Industry Briefs

ZaZa Energy sells French assets to Vermilion Energy

Houston-based ZaZa Energy Corp. said Dec. 27 that it has completed the sale of its French assets, comprising 100% of the shares of ZaZa Energy France SAS (ZEF), to Vermilion REP SAS, a wholly-owned subsidiary of Vermilion Energy Inc., for a gross purchase price of US$85.8 million. Taking into consideration customary closing adjustments and contractually obligated asset integrity and G&A contributions, the net purchase price paid to ZaZa was approximately US$76 million. Resulting acquisition metrics reflect a cash valuation of ~US$90,000 per bbl/d and ~US$13.64 per boe of proved reserves. ZaZa applied half of the net proceeds from the disposition to pay down a substantial part of its remaining senior secured notes. As part of the Paris Basin Purchase and Sale Agreement signed with Hess in July 2012, $15.0 million of the proceeds will be held in escrow until title to all Paris Basin exploration permits have been successfully transferred to Hess. The title transfer process is underway and is expected to be completed in 2013. The remaining proceeds will be used to fund ZaZa's development program.

Talisman finalizes $1.5B North Sea deal

Talisman Energy Inc. has completed its joint venture transaction with Addax Petroleum UK Ltd., an indirect wholly-owned subsidiary of China Petrochemical Corp. (Sinopec Group) following receipt of government and regulatory approval. The completion follows the original announcement of the transaction in July this year. Sinopec Group has acquired a 49% equity interest in Talisman's UK North Sea business, Talisman Energy (UK) Ltd., for $1.5 billion. Talisman will continue to hold 51% of the joint venture company. The UK North Sea will be a smaller part of Talisman's overall portfolio, but remains an important part of its North Sea business. Talisman Energy (UK) Limited will be renamed Talisman Sinopec Energy UK Limited.

Dejour executes sale, farmout agreement on Piceance Basin lands

Dejour Energy Inc. has executed a sale and farmout agreement covering a total of approximately 7,450 acres of 100% owned western Piceance Basin lands to a large NYSE-listed E&P for an undisclosed cash consideration and a commitment to carry Dejour through the drilling and completion of three earning wells, with certain performance provisions. Dejour will retain a 20% WI in over 5,100 acres in the project.

Cabot sells South Texas assets for $29M

Cabot Oil & Gas Corp. has sold 18bcfe of proved reserves in South Texas for $29 million, or $1.61/ mcfe. The sale included 2.2 MMcfepd of current production. This asset sale likely will generate an after-tax charge of $12 million for Cabot once it closes, noted Global Hunter Securities after the announcement. At the same time, Cabot announced that the company's production rate exceeded 1 bcfepd. For the month of December, production averaged 930 MMcfepd.

Trilantic Capital Partners sells majority stake in TLP Energy

Trilantic Capital Partners, a global private equity firm, has completed the sale of the assets of TLP Energy (TLP), an Oklahoma City-based oil and gas producer, to NFR Energy (NFR) for approximately $655 million, subject to customary closing adjustments. NFR will acquire the upstream and midstream assets of TLP, including approximately 64,000 net acres of mineral leasehold and production of approximately 6,500 barrels of oil equivalent per day. TLP Energy was formed in August 2011 by its CEO, David Le Norman, with funding by Trilantic Capital Partners. TLP's assets consist primarily of oil and gas production and leases in the Texas Panhandle and Oklahoma. The company targets several hydrocarbon reservoirs, including the Cleveland Sands and the Granite Wash plays.

Synergy completes Orr asset acquisition

Synergy Resources Corp. has purchased from Orr Energy certain assets that include 36 producing oil and gas wells in the Wattenberg Field of the Denver-Julesburg Basin, along with a number of undeveloped leases both in the Wattenberg and surrounding area. Synergy paid a total consideration of $42 million for the assets, comprised of $30 million in cash and $12 million in Synergy's common stock (approximately 3.1 million shares). The 36 wells are currently producing at an aggregate average rate of 360 net boe/d, with Synergy the operator on 35 of the wells. The oldest well has been producing since 2006, and all of the wells have been drilled vertically to the Codell, Niobrara and/or JSand formations. Synergy has a 100% working interest (77% net revenue interest) in 29 of the wells, with a smaller working /net revenue interest in the remaining seven wells. The company will have a 100% working interest (80% net revenue interest) in the majority of future wells drilled on the leased acreage. The drilled and undrilled leases cover approximately 3,933 gross (3,196 net) acres. Of these net acres, 2,191 are in the core of the Wattenberg field, adjoining or near existing Synergy leased acreage. Given the 20 acre spacing for vertical wells on this acreage, there is the potential to drill approximately 75 new vertical wells. Based on the 80 acre spacing for horizontal wells, there is the potential to drill 55 Codell / obrara horizontal wells. The remaining net acres (approximately 1,005) are located northeast of the Wattenberg field near Grover, Colorado, and have not been drilled by Orr. Existing seismic data acquired in the transaction will be used to establish a drilling program for vertical and horizontal wells on the acreage.

Resolute Energy to use senior notes offering for Permian Basin acquisition

Resolute Energy Corp. has announced the pricing of its private placement of an additional $150 million in principal amount of its 8.50% senior notes due 2020. The Senior Notes will be issued at 101.25% of par. Resolute intends to use net proceeds from the offering to fund its pending acquisition of Permian Basin oil and gas assets for approximately $120 million, to repay indebtedness under its revolving credit facility, which matures in April 2017, and for general corporate purposes. On December 3, the announced its definitive agreement to acquire oil assets in the Permian Basin from a private party. The assets are primarily located in Howard County, Texas, and Lea County, New Mexico and, combined, produced a net 1,418 barrels of oil equivalent per day in the third quarter of 2012 and had estimated proved reserves of 4.1 million boe, of which 73% is crude oil.

Caterpillar, Ariel create pressure-pumping JV

Caterpillar Inc. and Ariel Corp. have formed a 50-50 joint venture that will provide well service pressure pumping products for customers in the global oil and gas industry. The combined venture, Black Horse LLC, also announced the acquisition of pump manufacturer ProSource of Houston, Texas. The acquisition of ProSource, which designs and manufactures reciprocating pressure pumps, enables Black Horse LLC to serve the well service market. Black Horse LLC will leverage Caterpillar and Ariel engineering and manufacturing expertise to expand ProSource's existing product line. Frac pumps sold through the combined venture will be branded and sold under the Cat name and distributed through the Cat dealer network. Executives from Caterpillar's Marine and Petroleum Power Division and Ariel Corp. will jointly lead Black Horse LLC.

Statoil awards $152M subsea project to FMC Technologies

FMC Technologies Inc. has been awarded a $152 million subsea project from Statoil for the Oseberg Delta 2 project. The project includes five subsea trees, five wellheads, two manifolds, control systems and other associated equipment. Deliveries are planned for 2013-2014.

BP to sell non-operated interest in North Sea Sean oil and gas field to SSE

BP has agreed to sell certain non-operated North Sea oil and gas assets to SSE plc for $288 million in cash. The sale comprises BP's non-operated 50% stake in the Sean gas field in the UK North Sea. Sean is a gas field in the Southern North Sea and is operated by Shell. Current net BP production from Sean is around 18,000 barrels of oil equivalent per day. Completion of the deal is anticipated during the first half of 2013, subject to regulatory approval. Jefferies acted as financial adviser to BP in relation to the transaction.

Oil States to acquire Tempress Technologies

Houston-based Oil States International Inc. said Dec. 17 that its subsidiary, Oil States Energy Services Inc., has acquired Tempress Technologies Inc. Tempress, headquartered in Kent, Wash., designs, develops, and markets a suite of specialized, hydraulically activated tools utilized during downhole completion activities. For the 12 months ended Dec. 31, 2012, Tempress is anticipated to generate approximately $8.0 million of EBITDA. Subject to customary post-closing adjustments, total transaction consideration was $52.5 million, funded from amounts available under Oil States' existing US revolving credit facility. Oil States International is a diversified oilfield services company and an integrated provider of remote site accommodations with prominent market positions in the Canadian oil sands and the Australian mining regions.

Schlumberger acquires GeoKnowledge

Schlumberger has acquired GeoKnowledge, a Norwegian-based software company specialized in delivering exploration decision-support solutions for the oil and gas industry. GeoKnowledge supplies the GeoX software suite for exploration prospect risk, resource and value assessment. Core software product development will continue to be in Oslo, Norway, where most of the 30 GeoKnowledge employees are based. The company also has offices in Houston, Texas, and Kuala Lumpur, Malaysia.

Ultra Petroleum reaches $225M Pinedale midstream agreement

Houston-based Ultra PetroleumCorp. has agreed to sell certainmidstream assets in Wyoming to Pinedale Corridor LP, a newly formed subsidiary of CorEnergy Infrastructure Trust Inc., for $225 million in cash. Assets include Ultra's pipeline system and central gathering facilities (the LGS) in the Pinedale anticline. The agreement provides that at the closing of the acquisition, Pinedale LP will enter into a 15-year triple net lease relating to the use of the LGS with Ultra Wyoming LGS LLC, an indirect wholly-owned subsidiary of Ultra Petroleum. The lease provides for a minimum annual base rent of $20 million, subject to inflation adjustment. On December 7, 2012, Pinedale LP and Pinedale GP Inc. entered into a subscription agreement with Ross Avenue Investments LLC, an indirect wholly-owned subsidiary of Prudential Financial Inc., pursuant to which Prudential has agreed to fund a portion of the acquisition by investing $30 million in cash in Pinedale LP, and Pinedale GP has agreed to fund a portion of the acquisition by contributing approximately $134 million in cash to Pinedale LP. Following the closing, Prudential will hold a limited partner interest in Pinedale LP, and Pinedale GP will hold a general partner interest. Prudential will hold approximately 18% of the economic interest in Pinedale LP, and Pinedale GP will hold approximately 82% of the economic interest. Also on December 7, Pinedale LP entered into a $65 million secured Term Credit Agreement with Key-Bank National Association serving as a lender and the administrative agent. Outstanding balances will generally accrue interest at a variable annual rate equal to LIBOR plus 3.25%. The Credit Facility will remain in effect through December 2015, with an option to extend through December 2016.

Chesapeake plans $2.2B midstream assets sale

Chesapeake Energy Corp. said Dec. 11 that it has entered into a definitive agreement to sell a substantial majority of its remaining midstream assets to Access Midstream Partners LP for approximately $2.16 billion. These midstream assets are located primarily in the company's Marcellus, Utica, Eagle Ford, Haynesville, and Niobrara shale plays. The transaction with Access includes new marketbased gathering and processing agreements covering various acreage dedication areas. In addition, Chesapeake has recently completed the sale of other midstream assets in Oklahoma and Texas during the 2012 fourth quarter for approximately $175 million. Chesapeake says it anticipates completing the sale of its remaining midstream assets, including Mid-Continent and other assets, by the end of the 2013 first quarter for approximately $425 million, bringing the total of current and anticipated midstream asset sales to $2.75 billion. Including the approximate $2.125billion of midstream asset sales completed in the 2012 second and third quarters, the proceeds from the company's midstream exit are anticipated to total approximately $4.875 billion. Jefferies & Company Inc. and Goldman, Sachs & Co. are serving as financial advisors to Chesapeake on its midstream transactions. Enerplus acquires additional Bakken interests in Montana Enerplus Corp. has acquired additional low decline, light oil Bakken Shale interests in Montana. The company has agreed to acquire an additional 20% working interest in its operated leases in the Sleeping Giant area in the Elm Coulee field in Richland County, Montana for approximately US$131 million (approximately US$121 million after estimated closing adjustments of US$10 million). The acquisition complements the company's existing operations in Sleeping Giant where it currently owns an operated 70% working interest. The light oil property has an average decline rate of 14% and the company estimates internal reserves assessment of 6.2 million boe of proved plus probable reserves associated with the acquisition and daily production of approximately 1,550 boe/day (both of which are weighted 80% to light crude oil). The transaction has acquisition metrics of 4.2 times annual funds flow after estimated closing adjustments, $23.00/boe of proved plus probable reserves including future development capital and is expected to be 4% accretive to funds flow in 2013 (2% on a debt-adjusted basis). This light oil property has current netbacks of approximately $50/boe with low operating costs averaging $5.50/boe in 2012. Following the closing of the transaction, Enerplus will own a 90% working interest in the operated leases with production of approximately 7,300 boe/d. The company expects a modest level of capital spending at Sleeping Giant in 2013.

Gulf Coast Energy receives additional equity financing

Quantum Energy Partners (QEP) and Global Reserve Group (GRG) will provide $125 in equity commitment to help grow Gulf Coast Energy Resources LLC (GCER). With $250 million in equity from original investors Warburg Pincus and GCER management, the new equity financing brings the total equity line to $375 million. The funds will be used to continue GCER's acquisition, exploration, and production activity along the Gulf Coast and offshore Gulf of Mexico, including the development of three new discoveries made by the company. Two of the finds are located in the onshore region of Texas, while one discovery lies in the offshore Shelf of the Gulf of Mexico. GCER is currently drilling two wells and plans to drill 14 exploration wells in 2013. The drilling program will target onshore Texas and Louisiana as well as the offshore Shelf.

Standard Chartered opens Shariah compliant online banking platform

Standard Chartered Bank launched an Islamic version of its online banking platform, Straight2Bank. The platform provides its Islamic customer base a secure online portal that is compliant with Shariah laws.

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