A&D Watch 11

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Little billions. Raymond James research analyst Pavel Molchanov, reporting from asellside analyst luncheon with executives at Chevron Corp., said the company has var-ious options on how to deploy $13 billion in cash. Acquisitions are one option, althoughprobably not on one giant gobble.

“The company favors small, more bolt-on deals,” Pavel said, although “small” is de-fined as the company’s $4.3-billion acquisition of Atlas Energy earlier. “Managementlooks for resource accumulation acquisitions like Atlas that will add long-term value,noting that paying for current production is often expensive.”

The Chevron guys did discount spinning out its downstream portfolio, citing its prof-itability, so that’s one less new hungry independent fighting for assets.

Steady M&A. When analyst Gabriele Sorbara opened up an E&P shop at Caris & Co.in September and initiated coverage of eight small and mid-caps, he predicted M&A ac-tivity would remain elevated through next year.

“We believe M&A activity will remain elevated over the next 12 months, as manycompanies are trading at depressed valuations, in need of capital to develop their poten-tial resource base, or simply just to stay within internally generated cash flow,” he said.

His top take-out candidate is Cabot Oil & Gas, with its concentration in a Marcellussweet spot and several emerging liquids plays, as well as its clean balance sheet andlarge, undeveloped acreage positions in the U.S. “We also believe Pioneer Natural Re-sources, Oasis Petroleum and Rosetta Resources are potential takeout candidatesgiven their clean capital structure and reserve upside potential.”

© 2011 by Hart Energy Publishing LP. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to $100,000 for violations.

November 2011, Vol. 25, No. 11

Special Report: Cabot’s Forward Curve Inside…

A&D Marketplace Notes

(Cont. on p. 54)

PDC Plans Wolfberry, COSales, Seeks Utica JV Partner

Quicksilver To Launch New Barnett MLP

BREAKING NEWS AT

Top Stories:

Norway’s Statoil Buys Brigham For Prime Stake In Bakken Oil Play . . . . . . . . . . . . . . . . .36

Kinder Morgan, El Paso To Combine; E&P Assets To Fly . . . . . . . . . . . . . . . . . . . . . .45

Kodiak To Tack on 13,500 Additional Williston Basin Acres . . . . . . . . . . . . . . . . . . . .32

Carrizo Opens Up JV On Eagle Ford Project To India’s Gail . . . . . . . . . . . . . . . . . . .32

GeoMet To Take Hold Of West Virginia, Alabama CBM Properties . . . . . . . . . . . . . . . . .32

SandRidge To Unload E TX Gas Properties . .33

PDC Energy, Lime Rock JV To Consume WV Marcellus Company . . . . . . . . . . . . . . . . . .34

Antero Adds 60 Bcf Proved In Marcellus On Consol Override . . . . . . . . . . . . . . . . . . . . .31

Sinopec Eyes Another Large Canadian Purchase . . . . . . . . . . . . . . . . . . . . .40

ExxonMobil, Rosneft Team Up On Offshore Arctic, U.S. Shales . . . . . . . . . . . . . . .43

Editor’s Commentary . . . . . . . . . . . . . . . 3

Special Report . . . . . . . . . . . . . . . . . . . . . 6

On The Market . . . . . . . . . . . . . . . . . . . . . 9

Divestment Services . . . . . . . . . . . . . . . 15

A&D Networking Opportunities . . . . . . 17

E&P A&D News . . . . . . . . . . . . . . . . . . . 23

S&S A&D News . . . . . . . . . . . . . . . . . . . 48

Companies In This Issue . . . . . . . . . . . 52

M&A Report Card . . . . . . . . . . . . . . . . 54

At Closing . . . . . . . . . . . . . . . . . . . . . . . 54

North America M&A Implied Reserve Values 2011 YTDTotal Value Implied Reserve

Region # Deals ($MM) Value ($/Mcfe)

Alaska - - -Appalachia 3 $275 $0.61Gulf Coast onshore 6 $489 $1.57Gulf of Mexico 9 $744.7 $1.98Midcontinent 20 $8,095.7 $1.67North-Central - - -Northeast - - -Rockies 11 $1,230.3 $1.41Southeast - - -West Coast - - -Canada 18 $7,903.1 $2.96Source: BMO Capital Markets. YTD as of 10/1/11. Includes only transactions with disclosedproved reserve data.

A&D Watch • November 2011 • 3

Buy, Buy, ByeHooray For Shale Plays, But Where Did The Asset Buyers Go?

Say it ain’t so, Subash.New York-based sellside analyst Subash Chandra, Jefferies & Co. Inc., coming off a meeting with ConocoPhillips chief Jim Mulva in

early October, penned a research piece drawing the conclusion that shale plays are sucking the capital out of acquisitions. Not just becauseshales cost a lot to develop, but because their low-risk, repeatable, enormous nature make them a better avenue to production growth than, say,the old (old?) acquire-and-exploit model.

Mulva started the rumor. He told the analysts that ConocoPhillips, following its downstream spin-off, would concentrate on greenfield ex-ploration rather than growth though acquisitions.

The enormous success of shales is causing what was once a clear link between commodity prices and E&P spending to break down, Chan-dra postulates in his Oct. 4 report, “Being Independent—Why Drilling Capex May Not Go Down.”

“The superior risk/reward ratio in unconventional drilling is causing companies to devote more of their resources to developing assets or-ganically vs. through acquisitions,” Chandra says.

Woe is me, an A&D junkie by trade.Chandra’s report pushes the argument that drilling capex (and rig counts) will be sustained or even increase in the face of soft commodity

prices, in spite of historical trends. For 10 years previous, aggregate capex vs. both cash flows and commodity prices have trended in lockstep,a factor of 97% and 99%, respectively.

But shales have created a vigorous appetite for exploratory drilling. In 2010, for the first time in a decade, capex exceeded each measure-ment. First-half 2011 blew historical stats out of the water with capex hitting 122% of cash flows.

From the desk ofA&D Watch’sSteve Toon

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��

0

20

40

60

80

100

120

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Drilling Capex ($mm)

WTI Oil Price ($)R = 0.99

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Drilling Capex($mm)Cash Flow fromOperations ($mm)

R = 0.97

Capex vs. Cash Flow Capex vs. Crude Price

Source: Jefferies & Co. Inc.’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 1H’11 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 1H’11

“We believe this is a direct result of the shale revolution,” says Chandra. “Our premiseis they will drill through everything but a credit crisis.”

This heady drill spend is at the expense of dealmaking, he says. Historically, compa-nies acquired their way to growth when commodity prices declined, as long as equity andcredit markets were open. “Companies could reload their inventories by buying assets orcompanies that had derisked a play.”

As independents have pushed harder into shales, however, they are now relying less onacquisitions and more on the drill bit to grow volumes. Over the past two and a half years,Chandra notes, acquisitions have dropped to 20% of total E&P spending, down from 30%average over the past decade—and are falling.

While exploration is replacing acquisitions as the strategy of choice, the cost of entryin new shale plays increases rapidly as they are derisked.

“As a result, traditional acquire-and-exploit models are working hard to improve theirexploration expertise.”

Take Devon Energy, for example, once an active acquirer. The company has set up anew ventures team to search for new plays.

“Their intent is to get away from acquisitions as a whole. Acquisitions are expensive—the costs of being late to a play are punitive. You’re much better off being an early mover.”

Now, shale-driven independents are trading acquisition dollars for R&D divisions.Leasing expenses, too, are absorbing a bulk of bucks. “If you already have shale, you’redrilling away. If you need more shale, you go leasing.”

Alas, the certainty of a shale-well return on investment trumps having a pocketful ofbrand-new assets in the portfolio. Shale opportunities last longer, have a better probabil-ity distribution and better repeatability than do conventional plays. And the cost of beinga second mover in a shale play has exploded.

Money is no obstacle to acquisitions—equity and debt markets are easy now. “Capitalhas not been a limiting factor for smaller operators (except during the financial crisis), aslong as their resources are economic at the prevailing commodity prices.”

And yet independents would still rather not acquire assets, even with open capital mar-kets.

“They would rather use the equity to drill. They have a lot of potential wells. That’s thewhole difference now vs. the first half of the last decade. Then, those opportunities did notexist, so they had to reload and acquire. Now they have internal opportunities and toomuch to chew.”

But… not everyone has shale—yet. While independent E&Ps loaded with shale oppor-tunities are no longer aggressive acquirers of asset packages nor of each other, they haveinstead become targets of larger entities devoid of shale. For a time, he believes, M&A ofshale independents will increase.

“E&P valuations are reflecting long-term prices lower than the strip,” says Chandra,exactly opposite of the norm. “They are transactable. There is a huge pool of players outthere that can buy independents.”

How long will this downtrend in A&D and uptick in M&A last? Two or three years,predicts Chandra. “A lot of (shale-focused) companies are guaranteed negative free cashflow for the next couple of years. In that time, the dollars will go to the drill bit. When theystart seeing free cash flows out of these shale plays, then they can reload their inventory.”

Editor’s Commentary


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Steve Herod, BHP Petrohawk.

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Subscriptions: $747 per year, non-North American add $50 for air mail.The material and data in this newsletter have been compiled from a num-ber of sources by the editors for the sole use of newsletter subscribers.A&D Watch newsletter believes the data to be accurate and its sourcesreliable, but does not warrant the accuracy and the information herein.Reproduction of this newsletter in whole, or in part, without prior consentof Hart Energy Publishing LP is prohibited. Federal copyright law pro-hibits unauthorized reproduction by any means and imposes fines up to$100,000 for violations. Sub scriptions: 1616 S. Voss Rd., Ste. 1000,Houston, Texas 77057. Phone: 713-260-6437. Fax: 713-840-0923.

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'

For more discussion of A&D, go to A-Dcenter.com.

24%

35%30%

26%

37%

22%

47%

30% 25%

16%13%

0%5%

10%15%20%25%30%35%40%45%50%

’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 1H’11

30%

APA buying ME andBP/DVN properties

Source: Jefferies & Co. Inc.

Acquisitions As % Of E&P Capex

6 • A&D Watch • November 2011

“Ours is a fairly simple program,” says Cabot Oil & Gas Corp.chairman, president and chief executive Dan O. Dinges. “We have acapital program funded by cash flow and asset sale proceeds allo-cated to the Marcellus shale in northeastern Pennsylvania and to theoil window of the Eagle Ford shale.”

Houston-based Cabot is pumping virtually its entire capitalbudget into these two plays, which just happen to be two of the mosteconomic resource plays in the U.S. today.

Cabot was among the first movers in the Marcellus, where it holds200,000 acres in the dry-gas zone, mostly in prolific SusquehannaCounty. With a rate of return exceeding 100% at $5 natural gas, thecompany makes no apologies for its 96% gas weighting. It will invest60% of its budget into the region in 2011. “Our Marcellus gas playcompetes with all of the best oil plays,” Dinges says.

In fact, Cabot boasts seven of the top 10 producing wells in Penn-sylvania. As of the beginning of October, its production from theMarcellus was a restricted 430-450 million cubic feet (MMcf) per dayfrom 95 horizontal wells, plus a backlog of 38 wells drilled but wait-ing on completion. Ongoing infrastructure build-out will provide itwith a total 1.2 billion cubic feet (Bcf) per day of firm capacity byyear-end 2012.

Outside of the Marcellus, oil targets capture the remainder ofCabot’s capital budget, with 40% aimed at the Eagle Ford shale inSouth Texas. Here, the company holds some 60,000 net acres in theoil window. Current activity is focused on its Buckhorn project inFrio County, with latest results averaging in excess of 700 barrels ofoil per day on a 24-hour initial production rate. Again, returns arerobust: 50% to 120% on estimated ultimate recoveries (EURs) of400,000 to 600,000 barrels of oil per well.

Emerging oil plays are destined to gain traction and dollars inCabot’s portfolio. In particular, the company is optimistic about theMarmaton play in the Oklahoma and Texas panhandles, where itholds 32,000 acres, and the Heath in Wyoming, surpassing 100,000acres.

Dinges, who holds a petroleum land management degree from theUniversity of Texas, has been with Cabot since 2001 as president andchairman, and as CEO since 2002. For 20 years prior, he served withSamedan Oil Corp., a subsidiary of Noble Affiliates, now Noble En-ergy Inc. His role there largely concentrated on the company’s off-shore division.

A&D Watch recently visited with Dinges.A&D Watch Why are your wells some of the very best in the

Marcellus?Dinges The wells in Susquehanna continue to exceed our expec-

tations. We have clearly identified a sweet spot in the Marcellus. Our

initial thesis was the thickness of the Marcellus section coupled withthe depth of burial should provide superior in-place reserves and pro-duction rates. To date, our data indicates that our thesis has proventrue.

We have achieved a new one-day natural-gas-production high of440 MMcf per day. Some of the wells contributing to this record pro-duction include five wells completed in the second quarter with 24-hour production rates between 21 MMcf and 28 MMcf per day.

A&D Watch How have your well results improved?Dinges Our 2010 program produced wells with a 10-billion-cubic-

feet-equivalent (Bcfe) EUR. That’s with a 3,600-foot lateral and 14stages. Now, a typical average lateral length is 3,700 feet with 15stages. We have seen an increase in our initial production by virtue ofthe additional stages.

A&D Watch You have choked back some Marcellus wells. Is thatbecause of a lack of pipeline take-away capacity, or is it more to dowith managing the reservoir and getting a higher EUR?

Dinges Our curtailed wells are due entirely to the infrastructuredynamic in the area. Our team does a great job of managing our com-pletion activity with our productive capacity. To effectively completethese wells, we want the fluid off the formation quickly. To accom-plish this, we shut in producing wells to make room for newly com-pleted wells. However, we are collecting data allowing us to evaluatethe relationship between restricted initial production and ultimateEUR, but that analysis will take some time to arrive at a conclusion.

A&D Watch What are you doing to increase take-away capacity?Dinges To remove this barrier, we entered into a long-term

arrangement with Williams Field Services to construct the infrastruc-ture throughout our acreage and gather our gas. By January 2013, theagreement with Williams will provide Cabot with some 1.2 Bcf perday of take-away capacity.

A&D Watch How much production is choked back?Dinges It is tough to say how much of our existing Marcellus pro-

duction is constrained. Most recently, we brought on two new wellsand increased the rates on our currently producing wells, which al-lowed us to fill, within a 24-hour period, an incremental 100 MMcfper day of additional infrastructure capacity we had just commis-sioned.

A&D Watch Cabot has a backlog of more than 500 frac stages tobe completed in the Marcellus. How many frac crews are dedicatedto Cabot?

Dinges We currently have one frac crew dedicated to Cabot in theMarcellus. This crew is averaging 60 to 70 frac-stage completions permonth. If you assume the midpoint at 65 stages per month, thisequates to 52 wells completed annually on an average of 15 stages per

Cabot’s Forward CurveDan Dinges Has Cabot O&G Aggressively Pursuing Two Of America’s Highest-Return Resource PlaysBy Steve Toon

Special Report

Special Report


well.We also recently took advantage of a couple of frac crews that

were down when a peer company had its evaluation process going onwith a well in Bradford County. The displaced crew was looking foradditional work, and we had projects ready to go. We picked up anadditional 100 to 150 stages by utilizing those crews.

We could catch up fairly quickly by bringing in another frac crew,but with the number of wells that are being restrained, we don’t havea sense of urgency with catching up with that number. We are onlyable to produce as much as the infrastructure will hold. As capacitybecomes available, and as we get into later parts of 2012, I envisionthat we would work through some of the backlog with an additionalfrac crew.

A&D Watch How is take-away capacity affecting your Marcellusdrilling program?

Dinges Take-away capacity simply limits our timing for monetiz-ing those investment dollars. We have five rigs running in the Mar-cellus. The wells are very prolific, and we’ve seen good consisten-cies. Our biggest constraint is that the take-away capacity limits ourability to place unlimited frac stages on production.

Looking at the amount of potential production we have restrained,and the number of wells that we’re going to be adding to the queuewith the existing five rigs, we’re able to stay current with the debot-tlenecking process we have in place.

A&D Watch How much additional capacity do you expect toflow through when the Springville line comes on later this year?

Dinges The Springville line is designed for an additional 300MMcf per day. However, we would then reach the capacity con-straints of our Lathrop and Teel compressor stations, which is about550 MMcf per day total. That line allows additional capacity, buttransfers the bottleneck back to the compressor stations. Some of thatis affected by the meter size going into the Tennessee line.

It’s a high-class problem. Once we have the next bottleneck takencare of, we’re going to feel comfortable about being able to producethat excess capacity in a fairly good time frame.

A&D Watch How are the economics shaping up for your EagleFord program?

Dinges As in any new shale play, our initial effort in the EagleFord has produced a fairly large delta regarding results as we imple-ment different drilling and completion techniques. With that said, ourresults to date have exceeded our pre-drill expectations. The EagleFord offers the second-best rate-of-return projects in our portfolio atthis time, making it an important effort going forward. It also givesus a natural hedge against the volatility of natural gas prices, as all ofour acreage is in the oil window.

We have added a partner, EOG Resources Inc., through an area ofmutual interest on an 18,000-plus-acre area of the Eagle Ford to bestexploit this portion of our acreage. This is a heads-up deal with nopromote where each party has a 50% working interest. Two wells arecurrently drilling. Cabot intends to participate, in total, in 25 to 30 netEagle Ford wells in 2011.

A&D Watch How important is this position to your forwardplans?

Dinges We like to hedge the gas price with some liquids produc-tion. We have a fairly substantial investment of $250 million out of a$600-million program going to liquids production. That’s a prettygood statement that it’s important to our overall product mix.

A&D Watch To what extent do you want to increase your oil pro-duction?

Dinges With the robust natural gas production profile comingfrom the Marcellus, Cabot’s oil/gas mix will not change based on the

investment in the Eagle Ford. We have no predetermined target mix;these are simply our best projects. However, with the percentage ofour capital being allocated toward oil production, we do expect ourliquids production to nearly double.

A&D Watch What more can you tell us about the Heath shaleplay? The Marmaton?

Dinges Both of these plays are emerging. We have one well com-pleted in each with one of the wells producing and the other well inthe early stages of flowing back.

There’s not much industry information available in the Heath; justa couple of companies are gathering information through the drill bit.It is very early stage. We’ve drilled a very short lateral well to get anidea of what it might be able to do. The expectation is we will be ableto produce oil at a rate that would yield a competitive return. Wedon’t have enough information at this stage to be able to say howmuch capital we’re going to allocate.

We’re further along in the Marmaton. Cabot completed its firstMarmaton well in Beaver County with a 24-hour rate of 592 barrelsof oil and 325,000 cubic feet of gas per day for an equivalent total of646 barrels. The well was drilled with a 4,000-foot lateral and com-pleted with a 10-stage frac for around $4 million. It averaged 368 bar-rels plus 130,000 cubic feet per day for the first 30 days, and 320 bar-rels of oil and 189,000 cubic feet of gas per day for the first 60 days.It’s a little early to discuss EURs, but based on early results, a rangewe could throw out would be an expectation of 175,000 to 225,000barrels of oil equivalent.

Clearly, a 10-stage completed well with initial production compet-itive with the Eagle Ford play and at a lower cost is an attractive placeto allocate capital. Our plan would be to move in another rig at somepoint in time.

A&D Watch How does your Haynesville shale position fit intoyour forward plans?

Dinges We recently executed three different arrangements—twojoint ventures and one outright sale—around our Haynesvilleacreage. These negotiated agreements afford Cabot the ability to HBP(hold by production) the acreage with no dollars invested in the nearterm. We will then evaluate the productive nature of each well and in2013 may continue a development program on the acreage.

A&D Watch What is your capital plan for 2012?Dinges If you take the midpoint of our current guidance, which is

about where we’re producing right now, and hold that flat for 2012,at the current prices we should see a cash flow in the range of $850-to $950 million. We’ve asked our group to build out a program for2012 of about $850 million. With that, we will allocate a higher per-centage to the Marcellus and the remainder to the oil activity, whetherthe Eagle Ford or other areas we are currently looking at.

We are committed to a net investment program that approximatesanticipated cash flow.

A&D Watch Do you plan to use asset sales to boost capex?Dinges Asset sale proceeds may help fund an increment above

this. With our wealth of opportunities in northeastern Pennsylvaniaand our improved efficiencies and returns of our new liquids-richideas, we decided to monetize a portion of our Rocky Mountainlegacy Green River Basin assets for $285 million and deploy some ofthose dollars toward additional drilling in both our north and south re-gions.

Essentially, we’ve monetized an asset not valued by the market.We’ll be able to drill a few incremental Marcellus wells and replacethe sold production as we expand our efforts into high-return areas.We’ve also gathered some capital by selling off some nonoperated in-terests in the Haynesville area.


—United States

—Canada

—International

—Service & Supply

Location Seller Agent Deal #

For more information on each deal, see the text that follows this chart.U.S.Alabama Pickens Financial Group LLC EnergyNet.com 41

California Zodiac Exploration Inc., Bayswater Exploration & Production LLC Scotia Waterous Inc. 47

Colorado Dakota Exploration PLS Inc. 10

Colorado Earthstone Energy Inc. The Oil & Gas Asset Clearinghouse 12

Colorado Fidelity Exploration & Production Co., Bitter Creek Energy Services The Oil And Gas Assets Clearinghouse 18

Colorado State of Colorado, Colorado Board of Land Commissioners Meagher Energy Advisors 25

Colorado Meredith Land & Minerals Co. PLS Inc. 26

Colorado Petroleum Development Corp. Wells Fargo Securities LLC 40

Kansas Blake Exploration LLC The Oil & Gas Asset Clearinghouse 3

Kansas Dynamic Production Inc. Albrecht & Associates 11

Louisiana Newfield Exploration Co. The Oil & Gas Asset Clearinghouse 27

Louisiana Vada Group LP The Oil & Gas Asset Clearinghouse 45

Montana Indigo Minerals II LLC BMO Capital Markets 23

New Mexico US Enercorp Ltd. The Oil & Gas Asset Clearinghouse 44

New York Norse Energy Corp. Albrecht & Associates Inc. 29

North Dakota Indigo Minerals II LLC BMO Capital Markets 23

North Dakota Undisclosed PLS Inc. 42

Oklahoma Axis Energy Corp. Energy Spectrum Advisors Inc. 2

Oklahoma Chevron U.S.A. Inc. EnergyNet.com 9

Oklahoma Dynamic Production Inc. Albrecht & Associates 11

Texas Ashton Holdings Inc. EnergyNet.com 1

Texas Axis Energy Corp. Energy Spectrum Advisors Inc. 2

Texas Bold Energy II LLC Lantana Oil & Gas Partners 4

Texas Chaparral Energy The Oil & Gas Asset Clearinghouse 5

Texas Chevron Midcontinent LP, Unocal EnergyNet 7

Texas Chevron Midcontinent LP EnergyNet 8

Texas El Paso E&P Co. LP EnergyNet 13

Texas Encana Oil & Gas (USA) Inc., Encana Corp. Scotia Waterous (USA) Inc. 14

Texas EnerVest Ltd. BNP Paribas Securities Corp. 15

Texas EOG Resources Inc. The Oil & Gas Asset Clearinghouse 16

Texas Evan Schulz EnergyNet.com 17

Texas GreenBriar Energy LP IV EnergyNet.com 20

Texas Gulf Coast Tubulars LP Simon Energy Associates LLC 21

Texas HVL Energy LLC Raymond James & Associates Inc. 22

Texas Longfellow Exploration Co. LLC EnergyNet 24

Texas Parsley Energy LP Simon Energy Associates LLC 30

Texas Patriot Resources Inc. Simon Energy Associates LLC 31





Texas PDC Energy The Oil & Gas Asset Clearinghouse 36



Texas Peregrine Petroleum LLC Raymond James & Associates 39

Texas Petroleum Development Corp. Wells Fargo Securities LLC 40

Texas Texoz E&P I & II Inc. Albrecht & Associates Inc. 43

Texas ZO Energy Corp. EnergyNet 46

Utah NFR Energy LLC The Oil & Gas Asset Clearinghouse 28


On The Market

Utah Petroleum Development Corp. Wells Fargo Securities LLC 40

Wyoming Chesapeake Energy Corp. Meagher Energy Advisors 6

Wyoming GreenBriar Energy LP IV EnergyNet.com 19

CanadaAlberta Birchcliff Energy Ltd. Scotia Waterous 48

Alberta Chinook Energy Inc. Macquarie Tristone 49

Alberta Galleon Energy Inc. Scotia Waterous Inc. 50

Alberta Gift Energy Ltd. Sayer Energy Advisors 51

Alberta Penn West Exploration Scotia Waterous 52

Alberta Perpetual Energy Inc. Sayer Energy Advisors 53

Alberta Tenax Energy Inc. Sayer Energy Advisors 54

Manitoba Penn West Exploration Scotia Waterous 52

Saskatchewan Galleon Energy Inc. Scotia Waterous Inc. 50

Saskatchewan Tenax Energy Inc. Sayer Energy Advisors 54

InternationalBrazil Esso Exploração Santos Brasileira Ltda., ExxonMobil Corp. IndigoPool 55

Falkland Islands Falkland Oil and Gas Ltd. Stellar Energy Advisors 56

U.S.

1. NEW—Ashton Holdings Inc. is offeringproducing mineral interest and royalty inter-est in John Cashion unit targeting Barnettshale Johnson County, Texas via auction atEnergyNet.com.

Contact Michael Baker, 972-898-5358,[email protected].

2. NEW—Axis Energy Corp. has retainedEnergy Spectrum Advisors Inc. to sell cer-tain oil and liquid-rich gas properties in thehorizontal Cleveland sand play of the TexasPanhandle and Western Oklahoma.

The package includes a weighted average92% working interest (71% net revenue in-terest) on 5,194 gross acres (4,192 net) inOchiltree and Hemphill counties, Texas, andEllis County, Oklahoma. The properties are95% operated and 100% held by production.

Current net production is 550 barrels ofoil, 252 barrels of natural gas liquids, and 1.7million cubic feet of gas per day for a total of1,083 barrels of oil equivalent per day fromthe Cleveland sand. Net operating cash flowfor December is projected to be $1.35 mil-lion.

Proved reserves are 3.1 million barrels ofoil (42% proved developed) with an addi-tional 1.8 million barrels of probable re-serves.

Upside includes average future ultimaterecovery of Axis’ horizontal Cleveland wellsaverage 277,000 barrels equivalent per well,according to Axis.

The bid due date is Nov. 11. Contact Wood Brookshire, 214-987-6133,

[email protected].

3. NEW—Blake Exploration LLC, is offer-

ing operated working interest in Bemis-Shutts Field in Ellis County, Kansas, via TheOil & Gas Asset Clearinghouse auctionNov. 9. Average gross production is 26 bar-rels of oil per day. Cash flow is $55,000 permonth. Go to ogclearinghouse.com.

4. NEW—Bold Energy II LLC has retainedLantana Oil & Gas Partners to sell certainWest Texas assets.

The package includes operated and non-operated assets in 9,011.7 gross mineralacres (4,623.1 net) in Gaines county. The as-sets feature 12 proved developed producingwells (seven operated) with 32 operatedproved undeveloped locations (one nonoper-ated). The operated wells have an average82.2% working interest (63.2% net revenueinterest). Upside includes multiple stackedpay zones, total depths of less than 7,800feet, and horizontal potential and secondaryrecovery potential.

Gross production for June was 15,994barrels of oil (5,815 barrels net) and 28.7 mil-lion cubic feet of gas (16.7 million net), or20,782 barrels of oil equivalent gross (8,604BOE net). Average daily June productionwas 531 barrels of oil per day (194 net) and958,000 cubic feet of gas (548,000 net), or591 BOE per day gross (285 net). Net provedreserves are 2.34 million BOE as per theW.D. Von Gonten reserve report effectiveNov. 1, 2011.

The bid due date is Nov. 3. The effectivedate is Nov. 1. Contact David Nini, 713-426-9001, [email protected].

5. NEW—Chaparral Energy is offering op-erated interest in Sugar Valley Field,Matagorda County, Texas, via The Oil &Gas Asset Clearinghouse auction Nov. 9.Average gross production is 72 barrels of oil

per day and 1.3 million cubic feet of gas perday. Cash flow is $68,000 per month. Go toogclearinghouse.com

6. NEW—Chesapeake Energy Corp. hasretained Meagher Energy Advisors to sellcertain northern D-J Basin assets inWyoming.

The package includes an average 95%working interest (80% net revenue interest)in conventional and unconventional opportu-nities in approximately 257,410 gross acres(199,263 net) in Goshen, Laramie and Plattecounties. The properties feature eight oper-ated wells with four waiting on completion.Three Niobrara wells and one Codell wellhave been completed, and two wells operatedby RKI have been drilled with one waiting oncompletion

The assets are in a consolidated acreageposition encompassing a 36-township area.The majority of leases expire from 2013 to2021. Many leases have two- to five-year ex-tension options and the leases cover alldepths.

Upside includes horizontal resource playpotential in the Niobrara and Codell forma-tions and possible additional deeper conven-tional and unconventional targets in theGreenhorn, Muddy, Dakota “J” and Paleo-zoic formations.

The bid due date is Nov. 17. The effectivedate is Nov. 1.

Contact Julia Foster, 303-721-6354 ext.229, [email protected].

7. NEW—Chevron Midcontinent LP andUnocal have retained EnergyNet to sell as-sets in the West Texas Permian Basin in a ne-gotiated transaction.

The package includes a total 81.311%nonoperated working interest (69.09% net

On The Market


revenue interest) and a combined 1.2843%term unit royalty interest in North FosterField in Ector County. The assets are on 120gross acres of held by production and feature24 producing wells, 18 injectors, 25 shut insand 17 in various states of abandonment.

Production is 147 barrels of oil per dayand 46,000 cubic feet of gas per day. The av-erage net cash flow is $232,988 per month.

Contact Ethan House, 806-463-3609,[email protected].

8. NEW—Chevron Midcontinent LP hasretained EnergyNet to sell assets in the WestTexas Permian Basin in a negotiated transac-tion.

The package includes 100% working in-terest (87.5% net revenue interest) and4.6875% term unit royalty interest in John-son Field in Ector County. The assets feature41 producing wells and 24 shut ins.

Production is 116 barrels of oil per dayand 51,000 cubic feet of gas per day. The av-erage net cash flow is $197,928 per month.

Contact Ethan House, 806-463-3609,[email protected].

9. NEW—Chevron U.S.A. Inc. is offeringnonoperated working interest and overridingroyalty interest in Gray Field in Pot-tawatomie County, Oklahoma via auction atEnergyNet.com.

Contact Chris Atherton, 832-654-6612,[email protected].

10. NEW—Dakota Exploration has re-tained PLS Inc. to sell certain Colorado Nio-brara assets.

The package includes 100% operatedworking interest (80% net revenue interest)in 1,920 net acres in the D-J Basin in WeldCounty. Initial production in the area aver-ages about 1,000 barrels of oil per day. Totalestimate project reserves are 1.5 million bar-rels equivalent.

Upside includes potential in the D-Sand,J-Sand, Codell Hygiene and Terry (Sussex)plays.

Contact Rob Via, 303-728-9636,[email protected].

11. Dynamic Production Inc. has retainedAlbrecht & Associates to sell certain Mis-sissippi lime assets in Oklahoma and Kansas.

The package includes interest in approxi-mately 18,400 net acres in Alfalfa, Garfield,Grant, and Kay counties, Oklahoma, andBarber County, Kansas. Dynamic’s acreageis in the most active area of the horizontalMississippian lime play in north central

Oklahoma and all leases are paid up and in-clude all depths. The average remaining pri-mary term is 31 months and the earliest expi-ration occurs in March 2014.

Leases covering approximately 64% ofthe acreage (11,750 net acres) include an op-tion to extend the lease term an additionaltwo years. The properties feature 77% netrevenue interest.

SandRidge Energy, Chesapeake En-ergy and Range Resources estimate ulti-mate recoveries (EURs) per well in the hori-zontal Mississippi lime play to be 409,000barrels of oil equivalent, 415,000 and485,000, respectively. Based on 160-acre de-velopment and gross reserves of 409,000 bar-rels equivalent per well, there are approxi-mately 115 net potential locations onDynamic’s acreage with total estimated grossreserves of 47 million barrels equivalent(36.2 million net).

The bid due date is Nov. 9. Contact Harrison Williams, 713-951-9586,

[email protected].

12. NEW—Earthstone Energy Inc. is of-fering working interest in Wattenberg Fieldin Weld County, Colorado, with undevel-oped horizontal Niobrara potential, operatedby both Earthstone Energy and Kerr-McGee Oil & Gas, via The Oil & GasAsset Clearinghouse auction Nov. 9. Aver-age gross production is 149 barrels of oil perday and 1.49 million cubic feet of gas perday. Cash flow is dsa approxi-mately $120,000 per month. Go to ogclear-inghouse.com.

13. NEW—El Paso E&P Co. LP has re-tained EnergyNet to sell certain assets inTexas in a negotiated sale.

The package includes 62.5 gross workinginterest in Alta Loma in East Field in Galve-ston County, which includes operations. Netproduction is 3.2 million cubic feet of gasequivalent per day. Net cash flow is$618,000 per month.


14. UPDATED—Encana Oil & Gas (USA)Inc., a subsidiary of Encana Corp., Calgary,(Toronto, NYSE: ECA) has retained ScotiaWaterous (USA) Inc. to sell its North Texasgas-producing assets in the Fort Worth BasinBarnett shale play.

The package includes and average 85%working interest (65% net revenue interest)in 52,000 net acres of high-quality, relativelymature producing properties in the Fort

Worth Basin. Production is 130 million cubicfeet of gas per day. The assets also includeassociated processing and pipeline facilities.

Upside includes 635 -isk infill drilling lo-cations and additional potential through com-prehensive re-frac and recompletion pro-grams, drilling campaign acceleration, andtapping vertically isolated intervals of theBarnett

Bids are due in early November. Contact John Wehrle, 832-426-6024,

[email protected].

15. NEW—EnerVest Ltd. has retainedBNP Paribas Securities Corp. to sell theentirety of its Austin chalk position in Jasper,Newton and Sabine counties, Texas.

The package includes average 87% work-ing interest (70% net revenue interest) in ap-proximately 250,450 gross acres (176,260net) targeting the Austin chalk formationonly. The assets feature 98 mostly operatedproducing wells targeting a naturally frac-tured carbonate reservoir with low porosityand low permeability matrix. The wells arecurrently producing from the “A” member ofthe chalk. The formation features a thicknessof 550- to 650 feet.

Net production as of June was 2.7 millioncubic feet of gas per day, 265 barrels of oilper day and 277 barrels of gas liquids per dayfor a total 6 million cubic feet of gas equiva-lent per day (54% liquids). Net cash flow inJune was $1.1 million.

Upside includes 27 inactive wells (16 op-erated), 16 low-risk Austin chalk “A” infillhorizontal proved undeveloped locations,multiple horizontal re-entry opportunities(“K” laterals) and potential to refrac mostwells with modern frac techniques. Also, theunexploited Austin chalk “B” is productivein the field (with two wells) and offset fields.

Bids are due in mid-December. ContactDavid Marcell, 713-982-1126, [email protected].

16. NEW—EOG Resources Inc. is offeringnonoperated working interest in Belle Fergu-son Field, Hidalgo County, Texas, operatedby Oxy USA, via The Oil & Gas AssetClearinghouse auction Nov. 9. Averagegross production is 34 barrels of oil per dayand 3.2 million cubic feet of gas per day.Cash flow is $73,000 per month. Go to og-clearinghouse.com.

17. NEW—Evan Schulz, et al., is offeringnonoperated working interest in New “A” 4in Johnstone Field in Victoria County, Texasvia auction at EnergyNet.com. Contact

On The Market


Chris Atherton, 832-654-6612, [email protected].

18. NEW—Fidelity Exploration & Pro-duction Co. and Bitter Creek Energy Serv-ices have retained The Oil And Gas AssetsClearinghouse to sell certain assets in Col-orado.

The Fidelity portion of the package in-cludes an average 99.94% working interest(86.72% net revenue interest) in 196 oper-ated proved developed producing wells andthree saltwater disposal wells on 23,483 netacres in Bonny Field in Yuma County.

Net production is 1.73 million cubic feetof gas per day.

The Bitter Creek assets include a 28-mil-lion transport pipeline and dedicated capacityon Southern Star Mainline. There is also ex-isting third-party gathering revenue.

Upside includes 34 proved developednonproducing opportunities and 32 provedundeveloped opportunities.

The bid due date is Nov. 16. The effectivedate is Dec. 1. Contact Verna Ray, 832-601-7662, [email protected].

19. NEW—GreenBriar Energy LP IV isoffering nonoperated working interest inMapes Field Federal W-54014 #13-27 andinjection well, Fish (Minnelusa A) unit inFish Field and Deep Draw #14-17 in DeepDraw Field in Campbell County, Wyomingvia auction at EnergyNet.com. ContactChris Atherton, 832-654-6612, [email protected].

20. NEW—Greenbriar Energy LP IV isoffering nonoperated working interest inWest Algoa Field in Brazoria County, Texasvia auction at EnergyNet.com. ContactChris Atherton, 832-654-6612, [email protected].

21. NEW—Gulf Coast Tubulars LP has re-tained Simon Energy Associates LLC tosell certain West Texas Permian assets.

The package includes nonoperated 12.5%working interest (9.375% net revenue inter-est) in 240 acres in Spraberry trend in MartinCounty. The properties feature two wells.Lone Star Oil & Gas Inc. is operator.

Production is 58 barrels of oil and130,000 cubic feet of gas per day. Monthlycash flow is $14,000.

Upside includes four proved undevelopedlocations.

Contact Byron Tuck, 432-686-7022,[email protected].

22. NEW—HVL Energy LLC, a portfoliocompany of EncCap Investments LP, hasretained Raymond James & Associates Inc.to sell certain Permian Basin assets in Texas.

The package includes 100% operatedleasehold position in 7,900 gross acres(7,200 net) in Cochran, Yoakum, Terry,Gaines, Howard, Sterling and Brown coun-ties. The properties average 98% working in-terest (76% net revenue interest) in 18 activeproducing wells and 19 saltwater-disposalwells in the core area. The wells target theDevonian, Fusselman and San Andres forma-tions.

Gross production is approximately 500barrels of oil equivalent per day (360 barrelsnet, 98% oil). A well waiting on additionalsaltwater-disposal capacity will bring grossproduction to 600 barrels equivalent per day(440 barrels net) in October.

High-volume lift (HVL) equipment hasbeen used to increase production recoverablereserves in strong-water-drive reservoirswith high permeability.

Upside includes potential in Devonian,Fusselman, Wolfberry and San Andres for-mations and additional proved upside re-serves in HVL opportunities.

Bids are due in early December. The ef-fective date is Oct. 1. Contact Chris Simon,713-278-5206, [email protected].

23. Indigo Minerals II LLC has retainedBMO Capital Markets to sell certain assetsin the Bakken and Three Forks trend areasof North Dakota and Montana.

The package includes 34 Bakken/ThreeForks wells drilled on approximately 2,550net mineral acres in the core area of theWilliston Basin Bakken/Three Forks re-source play. Interests include overriding roy-alty interest, unleased minerals, royalty inter-est in leased acreage and working interestparticipation with minerals.

Pro forma December 2011, net productionis expected to be 135 barrels of oil equivalentper day from Bakken/Three Forks and Madi-son wells.

Upside includes AFEs received for six ad-ditional wells.

Bids are due in November. Contact Miles Redfield, 713-546-9715,

[email protected].

24. NEW—Longfellow Exploration Co.LLC has retained EnergyNet to sell certainassets in Texas in a negotiated sale.

The package includes 0.5% to 20% work-ing interest in 440 wells on 17,500 acres in

Piñon Field in Pecos County. The field is op-erated by SandRidge.

Net production is 10 million cubic feet ofgas equivalent per month, or approximately333,333 cubic feet equivalent per day. Netcash flow is $30,449 per month.

Upside includes more than 2,000 drillinglocations and 1,300 square miles of 3-D seis-mic data.

The bid due date is Nov. 18. ContactChris Atherton, 832-654-6612, [email protected].

25. NEW—Meagher Energy Advisors hasbeen retained by the State of Colorado andthe Colorado Board of Land Commissionersto seek companies to develop assets in theLowry Range.

The assets includes approximately 21,048net mineral and approximately 26,591 sur-face acres in a concentrated area approxi-mately 20 miles southeast of Metro Denverthat would allow for efficient operations andeconomic infrastructure requirements.

There are major Niobrara players in theadjacent area with active leasing, seismic anddrilling programs. Geology includes superiorNiobrara resistivity readings in the acreageblock, according to Meagher. There is strongevidence of natural fracturing and Niobraramaturity of acreage indicates to be in the oil-generative window.

The target formation is the Niobrara “B”chalk will also the Niobrara “C” chalk in ad-dition. Upside includes potential additionalhorizontal targets in the Codell and Green-horn as well as vertical targets in the “D” and“J” sands. Offset drilling is ongoing and de-risking the project.

The location requires high levels of sur-face stewardship during oil and gas develop-ment. The location was a formerly used de-fense site, the majority of which has beenremediated by the US Army Corps of Engi-neers

The request for qualifications due date isNov. 7. The effective date is April 1, 2012.Contact Jacque Semple, (918) 481-5900 ext.221, [email protected].

26. NEW—Meredith Land & MineralsCo. has retained PLS Inc. to sell certain Col-orado Niobrara assts.

The package includes 100% operatedworking interest (80% net revenue interest)in 29,000 net acres in the D-J Basin in Doou-glas, Elberta and El Paso counties. Initialproduction in the area averages about 500barrels of oil per day.

Upside includes potential in the DJ-Sand,


Oil & Gas Asset-Divestment ServicesCompany Contact Region Phone More Info

Listings in bold are new or updated this month. To be listed here, call 713-260-6431. The listing is free.

A&D Insight LLC Colin Nisbeth U.S. 720-881-4484 [email protected] & Associates Harrison Williams, Bob Albrecht U.S. 713-951-9586 [email protected] Corp Capital Inc. Leslie Kende Global 403-539-8622 [email protected] O&G Inc. William D. Anderson U.S. 214-270-0840 [email protected] Production Tony Motto U.S. 281-467-8818 [email protected] Capital Nick Chini U.S. 858-410-0915 [email protected] of America Merrill Lynch Randy King, Mark Deverka Global 713-759-2528 [email protected] Capital Greg Pipkin U.S. 713-236-3954 [email protected] Capital Markets-U.S. Miles Redfield U.S. 713-546-9715 [email protected] Capital Markets-Canada Ian van Staalduinen Canada 403-515-1526 [email protected] Paribas David Marcell, Dane Isenhower U.S. 713-982-1126 [email protected] Oil & Gas Properties Richard Klauzinski U.S. 281-580-4590 [email protected] Energy Advisors Inc. Trace Hight Global 512-744-1787 [email protected] Advisors LLC Jon Dormer U.S. 469-533-6734 [email protected] World Markets-Global Jordan Horoschak Global 281-848-3141 [email protected] World Markets-Canada Gerry Stevenson Canada 403-216-3013 [email protected] Chris Miller, John Bishop Global 713-752-5335 [email protected] International William Divine Global 713-893-6300 [email protected] LLC Thomas J. Ervin U.S. 214-363-2401 [email protected] Capital Solutions Russell Weinberg, Keith Behrens U.S. 214-219-8200 [email protected] Exchange David Mangum Global 281-363-8160 enex.comEnergy Property Advisors Donald Owen U.S. 832-308-3401 [email protected] Spectrum Advisors Charles M. Lapeyre U.S. 214-987-6123 [email protected] Bill Britain U.S. 806-351-2953 [email protected] Capital Dan Mooney U.S. 214-468-0900 [email protected] Mike Lakin Global +44 20 8566 1310 [email protected] Partners Lance Dardis U.S. 713-427-5130 [email protected] & Co. John Graves Global 713-650-0811 [email protected] Capital Partners Scott L. Bok Global 212-389-1500 greenhill-co.comGriffis & Small Richard Griffis U.S. 713-650-8600 [email protected] Capital Partners Sean Flinn U.S. 281-445-6611 [email protected] International Inc. Robert Patterson Global 713-298-4997 globaltradedays.comHarris Williams & Co. Drew Spitzer Global 804-648-0072 [email protected] & Company David T. Holt U.S. 615-395-0054 holtenergy.comIndigoPool Les Finalle, Greg Mowlds Global 713-689-5860 [email protected] & Co. Inc. Bill Marko, Joe Gladbach Global 281-774-2000 [email protected]. Morgan Brady Rodgers Global 713-216-4743 [email protected] Capital Markets Sylvia Barnes U.S. 713-306-0383 [email protected] Oil & Gas Partners Andy Taurins, David Nini U.S. 713-426-9001 [email protected] Energy Advisors Matt Meagher U.S. 303-721-6354 [email protected] Tristone-Canada Dave Vetters Canada 403-539-8524 [email protected] Tristone-Global Paul Connolly Global 44 20 7355 5800 [email protected] Tristone-U.S. Jon Goddard, Rob Bilger U.S. 713-651-4200 [email protected] Energy Advisors Mike Mitchell, Mike Taylor U.S. 469-916-7480 mitchellenergypartners.comMoyes & Co. Inc. Chris Moyes Global 214-363-9020 [email protected] Exchange Services Robert Garcia U.S. 817-303-1031 [email protected] Energy Advisory Group Nick Nichols U.S. 405-842-6417 [email protected] Advisors Grant Schwartzwelder U.S. 972-831-1300 [email protected] Strategies 1031 Mark Nierenberg U.S. 720-635-1031 [email protected] Prospects Marketing Todd McMahon U.S. 801-361-1978 [email protected] Inc. Richard Martin U.S. 713-600-0107 [email protected] James & Associates Christopher J. Simon U.S. 713-278-5206 [email protected] Richardson Barr Scott Richardson, Craig Lande U.S. 713-585-3300 [email protected] Rundle Tom Caldwell Canada 403-298-9725 [email protected] Energy Advisors Todd Larsson U.S. 432-686-9400 [email protected] Energy Advisors Alan Tambosso Canada 403-266-6133 [email protected] Waterous-U.S. Adrian Goodisman, David Cecil U.S. 713-437-5050 [email protected] Waterous-Canada David Potter Canada 403-261-2378 [email protected] Waterous-International Doug DeFilippi Global 713-437-5045 [email protected] & Co. International Jay Boudreaux U.S. 713-546-7325 [email protected] Energy Associates Byron Tuck U.S. 432-686-7022 [email protected] Energy Solutions David Fowler U.S. 432-683-3791 [email protected] Brothers LLC Paul Smart U.S. 405-478-0404 [email protected] Chartered Bank Carlos Garibaldi Global 713-877-9588 [email protected] Investments LLC Bryan Emerson U.S. 713-225-3028 [email protected] Energy Advisors Ltd. Dave Fassom, Spencer Winter Global 44 (20) 7493 1977 stellarlimited.comThe Dillard Anderson Group Max Dillard, Sam Anderson Global 281-873-6100 [email protected] Lease Auction House Rhett Bennett U.S. 817-698-9901 [email protected] Oil & Gas Asset Clearinghouse Ron Barnes U.S. 281-873-4600 [email protected], Pickering, Holt & Co. Ward Polzin U.S. 303-300-1906 [email protected] Energy Advisors Jim Keil U.S. 281-752-4300 [email protected]


On The Market

Codell and Greenhorn plays.Contact Rob Via, 303-728-9636,

[email protected].

27. NEW—Newfield Exploration Co. is of-fering nonoperated working interest inRiceville Field in Vermillion Parish,Louisiana, operated by Murphy Explo-ration & Production, via The Oil & GasAsset Clearinghouse auction Nov. 9. Aver-age gross production is 78 barrels of oil perday and 4.2 million cubic feet of gas per day.Cash flow is $200,000 per month. Go to og-clearinghouse.com

28. NEW—NFR Energy LLC has retainedThe Oil & Gas Asset Clearinghouse to sellcertain nonoperated assets in the Utah UintahBasin.

The package includes 1,360 gross acres(797 net) in Uintah County that feature 32producing wells. Average working interest is58.5% (46.8% net revenue interest). Thewells target multiple producing formations.

Net production is 6.2 million cubic feet ofgas equivalent per day. Average net cashflow is $489,000 per month.

The assets are fully developed on 40 acreswith the exception of one proved undevel-oped location. Upside includes down-spac-ing potential to 10 acres.

The bid due date is Nov. 1. The effectivedate is Nov. 1. Contact Pat Dapra, 832-601-7655, [email protected].

29. NEW—Norse Energy Corp. has re-tained Albrecht & Associates Inc. to sellcertain unconventional assets in New York.

The package includes 133,000 net acresprospective for the Marcellus and Uticashales in Broome, Chenango and Madisoncounties. Nearly 19,500 net acres are held byproduction from the shallower Herkimersandstone and Norse owns the mineralsunder another 5,485 acres. Net revenue in-terest is 82.5%.

Norse is also selling its interests in Madi-son, Chenango and Broome Counties in a75-mile multi-line ROW, allowing futuremidstream infrastructure to connect threemajor interstate pipelines—Millennium,Tennessee, and Dominion—and debottle-necking Susquehanna County, Pennsylvania,the most prolifically producing portion of the

Marcellus trend.Norse is selling 408 miles of proprietary

2-D seismic and 76 square miles ofproprietary 3-D seismic of which 56

square miles were shot in 2010.Morgan Keegan Investment Banking is

financial advisor to Norse.Bids are due by year-end 2011. Contact Harrison Williams, 713-951-

9586, [email protected].

30. Parsley Energy LP has retained SimonEnergy Associates LLC to sell certainWolfcamp assets in West Texas.

The package includes 100% working in-terest (75% net revenue interest) in the2,440-acre Mesa prospect in Spraberry TrendField in Upton County.


31. Patriot Resources Inc. has retainedSimon Energy Associates LLC to sell cer-tain operated assets in Central Texas.

The package includes 34% working inter-est (27.285% net revenue interest) in 160acres in Excalibur Field in Howard County.

A&D Networking OpportunitiesEvent Date City Venue More Info

ADAM-Dallas/Fort Worth First Thursdays Dallas Dallas Petroleum Club AdamEnergyForum.orgDenver A&D Group First Thursdays Denver Brown Palace/Comfort Inn [email protected] Luncheon First Fridays Austin, Texas County Line BBQ austinlandmen.orgIPAMS Energy Finance Discussion Group Second Tuesdays Denver Denver Athletic Club ipams.orgTIPRO-IPAA Speaker Series Second Wednesdays Houston Houston Petroleum Club tipro.com Houston Producers’ Forum Third Tuesdays Houston Houston Petroleum Club HoustonProducersForum.comHouston Energy Finance Grp Third Wednesdays Houston Houston Center Club B.K. Buongiorno; [email protected] San Antonio Third Wednesdays San Antonio San Antonio Petroleum Club sanantonioapispe.comHAPL Luncheon Third Thurs/Semi-Monthly Houston Houston Petroleum Club hapl.orgADAM-Tulsa Energy Network Fourth Tuesday Tulsa, OK Brady Tavern [email protected] Third Fridays Houston Brennan’s adamhouston.orgEnergy Network–The Woodlands Last Thursdays The Woodlands Macaroni Grill http://nrgnet.ning.comSPE-GCS Bus. Dvlpmt Group Semi-Monthly Houston Four Seasons spegcs.orgADAM-East Texas Semi-Monthly Tyler, Texas Hollytree CC adamenergyforum.orgIPAA Tulsa Leadership Luncheon Quarterly Tulsa, OK The Summit Teri Williams, 918-481-5900 x224DAPL (Denver) Luncheon Varies Denver Brown Palace dapldenver.orgASPO-USA Peak Oil & Energy Nov. 2-5, 2011 Washington D.C. Hyatt Regency Capitol Hill aspo-usa.comConferenceTAEP Houston Oil Patch Golf Nov. 7, 2011 Humble, Texas Tour 18 Gulf Course Houston texasalliance.orgTournamentTAPL Education Seminar Nov. 8, 2011 Tulsa, OK OSU-Tulsa Room #150 tapl.org

“Oil & Gas Exploration Contracts”

IPAA Annual Meeting Nov. 10-12, 2011 LaQuinta, Ca LaQuinta Resort & Club ipaa.orgHAPL Golf Tournament Nov. 14, 2011 Houston Kingwood CC hapl.orgDeveloping Unconventional Gas—East Nov. 15-17, 2011 Pittsburgh Lawrence Convention Center dugeast.comHAPL Offshore Social Nov. 17, 2011 Houston Westin Oaks hapl.org2011 Dallas E&P Forum Dec. 13, 2011 Dallas Southern Methodist University dgs.org

Prospex Dec. 13-14, 2011 London Business Design Center, Islington pesgb.org.uk/PESGBDAPL (Dallas) Christmas Party Dec. 14, 2011 Dallas Dallas Petroleum Club dapl.orgIPAA Private Capital Conference Jan. 24, 2012 Houston The Westin Houston, Memorial City ipaa.orgAAPL OCS Workshop Feb. 2, 2012 The Woodlands, TX Anadarko Tower ocsadvisoryboard.orgIPAA OGIS Florida Feb. 2-3, 2012 Palm Beach, FL The Four Seasons Resort ipaa.orgGreat Balls of Fire Billiard Challenge Feb. 4-5, 2012 Denver Wynkoop Brewing Co. cpco.orgYES Texas Hold ’Em Poker Tournament Feb. 9, 2012 Houston TBA yesprep.org

Small Steps Clays Classic Feb. 15, 2012 Houston American Shooting Center ssnc.orgEnerCom’s Oil & Services Conf. Feb. 21-23, 2012 San Francisco Omni San Francisco theoilandservicesconference.comNAPE Expo 2011 Feb. 22-24, 2012 Houston George R. Brown CC napeexpo.comIPAA Wildcatters Ball Feb. 24, 2012 Houston Hilton Americas ipaa.orgLOGA Annual Meeting Feb. 26-28, 2012 Lake Charles, LA L’auberge du Lac loga.la

APPEX Prospect & Property Expo March 6-8, 2012 London, England Business Design Centre, Islington appex.aapg.orgTexas Oilman's Bass Invitational March 15-17, 2012 Lake Toledo Bend, TX Cypress Bend Park tobibass.com

Marcellus Midstream Conference March 19-21, 2012 Pittsburgh Lawerence Convention Center Marcellusmidstream.comIPAA Texas Wildcatter’s Open March 22, 2012 Cypress, TX Blackhorse Golf Club ipaa.orgHoward Weil Energy Conf. March 25-29, 2012 New Orleans The Roosevelt Hotel HowardWeil.com

Tipro Annual Convention March 27-28, 2012 Dallas, Texas Sheraton Dallas Hotel tipro.org

Metroplex Energy Tennis Tour. March 29-31, 2012 Dallas T Bar M Racquet Club mettdfw.org

API Cowboy Days March 30-31, 2012 Corpus Christi, TX Fort Bend County Fairgrounds corpuschristiapi.comExecutive Oil Conference April 2-3, 2012 Midland, Texas Midland Hilton Hotel petroleumstrategies.com

New Orleans Oilmen's Tennis Tour. April 13-14, 2012 New Orleans City Park Pepsi Tennis Complex noott.org

API Sporting Clays Tourn. April 14, 2012 Houston American Shooting Ctr. api-houston.org

IPAA OGIS-New York April 16-18, 2012 New York Sheraton NY ipaa.org

DUG—Developing Unconventional Gas April 23-25, 2012 Fort Worth, TX Fort Worth Convention Center dugconference.comWorld Oilman’s Tennis Tournament May 2-5, 2012 Houston Houston Racquet Club wott.org

DUO: Developing Unconventional Oil May 23-25, 2012 Denver Colorado CC hartduo.comDeveloping Unconventional Gas—Canada June 2012 Calgary Telus Convention Center hartenergy.comIPAA Midyear June 27-29, 2012 Amelia Island, Fla. The Ritz Carlton Hotel ipaa.org

Oil and Gas Investor’s Energy Capital June 6-7, 2012 Houston Omni Woodway Houston energycapitalweek.comConferenceTIPRO Summer Conference/Golf Tourn. Aug. 8-11, 2012 Galveston, TX Moody Gardens tipro.org

A&D Strategies/Opportunities Sept. 5-6, 2012 Dallas Ritz Carlton Hotel adstrategiesconference.com

API Golf Tournament Oct. 8, 2012 Houston Kingwood CC api-houston.org

Developing Unconventional Gas– Oct. 14-16, 2012 San Antonio Gonzalez CC dugeagleford.comEagle FordAPI Tennis Tournament Oct. 15, 2012 Houston Houston Racquet Club api-houston.org

Listings in bold are new or updated this month. Have an upcoming event that presents A&D networking opportunities? List it here. There is no fee. E-mail details [email protected]. A complete listing of events can be found at A-Dcenter.com.


On The Market

The assets feature one active well targetingthe Canyon Reef formation.

Production is 16 barrels of oil and 17, 460cubic feet of gas per day. Monthly cash flowis approximately $9,000.


32. Patriot Resources Inc. has retainedSimon Energy Associates LLC to sell cer-tain assets in Central Texas.

The package includes 49.25% working in-terest (39.4% net revenue interest) in 860.63acres in Thunder Valley Field in NolanCounty. The assets feature one active welltargeting the Canyon Sand formation.

Production is 7.6 barrels of oil per day.Monthly cash flow is approximately $8,000.


33. Patriot Resources Inc. has retainedSimon Energy Associates LLC to sell cer-tain operated assets in North Texas.

The package includes 75% working inter-est (54.125% net revenue interest) in 40 acresin Block A-2 Field in Pecos County. The as-sets feature one active well targeting the El-lenberger formation.

Production is 4.6 barrels of oil per day.Monthly cash flow is approximately $5,000.


34. Patriot Resources Inc. has retainedSimon Energy Associates LLC to sell cer-tain operated assets in the Texas Panhandle.

The package includes 52.5% working in-terest (30.75% net revenue interest) in 120acres in Anton-Irish and Lower Clearfolkfields in Hockley and Lamb counties. The as-sets feature three active wells targeting theLower Clearfolk formation and one saltwaterdisposal well.

Production is 20.5 barrels of oil and 4,000cubic feet of gas per day. Monthly cash flowis approximately $9,000.


35. Patriot Resources Inc. has retainedSimon Energy Associates LLC to sell cer-tain operated assets in West Texas.

The package includes 30.791% workinginterest (24.348% net revenue interest) in 40acres in China Beach Field in HowardCounty. The assets feature one active welltargeting the Canyon Reef formation.

Production is 11.41 barrels of oil per day.

Monthly cash flow is approximately $3,600.Contact Byron Tuck, 432-686-7022,

[email protected].

36. NEW—PDC Energy is offering oper-ated working interest in Fullerton Field, An-drews County, Texas, via The Oil & GasAsset Clearinghouse auction Nov. 9. Aver-age gross production is 46 barrels of oil perday and 146,000 cubic feet of gas per day.Cash flow is $220,000 per month. Go to og-clearinghouse.com

37. NEW—PDC Energy is offering oper-ated working interest in T.D. Field, TomGreen County, Texas, via The Oil & GasAsset Clearinghouse auction Nov. 9. Aver-age gross production is four barrels of oil perday and 239,000 cubic feet of gas per day.Cash flow is $88,000 per month. Go to og-clearinghouse.com

38. NEW—PDC Energy is offering oper-ated working interest in Emperor Field, Win-kler County, Texas, via The Oil & GasAsset Clearinghouse auction Nov. 9. Aver-age gross production is 24 barrels of oil perday and 536,000 cubic feet of gas per day.Cash flow is $120,000 per month. Go to og-clearinghouse.com

39. Peregrine Petroleum LLC has retainedRaymond James & Associates to sell orseek a joint-venture partner for certain assetsin South Texas.

The package includes a 50,958-net-acreleasehold position in Dimmit and Maverickcounties within the Eagle Ford trend. The as-sets are 100% operated with a majority 95%to 100% working interest-owned. To date,seven Eagle Ford laterals have been drilledand completed, and only two wells are re-quired to be drilled in 2012 to hold the entireacreage position.

The assets are split into the 24,745-acreB-L-S area, the 21,729-acre Hamilton Rancharea, the 4,124-acre Carrizo Creek area andthe 360-acre Wilson-Boldt area.

The initial production rates of recent com-pletions in the area range from 240 to 520barrels of oil per day, with a gas-oil ratioranging from to 1,500 to more than 2,000cubic feet/barrels and gas content up to 1,500Btu per cubic feet.

Original oil in place is estimated to be upto 50 million barrels of oil per 640 acres.

Upside includes potential for more than480 Eagle Ford locations and 530 Pearsall lo-cations based on 80-acre spacing. The prop-

erties feature access to extensive pipeline in-frastructure that feeds into West Texas Gasand Enterprise pipeline systems.

The bid due date is mid-November. Theeffective date is Oct. 1. Contact Chris Simon,713-278-5206, [email protected].

40. NEW—Petroleum Development Corp.(dba PDC Energy), Denver, (Nasdaq:PETD) plans to sell Permian Basin Wolf-berry, northeastern Colorado and otheracreage, and also solicit joint venture partiersin the Utica, according to Wells Fargo Secu-rities LLC.

PDC is offering all of its 12,800 Permianacres, which are currently producing at rateof 1,400 barrels of oil equivalent per day.Total estimated reserves are 23 million bar-rels equivalent (on 40-acre spacing). The81,400 northeastern Colorado acres are pro-ducing at 10 million cubic feet of gas per daywith proved reserves of 40 billion cubic feet,reports Wells Fargo.

PDC is actively seeking a JV partner forits approximately 40,000 held-by-productionUtica acres in the wet gas and oil window.

The company reports that the divestitureprogram will allow it to focus its investmenton the Rockies and Appalachia, providefunding for recent acquisitions, and providethe balance sheet strength and financial flex-ibility to pursue additional strategic transac-tions, according to Wells Fargo.

These deals are expected to close in late2011 or early 2012, with projected proceedsof $350- to $450 million.

41. NEW—Pickens Financial Group LLCis offering term overriding royalty interest inHamiter 32-3 #1 in Conecuh County, Ala-bama via auction at EnergyNet.com. Con-tact Michael Baker, 972-898-5358,[email protected].

42. NEW—PLS Inc. has been retained tosell certain North Dakota Bakken assets.

The package includes 100% working in-terest (80% net revenue interest) in Bakkenand Three Forks assets in Ross and Parshallfields in Mountrail County. The initial pro-duction rates in the area are 500 to 1,300 bar-rels per day with individual well EURS ofless than 500,000 barrels equivalent.

Contact Brian Green, 713-650-1212,[email protected].

43. NEW—Texoz E&P I & II Inc. has re-tained Albrecht & Associates Inc. to sell


certain assets in Texas.The package includes an average 74%

working interest (59% net revenue interest)in 15 producing wells, four proved developednonproducing opportunities and 10 provedundeveloped locations in McMullen andJackson counties, Texas. The leasehold iscomprised of approximately 1,892 grossacres (1,500 net) and Texoz is selling onlythe Olmos rights in the McMullen Countyproperties.

Texoz operates all of the Olmos produc-ing wells and locations and the Goff #1through a contract operator. The three Yeguaproducing wells and four proved developednonproducing opportunities are operated byBright & Co. Ltd. through the

same contract operator. Eleven of the pro-ducing wells and all of the proved undevel-oped locations target the Olmos sand as apart of A.W.P. Field in McMullen County.The remaining four producing wells are cur-rently completed in the Yegua and Frio sandsin Jackson County.

Production is 190 barrels of oil per day,1.9 million cubic feet of gas per day and 170barrels of gas liquids per day. Proved re-serves are 640,000 barrels of oil, 8.3 billioncubic feet of gas and 1.1 million barrels ofgas liquids.

The bid due date is Nov. 16. The effectivedate is Dec. 1. Contact Harrison Williams,713-951-9586, [email protected].

44. NEW—US Enercorp Ltd. is offeringoperated working interest in West PuertoChiquito Mancos Field in Rio Arriba County,New Mexico, via The Oil & Gas AssetClearinghouse auction Nov. 9. Averagegross production is 25 barrels of oil per dayand 99,000 cubic feet of gas per day. Cashflow is $54,000 per month. Go to ogclearing-house.com

45. NEW—Vada Group LP is offering non-operated working interest in Scott Field inLafayette Parish, Louisiana, operated byLiberty Resources, via The Oil & GasAsset Clearinghouse auction Nov. 9. Aver-age gross production is 39 barrels of oil perday. Cash flow is $61,000 per month. Go toogclearinghouse.com.

46. ZO Energy Corp. has retained Energy-Net to sell certain Eagle Ford leasehold inSouth Texas in a lot auction.

The package includes 16% nonoperatedworking interest in 6,682.3 gross leaseholdacres (6,545 net) and 1,597.54 gross and net

additional leasehold acres in GonzalesCounty. The leases feature a 75% net rev-enue interest.

The acreage features one producingAustin chalk well with 16% working interestand 12% net revenue interest. Production is56 barrels of oil and 18,000 cubic feet of gasper day.

Upside includes one cased hole and a per-mitted location waiting on a rig. The operatoris Forest Oil Corp.


47. Zodiac Exploration Inc. and BayswaterExploration & Production LLC have re-tained Scotia Waterous Inc. to seek a joint-venture or farm-in partner for assets in theSan Joaquin Basin of California.

The package includes an interest in theJaquar prospect in Kings and Kern counties,which features potential across multiple hori-zons including Whepley, Vaqueros, Kreyen-hagen and Monterey formations. Zodiacholds approximately 86,000 acres andBayswater holds 17,000 acres in the concen-trated position.

The prospect features conventionaldrilling locations to complement and de-riskdevelopment of new play. Results are avail-able an from initial two-well test programdrilled to depths of approximately 15,000feet.

Third-party original oil in place is esti-mated at more than 4 billion gross barrels tar-geting only a portion of plays over a portionof acreage. Pay thickness of reservoirs aresandwiched between source rock. The assetsfeature infrastructure already in place.

Contact Adrian Goodisman, 713-437-5056,[email protected].

Canada

48. NEW—Birchcliff Energy Ltd. has re-tained Scotia Waterous to sell two proper-ties in northwestern Alberta.

The package include 92% average work-ing interest in 501,000 net acres undevelopedland in large contiguous blocks in the Mont-ney/Doig gas play at Pouce Coupe. The as-sets feature 91% working interest in 177,920net acres of Montney rights on theMiddle/Lower Montney 92% working inter-est in 124,493 net acres of Charlie Lakerights on the Worsley light oil play, 99%working interest in 124,800 net acres on theDuvernay play, 85% working interest in

393,644 net acres on the Nordegg play and98% working interest in 417,304 net acres onthe Banff/Exshaw play.

Production is 19,250 barrels of oil equiv-alent per day (76% gas). Proved and probablereserves as of June 30 were 229.4 millionbarrels equivalent.

Upside includes more than 1,900 netdrilling locations, with 84% of the locationshaving not yet been assigned 2P reserves.Also, the upside potential includes multipleuphole zones.

The company also owns and operates thePCS gas plant. Capacity at the plant is cur-rently being doubled to 120 million cubicfeet of gas per day.

Contact Adam Waterous, 403-261-4240,[email protected].

49. NEW—Chinook Energy Inc. has re-tained Macquarie Tristone to seek propos-als for all of its assets in southeastern Al-berta.

The package features an average 83%working interest in 39,200 gross acres(32,541 net) in the Manyberries region. Theproperties produce primarily from the Creta-ceous Sunburst and Jurassic Swift forma-tions. The majority of production, facilitiesand units are high working interest and oper-ated and the properties feature interest inmultiple Sunburst pools including six sepa-rate units.

Upside includes recent horizontal, multi-frac success with initial production is 120barrels per day and more than 16,000 barrelsproduced in the first seven months of produc-tion. There is also significant developmentupside related to further drilling and water-flood optimization and a large inventory ofvertical and horizontal drill locations identi-fied.

The bid due date is Nov. 15. ContactTrevor Anderson, 403-218-6663, [email protected].

50. NEW—Galleon Energy Inc. has re-tained Scotia Waterous Inc. to sell certainoil and gas assets in Alberta andSaskatchewan.

The deal includes four packages: Edam,Senex, Dawson and minor properties. Com-bined production in August 2011 was ap-proximately 713 barrels of oil per day and2.9 million cubic feet of gas per day for atotal 1,190 barrels of oil equivalent per day.

The bid due date is Nov. 2. Contact MikeJackson, 403-298-4096.

On The Market



On The Market

51. NEW—Gift Energy Ltd. has retainedSayer Energy Advisors to seek a joint ven-ture partner for assets in Alberta.

The package includes interest in a projectdeveloping oil and gas resources underlyingthe Gift Lake Métis settlement in north-cen-tral Alberta. The project includes undisposedoil, gas and oilsands rights in the north halfof Township 80 and all of Township 81 inRanges 12-13W5. The principal targets fordevelopment are oilsands/heavy oil in theBluesky/Gething and Pekisko formations andpetroleum and natural gas in the Slave Point,Gilwood and Granite Wash formations.

Proposals should indicate a detailed de-velopment plan for a specific resource under-lying a specific block of land on the project.Land blocks shall be a maximum of 12 sec-tions in size. Gift Energy will consider grant-ing an option for an additional block of landno larger than the initial block. Developmentplans should provide detail as to seismic pro-grams, well commitments, potential joint

venture structure and related needs.The bid due date is Nov. 10. Contact

Alan Tambosso, 403-266-6133, [email protected].

52. Penn West Exploration has retainedScotia Waterous to sell certain nonoperatedoil and gas assets in Alberta and Manitoba.

The package includes three oil-weightedproperties in the Kaybob and Westeroseareas of Alberta and the Virden Manitobaarea of Manitoba.

The Kaybob area feature an average 38%working interest on 113,280 gross acres tar-geting the Montney, Duvernay and Nordeggformations. Production is 2,100 barrels of oilequivalent per day (73% liquids).

The Virden Manitoba area features aver-age 38% working interst on 37,162 grossacres targeting Mississippian Lodgepole for-mation. Production is 1,000 barrels of oilequivlant per day (100% oil). Upside in-cludes horizontal infill drilling opportunities

and potential for Three Forks and Bakken de-velopment.

The Virden Manitoba also features99.27% working interest in 57,533 grossacres of fee land.

The Westerose area features 19% to 44%in interest in three units. Production is 1,300barrels equivalent per day (83% liquids). Up-side includes several infill and attic oil loca-tions and potential for enhanced oil recoverythrough CO2 flooding.

Total production for the assets is 4,548barrels equivalent per day. Total proved re-serves are 12.26 million barrels equivalentand proved and probable reserves are 15.6million barrels equivalent.

The bid due date is Nov. 3. The effectivedate is Oct. 1. Contact Mike Jackson, 403-298-4096.

53. NEW—Perpetual Energy Inc. has re-tained Sayer Energy Advisors to sell certaininterests in the Viking-Kinsella area of Al-

On The Market


berta.The package includes 50% working inter-

est in one section of producing land and a100% working interest in one section ofprospective undeveloped land offsetting theproducing property. The property is produc-ing from the Viking-Kinsella Sparky “G”pool which is offset by two large Sparky oilpools, the Viking-Kinsella Sparky “E” pooland the Viking-Kinsella Wainwright “B”pool.

Production is 60 barrels of oil per day (30net). Proved and probable reserves as of Dec.31 were 109,000 barrels of oil and gas liquidsand 27 million cubic feet of gas. Potential re-coverable reserves are approximately 1 mil-lion barrels.

Upside includes additional potential todrill up to 17 development wells on the prop-erty and to optimize the operation by initiat-ing a water injection scheme.

The bid due date is Nov. 10. Contact AlanTambosso, 403-266-6133, [email protected].

54. NEW—Tenax Energy Inc. has retainedSayer Energy Advisors to sell the company.

The company’s assets include an overrid-ing royalty ranging from 2.1875% and 2.5%on a heavy oil property at Onion Lake,Saskatchewan. The Onion Lake property ac-counts for over 97% of Tenax’s productionand value. The company also has additionalroyalty interests in producing properties inthe Freemont area of Saskatchewan and inthe Fishing Lake, Dewberry and Lavoy areasof Alberta.

Tenax also holds nonproducing royaltyinterests in properties in the Divide,Supreme, Battle Creek, Senlac and Fort Pittareas of Saskatchewan and in the Grouard

area of Alberta. Tenax also has a working in-terest in one non-producing natural gas prop-erty at Radway, Alberta.

Production is approximately 225 net bar-rels of oil per day and estimates it could exit2011 with more than 300 barrels per day ofnet royalty production. Net operating incomeis approximately C$410,000 per month.

Proved and probable reserves are 342,000barrels of oil and 15 million cubic feet of gasfor a total 344,000 barrels of oil equivalent.

The bid due date is Nov. 10. ContactAlan Tambosso, 403-266-6133, [email protected].

International

55. NEW—Esso Exploração SantosBrasileira Ltda., a subsidiary of ExxonMo-bil Corp. has retained IndigoPool to sell astake in a block offshore Brazil.

The package includes 25% interest inBlock BM-S-22 in the pre-salt play of theSantos Basin. Current participants in the con-cession are Esso with a 40% stake (operator),Hess with 40% and Petrobras with 20%. Inexchange for the 25% interest, the buyer willfund the drilling of a well (Maracanã) to testa new pre-salt play concept, which is well de-fined from high quality 3-D seismic.

The prospect is ready to drill with a per-mitted location. The initial gross unrisked re-coverable estimate for the play is up to 1.5billion barrels of oil. Upside includes oppor-tunity to access pre-salt objectives in thehighly prospective Outer Basin High wheregiant fields have been discovered.

The bid due date is Dec. 9. Contact JohnMedler, 713-513-2155, [email protected].

56. NEW—Falkland Oil and Gas Ltd.has retained Stellar Energy Advisors to sellassets in the East Falkland Basin.

The package includes a farm-in opportu-nity in two large, license areas, Northern andSouthern, covering a combined area of49,000 square kilometers. Falkland Oil wantsa farminee to participate in two explorationwells to be drilled in the first half of 2012 inthe Northern license area in exchange for a10% to 50% equity position.

Recent drilling opened up a new deepwa-ter play in the mid Cretaceous. In addition,the presence of the Jurassic Springhill playwas confirmed. The next two wells will tar-get multi-billion barrel potential in twountested plays—the Tertiary Channel playand the mid Cretaceous Fan play.

The Loligo prospect is a large, shallow,stacked, Tertiary channel feature with a ClassIII AVO response. It has mean potential re-serves of more than 4.7 billion barrels.

The Scotia prospect is a mid-CretaceousFan play with mean reserves more than 1 bil-lion barrels equivalent. It has a Class II AVOresponse that is generally coincident withstructure and sits above the mature Aptiansource rock.

The forthcoming drilling program is bud-geted to cost US$175 million.

Contact Dave Fassom, 44 (0) 20 74931977, [email protected].

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—Acquisitions

—Divestitures

—Capital Providers

—New E&P Companies

Buyer SellerLocation of Assets Comments

For more details on each deal, see the text that follows this chart. The deals are described in the order in which they appear here.

U.S.AER Energy ResourcesInc.

Riverton Energy Louisiana Entered JV to purchase leases in South-Central LA with intent to testNodasaria Frio sand, Cockfield sand & Sparta sand.

AER Energy ResourcesInc.

Black Gold Explo-ration LLC

Texas Acquired 50% in JV to drill 2 new wells on leases in Knox County, TX.

AER Energy ResourcesInc.

Rehoboth Oil & GasLLC

Texas To purchase three oil & gas leases for producing wells in Young &Archer counties, TX.

Antero Resources Consol Energy Inc. WV, PA Acquired 7% ORRI in 115,647 net acres in Marcellus shale play in WV& PA, gaining 12 MMcf/d, 60 Bcfe proved.

Atinum Partners Co. Ltd. SandRidge EnergyInc.

TX, OK, KS Acquired 13.2% nonop WI in approximately 860,000 lease acres in OK &KS for development of Mississippian Lime horizontal play.

Baron Energy Inc. Undisclosed Texas Acquired oil producing property in Archer County, TX.

Bering Exploration Inc. Undisclosed Louisiana Acquired additional leasehold on its prospect in Singer, Louisiana, bring-ing total to 320 acres.

BreitBurn Energy PartnersLP

Cabot Oil & GasCorp.

WY, CO, UT Closed acquisition of 238,000 gross acres in WY, CO & UT, primarily inEvanston & Green River basins of SW WY, gaining more than 30MMcfe/d, 230 Bcfe proved.

Brenham Oil & Gas Corp.,American International Industries Inc.

Undisclosed Texas Acquired leases of Dyess Oil Field near Abilene, TX, covering approxi-mately 700 acres, gaining 1.4 MMBO probable.

Carrizo Oil & Gas Inc.,Avista Capital Partners

Undisclosed OH, PA JV acquired 15,000 net acres in E OH & NW PA.

EnerJex Resources Inc. Undisclosed Kansas To acquire 90% WI in 1,920 oil producing acres adjacent to its existingBlack Oaks project targeting Mississippian formation in eastern Kansas,gaining 1.4 MMBO proved.

Fox Petroleum Inc. Renfro Energy LLC,Cameron ParishPipelines LLC.

Louisiana Acquired companies with assets in Johnson Bayou, Louisiana.

Gail (India) Ltd Carrizo Oil & GasInc.

Texas Entered a JV in Texas Eagle Ford formation for 20% WI in approxi-mately 20,200 net mineral acres primarily in La Salle County & 20% WIin 8 horizontal wells, gaining 340 BO/d & 760,000 Cf/d net, 2,76MMBOE net proved.

GeoMet Inc. Undisclosed AL, WV To acquire CBM assets in AL & WV Virginia, including approximately70,000 net acres of undeveloped leasehold in WV, gaining 22 MMcf/d,50 Bcf proved.

Undisclosed Gulfsands PetroleumPlc

Gulf of Mexico Acquired WI in shallow-water GOM properties, gaining 1.1 MMBOE 2P,322 BOE/d.

Kodiak Oil & Gas Corp. Undisclosed North Dakota To acquire 13,500 net mineral acres principally in Williams County inND Williston Basin, gaining 3,000 BOE/d.

Legend Oil and Gas Ltd. Double 7 Oil andGas LLC

Kansas To acquire producing oil assets in SE KS which features 29 wells, gaining16 BO/d.

Milagro Oil & Gas Inc.,Milagro Producing LLC

Undisclosed Texas Purchased S TX producing assets including 77 wells in Starr & Hidalgocounties, gaining 3 MMcfe’d, 15.0 Bcfe proved

E&P A&D News


New Western EnergyCorp., New WesternTexas Oil and Gas Corp.

Undisclosed Texas Acquired 84-acre Reves lease in Jones County, TX.

NFR Energy LLC SandRidge Energy Inc. Texas Plans to acquire 25,000 net acres in Gregg, Harrison, Rusk & Panolacounties in E TX, gaining 25 MMcfe/d.

Noble Energy Inc. Consol Energy Inc. PA, WV Acquired 50% interest in 628,000 net Marcellus shale acres in in SWPA & NW WV, gaining 400 Bcfe proved.

Nordic Oil USA 2 LLP Lucas Energy Inc. New Mexico To acquire assets in McKinley County, NM.

Panhandle Oil And GasInc.

Undisclosed Arkansas To acquire 1,531 acres of leasehold in 69 drilling units in Van Buren, Con-way & Cleburne counties, AR, gaining 2.7 MMcfe/d, 9.2 Bcfe proved.

PDC Mountaineer LLC,Lime Rock Partners V LP,Lime Rock Partners,

Seneca-Upshur LLC West Vir-ginia

To acquire membership interests of co. with estimated 90,000 net acresprospective in Marcellus shale primarily in Harrison, Taylor, Barbour,Upshur, Lewis & Randolph counties, WV, gaining 5.4 MMcf/d net, 30Bcfe proved.

PRE Resources Inc., GEEnergy Financial Services,

Undisclosed WY, CO To buy more than 100 producing wells & undeveloped acreage across29 fields on 18,000 net acres in WY & CO.

Statoil Exploration Inc. Brigham Exploration Co. ND, MT To acquire co. with 375,000-net-acre stake in Bakken & Three Forkstight oil play in ND & MN, with additional 40,000 acres in onshoreGulf Coast, Anadarko Basin ; Permian Basin, gaining 21,000 BOE/dwith potential to escalate up to 100,000 BOE/d, 68 million BOEproved.

Strategic American OilCorp.

SPE Navigation I LLC Texas Bought co. with four producing oil & gas fields in Galveston Bay, TX.

Texas Oil and Minerals Undisclosed Texas To acquire additional 156 acres that adjoins its prospective 227-acrelease block in DeWitt County, TX, targeting Upper Wilcox formation.

Texas Oil and Minerals Undisclosed Texas To buy 258 acres in Damon Mound Field in Brazoria County, Texas.

Treaty Energy Corp. Undisclosed Texas Purchased Mach H. Wooldridge & Eula E. Wooldridge leases in Shack-elford County, TX.

Victory Energy Corp., Au-rora Energy Partners

Undisclosed Texas Acquired 5% WI in Jones County play in TX.

Xtreme Oil & Gas Inc. Husky Ventures Inc. Oklahoma Acquired WI in Hancock well targeting Sooner trend on OK AnardarkoBasin.

CanadaCrescent Point Arcan Resources Ltd. Alberta Bought stake in co. holding interests in Deer Mountain, Swan Hills &

Hamburg in NW AB & McLeod in west-central AB.

Edge Resources Inc. Undisclosed Alberta Acquired a producing foothold in Edmonton Sands project area.

Lone Pine Resources Inc. Forest Oil Corp. Alberta Spun off from Forest.

Manitok Energy Inc.,Petrus Resources Ltd.

Undisclosed Alberta To buy assets in central Alberta foothills, gaining 10 MMBOE proved,2,600 BOE/d.

Newton Energy PartnersLLC, NEP Canada ULC

MEC Operating Co. ULC Alberta Bought co. with 5 fields in AB featuring 225 producing wells on 73,000acres, gaining 2,400 BOE/d.

Northern Spirit ResourcesInc.

Cascade Resources Inc. Alberta To buy company with assets in east-central AB, west-central SK in re-verse takeover.

Undisclosed Oilsands Quest Inc. Alberta To acquire Wallace Creek assets in AB, featuring 45,545 acre-permit.

Sinopec International Pe-troleum Exploration andProduction Corp.

Daylight Energy Ltd. AB, BC To acquire co. with more than 324,000 net acres of assets in DeepBasin of AB & NE BC, gaining 37,000 BOE/d, 174.2 MMBOE 2P.

AfricaDragon Oil Plc Cooper Energy Ltd. Tunisia To acquire 55% WI in 4,616-kilometer Bargou permit offshore Tunisia.

Mubadala Oil & Gas Dominion Petroleum Ltd. Tanzania Acquired 20% WI in Block 7 offshore Tanzania.

E&P A&D News


OMV (Tunesien) ProductionGmbH

Medco Tunisia AnaguidLtd., Medco Tunisia Hold-ing Ltd., PT Medco EnergiInternational

Tunisia To acquire Medco Tunisia Anaguid Ltd., gaining 20% WI Durraconcession & 20% WI in Anaguid permit offshore Tunisia.

Ophir Energy Dominion Petroleum Tanzania,Kenya

To acquire co., gaining deepwater acreage offshore Tanzania &Kenya.

AsiaBP Plc Reliance Industries Ltd. India Bought 30% stake in 21 PSC operating in India, including produc-

ing KG D6 block, & will form 50/50 JV.

Australia & NZArrow Energy Holdings Pty.Ltd.

Bow Energy Ltd. Australia To acquire co. with 8 Queensland CSG assets within Bowen &Surat basins, gaining more than 13.8 Tcf & 2,739 petajoules 3P.

Magellan Petroleum Corp. Santos Ltd. Australia To swap assets in Australia’s Amadeus Basin in which Magellanwill acquire Santos’ 48% WI in Palm Valley Field & 66% WI inDingo Field; Santos to receive Magellan’s 35% WI in MereenieField.

EuropeAmerican Energy Develop-ment Corp.

Reservoir Resources Ltd. U.K. NorthSea

To acquire co. with 24,000 acres in an oil producing area in U.KNorth Sea.

BRS Resources Ltd. Saxon Oil Co. Ltd.,AleAnna Resources LLC

Italy Acquired an additional 20% WI in Italy-based AleAnna ResourcesLLC, which has 8 exploration permits & 3 applications for explo-ration permits, totaling more than 800,000 acres, primarily inItaly’s Po Valley.

LNG Energy Ltd. TransAtlantic WorldwideLtd., TransAtlantic Petro-leum Ltd.

Bulgaria To farm in & gain 50% WI in Etropole production concession inNW Bulgaria, expected to cover up to 1,640 square kilometers(405,080 acres).

FSUExxonMobil Corp. Rosneft Russia To form partnership to jointly explore Arctic & Black Sea offshore

Russia & shale fields in TX & deepwater GOM projects.

Latin AmericaLG International Corp. GeoPark Holdings Ltd. Chile To acquire additional 10% stake in upstream subsidiary with pro-

ducing & exploration blocks in Chile.

Pacific Rubiales Energy Corp. Maurel & Prom Peru To acquire 50% WI 6,600 square-kilometer Block 116 in NE Peru.

Middle EastVallares Plc Genel Energy International

Ltd.Iraq To merge, creating Kurdistan-based producer with 41,000 BOE/d,

1.4 BBOE 2P.

MidstreamBoardwalk HP Storage Co.LLC

Enterprise Products Part-ners LP

Mississippi To acquire gas storage facilities in Forrest County, MS, gaining 7salt dome gas storage caverns, a leaching plant, freshwater & brinedisposal wells, approximately 69,000 horsepower of compression& approximately 105 miles of pipeline.

Crestwood Midstream Part-ners LP

Tristate Sabine LLC, En-ergy Spectrum Capital,Zwolle Pipeline LLC

Louisiana To acquire Tristate Sabine LLC, gaining 52 miles of high-pressuregas gathering pipelines in Sabine Parish, LA.

Enbridge Inc. EnCana Corp. British Co-lumbia

To acquire 52% WI in first two phases of NE BC natural gas pro-cessing plant, which has regulatory approval for total processingcapacity of 800 MMcf/d.

Enogex Roger Mills Gas GatheringLLC, Cordillera EnergyPartners III LLC, OxbowMidstream LLC, WestCanadian Midstream

Oklahoma To acquire Roger Mills Gas Gathering LLC, gaining pipeline as-sets in Granite Wash, Tonkawa & Marmaton plays of NW OK.


E&P A&D News

E&P A&D – U.S.

AER Energy Inks Deal For Three TX Leases� AER Energy Resources Inc., Scottsdale,Ariz., (Pink Sheets: AERN) has signed anagreement with Rehoboth Oil & Gas LLCof Baytown, Texas, for the purchase of threeoil and gas leases for producing wells inYoung and Archer counties, Texas.

“AER Energy continues to implement itsplan of acquiring existing leases with operat-ing wells or wells for secondary recovery op-portunities and these three Rehoboth leasesalong with the 23 multiplex wells previouslyannounced bring AER Energy substantiallyahead of 2011 planned benchmarks with netrevenues totaling in the millions,” says Stan-ley F. Wilson, president of AER.

AER Energy, Black Gold Form Permian Basin JV� AER Energy Resources Inc., Scottsdale,Ariz., (Pink Sheets: AERN) plans to joinwith Black Gold Exploration LLC, Farm-ersville, Texas, in a drilling joint venture.

AER Energy is purchasing a 50% interestfor the drilling of two new wells on leases inKnox County, Texas. The agreement callsfor a definitive joint venture to be executedno later than Oct. 20, 2011, with closing nolater than Nov. 11, 2011. Both companies ex-pect successful completion of the JV.

The Black Gold joint venture involves thedrilling of two 1,800-feet vertical wellsthrough the Wolfcamp Lower Permian sand-stone, the Saddlecreek sandstone, the NoodleCreek sandstone and the Stockwether lime-stone. Upon completion, the JV expects wellproduction to approximate 60 barrels of oilper day.

AER Energy Inks JV Targeting NodasariaFrio, Sparta Sands� AER Energy Resources Inc., Scottsdale,Ariz., (Pink Sheets: AERN) has successfullysigned an agreement with Eric Johnson andRiverton Energy for the formation of a jointventure to purchase oil and gas leases insouth-central Louisiana with the intent todrill to 12,500 feet to test the Nodasaria Friosand (9,400 feet), the Cockfield sand (10,700feet) and the Sparta sand (12,300 feet), all ofwhich are major producers of oil and naturalgas in surrounding fields at Fordoche, Livo-nia and Opelousas.

Stan Wilson, AER president and generalcounsel, says, “Having previously workedwith Riverton Energy on capital formationfor the development of two Eagle Ford shalemineral leases, the Mathews and the Murphyleases in Zavala County, Texas, I am pleasedthat AER Energy Resources Inc. has been af-forded this opportunity to joint venture withRiverton Energy on the “Bayou B Prospect”in the Atchafalaya Basin area with an ex-pected lease acquisition to take place in earlyNovember and drilling to begin no later thanFebruary 2012.

SandRidge Closes $500 MillionMississippian JV� SandRidge Energy Inc., Oklahoma City,(NYSE:SD) has completed its previously an-nounced joint-venture transaction with an af-filiate of Atinum Partners Co. Ltd., a lead-ing investment firm located in the Republicof Korea.

At closing, SandRidge received approxi-mately $250 million in cash and transferredto Atinum an undivided 13.2% nonoperatedworking interest in SandRidge’s originalMississippian play. SandRidge will receivean additional $250 million in the form of adrilling carry.

Atinum Partners, headquartered in Seoul,

Republic of Korea, is a leading private in-vestment company. Established in 2008, At-inum Partners focuses on domestic and inter-national investment opportunities in a broadrange of industries.

Carrizo, Avista Unite For Utica Shale JV� Carrizo Oil & Gas Inc., Houston, (Nas-daq: CRZO) and New York-based privateequity firm Avista Capital Partners haveentered a joint venture to acquire and developacreage in the liquids rich region of the Uticashale.

The JV has closed on its first acquisitionof 15,000 net acres in eastern Ohio andnorthwestern Pennsylvania at an average costof less than $1,500 per acre. Carrizo will ownan initial 10% interest in the joint-ventureproperties with Avista owning the remaining90%. Avista has the right to contribute aggre-gate funds of up to $130 million to the jointventure, with the ability to raise this amountby an incremental $70 million.

Carrizo holds two purchase options to in-crease its participating interest to 50% in theproperties acquired by the joint venture overthe next 18 months. Carrizo’s purchase op-tions may be exercised at specified incre-ments above acreage cost and associated im-provements at any time during the optionperiod. In the event these purchase optionsare not exercised, Carrizo will be entitled toshare in any cash distributions by Avista toits partners, provided specified return on in-vestment thresholds on Avista’s investmentare achieved.

Carrizo will initially act as operator of thejoint-venture properties and will provide cer-tain management services to Avista related tothe joint venture.

Carrizo president and chief executive S.P.(Chip) Johnson IV says, “We are excitedabout this joint venture with Avista whichshould allow both companies to quicklygrow a meaningful position in one of the

High Point Gas Trans-mission LLC

Southern Natural GasCompany LLC

Louisiana To acquire 621 miles of onshore & offshore pipeline south of Toca com-pressor station onshore & offshore LA.

Kinder Morgan Inc. El Paso Corp. TX, LA, NM,UT

To buy gas pipeline co. with holds 43,000 miles of pipeline in Eagle Ford& Haynesville shales, Wolfcamp trend of Permian Basin, Altamont re-gion of Uinta Basin, South Louisiana Wilcox& international holdings inEgypt & Brazil, gaining 823 MMcfe/d, risked resource potential of 8Tcfe, throughput of 17 Bcf/d, total capacity of 28 Bcf/d.

Peregrine MidstreamPartners LLC

GeoPetro ResourcesCo., Madisonville Mid-stream LLC

Texas To acquire equipment at gas treatment plant in Madison County, Texas.

Summit Midstream Part-ners LLC

Encana Oil & Gas(USA) Inc., EncanaCorp.

Colorado To acquire approximately 260 miles of pipeline & 90,000 horsepower ofcompression facilities in area around Rifle, CO, gaining 500 MMcf/d.

PERFECT MERGER, PERFECT PLAYThe recent acquisition of Petrohawk Energy by Australia-based BHP Billiton is “as close to a per-fect merger as possible,” according to the Hawk’s Dick Stoneburner. “We had some of the most en-viable assets within the industry.”

STRONG 3Q PROPELS U.S. A&D TO $48BThird-quarter 2011 closed the books on a story line that show deep-pocketed, technically savvy oiland gas operators placing high-dollar bets on the efficacy of unconventional resources, both in areasthat are well-established as well as regions that are in the earliest phases of exploration.

RANGE’S POSITIONRange Resources chairman and chief executive John Pinkerton seems to suggest it is highly unlikelyhe would sell out or sell down his prized positions in the Marcellus shale and unconventionalAnadarko Basin holdings anytime soon.

SLOW GOM PERMITS CREATING BUYERS IN UNCONVENTIONALSIf robust drilling is not revived and the only wildcatters left in the billion-barrel Gulf region aremega-cap E&Ps, it is another nail in the coffin for non-OPEC production if this is really peak activ-ity in the Gulf of Mexico, with Chevron and other mega-caps as the only players.

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highest potential liquids-rich shale plays inthe U.S.”

Avista partner Robert L. Cabes Jr. says,“Avista is pleased to continue its partnershipwith the Carrizo team and build upon thegreat success we have achieved together inthe Marcellus shale. We are excited aboutour prospects in the Utica shale and look for-ward to the successful growth of this ven-ture.”

Baron Energy Gains Producing Assets In Archer County, TX� Baron Energy Inc., New Braunfels,Texas, (Pink Sheets: BROE) has acquired in-terest in an oil producing property located inArcher County, Texas.

“We recently acquired a 20% working in-terest in an oil property in Archer County,Texas, producing from the Gunsight forma-tion,” says Ronnie L. Steinocher, presidentand CEO. “We have also retained an optionto purchase an additional 20% working inter-est in this property within the next sixmonths. There appears to be production up-side via a three-well workover program andproduction enhancement procedures withinthis five-well property.” Baron is operator.

Bering Tacks On Additional Louisiana Acreage� Bering Exploration Inc., Houston,(OTCBB: BERX) has acquired an additionalleasehold on its prospect located in Singer,Louisiana, bringing the total leasehold to 320acres. This prospect will target five potentialzones from 9,600 feet to 10,600 feet, and haspotential gross reserves of 1.3 million barrelsof oil. Bering currently owns a 100% work-ing interests in this prospect.

“Now that we have completed the acqui-sition of this additional acreage we will beginthe initial steps to prepare the drill site,” saysSteven Plumb, vice president of finance ofBering. “We hope to begin drilling opera-tions on this prospect during this calendaryear.”

BreitBurn Energy Banks Cabot’s Rockies Assets For $283MM� BreitBurn Energy Partners LP, Los An-geles, (Nasdaq: BBEP) has closed its acqui-sition of producing gas and oil properties pri-marily in Wyoming from Cabot Oil andGas Corp., Houston, (NYSE: COG) for$283 million.

The transaction was funded with borrow-ings under the partnership’s existing bankcredit facility. Further, no material preferen-

tial rights were exercised as part of the acqui-sition.

Breitburn acquired reserves comprisingapproximately 95% natural gas; estimatedproved reserves of approximately 230 billioncubic feet equivalent (136 Bcfe estimatedproved developed producing reserves); netexpected production averaging more than 30million cubic feet per day for 2012; approxi-mately 620 producing wells in 16 fields;more than 90 proven, undeveloped drillinglocations and more than 600 additional po-tential drilling locations; estimated reservelife index of approximately 21 years on esti-mated proved reserves and 12 years on esti-mated proved developed reserves; low liftingcosts of approximately $0.83 per Mcfe; andhigh Btu content ranging from 1,000 to 1,300MMbtu per estimated Mcfe.

In the acquisition, Breitburn acquired ap-proximately 255,000 gross (approximately125,000 net) acres of which 238,000 gross(111,500 net) are in Wyoming, 15,000 gross(13,000 net) are in Colorado, and 2,000 gross(500 net) are in Utah.

Breitburn has additionally entered intonatural gas hedges for the period covering2011 through 2015 on approximately 30.5MMbtu at a weighted average price of $5.11per MMbtu.

Brenham Oil Acquires West Texas Oil Field Leases� Brenham Oil & Gas Corp., Houston,(OTCBB: BRHM), a subsidiary of Ameri-can International Industries Inc.,(OTCBB: AMIN) has acquired the leases ofDyess Oil Field near Abilene, Texas, from anundisclosed seller for $500,000 in stock.

Brenham issued 2 million shares to theDyess Field leaseholders.

The Dyess Oil Field leases covering ap-proximately 700 acres with probable reservesof 1.4 million barrels of oil and is delineatedby more than two dozen existing wells. Bren-ham’s operating subsidiary, Brenham Oper-ating LLC, will operate Dyess Field.

Brenham granted the owners of DyessField leases an overriding royalty interest.

Brenham president Scott Gaille says,“Brenham intends to restart production fromselected Dyess wells and undertake waterflood pilot programs in early 2012.”

Antero Adds 60 Bcf Proved In Marcellus On Consol Override� Antero Resources, Denver, has acquired a7% overriding royalty interest from ConsolEnergy Inc., Pittsburgh, Pa., (NYSE: CNX)

in 115,647 net acres in the southwestern coreof the Marcellus shale play on a large portionof Antero’s existing West Virginia and Penn-sylvania acreage position for $193 million incash.

The acquisition of the Consol ORRI in-creases Antero’s average net revenue interestto 87% in the 115,000 net Marcellus acresthat the company acquired from DominionResources Inc. in September 2008 and adds12 million cubic feet per day of current netdaily production in existing Antero operatedwells. Antero estimates that the acquisitionadds more than 500 billion cubic feet equiv-alent of net risked resource, including morethan 60 Bcfe of proved reserves.

Pro forma, Antero now owns more than200,000 net acres of leasehold in the Marcel-lus shale play. Antero currently has 227MMcf per day of gross operated productionfrom the Marcellus, 99% of which is comingfrom 53 horizontal wells, resulting in 181MMcf per day net production following theacquisition.

This asset was excluded from the NobleEnergy Inc. joint venture announced byConsol in August. Consol will retain the ex-isting shallow wells and formations and allother leasehold interests on the acreage, in-cluding geological formations generallyabove and below the Marcellus shale.

The transaction closed on Sept. 21, 2011,with an effective date of July 1, 2011.

Antero focuses on unconventional gasproperties primarily in the AppalachianBasin in West Virginia and Pennsylvania, theArkoma Basin in Oklahoma and the PiceanceBasin in Colorado.

Stifel, Nicolaus & Co. Inc. was financialadvisor to Consol. Akin Gump StraussHauer & Feld LLP was legal advisor.

EnerJex To Exercise Option For 90% WI In Mississippian Play� EnerJex Resources Inc., San Antonio,Texas, (OTCBB: ENRJ) has entered into anagreement under which the company wasgranted an option to acquire a 90% workinginterest in 1,920 oil producing acres locatedadjacent to its existing Black Oaks Projectwhich produces oil from the Mississippianformation.

EnerJex intends to exercise this option inthe coming weeks, and the additional acreagewould nearly double the company’s positionin this project to a 90% working interest in4,020 acres.

Based on EnerJex’s Dec. 31, 2010, third-party reserve report, the company’s existing


E&P A&D News

Black Oaks Project holds 1.4 million net bar-rels of proved oil reserves which are ex-pected to generate future pre-tax net cashflow of $89 million with a PV10 value of $29million.

EnerJex’s management believes that thisadditional acreage will yield a proportionateamount of recoverable oil with similar eco-nomic results as compared to the Black OaksProject. It is anticipated that this additionalacreage would require approximately 150new wells to fully develop at an all-in cost(including acquisition costs) of less than $10per net barrel of recoverable oil, with operat-ing expenses of $15-$20 per net barrel.

Fox Petroleum To Acquire Renfro Energy,Cameron Parish� Fox Petroleum Inc., New York, (PinkSheets: FXPT) plans to acquire Renfro En-ergy LLC, Dallas, and Cameron ParishPipelines LLC.

Renfro Energy and Cameron ParishPipelines assets are located in the heart of theJohnson Bayou, Louisiana. The CameronParish School Board Lease has cumulativelyproduced over 6 million barrels of oil sincethe 1930s.

Terms of the deal were undisclosed.

Carrizo Opens Up JV On Eagle FordProject To India’s Gail� A subsidiary of Gail (India) Ltd., NewDelhi, India, (NYSE: GAIL) has entered ajoint venture in the Texas Eagle Ford forma-tion with Carrizo Oil & Gas Inc., Houston,(Nasdaq: CRZO) for a total $95 million incash and production costs.

The deal includes $63.65 million in cashand the assumption of an additional $31.35million of Carrizo’s future drilling and devel-opment costs.

Carrizo sold 20% of its interest in approxi-mately 20,200 net mineral acres leased in thecondensate zone of the Eagle Ford shale. Theassets conveyed to Gail include approximately4,040 net acres primarily in La Salle Countyand a 20% interest in eight horizontal wells.

Production is approximately 1,700 netbarrels of oil per day (340 barrels per day netto Gail) and 3.8 million cubic feet per day ofrich gas (760,000 cubic feet net to Gail).Proved reserves are 13.8 million barrelsequivalent (2.76 million net to Gail) with 2.5million barrels equivalent classified asproved developed (500,000 barrels net toGail).

A rig is currently drilling a four-well padon the joint-venture property, which is ex-

pected to be completed and brought on pro-duction near the end of this year. Carrizocontinues as operator of these properties, andcurrently expects the $31.35 million drillingcarry to be fully realized in less than oneyear.

Carrizo has recently entered purchaseagreements for additional Eagle Ford acreagenot included in the joint venture with Gail.Pro forma the joint venture and successfulclosing of the additional deals, Carrizo’s netEagle Ford shale lease position wouldamount to approximately 41,000 net acres.

Carrizo president and chief executive S.P.(Chip) Johnson IV says, “With the currentuncertainty in the global financial markets,we felt it prudent to execute this transactionand take the opportunity to reduce our finan-cial leverage and preserve our liquidity to bebetter prepared for whatever the futureshould hold. As we continue to control thepace of substantially all of our developmentactivities, we have the flexibility to adjustour capital requirements as necessary.”

KeyBanc Capital Markets Inc. analystJack Aydin says the deal values the propertyat $16,000 per net acre and production at$65,000 per barrel equivalent per day.

“We think Carrizo received a solid pricefor the acreage considering the valuation isgreater than recent Eagle Ford transactions,including SM Energy Co.’s (NYSE: SM) re-cent divestiture in La Salle County at$14,640 per net acre and the average for re-cent meaningful transactions in the EagleFord at approximately $12,500 per net acre.”

GeoMet To Take Hold Of West Virginia,Alabama CBM Properties� GeoMet Inc., Houston, (Nasdaq: GMET)plans to acquire coalbed-methane assets inAlabama and West Virginia, certain gashedge positions, and a license to use a certaindrilling technology from an undisclosed pri-vately-held company for $90.2 million.

The assets include approximately 70,000net acres of undeveloped leasehold in WestVirginia, a royalty-free license to use a cer-tain drilling technology in nine counties inWest Virginia and one county in Virginiaand gas hedge positions totaling approxi-mately 6.5 billion cubic feet from the effec-tive date of July 1 through December 2012with an average fixed price of $6.44 perthousand cubic feet.

Net daily gas sales volumes averaged ap-proximately 22 million cubic feet per day forthe first six months of 2011. Proved reservesare approximately 50 billion net cubic feet of

coalbed-methane reserves.A portion of the coalbed-methane proper-

ties are in Alabama, subject to two separatepreferential rights to purchase by a singleparty. These assets have an allocated value of$30.8 million. Preferential rights are ex-pected to expire by Oct. 31, if not earlier ex-ercised or waived.

A portion of the CBM properties to be ac-quired in West Virginia, subject to a prefer-ential right to purchase by a single party,have an allocated value of $23.4 million. Thepreferential right is expected to expire byDec. 6, 2011, if not earlier exercised orwaived.

In the event that any one or all of thesepreferential purchase rights are exercised andthe other conditions to closing are satisfied orwaived, the company is obligated to close onthe remainder of the transaction.

Gulfsands Sells Down Shallow GOMInterests; Looks To Divest More� Gulfsands Petroleum Plc, London, (Lon-don AIM: GPX) has sold shallow-waterproperties in the Gulf of Mexico to an undis-closed buyer for $6 million.

The properties include various workinginterests in: East Cameron 62, Block EC66A6; East Cameron 271, Block VR261; GOMST904, Block CC904 Unit; Ship Shoal 176,Block SS177; Vermillion 162, Block VR161;Vermillion 315, Block VR314, VR315; Ver-million 332, Block VR332; West Delta 27,WD27; and West Delta 58, Block WD59.

Proved and probable reserves as of year-end 2010 are approximately 1.1 million bar-rels of oil equivalent. During the last week ofSeptember, the properties produced approxi-mately 322 BOE per day net (60% gas).

The effective date is June 1, 2011.This is the second sale of a package of

Gulf of Mexico assets completed by Gulf-sands since the beginning of the year, gener-ating approximately $20 million in total cash.Further such sales are anticipated to substan-tially exit the group’s involvement in thisbusiness. Pro forma proved and probableworking interest reserves remaining after thissale are 2.1 MMBOE.

Kodiak To Tack on 13,500 AdditionalWilliston Basin Acres� Kodiak Oil & Gas Corp., Denver,(NYSE: KOG) plans to acquire producingproperties and undeveloped leasehold in theNorth Dakota Williston Basin from an undis-closed private seller for $235 million.

The deal includes 13,500 net mineral

E&P A&D News


acres principally in Williams County in anarea just north of Kodiak’s Koala projectarea. Kodiak will assume operatorship of 15drilling units on the contiguous leasehold tobe acquired. Kodiak has also agreed to as-sume the seller’s term-contract for a drillingrig, subject to the rig owner’s consent.

The transaction includes a working inter-est in six gross (4.6 net) operated producingwells. The acquisition also includes threegross (1.5 net) wells that have been drilledand are waiting on completion, two of whichare projected to be completed before closing,one gross (0.35 net) well currently drilling,and four permitted and built locations. Oncethe four permitted wells are drilled, nearly allof the leasehold to be acquired will be heldby production by early 2012.

Production is projected to be approxi-mately 3,000 barrels of oil equivalent per dayat closing.

Pro forma, Kodiak with have an acreageposition in the Williston Basin of nearly110,000 net acres.

Included in the acquisition are certain sur-face equipment and gas pipeline connectionfacilities that tie into a regional third-partynatural gas gathering system. The operatedlands are within a few miles of a crude oilrailway terminal and interstate pipeline inter-connect that is expected to be fully in serviceduring 2012.

Also included in the transaction is a newlydrilled salt water disposal well and watergathering pipelines.

The drilling rig contract that Kodiak hasagreed to assume is currently drilling the lastof the four wells under the primary contractand, subject to the rig owners’ consent, it willprovide Kodiak with an option for a 12-wellextension.

Kodiak is also participating with an ap-proximate 50% nonoperated working interestunder leasehold in Dunn County where tworigs are presently drilling.

Kodiak chairman and chief executiveLynn Peterson says, “We continue to executeon our stated goal of acquiring contiguous,operated leasehold in the heart of the Bakkenplay. (This) transaction, when closed, willadd significantly to our leasehold and com-plements our core operating area in McKen-zie County where we have been completingstrong producing wells. The acquired oper-ated lands are proximate to the major re-gional oil service center of Williston, N.D.which should provide some field-level oper-ating efficiencies.”

The deal was expected to close in lateOctober.

Legend O&G Inks LOI For Oily Kansas Assets� Legend Oil and Gas Ltd., Seattle, Wash.,(OTCBB: LOGL) plans to acquire producingoil assets in southeastern Kansas from Dou-ble 7 Oil and Gas LLC.

The assets contain 29 wells which cumu-latively produced an average of 16 barrels oilper day during a seven-day test productionperiod in August 2011. An additional 14water injection wells have yet to be put intoservice. The production is located on a 240-acre contiguous lease in the McCune area ofsoutheastern Kansas.

“This acquisition will augment our exist-ing production in Kansas and will providethe opportunity to exploit additional hydro-carbons through the completion of a water-injection system,” says Marshall Diamond-Goldberg, president. “The wells and flowlines are already in place; all that is necessaryto complete the water flood is a water sourcewell and injection pump.”

The property can be further developedwith additional infill locations and furtherexpansion of the water flood, he adds. Thereservoir is at a depth of less than 250 feet,reducing the cost to drill additional wells.with the effectiveness of water flooding to in-crease production demonstrated in nearbyanalogue fields.

Milagro Bolts On South TX Producing Assets� Milagro Oil & Gas Inc., Houston, has re-ported that, through its wholly owned sub-sidiary Milagro Producing LLC, it hascompleted the purchase of certain SouthTexas producing assets.

The assets acquired in the transaction in-clude 77 wells in Starr and Hidalgo Counties,Texas, 60 of which are currently operated byMilagro Exploration LLC, also a wholly-owned subsidiary of Milagro Oil & Gas Inc.The acquisition, which closed Sept. 29, 2011,with an effective date of July 1, 2011, addsapproximately 3 MMcfe per day net to Mila-gro, with proved reserves of approximately15.0 Bcfe.

With this and the company’s previous ac-quisition in 2011, Milagro Oil & Gas Inc. hasnow met its goal of replacing projected 2011production.

New Western Energy Bolts On Texas Leasehold� New Western Energy Corp., Irvine,Calif., (Pink Sheets: NWTR) has reportedthat its wholly owned subsidiary, New West-

ern Texas Oil and Gas Corp., has finalizedthe acquisition of the Reves Lease, in JonesCounty, Texas.

“The 84-acre Reves Lease is a strategicacquisition that is adjacent to the SwensonLease, which our wholly owned subsidiaryacquired earlier this year,” says Javan Khaz-ali, president of New Western Energy. “Thefirst test well that was drilled on the SwensonLease is currently in production, and the ac-quisition of the adjacent Reves Lease allowsus to further expand our acreage in the re-gion.”

SandRidge To Unload E TX GasProperties� David Sambrooks’ privately held, Hous-ton-based NFR Energy LLC plans to ac-quire certain East Texas natural gas proper-ties from SandRidge Energy Inc.,Oklahoma City, (NYSE: SD) for $231 mil-lion.

The properties include approximately25,000 net acres in Gregg, Harrison, Ruskand Panola counties. Average 2011 produc-tion is approximately 25 million cubic feet ofgas equivalent per day.

Pro forma, SandRidge expects productionto be 23.9 million barrels equivalent in 2011and 27.7 million barrels equivalent in 2012.SandRidge plans to use the cash proceeds tofund a portion of its oil-focused drilling pro-gram.

SandRidge chairman and chief executiveTom Ward says, “This asset sale is part of thecapital plan to execute our three-year-strat-egy of tripling EBITDA, doubling oil pro-duction, and lowering our debt ratio by theend of 2014 by continuing to develop highrate of return oil wells in the Central Basinplatform and the Mississippian play in theMidcontinent.”

NFR values the deal at $7,092 per flowingMcfe, and $ 1.38 per Mcfe of proved devel-oped producing reserves, and $0.46 Mcfe oftotal proved reserves.

In a presentation, NFR said the acquisi-tion continues the company’s strategy of ac-quiring properties in a soft gas price environ-ment, and adds horizontal developmentinventory with excellent economics.

“NFR continues to see opportunities toacquire assets at compelling valuations thatcomplement its dominant East Texas assetbase,” according to the presentation. “Manyof the acquisitions have meaningful currentproduction, horizontal drilling upside andhigh value liquids. Since May 2010, we haveclosed or announced five acquisitions forover $500 million of total consideration,


E&P A&D News

funded with $240 million of sponsor equity(inclusive of pending East Texas acquisi-tion).” The deal is expected to close in No-vember.

NFR Energy is principally focused on de-veloping its Haynesville and Cotton Valleyassets in East Texas.

Noble, Consol Wrap Up Marcellus JV� Noble Energy Inc., Houston, (NYSE:NBL) plans to enter a joint-venture partner-ship with Consol Energy Inc., Pittsburgh,(NYSE: CNX) to develop Consol’s Marcel-lus shale properties in southwestern Pennsyl-vania and northwestern West Virginia for$3.3 billion.

Noble Energy acquired a 50% interest in628,000 net Marcellus shale acres for $1 bil-lion, will fund $2.1 billion of Consol’s futuredrilling and completion costs and acquire a50% interest in 70 million cubic feet equiva-lent per day of existing Marcellus productionand infrastructure for $219 million.

The deal was originally for 50% interestin 663,350 net undeveloped acres for $1.07billion, but was later adjusted.

Net production to Noble Energy’s interesthas the potential to reach 600 million cubicfeet of gas equivalent per day in 2015 and isexpected to continue growing into the nextdecade. The acreage is estimated to contain7.4 trillion cubic feet equivalent risked re-sources net to Noble’s interest, of which 400billion cubic feet equivalent were proven re-serves at year-end 2010.

The assets also feature more than a decadeof expected development activity, which in-cludes the drilling of approximately 4,400gross well locations. The leasehold positionis more than 85% held by production, almostentirely operated with close to 100% work-ing interest (88% net revenue interests).

A long-term development plan forecastsdrilling activity to increase from four to 16rigs in 2015. Operations are to be shared be-tween the partners with Noble Energy’s ini-tial focus on the wet gas portion of theacreage. Also, the companies will share mid-stream infrastructure and access to water-handling capabilities.

Noble chairman and chief executiveCharles D. Davidson says, “This transactionwill complement and further strengthen ourU.S. portfolio by adding a high-quality assetwith a substantial growth profile. The Mar-cellus, combined with our ongoing develop-ments in the D-J Basin and deepwater Gulf ofMexico, will provide important balance toour rapidly expanding international pro-

grams. Spreading the transaction costs overan extended time horizon creates better part-ner alignment on investment decisions andmaintains our strong balance sheet.”

Consol chairman and CEO J. Brett Har-vey says, “We are very pleased to haveclosed this transaction on schedule. As wehave worked with Noble Energy’s team overthe last six weeks to put this joint venture to-gether, we have seen that we share similarcorporate cultures—with a strong commit-ment to safety and compliance—and weshare a common vision for the accelerateddevelopment of these assets.”

Noble plans to fund the deal with cash onhand and its revolving credit facility.

Jefferies & Co. Inc. was financial advi-sor to Consol. Vinson & Elkins LLP andWachtell, Lipton, Rosen & Katz were legaladvisors to Consol. Porter Hedges LLP waslegal advisor to Noble.

Tudor, Pickering, Holt & Co. analystDave Pursell values the deal at $10,200 peracre, undiscounted.

“Balance is important at Noble and thisdeal balances the company’s portfolio—do-mestic/international; lower-risk develop-ment/higher risk exploration,” saysPursell. “Noble paid a fair price pre-acceler-ation at $7,100 per acre. As they acceleratewe see the value accreting toward $9,000 peracre.”

Pursell adds Tudor Pickering’s dis-counted development values for the 15 com-panies with Marcellus acreage that the firmfollows have an average value of $8,100 peracre with a median value of $6,900 per acre.

Nordic Oil Picks Up New Mexico Interests From Lucas� Nordic Oil USA 2 LLP plans to acquireNew Mexico oil and gas properties fromHouston-based Lucas Energy Inc. (NYSEAmex: LEI) for $4 million in cash. The as-sets include working interests in McKinleyCounty, New Mexico.

William Sawyer, Lucas chief executive,says, “Divestiture of our New Mexico prop-erties will generate additional funds whichwe plan to use for the development of ourTexas properties.”

Lucas operates in the Austin chalk andEagle Ford trends in South Texas.

Panhandle Oil To Tack On Additional1,531 Fayetteville Acres� Panhandle Oil and Gas Inc., OklahomaCity, (NYSE: PHX) plans to purchase inter-ests in 193 nonoperated gas wells and 1,531

acres of leasehold targeting the ArkansasFayetteville from an undisclosed privateseller for $17.5 million in cash and debt.

The acquisition will be funded with acombination of existing cash on hand andPanhandle’s credit facility with Bank ofOklahoma.

The assets are in Van Buren, Conway andCleburne counties and are principally in thecore of the Fayetteville shale gas play. Theassets are primarily operated by the play’spremier operator.

The 1,531 acres of leasehold are in 69drilling units with 82% of the leaseholdbeing held by production. In addition, thereare approximately 240 future infill-drillinglocations identified on the leasehold, assum-ing development of eight wells per unit.

Net production for the fourth quarter fromexisting wells is projected to be approxi-mately 2.7 million cubic feet of gas per day.The estimated net proved developed produc-ing reserves are approximately 9.2 billioncubic feet of gas equivalent, and there are ap-proximately 15.2 billion cubic feet equiva-lent of identified undeveloped reserves onthe properties.

Panhandle president and chief executiveMichael C. Coffman says, “These propertieswill increase our acreage holdings in the corearea of the Fayetteville by 18% and the cur-rent production from the properties will in-crease total Panhandle production by approx-imately 12%. In addition to this acquisition,we have purchased 1,160 net fee mineralacres in the Fayetteville over the last coupleof months.”

The deal was expected to close by Oct.25.

PDC Energy, Lime Rock JV To ConsumeWest Virginia Marcellus Company� PDC Mountaineer LLC, the 50/50 jointventure of PDC Energy, Denver, (Nasdaq:PETD) and Lime Rock Partners V LP, anaffiliate of Houston-based private-equityfirm Lime Rock Partners, plans to acquirethe membership interests of privately held,Parkersburg, W.Va.-based Seneca-UpshurLLC for $152.5 million.

PDC Energy and Lime Rock will eachpay $76.25 million of the purchase price.

PDC Mountaineer will acquire all rightsand all depths to an estimated 90,000 netacres prospective in the Marcellus shale pri-marily in Harrison, Taylor, Barbour, Upshur,Lewis and Randolph counties of north-cen-tral West Virginia. An additional 10,000 netacres are located in Mingo and McDowell


E&P A&D News

counties in southwestern West Virginia,which is prospective for the Huron shale. Theacquired acreage has an average working in-terest of 95% with average royalty burdens ofapproximately 17%.

The acreage is 100% held by productionfrom shallow Devonian producing wells in-cluded in the acquisition. The held-by-pro-duction status of the acreage will providesufficient time for the JV to technically de-risk and develop the acquired lease positionand provides the ongoing option to deferdrilling should gas prices drop to a level thatcannot support sufficient economic returns.

Current production is approximately 5.4million net cubic feet per day net, primarilyfrom the shallow Devonian formation, andwill be operated by PDC Mountaineer. Esti-mated net proved developed producing re-serves are 30 billion cubic feet equivalentand net risked resources is estimated at 1.5trillion cubic feet equivalent from approxi-mately 435 gross horizontal Marcellusdrilling locations.

A significant portion of the acreage is inclose proximity to PDC Mountaineer’s cur-rent lease positions in Harrison, Taylor, andBarbour counties, which should provide op-erational, midstream and marketing syner-gies to the newly acquired acreage. PDCMountaineer has accumulated substantialtechnical and economic data from its existingWest Virginia Marcellus acreage positionand, based upon this data, believes theacreage acquired has the potential to generatestrong economic returns consistent with theresults being delivered by its current drillingactivities.

The acquisition includes Seneca-Upshur’sfield office in Buckhannon, W.Va., and astaff of approximately 33 employees. PDCMountaineer plans to begin development ofthe Marcellus on the acquired lands in 2012.

In addition, PDC Mountaineer has ex-panded its commitment to Equitrans, a sub-sidiary of EQT Corp., for long-term trans-port of up to 76 million cubic feet equivalentper day of Marcellus production. This com-mitment is in addition to existing pipeline ca-pacity that is currently transporting PDCMountaineer’s shallow Devonian produc-tion.

Pro forma, PDC Mountaineer will havenet production from both Marcellus and De-vonian of about 24 million cubic feet equiva-lent per day. Combined West Virginia Mar-cellus acreage position will be approximately140,000 net acres.

The combined West Virginia Marcellus

acreage is estimated to contain 2.2 trillioncubic feet equivalent of net risked resourcesfrom an estimated 610 gross horizontal Mar-cellus drilling locations based on applying anacreage utilization factor of approximately50%.

PDC Mountaineer is currently operatingone Marcellus drilling rig in West Virginiaand expects to drill nine wells in 2011. Withthe addition of the Seneca-Upshur acreage,PDCM plans to operate one full-time rig todrill a total of 20 to 25 horizontal Marcelluswells per year beginning in 2012.

PDC Mountaineer plans to divest itsPennsylvania Marcellus acreage to fund ac-celerated development of its West VirginiaMarcellus assets. The JV currently holds ap-proximately 9,000 net Marcellus acres inPennsylvania.

PDC Energy president and chief execu-tive James Trimble says, “The acquisitionnearly triples our Marcellus position in WestVirginia and represents a significant growthopportunity for PDC Energy over the next 10to 20 years. The acreage acquired includes allrights/all depths which could provide futureresource potential in addition to the Marcel-lus shale formation.”

PDC Mountaineer CEO Dewey Gerdomsays, “The Seneca-Upshur assets are an ex-cellent strategic fit with our Marcellus assetsin West Virginia and provide critical massand meaningful economies of scale to ouroperations. The acquired assets will be oper-ated by PDCM and include several large con-tiguous acreage blocks for efficient horizon-tal Marcellus development. In addition,PDCM’s expanded transportation agreementwith Equitrans provides us the ability to effi-ciently develop and transport the Seneca-Up-shur Marcellus gas along with our existinggas production.”

PDC Energy expects to fund its net acqui-sition contribution initially through a draw-ing under its existing credit facility. Thecompany will seek to sell certain noncore as-sets to reimburse a portion of the acquisitioncost.

The deal was expected to close Oct. 3.Wells Fargo Securities LLC senior ana-

lyst David Tameron says the purchase is a“confirmation of success in the current pro-gram” following the PDC Energy’s an-nouncement this summer that it would bemore aggressive in its drilling and acquisi-tions.

Wells Fargo values the acquisition at$1,700 per acre, production at $28,000 perthousand cubic feet equivalent per day and

reserves at $5.08 per thousand cubic feetequivalent. On a risked resource basis,Tameron says the JV paid $0.10 per thousandcubic feet equivalent.

“It makes us wonder if PDC will be afive-basin operator or perhaps the Piceanceand/or Permian Basin assets might be di-vestiture candidates down the road,” saysTameron.

PRE Resources, GE To PurchaseConventional Rocky Mountain Acreage� Expanding its Rocky Mountain oil and gasreserves footprint, PRE Resources Inc.,Denver, is teaming up with GE Energy Fi-nancial Services, a unit of GE (NYSE: GE),to buy more than 100 producing wells andundeveloped acreage across 29 fields inWyoming and Colorado for $51 million.

GE Energy Financial Services provided$46 million and committed to additional cap-ital expenditures to form a partnership withDenver-based PRE Resources to buy thefields spread across Weston, Campbell,Crook, Niobrara and Hot Springs counties,Wyoming, as well as Moffat County, Col-orado. The seller was undisclosed. PRE Re-sources is investing $5 million in the acquisi-tion and will serve as general partner andoperator, with GE Energy Financial Servicesserving as limited partner. The fields featureprimarily long-lived oil reserves on nearly18,000 net acres.

“This partnership with GE will enable usto enhance the assets’ production, implementlow-risk secondary recovery programs andgenerate new drilling,” says Mark A. Erick-son, PRE chairman and CEO. “We are com-bining PRE’s technical and operating experi-ence in the Powder River with GE EnergyFinancial Services’ technical and risk expert-ise and capital to set the stage for generatingattractive returns.”

“This transaction executes on our strategyof acquiring conventional, long-lived, pro-ducing assets that should generate a robustcurrent yield with upside potential fromdrilling, development and operational en-hancements,” says John Schaeffer, managingdirector and head of the oil and gas unit atGE Energy Financial Services.

Norway’s Statoil Buys Brigham For PrimeStake In Bakken Oil Play� Norwegian national oil company StatoilASA (NYSE: STO; Oslo: STL) is making amove to claim a 375,000-net-acre stake in theBakken and Three Forks tight oil play in


E&P A&D News

North Dakota and Montana via the acquisi-tion of independent producer Brigham Ex-ploration Co., Austin, Texas, (Nasdaq:BEXP) for a total deal value of $4.7 billion.

Statoil will pay US$36.5 per share in anall-cash deal for a total equity value of $4.4billion, a 36% premium over an average ofthe last 30 trading days and 20% above closeof trading Oct. 14. Statoil will also assumeapproximately $300 million of Brigham debt.

“The U.S. unconventional plays hold asubstantial resource base and represent an in-creasingly important part of future energysupplies,” says Statoil president and chief ex-ecutive Helge Lund. “Entering the Bakkenand Three Forks tight oil plays and taking onoperatorship represents a new significantstep for Statoil.”

Brigham currently holds some 375,800net acres in the Williston Basin with produc-tion of 21,000 barrels of oil per day, with thepotential to escalate to 60,000 to 100,000BOE per day within five years, according toStatoil’s estimates. With 88 North Dakotawells on production, 24-hour initial produc-tion rates have averaged 2,800 BOE per day.Brigham operates 12 rigs in the region with140 wells planned for 2012. Proved reservesyear-end 2010 were 68 million BOE.

Caris & Co. analyst Gabriele Sorbaravalues the deal at $12,533 per acre ($9,929per acre when backing out production valuedat $80,000 per BOE per day), $70.31 perproved BOE, and $223,810 per flowingBOE.

Statoil estimates the risked resource baseat 300- to 500 million BOE. Wells Fargo Se-curities analyst David Tameron estimatesStatoil is paying $9 to $15 per barrel onrisked resource potential. The Brigham trans-action also includes approximately 430 milesof oil, natural gas and water transportationsystems centrally located in the WillistonBasin.

Brigham has positions in an additional40,000 acres in the onshore Gulf Coast, theAnadarko Basin and the Permian Basin.

Bud Brigham, Brigham Explorationchairman, president and CEO, says a biggerenterprise with a larger balance sheet will bebetter positioned to take advantage of thecompany’s large and growing inventory ofWilliston Basin drilling locations. “We areexcited to see this transaction completed andlook forward to having our assets and em-ployees integrate with the Statoil organiza-tion and the substantial asset position thatthey are growing in their U.S. onshore busi-ness.”

Statoil holds U.S. positions in both theMarcellus and Eagle Ford shales as well,primarily nonoperated. Lund says the com-pany is positioning to be a leading player inthe fast-growing U.S. onshore oil and gasindustry.

“Brigham has proven itself as a premieroperator with a highly attractive position inthe Williston Basin,” says Lund. “We are astrong strategic fit, as both companies put apremium on technological innovation andadvancement.”

“The transaction reflects the continuedhunger of IOCs (international oil companies)and NOCs for exposure to U.S. shale plays,”says Global Hunter Securities analystMichael Bodino. “This transaction is a bigstep for Statoil as they enter the Bakken andtake on operatorship.”

Brigham, based in Austin, Texas, hasmore than 100 employees in Austin andNorth Dakota. Statoil plans to maintain theAustin office with a retention plan for currentemployees.

“We are impressed by the performanceand technological prowess demonstrated bythe employees of Brigham and look forwardto further responsible development of theseworld-class assets. We will build onBrigham’s good-neighbor program and con-tinue to engage with local authorities andcommunities in the Williston Basin area,”says Bill Maloney, executive vice presidentfor Statoil in North America.

Closing is expected by the end of the firstquarter 2012.

Tudor, Pickering, Holt & Co. SecuritiesInc. and Goldman, Sachs & Co. are finan-cial advisors to Statoil. Vinson & ElkinsLLP is legal advisor. Jefferies & Co. Inc. isfinancial advisor to Brigham.

Strategic American Eyes PrivateCompany With Galveston Bay Interests� Strategic American Oil Corp., Houston,(OTCBB: SGCA) has acquired privatelyheld, Nevada-based SPE Navigation I LLCfor an undisclosed price.

The assets consist of certain oil and gasworking interests equal to one third theworking interests owned by Strategic in andto four producing oil and gas fields in Galve-ston Bay, Texas, together with one millionshares of Hyperdynamics Corp. (NYSE:HDY).

Jeremy G. Driver, Strategic AmericanCEO, says, “With the consummation of thistransaction, both our cash flow and balancesheet are greatly improved. This puts us in an

excellent position for substantial growth. Wehave multiple opportunities that can now bepursued, allowing us the opportunity to in-crease production and further enhance share-holder value.”

Texas Oil And Minerals Eyes AdditionalWilcox Acres� Texas Oil and Minerals, Houston, (OTC:BNPD) plans to acquire an additional 156acres that adjoins its prospective 227-acrelease block in DeWitt County, Texas.

Upon completion, this additional acreage,with the original 227 acreage block, will sub-stantially increase the prospect reserves inthe Upper Wilcox formation. In addition, itwill bring into play the shallower Yeguasand, providing the company a block ofacreage large enough to drill a test well to theMiddle and Deep Wilcox sands at approxi-mately 10,000 feet.

Texas Oil And Minerals Inks LOI ForDamon Mound Development� Texas Oil and Minerals, San Antonio,Texas, (OTC Markets: BNPD) plans to buy258 acres in Damon Mound Field in BrazoriaCounty, Texas. This will be the company’ssecond acquisition in this field.

The Damon Mound Field is located on asalt dome which was discovered in 1915 andhas produced over 5.6 million barrels cumu-lative with an average well producing around60,000 barrels per well.

“We are very pleased with our initial ac-quisition’s and believe this additional acqui-sition continues the company’s developmentplans to further increase the asset and cashflow models,” says Tom Gouger, CEOof Texas Oil and Minerals.

The existing wells and will be re-enteredand cleaned up to enhance pressure to expe-dite recovery. The company plans to com-mence drilling at the beginning of the firstquarter of 2012.

Treaty Energy Purchases TX WooldridgeLeases� Treaty Energy Corp., New Orleans,(OTCQB: TECO) has purchased the MachH. Wooldridge and Eula E. Wooldridge oiland gas leases in Shackelford County, Texas.

“The real upside to these leases is theytotal 280 acres and provide us with ample op-portunity for many additional new wells tobe drilled,” says Stephen L. York, presidentand COO.

Based on available data, each well will


E&P A&D News

likely produce at eight to 12 barrels per dayper well, says York, and since these wellswill come in at about 500 to 700 feet deep,“we can drill, complete, and operate in-houseand continue toward our company goal of1,000 barrels per day in the next 10 monthsfrom our Texas leases.”

Victory Energy Ups Ante In TX JonesCounty Play� Victory Energy Corp., Newport Beach,Calif., (OTCQB: VYEY), through its part-nership with Aurora Energy Partners, hasreported that the company has increased itsinterest in the Jones County play in Texas.The company will now own a 5% workinginterest for all new wells drilled within the 82square mile (52,480 acres), 3-D seismic sup-ported prospect area.

This new working interest representsmore than a three-fold increase from the orig-inal 1.5% held by the company. The opera-tor, C.O. Energy, envisions drilling one tothree wells per month until the targeted area

is fully developed. Victory Energy maintainsa thirty (30) day first right of refusal to par-ticipate in each prospect well.

Six wells have been drilled to date ofwhich four wells were successful. Thelargest well to date (Nassau #1) was com-pleted in August and has an estimated recov-erable reserve of 100,000 barrels of oil and ayet to be determined volume of recoverablenatural gas.

Typical wells drilled in this area are antic-ipated to hold 20,000 to 45,000 barrels of re-coverable oil.

Xtreme Grabs WI In Well TargetingHunton Formation� Xtreme Oil & Gas Inc., Plano, Texas,(OTCBB: XTOG) has completed its acquisi-tion of working interest in the Hancock wellfrom the well operator, Husky VenturesInc. Hancock is located in the Sooner trendin the Anadarko Basin and is drilled to theHunton formation. The operator expects pro-duction to begin next month.

The Hancock well is adjacent to anotherHunton well that has produced 18,000 barrelsof oil in the previous nine months and iswithin a mile of the company’s Robinsonwell which has produced over 38,000 barrelsof oil in the past 12 months. These wells areall exploiting similar vertical geologicalstructures that are present in the company’sKansas properties making horizontal drillingand fracturing technologies an excellentchoice for these projects.

“Xtreme continues to leverage our keystrategic relationships to expand our oil prop-erty holdings,” says Willard G. McAndrew,CEO of Xtreme. “The Hancock and Robin-son wells are using the same successful tech-nologies that will be applied in Kansas. Ourcollective experience in horizontal drillingtechnologies has created significant value forall the partners, who have spent approxi-mately $22 million perfecting the science.We expect this well to generate productionsimilar to the surrounding wells in the next12 months.”

E&P A&D News

E&P A&D – Canada

Crescent Point Raises Stake In ArcanResources To 19%� Crescent Point Energy Corp., Calgary,(Toronto: CPG) has acquired 1.75 millionshares of Arcan Resources Ltd., Calgary,(Toronto Venture: ARN) for C$9.5 million incash. Crescent Point now holds 18.5 millionshares, representing approximately 19% ofthe total issued and outstanding commonshares of Arcan.

Arcan Resources has oil and gas interestsin Deer Mountain, Swan Hills and Hamburgin northwestern Alberta and McLeod inwest-central Alberta. Arcan averaged 2,243barrels of oil equivalent in 2010. The com-pany expected to average 4,000 barrelsequivalent per day in 2011.

Lone Pine Completes Spin-Off From Forest Oil Corp.� Lone Pine Resources Inc., Calgary,(NYSE: LPR; Toronto: LPR) has reportedthat Forest Oil Corp., Denver, (NYSE: FST)has completed its previously announced dis-tribution of 70,000,000 shares of commonstock of Lone Pine owned by Forest, repre-senting approximately 82% of the outstand-ing shares of Lone Pine common stock.

Upon the completion of the distribution,Lone Pine became a stand-alone public com-pany, and the previously announced resigna-tion of H. Craig Clark as a director of LonePine and the election of Rob Wonnacott andDonald McKenzie as directors of Lone Pinebecame effective.

Manitok, Petrus Team Up On CentralAlberta Foothills Assets� Manitok Energy Inc., Calgary, (TorontoVenture: MEI) and Petrus Resources Ltd.,Calgary, plan to acquire oil and gas assets inthe central Alberta foothills area from anundisclosed seller for C$85 million in cash.

Each company will participate with anequal 50% interest in the assets.

The companies estimate acquisition met-rics of C$32,692 per flowing BOE, C$10.20per BOE of proved reserves (C$8.71 exclud-ing future capital), and $7.55 per BOE ofproved plus probable reserves ($6.35 exclud-ing future capital). The estimated value of netundeveloped land, at $100 per acre, is $1.83million. The estimated value of theprocessed, proprietary 2D seismic is $5.1million.

Current production associated with the as-

sets is approximately 2,600 barrels of oilequivalent per day (45% operated; 94% gas).Manitok will be the operator of record on theoperated portion. Proved reserves are ap-proximately 10 MMBOE (14 MMBOEproved plus probable). The reserve-life indexis 10 years (13 on 2P reserves). The total landposition is 140,209 gross (31,652 net) acres,which includes undeveloped land of 72,199gross (18,281 net) acres.

Potential opportunities exist in the Creta-ceous; specifically in the Cardium, Dunve-gan and Mannville reservoirs. In the centralAlberta area, these shallower foothills reser-voirs range from sweet light oil to sweet liq-uids-rich natural gas. Manitok and Petruswill focus on targeting these conventionalreservoirs to drive production and reservesgrowth in the near term. Manitok and Petrusbelieve that there are at least 30 initialdrilling locations. There is also potential inthe Triassic and Devonian; specifically theCharlie Lake and Leduc reservoirs.

Facilities include a 20.4% working inter-est in the Hanlan/Robb sweet gas plant,which has a capacity of 40 MMcf per day, a50% working interest in three compressorand dehydration stations, and varying owner-ship in six field compressor sites and as-sorted gathering systems. Significant excesscapacity exists at many of the facilities.

The effective date is July 1, 2011. Thedeal is expected to close on Oct. 31, 2011.

Petrus is a new private energy companywith a focus on the Alberta foothills. Mani-tok is a public oil and gas exploration and de-velopment company focusing on conven-tional oil and gas reservoirs in the Canadianfoothills and heavy crude oil in east-centralAlberta.

Newton Energy Acquires OutstandingShares Of MEC� The Woodlands, Texas-based Newton En-ergy Partners LLC, through its Calgary-based affiliate NEP Canada ULC, has ac-quired all outstanding shares of MECOperating Co. ULC.

MEC’s assets consist of five fields in Al-berta, including the historic Leduc Wood-bend Field close to Edmonton. The MEC as-sets are currently producing 2,400 net BOEper day (60% liquids) from approximately225 producing wells on 73,000 gross acresand include several hundred inactive well-bores available for future projects.

Bud Newton, Newton president and CEO,describes these assets as one of the most “op-portunity-rich legacy assets” he has seen in

his career and is an ideal fit for the Newtonmanagement team. “We plan to execute anaggressive drilling and workover programover the next few years that will result in sig-nificant production and reserves growth. Ad-ditionally, we will continue to pursue addi-tional acquisitions in the country.”

Newton Energy Partners was formed inOctober 2010 by Bud Newton and KayneAnderson Energy Funds.

Northern Spirit, Cascade To Combine In Reverse Takeover� Northern Spirit Resources Inc., Calgary,(Toronto Venture: NS) plans to acquire Cas-cade Resources Inc., a private Alberta com-pany actively engaged in oil and gas devel-opment and exploration activities in eastcentral Alberta and west centralSaskatchewan, in a reverse takeover for ap-proximately C$23 million in stock.

Cascade is an emerging, junior, privately-held petroleum and natural gas exploration,development and production company. Cas-cade’s assets include proved producing andproved nonproducing and probable proper-ties in the Cadogan, Klein, Sounding Lakeand Veteran areas of Alberta and the Hoosierarea of Saskatchewan. Since June 2007, Cas-cade has grown its production to over 200BOE per day (prior to its recent sale of 80BOE per day) through land acquisitions anddrilling.

Oilsands Quest To Sell Wallace Creek Assets� Oilsands Quest Inc., Calgary, (NYSEAmex: BQI) plans to sell its Wallace Creekassets for total consideration of $60 million,which includes $40 million cash at closingand a $20 million contingent payment that issubject to certain future events. The sale ofthe Wallace Creek property would providethe company with the financial resources tofocus on moving its largest and most ad-vanced asset, Axe Lake, toward commercialdevelopment.

“This prospective transaction…will pro-vide us much of the capital we need to com-plete the Axe Lake pilot and prove the com-mercial recoverability of our highest-prioritycore asset,” says Oilsands Quest chief execu-tive Garth Wong. “While Wallace Creek hasshown considerable potential, it is not yet aswell delineated as Axe Lake and is thereforeconsiderably further away from commercialdevelopment.”

Oilsands Quest has held Wallace Creek inits portfolio since January 2008, when the



E&P A&D News

company purchased the 45,545-acre permit.The area is prospective for steam assistedgravity drainage (SAGD) oil-sands recovery,subject to further seismic and drilling invest-ment to delineate the bitumen reservoir morefully.

Closing is expected by the end of Decem-ber 2011.

The proceeds from the sale of the WallaceCreek asset, if concluded, will reduce theamount of capital that Oilsands Quest re-quires to advance its development priorities.To raise the remaining required capital and tostrengthen near-term liquidity, the companyis evaluating financing alternatives includinga private placement of equity or a new,smaller rights offering. OQI will also con-tinue to explore strategic partnerships or fur-ther asset sales.

Sinopec Eyes Another Large CanadianPurchase� Sinopec International Petroleum Explo-ration and Production Corp., a subsidiaryof China Petrochemical Corp. (Sinopec),

Beijing, (NYSE: SNP) plans to acquireCanadian upstream player Daylight EnergyLtd., Calgary, (Toronto: DAY) for approxi-mately C$2.2 billion in cash.

Sinopec will pay C$10.08 per Daylightshare, representing a 43.6% premium overthe 60-day weighted average trading price atend of trading Oct. 7.

Daylight has core assets in 69 oil and gasfields with more than 324,000 net acres in theDeep Basin of Alberta and northeasternBritish Columbia. The assets are primarily inthe Pembina, Elmworth and West Central.Production as of June 30 was approximately37,000 barrels of oil equivalent per day.Proved and probable reserves as of year-end2010 were 174.2 million barrels equivalent.

Daylight president and chief executiveAnthony Lambert says, “We believe thistransaction with SIPC recognizes the highlyattractive asset portfolio and exceptional teamthat we have assembled at Daylight. The ef-forts and accomplishments of this team willbe built upon through increased investment inthe business and acceleration of our develop-

ment and exploration opportunities.”In 2010, Sinopec entered an agreement to

acquire a 9.03% interest in the Canadian oil-sands Syncrude partnership from integratedenergy company ConocoPhillips, Houston,(NYSE: COP) for $4.65 billion. The deal re-ceived government approval in June of thatyear.

Canaccord Genuity Corp. and CIBCWorld Markets Inc. are financial advisorsto Daylight. Blake, Cassels & GraydonLLP are legal counsel to Daylight. BarclaysCapital is financial advisor to SIPC. Vinson& Elkins LLP and Bennett Jones LLP arelegal counsel to SIPC.

The deal is expected to close by the end ofDecember.

E&P A&D – Africa

Dominion Agrees To Acquisition By Ophir� The boards of Ophir Energy and Domin-ion Petroleum have reached agreement onthe terms of a recommended offer to be made

E&P A&D News


by Ophir to acquire the entire issued and to-be-issued share capital of Dominion.

The offer consists of 0.0244 new Ophirshare for each Dominion share. The entireissue is valued at $186.3 million based on theclosing prices on Oct. 12, a 64.2% premium.

The acquisition reinforces Ophir’s posi-tion in its core East Africa play where it hasled exploration activity resulting in threeconsecutive deepwater discoveries. Specifi-cally, the offer would create the largest inde-pendent net deepwater acreage portfolio inthe emerging and highly prospective hydro-carbon province of East Africa, according toOphir. The company will remain wellfunded following this transaction with the ca-pability to accelerate exploration and ap-praisal programs across the enlarged portfo-lio.

“The exposure to Ophir’s existing discov-eries in Tanzania would derisk the combinedportfolio while maintaining significant upsideexposure for both companies’ shareholders,”said Roger Cagle, Dominion chairman.

“The addition of Dominion’s assets to ourportfolio positions Ophir as the largest inde-pendent net-deepwater-acreage holder inEast Africa with a portfolio of seven offshoreblocks at high equity levels in highlyprospective acreage offshore Tanzania andKenya. There are significant potential geo-logical, operational and commercial syner-gies in bringing these portfolios together,”says Nick Cooper, Ophir chief executive.

Dragon Gets Offshore Tunisian Farm-In � Dragon Oil Plc, Dubai, (London: DGO)has signed a farm-in agreement with awholly owned subsidiary of Cooper EnergyLtd., Perth, Australia, (Australia: COE)through which Dragon will earn a 55% par-ticipating interest in and, in any developmentphase, assume operatorship of the BargouExploration Permit, offshore Tunisia.

The Bargou Exploration Permit is locatedin the Gulf of Hammamet in the Mediter-ranean Sea. The permit covers an area of4,616 square kilometers with predominantlyoffshore exploration prospects and leads inwater depths of approximately 50 to 100 me-ters (165 to 330 feet).

Dragon will earn the interest by paying75% of the cost to drill the Hammamet West-3 well in the Hammamet West Oil Field, upto a cost cap of $26.6 million (on a 100%basis). If the well cost exceeds that amount,excess costs will be shared among the jointventure partners pro rata to their participatinginterest. The well plan is to intersect the frac-

tures within the Abiod formation thereby in-creasing the flow potential of the reservoir.This well is expected to be drilled in 2012.

The Bargou joint venture will then com-prise Dragon Oil (55%), Cooper Energy(30%) and Jacka Resources (15%). In thecase of a development phase, Dragon willcarry Cooper in an amount equal to approxi-mately $5 million to compensate them forpro-rata past costs, after which all parties willpay their participating interest share.

Mubadala Farms Into Dominion’sTanzania, Kenya Blocks� Abu Dhabi’s Mubadala Oil & Gas hasfarmed into a 20% working interest in Block7, deepwater Tanzania, with Dominion Pe-troleum Ltd., Bermuda, for US$20 millionin cash and carry Dominion’s remaining 80%working interest in a new seismic programexpected to commence prior to year-end upto a cap of US$2.4 million.

Dominion will hold an 80% working in-terest and operatorship in the block.

Dominion and Mubadala will work to-gether to assess potential targets, both withinAlpha and on other prospects mapped withinthe survey area.

Dominion chief executive AndrewCochran says, “This agreement demonstratesthe value of Dominion’s offshore portfolio,which will benefit significantly fromMubadala’s technical expertise, financial re-sources and gas marketing experience. Theplanned partnership may seek to bring in an-other party as we approach Block 7’s drillingphase next year, while Dominion accelerateswork on the new acreage in Kenya.”

Dominion will acquire operatorship and a100% working interest in the PSC for BlockL15 in the Lamu Basin offshore Kenya.

Mubadala Oil & Gas is a business unit ofMubadala Development Co. with E&P in-terests in the Middle East, North Africa andCentral and Southeast Asia.

OMV Will Acquire Medco’s Tunisian Assets � OMV (Tunesien) Production GmbH hassigned an agreement to purchase 100% of theissued share capital of Medco TunisiaAnaguid Ltd. from Medco Tunisia Hold-ing Ltd., a subsidiary of Indonesia-listed PTMedco Energi Internasional, Jakarta, forUS$58 million. Closing of the transaction isexpected within the next few months.

OMV will acquire Medco’s 20% interestin the Durra concession and 20% interest inthe Anaguid exploration permit in which

OMV already had 30% stakes.Jaap Huijskes, OMV executive board

member responsible for E&P, stated, “This isin line with the company’s strategy. It en-ables further operational synergies and anoptimized value enhancement betweenOMV’s assets. Henceforth, OMV will be theexclusive partner of ETAP in blocks oper-ated by OMV in this area.”

The transaction will be funded with exist-ing cash and undrawn committed credit lines.

E&P A&D – Asia

BP Picks Up 30% Stake In Reliance’sIndian PSCs� Indian conglomerate Reliance IndustriesLtd., Mumbai, and BP Plc, London, (NYSE:BP) have reported the completion of BP’s ac-quisition of a 30% stake in 21 oil and gasproduction sharing contracts that Relianceoperates in India, including the producingKG D6 block.

The two companies will also form a 50/50joint venture for the sourcing and marketingof gas in India, which BP says will acceleratethe creation of infrastructure for receiving,transporting and marketing natural gas.

BP will pay Reliance an aggregate consid-eration of US$7.2 billion subject to comple-tion adjustments for interests to be acquiredin 21 production-sharing contracts. Furtherperformance payments of up to US $1.8 bil-lion could be paid based on exploration suc-cesses that result in development of commer-cial discoveries.

E&P A&D – Australia & NZ

Shell, PetroChina’s Arrow JV Woos BowTo Feed Queensland LNG Trains� Australia’s Arrow Energy Holdings Pty.Ltd. plans to acquire coal-seam gas companyBow Energy Ltd., Brisbane, Australia,(Australia: BOW) for A$535 million in cash.

Arrow will pay A$1.52 per Bow share,representing a 72% premium at the time ofoffer, and a 46% premium on a 30-day aver-age.

The offer allows Bow shareholders to real-ize the value of their Queensland CSG assets.

Bow has eight CSG projects located inQueensland within the Bowen and Suratbasins. A third-party study has identified gas-


E&P A&D News

in-place potential across Bow’s CSG projectsof over 13.8 trillion cubic feet and 2,739petajoules (PJ) of 3P and 149 PJ of 2P net gasreserves. Bow is targeting 2011 year-end gasreserves of 1,250 PJ of 2P and 6,200 PJ of 3P.

Arrow, an Australian coal-seam gas explo-ration and production company, is a 50-50joint venture owned by subsidiaries of RoyalDutch Shell and PetroChina. Arrow is de-veloping an LNG project at Gladstone. Theacquisition of Bow contributes to Arrow’sopportunity to expand each of the two trainsof its proposed LNG project from 4 milliontons per year currently planned in Queens-land.

Closing is expected in January 2012.J.P. Morgan is financial advisor for

Arrow. Allens Arthur Robinson and BlakeDawson are legal advisors to Arrow. MerrillLynch and Wilson HTM are advisors toBow. HopgoodGanim and Gilbert + Tobinare legal advisers to Bow.

Magellan, Santos Swap Assets Down Under� Magellan Petroleum Corp., Portland,Maine, has joined Australian E&P SantosLtd. to swap assets in the Amadeus Basin ofAustralia.

The asset swap provides for the transfer ofSantos’ interest in Palm Valley Field and inDingoFfield of 48% and 66%, respectively,to Magellan, and will transfer Magellan’s35% interest in Mereenie Field to Santos.Magellan will receive A$25 million cashconsideration with bonus amounts up to anadditional A$17.5 million, based upon pro-duction volume thresholds at the Mereeniefield over the next 20 years.

Further, Magellan and Santos entered intoa long term gas supply agreement in whichMagellan will sell a total contract gas quan-tity of 25.65 PJ, which represents approxi-mately all the remaining reserves of the PalmValley Field over a 17-year term.

E&P A&D – Europe

American Energy Development Corp. ToAcquire Reservoir Resources� American Energy Development Corp.,Reno, Nevada, (OTCBB: AEDC) has enteredinto an agreement to acquire Reservoir Re-sources Ltd., an Ireland-based oil and gascompany focused on the exploration of oiland gas basins in the United Kingdom.

AED’s acquisition positions the company

for exposure to the international oil and gasindustry. The acreage totals approximately24,000 acres in an oil producing area locatedamong companies such as BP Plc with itsWytch farm oil field.

As part of AED’s strategy to developacreage using proven technology, the acreagecontains a seismic survey outlining theprospect and drill locations. AED now plansto construct a development program for theregion with the commencement of drillingplanned to commence in 2012.

“AED is continuing its planned acquisi-tion of high-quality assets and using technol-ogy for best results. We are excited about theprospect of the Reservoir acreage,” saysHerold Ribsskog, president of AED.

Saxon Oil Sheds Interest In AleAnnaResources; Shifts Focus To Domestics� BRS Resources Ltd., Dallas, (TorontoVenture: BRS) has jointly acquired an addi-tional 20% interest in Italy-based AleAnnaResources LLC, a company owned 49% byBRS and 51% by privately held, Dallas-based Bluescape Resources Co. LLC, fromSaxon Oil Co. Ltd., Houston, (Toronto Ven-ture: SXN) for an undisclosed amount incash and stock.

BRS issued 750,000 shares and paid anundisclosed cash amount for the interest.

AleAnna has eight exploration permitsand three applications for exploration per-mits, totaling more than 800,000 acres (3,250square kilometers). The majority of theacreage is in Italy’s Po Valley.

AleAnna Energy held 15% of the mem-bership interest in AleAnna Resources, withan additional 20% back-in interest after pay-out. AleAnna Energy now owns 35% ofAleAnna Resources, with an additional 20%back-in interest. Through its 49% member-ship interest in AleAnna Energy, BRS ownsapproximately 25% of AleAnna Resourcesafter payout.

Saxon sold the interest to complete its re-cent efforts to exit from all nondomestic oiland gas opportunities. The company willcontinue to focus on its existing producingproperties in Texas, Oklahoma and NewMexico.

LNG Energy Farms In To BulgariaProducing Concession� LNG Energy Ltd., Vancouver, (TorontoVenture: LNG) has closed its farm-in trans-action with TransAtlantic Worldwide Ltd.,a subsidiary of TransAtlantic PetroleumLtd. (Toronto: TNP; NYSE Amex: TAT) to

earn a 50% interest in a future productionconcession in northwestern Bulgaria forUS$7.5 million in exchange for US$7.5 mil-lion in drilling expenses.

LNG Energy will initially fund thedrilling, coring and testing of a 3,200-meterexploration well on the A-Lovech explo-ration license in Bulgaria targeting the Mid-dle Jurassic Etropole shale formation. LNGEnergy previously advanced US$1.5 millionto TransAtlantic.

As required in Bulgaria, on a successfulresult from this well, TransAtlantic’s sub-sidiary, Direct Petroleum Bulgaria EOOD,will apply to the government of Bulgaria fora production concession. The Etropole con-cession is expected to cover an area up to1,640 square kilometers (405,080 acres) for aterm of up to 35 years.

LNG Energy will form a subsidiary inBulgaria which will fund up to an additionalUS$12.5 million, of which US$7.5 millionwill be used to drill a second well or for otherexploration activities on the Etropole conces-sion. In return, and subject to Bulgarian gov-ernment approval, LNG Bulgaria will ac-quire a 50% undivided interest in theEtropole concession.

The Etropole formation, especially its or-ganic-rich lower part (Stefanetz member), isthe targeted interval for a gas resource.

Premier Oil Expands North Sea, CatcherOpportunity Via EnCore Acquisition� Premier Oil Plc, London, (London: PMO)plans to acquire EnCore Oil Plc, London,(London: EO) for £221 million (approxi-mately US$340 million) in cash.

Premier will pay 70 pence per EnCoreshare, a 55% premium to EnCore’s closingprice Oct. 4.

EnCore’s portfolio of assets is focused inthe offshore U.K. Continental Shelf, and in-cludes interests in the Catcher and Cladhanareas. Assets include a 15% interest U.K.North Sea License PL1430 in Catcher Field,increasing Premier’s overall interest to 50%and operator; a 16.6%. interest in the Clad-han discovery, 100% interest in the Coasterprospect east of Catcher; 40% in Tudor Rose,and 28% in the Spaniards prospects. The ac-quisition involves an additional estimated 17million barrels of discovered oil reserves andresources from wells drilled to date in theCatcher and Cladhan areas.

The acquisition will be financed with cashon hand.

Premier chief executive Simon Lockettsays, “This is a perfect fit for Premier given

E&P A&D News


our existing North Sea assets. Operatorshipof and the increased equity position inCatcher will help us to progress this develop-ment in line with our timeframe and maintainmomentum across our portfolio. In additionto existing discoveries, this acquisition willalso add a number of exploration prospects toour 2011 and 2012 exploration program.”

EnCore chief executive Alan Booth says,“”The acquisition de-risks EnCore’s devel-opment portfolio of assets, providing EnCoreshareholders with an opportunity to crystal-lize the value created through EnCore’shighly successful exploration track record.The acquisition…also gives EnCore share-holders the option of retaining exposure toEnCore’s assets within the enlarged portfoliovia the share alternative.”

RBC Capital Markets is advisor for Pre-mier. Rothschild is advisor to EnCore.

E&P A&D – FSU

ExxonMobil, Rosneft Team Up ForOffshore Arctic Project, U.S. Shales� ExxonMobil Corp., Irving, Texas,(NYSE: XOM) has replaced BP Plc, Lon-don, (NYSE: BP) in a partnership with Rus-sia’s OAO Rosneft to drill in the Arctic, oneof the last untapped oil frontiers in the world,according to the Russian InformationAgency Novosti. In turn, Rosneft, Russia’stop oil producer, may have a chance for up toa 30% share in ExxonMobil’s U.S. offshoreoperations and shale plays.

In exchange for access to potentially bil-lions of barrels of crude in the Arctic Ocean,Exxon will grant Rosneft stakes in Texasshale fields and deep-water projects in theGulf of Mexico.

Exxon and Rosneft plan to spend an initial$3.2 billion exploring Russia’s Arctic off-shore and the Black Sea. Rosneft may be-come the first major Russian oil producer todevelop U.S. deposits, gaining experience indeep-water and shale oil.

Russia is seeking access to more interna-tional technology to help it exploit complexcrude deposits in increasingly harsh environ-ments as traditional resources, such as west-ern Siberian fields, are declining. The Exxonagreement will help Rosneft meet PrimeMinister Vladimir Putin’s challenge thatRussian producers maintain the country’sworld-leading output of 10 million barrels aday for at least a decade.

Russia’s government will support the

Exxon-Rosneft alliance “in every way,” saidPutin.

Exxon replaces BP as Rosneft’s partner inthe Arctic Kara Sea after the U.K. explorer’sbillionaire partners in the TNK-BP Holding(TNBP) venture blocked the agreement thisyear. The three blocks in the Kara Sea fieldsthat are part of this agreement are about thesize of the U.K. North Sea and may hold asmuch as 100 billion barrels of oil equivalent,according to BP.

E&P A&D – Latin America

LGI Expands Chile Interest With 10%Upgrade From GeoPark� Korean conglomerate LG InternationalCorp. plans to acquire an additional 10%stake in the Chilean upstream business ofGeoPark Holdings Ltd., Bermuda, (LondonAIM: GPK) for US$78 million in cash. Thetransaction follows from the sale of an initial10% interest in GeoPark’s Chilean business toLGI for US$70 million in cash in May 2011.

Geopark has one producing block and twoexploration blocks in Chile. The Fell block,which began production in 2006, is currentlyproducing 9,000 barrels of oil and gas perday, and is gradually increasing its produc-tion. The Tranquilo block and Otway blockare now actively being explored.

LGI is taking a 14% direct interest inGeoPark TdF, the subsidiary of GeoParkChile, which is currently applying withENAP, the state oil company of Chile, forthree new hydrocarbon blocks in Tierra delFuego.

In 2010, GeoPark and LGI entered into astrategic partnership to acquire a portfolio ofoil and gas upstream assets throughout LatinAmerica.

Oriel Securities Ltd. is advisor to GeoP-ark.

Pacific Rubiales To Snag 50% WI In PeruFarm-Out� Pacific Rubiales Energy Corp., Toronto,(Toronto: PRE) plans to acquire a 50% work-ing interest in Block 116 in northeastern Perufrom Maurel & Prom, Paris, (Paris: MAU)for $75 million in E&P obligations.

The block has an area of 6,600 squarekilometers covering most of what has beendenominated the Santiago sub-basin, at thewestern-most area of what is known as theMarañón Basin. The contract is of the roy-

alty-tax nature, currently undergoing phaseII. The environmental impact assessment todrill the Dominguza well has been approvedon Oct. 3 and work will begin to drill thisfirst prospect of two already identified in theblock.

The existing North Peruvian oil pipelinecrosses the southern section of the block only25 kilometers south of the identifiedprospects.

E&P A&D – Middle East

Hayward To Take Reigns As VallaresBuys Into Iraq With Genel Acquisition� Just over two months after raising morethan $2 billion to invest in promising oil andgas projects in developing markets, VallaresPlc announced that it plans to merge withGenel Energy International Ltd., thelargest oil producer in the Kurdistan regionof Iraq.

Genel has stakes in two world-scale pro-ducing oilfields, a major gas condensate dis-covery and significant exploration acreage,all in the Kurdistan region. The company isexpected to be among the top three, inde-pendent, U.K.-listed E&P companies by 2Preserves with an estimated unrisked resourcebase of 1.4 billion barrels of oil equivalent,including proved and probable reserves of356 million barrels. Current production is41,000 BOE per day, projected to rise to90,000 BOE per day by 2013.

The merger will be achieved through anall-share reverse-takeover in which Vallareswill issue new shares worth US$2.1 billion ata price of £10 a share to acquire 100% ofGenel, giving Vallares and Genel’s currentowners equal stakes in the combined business.

The newly enlarged company will be re-named Genel Energy Plc.

Tony Hayward will be chief executiveand Julian Metherell will be chief financialofficer. Both will sit on the board. NathanielRothschild will be a non-executive director.

Announcing details of the deal in London,Tony Hayward said, “I believe our investorsare acquiring a strong existing business withexcellent producing assets, a fine team oftechnical and operating staff already in place,and immense potential for future growth.Most importantly, we are doing so at the at-tractive entry price of some US$1.50 a barrel.”

Hayward noted that finding and develop-ment costs were low, typically between $2and $4 a barrel, and predicted that the pre-


E&P A&D News

vailing transportation fee of around $3 a bar-rel would fall as more pipeline infrastructurewas built, particularly the planned South-North KICE link to the Kirkuk-Ceyhanpipeline.

Genel’s biggest producing asset is the TaqTaq Field where it has a 44% working inter-est and is joint operator. It holds a 25% stakein the smaller Tawke Field, near the Turkishborder which is operated by DNO. Theirproven and probable gross reserves are esti-mated at 647 MMBOE and 286 MMBOE, re-spectively.

Genel’s exploration portfolio includes in-terests in six licenses and runs from Peshk-abir in the north of the region to Chia Surkhin the extreme south. Results from the Sum-mail-1 well, which began drilling in April inthe Dohuk prospect, are due before the end ofthe year.

A further five exploration wells areplanned over the next 12 months to assess thefull potential of the acreage. The explorationactivity is targeting a total resource in excessof 750 MMBOE net to Genel.

Heyward added that the political relation-ship between the Kurdistan region of Iraqand Baghdad was showing increasing align-ment, oil exports were flowing again andGenel and other producers had received pay-ment for first quarter export sales from theFederal Ministry of Finance and a secondpayment is in the process of being paid. Ex-port prices at Ceyhan were at internationallevels. Sales into the domestic market madebetween $50 and $70 a barrel in August.

In terms of geography, the company in-tends to focus primarily on emerging andunder-developed geographic regions wherethe founders collectively have prior knowl-edge and experience. These include Russia,the CIS region, the Middle East, Africa, Asiaand Latin America.

E&P – Midstream

Enterprise To Sell Mississippi StorageAssets To Boadwalk� Enterprise Products Partners LP, Hous-ton, (NYSE: EPD) reached agreement to sellits natural gas storage facilities in Mississippito Boardwalk HP Storage Co. LLC for$550 million. The facilities, Petal Gas Stor-age LLC and Hattiesburg Gas Storage Co.,have a total storage capacity of 29 billioncubic feet.

These facilities own and operate seven

high deliverability salt dome natural gas stor-age caverns in Forrest County, Mississippi,as well as a leaching plant, freshwater andbrine disposal wells, approximately 69,000horsepower of compression and approxi-mately 105 miles of pipeline which connecttheir facilities with several major natural gaspipelines, including Boardwalk’s Gulf Southpipeline. The facilities also own undevelopedland which is suitable for up to six additionalstorage caverns, one of which is expected togo into service in 2013.

Enterprises president and chief executiveMichael A. Creel, said that the companychose to sell the assets because it is a stand-alone system that doesn’t integrate with itspipeline assets. “Asset integration is one ofEnterprise’s core principles in creating incre-mental value for our partners. We believe theMississippi facilities will be more valuable toBoardwalk HP Storage Co., whose affiliate,Boardwalk Pipeline Partners LP, has comple-mentary assets that may facilitate additionalbusiness opportunities and synergies,” hesaid in a news statement.

Creel added that the company intends toreinvest the proceeds form the sale to helpfund its $7-billion worth of infrastructureprojects. The agreement is expected to closein fourth-quarter 2011.

Crestwood To Gain 52-Mile Pipeline System� Crestwood Midstream Partners LP,Houston, (NYSE: CMLP) plans to acquireDenton, Texas-based Tristate Sabine LLCfrom affiliates of Dallas-based private-equityfirm Energy Spectrum Capital, Austin,Texas-based Zwolle Pipeline LLC and theTristate management for $73 million in cash.

Crestwood will pay $65 million at closingand make a deferred payment of approxi-mately $8 million one year following theclosing date.

The assets include entities that own andoperate approximately 52 miles of high-pres-sure natural gas gathering pipelines in SabineParish, Louisiana. The Tristate system pro-vides gathering and treating services forHaynesville and Bossier shale productionfrom Toledo Bend South Field area for rede-livery to Gulf South Pipeline and TennesseeGas Pipeline. Contracts on the Tristate Sys-tem dedicate approximately 20,000 acresunder long-term, fixed-fee arrangements.System capacity is currently being expandedto 100 million cubic feet per day for gather-ing and 80 million cubic feet per day fortreating. The majority of the system has been

constructed since 2009.Robert G. Phillips, president and chief ex-

ecutive of Crestwood’s general partner, says,“The Tristate acquisition fits with our strategyof owning assets in core shale play acreagethat are backed by long-term, fixed-fee con-tracts with experienced producers. This trans-action comes at a compelling value and willbe easily integrated into Crestwood.”

Crestwood will fund the deal with bor-rowings from its existing revolving-credit fa-cility.

The deal is expected to close on Nov. 1.Evercore Partners is financial advisor to

Crestwood.

Encana To Shed Horn River Gas Plant For C$220 Million� Encana Corp., Calgary, (Toronto, NYSE:ECA) has reached an agreement to sell its in-terest in the Cabin Gas Plant in the HornRiver Basin of northeastern British Columbiato Enbridge Inc., Calgary, for approxi-mately C$220 million at closing, which is ex-pected in December 2011.

Enbridge will acquire a 57.6% interest inPhases 1 and 2 of the Cabin Gas Plant Devel-opment which together will be capable ofprocessing 800 million cubic feet per day.Upon completion of Phases 1 and 2, En-bridge’s total investment is expected to beapproximately C$900 million.

Phase 1 of the development will have 400MMcf per day of natural gas processing ca-pacity. The plant is currently under construc-tion and is expected to be in-service in thethird-quarter 2012. Phase 2 will add an addi-tional 400 MMcf per day of capacity and hasbeen sanctioned by producers and receivedregulatory approval. The Phase 2 plant is ex-pected to be ready for service in the third-quarter 2014. Capacity for both Phases 1 and2 has been fully taken up by Horn River pro-ducers.

“Our investment in the Cabin Gas PlantDevelopment is a substantial initial step inthe execution of our strategy to establish astrong position in the Canadian midstreambusiness focused on growing unconventionalgas production in B.C. and Alberta,” says AlMonaco, Enbridge president, Gas Pipelines,Green Energy & International. “This strategyinvolves leveraging our gas midstream capa-bilities from our extensive U.S. operationstogether with the advantageous cost of capi-tal we can bring to the infrastructure needs ofthis active area.

Encana, as operator, has led constructionof the Cabin Gas Plant to serve producers in

E&P A&D News


the Horn River natural gas play. The plant islocated approximately 60 kilometers north-east of Fort Nelson, B.C. Construction of thefirst phase is about 70% complete. The entiredevelopment has the potential to include upto six phases with an ultimate capacity of 2.4billion cubic feet per day.

“This sale is another example of Encanaredirecting midstream capital into ourhigher-return core business of growing natu-ral gas and liquids production,” says ReneeZemljak, Encana executive vice president ofmidstream, marketing & fundamentals. “Ear-lier this year, we sold our Fort Lupton gath-ering system and processing plant, and re-cently, we agreed to sell a portion of ourPiceance midstream assets, also in Colorado.With the Cabin sale, proceeds totaling C$1.1billion from these three midstream asset saleswill strengthen our balance sheet, which willprovide greater financial flexibility goinginto 2012.”

Goldman, Sachs & Co. is advisor to En-cana.

Enogex To Acquire Pipeline Assets, BuildNew Processing Plant In Oklahoma� Enogex, Oklahoma City, Oklahoma,signed agreements to acquire natural gasmidstream pipeline assets with dedicatedrights to gather and process production froma large acreage position located in the Gran-ite Wash, Tonkawa and Marmaton plays ofnorthwestern Oklahoma.

Cordillera Energy Partners III LLC,Oxbow Midstream LLC and West Cana-dian Midstream sold Roger Mills GasGathering LLC, which owns a gatheringsystem that is located in Roger Mills andEllis counties, and an additional gas gather-ing system in Roger Mills County.

“We are excited about this opportunity toexpand our position and customer base inthis area,” said Keith Mitchell, president andCOO of Enogex. “These acquisitions, alongwith the new processing capacity and addi-tional capital expenditures for gathering, areall part of our plan to grow our existingpipeline infrastructure to meet increasingcustomer capacity needs.”

High Point Gas Transmission To AcquireSouthern Natural Assets� High Point Gas Transmission LLC, apartnership between an affiliate of ArcLightCapital Partners LLC and High Point En-ergy LLC, entered into a purchase and saleagreement with Southern Natural GasCompany LLC to acquire certain natural

gas pipeline assets located in SNG’s supplyarea south of the Toca compressor station onits east leg.

The proposed sale encompasses approxi-mately 621 miles of onshore and offshorepipeline ranging from four inches to 26inches in water depths of up to 1,000 feet, in-cluding four platforms, approximately 68 ac-tive receipt points and 25 active deliverypoints, and certain related pig launching andreceiving equipment, machinery, electronicflow measurement and communicationsequipment, rights of way, easements, permitsand line pack. The sale is subject to FERCapproval and certain other customary closingconditions, and is expected to close in 2012.

ArcLight and High Point Energy haveagreed to contribute certain other relatedpipeline assets to Hight Point Gas Transmis-sion and intend to grow the business by part-nering with local producers to develop andmaintain the infrastructure and producerservices needed to grow Gulf Coast oil andgas production and completing targeted ac-quisitions and capital projects.

Kinder Morgan, El Paso To Combine IntoFourth-Largest U.S. Energy Company;E&P Assets To Fly� In a move that will make it the largest nat-ural gas pipeline transporter in the U.S.,Kinder Morgan Inc., Houston, (NYSE:KMI) plans to acquire Houston-based ElPaso Corp. (NYSE: EP) for approximately$38 billion and subsequently spin out andsell El Paso’s upstream holdings.

Kinder Morgan chairman and chief exec-utive Richard Kinder called the deal a once-in-a-lifetime transaction. “We believe naturalgas is going to play an increasingly integralrole in North America,” he says.

Pointing to abundant supplies of naturalgas from developing shale resources and an-ticipated gas-fired power generation, he says,“We are delighted to be able to significantlyexpand our natural-gas transportation foot-print at a time when it seems likely that do-mestic natural gas supply and demand willgrow at attractive rates for years to come.”

Kinder Morgan will pay considerationequal to $26.87 per El Paso share, consistingof $14.65 per share in cash and KMI sharesand warrants. The price represents a 37%premium to the closing price on Oct. 14, anda 47% premium to the 20-day average clos-ing price. KMI shareholders will own ap-proximately 68% of the combined compa-nies. Kinder Morgan will assume some $16.7billion of El Paso debt.

El Paso’s portfolio consists of 43,000miles of pipeline in the Northeast, Southeast,Rockies and Southwest. Current throughputis 17 billion cubic feet per day, representing26% of gas delivered to U.S. consumers.Total capacity is 28 Bcf per day.

“The El Paso assets are primarily regu-lated interstate natural gas pipelines that pro-duce substantial, stable cash flow and haveaccess to key regions and major consumingmarkets,” says Kinder. The combined sys-tems are complementary, he says, as they pri-marily serve different supply sources andmarkets in the U.S.

Together, the companies will have an en-terprise value of $94 billion with 80,000miles of pipeline, making it the fourth-largestU.S. energy company.

El Paso will become a subsidiary toKinder Morgan, at which time the companyplans to sell El Paso’s E&P assets. In May, ElPaso announced it planned to spin out theE&P assets into a separate company. TheE&P sale proceeds instead will be used tooffset assumed debt in the acquisition.

Raymond James & Associates analystDarren Horowitz calculates El Paso’s E&Passets will attract $7.5- to $9 billion based ona multiple of 6-7x EBITDA. “Only a handfulof companies are able to ante up that kind ofcapital, primarily large multinational E&Pcompanies.”

Doug Foshee, El Paso chairman, presi-dent and chief executive, says, “Our agree-ment with Kinder Morgan will provide evengreater value for our shareholders than weexpected through the planned spin-off of ourexploration and production business.”

El Paso holds E&P assets in the EagleFord and Haynesville shales, the Wolfcamptrend of the Permian Basin, the Altamont re-gion of the Uinta Basin, the South LouisianaWilcox, as well as international holdings inEgypt and Brazil. Total net risked resourcepotential is 8 trillion cubic feet equivalentwith 3,260 total drilling locations in core op-erations (48% oil). Production at the end ofthe third quarter was 823 million cubic feetequivalent per day.

The present deal is expected to close insecond-quarter 2012 and is subject to a $650-million termination fee. El Paso has agreed tonot solicit competing bids.

Evercore Partners and Barclays Capi-tal are financial advisors to Kinder Morganand provided a fairness opinion. Weil Got-shal & Manges LLP and Bracewell &Guiliani LLP are legal counsel. MorganStanley is financial advisor to El Paso andprovided a fairness opinion. Goldman Sachs


E&P A&D News

also is financial advisor to El Paso in thistransaction and in relation to its previouslyannounced spin-off. Wachtell, Lipton,Rosen & Katz is legal advisor to El Paso.

GeoPetro Completes Sale OfMadisonville Plant Equipment� GeoPetro Resources Co., San Francisco,(NYSE: GPR) announced that its whollyowned, indirect subsidiary, MadisonvilleMidstream LLC, closed a transaction withPeregrine Midstream Partners LLC to sellcertain idle and non-income producingequipment at its gas treatment plant locatedin Madisonville, Madison County, Texas, for$9.25 million.

Simultaneously with the closing of thePeregrine transaction, the company repaid itssecured loan from the Bank of Oklahoma.The loan, in the original principal amount of$7.7 million, was made in December 2008when GeoPetro, through its subsidiaryMML, purchased the Madisonville gas treat-ment plant.

GeoPetro president and CEO Stuart J.Doshi says, “Closing the Peregrine transac-tion and retiring our bank debt are significantmilestones for GeoPetro. We continue to pru-dently manage and enhance our liquidity andcapital positions. With much improved liq-uidity and a stronger balance sheet, the com-pany is now well-positioned to focus on en-hancing our gas production in MadisonvilleField, continuing to explore and develop ourother projects, and implementing strategiesto increase shareholder value.”

He adds the company is also focused onsecuring an industry partner to do additionalworkovers on the Mitchell and Wilson wellsin the Madisonville Field to further increaseproduction, and undertake the drilling of adeep well to test six zones in MadisonvilleField. “Our 3-D seismic shows a very attrac-tive structural closure with a high potentialfor a major discovery.”

Summit Eyes Encana’s PiceanceMidstream Assets� Summit Midstream Partners LLC, Dal-las, has entered into a purchase and saleagreement with Encana Oil & Gas (USA)Inc., a subsidiary of Encana Corp., Calgary,(Toronto, NYSE: ECA) to acquire naturalgas midstream assets located in the PiceanceBasin for $590 million.

The acquired assets encompass approxi-mately 260 miles of pipeline and 90,000horsepower of compression facilities. The as-sets serve Mamm Creek, Orchard and South

Parachute production in the area aroundRifle, Colorado. Currently, the assets aretransporting approximately 500 million cubicfeet per day of natural gas under long termcontracts with multiple producers.

In addition to the purchase, Summit hascommitted to build for Encana the midstreaminfrastructure necessary to support Encana’semerging Niobrara development. The sale isexpected to close in the fourth quarter of2011.

“We are extremely excited about the op-portunity to expand Summit’s operations tothe Rockies,” says Steve Newby, Summitpresident and CEO. “In addition to the phys-ical assets, Summit will also add a team ofveteran midstream operators with extensiveRockies experience. Our combined teamlooks forward to providing premium mid-stream services to Encana and other area pro-ducers as the traditional and highly econom-ical Mesa Verde production is supplementedby the emerging Niobrara and Mancos devel-opment.”

A&D – Capital Providers

Gulfmark Energy Inks LOI For Eagle Ford Shale Assets� Gulfmark Energy Group Inc., San Anto-nio, Texas, (OTCBB: GMEI) has signed anon-binding letter of intent with Notre-Dame Capital Inc., Montreal, Quebec, to as-sist Gulfmark with the development of theirEagle Ford shale assets.

Gulfmark intends to drill verticallythrough the Escondido, Olmos, San Miguel,Austin chalk and Eagle Ford shale forma-tions.

“This financing will propel Gulfmark’sfootprint in the Eagle Ford shale play andprovide the flexibility to execute on its busi-ness plans while affording it the developmentopportunities which currently exist in thisprolific play,” says Michael Ward, presidentand CEO of Gulfmark.

“We have yet to assess all of the undevel-oped potential opportunities to expand ouroperations utilizing horizontal wells withmulti-stage fracturing technologies. Multipletargets have been identified; however, sev-eral other opportunities are currently underevaluation and analysis. This financing willallow us to explore all resources available inour current asset base.”

A&D – Advisors

AltaCorp Forms A&D Group With FormerTristone, Scotia Members� Calgary-based advisory firm AltaCorpCapital has formed a new Calgary-basedA&D group.

The group is headed by managing directorLeslie Kende. Kende helped develop Tris-tone Capital’s A&D practice where he wasinvolved in more than C$8 billion worth oftransactions during a five-year period. He hasmore than 20 years experience in production,development, and reservoir engineering witha number of junior to multi-national explo-ration and production companies.

Cliff Johnson has been named to the A&DGroup. He was an investment banker and amember of the A&D group of MacquarieTristone.

Kelly Wylie has been named to the A&DGroup. Wylie has seven years of A&D expe-rience with Macquarie Tristone.

Gurdeep Gill and Lee Girardo have beennamed investment bankers to the A&D team.Gill worked with National Bank in corpo-rate and investment banking. Prior to that, hewas with Tristone Capital for eight yearswhere he was actively involved in a numberof mergers, A&D and equity and debt financ-ings. Girardo brings 10 years experiencefrom Scotia Capital where he was involvedin executing a broad range of financial trans-actions including M&A and equity and debtfinancings.

Evercore Expands M&A Advisory Shop To Include Upstream A&D Team� Investment bank Evercore Partners hasrounded out its energy M&A advisory firmwith the addition of an upstream team, com-plementing its existing advisory services.The new team will be led by former ScotiaWaterous transaction specialists ShaunFinnie and Lance Dardis.

Evercore’s Houston energy advisory isled by Rob Pacha, Ray Strong and nowFinnie. Evercore has quickly built one of thelargest energy advisory groups with 24 pro-fessionals positioned in its newly-con-structed Houston office.

Finnie, previously head of U.S. mergersand acquisitions for Scotia Waterous, joinedEvercore in October to lead the firm’s up-stream A&D effort. Dardis, a director atScotia, joined in September. Tim Carlson,previously a managing director at JP Morgan

E&P A&D News


focused on upstream clients, will be startingin November.

Leading the A&D technical team at Ever-core will be Doug Rogers and Jerry Smith,who had worked together as petroleum engi-neers at ExxonMobil before taking differentpaths into the A&D arena, only to be re-united now as Evercore’s core engineeringteam.

Pacha joined Evercore as the first seniormanaging director in the energy group com-ing from Bank of America Merrill Lynchin 2009, where he headed the midstream andMLP practice. Strong, previously a manag-ing director and head of midstream anddownstream in Goldman Sachs’ NaturalResources group, joined the Evercore mid-stream group in June of this year.

Chris Juban, previously with UBS, hasalso joined the energy team.

Evercore recently advised Kinder Mor-gan on its $38-billion acquisition of El PasoCorp., with the new upstream team handlingthe subsequent divestiture mandate fromKinder Morgan with respect to El Paso’sE&P assets. The transaction represents thelargest North American energy transactionsince Exxon Mobil’s $41-billion acquisitionof XTO Energy in late 2009, and the com-bined company will be the fourth-largest en-ergy company in North America.

This transaction comes just four monthsfollowing the announcement of SouthernUnion’s $9.4-billion sale to Energy Trans-fer Equity, on which Evercore is advisingSouthern Union.

Evercore expects to have 30 to 40 profes-sionals in Houston focused on energy by theend of 2012.

The advisory team is located in Ever-core’s new facility, which includes a state-of-the-art A&D center, in Two HoustonCenter in downtown Houston.

Dardis can be reached at 713-427-5130,[email protected].

Lantana Adds ExxonMobil’s LaurenLaFleur, New Office� Lantana Oil & Gas Partners has namedLauren LaFleur reservoir engineer. She heldvarious engineering positions at ExxonMo-bil Corp., Irving, Texas, (NYSE: XOM)where she spent the past five years.

Also, the company has recently acquired anew office in Houston. The address is 5910Rose Street, Houston, TX, 77007, off West-cott and near Memorial Park and the Wash-ington Street round-a-bout.

E&P – New Companies

Atlas Energy To Form E&P MLP ForShale, Other Properties� Atlas Energy LP, Philadelphia, (NYSE:ATLS) plans to create an E&P master limitedpartnership named Atlas Resource PartnersLP, which will hold substantially all of AtlasEnergy’s current gas and oil developmentand production assets.

Atlas Energy plans to take Atlas ResourcePartners public by distributing to Atlas Energyunit holders common units representing an ap-proximately 19.6% limited partner interest inAtlas Resource Partners. Atlas Resource Part-ners intends to apply to list its common unitson the New York Stock Exchange.

Prior to closing the transaction, Atlas En-ergy will transfer to Atlas Resource Partnersits proved reserves in Appalachia, the Nio-brara formation in Colorado, the New Al-bany shale in Indiana, the Antrim shale inMichigan and the Chattanooga shale in Ten-nessee. The assets also include its producingproperties in these respective areas and itspartnership management business and relatedfee-based income streams.

Atlas Energy management believes thatthis transaction will substantially enhanceunit holder value by separating the com-pany’s current E&P assets and partnershipmanagement business from Atlas Energy’sgeneral partner interests and incentive distri-bution rights in Atlas Pipeline Partners LP(NYSE: APL).

Atlas Energy chief executive Edward E.Cohen says, “By creating this new entity, weare positioning ourselves to capitalize morefully on the many opportunities currentlyavailable to us in the U.S. E&P industry. Weexpect that the transaction will enable us toachieve substantial growth in cash flows toour Atlas Energy unit holders from increaseddistributions in the future both from AtlasResource Partners and Atlas Pipeline Part-ners.”

Atlas Energy expects the transaction to becompleted by the first quarter of 2012.

E&P – Other

Encore Energy Names Champion New VP Of BD� Encore Energy Inc., Bowling Green, Ken-tucky, has reported that William “Bill”Champion has officially been named the vicepresident of business development.

Champion has more than 17 years of ex-perience developing and marketing projectsin the oil and gas industry through industrypartnerships and NASD broker-dealers.Champion was VP of a privately held oil andnatural gas exploration company for nearly12 years between 1995 and 2007. Prior toworking in the exploration industry, heworked for 10 years with a Fortune 500chemical manufacturing company that sup-plied specialty chemicals directly to the oiland gas industry as well as the coal miningindustry.

Champion attended Western KentuckyUniversity and has previously held NASDSeries 63 and 22 licenses.






Service & Supply A&D News

—Acquisitions

—Divestitures

S&S A&D – U.S.

Greene’s Acquires Pro-Valve Services Assets� Greene’s Energy Group, Houston, aprovider of integrated testing, rentals andspecialty services, has acquired the assets ofPro-Valve Services Inc., Houma, La, fromowner Jeff Mike.

The acquisition will broaden the after-market production valve services providedby Greene’s wellhead and valve division.The company will offer integrated repair, re-manufacture and operational services fordrilling and production valves. Additionally,the acquisition broadens the company’s ca-pabilities in major U.S. shale plays.

Halliburton Finalizes Acquisition Of Multi-Chem� Halliburton, Houston, (NYSE: HAL) hascompleted the acquisition of Multi-ChemGroup LLC, San Angelo, Texas, for anundisclosed price.

Multi-Chem is the fourth-largest providerof production chemicals in North America,delivering specialty chemicals, services andsolutions that help oil and gas companies de-velop resources in more than 30,000 oil andnatural gas wells around the world.

High Plains To Gain Rockies Construction Service� High Plains Gas Inc., Gillette, Wyo.,(OTCBB: HPGS) plans to acquire Lovell,Wyo.-based Miller Fabrication LLC for anundisclosed total of cash and stock.

Terms of the deal will announced at clos-ing.

Miller is a facility construction companyproviding services for the energy industry.Miller Fabrication has executed contractsand completed energy-related constructionprojects for established regional and nationalfirms within the Bakken and Niobrara shales.

High Plains Gas chief executive BrandonHargett says, “Miller Fabrication’s capabili-ties, combined with the extensive experience,

mature infrastructure, and capacious industrypartnerships assembled by Mark Hettinger,chief operating officer of High Plains Gas,over the past three decades will quickly es-tablish us as a significant player in the indus-try.”

The deal was expected to close by Oct.31.

Logan International Adds Tulsa’s KlineOilfield To Family� Logan International Inc., Calgary,(Toronto: LII) has acquired all of the out-standing stock of Kline Oilfield EquipmentInc., Tulsa, Oklahoma, for approximatelyC$11 million in cash.

Kline, which was founded in 1978, manu-factures and sells packers, bridge plugs, re-trieving tools and other completion andworkover tools. Kline also operates an as-sembly and warehouse facility in Odessa,Texas. Kline principally sells to oilfield serv-ices customers in the U.S. It is currently in-tended that Kline will continue to operateunder the Kline name.

David Barr, Logan chief executive, says,“This transaction is consistent with our strat-egy of being a leading worldwide supplier ofdownhole tools to the energy industry.Kline’s products will enhance our presencein this market. We believe that we willgreatly benefit from the combination ofLogan’s existing engineering and manufac-turing skills with Kline’s well-respectedproduct line.”

Logan manufactures and sells fishing andintervention tools, provides fracturing prod-ucts, and sells high-performance polycrys-talline diamond compact cutters and bear-ings.

National Oilwell Varco, Ameron Close Merger� National Oilwell Varco, Houston,(NYSE: NOV) has closed its acquisition ofAmeron International Corp., Pasadena,Calif., (NYSE: AMN) for approximately$777 million.

National Oilwell Varco paid $85 in cash

per Ameron share.Ameron is a multinational manufacturer

of highly-engineered products and materialsfor the chemical, industrial, energy, trans-portation and infrastructure markets. Ameronis a leading producer of fiberglass-compositepipe for transporting oil, chemicals and cor-rosive fluids, and specialized materials andproducts used in infrastructure projects.Ameron is also a leading provider of watertransmission lines and fabricated steel prod-ucts, such as wind towers. Ameron operatesbusinesses in North America, South Amer-ica, Europe and Asia, has a presence throughaffiliated companies in the Middle East, andhas approximately 2,900 employees and 25manufacturing locations on a worldwidebasis.

NOV is a worldwide leader in the design,manufacture and sale of equipment and com-ponents used in oil and gas drilling and pro-duction operations, the provision of oilfieldservices, and supply chain integration serv-ices to the upstream oil and gas industry.

Select Energy Services Expands BakkenPresence With IWF Acquisitions� Houston-based oilfield service companySelect Energy Services LLC has acquiredWilliston, N.D., International WesternFlowback LLC for an undisclosed price.

International Western Flowback providesflowback services in North Dakota and Okla-homa to manage extreme weather conditions.IWF has engineered specialized flowbackunits designed to withstand freezing temper-atures that allows them to maintain drillingand production activities during the wintermonths.

The acquisition expands Select’s presencein the Bakken region and extends Select’swater solutions offerings in the region to in-clude well-testing in addition to water sourc-ing and water transfer services.

Select Energy chief executive JohnSchmitz says, “The regional demand for win-terized flowback equipment and services isextensive and Select’s entry into this impor-tant service line is a significant step forward.Flowback operations in the Bakken are quite


S&S A&D News

different from those in other shale plays dueto the harsh conditions, and IWF is a leaderin developing the technical expertise andspecialized flowback equipment essential tosuccessfully operating in the Bakken region.”

Superior Energy, Complete Production To Unite� Superior Energy Services Inc., New Or-leans, (NYSE: SPN) plans to acquire Com-plete Production Services Inc., Houston,(NYSE: CPX) in a merger in a deal valued atapproximately $2.35 billion in cash andstock.

Superior will pay $7 cash and issue 0.945share per Complete Production share. Com-plete Production has 79.3 million shares out-standing and Superior Energy shares tradedat approximately $24 at the time of the an-nouncement. The deal represents a premiumof 29% to Complete’s average price for thepast two months, according to Superior En-ergy.

Complete provides oilfield services inNorth America and southeastern Asia. It op-erates in three segments: completion and pro-duction services, drilling services and prod-uct sales. Services from the segments includecompletion, workover and maintenance serv-ices, downhole and wellsite services, con-tract drilling and specialized rig relocationand logistics services, oilfield service equip-ment and refurbishment of used equipmentand repair work and fabrication services.

Pro forma closing and the issuance of newSuperior shares, Superior shareholders willhold 52% of the merged company and Com-plete shareholders will hold the remaining48%. The combined company will retain Su-perior’s name.

Superior president and chief executiveDavid Dunlap says, “The combination of Su-perior and Complete creates a top-tier diver-sified oilfield services company with theproducts, technologies and talented peoplethat are critical to helping our customers cre-ate value, particularly in unconventionalfields in North America. Together we willhave enhanced positions in large sectors forkey products and services that are high inusage intensity and deemed critical by ourcustomers during their drilling, completionand production processes.”

Complete chairman and CEO Joe Winklersays, “Together, we will possess the scaleand offer the range of services necessary tocompete successfully on the global stage.”

Greenhill & Co. and J.P.Morgan werefinancial advisors to Superior. Jones,

Walker, Waechter, Poitevent, Carrere &Denegre LLP is legal advisor to Superior.Credit Suisse Securities (USA) LLC is fi-nancial advisor to Complete. Latham &Watkins LLP is legal advisor to Complete.

The deal is expected to close by year end.

S&S A&D – Canada

Entrec Bolsters Heavy Haul Fleet WithTwo Alberta Trucking Companies� Entrec Transportation Services Ltd.,Spruce Grove, Alberta, (Toronto Venture:ENT) plans to acquire Trak EquipmentHaulers, Edmonton, Alberta, for C$3.35million, and Jay Reid Trucking Ltd., Bon-nyville, Alberta, for C$1.47 million in cashand shares, for a combined value of C$4.82million.

Trak transports over-sized and over-weight equipment within the oil and gas andconstruction industries in Alberta, BritishColumbia and Saskatchewan. The assets ac-quired from Trak will be integrated into En-trec’s Spruce Grove division.

Jay Reid also specializes in the transporta-tion of over-sized and over-weight equip-ment within with services in Alberta andSaskatchewan. These assets will be inte-grated into Entrec’s Bonnyville division.

Rod Marlin, Entrec chairman and CEO,says, “We are experiencing a high demandfor our services and this acquisition will helpprovide the additional equipment and man-power resources we need to meet this de-mand.”

The combined fleets consist of two pilottrucks, 12 specialized tractor units, over 40specialized trailers and various additionalsupport and ancillary equipment pieces. Rev-enue generated from the acquisitions for2012 is expected to be approximately C$6million.

Closing is expected on or about Nov. 1,2011.

Entrec specializes in the transportationand rigging of overweight and oversizedcargo for the oil and gas, construction, petro-chemical, mining and power generation in-dustries.

Flint Energy Concludes Carson Energy Deal� Flint Energy Services Ltd., Calgary,(Toronto: FES) has completed the acquisi-tion of privately held, Lampman,Saskatchewan-based Carson Energy Serv-

ices Ltd. for approximately C$163.1 million.Flint Energy paid C$112 million in cash,

issued 2.12 million shares valued at approxi-mately C$21.1 million and will pay an addi-tional C$30 million earn-out spread duringthe next three years.

Carson Energy has operations in 17 loca-tions and provides energy services inSaskatchewan, Manitoba and eastern Al-berta. Services include pipeline construction,fabrication, civil and facility construction,oilfield maintenance, pipeline integrity, hori-zontal directional drilling, trucking and tubu-lar management, environmental and safetysales and services.

Carson Energy president Ron Carson willcontinue as president of Carson’s operationswithin Flint. Carson will continue to operateunder the Carson Energy Services brand.

Flint president and chief executive W. J.(Bill) Lingard says, “Flint sees this combina-tion with Carson as a strategic opportunityfor growth, tied to the increasing oil drillingand production activities we are seeing inSaskatchewan. Flint and Carson share similarcultures of safety, business ethics, and sup-port for its people, communities and cus-tomers. Our combined strengths and re-sources will make us the largest energyservices provider in Saskatchewan, provid-ing a strong service platform for our cus-tomers in this region, increasing the servicelines available to the producers of southeastSaskatchewan and Manitoba.”

Lufkin Lifts Quinn’s Rod Pump Assets� Lufkin Industries Inc., Lufkin, Texas,(Nasdaq: LUFK) plans to acquire substan-tially all of the assets of Quinn’s OilfieldSupply Ltd., Red Deer, Alberta, for approx-imately $303 million in cash.

Quinn’s is one of the largest reciprocatingrod-pump manufacturers in North Americaand, through its acquisition of GrenCo In-dustries in June 2010, also manufactures anddistributes progressive cavity pumps and re-lated equipment. Founded in 1965, Quinn’soperations include two manufacturing facili-ties in Canada, one in the U.S. and 51 servicelocations in oil and gas producing areas ofNorth America.

Financing for this transaction is antici-pated to include a combination of borrowingsunder an expanded revolving credit facilityand a senior secured term loan.

Lufkin chief executive and president JohnF. “Jay” Glick says, “The acquisition ofQuinn’s continues our strategy of expandingour product portfolio in artificial lift systems,


S&S A&D News

while at the same time extending our salesand service network in the increasingly ac-tive oil provinces of the United States andWestern Canada. The integration of Lufkin’ssurface beam pump unit with Quinn’s down-hole rod pump will enhance Lufkin ‘s abilityto package complementary products andallow us to better optimize the rod lift systemto the benefit of our customers.”

He adds that Quinn’s is well positioned tobenefit from the large increase in unconven-tional oil plays as oil shale wells generallytransition to artificial lift approximately 18 to24 months after completion. “We expect toleverage Lufkin’s global infrastructure to in-troduce Quinn’s products and services toLatin America, Eastern Europe, North Africaand the Middle East. Additionally, the acqui-sition of Quinn’s will instantly give Lufkin asignificantly larger footprint in Canada fromwhich to market and service our other prod-ucts.”

Simmons & Co. International was advi-sor to Lufkin. Wood Roberts LLC and In-finity Energy Capital LLC served were ad-visors to Quinn’s.

Lufkin Industries Completes Acquisitionof Pentagon Optimization Services� Lufkin Industries Inc., Lufkin, Texas,(Nasdaq: LUFK) has completed the acquisi-tion of Pentagon Optimization ServicesInc. for an undisclosed price.

Pentagon, based in Red Deer, Alberta, is adiversified well-optimization company serv-ing the oil and gas industry that provides awide range of products and services includ-ing plunger lift systems and well engineeringand testing.

John F. “Jay” Glick, Lufkin president andchief executive, says, “This acquisition im-mediately expands our footprint in Canada,the second largest plunger lift market outsidethe U.S. It also improves our existing plungerlift product portfolio, and provides entry tothe well optimization, engineering and test-ing services market, which is highly comple-mentary to our automation strategy.

Pentagon’s Angel pump provides a cost-effective method to produce pressure-de-pleted gas wells and can pump both liquidand gas simultaneously without gas lock-ing. The angel pump has been successfullyinstalled and tested in multiple highly devi-ated wells with high gas-oil ratios (GOR),and is expected to be ready for global com-mercialization next year, says Glick.

Lufkin Industries sells and services oil-field pumping units, well automation sys-

tems, gas lift and plunger lift systems,foundry castings and power transmissionproducts throughout the world.

Precision Drilling Lands Canadian BasedDirectional Drilling Companyn

Precision Drilling Corp., Calgary,(Toronto: PD; NYSE: PDS) has acquiredAxis Energy Services Holdings Inc. for anundisclosed price.

Axis provides directional drilling andMWD services, primarily in WesternCanada, and has a 30-job capacity. Axis wasformed in 2006 and has approximately 70employees.

“The Axis acquisition represents an im-portant step in our strategy to integrate direc-tional drilling services with our high-per-formance, high-value drilling rigs”, saysKevin Neveu, president and chief executiveof Precision.

Provident Completes Acquisition of ThreeStar Trucking� Provident Energy Ltd., Calgary,(Toronto: PVE; NYSE: PVX) has acquired atwo-thirds interest in Three Star TruckingLtd., a Saskatchewan based oilfield haulingcompany serving Bakken-area crude oil pro-ducers, for an undisclosed price.

The acquisition expands Provident’s foot-print within the Bakken area, establishing astrong crude oil presence and providing op-portunities to enhance its NGL and diluentslogistics services businesses. In addition,combined with the construction of the re-cently announced truck terminal at Cromer,Manitoba, Provident will be able to enhanceits supply of natural gas liquids into the Sar-nia, Ontario area.

Precision Drilling Lands Canadian BasedDirectional Drilling Company� Precision Drilling Corp., Calgary,(Toronto: PD; NYSE: PDS) has acquiredAxis Energy Services Holdings Inc. for anundisclosed price.

Axis provides directional drilling andMWD services, primarily in WesternCanada, and has a 30-job capacity. Axis wasformed in 2006 and has approximately 70employees.

“The Axis acquisition represents an im-portant step in our strategy to integrate direc-tional drilling services with our high-per-formance, high-value drilling rigs”, saysKevin Neveu, president and chief executiveof Precision.

S&S A&D – International

Baker Hughes Acquires Equity Stake InVerdande Energy� Baker Hughes, Houston (NYSE: BHI) andVerdande Technology AS, Trondheim,Norway, reported that a subsidiary of BakerHughes has acquired a minority equity stakein Verdande Energy AS, a subsidiary ofVerdande Technology AS, and will become auser of Verdande Technology’s case-basedreasoning (CBR) software platform for oiland gas applications.

This CBR technology, called DrillEdge,is a real-time intervention tool constructed onthe principle of case-based reasoning, a prob-lem-solving process that identifies similar is-sues from relevant wells drilled in the pastand offers similar solutions. This immediateintervention-while-drilling response providesa thorough, fast and practical real-timebridge between past experience and currentoperations. Under the terms of the agree-ment, Baker Hughes will be involved in fur-ther developing the capabilities.

“The DrillEdge platform is expected tohelp operators lower risk, increase their rateof penetration and reduce non-productivetime while drilling,” says Scott Schmidt,president of Drilling and Evaluation forBaker Hughes. “Integrating this capabilityinto our portfolio of real-time optimizationand remote drilling services complementsour BEACON remote operations platform.The technology is expected to help our cus-tomers expand their understanding of theirwells without increasing their workload asthey continue to drill more demanding andtechnically challenging wells.”

“This strategic arrangement delivers im-mense benefits to our customers seeking toimprove drilling performance and drive oper-ational efficiencies by joining our technologywith Baker Hughes’ extensive network,”says Lars Olrik, chief executive of VerdandeTechnology. “It helps a small company likeours strengthen its place in the market, accessa global support and operational network andfurther develop the technology at a morerapid pace.”

Hercules Offshore Increases Stake InDiscovery Offshore SA� Hercules Offshore Inc., Houston, (Nas-daq: HERO) has acquired an additional 6.1million shares of Discovery Offshore S.A. atan average price of NOK9.02 per share. Withthis latest purchase, Hercules Offshore has


S&S A&D News

invested a total of approximately $34.1 mil-lion in Discovery Offshore, and currentlyholds a 28% ownership interest in DiscoveryOffshore.

“Since our initial investment in DiscoveryOffshore in January 2011, the fundamentalsof the offshore drilling industry havestrengthened, and demand for ultra high-specification jack-up rigs remains exception-ally strong,” says John T. Rynd, presidentand chief executive of Hercules Offshore.“Once delivered in 2013, these rigs will beamong the most technically capable jack-upsworldwide, servicing a growing niche marketthat requires the advanced capabilities theserigs can provide. Initial discussions with cus-tomers confirm our confidence in the rig de-sign, and the robust demand that we antici-pate for these rigs for the foreseeable future.”

Discovery Offshore is a Luxembourg-based company, focused on ownership ofultra high-specification jack-up rigs. Discov-ery Offshore currently has two ultra high-specification jack-up rigs under constructionat Keppel FELS in Singapore, with deliveryscheduled during the second and fourth quar-ter of 2013. Discovery Offshore also holdsoptions for two additional jack-up rigs. Her-cules Offshore is overseeing the construc-tion, marketing and operations of rigs ownedby Discovery Offshore, as well as perform-ing other corporate administrative functionsrequired by Discovery Offshore.

Integra Group Integrates Russian OFSProvider Siam� Integra Group (London: INTE) has ac-quired Siam Co., a Russian oilfield servicescompany specializing in wireline and slick-line services, production logging and testingfor RR2.2 billion (US$71 million).

Siam provides opportunities for expan-sion of Integra’s portfolio of technologyservices and reinforces its position as theleading Russian provider of complex OFSsolutions at all stages of oilfield develop-ment.

Integra Group is a diversified oilfieldservices provider and is manufacturer of spe-cialized equipment used in the exploration,development and production of oil and gas.Integra operates in all major oil and gas pro-ducing regions in Russia and in many otherCIS countries.

Transocean Finalizes Acquisition Of Aker Drilling� Transocean Services AS, a wholly ownedsubsidiary of Transocean Ltd., Switzerland,

(NYSE: RIG) has completed the acquisitionof 100% of the shares of Stavanger, Norway-based Aker Drilling ASA for NOK 26.50per share.

This acquisition further strengthensTransocean’s position, adding approximately$1 billion in backlog as well as Aker’s twoharsh environments, semi-submersibledrilling rigs and two drillships under con-struction in Korea.

“We are very excited about the opportuni-ties this combination brings, both financiallyand strategically,” says Steven Newman,president and CEO of Transocean Ltd. “Withthe close of this transaction we’ve immedi-ately enhanced the overall makeup of ourfleet, strengthened our position in Norway,and furthered our competitive position in themarketplace through the addition of high-spec assets and exceptional people.”

Tuscany Expands In South America WithM&P Subsidiary� Tuscany International Drilling Inc., Cal-gary, (Toronto: TID) has acquired CaroilSAS, a drilling and work-over subsidiary ofMaurel & Prom, for a total value of approx-imately $202 million.

The purchase price includes $120 millionin cash, 82.5 million common shares of Tus-cany and 27.5 million zero-cost, non-trans-ferable, non-voting common share purchasewarrants.

“This acquisition expands our existingoperation in South America and adds an upand running African component establishingTuscany as a leading emerging marketdrilling contractor,” says Walter Dawson,chairman and chief executive of Tuscany.

Jennings Capital Inc. was advisor toTuscany. Tuscany provides drilling andwork-over services along with equipmentrentals to the oil and gas industry in SouthAmerica. Tuscany has operating centers inColombia, Ecuador and Brazil.

S&S – Other

Triangle Petroleum Forms WillistonBasin Services Co.� Triangle Petroleum Corp., Denver ,(AMEX: TPLM), has reported the formationof RockPile Energy Services LLC, a major-ity-owned subsidiary focused on providingpressure pumping and ancillary services inthe Williston Basin. RockPile will be head-quartered in Denver, Colo., with field opera-

tions in both Dickinson and Williston, N.D.RockPile has received commitments for a

$24 million Series A 6% Convertible Pre-ferred Unit offering, with Triangle subscrib-ing for $20 million, giving Triangle an 83%interest in the Series A Units. Proceeds fromthe Series A offering will be used to purchaseequipment for one pressure pumping spread,to build a rail-based proppant receiving ter-minal located in Dickinson, N.D., and forgeneral and corporate purposes.

RockPile has appointed Curt Dacar aschief operating officer. Dacar, originallyfrom Dickinson, spent nearly 32 years withSchlumberger, where he was involved in allaspects of the management of the pressurepumping value chain. Most recently, Dacarworked with Occidental Petroleum Corp.in its Williston Basin completions program.RockPile is also currently interviewing can-didates for additional key roles.

RockPile anticipates the commencementof its pressure pumping operations in mid-2012. RockPile and Triangle USA Petro-leum, a wholly owned operating subsidiaryof Triangle, have entered into an agreementfor the use of 50% of the pumping capacityof the first spread, based on prevailing mar-ket rates. RockPile will seek third-party cus-tomers as it expands operations and will con-sider additional pressure pumping spreadsbased on customer demand and sourcing ad-ditional capital.

“RockPile is an exciting venture, with thepotential to generate substantial revenue andprofits in the Williston Basin,” says JonathanSamuels, president and chief financial officerof Triangle. “Based on our current operatedcapital budget through the end of 2012, wealready plan to spend over $25 million net toour interest on pressure-pumping services.”

Triangle will fund its $20-million com-mitment through cash on hand, as part of itspreviously announced $30-million infra-structure budget. RockPile is calling half ofits $24 million capital commitment today,with the remaining 50% due upon the deliv-ery of the first spread in the second quarter of2012.






Companies in This Issue

A

A&D Insight LLC .................................................15AER Energy Resources Inc. ...............................26Aker Drilling ASA ................................................51Akin Gump Strauss Hauer & Feld LLP ...............31Albrecht & Associates ......................11, 15, 16, 18AleAnna Resources LLC.....................................42Allens Arthur Robinson.......................................42Alta Corp Capital Inc. ...................................15, 46American Energy Development Corp. ................42American International Industries Inc. ................31Ameron International Corp. ................................48Anderson O&G Inc..............................................15Antero Resources ...............................................31Arcan Resources Ltd. .........................................39ArcLight Capital Partners LLC............................45Arrow Energy Holdings Pty. Ltd. ........................41Ashton Holdings Inc. ..........................................10Atinum Partners Co. Ltd.....................................26Atlas Energy LP ..................................................47Atlas Pipeline Partners LP ..................................47Atlas Resource Partners LP ...............................47ATM Production..................................................15Aurora Energy Partners ......................................38Avista Capital Partners .......................................26Axis Energy Corp..........................................10, 50

B

Bainbridge Capital ..............................................15Baker Hughes .....................................................50Bank of America Merrill Lynch .....................15, 47Bank of Oklahoma........................................34, 46Barclays Capital .....................................15, 40, 45Baron Energy Inc. ...............................................31Bayswater Exploration & Production LLC..........19Bennett Jones LLP .............................................40Bering Exploration Inc. .......................................31BHP Billiton.........................................................54Birchcliff Energy Ltd. ..........................................19Bitter Creek Energy Services ............................13Blake Dawson.....................................................42Blake Exploration LLC........................................10Blake, Cassels & Graydon LLP ..........................40Bluescape Resources Co. LLC ..........................42BMO Capital Markets.........................1, 13, 15, 20BNP Paribas .................................................11, 15Boardwalk HP Storage Co. LLC.........................44Bold Energy II LLC .............................................10Bow Energy Ltd. .................................................41BP Plc.....................................................41, 42, 43Bracewell & Guiliani LLP ....................................45BreitBurn Energy Partners LP ............................31Brenham Oil & Gas Corp..............................31, 31Brigham Exploration Co. ....................................37Bright & Co. Ltd..................................................19BRS Resources Ltd. ...........................................42Burks Oil & Gas Properties.................................15

C

C.O. Energy ........................................................38Cabot Oil & Gas Corp. ...............................1, 6, 31Cameron Parish Pipelines LLC...........................32Canaccord Genuity Corp....................................40Capital Energy Advisors Inc. ..............................15Caris & Co. .....................................................1, 37Caroil SAS ..........................................................51Carrizo Oil & Gas Inc. ...................................26, 32

Carson Energy Services Ltd...............................49Cascade Resources Inc. ....................................39Centergy Advisors LLC.......................................15Chaparral Energy................................................10Chesapeake Energy Corp. ...........................10, 11Chevron Corp. ....................................1, 10, 11, 54China Petrochemical Corp. ................................40Chinook Energy Inc. ...........................................19CIBC World Markets Inc...............................15, 40Citi.......................................................................15Complete Production Services Inc.....................49Concessions International ..................................15ConocoPhillips................................................3, 40Consol Energy Inc. .......................................31, 34Cooper Energy Ltd. ............................................41Cordillera Energy Partners III LLC......................45Credit Suisse Securities (USA) LLC ...................49Crescent Point Energy Corp...............................39Crestwood Midstream Partners LP ....................44

D

Dakota Exploration ............................................11Daylight Energy Ltd. ...........................................40Deutsche Bank ...................................................54Devon Energy .......................................................5Discovery Offshore S.A. .....................................50Dominion Petroleum...............................31, 40, 41Double 7 Oil and Gas LLC .................................33Dragon Oil Plc.....................................................41Dynamic Production Inc. ....................................11

E

Earthstone Energy Inc. .......................................11EeTradeco LLC...................................................15El Paso Corp. .........................................11, 45, 47Enbridge Inc. ......................................................44Encana Corp.................................................11, 44EnCap Investments LP.................................54, 13Encore Energy Inc. .............................................47EnCore Oil Plc ....................................................42Energy Capital Solutions ....................................15Energy Exchange................................................15Energy Property Advisors...................................15Energy Spectrum Advisors Inc.....................15, 10Energy Spectrum Capital ...................................44Energy Transfer Equity .......................................47EnergyNet.............................10, 11, 13, 15, 18, 19EnerJex Resources Inc.......................................31EnerVest Ltd. ......................................................11Enogex................................................................45Enstream Capital ................................................15Enterprise Products Partners LP........................44Entrec Transportation Services Ltd....................49Envoi ...................................................................15EOG Resources Inc. ...........................................11EQT Corp............................................................36Equitrans.............................................................36Esso Exploração Santos Brasileira Ltda. ...........21Evercore Partners.............................15, 44, 45, 46ExxonMobil Corp....................................21, 43, 47

F

Falkland Oil and Gas Ltd....................................21Fidelity Exploration & Production Co. ...............13Flint Energy Services Ltd....................................49Forest Oil Corp. ............................................19, 39Fox Petroleum Inc. .............................................32

G

Gail (India) Ltd.....................................................32Galleon Energy Inc. ............................................19GE.......................................................................36GE Energy Financial Services ............................36Genel Energy International Ltd. ..........................43Genel Energy Plc ................................................43GeoMet Inc. ........................................................32GeoPark Holdings Ltd. .......................................43GeoPetro Resources Co.....................................46Gift Energy Ltd....................................................20Gilbert + Tobin....................................................42Global Hunter Securities.....................................37Goldman Sachs......................................37, 45, 47Graves & Co. ......................................................15GreenBriar Energy LP IV.....................................13Greene’s Energy Group......................................48Greenhill & Co.....................................................49Greenhill Capital Partners...................................15GrenCo Industries...............................................49Griffis & Small .....................................................15Growth Capital Partners .....................................15GT International Inc. ...........................................15Gulf Coast Tubulars LP ......................................13Gulfmark Energy Group Inc................................46Gulfsands Petroleum Plc ....................................32

H

Halliburton ..........................................................48Harris Williams & Co...........................................15Hattiesburg Gas Storage Co. .............................44Hercules Offshore Inc.........................................50Hess Corp...........................................................54High Plains Gas Inc. ...........................................48High Point Energy LLC .......................................45Hilcorp ................................................................54Holt & Company .................................................15HopgoodGanim ..................................................42Husky Ventures Inc.............................................38HVL Energy LLC .................................................13Hyperdynamics Corp..........................................37

I

Indigo Minerals II LLC.........................................13IndigoPool.....................................................15, 21Infinity Energy Capital LLC.................................50Integra Group .....................................................51International Western Flowback LLC .................48

J

J.P. Morgan......................................15, 42, 47, 49Jacka Resources ................................................41Jay Reid Trucking Ltd. .......................................49Jefferies & Co. Inc........................3, 15, 34, 37, 54Jennings Capital Inc. ..........................................51Jones, Walker, Waechter, Poitevent, Carrere & Denegre LLP ...................................49

K

Kayne Anderson Energy Funds..........................39Kerr-McGee Oil & Gas........................................11KeyBanc Capital Markets Inc.................15, 22, 32Kinder Morgan Inc. .......................................45, 47Kline Oilfield Equipment Inc. ..............................48Kodiak Oil & Gas Corp. ......................................32

L

Lantana Oil & Gas Partners....................10, 15, 46Latham & Watkins LLP .......................................49


Companies In This Issue

Legend Oil and Gas Ltd. ....................................33LG International Corp. ........................................43Liberty Resources...............................................19Lime Rock Partners ............................................34LNG Energy Ltd. .................................................42Logan International Inc. ......................................48Lone Pine Resources Inc....................................39Lone Star Oil & Gas Inc. ....................................13Longfellow Exploration Co. LLC.........................13Lucas Energy Inc. ...............................................34Lufkin Industries Inc. ....................................49, 50

M

Macquarie Tristone ......................8, 15, 19, 46, 54Madisonville Midstream LLC..............................46Magellan Petroleum Corp...................................42Manitok Energy Inc.............................................39Marathon Oil .......................................................54Maurel & Prom..............................................43, 51Meagher Energy Advisors ..................2, 10, 13, 15MEC Operating Co. ULC....................................39Medco Tunisia Holding Ltd. ...............................41Meredith Land & Minerals Co.............................13Merrill Lynch .......................................................42Milagro Exploration LLC.....................................33Milagro Oil & Gas Inc..........................................33Miller Fabrication LLC ........................................48Mitchell Energy Advisors ....................................15Morgan Keegan Investment Banking .................16Morgan Stanley ..................................................45Moyes & Co. Inc. ................................................15Mubadala Oil & Gas............................................41Multi-Chem Group LLC ......................................48Murphy Exploration & Production ......................16Murphy Oil ..........................................................54

N

National Bank .....................................................46National Oilwell Varco.........................................48Nationwide Exchange Services ..........................15NEP Canada ULC...............................................39Netherland, Sewell & Associates Inc..................38New Western Energy Corp.................................33Newfield Exploration Co.....................................16Newton Energy Partners LLC.............................39NFR Energy LLC...........................................16, 33Nichols Energy Advisory Group .........................15Noble Affiliates......................................................6Noble Energy Inc. .....................................6, 31, 34Noble Royalties Inc.............................................14Nordic Oil USA 2 LLP.........................................34Norse Energy Corp. ...........................................16Northern Spirit Resources Inc. ...........................39Notre-Dame Capital Inc......................................46

O

Oasis Petroleum ...................................................1Occidental Petroleum Corp..........................47, 51Oilsands Quest Inc. ............................................39OMV (Tunesien) Production GmbH....................41Ophir Energy.......................................................40Oriel Securities Ltd. ............................................43Oxbow Midstream LLC ......................................45Oxy USA .............................................................11

P

Pacific Rubiales Energy Corp.............................43Panhandle Oil and Gas Inc.................................34Parsley Energy LP ..............................................16

Patriot Resources Inc. ..................................16, 18PDC Energy ..................................................18, 34Penn West Exploration .......................................20Pentagon Optimization Services Inc. .................50Peregrine Midstream Partners LLC....................46Peregrine Petroleum LLC ...................................18Perpetual Energy Inc. .........................................20Petal Gas Storage LLC.......................................44Petro Prospects Marketing.................................15PetroChina..........................................................42PetroGrowth Advisors ........................................15Petrohawk Energy Corp. ....................................54Petroleum Development Corp. ...........................18Petroleum Strategies 1031 .................................15Petrus Resources Ltd. ........................................39Pickens Financial Group LLC.............................18Pioneer Natural Resources...................................1PLS Inc. ...........................................11, 13, 15, 18Porter Hedges LLP .............................................34PRE Resources Inc.............................................36Precision Drilling Corp........................................50Premier Oil Plc....................................................42Pro-Valve Services Inc. ......................................48Provident Energy Ltd..........................................50PT Medco Energi Internasional ..........................41

Q

Quinn's Oilfield Supply Ltd.................................49

R

Range Resources ...............................................11Raymond James & Associates Inc. ...........................................1, 13, 15, 18, 45

RBC Capital Markets..........................................43RBC Richardson Barr .........................................15RBC Rundle ........................................................15Rehoboth Oil & Gas LLC ....................................26Reliance Industries Ltd. ......................................41Renfro Energy LLC .............................................32Reservoir Resources Ltd. ...................................42Riverton Energy ..................................................26Riviera-Ensley Energy Advisors..........................15RockPile Energy Services LLC.....................47, 51Roger Mills Gas Gathering LLC..........................45Rosetta Resources ...............................................1Rosneft ...............................................................43Rothschild...........................................................43Royal Dutch Shell ...............................................42

S

Samedan Oil Corp. ...............................................6SandRidge Energy Corp. .................11, 13, 26, 33Santos Ltd. .........................................................42Saxon Oil Co. Ltd. ..............................................42Sayer Energy Advisors ...........................15, 20, 21Schlumberger ...............................................47, 51Scotia Capital .....................................................46Scotia Waterous.....................4, 11, 15, 19, 20, 46Select Energy Services LLC ...............................48Seneca-Upshur LLC ...........................................34Siam Co. .............................................................51Simmons & Co. International........................15, 50Simon Energy Associates LLC ........13, 15, 16, 18Simplex Energy Solutions...................................15Sinopec International Petroleum Exploration and Production Corp. ..................40

SM Energy Co. ...................................................32Smart Brothers LLC............................................15

Southern Natural Gas Company LLC.................45Southern Union...................................................47SPE Navigation I LLC .........................................37Standard Chartered Bank...................................15Starlight Investments LLC ..................................15Statoil ASA..........................................................36Stellar Energy Advisors Ltd. .........................15, 21Stifel, Nicolaus & Co. Inc....................................31Strategic American Oil Corp...............................37Summit Midstream Partners LLC.......................46Superior Energy Services Inc. ............................49Syncrude.............................................................40

T

Tenax Energy Inc................................................21Texas Capital Bank.............................................56Texas Oil and Minerals .......................................37Texoz E&P I & II Inc. ...........................................18The Dillard Anderson Group...............................15The Lease Auction House ..................................15The Oil & Gas Asset Clearinghouse.............10, 11, 13, 15, 16, 18, 19

Three Star Trucking Ltd......................................50Tracker Resource Development .........................54Trak Equipment Haulers .....................................49TransAtlantic Petroleum Ltd. ..............................42Transocean Ltd...................................................51Transocean Services AS ....................................51Treaty Energy Corp. ...........................................37Triangle Petroleum Corp. .............................47, 51Tristate Sabine LLC ...........................................44Tristone Capital ..................................................46TRZ Energy LLC .................................................54Tudor, Pickering, Holt & Co. ..................15, 34, 37Tuscany International Drilling Inc. ......................51

U

UBS.....................................................................47Unocal ...............................................................10US Enercorp Ltd.................................................19

V

Vada Group LP ...................................................19Vallares Plc .........................................................43Verdande Energy AS ..........................................50Victory Energy Corp. ..........................................38Vinson & Elkins LLP ...............................34, 37, 40Vision Energy Advisors .......................................15

W

Wachtell, Lipton, Rosen & Katz....................34, 46Weil Gotshal & Manges LLP...............................45Wells Fargo Securities LLC....................18, 36, 37West Canadian Midstream .................................45Wilson HTM ........................................................42Wood Roberts LLC.............................................50

X

XTO Energy.........................................................47Xtreme Oil & Gas Inc. .........................................38

Z

ZO Energy Corp..................................................19Zodiac Exploration Inc........................................19Zwolle Pipeline LLC............................................44

Eagle Ford Valuations Soar Skyward

“This is the place where all the excite-ment is happening,” said William Marko,managing director, energy investmentbanking, Jefferies & Co. Inc., speakingat Hart Energy’s DUG Eagle Ford con-ference in San Antonio. The sprawling

expanse of the Eagle Ford, its location in oil and gas country pop-ulated by sophisticated landowners, the friendly Texas regulatoryenvironment, and its existing services and midstream infrastruc-ture are all positives.

But, the overriding reason the Eagle Ford is so popular is thesterling economics operators can realize, specifically in thegas/condensate portion of the play.

“It’s the star of the show,” said Marko.Valuations have soared skyward as companies have fallen in

love with the play. To date, most deals have been in liquids-richassets, thanks to the unprecedented 20-to-1 ratio of oil price to gasprice. In early 2010, as the liquids play was just emerging, assetswere changing hands at values of $5,000 to $6,000 an acre. In ashort time, due to the higher oil prices, derisking of the play,strong well results and the availability of infrastructure, valueshave climbed dramatically.

The culmination is the $25,000-an-acre price Marathon Oil ispaying for Hilcorp’s 141,000 net acres, although that valuationcannot be ascribed across the broad trend. “That’s a very tightlyfocused, gas-liquids package right in the core area, with a long

track record,” said Marko.Activity does not look to slow: Eagle Ford deals to date involve

$4.2 billion in associated drilling carries, fully one-quarter of the$19 billion in drilling carries announced in U.S. shale play.

Marko predicted that Eagle Ford economics will also steadilyimprove. Initial potentials and estimated ultimate recoveriesshould grow as operators extend laterals and improve completions,while costs should decline as operators become more efficient anduse economy-of-scale techniques such as pad drilling.

The deal flow will also remain brisk, and the trend of rising val-uations will persist as long as oil prices and good well results sup-port it. Smaller, less well-capitalized companies are going to lookfor partners, and companies that have done deals will seek otherbolt-ons. “There are a lot of 20,000- to 30,000-acre packages thatpeople are thinking about selling, or taking on a partner, and a lotof activity is going on,” said Marko. “The Eagle Ford is still earlyin its ultimate life cycle.”

Truly, the Eagle Ford has been a wild ride from initial well an-nouncements to the first billion-dollar-deal to the Petrohawk/BHP Billiton announcement. From 2010 to present, Eagle Fordtransactions total $21.1 billion, said Jon Goddard, senior vice pres-ident, Macquarie Tristone, also speaking at DUG Eagle Ford.

The median price paid has been $9,700 per acre, but size doesmatter. “As packages increase in size, the dollars per acre also goup,” he said. Packages containing more than 100,000 net acreshave sold for nearly twice the per-acre price of those smaller than20,000 acres.

—Peggy Williams

AtClosing

Tracker’s surprise $1B buyer. In the A&D world,it pays to develop the largest contact list possible and when contem-plating the all-important exit, to identify likely buyers in advance. Butthen again, a surprise can show up out of left field. That was appar-ently the case when Hess Corp. acquired TRZ Energy LLC, a unitof EnCap Investments-backed Tracker Resource Development,last December for $1,050 million in cash.

“You never know who the buyer might be,” said former TrackerCFO Paul Wiesner, speaking at The Oil Council conference in NewYork in early October. “We had maybe 12 visitors to the data roomand a good amount of interest, but the buyer was a surprise to us.Hess was not even on our radar screen. Not a lot of buyers can pay $1billion. But we had put together a list.”

Wiesner said TRZ had not drilled all that many wells at the time,but it did provide some type curves. The key was that it provided a lotof other data, “from having monitored all that was going on aroundus, logs and so on from other people’s wells.”

Slow Gulf drives onshore unconventionals. According to DeutscheBank integrated-oil equity analyst Paul Sankey, “This is as good as itgets in the deepwater Gulf of Mexico,” referencing slow permitting.Again with news from Chevron Corp., execs there say current Gulfactivity is “the new normal” for the foreseeable future considering

post-Macondo regulations.If robust drilling is not revived and the only wildcatters left in the

billion-barrel Gulf region are mega-cap E&Ps, it is “another nail innon-OPEC (production’s) coffin if this is really peak activity in theGOM, with Chevron and other mega-caps as the only players. Thosecompanies will see fewer competitors.”

The beneficiary of stranded capex that super-majors planned forthe deepwater Gulf includes onshore Lower 48 unconventional-re-source plays. Murphy Oil, which he says is considering a Gulf exit,has already stated that it plans to increase spending in the Eagle Fordshale-liquids and -gas play in South Texas.

(Cont. from p. 1)

The Monthly M&A Report Card*YTD 2010 YTD 2011

# DealsValue($MM) # Deals

Value($MM)

U.S. 53 $21,898.9 69 $26,441.3

Canada 43 $17,557.4 21 $9,349.7

Non-North America 35 $25,434.5 56 $22,570.5

* Deals of US$20MM or more. YTD is through September 2011.Source: Scotia Waterous


Documents

A&D Watch 11