Company News: Pengrowth to buy Canadian assets from Murphy Oil
Pengrowth Corp. Calgary, administrator of Pengrowth Energy Trust, agreed to acquire oil and natural gas assets in Alberta and Saskatchewan from a subsidiary of Murphy Oil Corp. through a share purchase worth $550 million (Can.).
The deal is expected to be completed in late May, with an effective date of Apr. 1.
In other recent upstream news:
- APF Energy Trust, Calgary, agreed to acquire Great Northern Exploration Ltd. for $291 million (Can) plus $56 million of debt. The boards of both companies approved the transaction, which is expected to close in early June.
- European independent Perenco SA agreed to buy Houston-based Nuevo Energy Co.'s interest in the Marine 1 permit off Congo for $62 million.
- Crow Creek Energy LLC, Tulsa, a private portfolio company of Natural Gas Partners, Dallas, plans to acquire the US oil and gas business of Wilshire Enterprises Inc., Jersey City, NJ, for $13.7 million. Closing is expected this month.
- Denver-based Teton Petroleum, which has exploration and production assets in Russia, agreed to sell its 35% stake in the Goloil license in western Siberia to a private Russian independent.
- PYR Energy Corp., Denver, agreed to acquire the assets of Venus Exploration Inc., San Antonio, for $3.2 million, with closing expected by May 3.
Meanwhile, in recent midstream news:
- Link Energy LLC, Houston, sold all of its North American crude oil and pipeline operations to Plains All American Pipeline LP, also of Houston, in a deal valued at $330 million.
- Targa Resources Inc., Houston, announced plans to acquire major midstream assets in Texas and Louisiana from ConocoPhillips.
- Crosstex Energy LP, Dallas, a midstream natural gas company, said Crosstex Louisiana Energy LP, acquired the LIG Pipeline Co. and its subsidiaries from American Electric Power Co. Inc., Columbus, Ohio, for $76.2 million.
Pengrowth-Murphy Oil
The properties involved are a diverse group in western Canada, including interests in the West Central and Peace River Arch areas, southern Alberta, and heavy oil interests in the Lindbergh, Tangleflags, and Lloydminster areas. Current production from those properties is 46 MMcfd of natural gas, 1,550 b/d of light-to-medium crude and natural gas liquids, and 6,250 b/d of heavy oil.
The acquisition will increase Pengrowth's total production to 62,000 boed from 46,500 boed. An independent engineering appraisal lists proved reserves of 43.6 million boe and proved plus probable reserves of 54.2 million boe.
As part of that deal, Pengrowth will acquire 219,000 undeveloped acres.
The acquisition will augment Pengrowth's present interests in the Western Canadian Sedimentary Basin and in the Sable gas fields off Nova Scotia, executives said.
APF-Great Northern
The acquisition will increase APF's total production to 18,500 boed, with a 51% weighting to natural gas.
Great Northern assets include reserves valued at $280 million, 141,000 acres of land, and an extensive seismic database. APF also will benefit from acquiring West Central Alberta assets and 41,600 acres of coalbed methane prospects in the Horseshoe Canyon formation.
Perenco-Nuevo
Nuevo has a 37.5% average net revenue interest in the Marine 1 permit, including Yombo and Masseko fields as well as a 50% interest in a floating, production, storage, and offloading vessel.
In 2003, production averaged 4,800 boed net to Nuevo.
Subject to final consents and reviews, the sale will be retroactive to Jan. 1, Nuevo said.
Crow Creek-Wilshire
Wilshire is negotiating with several entities regarding the sale of its Canadian oil and gas business.
The US business, Wilshire Oil Co. of Texas, listed proved reserves of 569,000 bbl of liquids and 8.6 bcf of gas as of Dec. 31, 2002. Its 2002 production totaled 49,000 bbl of liquids and 1.021 bcf of gas.
Teton's Goloil stake
Teton declined to identify the buyer or terms of the deal. Goloil is a Russian joint stock company that owns the Eguryak license in Siberia.
The sale price will include all outstanding loans and accrued interest owed to Teton. Proceeds from the sale will be used for a pending Russian oil field acquisition, the company said.
The pending Russian property acquisition will produce 3,400 b/d net to Teton, the company said. A spokeswoman declined to provide any additional details, including the field involved, the seller, or the value of the deal. The company has said only that "a major western European partner" is involved.
PYR-Venus
Venus is under supervision of the US Bankruptcy Court in the Eastern District of Texas. PYR said the purchase provides for a net profits interest payable to the Venus Exploration Trust.
The acquisition includes net production of 980 Mcfed and 4.667 bcfe of proved reserves.
The assets being acquired are the Tortuga Grande (Cotton Valley) prospect in Smith County, Tex., and the Nome and Madison prospects in Jefferson County, Tex. Nome and Madison are Expanded Yegua fairway prospects.
Link Energy-Plains All American
As a result of the deal with Plains All American, Link Energy—formerly EOTT Energy, one of the largest US independent gatherers and marketers of crude oil—has no further operations and will wind down its business affairs, executives said.
A unit of Enron Corp. previously held a 25% stake in EOTT Energy and was general partner. Facing Enron-related financial difficulties, EOTT Energy filed for Chapter 11 bankruptcy protection in 2002, from which it emerged in 2003 as Link Energy.
In addition to a cash payment of $273 million, Plains All American agreed to assume $49 million of liabilities and net working capital items and expects to incur $8 million of third-party and other costs.
Link's oil business included 7,000 miles of active crude oil pipeline and gathering systems, more than 10 million bbl of crude oil storage capacity, a fleet of 200 trucks, and 2 million bbl of crude oil line fill and working inventory.
"The Link assets are complementary to our assets in West Texas and along the Gulf Coast. Additionally, this acquisition meaningfully expands our footprint in the Rocky Mountain and Oklahoma-Kansas regions," said Greg L. Armstrong, Plains All American chairman and CEO. "Due to the significant overlap of administrative and back office expenses, we believe that we can capture annual cost savings and commercial synergies in the range of $20-30 million within the first 18 months after the acquisition is completed."
Targa-ConocoPhillips
Terms of the deal were not disclosed, but analysts estimated the transaction's value at $200-300 million. Targa and ConocoPhillips already received all necessary regulatory approvals. The transaction is expected to close this month.
The Texas assets involve an integrated gathering and processing system with 1,200 mile of pipelines covering parts of eight counties from San Angelo to Big Springs.
The Louisiana assets involve an integrated gathering and processing system covering 2,000 sq miles.
Targa Resources was formed last year to acquire gas gathering, processing, and pipeline assets. Targa CEO Rene R. Joyce and several executives previously worked together at Tejas Gas Corp., which Shell Oil Co. bought in 1998 for $2.4 billion.
Crosstex Energy-LIG Pipeline Co.
Crosstex's acquisition increases its assets to 4,500 miles of pipeline, 1.2 bcfd of transported volumes, and more than 700 MMcfd of processing capacity.
"This asset gives Crosstex a strategic presence all along the Gulf Coast, from South Texas to Mississippi while practically doubling our pipeline footprint," said Crosstex Pres. and CEO Barry E. Davis.
LIG, one of Louisiana's largest intrastate pipelines, has 2,000 miles of gas gathering and transmission systems in 29 parishes.
The company's subsidiaries acquired in the deal were LIG Inc., Louisiana Intrastate Gas Co. LLC, LIG Chemical Co., LIG Liquids Co. LLC, and Tuscaloosa Pipeline Co.
