Additional news

• Jim Parkman and Graham Whaling have formed energy investment-banking and M&A advisory firm Parkman Whaling LLC in Houston.

Parkman was a founder in 1989 of investment-banking and M&A advisory firm Petrie Parkman & Co., which was sold in 2006 to Merrill Lynch. Previously, he was with First Boston Corp. and the Federal Reserve Bank.

Whaling was a founder of Houston-based, EnCap Investments LP-funded E&P company Laredo Energy, which developed and sold assets in South Texas three times in the past six years: twice to Chesapeake Energy Corp. and once to El Paso Corp.

Previously, he was chairman of producer Michael Petroleum Corp., chairman and chief executive of Monterey Resources, a spin-out of Santa Fe Energy of which he was chief financial officer, and was with Lazard Freres & Co. and CS First Boston.

Parkman and Whaling can be reached at 713-333-8400.

• Arthur L. Smith has joined the buy side. He has formed Triple Double Advisors LLC, a Houston-based firm that will manage two investment funds. Smith recently sold John S. Herold Inc., where he was chief executive and which he acquired in 1984, to IHS Inc. (NYSE: IHS) for $48 million.

Smith emphasizes the new firm is not a hedge fund or a private-equity fund that backs E&P companies, but is a money manager for certain investors. "If I could do well managing some clients' money with only 25% of my time [while at Herold], I asked myself, how much more could I do with 100% of my time?"

• Aurora Oil & Gas Corp., Traverse City, Mich., (Amex: AOG) has retained Johnson Rice & Co. LLC to investigate strategic alternatives including possible asset divestitures. Aurora is focused on the Michigan Antrim shale, Indiana New Albany shale and the Oklahoma Woodford shale.

Strategic alternatives may also include operating partnerships, identifying additional capital resources, or a merger or other business combination. Proved developed reserves as of end-of-year 2006 are approximately 54,000 bbl. of oil and 82.6 billion cu. ft. of gas. It owns working interests in 495 Antrim wells and 34 New Albany shale wells.

Aurora chairman and chief executive William W. Deneau says, "With the recent announcement of our Woodford shale acreage and our continuing activities in the Antrim shale and New Albany shale, it is obvious that the company has more opportunity available than can be developed with available capital."

• Exco Partners LP, Dallas, has filed an S-1 to IPO 75 million units at an undisclosed price per unit for a total raise of up to $1.73 billion on the New York Stock Exchange as XP. The underwriters are Goldman, Sachs & Co., Citigroup Global Markets Inc., UBS Securities LLC, J.P. Morgan Securities Inc., Merrill Lynch, Morgan Stanley & Co. Inc. and Wachovia Capital Markets LLC.

Exco Resources Inc., Dallas, (NYSE: XCO) formed the MLP and will own a 48% limited-partner interest, a 2% general-partner interest and the related incentive distribution rights. Exco Resources indirectly owns the general partner, Exco GP Partners LP.

Exco Partners will use proceeds to retire debt related with the partnership properties, pay Exco as partial consideration for the properties and provide working capital. Some of the debt was incurred by Exco Resources in making large acquisitions, such as from Anadarko Petroleum Corp., this and last year.

Exco Partners has interests in 8,869 gross wells in Appalachia, East Texas/North Louisiana, the Midcontinent and Permian Basin. Proved reserves as of June 30 were approximately 895.8 billion cu. ft. of gas equivalent (92% gas, 82% proved developed), representing 49.8% of Exco's proved reserves.

• Encore Acquisition Co., Fort Worth, Texas, (NYSE: EAC) priced its Encore Energy Partners LP IPO of 9 million common units at $21 each for a total raise of $189 million. Units were trading on the NYSE as ENP at approximately $22 soon after. Underwriters had an overallotment allowance of 1.35 million common units.

The IPO is of 37% equity interest in the MLP or 40% if the overallotment is exercised. UBS Investment Bank and Lehman Brothers were joint book-running managers. A.G. Edwards & Sons, Credit Suisse, Raymond James & Associates and RBC Capital Markets were co-managers.

Encore Energy Partners holds producing and nonproducing properties in the Elk Basin of Wyoming and Montana (including EAC's purchases from Anadarko Petroleum Corp.) and in the Permian Basin. At year-end 2006, the Elk Basin assets had proved reserves of 21.4 million BOE (68% oil; 86% proved developed).

• Independent Vanguard Natural Resources LLC, Houston, has filed an amendment to its S-1 for an IPO and will now offer 5 million common units at $22 to $24 each on NYSE Arca as VNR, for a total raise of up to $120 million. Citigroup Global Markets Inc., Lehman Brothers, A.G. Edwards, Wachovia Securities, Jefferies & Co. and BNP Paribas are underwriters.

The underwriters may purchase up to 750,000 shares as overallotment, which will bring the total raise to $138 million.

Owning 100% of VNR are Vinland Energy Eastern LLC and Majeed S. Nami. They will hold a combined 29.7% membership interest in the roll-out.

VNR is a holding company, and its operating assets will be owned directly or indirectly by subsidiary Vanguard Natural Gas LLC. Management will own 460,000 Class B units (3.8% membership interest); Nami et al. will hold 3.25 million common units (27.1%); private investors will own 2.29 million (19.1%); and public unit-holders, 6 million (50%).

VNR has mature, long-lived properties in the southern Appalachian Basin, primarily southeastern Kentucky and northeastern Tennessee. As of June 30, it held working interests in 891 gross (805 net) producing wells and had average net production of 11.9 million cu. ft. equivalent per day.

It also holds 40% working interest in some 95,000 gross undeveloped acres near its producing assets. Proved reserves as of March 31 were 66.7 billion cu. ft. equivalent (98% gas; 75% proved developed; 15-year life).

Proceeds will be used to pay debt; make distributions to Nami, management and private investors; and fund working capital.

Scott W. Smith is president and chief executive and was president of Ensource Energy Co. LLC and principal investor in Wiser Investment Co. LLC, the largest shareholder in The Wiser Oil Co., which was sold to Forest Oil Corp. (NYSE: FST) in June 2004. Richard A. Robert is executive vice president and chief financial officer and was vice president, finance, for midstream company Enbridge US Inc.

Thomas M. Blake is president and CEO of VNR subsidiaries Vinland Energy Gathering LLC and Vinland Gulf Coast LLC and was with Appalachian Production Services Inc. and Appalachian Energy as well as Columbia Natural Resources Inc.

• Tom Hicks and team at Dallas-based Hicks Holdings LLC have priced their blank-check Hicks Acquisition Co. I Inc. IPO at $10 per unit, generating gross proceeds of $520 million in the largest IPO of a special-purpose acquisition company (SPAC). Citi was the underwriter. The units closed at $9.97 each on the first day of trading.

Hicks Acquisition aims to acquire businesses and assets in no specified sector. Hicks Holdings is currently invested in E&P company Berkshire Resources LLC, and previously invested in producer Triton Energy Ltd., which was sold to Hess Corp. in 2001. It is also invested currently in manufacturer Latrobe Specialty Steel Co. Hicks co-founded Hicks, Muse, Tate & Furst, which had private-equity investments of more than $12 billion in its 15-year run.

• Williams Cos. Inc., Tulsa, Okla., (NYSE: WMB) has amended its plans to create an MLP named Williams Pipeline Partners LP that will own a 25% interest in Williams' Northwest Pipeline Corp., which owns a 3,900-mile bi-directional transmission system that carries gas from the Rockies, Canada and the San Juan Basin to the Pacific Northwest. The company has filed an S-1 to IPO 13 million units for an undisclosed price for a total raise of up to $313.95 million on the New York Stock Exchange with the ticker WMZ.

The offering represents a 53.6% limited-partner interest in the MLP. Pro forma the offering, a subsidiary of Williams will own the 2% general-partner interest, all of the incentive distribution rights, and a 44.4% limited-partner interest in Williams Pipeline Partners (37.1% if underwriters exercise their overallotment option).

Williams will continue to own the remaining 75% interest and operate Northwest Pipeline. Williams will have a like capacity with its midstream-focused MLP Williams Partners LP (NYSE: WPZ).

Williams chairman, president and chief executive Steve Malcolm says, "The new gas pipeline MLP is complementary to our existing, very successful midstream MLP. We remain focused on our commitment to drive growth in Williams Partners through a combination of drop-downs, third-party acquisitions and organic growth."

Williams intends to use proceeds to acquire a 13.4% general-partner interest in Northwest, pay expenses incurred from the offering and for general corporate purposes. The MLP debt is consolidated and reported on Williams' balance sheet and the company plans to retire an approximate amount of Williams' debt so that consolidated balances remain constant.

Lehman Brothers Inc. and Citigroup Global Markets Inc. are joint book-running managers.

• Houston-based midstream operator Targa Resources Partners LP has filed an S-1 to IPO 12.5 million units at $28.70 each for a total raise of $358.5 million on Nasdaq as NGLS. Citi and Lehman Brothers are underwriters. Targa Resources Inc. is the MLP's parent and Targa Resources GP LLC is the general partner, which holds a 2% general-partner interest in the MLP.

The Targa MLP plans to use the proceeds to acquire assets in Texas and Louisiana from its parent, and pay debt and expenses related to the acquisition.

The Targa MLP operates in the Fort Worth Basin/Bend Arch in North Texas with more than 4,000 miles of integrated gathering pipelines in 14 counties, the Chico and Shackelford systems, collectively the North Texas system, that gather and compress gas from approximately 2,650 receipt points in the Fort Worth Basin, two gas-processing plants that compress, treat and process the gas, and a fractionator that fractionates a portion of the raw gas liquids produced in the processing operations into gas liquids products.

The MLP also plans to acquire certain gas-gathering and processing operations in the Permian Basin of West Texas and in southwestern Louisiana from its parent for $705 million. The assets include all direct and indirect equity interests in Targa Texas Field Services LP, consisting of the SAOU system, and Targa Louisiana Field Services LLC, consisting of the LOU system.

The SAOU system includes approximately 1,350 miles of pipelines covering approximately 4,000 square miles in 10 counties near San Angelo, Texas, including low-pressure gathering systems, the Mertzon and Sterling processing plants and other assets. The LOU system includes approximately 700 miles of pipelines covering approximately 3,800 square miles in southwestern Louisiana between Lafayette and Lake Charles, including the Gillis and Acadia processing plants and other assets.

• Alameda, Calif.-based United States 12 Month Natural Gas Fund LP (USNG) plans to IPO 1 million units at $50 each for a total raise of $50 million on the American Stock Exchange. A ticker has not been determined yet. ALPS Distributors Inc. is marketing agent.

USNG's assets will consist primarily of investments in energy futures contracts on Nymex, ICE Futures or other U.S. and foreign exchanges. USNG's general partner is Alameda-based Victoria Bay Asset Management LLC. Nicholas Gerber is president and chief executive of Victoria Bay. Andrew F. Ngim is management director and treasurer. Howard Mah is chief financial officer.

• Houston-based start-up Sheridan Production Partners has acquired assets in Texas and New Mexico from an undisclosed private seller for $165 million in its first acquisition.

The properties are in the Permian Basin and Austin Chalk Trend, primarily in Lea County, N.M., and Andrews, Reeves and Burleson counties, Texas. Net production is approximately 1,200 bbl. of oil and 4.3 million cu. ft. per of gas day from about 200 wells.

Sheridan Production Partners was formed in 2006 with Warburg Pincus. Sheridan raised its first fund, Sheridan Production Partners LP, which closed on Aug. 8 with $1.3 billion.

Sheridan chief executive Lisa Stewart says, "Sheridan has had a terrific, fast start, and we are very pleased to have completed our first acquisition. These mature oil producing assets in the Permian Basin and the Austin Chalk Trend meet our objective of acquiring established properties with limited risk in predicting future production levels.

"We are now an operator and are focused on extracting value and enhancing efficiencies across our new assets. Additionally, we continue to look for attractive investment opportunities."

• San Francisco-based GeoPetro Resources Co. (Amex: GPR) shareholders plan to sell up to 2.8 million shares at $3.99 each for a total divestment of up to $11.1 million.

The shares are being sold by existing shareholders. GeoPetro could receive up to $3.6 million if warrants are fully exercised. If the warrants are tendered, the company will use its proceeds to fund working capital. The selling shareholders will own approximately 1 million shares, total, after the sell-down.

Stuart Doshi is president and chief executive. He was managing director of Sierra Overseas Corp., a San Francisco-based securities broker. J. Chris Steinhauser is chief financial officer and principal accounting officer. He was CFO of Beta Oil & Gas Inc., which was sold in 2004 to Petrohawk Energy Corp., Houston (NYSE: HK).

GeoPetro's assets include eight gross wells (two producing) on 1.03 million gross (236,170 net) acres in the U.S., Canada and Indonesia. The U.S. assets are in East Texas, the Cook Inlet area of Alaska and the San Joaquin Basin in California; the Canadian assets are in Alberta; and the Indonesian assets are in East Kalimantan province.

Production as of June 30 was 5.3 million cu. ft. of gas per day and proved reserves as of Dec. 31 were 24.6 billion cu. ft. (12.2 billion proved developed).

• Standard & Poor's Ratings Service has affirmed a B+ corporate credit rating with a negative outlook on Lafayette, La.-based E&P company Stone Energy Corp. (NYSE: SGY).

As of August, Stone had $400 million in long-term debt, which actually comes to $646 million when adjusted for operating leases and asset retirement obligations. Even with its recent sale of substantially all Rockies assets to Newfield Exploration Co., the company still continues to face credit scrutiny due to a small, geographically concentrated reserve base; less than five years proved developed producing reserves life; high F&D costs in core areas; and participation in the cyclical and capital-intensive E&P segment of the industry.

These concerns are partially mitigated, however, by enhanced near-term liquidity, favorable oil-price trends, a two to three-year inventory of low-risk projects to cull additional production, improved leverage metrics, and favorable cash margins.

S&P credit analyst Jeffrey Morrison says, "The affirmation followed a full review of the company and its announced strategic initiatives after its recent property sale."

As long as Stone's ability to improve upon weak reserve-replacement measures and elevated F&D costs remains in question, S&P doesn't plan budging its rating.

• Range Resources Corp., Fort Worth, Texas, (NYSE: RRC) reports subsidiary Great Lakes Energy Partners LLC has changed its name to Range Resources-Appalachia LLC, and subsidiary Pine Mountain Oil and Gas Inc. has changed its name to Range Resources-Pine Mountain Inc.

Range Resources-Appalachia controls approximately 2.5 million net leasehold acres in the Appalachian Basin and operates more than 11,000 wells in Pennsylvania, Ohio, Virginia, West Virginia and New York. Range Resources-Pine Mountain controls more than 300,000 net acres and owns interests in more than 1,500 wells in Virginia and West Virginia.

Range chief executive John Pinkerton says, "The majority of our wells were being drilled in the Appalachian Basin under the auspices of various operating entities. Bringing all the entities together under the Range name is intended to eliminate confusion and simplify our business."

• ConocoPhillips Alaska Inc., a subsidiary of ConocoPhillips, Houston, (NYSE: COP) and partners Anadarko Petroleum Corp., The Woodlands, Texas, (NYSE: APC) and Pioneer Natural Resources, Irving, Texas, (NYSE: PXD) have relinquished 300,000 lease acres in the National Petroleum Reserve-Alaska to the U.S. Bureau of Land Management, according to Reuters. The companies cited prohibitive costs of exploring the stranded resources.

• The U.S. Minerals Management Service, New Orleans, has named Lars Herbst regional director, Gulf of Mexico shelf region. He was regional supervisor of field operations.

• BPI Energy Holdings Inc., Cleveland, (Amex: BPG) reports that it is not in compliance with listing requirements for the American Stock Exchange. The company has only two members on its audit committee following the resignation of one member, and listing rules require at least three. Amex has granted BPI until Jan. 3 to come into compliance.

• IPAA is adding another OGIS (oil and gas investment symposium) to its slate. This one will feature MLPs and LLCs and is planned for Jan. 17-18 in Houston in conjunction with IPAA's annual private-capital conference. Other OGISes are in Florida (February, small caps), New York (April, all caps), London (summer, international capital access) and San Francisco (October, all caps, West Coast capital access).

• Denver-based Van Gilder Insurance Corp. and Fort Worth, Texas-based energy insurance provider EnRisk Services Inc. have created a partnership, Vangilder Enrisk, to specialize in risk mitigation and insurance for the energy industry in the western U.S.