Energen sells natgas utility to become E&P pure play
Energen Corp. has signed a definitive stock purchase agreement to sell its natural gas utility business, Alabama Gas Corporation (Alagasco), to The Laclede Group Inc. The value of the transaction is $1.6 billion, subject to customary closing adjustments, and is comprised of $1.28 billion in cash and approximately $320 million of debt. Energen's after-tax proceeds are estimated to be $1.1 billion, after consideration of accelerated intangible drilling costs. Energen plans to use cash proceeds to reduce short-term debt and potentially accelerate the pace of drilling and development of its Permian Basin assets in 2015 and beyond. "With the transaction, EGN now has the dry powder to fund outspending of $200-$250 million for a number of years," noted analysts with Wunderlich Securities, highlighting the fact that Energen will finally become an E&P pure play following the sale. "As such, we believe that EGN will get more visibility and additional coverage from analysts in the E&P sector, a very positive move. We reiterate our Buy rating on this solid Permian name with lots of running room in one of the hottest trends in the US," they concluded. This transaction is subject to state and federal regulatory approval and is expected to close in 2014. JP Morgan Chase & Co. is acting as financial advisor to Energen, and Bradley Arant Boult Cummings LLP is acting as legal counsel.
Athlon to Acquire Northern Midland Basin Properties
Athlon Energy has entered into multiple definitive agreements with five unrelated third-party sellers to acquire certain producing properties and undeveloped acreage for an aggregate purchase price of $873 million in cash. The properties are 100% operated and are concentrated primarily on the western side of the northern Midland Basin in Martin, Upton, Andrews, and Glasscock counties. The company plans to accelerate to four operated horizontal rigs by early fourth-quarter 2014. The company believes the assets are prospective for horizontal development, with 425 identified gross potential locations in six zones including the Wolfcamp A & B, Lower and Middle Spraberry, Wolfcamp D, and Clearfork horizons. The company's pro forma acreage position stands at 134,000 net acres. The transactions are expected to close by or before June 2014. Athlon expects to fund the acquisitions with a combination of borrowings under its existing revolving credit facility and equity and debt capital markets transactions. Athlon expects its revolving credit facility to increase from $525 million to $1 billion as a result of additional proved reserves added through its drilling program and 2014 acquisitions. On news of these Midland Basin acquisitions, analysts from Global Hunter Securities commented, "The Midland Basin acreage arms race continues as ATHL pulls the trigger on an $873MM deal covering 23.5K net acres. No doubt that this acreage is high quality, but the offset is that paying $25K/acre dilutes both ATHL's best-in-class recycle ratio (operating margin per boe/F&D cost) and production growth per debt-adjusted share (our five-year 27% CAGR likely gets revised downward)."
Weatherford Mulls Move
Weatherford International Ltd. has made plans to move its corporate headquarters from Switzerland to Ireland, after the Swiss government handed investors authority to rein in top-level executive pay. If approved by shareholders, Weatherford's move will follow the merger of Weatherford, the current Swiss parent company, into a newly formed subsidiary incorporated under Irish law that will be called Weatherford Ireland. Weatherford Ireland will continue to be subject to US reporting requirements and the rules of the NYSE. While Weatherford is moving its headquarters and legal domicile to Ireland, it is still keeping its tax domicile in Switzerland. In April, the company agreed to sell its pipeline and specialty service business to Baker Hughes for $250 million, the first of four units (including its land drilling rig and drilling fluids businesses) that Weatherford plans to sell for up to $1.3 billion combined. Weatherford is also decreasing its global workforce of 67,000 by about 10%. Commenting on Weatherford's announcement, analysts from the Cowen Group said, "The move to Ireland should lower Weatherford's administrative costs, improve its operating efficiencies, and make it easier to retain and attract top executives. Its Swiss multinational tax structure will not change."
Pioneer closes sale of Alaska subsidiary to Caelus Energy
Pioneer Natural Resources Co. has closed the sale of its Alaska subsidiary to Caelus Energy Alaska LLC for cash proceeds of $300 million. The company expects to recognize a noncash loss of approximately $30 million associated with the sale when it reports earnings for the first quarter of 2014. Pioneer is an independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations in the US.
Athabasca sells Dover oil sands Stake to Petrochina
Athasbasca Oil Corp. has exercised an option to sell its 40% stake in the planned Dover oil sands project to its partner PetroChina Co. for C$1.32 billion (US$1.20 billion) after the project received final approvals from the government of Alberta, Canada. Athabasca said it would sell its stake in the Brion Energy partnership developing the thermal oil sands project to its Chinese partner under an existing agreement between the two. PetroChina can now build Dover, which could eventually produce as much as 250,000 barrels of oil sands bitumen per day. Athabasca expects to realize C$1.23 billion from the sale of its stake after closing adjustments. The company expects to use the proceeds to develop its other oil sands and light oil projects in Alberta.
Dino signs Middle East oil and gas participation agreement
Calgary, Alberta-based Dino Energy Corp. has entered into an agreement in which Dino will assume, along with conditions, 49% ownership interest in a newly established company in Qatar, Dino Energy Petroleum Services, to pursue oil and gas exploration and development projects in Qatar. Dino Energy Petroleum Services is currently waiting for a vendor license to begin its operations. In addition to Dino, there are two other shareholders, one of which is Sheikh Fahad Al-Thani who is a member of the Royal Family of Qatar.
FMC Technologies Awarded $322 Million Contract with BP
FMC Technologies Inc. has received an order from BP to supply subsea systems for its Shah Deniz Stage 2 project in the Caspian Sea. The order has an estimated value of $322 million in revenue. FMC Technologies' scope of supply includes subsea manifolds, associated controls and connection equipment as well as key controls and connection components for subsea production trees. The Shah Deniz field is located in the Azerbaijan sector of the Caspian Sea, 43 miles southeast of Baku.
Premier Oil Services acquires Perfect Metals USA
Premier Oil Services has acquired 100% of Perfect Metals USA for nine million shares of its common stock. Premier Oil's CEO, Lewis Andrews, has resigned, and Gordon Muir, the CEO of Perfect Metals, has been appointed to the position of chairman and CEO of the company. Premier Oil Services provides drilling motors used onsite in the hydraulic fracturing process. The company also provides chemicals used in the fracturing process and reprocesses the chemicals for continued use.
Zavanna, GSO Capital form River Bend partnership
Zavanna LLC, an upstream oil and natural gas company, reports that GSO Capital Partners LP, a division of Blackstone, along with Zavanna's existing management, have formed a partnership, River Bend Oil & Gas LLC, which is focused on the acquisition and development of upstream assets in core areas of the Williston Basin. Since the partnership was formed in June 2013 with a $200 million preferred equity commitment from affiliates of GSO and a contribution of assets by Zavanna, the River Bend team has closed over 30 separate acquisitions for over $100 million and has committed substantial additional capital to fund drilling. River Bend is participating as a non-operating working interest partner in Zavanna's development program, including a three-rig program and over $200 million gross operated capital budget for 2014.
Wood Group acquires Sunstone Projects
Wood Group has acquired Sunstone Projects Ltd. of Calgary, Alberta, Canada, for C$14.5 million. Sunstone is a pipeline consulting company providing engineering, procurement, and construction management services to clients in the Canadian oil and gas industry. Sunstone generated sales of approximately C$21 million in 2013 and employs approximately 70 people. Sunstone will be rebranded as Wood Group Mustang and will operate within its Canadian operations. Sunstone will continue to be led by the existing management team under Sunstone president Barry Bauhuis.
Devon sells Canadian conventional assets
Devon Energy Corp. has completed the sale of its Canadian conventional assets to Canadian Natural Resources Ltd. for C$3.125 billion. The company's retained Canadian business will consist of its thermal heavy oil, Lloydminster, and Horn River assets. The company plans to repatriate the proceeds to the US for use in the repayment of debt incurred to finance its Eagle Ford acquisition. The company expects net proceeds of US$2.7 billion after adjusting for currency exchange and taxes associated with the sale and repatriation of the funds to the US.
Riverstone to sell R/C Sugarkane to Warwick
Riverstone Holdings LLC and Warwick Energy Group, an Oklahoma City, Oklahoma-based oil and gas company, have signed a definitive agreement to which Riverstone/Carlyle Global Energy and Power Fund IV LP have agreed to sell R/C Sugarkane LLC to an entity affiliated with Warwick. Financial terms were not disclosed. R/C Sugarkane is a private upstream oil and gas company with non-operated working interests comprising 6,000 net acres in the Eagle Ford shale play, and with 3,000 boe/d of net daily production. The Riverstone transaction team managed its investment in partnership with the management team of Texas Crude Energy Inc.
Canyon creek sees $75M from ArcLight Capital Affiliate
Canyon Creek Resources LLC, a Tulsa, Oklahoma-based oil and gas exploration company, has received an equity capital commitment of $75 million from an affiliate of ArcLight Capital Partners LLC. In connection, Canyon Creek and ArcLight have formed Canyon Creek Energy Partners LLC. Canyon Creek Energy will engage in the acquisition and development of oil and gas assets in the Mid-Continent region of the US. Canyon Creek will continue to be led by R. Luke Essman, president and CEO, and Brett A. Bradford, executive vice president and COO.
Swissco to acquire Scott and English Energy
Singapore-listed Swissco Holdings Ltd., a marine service provider for the offshore oil and gas industry, has entered into a definitive sale and purchase agreement (SPA) in relation to a proposed $225 million acquisition of Scott and English Energy Pte. Ltd. The SPA was signed with Double Dragon Energy Holdings Ltd. for the acquisition of the entire issued and paid-up share capital in Scott and English. Scott and English owns and leases mobile offshore drilling units and service rigs. With respect of the acquisition, UOB Kay Hian Private Ltd. has been appointed as the sole financial adviser, and Provenance Capital Pte. Ltd. has been appointed as the independent financial advisor on the transaction.
Bass Strait Oil to divest Gippsland Basin assets
Bass Strait Oil Co. Ltd. has begun a formal divestment process for its offshore Gippsland Basin portfolio offshore Victoria, Australia. Across Vic/P41 (BAS, 64.565%) and Vic/P68 (BAS, 100%), BAS holds a large trend-focused acreage position containing conventional oil and gas prospects. GMP Securities Australia Pty. Ltd. is assisting with the divestment process.
Seadrill sells 4% interest in SapuraKencana for $300M
Seadrill Ltd. has sold 230 million shares of SapuraKencana Petroleum Berhad, raising approximately $300 million in proceeds. The total economic gain realized from this sale is approximately $165 million. Following the completion of this transaction, Seadrill will continue to own approximately 490 million shares, representing an approximate 8% ownership stake in SapuraKencana. On April 30, 2013, Seadrill increased its ownership stake in SapuraKencana to 12% as a result of the integration of its tender rig business into SapuraKencana. Seadrill remains a long-term strategic investor in SapuraKencana and, in connection with the sale, has entered into a lock-up agreement for its remaining shares until the end of 2014.
Baker Hughes buys performix
Baker Hughes Inc. has acquired Perfomix Inc., a Texas-based oilfield software technology company. Perfomix will operate as a wholly owned subsidiary of Baker Hughes and will be integrated into the company's remote operations services organization. Perfomix offers a data and advisory services delivery platform to support drilling, pressure pumping, completions and production operations, and regulatory reporting requirements.
Intertek opens Eagle Ford Shale laboratory in Texas
Intertek, a solutions provider to industries worldwide, has opened a new laboratory in Elmendorf, Texas. The new 2,400-square-foot laboratory is located in the heart of the Eagle Ford shale play, and is designed to provide quality control and related technical services to shale oil and gas clients. Specific testing capabilities at the new lab include hydrogen sulfide, reid vapor pressure (RVP), detailed hydrocarbon analysis, and more. The new facility complements Intertek's existing global network of oil and gas laboratories and is the first shale oil and gas designated lab.
CONSOl closes $1.6B offering
CONSOL Energy Inc. has closed its private placement of $1.6 billion of its 5.875% senior notes due 2022. The notes are guaranteed by substantially all of CONSOL's wholly owned domestic restricted subsidiaries. The company intends to use a portion of the net proceeds of the sale to purchase all of the 8.00% senior notes due 2017 that are validly tendered pursuant to its previously announced tender offer and consent solicitation in respect of the 2017 notes. CONSOL plans to use the remaining net proceeds to finance the redemption of all of the 2017 notes that remain outstanding on May 15, and, if any net proceeds remain, to repay other outstanding senior indebtedness.
TXON Partners to sell North TX oil properties
TXON Partners LLC has retained E-Spectrum Advisors, an affiliate of Energy Spectrum Advisors Inc., to sell certain operated oil properties in North Texas. The properties are located in the KMA oil field in Wichita County, Texas. The package includes ownership in approximately 157 producing wells with a 100% working interest (approximately 77% net revenue interest) on 5,326 gross/net acres (100% HBP). Net production is 315 barrels of oil equivalent per day (99% oil) from shallow sands less than 5,000 feet. Recent net operating cash flow is approximately $845,000 per month. Total proved reserves are 1.6 million barrels of oil. Probable and possible reserves add another 3.5 million barrels oil.
Saipem awarded FPSO contracts in Angola
Total has awarded Saipem two contracts in Angola for a combined total of more than $4 billion. The main contract is worth more than $3 billion, and is for the engineering, procurement, installation, and commissioning of two converted turret-moored floating production storage and offloading (FPSO) units for the Kaombo Field Development Project, located in Block 32, offshore Angola. Saipem has also been awarded a seven-year contract of $1 billion for operation and maintenance services of the two vessels. The two converted FPSO units, owned by Total, will each have an oil treating capacity of 115,000 barrels per day, a water injection capacity of 200,000 barrels per day, a 100 million scfd gas compression capacity, and a storage capacity of 1.7 million barrels of oil.
