One large international transaction dominated the M&A arena the past month: London-based Tullow Oil's estimated $1.35 billion acquisition of Heritage Oil & Gas's 50% interest in Blocks 1 and 3A in Uganda (East Africa).
Over the past six years, Tullow and Heritage have invested over US$700 million in the Lake Albert Rift basin in drilling 27 wells to prove up over 700 million barrels of oil and identify over 1.5 billion barrels of potential yet to be explored. Tullow CEO and founder Aiden Heavey noted, "The pre-emption of the Heritage transaction and completion of Tullow's farmdown process is an excellent opportunity to deliver an accelerated basin-wide development plan best suited to [the Ugandan government's] needs and to optimize value for all stakeholders." Approval of the sale is expected quickly.
In another large deal, Calgary-based Progress Energy has acquired certain northeast British Columbia Foothills assets for about $390 million (before closing adjustments). The seller is Suncor Energy. Progress has been an active Foothills explorer and producer since 2002, having drilled more than 280 wells. Current production is about 7,300 boe per day, about 91% natural gas.
Major US transactions include Fort Worth-based Range Resources sale of its tight gas sands properties in Ohio to EV Energy Partners and certain institutional partnerships managed by EnerVest Ltd. for approximately $330 million.
The Ohio properties include nearly 3,300 producing wells with net production of about 25 MMcfe per day. Current production is 70% natural gas and 30% oil. The properties include approximately 418,000 net acres of leasehold and about 1,600 miles of pipeline and gathering system infrastructure.