Precision Drilling Trust, Grey Wolf try again to merge
Precision Drilling Trust and Grey Wolf Inc. have approved a definitive merger agreement pursuant to which Precision will acquire Grey Wolf.
The combination of Precision and Grey Wolf will have land drilling operations in virtually every conventional and unconventional oil and gas basin in the lower 48 United States and Canada with an emerging presence in Mexico.
Grey Wolf shareholders will receive US$5.00 in cash and 0.1883 newly-issued Precision trust units for each Grey Wolf common share on a fully-diluted basis, for aggregate consideration of US$1.12 billion in cash and 42.0 million Units.
The consideration represents a 4.5% increase in the aggregate number of units offered to Grey Wolf shareholders since Precision's last announcement of its intention to acquire Grey Wolf.
Existing Grey Wolf shareholders will own approximately 25% of the combined entity and three of the current Grey Wolf directors will be added to the board of Precision Drilling Corp., the administrator of Precision Drilling Trust, at closing.
Grey Wolf reached agreement with Precision following its previously announced review of strategic alternatives for enhancing shareholder value. This review included an update to Grey Wolf's existing strategic plan and, ultimately, active solicitation of interest among a broad range of potential strategic and financial buyers for Grey Wolf, with the assistance of its independent financial advisors, UBS Investment Bank.
Precision has received commitments from Deutsche Bank Securities, Royal Bank of Canada, HSBC Bank and The Toronto Dominion Bank to finance the cash portion of the transaction.
Upon completion of the transaction, Precision will remain headquartered in Calgary, Alberta with its US operations headquartered in Houston. Precision will maintain Grey Wolf's principal offices and facilities and will offer opportunities for all of Grey Wolf employees. It is anticipated that the Grey Wolf name will continue to be used for a period of time.
Precision's contract drilling operations leadership team in the United States will be a combination from both companies' management teams and led by David Crowley, currently executive vice president and COO of Grey Wolf, who will be president of Precision's US operations.
Deutsche Bank Securities Inc. and RBC Capital Markets are acting as financial advisors to Precision on the transaction. Precision's legal counsel are Mayer Brown LLP, Bennett Jones LLP and Felesky Flynn LLP.
UBS Investment Bank is acting as exclusive financial advisor to Grey Wolf on the transaction. Grey Wolf's legal counsel are Porter & Hedges LLP, Blake, Cassels & Graydon LLP and Gardere Wynne Sewell LLP.
Falcon to acquire assets from PetroHunter
Falcon Oil & Gas Ltd. and PetroHunter Energy Corp. have entered an agreement under which Falcon will acquire a 25% working interest in five wells located within PetroHunter's 20,000 acre Buckskin Mesa project located in the Piceance Basin, Colorado and undertake a completion and testing program in respect of these wells.
If testing is successful, Falcon will have an option to acquire a 50% working interest in the Buckskin Mesa Project. Falcon has also entered into agreements to acquire a 50% working interest in PetroHunter's seven million acre prospect in Northern Territory, Australia.
Marc A. Bruner, the chairman, CEO, and president of Falcon is a significant shareholder of PetroHunter. As a result, the board of Falcon formed an Independent Committee, consisting of the six independent directors of Falcon, to evaluate and approve the transactions.
BMO Capital Markets is acting as exclusive financial advisor to Falcon in connection with these transactions.
SMT expands again with Moscow office
SMT, a provider of Windows-based geoscientific interpretation software, thas opened its sales and support office in Moscow, Russia.
This follows on the heels of the company's Calgary, Canada office opening earlier this month.
The Moscow team will be headed up by Country Manager, Nikolay Kutsenko, and includes technical support as well as sales operations.
SCAN snags $70M seismic contract offshore Venezuela
SCAN Geophysical ASA (SCAN) has been awarded the company's largest ever seismic contract, an approximately US$70 million program from Petroleos de Venezuela SA for 3,300 Km2 of 3D seismic work offshore Venezuela.
Northern Offshore enters drilling contract for GSF Arctic II
Northern Offshore Ltd. has entered into a drilling contract with AGR Peak Well Management Ltd., a subsidiary of AGR Group ASA for the use of the semisubmersible GSF Arctic II in the North Sea. As previously announced, Northern Offshore has entered into an agreement with an affiliate of Transocean Inc. to acquire the rig and expects to close on the rig purchase in the fourth quarter of 2008. Following the closing, the rig will be renamed the Energy Atlas.
The contract is for a period of one year and has a contract value of roughly US$155 million.
The company also reported that a 145-day commitment it had entered into for the Energy Searcher to begin in mid-July has been terminated as a result of the counterparty's inability to deliver the required financial guarantees.
Northern Offshore Ltd. is a Bermuda holding company which operates offshore oil and gas production and drilling vessels deployed around the world.
Crocotta approves $40M drilling program in Canadian assets
Crocotta Energy Inc. has approved a Q3/Q408 drilling program of $40 million. The program will allow Crocotta to further its key growth plays in the Rock Creek and Montney formations using horizontal multi-frac technology in addition to conventional drilling on various key properties. The program will be funded entirely from cash flow and undrawn bank credit facilities.
The program consists of roughly 16 gross wells (12 net) and is estimated to add approximately 2,000 boe/d of risked production.
The Niton and North Pembina areas of Crocotta's West Central Alberta core area are the main focus of the drilling program with nearly 50% of the budget ($20 million) allocated to the area.
Crocotta holds an average 76% interest in approximately 12,500 acres of Montney rights in the Tupper and Dawson areas of British Columbia. The lands are located in the Montney fairway that has significant natural gas resource potential. Crocotta anticipates it will drill its first Montney horizontal in late September or early October of this year.
Crocotta holds a 50% working interest in 7,040 acres of land and can earn a 50% working interest (via farm-in) in an additional 5,120 gross acres by drilling 2 wells by early 2009. Crocotta plans to drill 2 (1.0 net) wells following up a Mannville discovery well that was drilled by the company late in 2007.
Atwood snags contracts for Aurora, Southern Cross
Atwood Oceanics Inc.'s Atwood Aurora, a LeTourneau Super 116E Jackup currently being constructed in Brownsville, Tex. by Atwood Oceanics Pacific Ltd., has been awarded a contract by RWE Dea Nile GmbH for work offshore Egypt.
Thhe two year contract holds an operating dayrate of $165,000. This contract includes a cost escalation clause and provides for two separate options to extend the term to three years.
The contract also provides for a mobilization payment of $4.5 million. The company expects total construction cost to be $177 million to $180 million.
The Atwood Southern Cross has received a commitment from an operator in West Africa for the drilling of one well.
The contract is presently expected to commence immediately upon the rig completing its current contract offshore Italy, and provides a dayrate of $262,500 during mobilization from its current location to West Africa and $352,000 during drilling operation.
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