PARSLEY ENERGY ACQUIRES MIDLAND BASIN ASSETS
Parsley Energy Inc. has agreed to acquire certain undeveloped acreage and producing oil and gas properties located adjacent to the company's existing operating areas in Upton, Reagan, and Glasscock Counties, TX in the Permian basin for $148.5 million in cash from private equity-backed PCORE Exploration & Production LLC. The assets include 238 net horizontal drilling locations across 5,274 net surface acres with net production during the month of November 2015 from three producing horizontal wells estimated at near 1,000 barrels of oil equivalent per day. The acquisition also includes one drilled horizontal well that is anticipated to be completed by the seller prior to the closing of the transaction, scheduled for early January 2016. The deal was done at a "favorable" $19.6K/acre, said Seaport Global Securities following the announcement, adding "we like management's use of equity to fund the acquisition while preserving its strong liquidity position (~$698MM pro forma for its borrowing base redetermination)." Canaccord Genuity analyst Sam Burwell said "We maintain our belief that PE is very well positioned to ramp production and increase cash margins in 2016 and beyond. The newly-acquired acreage overlaps nicely with the company's current position in Reagan County, where it has achieved very strong results in the Wolfcamp A/B. PE also paid what we consider a reasonable valuation (by Permian standards)." Concurrent with the acquisition, PE announced a public offering of 8.5 million common shares, with an over-allotment option of 1.275 million shares. The offering, noted Stifel analyst, should "fully cover the acquisition purchase price, allowing PE to keep its top-tier balance sheet intact."
TALLGRASS ENERGY PARTNERS BUYS REDTAIL WATER BUSINESS FROM WHITING
Tallgrass Energy Partners LP, through its subsidiary BNN Water Solutions, has closed on the $75 million acquisition of Whiting Oil & Gas Corp.'s Redtail Saltwater Disposal and Fresh Water Transportation and Storage System in Weld County, Colorado. The acquisition includes a freshwater delivery and storage system and a produced water gathering and disposal system that together comprise 62 miles of pipeline, along with associated freshwater ponds and disposal wells. The purchase agreement with Whiting includes a five-year freshwater service contract and a nine-year gathering and disposal contract, each of which includes annual minimum volume commitments in line with Whiting's currently expected volumes. Whiting also dedicated approximately 148,000 acres to the Redtail Water System. Following the announcement, Stifel analysts called the sale modestly positive for Whiting given that it was done for "a reasonable price" amid the challenging price environment. "We now forecast YE15 debt/TTM EBITDA of 4.2x versus 4.3x, previously. A much more meaningful potential sale of the company's gas plants, however, has likely been complicated by declining oil and natural gas prices," the analysts continued.
DOUGLAS-WESTWOOD, HANNON WESTWOOD UNITE
Douglas-Westwood and Hannon Westwood have united as part of the ESIA group of companies. The addition of Douglas-Westwood's consulting, research and analytical services will extend ESIA's reach into the oilfield services market and add DW's capabilities in renewable and conventional energy. Hannon Westwood delivers strategic business development projects to the upstream oil and gas industry, spanning E&A, field production, export options, fiscal studies and corporate acquisitions.
ACCENTURE ACQUIRES CIMATION
Professional services company Accenture has agreed to acquire Cimation, an operations consulting company and provider of technology solutions to the global energy and chemicals industries. The transaction supports the integration of enterprise IT systems and operational technology (OT) used by resources industries for automation solutions, production optimization, asset analytics and ICS cyber security. Cimation's approximately 200 people, most of whom are located in the US and Canada, will join the Accenture Asset and Operations Services group. Terms of the transaction were not disclosed.
PAR PACIFIC LEADS INVESTMENT FOR LARAMIE TO ACQUIRE PICEANCE BASIN ASSETS
Par Pacific Holdings Inc. is leading an investment by which Piceance Energy LLC, d/b/a Laramie Energy Co., has entered into an agreement to acquire certain properties in the Piceance Basin for $157.5 million. Laramie Energy has commitments to fund the transaction with $57.5 million of borrowings under its amended reserve based revolver, $30 million of preferred equity issued to a major financial institution, and $70 million of common equity investment including $55 million from Par Pacific. The assets consist of 89 MMcfe/d of existing production during November, 283 bcfe of proved developed producing reserves as of November, and more than 53,000 net operated acres and more than 18,000 net non-operated acres. A portion of the operations acquired are adjacent to existing Laramie operations. The transaction is expected to close on or before March 1, 2016, and once complete, Laramie will assume ownership and operatorship of the purchased properties. As part of the acquisition financing, the company's ownership interest in Laramie is expected to increase from 32.4% to 42.3% as a result of its $55 million common equity investment.
NEW SOURCE SELLS ERICK FLOWBACK SERVICES, ROD'S PRODUCTION SERVICES
New Source Energy Partners LP's subsidiary, MidCentral Energy Partners LP (MCLP), has sold all of the outstanding membership interests in Erick Flowback Services LLC (EFS) and all of the outstanding membership interests in Rod's Production Services LLC (RPS) to Erick's Holdings LLC. The transaction closed on Dec. 16. EFS and RPS specialize in providing services to oil and natural gas exploration and production companies that increase the safety and efficiencies in pressure-related processes during the completion phase of a well, with a specific focus on well testing and flowback services. EFS and RPS operate primarily in Oklahoma, Texas, Pennsylvania, and Ohio. The total purchase price for the transaction was $44.9 million, consisting of cash consideration of $5 million, a promissory note from Erick's Holdings in favor of MCLP in the amount of $8 million, and the assumption and elimination of $31.9 million of certain liabilities of MCLP and its subsidiaries and affiliates. New Source Energy Partners is engaged in the production of its onshore oil and natural gas properties that extends across conventional resource reservoirs in east-central Oklahoma and in oilfield services related to drilling and completion processes.
WELLDOG LAUNCHES CARBON SERVICES DIVISION
WellDog has established a new carbon services division dedicated to applying the company's downhole products and services to ensuring carbon dioxide can be sequestered safely and efficiently in geological formations. The company's product portfolio includes the world's only technical service capable of practical, direct measurement of carbon dioxide or methane injected in underground depleted oil and gas and saline formations. The company simultaneously announced a partnership with the University of Queensland, funded by a grant from the Australian National Low Emissions Coal Research & Development, to expand application of WellDog's technology to track trace gases that may be sequestered alongside carbon dioxide. The one-year ANLEC grant, which started in October, supports using WellDog's Raman technology to establish the key sensor signatures that result from trace gas reactions with formation geology. Since 1999, WellDog has provided a range of downhole reservoir characterization and monitoring products and services to oil, gas, and mining operators.
WARBURG PINCUS INVESTS UP TO $300M IN RUBICON OILFIELD INTERNATIONAL
Warburg Pincus, a global private equity firm, has agreed to a line-of-equity investment of up to $300 million in Rubicon Oilfield International, a startup oilfield services company. Rubicon intends to acquire, integrate, and enhance small and medium-sized businesses in the upstream oilfield technology sector with a focus on proprietary downhole tools, products, and technologies. Rubicon comprises five founding members led by CEO Michael Reeves, who most recently served as president of Sandvik - drilling and completions. John Griggs, formerly a managing director at CSL Capital Management, serves as CFO of Rubicon.
WOODSIDE WITHDRAWS MERGER PROPOSAL
Woodside has informed Oil Search Ltd.'s board of directors that Woodside has withdrawn its proposal to merge the two businesses. On Sept. 3, Woodside provided Oil Search with a proposal to merge Woodside and Oil Search through a scheme of arrangement. Oil Search rejected Woodside's proposal to acquire all the shares in Oil Search for a consideration of one Woodside share for every four Oil Search shares held, saying that the proposal was opportunistic and that it undervalued Oil Search. Woodside says that it is not pursuing any alternative transactions to combine the businesses.
ENXP FILES FOR CHAPTER 11; OPERATIONS TO CONTINUE DURING RESTRUCTURING
Fort Worth, TX-based Energy and Exploration Partners Inc. (ENXP) has filed a voluntary petition under Chapter 11 of the US Bankruptcy Code. To fund its operations during the restructuring process, ENXP secured commitments for up to $135 million of new debtor-in-possession financing from a group of its existing senior lenders, subject to court approval. The filing converts the previously announced involuntary petition for ENXP Operating LP filed by certain vendors into a voluntary petition. In conjunction with the Nov. 7 filings, the company requested customary relief to support its royalty owners, partners, and employees during the process. As part of this relief, the company asked the Court for permission to continue employee programs and mineral interest owner payments without interruption. Prior to this voluntary filing, ENXP initiated a reduction in staffing and several senior executives resigned to pursue other interests. Those include executive vice president, business operations and development, Robert Karpman; executive vice president of A&D, David Patty; COO, John Richards; CAO, Jim Howel; and CFO, Brian Nelson. John Castellano of AlixPartners LLP was named interim CFO. ENXP's legal advisor is Bracewell & Giuliani LLP, and the company has engaged AlixPartners LLP as its restructuring advisor. Evercore has been retained as ENXP's investment banker.
NOV TO ELIMINATE ANOTHER 900 NORWEGIAN JOBS
National Oilwell Varco (NOV) plans to eliminate another 900 jobs from its Norwegian workforce, Reuters reported in early December 2015. The layoffs will involve permanent jobs. The latest cut follows NOV's layoff announcement in June, when it said it would cut 900 permanent jobs and 600 contractor positions from its Norwegian workforce. Following this latest round of job cuts, NOV will have reduced its staff in Norway by approximately half, Reuters reported.
HARVEST RECEIVES CONTINUED NOTICE LISTING
On Dec. 2, Harvest Natural Resources Inc. received notification from the New York Stock Exchange (NYSE) that the company had fallen below the NYSE's continued listing standard, which requires a minimum average closing price of $1 per share over 30 consecutive trading days. Houston, TX-based Harvest is an independent energy company with principal operations in Venezuela and Gabon.
