Range Resources plans a $330 million divestiture of properties in Ohio to EV Energy Partners LP and certain institutional partnerships managed by EnerVest Ltd. The tight gas assets are shallow sandstone, long-lived assets producing at 25 MMcfe/d, with a divestiture price of $13,200 per flowing Mcfe. The Ohio properties include roughly 3,300 producing wells with current production holding at 70% natural gas and 30% oil. The properties include roughly 418,000 net acres of leasehold and about 1,600 miles of pipeline and gathering system infrastructure. John Pinkerton, Range's chairman and CEO said the sale will help "streamline" the business and provide flexibility in implementing its 2010 capital spending program. Madison Williams expects the proceeds will likely support incremental drilling in the Marcellus Shale.
GE Oil & Gas adds to drilling, production portfolio
GE Energy's Oilfield Technology (OFT) business has been realigned from GE Energy Services to GE Oil & Gas. The move expands GE Oil & Gas' Drilling & Production portfolio offering to customers, extending the business reach with directional drilling, formation evaluation systems, and wireline solutions for the exploration and production of oil and gas. Headquartered in Yateley, Hampshire, UK, OFT builds on the 30-year product line heritage of the Tensor, Reuter Stokes, Geolink and Sondex businesses. OFT has 4 facilities, including manufacturing sites in North America and Europe and sales offices in China and India.
Frontier Gas Services acquires gas gathering systems in Fayetteville
Tulsa, Okla.-based Frontier Gas Services LLC has acquired two gas gathering systems located in the Fayetteville Shale in Faulkner and Conway Counties, Arkansas. The assets include approximately 20,000 horsepower of leased compression, two natural gas treating facilities and 38 miles of constructed 8-, 10-, 12- and 16-inch steel pipe with current capacity to deliver more than 100 MMcfd into the Boardwalk and Ozark pipelines. Frontier plans to expand the assets, including interconnects with the Fayetteville Express Pipeline, in 2011. Chesapeake Energy Marketing Inc. has dedicated its interest in a defined area adjacent to the two gathering systems and has an aggressive drilling plan in progress. Frontier Gas Services LLC is a joint venture formed by Energy Spectrum Partners V LP and TPF II LP, both private equity funds, to back Frontier Energy Services LLC, a midstream manager and operator.
Gastar Exploration wins $12.5M upside payment from Australian assets
Gastar Exploration expects to receive nearly US$12.5 million in additional after-tax consideration for the 2009 sale of its interests in PEL 238, a coal seam natural gas project in New South Wales, Australia. Year-end reserves for the project disclosed by project operator Eastern Star Gas exceeded the 2P target of 1.3 Tcf under the sale agreement. As a result, Gastar has earned an additional AU$20 million payment from the purchaser, affiliates of Santos Ltd. Based on recent foreign exchange rates and net of the 30% Australian tax due on the additional payment, net proceeds are expected to be approximately US $12.5 million. In addition to the reserve upside payment from Santos, Gastar also has the right to receive up to US$10 million in future cash payments from Eastern Star if certain previously negotiated production thresholds are achieved in the future. Proceeds are expected to help execute the company's capital programs in the Marcellus Shale and in the East Texas Bossier play.
Coal producer, private driller form Marcellus joint venture
Abingdon, Va.-based coal producer Alpha Natural Resources Inc. and privately-held Rice Energy LP have formed a 50/50 joint venture to develop Marcellus Shale gas resources in southwestern Pennsylvania, where Alpha controls nearly 20,000. The initial phase of development is underway, currently drilling the first of four wells planned for 2010. The companies jointly contributed $20 million to a newly-formed partnership that will own and develop the assets. A limited liability company was also formed to be the managing general partner of the partnership. Alpha Natural Resources is a coal supplier with coal production capacity of greater than 90 million tons a year. Rice Energy, based near Pittsburgh, is a private exploration and production company focused on acquiring and developing unconventional oil and natural gas resources in the United States.
Avalon Oil & Gas acquires Mississippi leasehold
Avalon Oil & Gas Inc. has purchased an 18.75% working interest in Bayside Petroleum Co. Inc.'s Baxterville Field Prospect in Lamar County, Mississippi. The 200 acre leasehold contains three wellbores; two are equipped for production. The Baxterville Field spans over 13,000 acres, with more than 300 producing wells. The field has produced 262 million barrels of oil and 450 billion cubic feet of gas, primarily from the Tuscaloosa formation. The wellbores on the Baxterville Field Prospect have produced from the Lower Tuscaloosa Sand at a depth of 8,800 feet. The three wells have produced more than 500,000 barrels of oil and were producing 200 barrels of fluid, with a 5% oil cut when they were shut-in, in 2006.
OpenLink Financial acquires dbc SMARTsoftware Inc.
Open Link Financial Inc., a provider of cross-asset trading, risk management and operations processing software solutions, has acquired dbc SMARTsoftware Inc., (dbc), a global provider of software solutions for the agricultural, biofuel and soft commodity industries. dbc develops and markets SMARTsoft, a software solution suite for producers, processors, manufacturers and traders who buy, sell, hedge, warehouse, merchandise, export, and transform commodities into value-added products and by-products for distribution. Maurice Boughton, founder and president of dbc, will continue to manage the business, which will operate as SMARTsoft, an OpenLink Co. with Andy Joakim remaining CTO. dbc SMARTsoftware specializes in the development of Commodity Management, Merchandising and Grain Accounting software. The company has over 30 years experience in the commodity-agribusiness industry and is located outside of Toronto, Canada.
New $200M credit facility gives Resaca green light for Cano acquisition
Closing in conjunction with a proposed merger with Cano Petroleum Inc., Resaca Exploration Inc. has received a new $200 million senior secured revolving credit facility provided by Union Bank NA. The bank will act as Lead Arranger and Administrative Agent. Proceeds will be used to repay and refinance Resaca's and Cano's existing debt, to fund future acquisitions, and for general corporate purposes. The Cano merger is subject to a number of closing conditions, including refinancing of existing bank debt. The commitment for the new facility is expected to satisfy this closing condition. An initial borrowing base of $90 million has been established based on the company and Cano's combined reserves. Based on values assigned to crude oil and natural gas properties which may be either acquired or discovered over time, the company's borrowing base may be increased up to a maximum of $200 million.
Double Eagle gets credit facility extension, reaffirmed credit line
Denver-based Double Eagle Petroleum Co. has signed an amended credit agreement with its lenders to extend the maturity date on its credit facility from July 31, 2010 to January 31, 2013. The new agreement reaffirms its current committed credit line of $45 million, of which the company currently has $31 million outstanding. The company's borrowing base, determined from the company's current oil and gas reserves and using the existing bank pricing deck, is above $65 million. The lending group is comprised of Bank of Oklahoma and Key Bank, with Bank of Oklahoma serving as the lead. Double Eagle explores for, develops, and sells natural gas and crude oil, with natural gas constituting more than 95% of its production and reserves. The company's current major development activities are in its Atlantic Rim coal bed methane play and in the Pinedale Anticline in Wyoming.
Knowledge Reservoir realigns service offerings
Knowledge Reservoir, a geosciences and engineering consulting company, has realigned and its business structure and service offering by dividing its business lines into a series of consulting practices: The Reservoir Management business is refocused into four practices: Deepwater; Improved Recovery and Field Redevelopment; Unconventional Resources; and Reserves and Mergers / Acquisitions. Knowledge Reservoir also continues to grow its Surface Systems business along two practices: Flow Assurance and Pipeline Systems Engineering. The Knowledge Management business stream will be developed in three areas: the ReservoirKB deepwater knowledge base; Knowledge Base Products; and Knowledge Management Consulting, including Data Management Solutions.
Terra-Gen taps P2 for alternative energy land management software
P2 Energy Solutions has signed a new software contract with Terra-Gen Power to manage all requirements associated with land assets for the firm's wind, solar, and geothermal energy installations. Terra-Gen Power is headquartered in New York and operates alternative energy facilities that generate 842 megawatts of electricity. Tobin Enterprise Land (TEL) software, from P2, will enable Terra-Gen to consolidate all land assets into a single registry.
PGS selects CyrusOne as North American data center provider
Oil exploration service company Petroleum Geo-Services (PGS) will occupy a 10,000 square foot data hall in CyrusOne's newest co-located data center located in West Houston. The Oslo, Norway-based company will co-locate high-density, mission-critical data and applications servers to support exploration projects and operations worldwide. These data processing systems and applications support several functions at PGS, including large-scale seismic data processing, complex reservoir analysis and interpretation and electromagnetic services. CyrusOne's West Houston data center offers the highest power redundancy (2N architecture) and highest power-density infrastructure, supporting 250+ watts per square foot.
Quintana Capital Group acquires Genesis Energy GP
Quintana Capital Group, a Houston-based, energy-focused private-equity firm, acquired all membership interests of Genesis Energy LP's general partner from Denbury Resources Inc. for roughly $85 million in cash.Denbury first acquired the general partner in 2002 for $2.2 million. Upon closing, Quintana and its co-investors will control the general partner. Members of the Davison family and Genesis Energy LP's management team will become minority investors. Certain members of the Davison family currently own roughly 30% of Genesis' outstanding common units and Denbury currently owns roughly 10% of the outstanding common units.
Statoil awards Baker Hughes contract extensions in Norway
Statoil has awarded Baker Hughes two-year extensions on two contracts in Norway. The contracts are for the provision of drill bits, directional drilling, formation evaluation and related services on 10 to 12 rigs operating in multiple fields offshore Norway. Valued at nearly $270 million, the award extends the contracts through October 2012. Baker Hughes has been operating in Norway for 36 years and currently has over 1,000 employees in Norway.
El Paso makes deal with Chesapeake, Statoil on Northeast Upgrade Project
Tennessee Gas Pipeline Co. (TGP), a subsidiary of El Paso Corp. has executed a 20-year term agreements with Chesapeake Energy Marketing Inc., a wholly owned subsidiary of Chesapeake Energy Corp., and StatOil Natural Gas LLC, a wholly owned subsidiary of Statoil, for 100% of the capacity for its Northeast Upgrade Project. The project will provide 636,000 dekatherms per day of incremental firm transportation capacity from TGP's 300 Line in Pennsylvania to an interconnect in New Jersey to serve the Northeast. The project is a natural extension of TGP's presence in the Marcellus Shale play. The project is estimated to cost roughly $400 million with a majority of the capital spending taking place in 2013. A spring 2011 FERC filing date is anticipated with a scheduled November 1, 2013 in-service date. An open season is expected to begin soon with final capacity awarded in March 2010.
Pioneer Drilling gearsup shale work; sets 2010 CAPEX at $80M
Pioneer Drilling Co. Inc. has approved a capital expenditures budget of $80 million for 2010. The company's drilling services division has five rigs working in the Marcellus, five operating in the Bakken, and five in various other shale plays. The company is also expanding well servicing operations in the shale plays. Pioneer's working capital was $90.3 million at December 31, 2009, up from $64.4 million a year prior. Currently, $257.5 million is outstanding under the senior secured revolving credit facility, of which, $1.9 million is due in 1Q10 and the remaining $255.6 million is due at on August 31, 2012.
Noble Energy tags $2.5B Capex; 20% marked for E&P
Noble Energy has set its 2010 total capital investment program at $2.5 billion, with 40% going toward major project developments, 20% for exploration and appraisal activities, and the remaining 40% for ongoing maintenance and growth. Roughly 55% of the total is to be spent in the US with the other 45% slated to international activities. Major project investments are expected to be about $1B - the majority directed to the development of Galapagos in deepwater GoM, Aseng offshore Equatorial Guinea, and Tamar offshore Israel. Nearly $500M is set for exploration activities in plays where Noble has experienced success. The remainder is set for liquid-rich and new opportunities onshore US and development in Israel, the North Sea and China. Excluded from the budget is the $494M DJ Basin asset acquisition set to close in 1Q10, as well as $235M of non-cash capital to be accrued for the Aseng FPSO capital lease.
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