INDUSTRY BRIEFS

Chevron sets 2015 budget 13% lower than 2014 total investments

Oil and gas giant Chevron Corp. has set its 2015 capital and exploratory investment budget at $35.0 billion. Included in the 2015 program are $4.0 billion of planned expenditures by affiliates, which do not require cash outlays by Chevron. The 2015 budget is 13% lower than total investments for 2014. While the $31 billion of cash capital expenditures is in line with estimates compiled by Jefferies, the analysts assumed a total capital budget of $36.5 billion. For upstream, approximately $12 billion of planned upstream capital spending is directed at existing base producing assets, which includes shale and tight resource investments. Roughly $14 billion is related to the construction of major capital projects already underway, primarily LNG and deepwater developments. Global exploration funding accounts for approximately $3 billion. Roughly 75% of affiliate expenditures are associated with investments by Tengizchevroil LLP in Kazakhstan and Chevron Phillips Chemical Company LLC (CPChem) in the United States.

OWL closes $250M credit facility

Oilfield Water Logistics (OWL), a Natural Gas Partners (NGP) portfolio company providing water infrastructure and services to the energy industry, has secured a $250 million untapped credit facility with Texas Capital Bank. OWL currently has operations in the Permian (Delaware/Midland), Haynesville/Cotton Valley, Powder River, Niobrara, DJ, Uinta and Piceance basins, with 27 oilfield water facilities in operation or development and an extensive network of water pipelines and surface use agreements.

Goodrich revises 2015 budget

Based on current commodity prices, Goodrich Petroleum Corp. has revised its preliminary capital expenditure budget for 2015 to $90 - $110 million, comprised of $80 - $100 million of drilling and completion capital expenditures and approximately $10 million of leasehold and infrastructure expenditures. The budget is "43% below the mid-point of prior guidance (12/10/14) and 70% below estimated 2014 expenditures," noted Stifel analysts. The company noted it will monitor capital expenditures on a quarterly basis and maintain flexibility to accelerate capital expenditures with improvement in oil prices and the monetization of certain assets. Oil directed capital is estimated to be approximately 91 - 93% of the total drilling and completion budget, with the entire oil-directed allocation to the Tuscaloosa Marine Shale, where the company is seeing reductions in well costs. Stifel analysts expect Goodrich to retain more than 250,000 net acres in the play, including 157 net core acres. Oil production volumes are expected to average approximately 4,800 - 5,200 barrels per day for 2015, which includes completion deferrals into the second half of 2015. Natural gas volumes are expected to average approximately 23,000 - 26,000 Mcf per day.

Oceaneering to acquire C & C technologies

C & C Technologies, an international provider of survey and mapping services, has agreed to be acquired by Oceaneering International Inc. The transaction is anticipated to be completed in early April 2015, subject to customary closing conditions. C & C Technologies is expected to retain its name and continue to be headquartered in Lafayette, Louisiana. Simmons & Company International served as financial advisor to C & C Technologies.

NGL to acquire Magnum NGLs

NGL Energy Partners LP has entered into a definitive purchase agreement with Magnum Development LLC, a portfolio company of Haddington Ventures LLC and other Haddington-sponsored investment entities, to acquire Magnum NGLs LLC for total consideration of $280 million. Magnum owns and operates a natural gas liquids storage facility with multiple existing salt caverns and a potential capacity of greater than 10 million barrels. The facility is located southwest of Salt Lake City, Utah with rail and truck access to Western US markets. NGL Energy Partners LP is a Delaware limited partnership. NGL owns and operates a vertically integrated energy business with five primary businesses: water solutions, crude oil logistics, NGL logistics, refined products/renewables and retail propane. The transaction is fully-financed and will be paid through a combination of $80 million in cash and $200 million in NGL Common Units issued to the seller and subject to certain lock-up provisions. The consummation of the transaction is subject to customary closing conditions and is expected to close in the first quarter of 2015. Simmons & Company International served as the exclusive financial advisor to Magnum and Haddington.

Quicksilver Resources decides not to make interest payment

Quicksilver Resources Inc. said February 17 that the company has decided not to make the approximately $13.6 million interest payment due Feb. 17 on its 9.125% senior notes due in 2019. Under the terms of the indenture governing the 2019 Notes, the Fort Worth, Texas-based company has a 30-day grace period before the failure to make the interest payment results in an event of default. Quicksilver noted in a press release that it believes it is in the best interests of its stakeholders to continue to focus on actively addressing the company's debt and capital structure and intends to continue discussions with its creditors during the 30-day grace period. If the company does not make the interest payment before the end of the grace period, the trustee or the holders of at least 25% in the aggregate principal amount of the outstanding 2019 Notes may declare the principal and accrued interest for all 2019 Notes due and payable immediately. The acceleration of the principal under the 2019 Notes would also result in defaults under the terms of other indebtedness of the company. Quicksilver has retained Houlihan Lokey Capital Inc., Deloitte Transactions and Business Analytics LLP, and other advisors to assist with the evaluation of the company's options to address near-term debt maturities, enhancement of its liquidity position, and evaluation of strategic alternatives. The company stated there are no assurances it will be able to successfully restructure its indebtedness, improve its short- and long-term liquidity position, or complete any strategic transactions in a timely manner or at all. Accordingly, the company said it may need to seek voluntary protection under chapter 11 of title 11 of the US Code to restructure its capital structure.

RigNet reallocates resources

RigNet Inc., a Houston-based provider of digital technology solutions to the oil and gas industry, said Feb. 19 that it will shift resources from its US land rig communications business and certain back office support functions to expand its global sales team and boost its business development and global expansion initiatives. RigNet expects to take a one-time charge of approximately $6.2 million in the first quarter of 2015 for facilities closures, employee severance expenses, and related matters. Separately, with the downturn in the oil and gas industry, RigNet also anticipates taking a pre-tax, non-cash goodwill impairment charge of approximately $2.7 million in the fourth quarter of 2014 related to RigNet's Telecommunications Systems Integration business segment.

Bayside completes $5M sale of subsidiary

Bayside Corp. has completed the 100% sale of the common stock of Bayside Petroleum Co. Inc. to Technis Energy Ltd. Bayside Petroleum Co. is now a wholly owned subsidiary of Technis Energy Ltd. Consideration for the sale includes $5 million of preferred stock of Bayside Petroleum Co. and cash consideration. Common stock shareholders of Bayside Corp. will also receive a stock dividend of Bayside Petroleum Co. Inc. Upon approval of the corporate action, and the appointment of the new Bayside Petroleum Co. management team, Bayside Petroleum Co. will seek to file a registration statement to initiate the quotation of its common stock on the OTC Bulletin Board.

Blackeagle acquires assets of Polaris Drilling

Blackeagle Energy Services, which provides oil and gas construction and fabrication, has purchased the assets of Polaris Drilling Inc., a company specializing in directional drilling. The acquisition of Polaris Drilling, and its capabilities in trenchless underground utility construction, complements Blackeagle's capabilities in pipeline, facility, maintenance, and fabrication services. The new company will operate under the name Polaris Drilling and will be led by Jeramy Wulkan, Polaris' former president and owner.

Silicon Valley Bank opens Houston office

Silicon Valley Bank has opened an office in Houston in order to support the growing number of technology, life science, and energy companies, as well as their investors, in the region. Silicon Valley Bank provides services to both private and public companies of all sizes, including more than 50% of all venture capital-backed companies in the US and two-thirds of the venture capital firms. Blake English serves as managing director for Silicon Valley Bank in Houston. "Silicon Valley Bank has been helping innovative companies succeed for more than three decades and in Texas specifically for nearly 20 years. The energy and growth in the Houston market has reached a milestone and we're thrilled to be involved," Blake said. In Texas, the Houston office joins SVB locations in Austin and Dallas. The team in Texas has grown to nearly 30 banking professionals providing commercial banking, including specialized lending, client services, analytics, and private equity services.

Lucas Energy amends loan agreement

Lucas Energy Inc.'s lender has agreed to amend the terms of its loan agreement and further granted an optional extension through Sept. 13, with a second extension option through Oct. 13, in order to facilitate the company's proposed business combination with Victory Energy Corp. Under the terms of the amended agreement, Lucas will pay interest at a 12% rate beginning in April, and interest for January, February, and March will be added to the outstanding balance of the loan. If the company elects to extend the maturity of the loan through September or October, a 2% extension fee will be added to the interest rate during the extension period. Lucas also agreed to pay all current and past-due legal and administration fees and other costs associated with the amended terms. The lender will release a portion of the collateralized oil and gas properties securing the loan so these properties can be transferred to an affiliate of Victory Energy and funded by Victory and its affiliates prior to the consummation of the business combination. If the business combination does not occur as contemplated, then the lender will have the right to receive a compensation payment from Victory.

Republic Services acquires Tervita

Republic Services Inc. has completed its acquisition of Tervita LLC, an environmental waste solutions provider serving oil and natural gas producers in the US. Tervita's assets complement Republic's existing E&P business, and provide customers with vertically integrated oilfield waste services across a geographic footprint spanning domestic basins, including the Permian, Eagle Ford, and Bakken shale plays.