Industry Briefs

Williams Partners adds Marubeni as JV partner on Initial Gulfstar FPS project

Williams Partners LP has sold a 49% interest in its first Gulfstar FPS project to Marubeni Corp. Upon closing of the agreement, expected in 2Q13, Marubeni will contribute roughly $225 million to fund capital expenditures, following with monthly capital contributions representing their 49% interest. Gulfstar FPS is Williams Partners' proprietary floating production system. The initial Gulfstar FPS, which has been under construction since late 2011, will support multiple agreements Williams Partners has signed with Hess Corp. and Chevron, through which production handling, export pipeline, oil and gas gathering and gas processing services are provided for the Tubular Bells field development located in the eastern deepwater Gulf of Mexico. The Gulfstar FPS will tie into Williams Partners' wholly owned oil, gas gathering and processing systems in the eastern Gulf of Mexico. The initial Gulfstar FPS is expected to be placed into service in mid-2014. Gulfstar FPS is expected to have an initial capacity of 60,000 barrels of oil per day, up to 200 million cubic feet of natural gas per day (MMcf/d) and the capability to provide seawater injection services.

Helix completes oil and gas business sale

Helix Energy Solutions Group Inc. has closed the previously announced sale of Energy Resource Technology GOM Inc. (ERT), the company's oil and gas subsidiary, to Talos Production LLC, a wholly owned subsidiary of Talos Energy LLC, a privately held Houston-based oil and gas company. Ranked by total gross revenue, Houston-based Helix has been noted as one of the top US-based oilfield service and supply companies. The energy company came in at No. 34 in the OGJ150 quarterly ranking in total assets for 2Q12. The company announced its plan to divest the oil and gas subsidiary in December, noting its strategic shift to focus on providing well intervention and robotics services. Proceeds from the transaction were approximately $620 million in cash, as well as overriding royalty interests in ERT's Wang discovery and certain exploration prospects. Jefferies & Company Inc. served as the exclusive financial advisor to Helix in conjunction with the transaction. A portion of the cash proceeds from the sale of ERT will be used to repay the company's term loans and revolving credit facility indebtedness as required by the governing credit agreement.

Apache, Chevron complete Chevron Canada's entry into Kitimat LNG

Apache Canada Ltd. has completed the previously disclosed transaction with Chevron Canada Ltd. to build and operate the Kitimat LNG project and develop natural gas resources at the Liard and Horn River basins in British Columbia, Canada. Chevron Canada and Apache Canada each have become a 50% owner of the Kitimat LNG plant, the Pacific Trail Pipelines and 644,000 gross undeveloped acres in the Horn River and Liard basins. After a brief transition period, Chevron Canada will assume operatorship of the LNG plant and the pipeline. Apache Canada increased its ownership in the LNG plant and pipeline from 40% and will operate the upstream assets. Apache's net proceeds from the transaction were $405 million. Encana and EOG Resources – formerly 30% non-operating owners in Kitimat LNG and Pacific Trail Pipelines – sold their interests and exited the venture. Kitimat LNG, at Bish Cove on the northern British Columbia coast approximately 400 miles (650 km) north of Vancouver, is currently completing front-end engineering and design, and early site work is under way. Current plans call for two liquefaction trains, each with expected capacity of 5 million tons of LNG per annum (about 750 million cubic feet of gas per day). Kitimat LNG has received all significant environmental approvals and a 20-year export license from the Canadian federal government.The 290-mile (463-km) Pacific Trail Pipelines will provide a direct connection between the Spectra Energy Transmission pipeline system and the Kitimat LNG terminal.

Forest Oil closes South Texas property divestiture

Forest Oil Corp. has closed on the previously announced sale of its properties in South Texas for net cash proceeds of approximately $307 million, after customary adjustments to reflect an effective date of January 1, 2013 and the hold-back of certain properties, valued at approximately $14 million, for which required consents-to-assign have not yet been obtained. A subsequent closing on these hold-back properties is expected to occur within 90 days. Proceeds from the sale will be used to redeem the remaining $300 million principal amount outstanding of the company's 8.5% Senior Notes due 2014. In connection with the closing of this transaction, the global borrowing base under Forest's credit facilities has been reduced to $900 million.

Gulfport Energy to add to Ohio Utica acreage

Gulfport Energy Corp. plans to acquire additional working interests in the Utica Shale in Eastern Ohio. The Oklahoma City, OK-based company has entered into a definitive agreement to purchase approximately 22,000 net acres in Eastern Ohio from Windsor Ohio LLC, an affiliate of Wexford Capital LP, for approximately $220 million, increasing Gulfport's leasehold interests in the Utica to approximately 137,000 gross (128,000 net) acres. The acquisition excludes Windsor Ohio's interest in 14 existing wells and 16 proposed future wells and certain acreage surrounding these wells. The proposed transaction will increase Gulfport's working interest in the acreage to 93.8%. After giving effect to this acquisition, Gulfport currently estimates that its 2013 net production will be approximately 21,370 to 22,192 barrels of oil equivalent per day. Gulfport will continue to serve as operator of its acreage in the Utica. The transaction was approved by a special committee of Gulfport's Board of Directors. Tudor Pickering Holt & Co. acted as advisor to the special committee.

Harbinger, EXCO partner to acquire assets from BG Group affiliate

HGI Energy Holdings LLC, a wholly-owned subsidiary of Harbinger Group Inc. has closed on its previously announced joint venture with EXCO Resources Inc. to create a private oil and gas partnership. The partnership purchased and will operate EXCO's conventional oil and natural gas assets in West Texas, including and above the Canyon Sand formation, as well as in the Danville, Waskom, Holly and Vernon fields in East Texas and North Louisiana. Under the terms of the agreement announced on November 5, the partnership acquired the oil and gas assets from EXCO for approximately $725 million of total consideration, which represents HGI's effective equity interest of $372.5 million, $127.5 million in oil and gas properties and related assets contributed by EXCO, in each case before giving effect to preliminary closing adjustments described below, and approximately $225 million of bank debt. The net cash contributed from HGI was $348.3 million reflecting the effect of preliminary closing adjustments and the economic benefits related to the July 1, 2012 effective date. HGI has approximately a 75% equity interest in the partnership. The partnership will be governed by a board of directors of the general partner consisting of two EXCO directors and two HGI directors. EXCO will continue to operate the assets as contract operator of the properties and provide services pursuant to contract operating and administrative service agreements with the partnership. HGI and EXCO intend to opportunistically add incremental cash flow to the Partnership through the acquisition of other mature, conventional assets over time. As the first step, effective as of February 14, 2013, the partnership agreement to acquire certain conventional oil and natural gas assets in the Danville, Waskom and Holly fields in East Texas and North Louisiana, including and above the Cotton Valley formation, from an affiliate of BG Group plc for $132.5 million. These properties represent an incremental working interest in properties that EXCO contributed to the partnership. The partnership intends to fund the acquisition using its revolving credit agreement. HGI's financial advisor for this transaction is Citigroup and its legal advisors were Andrews Kurth LLP and Paul, Weiss, Rifkind, Wharton & Garrison LLP.

NBGI Private Equity acquires Cosalt Offshore

NBGI Private Equity, investor in Aberdeen-based ATR Group, has acquired the Aberdeen and Norway operations of Cosalt Offshore. This will bring together Cosalt's technical leadership in offshore lifting, combined with its comprehensive offshore inspection, testing and safety service with ATR's global equipment rental service offering to the offshore maintenance sector. ATR is a supplier in the rental of specialized tools and equipment for the offshore oil and gas industry maintenance market. NBGI invested in the company in early 2012. Cosalt Offshore has been part of Grimsby-based Cosalt PLC. The company provides a wide range of offshore and marine safety equipment, lifting and rigging gear, wire rope, related tools and safety at height products alongside offshore inspection and compliance services. Advisers in the deal included Dundas & Wilson, Johnston Carmichael and PwC.

Oildex processes over $170B in transaction detail

Oildex, a developer of cloud-based information management solutions for the energy industry, saw record growth in 2012. The company processed $170 billion in transaction detail through its smart information management platform – an increase of more than 18% over the previous year. More than 7,900 companies and 130,000 registered users in the oil and gas industry utilize Oildex's financial data platform to exchange, process, and analyze business information. Oildex recently invested in and deployed the Oracle 11g database, providing the company with higher system performance and greater capacity for growth.

Investcorp acquires oilfield services provider Hydrasun

The Investcorp Gulf Opportunity Fund, along with other affiliates of Investcorp, has agreed to acquire a controlling stake in Hydrasun, an international provider of fluid control equipment and solutions for the global offshore oil and gas sector, from Equistone Partners Europe Limited. The value of the transaction was not disclosed.Founded in 1976 in Aberdeen, Scotland, Hydrasun has international operational bases in the United Kingdom, Middle East, the Netherlands, Caspian Sea, Brazil, West Africa and the Gulf Coast of the United States. Hydrasun is specifically engaged in the integration, manufacture and testing of hydraulic equipment and fluid connectors for the offshore oil and gas sector.

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