Oklahoma City-based Devon Energy Corp. has completed the sale of its operations in the West African nation of Cote d'Ivoire to Afren plc for $205 million. After adjusting for net revenues received by Devon from June 30, 2007, through closing, the adjusted proceeds were $164 million.
With completion of the Cote d'Ivoire transaction, Devon has divested all of its oil and gas producing properties in Africa. The aggregate pre-tax value of the combined African divestitures was approximately $3 billion.
Devon's African operations have been accounted for as discontinued operations since the company decided to exit Africa in early 2007. As a result, the Cote d'Ivoire divestiture has no effect upon Devon's oil and gas production or proved reserves.
Occidental makes West Texas, Piceance acquisitions
Occidental Petroleum Corp. has signed a definitive purchase and sale agreement with Plains Exploration & Production Co. to purchase all of PXP's interests in the Permian Basin of West Texas and New Mexico and Piceance Basin of Colorado for $1.25 billion.
Current production (net to Occidental) from the properties is roughly 4,300 barrels of liquids and 52 million cubic feet of gas per day; for a total of 13,000 barrels of oil equivalent per day. The properties have approximately 92 million barrels of oil equivalent of proved reserves (net to Occidental); of which approximately 69% are natural gas and 45% are developed.
In the Piceance basin in the first half of 2008, Occidental produced in excess of 50 MMcf/d. Occidental expects this to grow to at least 200 MMcf/d in 2010, including this acquisition. Occidental's net acreage position in the Piceance Basin now totals 129,000 acres.
CIT arranges $65 million financing for Petro Resources
CIT Group Inc., a global commercial finance company, served as the sole lead arranger in a $65 million financing deal for Petro Resources Corp., a Houston-based independent oil and natural gas company.
Financing was arranged by CIT Energy, a unit of CIT. The deal consists of a $50 million senior secured revolving credit facility and a $15 million second lien term loan. Petro Resources will use the proceeds to retire mezzanine debt incurred in its acquisition of Williston Basin assets, finance the company's capital program, and for general corporate purposes.
Mitcham Industries enters new $25 million credit facility
Mitcham Industries Inc. has entered into a new $25 million revolving credit facility with First Victoria National Bank. The new facility has a two year term, maturing September 24, 2010, and is secured with Mitcham's domestic assets. The agreement also provides Mitcham with the option, at any time up until the maturity of the revolving facility, to convert any portion, or all, of outstanding amounts into 48 month amortizing notes.
Mitcham Industries Inc., a geophysical equipment supplier, offers for lease or sale, new and "experienced" seismic equipment to the oil and gas industry, seismic contractors, environmental agencies, government agencies and universities.
Noble to build new ultra-deepwater drillship
Noble Corp.'s wholly-owned, indirect subsidiary, Noble Drilling Holding LLC, has signed contracts for the construction of a new, dynamically positioned, ultra-deepwater, harsh environment Globetrotter class drillship with South Korea's STX Heavy Industries Co. LTD (STX) and Dutch-based design and construction firm Huisman Equipment BV.
The delivered cost of the drillship, excluding capitalized interest, is estimated to be $585 million, with delivery scheduled for the second half of 2011.
Additionally, Noble has secured priced options for three additional Globetrotter drillships exercisable by Noble over the next 90, 120 and 180 days, respectively, from the date of contract execution.
The drillship will measure 620 feet long and 105 feet wide and will utilize Huisman's multi-purpose tower design with a drilling side and a pipe assembly side. The Globetrotter will be capable of drilling to a vertical depth of 40,000 feet and will feature DP-3 station-keeping ability, 18,000 tons of variable deck load, and quarters for 180 personnel.
Dominion ups Marcellus Shale acreage price with Antero Resources
Dominion is amending its agreement with Antero Resources, and will assign drilling rights to 114,259 acres in the Marcellus Shale prospect to Antero for about $347 million, or about $3,037 per acre, a higher value per acre than the prior agreement.
The amount assigned is reduced from $552 million for 205,000 acres because of Antero's difficulty in obtaining follow-on financing in the current market turmoil.
Dominion will still receive a 7.5% royalty interest on future natural gas production from the assigned acreage. Dominion will retain the drilling rights in traditional formations both above and below the Marcellus Shale interval and will continue its conventional drilling program on the acreage.
Dominion has drilling rights on 600,000 to 800,000 acres in the Marcellus Shale formation. The remaining acreage that was in the original agreement with Antero will now be included in the company's effort to market additional Marcellus Shale acreage.
Antero remains one of the anchor tenants of the proposed Dominion Keystone pipeline, which is designed to transport Marcellus Shale production to market. Dominion continues to negotiate binding precedent agreements with potential customers following an open season that concluded in August.
Proceeds after tax are expected to be roughly $205 million. The company intends to use the proceeds initially to reduce outstanding short-term debt. Longer term, the proceeds are expected to partially offset previously announced equity issuances in 2009. Barclays Capital Inc. acted as financial advisor to Dominion on the transaction.
Chevron awards KBR FEED contract for Gorgon Project
Kellogg Joint Venture Group (KJVG) has been awarded a Work Authorization by Chevron Australia Pty Ltd. for roughly AUD$300 million to finalize front end engineering and design (FEED) for the Chevron-operated Gorgon Project.
Through KJVG, KBR is leading the design of the Liquefied Natural Gas (LNG) facility on Barrow Island, which will consist of three, 5 million tonne per annum (MTPA) LNG trains. The FEED also includes a 300TJ/d domestic gas plant. The FEED, including the accelerated domestic gas scope, continues to be conducted from two Operating Centers, located in London, UK and Perth, Australia.
The Gorgon Project plans to develop the Greater Gorgon gas fields, located between 130km and 200km off the northwest coast of Western Australia. Chevron is operator of the project with a 50% interest, and ExxonMobil and Shell each hold 25%.
KJVG was formed as a partnership between KBR E&C Australia Pty Ltd., JGC Corp., Clough Projects Australia Pty Ltd., and Hatch Associates Pty Ltd. Group in January 2005 and was awarded a Gorgon Project downstream FEED Engineering Procurement and Construction Management contract in July that year.
Sinopec orders jackup from PPL Shipyard
PPL Shipyard, a subsidiary of Sembcorp Marine, has secured a contract from Sinopec International Co., a subsidiary company of China Petroleum & Chemical Corp., to build a PPL Shipyard Pacific Class 375 Offshore Jackup rig at a value of US$229 million.
This is the first newbuild jackup rig to be constructed outside of China. Scheduled for delivery in the first quarter of 2011, the rig will be owned and operated by the Shanghai Offshore Petroleum Bureau, a subsidiary of China Petroleum & Chemical Corp. (Sinopec).
This high performance jackup rig will be equipped to drill high pressure and high temperature wells at 30,000 feet whilst operating in 375 feet of water.
OilSands Quest enters into private placement
Oilsands Quest Inc. has entered into a private placement financing agreement with a syndicate of underwriters on a bought deal basis, to issue 3,266,000 common shares on a flow-through basis.
The Flow-Through shares will be issued to investors at a price of C$3.675 per share, for total gross proceeds to Oilsands Quest of nearly C$12 million.
This financing is in addition to the non-brokered private placement of up to 6,642,857 Flow-Through Shares announced previously by Oilsands Quest, priced at US $3.50 (C$3.675) per share, for aggregate proceeds of up to US $23.3 million (C$24.4 million).
The earlier announced private placement and the Offering are expected to result in aggregate gross proceeds of US $34.9 million (C$36.4 million). The proceeds from the non-brokered private placement and the Offering will be used to incur Canadian Exploration Expenses through exploration work relating to its planned exploration programs.
Mainland Resources grabs Haynesville Shale acreage in Mississippi
Mainland Resources Inc. has signed a letter agreement to acquire 5,000 net acres in Mississippi where the company plans to drill the first test well to evaluate the potential Haynesville Shale gas formation in the region.
Mainland Resources Inc. will acquire 100% working interest and 75% net revenue interest on all gas formations within the 5,000 net acres, which are located in southwestern Mississippi within the Mississippi Interior Salt Basin.
Mainland Resources Inc. is on schedule for its first Haynesville test well with joint-venture partner Petrohawk Energy in De Soto Parish, La. The Griffith No. 1-H well is stated in the JOA as having a target depth below 10,360 feet in order to test formations. Petrohawk, which will act as operator on the Griffith, has stated that the rig is on schedule and set to spud the well and drill as planned in September 2008.
Renaissance subsidiary scores $225M contract for support vessels
Renaissance Services' subsidiary, Topaz Energy and Marine Ltd. and it's Azeri offshore support vessel company, BUE Marine Ltd., has been awarded a 10-year contract for three support vessels from BP Azerbaijan. The contract value is estimated at US$225 million.
The three vessel package comprises one Dynamically Positioned Platform Supply Vessel (PSV), one Dynamically Positioned Anchor Handling Tug Supply Vessel with 150 tonnes bollard pull (AHTS) and one Emergency Recovery and Response Vessel (ERRV).
The Platform Supply Vessel will be the first of the three vessels to enter service in the Caspian Sea in early 2009 with the remaining two vessels arriving in mid 2010.
Chesapeake reduces drilling budget
Chesapeake Energy plans to reduce its drilling capital expenditure (capex) budget during the second half of 2008 through year-end 2010 by approximately $3.2 billion, or 17%, in response to an approximate 50% decrease in natural gas prices since June 30, 2008 and concerns about the possibility of an emerging US natural gas surplus in advance of increased demand from the US transportation sector.
Of the $3.2 billion reduction, $0.8 billion is attributable to the drilling capex carry associated with the company's recently closed Fayetteville Shale joint venture with BP America, $0.5 billion is attributable to the drilling capex carry anticipated in a Marcellus Shale joint venture, and $1.9 billion is attributable to reduced drilling activity. The company plans to reduce its current operated drilling rig count of 157 rigs to roughly 140 rigs by year-end 2008 and expects to keep its rig count relatively flat through 2009 and 2010.
In addition, the company will temporarily curtail a portion of its unhedged natural gas production in the Mid-Continent region due to unusually weak wellhead natural gas prices. The company has curtailed nearly 100 million cubic feet per day (MMcf/d) of net natural gas production (approximately 125-150 MMcf/d gross) and plans to restore this production once natural gas prices recover. This curtailment represents approximately 4% of the company's current net natural gas and oil production capacity of over 2.3 billion cubic feet of natural gas equivalent per day (92% natural gas).
Along these lines, the company has reduced its full-year 2008 production growth estimate to 18% from 21% to account for the temporary curtailment, the sale of 45 MMcfe/d of production associated with its Fayetteville Shale joint venture with BP, the anticipated sale of 60 MMcfe/d of production in the 2008 fourth quarter associated with the company's fourth volumetric production payment (VPP) and shut-ins in the 2008 third quarter of onshore production associated with natural gas processing plant limitations as a result of damage by Hurricane Ike.
Additionally, as a result of reduced drilling activity levels announced today, the company has lowered its anticipated production growth forecasts in 2009 and 2010 to 16% per year from 19% per year.
iStore launches crisis management tool for petroleum industry
The Information Store (iStore) has released its Event Management Solution (EMS) for the PetroTrek Digital Oilfield platform. iStore's new solution offering enables oil and gas companies to rapidly assess and respond to events that impact the performance of producing assets. EMS allows planning teams to forecast the path of severe weather in order to proactively protect facilities, human resources, and other assets as well as to re-route critical business systems and minimize downtime.
EMS places employees, assets and data in context of the environmental situation, enabling faster, more informed responses in the face of a crisis. The secure, Web-based solution combines a wide spectrum of essential information, including threat assessments, maps of impacted areas, weather, facilities, and production data. EMS integrates data from across the enterprise, from corporate databases and HR systems to live weather feeds and analysis from third party providers, delivering a single, actionable planning tool.
EMS utilizes Microsoft Virtual Earth and the Microsoft Office SharePoint Server 2007 collaborative environment. SharePoint Server enables oil and gas operators to streamline work processes with the ability to find, use and share live information and easily locate the right expert to make critical decisions. The solution also connects to several Microsoft SQL Server databases that the EMS client has in use.
In addition to Microsoft Virtual Earth, the PetroTrek Event Management Solution is compatible with many open source Web GIS frameworks.
Arena Resources opens Midland office
Tulsa, Okla.-based Arena Resources Inc. has finalized the lease of office space in Midland, Tex. with an anticipated opening date by the end of October. Will Porter has joined Arena as Permian Basin land manager and will manage the new office.
Porter has over 23 years of experience in all phases of land work. He graduated from Texas Tech University with a bachelor's degree. Prior to joining Arena, Porter worked for a number of Midland-based companies including TXO Production Co., ClayDesta National Bank, Perry and Perry Inc., PLP Partners, Permian Resources Inc., and Stanolind Oil and Gas Corp.
BJ Services establishes shale technology team
BJ Services Co. has formalized its global shale technology team. This group will support BJ's regional teams currently in place throughout the US and Canada and add new technologies to the company's arsenal as they are identified.
BJ Services has been providing expertise to solve challenges associated with unconventional wells for more than 35 years, offering completion technologies for mixed conventional and tight gas sandstone reservoirs since the 1970s, and coalbed methane and shale technologies since the 1980s.
Based at the corporate technology and research center in Tomball, Tex., the shale technology team is comprised of geological, geomechanical, and engineering services, focusing on understanding the reservoir stresses and rock-pore system properties before recommending a fit-for-purpose completion technique. The group works with regional teams in gathering data, performing field studies, and developing a network of solutions to the challenges of shale oil and gas reservoirs.
RWD Technologies opens Bogota office
The Houston-based energy division of RWD Technologies LLC (RWD) has opened an office at Edificio Corecol in Bogota, Colombia. Division director Al Khakoo heads the new staff of 10 professionals and intends to hire at least five more within the next year to service all of Central and South America.
Business development manager Joaquin Herrera and his consulting team will provide oil and gas, refining, and chemical companies with service-based consulting and solutions.
Dejour retains Porter, LeVay & Rose
Dejour Enterprises Ltd. has retained New York City-based Porter, LeVay & Rose Inc. This boutique firm, with over 38 years' experience, specializes in investor relations and corporate communications.
Porter, LeVay & Rose Inc. has been retained for an initial six month period ending February 29, 2009 with a retainer of US$12,000/ month, and is extendable with the mutual consent of both parties.
In other business, Dejour has accepted the resignation of Cannaday as director.
Dejour Enterprises Ltd. is a micro cap oil and natural gas explorer and producer. The company has 150,000 net acres of energy assets in North America.
Dejour, headquartered in Vancouver, British Columbia, maintains its operations offices in Denver, Colorado and Calgary, Alberta.
Texas Alliance receives award
The Texas Alliance of Energy Producers received the Association of the Year Award from Energy Advocates during ceremonies at the 2008 Annual International Energy Policy Conference (IEPC). Mark A. Stansberry, chairman of the IEPC, presented the award to Alliance president Alex Mills.
"When I entered this business in 1978, Energy Advocates – a group of oil and gas producers based in Tulsa – were making speeches across the nation about solutions to America's energy problems," said Mills.
Stansberry said globally we are facing an energy crisis. "Failure to effectively deal with this problem now will threaten our nation's economic prosperity, compromise our national security, and could radically alter our way life," Stansberry said.
He noted that the Alliance, which has 3,148 members in 28 states, is the largest state oil and gas association in the nation. The Alliance primarily represents independent oil and gas companies that have production in Texas. Stansberry noted that independents drilled 96% of the wells in Texas and produced 92% of the crude oil and 88% of the natural gas.
DEP issues 73 Marcellus Shale drilling permits
Acting Secretary John Hanger noted that the Department of Environmental Protection has issued 73 drilling permits for the Marcellus Shale formation that will protect water resources and could unlock new natural gas resources that lead to millions of dollars in new investments for 12 Pennsylvania counties, lower energy prices and reduced pollution through the increased supply of cleaner-burning fuel.
Hanger said DEP worked diligently to safeguard Pennsylvania's water resources as part of this development and to ensure that more citizens and communities could begin realizing the potential economic benefits the Marcellus Shale formation holds.
This year, 257 permits have been approved for drilling in the Marcellus Shale, with 73 being approved since Aug. 15. In total, 518 permits have been approved for drilling in the Marcellus Shale formation since 2005.
Another 24 permit applications are under technical review by the department and awaiting comprehensive water management plans to safeguard the state's water resources.
The permits approved already approved include enhanced protections for Pennsylvania's water resources.
The Marcellus Shale is a rock formation that underlies much of Pennsylvania and portions of New York and West Virginia at a depth of 5,000 to 8,000 feet. Extracting natural gas from the formation requires a relatively new drilling process known as horizontal drilling, which uses far greater amounts of water than traditional natural gas exploration.
Seadrill's West Alliance wins more work
Seadrill has been awarded a five year firm contract for the semi-submersible tender rig West Alliance for operations in South East Asia. Contract commencement will be in January 2010 in direct continuation of existing contract. Total contract value is estimated at roughly US$310 million.
Circle Oil divests 70% undivided interest in Ovambo Basin
Circle Oil plc has signed a farm-out agreement on its Ovambo Basin license in Northern Namibia with Petroholland Ltd., a Dubai holding company, with interests in both the upstream and downstream oil and gas industry. The license covers an area of over 70,000 square kilometers immediately to the south of the Angola Namibia border.
Petroholland will acquire a 70% undivided interest in the license with Circle retaining a 20% interest and NAMCOR, the Namibian State oil company holding a 10% share. Petroholland will pay Circle US$15 million in cash and cover all of the costs attributable to Circle's 20% share of exploration and development expenditure through to production.
The Namibian Minister for Energy and Mines, The Honourable Erkki Nghimtina MP, has already approved the assignment and has agreed that Petroholland will become the operator of the license. NAMCOR has elected not to exercise its pre-emption right.
Petroholland has engaged the services of Halliburton consultants to provide the technical capability, personnel and resources to fulfill its obligations under the terms of the farm-out agreement and the Joint Operating Agreement.
United American Energy opens new field headquarters in Ravenna
United American Energy (UAE) has a new field headquarters in central Kentucky at 540 Pitts Rd. in Ravenna. UAE's center of operations is now significantly closer to many of the company's producing oil wells.
Formerly located in Clay City, Ky., UAE's new 1,500-sqaure feet field headquarters is expected to improve the company's operating efficiency and support its growth strategy in Estill, Lee, and Powell counties.
To date more than 135 wells have been reworked throughout the company's approximately 6,000 acres of oil fields contributing to the target of 6,000 barrels of oil production per month in 2008. Additional lease, well rework and infrastructure improvements are scheduled through the end of 2010.
United American Energy operates and manages numerous oil and natural gas wells, equipment, leases and related facilities located on approximately 6,000 acres in Estill, Lee and Powell Counties in Kentucky. UAE is dedicated to the efficient management of oil and gas operations.