Abraxas Petroleum Corp., San Antonio, (Amex: ABP) has formed a master limited partnership (MLP), Abraxas Energy Partners LP, to which Abraxas contributed certain assets in South and West Texas. The assets have estimated proved reserves of approximately 65 billion cubic feet of gas equivalent as of year-end 2006 and currently account for approximately 85% of Abraxas' daily production. Abraxas will own an approximate 47% interest in the MLP. The general partner of the MLP, Abraxas General Partner LLC, will be a wholly owned subsidiary of Abraxas.
Abraxas has completed a private placement of $100 million, accounting for a 53% interest in the MLP, led by Lehman Brothers MLP Opportunity Fund LP and co-led by Citigroup Global Markets Inc., Third Point LLC and funds managed by Fiduciary Asset Management LLC, Merrill Lynch Commodity Partners LP and Tortoise Capital Resources Corp. Net proceeds of the private placement will be used to repay debt and fund future drilling opportunities and for general corporate purposes.
Allenergy Inc., Coffeyville, Kan., (Pink Sheets: ALRY) has acquired the 160-acre East Ball lease in Montgomery County, Kansas, from an undisclosed seller for an undisclosed price.
The lease has 13 wells with 11 equipped and a tank battery facility. Production from two of the wells is two barrels of oil per day.
The lease adjoins the 480-acre Ball lease that is one component of the 940-acre Project AE-4 in Chautauqua County, Kansas. Allenergy now has more than 7,000 acres and 150 wells.
Allied Energy Group Inc., Bowling Green, Ky., (Pink Sheets: AGGI) has closed its acquisition of interests in 27 wells in Oklahoma from operator KMV Consulting Inc., a subsidiary of Mammoth Energy Group Inc., Denver, (Pink Sheets: MMTH) for an undisclosed amount of cash, stock and assumed debt.
The assets include 68.5% working interest (63.75% net revenue interest) on more than 2,870 acres in Rogers County. Allied previously held 16.5% interest in the wells. Total production is approximately 1.2 million cubic feet of gas per day.
Allied also acquired the remaining 83.5% interest in more than 1,780 acres in the field where there are 10 wells being put into production and now has 100% working interest (75% net revenue interest) in the leasehold. This brings its holdings in Rogers County to approximately 3,100 acres.
Anadarko Minerals Inc., a subsidiary of privately held Oklahoma City-based Dutcher & Co. Inc., has acquired the Rich Valley, Okla., asset from Ladder Cos. Inc. and Tri-Flow Inc., subsidiaries of Cano Petroleum Inc., Fort Worth, Texas, (Amex: CFW) for $7 million.
The assets include 4,500 gross acres (3,690 net) in Grant and Garfield counties, Okla., and Meade County, Kan. Pro-duction is approximately 120 barrels of oil equivalent per day. Proved reserves as of July 2006 were approximately 600,000 barrels equivalent.
Cano will use the proceeds to pay down debt on its senior credit facility.
Cano chief executive Jeff Johnson says, "The sale of this non-strategic asset will allow us to concentrate on our core activities and will give us some additional financial flexibility."
Jefferies Randall & Dewey Inc. marketed the assets.
Black Dragon Resource Cos., Oil City, La., (Pink Sheets: BDGR) plans to take measures, including a stock buyback, to thwart a possible hostile takeover.
Black Dragon reports that a recent decline in stock price is due to a group that is looking to orchestrate a hostile takeover. The recent $0.05 share price has the company valued in the mid-$4-million range. Management considers this to be a "ridiculously low figure" when taking into account its current production, which is approximately 170 barrels of oil equivalent per day.
Black Dragon has 450 wells in the Caddo Lake area of Louisiana.
BreitBurn Energy Partners LP, Los Angeles, (Nasdaq: BBEP) has closed the acquisition of oil properties along the Sunniland Trend in Florida from Calumet Florida LLC, a unit of Florida-based Vulcan Resources Florida Inc. for $100 million.
The deal is valued at approximately $60,000 per flowing barrel and $10.50 per proved barrel, according to BreitBurn co-chief executive Hal Washburn.
The assets include 100% working interest (85% net revenue interest) in 15 producing wells on five separate fields. Expected net production (after royalties) is approximately 1,600 barrels of oil equivalent (100% oil). Proved reserves are approximately 9.5 million barrels equivalent (90% proved developed producing).
The assets also include a 23-mile pipeline serving one field, one storage terminal and rights in a shipping terminal.
BreitBurn co-chief executive Randy Breitenbach says, "We are pleased to announce another acquisition consistent with our proven strategy of acquiring and developing complex fields with large amounts of original oil in place and shallow production declines. This is a great fit given our experience with established producing assets and the strength of our technical and exploitation team."
BreitBurn funded the deal with a $130-million private placement.
BreitBurn Energy Partners LP, Los Angeles, (Nasdaq: BBEP) has acquired the majority interest in an institutional partnership that owns two significant, high quality oil properties in the Los Angeles Basin in California from Stamford, Conn.-based TIFD X-III LLC for approximately $82 million.
As part of the transaction, BreitBurn immediately broke unfavorable hedges associated with the properties at a cost of approximately $10 million. New derivative contracts have been put into place.
This institutional partnership is managed by BreitBurn Energy Co. LP, an affiliate of BreitBurn's general partner in which BreitBurn has no ownership interest. The two properties held by the partnership are the East Coyote Field and the Sawtelle Field, both of which have been operated by BreitBurn Energy Co. for more than seven years.
The fields have estimated net total proved producing reserves of approximately 6.5 million barrels of oil equivalent (99%; 100% PDP), and current net production of approximately 900 barrels of oil equivalent per day (after royalties).
Privately held Houston-based Castex Energy 2007 LP has closed the acquisition of substantially all of the onshore South Louisiana assets of Energy Partners Ltd., New Orleans, (NYSE: EPL) for $71.7 million in cash.
Energy Partners chairman and chief executive Richard A. Bachmann says, "We are very pleased to have received this compelling offer, which encouraged us to break out the onshore portion of our divesture package to accommodate the sale. We will now begin separately marketing the balance of our divesture package which is comprised entirely of Gulf of Mexico shelf assets."
Production from the onshore and shelf assets is 4,000 barrels of oil equivalent per day.
Energy Partners will use proceeds to pay down its revolving credit facility.
Merrill Lynch Petrie was financial advisor to Energy Partners.
Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) has acquired 1.8 million shares of Gastar Exploration Ltd., Houston, (Amex: GST; Toronto: YGA) for US$2 each in a deal valued at $3.5 million.
Chesapeake exercised its preemptive rights to acquire these shares following Gastar's issuance of shares to privately owned Texas-based Navasota Resources LP related to Navasota's acquisition of a portion of Gastar's East Texas assets for $92 million.
Chesapeake now owns 16.4% of Gastar's outstanding shares.
Gastar president and chief executive J. Russell Porter says, "We are pleased that Chesapeake has elected to maintain their ownership interest in Gastar and we greatly appreciate Chesapeake's continued support of Gastar."
Gastar and Chesapeake are conducting an exploration and development program in the Hilltop area of the deep Bossier play. The additional funds will support that as well as Gastar's other planned drilling.
CNX Gas Corp., Pittsburgh, (NYSE: CXG) plans to acquire approximately 70,000 lease acres in western Kentucky from a subsidiary of Atmos Energy Corp., Dallas, (NYSE: ATO) and Addison, Texas-based Teal Royalties LLC for an undisclosed price.
The assets are near CNX's existing properties in the New Albany shale, and the company will have 140,000 acres following the deal. There are no proved reserves associated with this acreage.
CNX president and chief executive Nicholas J. DeIuliis says, "This project is a first, and significant, step in our efforts to consolidate the position we enjoy in this emerging play. CNX Gas had unveiled its original 70,000 acres to investors last July at an analysts' day in a play known as Cardinal. Since then, we have begun a systematic approach to testing our acreage."
CNX Gas Corp., Pittsburgh, (NYSE: CXG) plans to acquire the gas interests, including coal gas, on more than 1 million gross acres from Peabody Energy Corp., St. Louis, (NYSE: BTU) in a deal valued at $66.5 million in assets and cash.
CNX will first acquire certain coal assets from Consol Energy Inc., Pittsburgh, (NYSE: CNX) for $45 million cash, plus a future payment valued at approximately $6.5 million. CNX will then convey those coal assets plus $15 million cash to Peabody for Peabody's coal gas and other gas rights on 654,000 acres in the Illinois Basin, 153,000 acres in northern Appalachia, 171,000 acres in the San Juan Basin, 47,000 acres in the Powder River Basin and 11,000 acres in the Rockies.
The deal will increase CNX's gross acreage 44% from 2.5- to 3.6 million acres.
There are no proved gas reserves on the assets, but CNX believes that 114,500 acres in the New Albany shale of the Illinois Basin contains at least net unproved reserves of 258 billion cubic feet of gas. If so the company's total proved and net unproved reserves may grow 18% from 3.1 trillion cubic feet to 3.7 trillion.
CNX president and chief executive Nicholas J. DeIuliis says, "CNX Gas is receiving a large block of unproved reserves at a very economic price. If the entire $66.5-million transaction price were allocated to only the 258 billion cubic feet of gas we expect to see in the New Albany shale, it would mean that those unproved reserves were being obtained for less than $0.26 per thousand cubic feet of gas."
He adds that the deal consolidates the company's position in the New Albany shale, making CNX Gas the leading acreage-holder in the shale, controlling 254,500 gross acres. The company will also control the leading coalbed-methane positions in central Appalachia, northern Appalachia and the Illinois Basin.
Merrill Lynch Petrie is financial advisor to Peabody.
The deal is expected to close by the end of July.
Comstock Resources Inc., Frisco, Texas, (NYSE: CRK) has acquired assets in South Texas from an undisclosed seller for $32.5 million.
The assets include additional working interests in the Javelina Field in Hildalgo County. Proved reserves are approximately 10.6 billion cubic feet of gas and probable and possible reserves are 8.1 billion cubic feet.
Joint-venture partners Energy Finders Inc., Dallas, (Pink Sheets: EGYF) and International TME Resources Inc., Dallas, (Pink Sheets: ITME) have acquired an additional 3,442 acres for the Trinity Sands (Mega West) project in Edwards County, Texas. The project now consists of 33,322 acres.
Energy XXI (Bermuda) Ltd., Houston, (London: EGY) has closed its acquisition of certain Gulf of Mexico shelf properties from Pogo Producing Co., Houston, (NYSE: PPP) for $414.7 million in cash.
The deal was originally for $419.5 million before the exercise of $4.8 million in preferential rights.
The assets include 28 fields (73% operated) on approximately 282,000 gross acres (91,600 net). Net production is approximately 7,400 barrels of oil equivalent per day (62% oil). Net proved reserves are approximately 20 million barrels equivalent (70% oil, 74% proved developed).
Energy XXI chairman and chief executive John Schiller says, "These properties largely overlap our current offshore holdings from both a geographic and geologic standpoint, which offers significant operating synergies. This transaction will boost our recent production run rate by more than 40% and our proved reserve base by about 50%."
Schiller adds the investment is attractive solely on the proved reserves, and there is upside potential with production of more than 1,500 barrels equivalent per day to be restored from hurricane-affected facilities and new drillsites.
Energy XXI funded the deal from bank debt and a private debt placement. Jefferies & Co., The Royal Bank of Scotland and BNP Paribas jointly arranged the financing.
Forest Oil Corp., Denver, (NYSE: FST) has closed its acquisition of The Houston Exploration Co., Houston, (NYSE: THX) for $1.5 billion in cash and stock and will assume net debt estimated at $100 million.
Forest paid 0.84 Forest share and $26.25 in cash (a $60.02 value) per Houston Exploration share, totaling some 23.6 million Forest shares and $750 million in cash. Forest shareholders now own 73% of the combined company.
Forest funded the cash portion with a $1.4-billion revolving credit facility underwritten by JPMorgan Chase Bank NA.
Forest had the support of New York-based Jana Partners LLC, which held 14.7% of outstanding Houston Exploration shares. Jana has agreed to not propose any extraordinary transactions with Forest or seek to influence the management or control of Forest for a year following the deal's closing.
The Houston Exploration assets are in South Texas, East Texas, the Arkoma Basin of Arkansas and Oklahoma, and the Uinta and D-J basins in the Rockies. Production is 205 million cubic feet of gas equivalent per day, and proved reserves are approximately 655 billion cubic feet equivalent.
Forest now has estimated proved reserves of approximately 2 trillion cubic feet equivalent (approximately 69% proved developed, approximately 70% gas).
Forest president and chief executive H. Craig Clark says, "We are undertaking this significant acquisition to further strengthen our onshore North American asset base and to add drilling inventory for our proven acquire-and-exploit strategy. This strategy has provided us with superior risk-weighted returns over the last several years."
The deal will add more than 3,200 drillsites to Forest's inventory. The assets are in tight-gas-sand basins in which Forest has recently benefited from new technological applications like horizontal drilling and fracture stimulation.
Houston Exploration chairman, president and chief executive William G. Hargett says, "The transaction with Forest not only provides immediate value to Houston Exploration's shareholders, but also affords them the opportunity to participate in the upside potential created by our combination. I am confident that together with Forest, we will have the financial and operational strength needed to continue capturing the opportunities in our industry."
Jana managing partner Barry Rosenstein says, "Given the current environment, we believe this is a good deal and we have confidence that Forest Oil is the right company to maximize the value of these assets. Forest Oil has a strong track record of keeping F&D costs and operating expenses low, and its disciplined management team has maintained some of the most favorable cost controls in the industry during the inflationary period of the last several years."
Credit Suisse Securities (USA) LLC was financial advisor to Forest, and Lehman Brothers Inc. was financial advisor to Houston Exploration.
Freestone Resources Inc., Fairfield, (Pink Sheets: FSNR) has acquired the Byrd A1 oil well in Turner-Gregory Field in Mitchell County, Texas, from an undisclosed seller for an undisclosed price. The assets include 100% working interest (83.4% net mineral lease) on an 80-acre lease. Also included is all surface and well equipment.
Gulf Biomedical Corp., Houston, (Pink Sheets: GBIC) has acquired an oil, gas and mineral lease containing a 50% working interest in the I.T. Kent lease in Navarro County, Texas, from an undisclosed seller for an undisclosed price. The lease comprises more than 20 wellbores on approximately 88 acres.
Hemi Energy Group Inc., Fort Worth, Texas, (Pink Sheets: HMGP) has acquired additional leases in Woodson County, Kansas.
The assets consist of approximately 2,200 acres contiguous to its five leases in Woodson County, bringing the total acreage to almost 11 square miles. The lease is part of Hemi's larger lease program in eastern Woodson County.
Hemi Energy Group Inc., Fort Worth, Texas, (Pink Sheets: HMGP) has acquired 1,200 lease acres in eastern Woodson County, Kansas, bringing the total project size to seven square miles.
Inform Worldwide Holdings Inc., Las Vegas, (OTCBB: IWWI) plans to acquire all rights held in two projects in Osage County, Okla., from an affiliated company, Texas-based Soam Oil & Gas Investments LLC for an undisclosed price.
The project consists of 80% net revenue interest in 50 wells on 2,720 acres. Production is more than 60 barrels of oil per day. Soam will remain operator.
Inform will also pay all of Soam's accrued expenses.
Inform Worldwide Holdings Inc., Las Vegas, (OTCBB: IWWI) plans to acquire certain leasehold interests and equipment in Osage County, Okla., from California-based Roark Oil & Gas for $1.4 million.
The asset is known as the Roark project. Production is approximately 27 barrels of oil and 60,000 cubic feet of gas per day.
Loews Corp., New York, (NYSE: LTR) and XTO Energy Inc., Fort Worth, Texas, (NYSE: XTO) plan to acquire most of the U.S. onshore E&P operations of Domin-ion Resources Inc., Richmond, Va., (NYSE: D) in two deals valued at a total $6.5 billion.
Loews will acquire Dominion's operations in the Permian Basin in Texas, the Antrim Shale in Michigan and the Black Warrior Basin in Alabama for $4 billion. Proved reserves are approximately 2.5 trillion cubic feet of gas equivalent.
The deal values the proved reserves at $1.61 per thousand cubic feet equivalent, according to the advisor to Loews, Merrill Lynch Petrie.
Dominion E&P senior vice president of E&P Timothy Parker will lead Loews' new E&P company.
Loews chief executive James Tisch says, "These long-lived and low-risk natural gas producing assets represent an excellent platform for Loews to enter the exploration and production business. We have a favorable long-term view of natural gas pricing in the U.S. and believe natural gas will increasingly be the fuel of choice in the future."
XTO will acquire 542,000 net acres (235,000 undeveloped) of Dominion's operations in the Rockies, Gulf Coast, San Juan Basin and South Louisiana (70% operated) for $2.5 billion. The Rockies assets make up the majority of the land and reserves and are primarily in the Uinta Basin, including interests in the Natural Buttes gas field in Utah, Drunkards Wash coalbed-methane field which offsets the company's Buzzard Bench operations, and bolt-on properties in the San Juan Basin. The Texas assets are primarily in the Wilcox Trend in Colorado, Lavaca, Wharton and Zapata counties.
Production is 200 million cubic feet equivalent per day. Proved reserves are 1.1 trillion cubic feet equivalent.
XTO president Keith Hutton says, "These choice assets will efficiently fit into our operating basins. Our development teams have acquired new growth opportunities in tight gas formations and coal bed methane in the Uinta Basin, entry into the Jonah Field of the Green River Basin, and legacy production in the San Juan Basin. The expansive undeveloped acreage in the Rocky Mountains, of which about 50% is located in Natural Buttes, is expected to add significant value to this transaction."
XTO plans to review its entire portfolio of producing properties, including this new acquisition, for selective inclusion in a master limited partnership with an initial capitalization of more than $500 million.
XTO chairman and chief executive Bob Simpson says, "In today's marketplace, we believe an opportunity exists with the MLP structure to further enhance the captured value of a portion of XTO's exceptional property base."
He adds that XTO has designed four royalty trusts which have prospered for the owners, and the formation of a new MLP will "unleash value to build for the future."
Dominion chairman, president and CEO Thomas Farrell says, "With today's announced divestitures, sales proceeds for more than 85% of reserves to be sold are known. We now have sufficient information to accurately model the new company on a post-divestiture basis."
Dominion also plans to sell its offshore assets to ENI SpA, Rome; (NYSE: E) its Canadian assets to Paramount Energy Trust, Calgary, (Toronto: PMT-UN) and Baytex Energy Trust, Calgary; (Toronto: BTE-UN) and its Midcontinent assets to an undisclosed buyer.
JPMorgan, Lehman Brothers and Juniper Advisory LP are financial advisors for Dominion and Merrill Lynch Petrie is financial advisor to Loews.
The deals are expected to close in August.
Standard & Poor's Ratings Services has affirmed XTO's BBB corporate credit rating following the announcement.
S&P credit analyst David Lundberg reports, "We expect XTO to finance the acquisition in a relatively balanced manner-$1 billion in new equity, with the remaining $1.5 billion funded through issuance of commercial paper and/or additional long-term debt. As a result, we expect XTO's leverage metrics to remain within acceptable levels for current ratings."
He adds that the likelihood of a positive rating improvement is limited at this time.
Pro forma the deal, XTO will have close to $5.1 billion in total debt outstanding.
Matrixx Resource Holdings Inc., Los Angeles, (OTCBB: MXXR) plans to acquire a 37.5% interest in the Easter prospect in Texas from an undisclosed seller for an undisclosed price.
The prospect covers 601 acres in Colorado County. The first well will be drilled to the Yegua sand. The test is expected to begin in early August.
The deal is expected to close in mid-June.
Morgan Creek Energy Corp., Dallas, (OTCBB: MCRE) has acquired an option on producing assets on approximately 3,000 acres in southern Texas form an undisclosed seller for an undisclosed price.
The assets include 87.5% net revenue interest in wells in Duval and Webb counties, Texas. There are 79 boreholes drilled on 42 leases in the optioned area.
New Frontier Energy Inc., Denver, (OTCBB: NFEI) has acquired a 66.67% working interest in an additional 600 gross acres in Slater Dome Field in northern Colorado and southern Wyoming from an undisclosed seller for an undisclosed price. The deal increases its total Slater Dome Field holdings to approximately 64,400 gross acres (34,400 net).
Toronto-based NRG Investments Inc. (CNQ: NRGI) plans to acquire Gemini Energy Corp., Vancouver, (Toronto: GNI) for C$98.4 million in cash and stock and assume C$47.3 million in debt in a total deal valued at C$145.7 million.
NRG plans to offer C$4 per share or one NRG share per Gemini share for non-U.S. shareholders and C$4 per share for U.S. shareholders.
Gemini's assets include 14,736 gross acres (4,105 net) in the Mesa, Warbonnet and Bull Draw areas of the Pinedale Anticline in southwestern Wyoming. Proved and probable reserves as of Dec. 31 were 149.2 billion cubic feet of gas equivalent.
At closing, Gemini will sell 12 million shares of Houston-based Exxel Energy Corp. (Toronto Venture: EXX) to Q Investments Ltd., as part of its term sheet with Q Investment.
Pacific Energy & Mining Co., Reno, Nev., (Pink Sheets: PEMC) has sold its fee surface rights in Cisco, Utah, to an undisclosed buyer for $310,000. Pacific Energy retains oil, gas and mineral rights and has the right to use 10 acres for storing its equipment for the next five years.
Pacific Energy Resources Ltd., Long Beach, Calif., (Toronto: PFE) plans to acquire all of the Alaska assets of Forest Oil Corp., Denver, (NYSE: FST) for US$448 million in cash and US$16 million in stock in a total deal valued at US$464 million.
The assets include Forest's subsidiary Forest Alaska Holding LLC and remaining assets not held by Forest Alaska, including an equity interest in the 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 barrels of oil equivalent per day (80% oil). Proved reserves are 15.8 million barrels equivalent (181 billion cubic feet equivalent), of which 13.2 million barrels are proved producing, and possible and probable reserves of 44.7 million barrels for total proved, probable and possible reserves of 60.6 million barrels.
The assets also include nearly 1 million net undeveloped acres covering three offshore fields of Corsair, Raptor and Valkyrie and the onshore field of 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 pursing 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 is expected to close on June 30.
Standard & Poor's Ratings Services has affirmed Forest's BB- corporate credit rating and revised its outlook on the company's credit quality to stable from negative. S&P credit analyst David Lundberg reports, "The ratings on Forest reflect the company's aggressive financial leverage, mixed reserve-replacement record and average cost measures, as well as the industry's overall high cyclicality and capital intensity. These risks are partially offset by the company's midsize reserve base, onshore geographic diversity, and the relatively low-risk nature of its drilling program."
Palo Duro Operating (U.S.) Inc., a subsidiary of Centillion Industries Inc., dba Palo Duro Energy Inc., Lethbridge, Alberta, (Toronto Venture: CID.H) has closed its acquisition of certain assets in the Palo Duro Basin, Texas, from Bankers Petroleum Ltd., Calgary, (Toronto, London: BNK) for approximately US$15 million in cash and US$4.5 million in units in a total deal valued at US$19.5 million.
The deal includes up to 27% of Bankers' approximately 375,000 net acres in the basin. Bankers will continue as operator. Bankers now owns 9.9% of Palo Duro Energy, and can increase its holdings to 14.2% if the company chooses to exercise rights.
San Antonio, Texas-based Pegasus Cementers Inc. reports that Drake Gold Resources Inc., Scottsdale, Ariz., (Pink Sheets: DKGR) has not purchased the company.
Drake made a public announcement of a 100% acquisition of Pegasus Cementers (dba Pegasus Oil Well Services). Pegasus responded that this was not true and Pegasus is not now, nor has it ever been, owned by Drake in whole or in part.
An initial agreement had been made between the companies but was never finalized, as Drake defaulted under the terms of the agreement.
Petsec Energy Ltd., Lafayette, La., (Australia: PSA; Pink Sheets: PSJEY) has acquired a production platform and associated facilities in the Gulf of Mexico from Callon Petroleum Co., Natchez, Miss., (NYSE: CPE) in exchange for Petsec assuming abandonment liability, which is estimated at US$4.9 million.
The assets include Mobile Bay 952 and three associated producing wells at Mobile 955 and 953. Petsec will use the host facility for production from its recent discoveries in Mobile Bay. Proved reserves are 3.5 billion cubic feet of gas equivalent that will be added to assets with 18 billion cubic feet equivalent Petsec recently acquired in the Mobile Bay area.
Petsec plans to assign a 50% interest to its Mobile Bay joint-venture partners.
Petsec Energy Ltd., Lafayette, La., (Australia: PSA; Pink Sheets: PSJEY) plans to acquire a 20% interest in a drilling program that includes a three-well commitment in Terrebonne Parish, La.
Gross reserves are 58.3 billion cubic feet of gas and 1.8 million barrels of oil for total net reserves of 8.8 billion cubic feet of gas equivalent.
Pioneer Oil and Gas, South Jordan, Utah, (Pink Sheets: POGS) has sold 50% of its interest in several thousand acres primarily in the Central Utah Overthrust trend to an undisclosed party for $1.5 million. Pioneer retains small overrides in the property.
Plains Exploration & Production Co., Houston, (NYSE: PXP) has closed its acquisition of all the interests in producing properties and midstream assets in Colorado from Denver-based Laramie Energy LLC for $900 million in cash and approximately $53 million in stock in a total deal valued at $953 million.
The assets include more than 200 producing wells on 60,000 gross acres (55,000 net) and more than 3,000 additional potential drilling locations in the Mesaverde section of the Piceance Basin. The assets also include a 25% interest in the 40-mile Collbran Valley gathering system.
Production is approximately 36 million cubic feet of gas per day (97% gas). Proved reserves are approximately 64 million barrels of oil equivalent and proved, probable and possible reserves are 359 million barrels.
Plains chairman, president and chief executive James C. Flores says, "This transaction provides PXP a meaningful acreage position with substantial reserve- and production-growth opportunities. We have identified over 3,000 drilling locations each with an estimated ultimate recovery of nearly 1 billion cubic feet equivalent per well. With five drilling rigs operating, we expect to initially drill about 100 wells per year."
Plains funded the deal with borrowings from its bank credit facility.
Lehman Brothers Inc. was financial advisor to Plains and Merrill Lynch Petrie Divestiture Advisors was financial advisor to Laramie.
Platina Energy Group Inc., Cheyenne, Wyo., (OTCBB: PLTG) plans to acquire a major stake in the Hall and Kirkpatrick leases in Swisher and Hale counties, Texas, from an undisclosed seller for an undisclosed price. The assets increase the company's Palo Duro Basin holdings by an additional 920 acres.
Pyramid Petroleum Inc., Calgary, (Toronto Venture: PYR) plans to acquire Capco Energy Inc., Houston, (Pink Sheets: CGYN) for an undisclosed amount of stock.
Pyramid will determine the number of shares issued to Capco shareholders based on discounted net asset value of both companies' reserves. Capco's outstanding shares are currently valued at US$7 million.
Capco has assets primarily in the Gulf of Mexico and was operator of 42 wells as of April. Major assets include interests in West Delta 62, Ship Shoal 144/145/159, West Cameron 102 and Brazos fields. Production is 19.5 million cubic feet of gas and 2,600 barrels of oil per day (7.3 million cubic feet equivalent net) from 23 wells.
Ilyas Chaudhary, the majority shareholder and chief executive of both companies will not participate in the selection of the third-party appraiser for the deal nor vote on any issue in this transaction. No other Capco director plans to join the Pyramid board.
Pro forma, Pyramid will operate approximately 125 wells in the Gulf of Mexico, own producing onshore assets in Texas, Montana and Alberta, and have a net undeveloped land position of 82,000 acres in various areas. The headquarters will be in Houston. Capco will become a subsidiary of Pyramid.
Quest Resource Corp., Oklahoma City, (Nasdaq: QRCP) plans to form a master limited partnership (MLP) and an initial public offering.
The MLP will own all of Quest Resource's properties in the Cherokee Basin of southeastern Kansas and northeastern Oklahoma. The company's gathering system, owned and operated by Quest Midstream Partners LP, and the undeveloped acreage leased by Quest Resource outside the Cherokee Basin will not be part of this deal.
Net proceeds from the IPO will be used to pay a portion of existing debt.
Samson Acquisition Corp., a subsidiary of privately held Samson Investment Co., Tulsa, Okla., has acquired approximately 92% of PYR Energy Corp., Denver, (Amex: PYR) for $40.8 million in cash.
Samson's offer is $1.30 per share. Purchase of the remaining shares will bring the total deal value to $49.4 million.
PYR has interests in 89 wells on 37,275 acres in the Rockies, Texas, Gulf Coast regions and in Canada. As of Aug. 31, proved reserves were 518,788 barrels of oil and gas liquids and 2.8 million barrels equivalent of gas.
C.K. Cooper & Co. Inc. is financial advisor to PYR.
Saxon Oil Co. Ltd., Dallas, (Toronto Venture: SXN; Pink Sheets: SXNOF) has acquired a 20% membership interest in AleAnna Resources LLC from Houston-based parent AleAnna Energy LLC for $100,000 in cash and $1.4 million in shares for a total deal valued at $1.5 million.
Saxon received a cash payment of $676,470 from a third-party entity who is also acquiring a portion of AleAnna's interests, bringing Saxon's total investment in the deal down to $823,530.
The assets include a 20% working interest in AleAnna's Permian Basin assets in West Texas and New Mexico. The Permian Basin assets include fewer than 2,160 gross acres (1,600 net).
St. Mary Land & Exploration Co., Denver, (NYSE: SM) has acquired assets in South Texas from an undisclosed seller for $29.5 million in cash.
The assets include operated 100% working interest (22.5% net revenue interest) in the Olmos shallow-gas formation in the Catarina Field in Webb and Dimmit counties, Texas. Net production is 2.9 million cubic feet of gas equivalent per day (98% gas). Net proved reserves are 14 billion cubic feet equivalent (99% gas, 65% proved developed).
St. Mary president and chief executive Tony Best says onshore South Texas is an area that St. Mary has been looking to enter for a number of years. "We are entering the play at an attractive cost and believe that this acquisition gives us a foundation for growth in the region."
St. Mary funded the deal with cash on hand and bank borrowings from its existing credit facility.
Tammany Oil & Gas LLC, Houston, has acquired Gulf of Mexico shelf assets from Dominion Oklahoma Texas Exploration & Production Inc., a subsidiary of Dominion, Richmond, Va., (NYSE: D) for an undisclosed price.
The assets include properties in state and federal waters across the Gulf, both operated and nonoperated.
The deal was funded by NGP Capital Resources Co., Houston (Nasdaq: NGPC).
Tammany president Erich Kraus says, "This divestment was part of Dominion's larger strategy to concentrate on their core business. At the same time, this transaction enables Tammany to grow and continue our search for other quality acquisitions."
Tecton Energy LLC has merged with Texas-based SouthView Energy LP for an undisclosed price.
Tecton now has more than 350,000 acres of producing, development and exploratory property throughout the U.S. and western Canada, focusing on unconventional resource plays such as tight sands, coalbed-methane and shale deposits.
SouthView chief executive Jack Schanck and Tecton CEO Bill Dirks are managing partners of the combined company.
Schanck and Dirks report, "We are delighted to be working together again. The combination of assets, talent and experience from these two companies, coupled with the financial backing of Quantum Energy Partners and Jefferies Capital Partners, creates a powerful growth vehicle in the North American E&P sector."
Affiliates of Houston-based Quantum Energy Partners and New York-based Jefferies Capital Partners have committed equity funding totaling $132 million. Quantum was invested in SouthView.
Quantum managing partner Wil VanLoh says, 'The merger provides Tecton with a superior competitive advantage in the development and exploration of North American resource plays. The collective skillset and demonstrated expertise of the Tecton and SouthView teams greatly enhance the company's ability to create value via organic growth through development and low-risk exploratory drilling across multiple core areas."
Teton Energy Corp., Denver, (Amex: TEC) has acquired an acreage position in Wyoming from an undisclosed seller for $469,270.
The assets include 100% working interest in approximately 6,250 gross and net acres in the Big Horn Basin. Teton plans to close on an additional 5,750 gross and net acres for a total 12,000 gross and net acres by June 6. Teton will be operator.
Teton president and chief executive Karl Arleth says, "With a 100% working interest in this relatively untouched acreage, we believe this acquisition represents an excellent opportunity to develop new oil and gas resources that will be key drivers of Teton's growth going forward."
Teton's long term strategy is to build its operating presence in assets it owns.
Teton Energy Corp., Denver, (Amex: TEC) has formed a drilling partnership with privately held Pittsburgh-based Targe Energy E&P LLC to evaluate approximately 9,000 gross and net acres in the Frenchman Creek prospect in Colorado held by Teton outside an area of mutual interest with Noble Energy Inc., Houston (NYSE: NBL).
The acreage block is in the eastern DJ Basin. Targe will carry Teton on a two-well pilot program and its proportionate share of 3-D seismic to earn a 50% interest in the acreage. Teton will be operator and will use coiled-tubing drilling and completion technology.
The Oil & Gas Asset Clearinghouse, Houston, sold more than $47.4 million of properties to more than 200 registered bidders who competed on 92 lots at auction May 9.
Palomino Petroleum sold 25 lots in western Kansas for $8.7 million; Samson, in the Sooner Trend area of Oklahoma and Texas for $29.4 million; Sands Reserve, in a one-well lot in Bolton Field, Hinds, Miss., for $1.2 million; and Suemaur Production, in the Edinburg East Field in Hidalgo, Texas, for $1 million.
The next auction will be June 13 in Houston and online.
The Stallion Group, Jackson, Miss., (OTCBB: SLGR) has acquired additional working interest in an area of mutual interest in Mississippi and Louisiana from an undisclosed seller for an undisclosed price.
The company's interest has increased from 30% to 40%. Stallion decided to increase its interest due to recent drilling success. Of six Frio wells drilled to date, five have been completed as gas wells for a success rate of 83%. The company previously announced a new 16-well E&P program in Mississippi that will commence shortly.
Thunderbird Energy Corp., Vancouver, (Toronto Venture: TBD) plans to acquire assets in Utah and Wyoming in two deals from joint-venture partner Fellows Energy Ltd., Broomfield, Colo., (OTCBB: FLWE) for a total US$6.5 million in cash and assumed debt.
In the first deal, Thunderbird will acquire the remaining 50% interest in the Carbon County gas project (aka Gordon Creek project) in Utah for US$3 million. The project comprises eight wells (four producing) on 5,953 gross acres (4,879 net). The gas is transported in a Questar Gas Resources-operated pipeline that crosses the acreage.
Fellows will retain its interests in the adjacent 5,242-acre Gordon Creek project. The deal is expected to close in July.
In the second deal, Thunderbird will acquire a 25% working interest in the Weston County project in Wyoming in exchange for US$3.5 million to fund development. Thunderbird will drill and complete three wells in the Dakota formation.
Trendsetter Production Co., a subsidiary of Hyperdynamics Corp., Houston, (Amex: HDY) plans to acquire assets in Louisiana from Ferriday, La.-based Rabb Resources Ltd. and Rabb Contracting Co. LLC for $100,000 in cash and $300,000 in stock in a total deal valued at $400,000.
The assets include an 85% working interest in approximately 1,100 acres. Proved reserves are 250,000 barrels of oil and total reserves are more than 1 million barrels. Rabb will operate the leases.
Rabb says, "This partnership will allow us to efficiently enhance production and fully develop the numerous leases and prospects we currently have and are looking to acquire in the near future."
Hyperdynamics chief executive Kent Watts says, "This is in line with our strategy to have our domestic operations support our West African exploration efforts."
TrueStar Petroleum Corp., Vancouver, (Toronto Venture: TPC) has canceled its proposed acquisition of leasehold in the Williston Basin in northwestern South Dakota from Colorado-based C&D Exploration LLC for 22 million shares valued at C$2 million.
The assets include leasehold on approximately 694,000 gross acres (515,000 net).
TrueStar concluded the block did not meet current company objectives. TrueStar will focus on other acreage in the Williston Basin.
Greenwich, Conn.-based Trust Venture Co. LLC plans to sell 315,600 units of Torch Energy Royalty Trust, Houston, (NYSE: TRU) for US$8 each for a total US$2.5 million.
The Bank of New York is depositary for the deal.
Unicorp Inc., Houston, (OTCBB: UCPI) has closed its acquisition of a producing field in South Louisiana from an undisclosed seller for $1.3 million.
Unicorp has 100% working interest (75% net revenue interest) in the Welsh Field, Jefferson Davis Parish that consists of 15 wells. Production is 42 gross barrels of oil per day (32 net) from two wells.
Unicorp funded the deal with a $7-million convertible debenture.
Venoco Inc., Denver, (NYSE: VQ) plans to IPO a master limited partnership (MLP) of some California and Texas assets.
The MLP is expected to own interest in Venoco's onshore California assets in the Beverly Hills West Field in Beverly Hills and the Santa Clara Avenue Field in Ventura County, a portion of its interests in the South Ellwood Field offshore California, and in the Hastings complex in Texas.
Westar Oil Inc., Beverly Hills, Calif., has acquired a $3-million senior debt position of Terax Energy, Dallas, (OTCBB: TEXG) from third-party creditors.
Westar plans to convert the debt into Terax shares at $6.75 per share. Westar has also announced its intention to enter a share-exchange agreement with Terax Energy in which Westar shares will be valued at $24.50 each and Terax shares will be valued at $6.75 each.
Terax has assets in the Barnett Shale of the Fort Worth Basin in northern Texas. Its principal properties consist of two blocks, one covering approximately 11,300 gross acres in Erath County and one covering approximately 16,200 gross acres in Comanche County.
Western Metals Corp., Los Angeles, (Pink Sheets: WTLC) plans to acquire interest in two gas wells in California from Clayton, Mo.-based Loto Energy II LLC for $2 million in cash and $2.9 million in stock for a total deal valued at $4.9 million.
The assets include 100% working interest (78.1% net revenue interest) in two wells in the Lindsey Slough Field in Solano County. The deal is expected to close by Sept. 30.