, increasing to over 250 MMcf/d by 2017. Additionally, MarkWest forecasts EBITDA of $30 million for the full-year 2014, increasing to more than $50 million by 2017. To support Chesapeake’s drilling program, MarkWest anticipates additional capital investment of approximately $90 million over the next five years for the completion and expansion of associated infrastructure. The majority of capital will be spent over the next two years to finalize construction of the Buffalo Creek Plant and the high-pressure trunk line to connect various low-pressure gas gathering systems, which are owned and operated by third parties.

Dana Gas completes US$1B Sukuk restructuring

Dana Gas PJSC, an independent oil and gas company in the UAE, has completed the restructuring of its US$1 billion Trust Certificates (sukuk al-mudarabah). The restructuring, the first of its kind in the Middle East, was implemented through the exchange of Dana Gas’ existing sukuk certificates with two tranches of new sukuk certificates (one convertible and one non-convertible tranche), each with a 5 year tenor. The shareholders of Dana Gas, as well as the holders of the existing sukuk, had previously approved the restructuring by a resounding vote. The restructuring of Dana Gas’ sukuk was closely watched by the market participants as the first consensual restructuring of a sukuk implemented in this manner and its particular relevance to the Middle East market given the number of liabilities of a diverse variety of issuers that are expected to fall due in the near future. The restructuring was particularly complex on account of the Sharia’ah structure underpinning the existing sukuk and Dana Gas’ strong desire that the restructuring be implemented through a Sharia’ah-compliant method. Latham & Watkins advised Dana Gas on the restructuring.

Rosetta Resources closes Permian Basin asset acquisition

Houston, TX-based Rosetta Resources Inc. has closed on the previously announced acquisition of Permian Basin assets from Comstock Resources Inc. Comstock agreed to sell the oil and gas properties in Reeves and Gaines counties in West Texas in an effort to reduce its outstanding debt. When the deal was announced in mid-March, Frisco, TX-based Comstock noted that part of the proceeds would help fund an increase to its 2013 Eagle Ford shale drilling program. The company has interests in roughly 27,000 net acres prospective for the Eagle Ford and has completed 10 (6.4 net) wells in the area in 2013. With the help of a $66.67 million joint venture with KKR, the company plans to accelerate drilling in its Eagle Ford shale program. Including the $38.4 million deposit previously paid, total consideration for the acquisition was $811 million, which includes the $768 million purchase price and $43.3 million in normal and customary closing adjustments. The transaction was largely funded by the net proceeds received from the Senior Notes issued in April, as well as borrowings under Rosetta’s expanded Senior Revolving Credit Facility. As of May 14, Rosetta has $100 million outstanding with $700 million available for borrowing under the Credit Facility. According to Comstock, the assets sold had proved reserves of 26.8 million barrels of oil equivalent as of December 31, 2012.

Legacy Reserves acquires Permian Basin properties

Legacy Reserves LP has entered into an agreement to purchase oil properties in the Permian Basin for $72 million from Resaca Exploitation Inc. These properties have current net production of approximately 668 barrels of oil equivalent (boe) per day. Legacy estimates that these properties contain 3.8 MMboe of proved reserves of which approximately 88% are oil and 84% are classified as proved developed producing. Closing of the acquisition remains subject to a vote of Resaca’s shareholders, and is also subject to customary purchase price adjustments and closing conditions.

Teekay Offshore acquires stake in Itajai FPSO

Teekay Offshore Partners LP has agreed to acquire a 50% interest in the Cidade de Itajai (Itajai) floating production, storage and offloading (FPSO) unit from Teekay Corp. for a approximately $204 million. The acquisition will be financed with assumed debt and proceeds from the recently completed equity private placement. The Itajai FPSO is operating on the Baúna and Piracaba (previously named Tiro and Sidon) fields in the Santos Basin offshore Brazil under a nine-year fixed-rate time-charter contract (plus extension options) with Petrobras. The remaining 50% interest in the Itajai FPSO is owned by Brazilian-based Odebrecht Oil & Gas SA. Tekkay Offshore Partners’ 50% interest in the Itajai FPSO unit, which will be equity accounted for, is expected to generate annual cash flow from vessel operations of approximately $25 million, and annual distributable cash flow of approximately $14 million.

Helmerich & Payne to sell portion of equity portfolio holdings

Helmerich & Payne Inc. has agreed to sell four million shares of Atwood Oceanics Inc. (ATW). Following completion of the sales, the company’s equity portfolio holdings will include four million ATW shares and 967,500 Schlumberger Limited (SLB) shares. Helmerich & Payne Inc. is primarily a contract drilling company. As of April 25, 2013, the company’s existing fleet included 302 land rigs in the US, 29 international land rigs and nine offshore platform rigs. The company’s global land fleet includes 300 FlexRigs (a registered trademark of Helmerich & Payne Inc.).

NorthWestern to buy Montana natural gas assets

NorthWestern Corp. d/b/a NorthWestern Energy has agreed to purchase operating and non-operating natural gas production interests in northern Montana’s Bear Paw Basin from Devon Energy Production Co. LP. The purchase also includes Devon’s 82% interest in the Havre Pipeline Co. LLC. NorthWestern Energy will need to obtain a regulatory waiver to acquire the Havre Pipeline Company, LLC, a necessary step in completing the transaction. This transaction is expected to close in 2013 subject to customary approvals. NorthWestern Energy proposes to acquire an interest in approximately 916 producing wells and connected gathering systems with over 82 miles of transmission line, 576 miles of gathering lines and 21 compressors in Blaine, Choteau and Hill Counties. The amount of net proven developed producing reserves purchased is estimated to be 64.6 billion cubic feet. The estimated natural gas production from this acquisition will be approximately 5.6-billion cubic feet in 2013, or about 28 percent of NorthWestern Energy’s current annual natural gas load in Montana. Once the purchase is completed, NorthWestern Energy’s annual natural gas supply load in Montana would be comprised of approximately 37% owned and regulated production. The purchase is expected to result in a 20-year levelized price for customers of approximately $4.10 per dekatherm. NorthWestern Energy currently owns gas production interests in the Battle Creek Field and the Bear Paw Basin which extends from the Missouri River North to the Canadian Border. Pipeline assets associated with the gas production include Havre Pipeline, Bear Paw, Willow Creek, Lodge Creek and Battle Creek gathering systems, all located in north-central Montana.

Technip awarded LNG project contract in Canada

Technip has been awarded a contract for an LNG project in Canada, along with Samsung and Huanqiu. The contract has been awarded by Pacific Northwest LNG and involves the front-end engineering design (FEED) and early detailed engineering services for an LNG project on Lelu Island, British Columbia. The project includes two six-million tons per annum LNG trains, process units and marine facilities; inlet facilities, utilities and power generation; and off-sites, including buildings and jetty topside facilities. Technip’s operating center in Rome, Italy will execute the contract along with the consortium project team in Seoul, Korea and Beijing, China. The project is scheduled for completion in the second half of 2014.

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