Industry Briefs

Aug. 1, 2012

Noble to divest assets to fund DJ Basin program

Noble Energy Inc. has signed a definitive agreement to sell certain oil and natural gas properties in western Oklahoma and the Texas Panhandle to Unit Petroleum Co. for $617 million. The properties include Noble Energy's interest in about 900 producing wells on approximately 84,000 net acres. As of the effective date, net daily production was nearly 60 million cubic feet equivalent per day and net proved reserves were approximately 250 billion cubic feet equivalent. Production consists of 65% natural gas, 27% natural gas liquids, and 8% oil. David L. Stover, Noble Energy's president and COO, said the sale "will provide additional flexibility in the implementation of our international program and the acceleration of the horizontal oil play in the DJ Basin." The transaction is expected to close in September 2012.

Capital One closes $15M credit facility for TEAM Oil Tools

Capital One Bank has closed a four-year $15 million Revolving Credit Facility for TEAM Oil Tools, a designer, manufacturer and supplier of down hole tools for the oil and gas industry. Proceeds of the facility were used to refinance existing debt and to fund ongoing working capital needs. Houston-based TEAM Oil Tools, an Intervale Capital portfolio company, also operates in the field of multi-zone high angle and horizontal fracturing operations with its T-Frac™ systems and full range of plugs and sleeves for open hole and cemented casing completions.

GMX Resources to monetize certain Cotton Valley assets

GMX Resources Inc. has engaged Global Hunter Securities as financial advisor in connection with a proposed sale of a portion of the company's Cotton Valley Sand liquids rich natural gas properties located in East Texas. The company currently expects that sales of these properties would occur during the third quarter of 2012. Oil shale resources are located in the Williston Basin, North Dakota & Montana targeting the Bakken Petroleum System and in the DJ Basin, Wyoming targeting the Niobrara Petroleum System; both plays are estimated 90% oil. The company's natural gas resources are located in the East Texas Basin, in the Haynesville/Bossier gas shale and the Cotton Valley Sand Formation.

OppenheimerFunds to acquire MLP investment manager SteelPath

OppenheimerFunds Inc. has agreed to purchase SteelPath Capital Management and SteelPath Fund Advisors, an energy infrastructure investments company focused on the Master Limited Partnership (MLP) sector. SteelPath offers a family of MLP-focused mutual funds as well as privately available products. The transaction is expected to close during the fourth quarter of 2012. Financial terms of the transaction were not disclosed. SteelPath has approximately $2.6 billion in assets under management as of June 30, 2012 and was first to market with MLP-focused open-end mutual funds. SteelPath is headquartered in Dallas. UBS Investment Bank acted as financial advisor to OppenheimerFunds Inc. and Deutsche Bank Securities Inc. acted as financial advisor to SteelPath. Willkie Farr & Gallagher LLP acted as legal advisor to OppenheimerFunds Inc. and Ropes & Gray LLP acted as legal advisor to SteelPath.

Meritage Midstream gets equity commitment up to $500M

Meritage Midstream Services II LLC has partnered with Riverstone Holdings LLC to pursue midstream opportunities in North America's emerging resource plays. Riverstone will provide Golden, Colo.-based Meritage II with up to $500 million in private equity capital to focus on developing midstream systems to serve producers of natural gas and natural gas liquids (NGLs).

Pegasi releases IP results from Bossier shale well

Tyler, TX-based Pegasi Energy Resources Corp. has released initial production results of its first horizontal well in Cass County, Texas. The completion of the Morse Unit # 1-H involved hydraulic fracturing of the well's 2,000 ft horizontal borehole in five stages. Baker Hughes field services performed the hydraulic fracturing operations in late June using their proprietary Frac-Point(TM) fracture completion system. The company holds a 56% working interest in the well. In its first five days of continuous production, the well produced a total of 1,404 bbls of oil giving an average initial production rate of 281 bbls of oil per day. The well has produced high quality, light, sweet oil with an API gravity greater than 40 degrees. There is associated gas production which has not been measured at this time.

Eagle Rock restarts Phoenix-Arrington Ranch Plant

Eagle Rock Energy Partners LP has restarted its Phoenix-Arrington Ranch Plant in Hemphill County, Texas, serving the Granite Wash play.On April 30, 2012, the Partnership reported an incident at its Phoenix-Arrington Ranch Plant. Following the incident, inlet natural gas volumes into the plant were shut-in. As and where possible, the partnership has diverted volumes to other Eagle Rock or third party processing facilities. Shut-in and diverted volumes will be restored to the Phoenix-Arrington Ranch Plant as expeditiously as possible. The partnership estimates the financial impact of the plant downtime to be approximately $2 to $3 million in Adjusted EBITDA before the benefit of any insurance recoveries. With the re-start of the Phoenix-Arrington Ranch Plant and the recently announced startup of its Woodall Plant, also in Hemphill County, Eagle Rock has approximately 190 MMcf/d of high efficiency cryogenic processing capacity serving the Granite Wash play.

NGP makes recent $75M investment

NGP Capital Resources Company completed two transactions that closed in the first two weeks of July, totaling $75 million. The investments were funded with cash on hand and borrowings under the company's revolving credit facility. On July 3, 2012, the company advanced an additional $25 million to ATP Oil & Gas Corp. under its limited-term overriding royalty interest (ORRI) in certain offshore oil and gas producing properties operated by ATP in the Gulf of Mexico. As consideration, the company obtained a 5% limited-term ORRI in ATP's Telemark properties, to supplement the 10.8% ORRI in ATP's Gomez field properties. On July 10, 2012, the company acquired $50 million of redeemable Preferred Units in a private oil and gas limited partnership engaged in the acquisition, exploration and development of oil and natural gas properties in South Louisiana and the shallow waters of the Gulf of Mexico. The purchase of the Preferred Units is NGP's third investment with the management team of the partnership.

KrisEnergy attracts Keppel as strategic investor

KrisEnergy Holdings Ltd . has accepted an offer from Singapore conglomerate, Keppel Corp. Ltd., to become a strategic shareholder in the upstream oil and gas company as it continues to extend its portfolio and activities across the Southeast Asia region. Through a private placement of new equity, Keppel Corp. has acquired a 20% shareholding in KrisEnergy Ltd. (KEL) for US$115 million. KEL previously was held 100% by parent company KEHL, whose major shareholder is an investment fund sponsored by First Reserve Corp. Keppel Corp.'s CEO Choo Chiau Beng and CFO Loh Chin Hua have been appointed to the Board of KrisEnergy as non-executive directors.

Drilling Info acquires County Scans

Austin, TX-based Drilling Info Inc., a SaaS-based provider of upstream business intelligence and analytics for the global upstream industry, has acquired Grand Prairie, TX-based County Scans, a provider of deep, digitized US mineral ownership data. County Scans collects, digitizes and indexes courthouse records in key oil and gas producing counties across the US, and has detailed coverage in several existing and emerging unconventional hydrocarbon plays. The company has been scanning original leasing records from county courthouses since 2000. County Scans has more than 40 counties digitized and indexed from sovereignty to the present. George and James Contos, founders of County Scans will continue to oversee the company's operations. All of County Scans' employees have been retained.

Aker Solutions acquires subsea companies

Aker Solutions has acquired the Norwegian companies Subsea House and SSH Engineering and plans to further expand and recruit 50-100 people in Stokke, located in the Vestfold county of Norway. The transaction value is undisclosed. Subsea House and SSH Engineering were established in 2007 and have developed a state-of-the-art subsea facility in Stokke, one hour southwest of Oslo, designed for testing of subsea products, systems and tools. Aker Solutions plans to invest USD 87 million in its subsea business which comes in addition to the acquisition of Subsea House. The investment is set to double the capacity of its manufacturing plants in Tranby, Norway, and Port Klang, Malaysia. New service bases will also be established in Malaysia and Thailand. The transaction of Subsea House and SSH Engineering is expected to be completed in the third quarter of 2012.

Hewitt EnnisKnupp launches institutional advisory solutions practice

Hewitt EnnisKnupp, an Aon plc company with more than 460 clients and $2 trillion in assets under advisement, has established an Institutional Advisory Solutions practice that will provide a full spectrum of institutional investment management solutions to financial services organizations around the world, including insurance companies, private banks, broker dealers and ultra high net worth platforms. To lead its Institutional Advisory Solutions practice, Hewitt EnnisKnupp has hired J.J. Wilczewski, who brings more than 16 years of industry experience. ost recently, Wilczewski led global business development for Wilshire Associates. Prior to joining Wilshire, he spent over a decade at Van Kampen Investments.

Schlumberger buys minority stake in China's Antonoil

Schlumberger has acquired a 20.10% stake (423,361,944 shares) in Beijing-based Anton Oilfield Services Group. Antonoil first entered into a strategic cooperation agreement with Schlumberger in 2010. Antonoil has sales offices and operations bases across China's major onshore oil and natural gas basins. The Group also has an international headquarters in Dubai with a network across the Middle East, Central Asia, Africa, and Americas.