Private equity firm SCF invests in subsea services by acquiring Nautronix

Global private equity firm SCF Partners has acquired Aberdeen-based subsea services company Nautronix for an undisclosed price. SCF Partners is headquartered in Houston, Texas, with representative offices in Calgary and Aberdeen. SCF Partners has invested $1.3 billion in 47 leading energy service and equipment transactions and more than 200 add-on acquisitions, has distributed $3.0 billion to its investors, and has a current portfolio with aggregate revenues of approximately $2 billion. Nautronix has a history in the subsea positioning and communications market and is a designer and supplier of advanced underwater acoustic systems. Nautronix received corporate finance advice from Simmons & Co. International and legal advice from Paull & Williamsons. Advisers to SCF included Maclay Murray Spens and Deloitte, with funding being provided by Lloyds Banking Group.

SandRidge Energy to acquire Arena Resources

Oklahoma City, OK-based SandRidge Energy Inc. has signed an agreement to acquire Arena Resources Inc. in a cash and stock transaction valued at nearly $1.6 billion. Arena shareholders will receive stock and cash consideration valued at $40 per share of Arena common stock. This represents a 17% premium for Arena shareholders. SandRidge will issue 4.7771 shares of SandRidge common stock and pay $2.50 in cash for each share of Arena common stock, resulting in a combined enterprise value of roughly $6.2 billion. SandRidge will be the surviving company, headquartered in Oklahoma City and its management team will continue in their current roles. The combined company will have over 200,000 net acres in the Permian Basin and 5,700 identified locations to drill primarily in the shallow San Andres and the Clear Fork formations. SandRidge also owns low risk natural gas properties in the Pinon Field, and exploration opportunities in the West Texas Overthrust. Deutsche Bank Securities Inc. is serving as financial advisor as well as providing a fairness opinion to SandRidge. SandRidge is represented by Covington & Burling LLP. SunTrust Robinson Humphrey Inc. is serving as financial advisor to Arena, and Tudor, Pickering, Holt & Co. Securities Inc. is providing a fairness opinion to Arena. Arena is represented by Johnson & Jones PC.

Southwestern snaps up New Brunswick acreage

The Department of Natural Resources of the Province of New Brunswick, Canada has accepted Southwestern Energy Co.'s bids for licenses to conduct an exploration program covering over 2,519,000 acres in the province in to test new hydrocarbon basins. The company will make investments of nearly US$47 million

Denbury Resources sells $900M in Encore assets to Quantum

Denbury Resources Inc. will sell certain of its oil and natural gas properties to Quantum Resources Management. The properties were recently acquired in the merger with Encore Acquisition Co. for $900 million. The properties are primarily located in the Permian Basin in West Texas and southeastern New Mexico; the Mid-continent area, which includes the Anadarko Basin in Oklahoma, Texas and Kansas; and the East Texas Basin. Production attributable to the properties is estimated at 13,000 boe/d (2/3 natural gas). December 31, 2009 proved reserves based on SEC prices were estimated at 54 million boe (roughly 64% gas). The sale properties do not include the company's Haynesville Shale, Paradox Basin, Cleveland Sand Play and Tuscaloosa Marine Shale properties. Proceeds will primarily be used to pay down Denbury's $1.6 billion bank credit facility, which had $800 million outstanding at March 31, 2010. RBC Richardson Barr acted as advisor to Denbury on the asset sale.

Mason Dixon Energygets capital infusionfrom Hudson Ferry Capital

Hudson Ferry Capital has made an investment in oil and gas land services provider Mason Dixon Energy (MDE). Bridgeport, WV-based MDE provides the following land services for its clients in the exploration and production, pipeline and electrical power distribution industries: acquisition of leases, surface rights and rights of way as well as related title research, title abstracting and title curative services. The investment marks the promotion of Asa Bowers, formerly vice president, to president of MDE. Greg Zerkel, founder, has assumed the role of chairman. Hudson Ferry Capital is a New York-based private equity firm that specializes in investing in lower middle market companies.

Petrohawk to sell Terryville Field for $320M

Petrohawk Energy Corp. has agreed to sell its interest in Terryville Field, located in Lincoln and Claiborne Parishes, LA, to a private company for $320 million. The sale is the second of four asset packages expected to be sold by the company during 2010. The company's first sale was its interest in the West Edmond Hunton Lime Unit (WEHLU) Field in Oklahoma County, Okla. to a private company for $155 million. As of December 31, 2009, Petrohawk had estimated proved reserves of nearly 110 billion bcfe associated with its interest in Terryville Field, 53% of which was proved developed. Proved reserves were approximately 92% natural gas. Current production is roughly 20 million cubic feet of natural gas equivalent per day (MMcfe/d). Bank of America Merrill Lynch acted as marketing and financial advisor to Petrohawk in connection with the sale.

Chevron expects 1Q earnings to trump 4Q09

Chevron Corp. reported in its interim update that earnings for 1Q10 are expected to be higher than 4Q09. Upstream earnings are projected to increase, reflecting higher commodity prices, partly offset by lower liquids liftings. Compared with the average for 4Q09, US net oil-equivalent production during the first two months of the first quarter dropped 20,000 barrels per day, primarily in the Gulf of Mexico, reflecting the absence of a favorable royalty settlement recognized in the prior quarter. International net oil-equivalent production through two months rose slightly compared with fourth quarter 2009, an increase of 5,000 barrels per day. For the first two months of the first quarter, average US crude oil realizations increased $2.47 per barrel to $72.75. International liquids realizations rose about $1 per barrel to $69.34. US natural gas realizations increased $1.41 to $5.64 per thousand cubic feet compared with the fourth quarter, while average international natural gas realizations improved $0.43 to $4.58 per thousand cubic feet.

BJ Services expands tubing, casing operationsin Marcellus shale fields

BJ Services Co. is expanding its tubing and casing running operations in the Marcellus shale fields of Pennsylvania, West Virginia, and New York. BJ Services' tubular services group launched its Marcellus Shale expansion program in West Virginia in August 2008. BJ recently opened a second base in Muncy, PA to support operations in Pennsylvania and New York. Heading up the tubular services team in Grafton and Muncy is Neil Kimbler, North East operations manager for BJ Services' tubular services group.

Another $300M acquisitionsees LINN Energy expand Permian Basin acreage

LINN Energy LLC has added to its Permian Basin assets with a $305 million bolt-on acquisition of oil and natural gas properties that is expected to double LINN's oil production and reserves in the area. At mid-year 2010, net production is expected to be roughly 2,800 boe/d (75+% oil) with proved reserves of nearly 18 million boe (roughly 71% oil); reserve life of roughly 17 years; nearly 120 proved low-risk infill drilling and optimization opportunities; and a sizable entry into the Wolfberry oil play. Closing is expected on or before May 27, 2010, and will be financed with proceeds from borrowings under its revolving credit facility. Earlier in March, the company agreed to acquire natural gas properties in the Antrim Shale of northern Michigan from HighMount Exploration & Production LLC for $330 million.

Delta to sell stake in Piceance Basin assets to Opon International

Delta Petroleum Corp. has entered into a non-binding letter of intent with Opon International LLC to sell a 37.5% non-operated working interest in the company's Vega Area assets located in the Piceance Basin for $400 million. It is expected that $225 million of the total consideration will be used by Delta for the development of the Vega Area over the next three years. Delta intends to use the remainder for its balance sheet obligations and general working capital purposes. Delta has also agreed to issue to Opon at closing, warrants to purchase 13.3 million shares of Delta common stock at $1.50 per share and 5.7 million shares at $3.50 per share. The offer is contingent upon the buyer's ability to arrange financing. Delta has granted Opon a 60-day exclusive period to finalize the transaction, which is expected to close on or before June 1, 2010. Delta will retain operations of the Vega Area subject to a joint venture agreement with Opon.

CCMP Capital invests $345M in Chaparral Energy

Chaparral Energy Inc. will receive a $345 million investment from global private equity firm CCMP Capital Advisors LLC and affiliates. CCMP will acquire a significant ownership stake in Chaparral Energy. Chaparral has increased reserves and production by acquiring and enhancing properties in its core areas of the Mid-Continent and the Permian Basin. Beginning in 2000, the company expanded its geographic focus to include Ark-La-Tex, North Texas, the Gulf Coast and the Rocky Mountains. Chaparral's assets are mostly oil, but the company does have unconventional gas exposure to the Woodford Shale, the Granite Wash, and Cleveland sand. CCMP's founders have invested in energy companies since 1990.

Mariner Energy increases borrowing base to $950M

Mariner Energy Inc.'s borrowing base for its $1.0 billion secured revolving credit facility has been increased to $950.0 million, up from $800.0 million. The credit facility is provided by a syndicate of 18 banks led by Union Bank NA and BNP Paribas. After giving effect to the increased borrowing base and $4.7 million in outstanding letters of credit, Mariner has roughly $613.0 million available under the credit facility. In connection with the latest redetermination, the facility also was amended to, among other things, increase the maximum permitted ratio of total debt to EBITDA to 3.5 to 1.0, up from 2.5 to 1.0.

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