Aug. 14, 2017

Bruin E&P Partners to acquire Halcón Resources' Williston Basin assets

An affiliate of Bruin E&P Partners, a portfolio company of ArcLight Capital Partners, has signed a definitive agreement to acquire Halcón Resources' operated oil and gas properties in the Williston Basin for $1.4 billion. Halcón's Williston Basin portfolio represents approximately 104,000 net acres of oil and gas properties in McKenzie, Williams, Mountrail, and Dunn counties in North Dakota, with the acreage 100% held by production. The portfolio is currently producing approximately 29,000 barrels of oil equivalent per day.

Pearl Energy Investments closes second fund at $600M hard cap

On July 14, 2017, Pearl Energy Investments held its first and final closing of Pearl Energy Investments II LP at its hard cap with total commitments of $600 million. Dallas, TX-based Pearl is a provider of equity capital and sponsorship to the energy industry, concentrating on the upstream, midstream, and services sectors. Pearl targets equity investments between $25 million and $75 million, and has led investments requiring in excess of $125 million of equity capital. Kirkland & Ellis LLP served as fund formation counsel. Pearl did not engage a placement agent in connection with the formation of the fund.

Native Exploration secures equity from Kayne Anderson

Native Exploration Holdings LLC has secured a $140 million equity investment from Kayne Anderson Energy Fund VII LP. Funds will be used for the further development of oil and gas properties. Locke Lord represented Native Exploration in the transaction.

Occidental to sell Permian acreage, add Permian EOR interests

Occidental Petroleum Corp. has agreed to a number of purchase and sale transactions in the Permian Basin. On a combined basis, these transactions require no net cash outlay and add approximately 3,500 barrels of oil equivalent per day to the company's production. Occidental will reduce its Permian position by 13,000 net acres, divesting non-strategic acreage in Andrews, Martin, and Pecos Counties and adding incremental acreage to enhance a future core development area in Glasscock County. In addition, Occidental agreed to increase its ownership interests and assume operatorship of a CO2 enhanced oil recovery (EOR) property from Hess Corp. The Permian EOR transaction included the acquisition of working interests in the Seminole-San Andres Unit, a premier CO2 flood, interests in the Seminole Gas Processing Plant, source fields at Bravo Dome Unit and West Bravo Dome Unit and the Sheep Mountain and Rosebud CO2 pipelines. Occidental has had an ownership interest in these EOR assets since 2000. Seminole-San Andres Unit will become Occidental's largest domestic oil producing EOR unit. In a note from Capital One Securities Inc. following the news, the analysts said the "~$600MM sale and ~$600MM acquisition wash out on a cash basis, but OXY nets ~3.5 Mboe/d of production (~70% oil) from the Seminole-San Andres Unit in Andrews County." Further, the analyst commented, the EOR acquisition "represents ~$73K per flowing boe/d and roughly 1% of OXY's ~$54B EV. Back-of-the-envelope calculation of OXY's Permian acreage sale totals averages ~$35K/adjusted acre unadjusted for the undisclosed acreage amount included in the Glasscock County acquisitions."

Primoris acquires Coastal Field Services

Primoris Services Corp. has acquired the assets of Coastal Field Services. Based in Beaumont, Texas, privately-held Coastal provides pipeline construction and maintenance, pipe and vessel coating and insulation, and integrity support services for leading companies in the oil and gas industry. The company targets midstream oil and gas companies that utilize pipelines and storage vessels for their products. For the year ended December 31, 2016, Coastal generated EBITDA margins greater than 10% on revenues of $37.3 million. Repeat customers accounted for approximately 90% of revenue. Total consideration was approximately $27.5 million paid in cash at closing. Coastal will operate as Primoris Coastal Field Services (PCFS), part of Primoris' Pipeline and Underground segment. Jeff Bridges, former co-owner and president, will continue to manage day-to-day operations as president of PCFS.

OfAC fines ExxonMobil $2M

The US Department of the Treasury's Office of Foreign Assets Control (OFAC) has assessed a $2 million civil monetary penalty against ExxonMobil Corp. of Irving, Texas, including its US subsidiaries ExxonMobil Development Co. and ExxonMobil Oil Corp., for violations of Ukraine-related sanctions regulations. OFAC said that in May 2014, ExxonMobil violated § 589.201 of the Ukraine-Related Sanctions Regulations when the presidents of its US subsidiaries dealt in services of an individual whose property and interests in property were blocked, namely, by signing eight legal documents related to oil and gas projects in Russia with Igor Sechin, the President of Rosneft OAO, and an individual identified on OFAC's List of Specially Designated Nationals and Blocked Persons. OFAC determined that ExxonMobil did not voluntarily self-disclose the violations to OFAC, and that the violations constitute an egregious case. In a statement, ExxonMobil called the action "fundamentally unfair," saying it "followed the clear guidance from the White House and Treasury Department when its representatives signed documents involving ongoing oil and gas activities in Russia with Rosneft - a non-blocked entity - that were countersigned on behalf of Rosneft by CEO Igor Sechin in his official representative capacity."

Linn, Citizen Energy form Roan Resources

Linn Energy Inc. has signed an agreement with Citizen Energy II LLC in which LINN and Citizen will each contribute certain upstream assets in Oklahoma to a newly formed company, Roan Resources LLC, focused on the accelerated development of the Merge/SCOOP/STACK play in the Anadarko Basin. LINN and Citizen will each contribute approximately 70,000 net acres to Roan for an equally split equity interest. The contributed properties include acreage in Canadian, Carter, Cleveland, Garvin, Grady, Kingfisher, McClain, and Stephens counties. Linn and Citizen are currently operating a combined total of five rigs in the Merge with plans to drill 58 gross wells combined in 2017. Combined production was more than 20,000 BOE/d as of May 2017 and at current rig pace is forecast to have an exit rate of more than 40,000 BOE/d by the end of 2017, with additional growth expected. The company anticipates an initial public offering in early 2018, subject to market conditions. Linn retains its majority operated position of approximately 105,000 net acres in the NW STACK and its Chisholm Trail midstream business, including a 250 MMcf/d capacity cryogenic plant that is currently under construction, and the Linn contributed acreage in the agreement remains dedicated to Chisholm Trail. Roan will have independent management and a separate board of directors comprised of four LINN designated directors, four Citizen designated directors and a to-be-appointed CEO who will be jointly designated by Linn and Citizen. Jefferies LLC acted as sole financial advisor, and Latham & Watkins LLP acted as legal advisor, to Linn for the transaction. Citigroup acted as sole financial advisor, and Thompson & Knight LLP acted as legal advisor, to Citizen for the transaction.

Silverback Exploration II forms with $500M equity commitment from EnCap

San Antonio, TX-based Silverback Exploration II LLC has secured an initial equity commitment of $500 million from EnCap Investments LP. Silverback II was formed by the same team that led its predecessor company, Silverback Exploration LLC (Silverback I), which was also backed by EnCap. Silverback I developed a position in the heart of the Delaware Basin, which was sold in December 2016 to Centennial Resource Development Inc. and its affiliates for $855 million. Silverback II was formed to pursue organic development projects and strategic acquisitions in conventional and unconventional resource plays across the US and is led by the Silverback I management team. Silverback II was advised by the Fort Worth office of Kelly Hart & Hallman. EnCap was advised by Thompson & Knight LLP.

ADS Services sees investment from Black Bay Energy Capital

Black Bay Energy Capital, a private equity firm focused on the North American oilfield service sector, has completed a majority recapitalization of, and growth equity investment in, ADS Services, alongside Black Bay Strategic Advisory Board member Charlie Orbell. ADS Services is a provider of pressure control equipment and services in the Permian Basin. The company is led by Charlie Orbell, who serves as president of ADS and is also a Black Bay Strategic Advisory Board member. Fishman Haygood served as Black Bay's counsel on the transaction.

Tracts launches new title software

Tracts has launched its title software to accelerate the mineral ownership reporting required by oil and gas companies. The software developer is venture backed by Chip Davis of Houston Ventures and is headquartered in Houston. The company uses a patent pending math engine and data visualization to simplify the complex, manual process of establishing legal ownership. Based in Houston, Texas, Tracts was founded in 2014 by legal professionals and computer scientists with extensive experience in the oil and gas title process.

Halliburton, SEC reach investigation resolution, company to pay $29.2M

Halliburton Co. and the US Securities and Exchange Commission have reached an agreement to settle a previously disclosed investigation into the oilfield service company's operations in Angola and Iraq. In December 2010, Halliburton received an anonymous allegation about possible violations of the Foreign Corrupt Practices Act (FPCA) and the Halliburton Code of Business Conduct, principally through the use of a vendor to satisfy Angolan local content requirements. Halliburton reported the allegation to the Department of Justice (DOJ), conducted an internal investigation, and cooperated with investigations by the Securities and Exchange Commission (SEC) and the DOJ. To settle the SEC investigation regarding the alleged conduct in Angola and Iraq, Halliburton, without admitting or denying any of the factual findings, has consented to the entry of an administrative order stating that in connection with its use of a local content provider in Angola, the company violated the books and records and internal controls provisions of the FCPA. The company agreed to a total payment of $29.2 million for disgorgement, prejudgment interest and a civil penalty, and to engage an independent consultant to review aspects of its compliance program in Africa. Separately, the DOJ has advised the company that it has closed its investigation and will not be taking any action.

Tidewater emerges from Chapter 11

Tidewater Inc. and its affiliated chapter 11 debtors have emerged from bankruptcy after completing reorganization pursuant to the Second Amended Joint Prepackaged Chapter 11 Plan of Reorganization of Tidewater and its Affiliated Debtors, that was confirmed on July 17, 2017 by the US Bankruptcy Court for the District of Delaware. Through its Plan, Tidewater eliminated approximately $1.6 billion in principal of outstanding debt, and considering the rejection of certain sale-leaseback agreements, Tidewater estimates that interest and operating lease expenses will be reduced by approximately $73 million annually. The company was principally advised by Lazard, Weil Gotschal & Manges LLP and Jones Walker LLP. The company's new board of directors consists of: Thomas R. Bates, Jr., Alan J. Carr, Randee E. Day, Dick Fagerstal, Steven L. Newman, and Larry T. Rigdon, with Jeffrey M. Platt, the company's president and CEO, continuing as a director.