• Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) and Anadarko Petroleum Corp., The Woodlands, Texas, (NYSE: APC) have entered a joint venture and other agreements involving assets in the Deep Haley area of the Delaware Basin in West Texas and elsewhere for $310 million in cash and other consideration. The basin is part of the Permian Basin.

Chesapeake has acquired from Anadarko 25% of its existing Deep Haley production; 25% of the leasehold in the central and eastern portions of the area; 50% leasehold and contractual rights in the western portion of the area; a lease on 2,100 net acres in the Fayetteville shale play in Arkansas; 5,600 net undeveloped lease acres in the Anadarko Basin in western Oklahoma; and Oklahoma City real estate assets Anadarko gained last year as part of its acquisition of Kerr-McGee Corp.

Other consideration includes reimbursing Anadarko for capex in development of the Deep Haley properties, and funding a portion of Anadarko's future Deep Haley area capital costs and 50% of certain Chesapeake nonproducing leasehold interests in Loving County, Texas.

Anadarko and Chesapeake will jointly evaluate and explore on a roughly 50/50 basis more than 1 million gross acres in the Deep Haley area. The two companies plan an aggressive drilling program for the area, with Anadarko and Chesapeake each currently operating eight drilling rigs in the area.

Chesapeake chairman and chief executive Aubrey K. McClendon says, "Our recent drilling results in the Deep Haley area have been exceptional and we are confident that by joining forces with Anadarko the technical teams of the two companies will continue to enjoy success in drilling prolific wells (there)."

Chesapeake's most recent seven wells in the Deep Haley area generated a combined 90 million cu. ft. of gas equivalent per day of gross production during May.

Anadarko chairman, president and CEO James T. Hackett says, "The Deep Haley area in West Texas has recovered over 1.4 trillion cu. ft. from the overpressured Pennsylvanian formations. Anadarko started work in the basin in 2003 and employed state-of-the-art drilling and completion technology with great success. After accumulating the rights to over 400,000 net acres, it was time to expand our drilling operations and we are glad to have Chesapeake jointly involved with us."



• Eagle Rock Energy Partners LP, Houston, (Nasdaq: EROC) plans to acquire Houston-based Escambia Asset Co. LLC and privately held Houston-based Redman Energy Holdings LP. In another deal, it has acquired certain assets of Odessa, Texas-based MacLondon Energy LP. The three deals are for a total $420 million in cash and equity.

Eagle Rock will pay $203.5 million in cash and $16.5 million in units for Escambia for a total $220 million, and $74.1 million in cash and $105.9 million in units for Redman for a total $180 million. It has paid approximately $20 million in units for the MacLondon assets.

The Escambia assets include 33 operated wells in Escambia County, Alabama. The assets include two treating facilities, a gas-processing plant and related gathering systems. Net production is 3,300 BOE per day. Proved reserves are 12.2 million BOE (89% proved developed producing).

The Redman assets include Redman Energy Holdings LP and Redman Energy Holdings II LP and certain assets owned by affiliate NGP Income Co-Investment Opportunities Fund II LP that include 76 operated and 95 nonoperated wells mainly in East and South Texas.

Production is 1,810 BOE per day. Proved reserves are 8.3 million BOE (78% proved developed producing).

The MacLondon assets include certain mineral and royalty interests in approximately 1,200 wells in various U.S. states in which Eagle Rock gained interest following its acquisition of Houston-based Montierra Minerals & Production LP in May. Net production is 21 bbl. of oil and 780,000 cu. ft. of gas per day.

Eagle Rock chairman and chief executive Joseph A. Mills says, "The EAC and Redman transactions solidify Eagle Rock's presence in the upstream sector, enabling us to expand our focus on acquisitions of operated properties. Our upstream management team has extensive experience in operating oil and gas producing properties including the operation of assets similar to those acquired in the EAC and Redman transactions."

He adds that the midstream assets fit the company's dual upstream/midstream model. Eagle Rock will partially fund the deal with a $204-million private placement led by Lehman Brothers MLP Opportunity Fund LP. The Escambia and Redman deals are expected to close in late July.



• Pacific Energy Resources Ltd., Long Beach, Calif., (Toronto: PFE) has amended its plans to acquire all of the Alaska assets of Forest Oil Corp., Denver, (NYSE: FST) and will now pay US$490.8 million.

The deal includes US$268 million in cash to pay the full balance of Forest Alaska Operating LLC's term loans, US$132 million in cash to Forest, 10 million Pacific Energy shares valued at approximately US$30 million and a US$60.75-million zero-coupon senior subordinated note due 2014.

The deal was previously for US$448 million in cash and US$16 million in stock in a total value of US$464 million.

The assets include Forest subsidiary Forest Alaska Holding LLC and remaining assets not held by Forest Alaska, including an equity interest in Cook Inlet Pipeline Co. Properties include nine fields in the Cook Inlet area, with the major fields of McArthur River, Redoubt Shoal, West McArthur River and Trading Bay, and the minor fields of West Foreland, Three Mile Creek, Sabre, Kustatan and Cosmopolitan.

Net production is approximately 5,900 BOE per day (80% oil). Proved reserves are 15.8 million BOE (181 billion cu. ft. equivalent), of which 13.2 million bbl. are proved producing, and possible and probable reserves of 44.7 million bbl. for total proved, probable and possible reserves of 60.6 million bbl.

The assets also include nearly 1 million net undeveloped acres covering three offshore fields (Corsair, Raptor and Valkyrie), the onshore Susitina Basin and other onshore fields.

Pacific Energy president Darren Katic says, "These large legacy assets have exactly the kind of characteristics we look for when pursuing acquisition opportunities. The established production, with long-life reserves, generates strong predictable cash flow. The multiple infill drilling opportunities provide a low-risk means to grow production through redevelopment."

Forest president and chief executive H. Craig Clark says, "Our equity ownership in Pacific indicates our confidence in their plan for further developing these assets based on their work in similar fields in the U.S."

Pacific Energy will fund the deal with a financing commitment of up to US$465 million. Energy Capital Solutions LP is financial advisor to Pacific Energy and Scotia Waterous is financial advisor to Forest. The deal was expected to close on Aug. 24.



• Constellation Energy Partners LLC, Baltimore, (NYSE: CEP) has closed its acquisition of Amvest Osage Inc., a subsidiary of privately held, Charlottesville, Va.-based Amvest Corp., for $240 million.

Amvest Osage owns producing and undeveloped properties in the Cherokee Basin in Oklahoma, including a 560,000-net-acre concession for coalbed-methane and shale rights from the Osage native American Nation. The assets feature 370 producing wells with a general 100% working interest. Amvest Osage is now a subsidiary of Constellation.

Net production is approximately 16 million cu. ft. of gas equivalent per day. Proved reserves as of March 31 were 93 billion cu. ft. equivalent.

Constellation chief executive Felix Dawson says, "These acquired properties, combined with our previous acquisition in the Cherokee Basin, expand our ownership and further establish us as one of the leading producers in the basin. The acquisition also provides potential opportunities for operational synergies and better positions us for further acquisition growth. Our Cherokee Basin properties are an excellent fit with both CEP and Constellation Energy's existing asset portfolios."

Constellation funded the deal with a $210-million private placement and its revolving credit facility.



• Pioneer Natural Resources Co., Dallas, (NYSE: PXD) plans to acquire an expanded interest in the Raton Basin in Colorado from privately held, Denver-based Petrogulf Corp. for $205 million.

The interests are in approximately 30,000 net acres, with the majority of the value from approximately 9,800 net acres immediately south of Pioneer's Sangre de Cristo Unit. Net production is 10 million cu. ft. of gas per day. Proved reserves are 95 billion cu. ft. and potential reserves are 29 billion cu. ft. The assets include more than 110 potential coalbed-methane drilling areas.

Pioneer chairman and chief executive Scott Sheffield says, "This acquisition further enhances our strong position in the Raton Basin at an attractive cost and with significant upside to expand the proved reserves through additional step-out drilling."

The deal is expected to close during the fourth quarter. Pioneer plans to IPO its Raton Basin assets next year as an MLP.



• EV Energy Partners LP, Houston, (Nasdaq: EVEP) plans to acquire properties in the Permian Basin from privately owned, Houston-based Plantation Petroleum Holdings III LLC, a company backed by Houston-based private-equity provider EnCap Investments LP, for $160 million.

The assets are comprised of 142 wells (100% operated) producing primarily from the Yates, Seven Rivers, Queen and Morrow formations in Lea and Eddy counties, New Mexico, and Winkler County, Texas; and the Clear Fork and Wichita Albany formations in Gaines County, Texas. Net production is approximately 11.2 million cu. ft. of gas equivalent per day. Proved reserves are 79.1 billion cu. ft. equivalent (49% gas liquids, 51% proved developed producing).

EV Energy chairman and chief executive John B. Walker says, "These assets give us additional growth opportunities through drilling, while our total mix of proved undeveloped reserves remains within our stated goal of 10% to 20%."

EV Energy plans to initially fund the deal from a credit facility. Simmons & Co. International and Griffis & Associates LLC are financial advisors to Plantation. The deal is expected to close by the end of this quarter.



• Constellation Energy Partners LLC, Baltimore, (NYSE: CEP) plans to acquire certain coalbed-methane properties in the Cherokee Basin in Oklahoma from Newfield Exploration Mid-Continent Inc., a subsidiary of Newfield Exploration Co., Houston, (NYSE: NFX) for $128 million.

The assets include an average 94% working interest in more than 650 producing wells on approximately 80,000 net acres. Net production is 10 million cu. ft. of gas equivalent. Proved reserves are 45 billion cu. ft. of gas equivalent. The assets also include a 350-mile gas-gathering system.

Constellation chief executive Felix Dawson says, "This acquisition complements and enhances our two previous acquisitions of coalbed-methane properties in the Cherokee Basin. The execution of these three acquisitions demonstrates our commitment to two of our key acquisition strategies-consolidation and competitive positioning within the basins in which we operate-as well as expansion of our focus in coalbed-methane. The Newfield properties are strategically located relative to our existing assets and provide further opportunities for operational synergies."

The acquisition will make Constellation the second-largest producer in the basin. Simmons & Co. International and Griffis & Associates LLC are financial advisors to Newfield. The deal is expected to close by the end of this quarter.



• St. Mary Land & Exploration Co., Denver, (NYSE: SM) plans to acquire assets in South Texas from an undisclosed seller for $153.1 million.

The assets include 98% average working interest (77% average net revenue interest) in 259 wells on 56,799 net acres in the Olmos formation that is adjacent to the company's Catarina field assets in Webb and Dimmit counties. Production is 9.2 million cu. ft. of gas equivalent per day (97% gas). Proved reserves are 94.8 billion cu. ft. equivalent (37.8 billion proved developed) and proved, probable and possible reserves of 160.8 billion cu. ft. equivalent.

The deal is expected to close in early October.



• EnergyQuest II LLC has acquired certain southwestern and central Louisiana assets from Houston-based Hilcorp Energy Co. for approximately $135 million. The assets include interest and operations in the Colgrade, Crowley North, Neale, and White Lake West fields. EnergyQuest II is funded by its management team and Houston-based investment firm Quantum Energy Partners IV LP.



• IPR North America Holdings Corp. and IPR Lay Creek LLC plan to acquire the U.S. assets of Santos Ltd., Adelaide, Australia, (Australia: STO) for US$70 million (A$82 million) in cash.

The assets include approximately 158 wells on 180,000 gross acres in western Colorado and onshore and offshore the Texas Gulf Coast. The assets produced 2.1 million bbl. of equivalent in 2005. Santos plans to focus its exploration activities in Australia, Asia and the Middle East.

Santos will receive 17.5% net-profits interest in three exploration prospects targeting deep gas structures in the Texas waters. The initial exploratory well for the first of these prospects (the Cougar L well) is currently drilling. Scotia Waterous marketed the assets for Santos.



• Privately held, Denver-based Cordillera Energy Partners, privately held, Denver-based Prima Exploration Inc., privately held, Greenwood Village, Co.-based Denver Mineral & Royalty Co. and their partners have sold their Red Sky and Stampede projects in Mountrail County, North Dakota, to an undisclosed buyer for an undisclosed price.

The Red Sky project encompasses more than 56,000 net acres and two horizontal Bakken wells, including the Nelson Farms 11-19H. Initial production in April was 443 bbl. of oil per day. The Stampede project includes 51,000 net acres.



• Legacy Reserves LP, Midland, Texas, (Nasdaq: LGCY) plans to acquire certain producing properties in the Permian Basin from undisclosed private parties for $20.3 million in cash.

The assets include 101 nonoperated properties primarily in the Permian Basin. Net production is approximately 302 BOE per day. Proved reserves are 1.22 million BOE (92% proved developed producing).



• Houston-based Layline Petroleum I LLC has acquired assets in Texas and Oklahoma from Houston-based EnergyQuest Resources LP for approximately $17 million.

The assets include production and other assets in Bosco Field, Acadia and St. Landry parishes, Louisiana; Odem Field, San Patricio County, Texas; NE IAB Field, Coke County, Texas; and Woodlawn Field, Marion and Harrison counties, Texas. Net production is approximately 285 BOE per day. Total net proved reserves as of April 1 were 3.8 billion cu. ft. of gas and 1.15 million bbl. of oil. All properties other than Odem Field will be operated by Layline.

Lantana Oil & Gas Partners marketed the items for EnergyQuest. CIT Energy, a unit of CIT, provided financing for Layline.



• Tatonka Oil & Gas Inc., Denver, (Pink Sheets: TTKA) has entered a participation agreement with an undisclosed private investor to join with Tatonka and its partners American Oil and Gas Inc., Denver, (Amex: AEZ) and Casper, Wyo.-based North Finn LLC in the Mowry shale prospect in the Powder River Basin in Wyoming for approximately $9.3 million.

The investor will pay $339,000 to Tatonka as an acquisition fee and $9 million to the prospect operator representing Tatonka's 60% portion of the exploration and development agreement (EDA) to drill and complete the commitment wells.

This area includes approximately 37,000 acres, with at least 230 locations in the prospect on 160-acre spacing, targeting the Mowry formation with both vertical and horizontal wells at depths ranging from 7,000 feet to 10,000 feet.

The investor will receive 50% of Tatonka's interest in its leasehold interests in the project and 50% interest in its EDA with American and North Finn. Before payout, the investor will receive 45% net revenues and Tatonka will receive 15%. Following payout, Tatonka and the investor will each receive 30% net revenues. Each party will be responsible for 30% of operating costs before and after payout.



• Penn Octane Corp., Palm Desert, Calif., (OTCBB: POCC) has acquired an additional 25% stake in Rio Vista GP LLC, the general partner of Rio Vista Energy Partners LP, Houston, (Nasdaq: RVEP) from Rio Vista affiliate Shore Trading LLC for $1.3 million.

Penn Octane exercised an option to acquire the stake, and now holds 75% interest. Rio Vista transports liquefied petroleum gas from Matamoros, Mexico, to an LPG terminal in Brownsville, Texas, and plans to broaden its business to include oil and gas E&P.

Rio Vista plans to acquire producing assets and associated gathering systems in east-central Oklahoma from four undisclosed, privately-held Oklahoma-based companies for $27.4 million in cash, equity and assumed debt.

The properties consist of 22,000 gross held-by-production acres in McIntosh, Haskell and Pittsburg counties, a 25-mile pipeline in Haskell and Pittsburg counties and a 40-mile pipeline that receives gas from leases in the Texanna area north of Lake Eufaula and delivers to the ONG-R-900 intrastate pipeline in McIntosh County.

The four companies have a majority interest in a total of 93 operated wells and 16 nonoperated wells primarily from Booch sand, Hartshorne coalbed-methane, George's Fork and Spiro wells. There are an additional 114 identified drilling locations in the upper formations with upside potential.

Acting Rio Vista chief executive Ian Bothwell says, "We believe the acquisition of these assets provides us with compelling near-term production opportunities in historically proven areas of coalbed-methane production. These fields in Oklahoma have produced large amounts of natural gas. With numerous additional attractive drilling locations we have identified, combined with the shallow drilling required, we believe that we can expand production with minimal capital risk."



• A subsidiary of privately owned NFR Energy LLC has entered the Riverbend project in Utah with Gasco Energy Inc., Denver, (Amex: GSX) for $19 million.

The deal includes participating in drilling 30 wells in the 1,200-gross-acre project in Uintah County in exchange for NFR earning 66.67% of Gasco's interest in each 40-acre drilling location. The agreement covers substantially all of Gasco's 2007 drilling program, retroactive for certain wells drilled year-to-date, and includes 13 gross operated wells spudded (3.5 net to Gasco, 6.9 net to NFR).

Excluded are the Federal #14-31 Mancos test and two Wilkin Ridge-area wells.



• BlueStone Natural Resources LLC, Tulsa, Okla., has acquired Col­um­bus Energy LLC for an undisclosed price.

Columbus operates more than 140 wells in South Texas and the Rockies. Production is more than 17.8 million cu. ft. of gas equivalent per day. Columbus is now a subsidiary of BlueStone.

In a separate transaction, Bluestone acquired certain additional interests in South Texas properties operated by Columbus from a subsidiary of Tulsa-based Samson. The acquisitions were funded by a $100-million credit facility with Bank of America.

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