A&D Transactions Article - Marble Falls Acquisition


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Article referencing the DTE and Atlas Energy regarding the Marble Falls acquisition. Additionally, three of the counties that they will be focusing the drilling in, are counties which Petrichor owns property in as well (Jack, Palo Pinto and Clay).

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A&D Transactions Article - Marble Falls Acquisition

  1. 1. December 5, 2012 • Volume 23, No. 16 Transactions Serving the marketplace with news, analysis and business opportunitiesFreeport shocks with $20 billion McMoRan & Plains buy Resolute triples Permian Global miner Freeport-McMoRan Copper & Gold raised investor eyebrows production for $120 millionby jumping back into the US upstream oil and gas sector, announcing its reunion with Resolute Energy is adding 1,4181994 spin-off McMoRan Exploration and also picking up Plains E&P in a pair of boepd of Permian Basin production inacquisitions totaling $19.6 billion in cash, equity and debt. To secure the deals, Freeport a $120 million deal The producing and paid shareholders a stock price premium of 74% for McMoRan and 39% for undeveloped properties are primarily Plains in cash and equity. The located in Howard Co., Texas (about The international mining firm takes out deals came as a surprise as six miles away 2 respected public E&Ps in one fell swoop.McMoRan has been plagued by operational from an existingdelays at its landmark Davy Jones discovery and Plains just closed November 30 on a $6.1 Resolute property with significantbillion purchase of deepwater Gulf of Mexico assets from BP and Shell—fundamentally production) and Lea Co., New Mexicoshifting the E&P firm’s portfolio from primarily onshore to about two-thirds offshore. and hold proved reserves of 4.1 The two takeovers give Freeport a large oil and gas asset base focused on the MMboe (73% oil).deepwater Gulf of Mexico and deep shelf gas prospects. In total, Freeport is gettingreserves of 575 MMboe 1P (64% liquids) and 1,581 MMboe 3P (45% liquids) with an Assets have 4.1 MMboe 1P (37% PUD) vs. Resolute’s pre-buy 3.5 MMboe (66% PUD).additional 6.3 Bboe of near-term resource potential. Continues On Pg 18Atlas buys highly attractive Marble Falls for $255 million The deal greatly increases both Atlas Resource Partners announced its fifth and largest acquisition since the Resolute’s Permian production andshale-focused MLP was spun off from Atlas Energy in March—picking up gas reserves from 600 boepd (in Q3) andand electric utility DTE Energy’s remaining upstream assets for $255 million. 3.5 MMboe. The acquired reserves are The assets in the Fort Worth Basin primarily target the shallow, liquids- located 44% in Howard Co. and 36% in rich Marble Falls limestone Lea Co.’s Denton field with other fields Pays DTE $500/acre plus $6.30 accounting for the remaining 20%. on acreage offsetting Atlas’ QPi ppboe/g or $58,000 ppboe/d.existing Barnett shale position. Continues On Pg 5 Located in Jack, Erath, Palo Pinto and Clay Cos., Texas, the DTE propertiesare estimated by Atlas to hold proved reserves of 35 MMboe (24% oil, 33% NGLs, FEATURED DEALS43% gas) which will increase the company’s total by 30% to 150 MMboe while alsoboosting liquids to 26% of total reserves from 17%. DTE placed the assets’ proved SOUTH TEXAS PROJECT 2-Horizontal PDP’s. 14,200-Net Acres.reserves at 46.5 MMboe (16% oil, 36% NGLs, 48% gas) at the end of Q2. With 261 LAVACA COUNTYwells currently producing 3,800 boepd (and an average 4,000 boepd expected in CONNIFF & GRAHMANN UNITS PP2013), the 88,000-net-acre acquisition is 80% undeveloped, 100% operated and held Eagleville (Eagle Ford). ~14,000 Ft.with an average 99% WI. Continues On Pg 16 Austin Chalk, Edwards & Buda. SIGNIFICANT UPSIDE POTENTIAL 100% OPERATED WI; 75% NRI 136Vanguard picks up Montana production for $131 million Gross Prod: 23 BOPD & 678 MCFD BOED Vanguard Natural Resources agreed to acquire mature non-op assets within Net Prod: 17 BOPD & 509 MCFDMontanas Bakken trend for $131 million from an undisclosed company. Vanguard said PLS IS BUILDING DATA ROOMcurrent net production of 1,100 boepd will be immediately accretive to cash flow when the PP 1932DVdeal closes in December. However, the properties are subject to third-party preferential PERMIAN SALE PACKAGE rights that could reduce the ultimate size of the deal. Those preferential rights 27-PDP Wells. ~1,930 Net Acres. expire December 9. MIDLAND, ECTOR & ANDREWS CO. With the Montana purchase, 2H12 acquisitions total ~$900 million, with other buys in Mid-Con & Rockies. SPRABERRY (TREND AREA) PPVanguard has now spent ~$900 million Multipay: Wolfberry; Strawn, Wolfcamp ---Dean, Spraberry & Clearforkthis year acquiring assets—all of which occurred during H2. First it paid Antero 50-100% OPERATED WI; ~38-75% NRIResources $434.4 million in June for Woodford and Fayetteville assets holding proved Gross Prod: 573 BOPD & 1,284 MCFD 393reserves of ~420 Bcfe (82% gas, 58% developed) and producing ~76 MMcfed (91% Net Prod: 320 BOPD & 741 MCFD BOEDgas) on 71,300 net acres. Net Cash Flow: >$1,000,000/Mn Then in early November Vanguard announced a $335 million purchase of Piceance Substantial Drilling Upside Offers Due By December 10, 2012Basin assets in Colorado and Wind River Basin assets in Wyoming from Bill Barrett— CALL PLS FOR MORE INFOwith production of ~65 MMcfed (86% gas) and proved reserves of ~300 Bcfe (78% PP 1695DVgas, 80% developed) on 208,100 net acres. Continues On Pg 17 All Standard Disclaimers & Seller Rights Apply.
  2. 2. Transactions 2 December 5, 2012A&D News TPG-Axon ratchets up theAbraxas kicks off divestiture program in Texas & Montana heat on SandRidge Abraxas Petroleum announced it has entered a preliminary agreement to sell Hedge fund TPG-Axon Managementits 25% WI in the Nordheim project targeting the Eagle Ford for $19.1 million to an sent a second letter on November 30unnamed “large institutional buyer.” The assets being divested consist of 544 net to SandRidge. “An outright sale ofacres in DeWitt Co., Texas with net production of ~380 Mcfed (56% gas, 26% NGLs, the company is the most realistic path 26% oil). Abraxas will retain its rights to production, reserves and to restoring the upside in the overlying Edwards limestone across both its Nordheim shareholder value thatand Wagner lease blocks. Petrie Partners is acting as Abraxas’ advisor in the sale has been destroyed,” fund manager Dinakarexpected to close December 17. The asset was part of Abraxas’ Blue Eagle JV with Singh wrote. A second option includesRock Oil until the two companies agreed in August to dissolve the partnership. dramatic simplification and restructuring of In another non-core divestiture, the company. TPG-Axon has increased its Got $20 million in sale of Eagle Ford stake in SandRidge from 6.2% to 6.5%.Abraxas agreed to sell its ~10,000-net-acre acreage, $3 million for Montana land.Alberta Basin leasehold in Montana and The new letter notifies SandRidge oflease its mineral acreage in the area for combined proceeds of $2.85 million and 1.25- TPG-Axons intent to take the fight directly5.00% ORRI. Closing was scheduled for late November on the Alberta Basin properties to shareholders and conduct a shareholderwhich do not have any associated production or reserves. Abraxas will use the proceeds consent solicitation to amend the bylaws toto reduce the $134 million in debt owed under its $150 million credit facility. allow for a de-staggered board and remove “The Alberta Basin and potential Nordheim asset sales are the start of what we directors with or without cause, and tohope to be an active and profitable campaign of divesting non-core assets,” said allow for removal and replacement of theAbraxas chief Bob Watson. “We remain committed to enhancing shareholder return entire board of directors. TPG-Axon hasby de-levering the balance sheet and refocusing the portfolio on our highest returning retained MacKenzie Partners Inc. toand highest growth basins.” handle the shareholder solicitation. The November 30 letter followsInvestor group pushes for further asset sales— a November 8 initial letter expressing Unsatisfied with company efforts, Abraxas investor Clinton Group (which believes discontent with SandRidges performanceitself to be one of the top 10 stockholders) wrote a letter to the company’s board urging and management. On Novemberit to rapidly sell non-operated and undeveloped acreage which it believes could bring an 15, investor Mount Kellett Capitaladditional $160 million. Clinton Group blamed Abraxas’ “unfocused” approach for stock’s Management (owner of 4.5% of32% slide over the past six months during which peers have seen they’re stock rise ~30%. SandRidge) also sent a letter expressing “In our view, the Company is too concern over management and value. Clinton Group has launched shareholder small to effectively support such a highly Following TPG-Axon’s initial letter, campaigns against 9 firms in 5 years. diversified such a highly diversified SandRidge adopted a poison pill.model, and management must take steps to consolidate operations and exploit economiesof scale by focusing on development activities in a small number of key basins,” theinvestment group wrote, specifying Abraxas’ high-working interest, operated holdings ABOUT PLSin the Bakken, Eagle Ford and Permian. The PLS A&D Transactions covers news Clinton Group also complained about Abraxas’ lack of transparency with regard the active asset marketplace with mergers,to production guidance and drilling results—a claim the E&P firm apparently took divestitures, transaction, analyst comments,to heart. Four days later Abraxas announced Q4 guidance of 4,300-4,500 boepd and deals in play and deal metrics.2013 guidance of 4,900-5,200 boepd (up 21-28% YOY). The Q4 guidance reflects the To obtain additional PLS product details,Nordheim divestment as well as recent and expected Eagle Ford and Bakken well results. drill www.plsx.com/publications. PLS Inc. Suggested Further Abraxas Divestitures & Est. Values One Riverway, Ste 2200 Houston, Texas 77056 Est. Net Est. Total 713-650-1212 (Main) Region Formation Acres Est. $/Acre ($MM) 713-658-1922 (Facsimile) Powder River Basin Niobrara 17,800 $2,500 $44.50 To obtain additional listing info, contact us Western Alberta Pekisko 6,880 $2,500 $17.20 at 713-650-1212 or listingmgr@plsx.com Permian (Reeves) Strawn/Frio/Yates 2,900 $5,500 $15.95 with the listing code. To become a client call 713-650-1212. Permian (Other) Strawn/Frio/Yates 32,631 $2,500 $81.58 © Copyright 2012 by PLS, Inc. Total 60,211 $159.23 Any means of unauthorized reproduction is Source: Clinton Group Press Release prohibited by federal law and imposes fines up to $100,000 for violations.Find more on the A&D arena at www.plsx.com
  3. 3. Volume 23, No. 16 3 A&DA&D News QRE expects robust MLP deal pace to continue next yearUS shale gas holds appeal QR Energy CFO Cedric Burgher believes the entire upstream MLP industry is “at capacity” with the strong pace of deal activity likely to continue well into 2013.for Qatar Petroleum Burgher told Baird at a non-deal road show in Milwaukee that QRE continues to seek Qatar Petroleum is seriously non-auctioned deals with reliance upon its reputation for reliable closing and fairconsidering investing in US dealing among potential private sellers.unconventional gas, the state-owned Burgher further stressed QRE’s efforts to bring increased transparency to thefirm’s international chief said at an energy firm’s G&A structure which Baird called a recent source of investor unease. Baird conference in London. Nasser said it expects material growth for the company next year. al-Jaidah called the US shale gas boom “an opportunity for us” andsaid the company would be interested Sundance enters Eagle Ford via $105 million Texon mergerin partnering with major operators Australia-listed US unconventional player Sundance Energy agreed to acquirewith whom it already has partnerships Eagle Ford producer Texon Petroleum—also based in Australia—in an all-stock dealback home—naming ExxonMobil and valued at $104.7 million. The deal adds Eagle Ford exposure to Sundance’s existingShell specifically. portfolio covering the Williston Basin, DJ Basin, Mississippi Lime and Woodford. May seek JV with IOC that participates The acquired assets QPi $60,000 ppboe/d plus ppboe/g or Sundance pays $18 $9,900/acre. in projects back home, like Exxon or Shell. cover ~7,500 net acres (~79% WI) in Al-Jaidah said the US shale gas McMullen Co., Texas with estimated reserves of 1.7 MMboe 1P (NPV10 of ~$25boom will allow top global LNG exporter million), 5.2 MMboe 2P (NPV10 of ~$103 million) and 11.3 MMboe 3P (NPV10Qatar to redirect more supply to lucrative of $280 million) as of August 1. Five wells were producing 511 boepd at the end ofAsian markets. Investing in US gas Q3 with two more being drilled and potential for more than 100 additional wells. Allwould also secure control of additional leases are covered by 3D seismic. Texon’s non-Eagle Ford assets will beresources at a time when Australia is “The combined company will have spun off into new Cliff Foss-led firm Talon.projected to overtake Qatar as the No. 1 production, cash flow and reserve growthLNG supplier by 2017. potential with highly attractive risk-adjusted return potential,” said Sundance managing director Eric McCrady. “Importantly, the combined company will have the funding Qatar Petroleum & Exxon won DOE capacity to unlock significant value for shareholders.” approval to ship LNG from Gulf Coast. Sundance will issue Texon shareholders two common shares per Texon share. Based In early October Qatar Petroleum on the closing prices of both companies the day before the announcement (A$0.82 for(70% WI) and Exxon (30% WI) won Sundance and A$0.36 for Texon), the deal represents a ~14% premium for Texon. Uponfederal approval to export LNG to closing expected in 1Q13, Texon shareholders will own a ~31% stake in Sundance. Theycountries holding free-trade agreements will also retain Texon’s non-Eagle Ford exploration assets in South and East Texas via awith the US from a $10 billion export new entity called Talon Petroleum to be led by current Texon chief Clifford S. Foss Jr.plant to be built adjacent to the companies’Golden Pass LNG import terminal on the Post-Merger Sundance Asset PorfolioTexas Gulf Coast. If constructed, theproject could be Qatar’s first venture forselling LNG produced in another country. Selling made simple! PLS has marketed over $4.0 billion in assets since 1988. Hire PLS to execute your next negotiated sale, call 713-650-1212For general inquiries, e-mail info@plsx.com Source: Sundance November 13 Presentation via PLS docFinder www.plsx.com/finder
  4. 4. Transactions 4 December 5, 2012A&D News A&D Briefs Magnum becomes US Bakken operator in $30 million deal • Alberta Bakken explorer Big Sky Samson Resources agreed to sell interests in Williston Basin wells and lease Petroleum entered the Permian with theacreage—much of which include operatorship—in Divide Co., North Dakota to acquisition of an operated 90% WI (75%Magnum Hunter for $30 million cash. Magnum already owned an average 47% NRI) in a ~2,300-acre initial lease block WI in the properties and will now targeting the Wolfberry play in Deal brings Magnum’s total Williston the southern Midland Basin. The hold varied working interests up leasehold to ~180,000 net acres. seller and purchase price were to 100%. The deal also bring not disclosed. Big Sky estimates theMagnum sub Williston Hunter its first Bakken-Three Forks operatorship on the acreage in Schleicher Co., Texas to holdNorth Dakota side of the border, though the company already operates Tableland field 57 drilling locations at 40-acre spacingon the Saskatchewan side with stakes ranging 70-100%. The Divide Co. properties with D&C costs of $2.0-2.2 million and wellproduce 192 boepd and hold PDP reserves of 310,000 boe on 20,000 net acres— EURs of 120,000 boe. An initial vertical which brings Magnum’s total Williston test well is planned for 1Q13. QPi acre plus $70,000 ppboe/d.$828/ leasehold to ~180,000 net acres. Magnum Hunter paying • Toronto-based miner Canuc Williston Hunter president Glenn Resources acquired 15% WI (12% NRI) in aDawson called the North Dakota operatorship brought by this deal a “primary goal” 14,574-acre lease in north-central Texas forof the company and said initial drilling operations in the area will commence in an undisclosed price. Extensively drilled1Q13 using the same methods as are for shallow oil, the Walker Buckler Ranch Sale seems to mark full divestiture ofbeing applied at Tableland. lease in Shackleford Co. was recently Samson’s North Dakota asset package. For Samson, the deal appears to tested with a 4,552-ft well that intersectedrepresent the complete divestiture of a 140,000-net-acre Bakken-Three Forks the Caddo and Marble Falls formationspackage the company was marketing earlier this year. Continental Resources on and came online at 250 Mcfd—half ofNovember 7 announced the acquisition of 120,000 net acres in Divide and Williams estimated capacity. A second well wasCos. from $650 million; the remaining acreage in the package is equivalent to what scheduled to spud by November 30 in aMagnum is buying. Magnum expects to close the deal around December 20. more oil-prone area. Based on 40-acre spacing, many additional wells can be drilled on the property. • Eastern American Natural Gas Trust terminated its agreement to sell RISK? royalty net profit interests in 257 West Virginia gas wells to Softvest LP after trust sponsor and well operator Energy Corporation of America exercised its right of first refusal. Based on the November 2 closing price for Nymex In a year of potential uncertainty from crude, ECA will pay ~$5.9 million for • Global economic instability and weak demand • Fiscal Cliff the interests, which generate average • Dodd Frank legislation six-month net cash flow of ~$202,000. • Libyan production coming back online Eastern American will retain its royalty • Iranian nuclear build up net profit interests in ~340 Pennsylvania • Israeli/Iranian crisis gas wells. The sale is expected to • Uncertainty surrounding taxation and energy regulation close in January. • Potential changes in crude oil transportation and distribution • First Titan Corp. announced it is investigation its first production acquisition wells since the company’s IPO in September 2011. First Titan has We Can Help. thus far concentrated its upstream efforts Now is the time to mitigate volatility and protect your company from falling market prices. on exploration prospects with partners Give us a call to discuss the best hedging strategy for your business in 2013. including Occidental, Anadarko, Energen and Apache on the Gulf Coast, Coquest Structured Products (214) 219-7555 in Oklahoma and in the Permian. It is now evaluating the purchase of a stake in a well producing 4.2 MMcfed (29% oil) near Norman Young (281) 326-6666 I John Vassallo I Justin Joyce I Laura Hunter some of the company’s other projects.Find more on the A&D arena at www.plsx.com To learn more about PLS, call 713-650-1212
  5. 5. Volume 23, No. 16 5 A&DA&D Briefs Argent Trust adds oily East Texas assets for $120 million • Houston-based Halcón Resources Argent Energy Trust agreed to buy primarily oil producing fields in East Texasacquired an undisclosed amount of from Wapiti Energy for $120 million. The assets cover 14,990 net acres (97%leased acreage near Lordstown, Ohio operated) at Newton, Livingston and Double AA Wells North fields with estimated from an unidentified operator gross 2P reserves of 8.7 MMboe (77% oil) as of March 31 and September net production that, according to a company of ~1,705 boepd (69% oil, 9% NGLs) linked to LLS. Argent expects to maintain that statement, “did not have the production level into 2013 with minimal investment.desire or ability to develop the deeper The deal adds a significant liquids component to Argent’s overall asset base andformations.” Halcón said it intends to increases the company’s total production by more than 40%. The acquired assets are“spend hundreds of millions of dollars” expected to generate long-term sustainable cash flow to supplement Argent’s Austindrilling horizontal Utica wells after Chalk and Eagle Ford development program. The buyer estimates the deal to be ~21%modifying current leases. accretive to 2013 cash flow and production per unit and ~5% accretive to reserves per • Maverick Drilling & Exploration unit, with a reserve life of ~13 years.acquired 100% WI in leases covering 211acres in and flanking the Gillock oil field20 miles south of Houston in Galveston Resolute triples Permian production Continued From Pg 1Co., Texas for an undisclosed price. PLS believes the seller to be private Fort Worth-based Celero Energy II LLPThe seller was also undisclosed. Initial which operates the producing wells being bought in Denton field according to maps reserve estimates provided by Resolute. are expected next In Howard Co., Resolute is getting 1,310 non-op net acres (39% WI) producingyear following a pilot drilling program 377 boepd net in Q3 (~64% oil) from 23 wells. Upside exists from ~64 verticaltargeting the Frio sands. The Gillock Wolfberry locations and 66 recompletion opportunities. In New Mexico, the chiefacquisition is Maverick’s fourth project asset Resolute will acquire is the operated 1950s-vintagearea following the nearby Blue Ridge, Denton field, a conventional fractured carbonate reservoirNash and Boling salt domes which covering 2,767 net acres (96% WI, 100% HBP). Q3 net production from 39 wellsit is jointly developing with Gulf was 833 boepd (~89% oil). The upside here comes mainly from deepening existingSouth Holdings. wells and infill drilling from 40-acre to • Globalgroup Investment 20-acre spacing. Finally, Resolute will Howard Co., Texas bolt-on offers multi- pay horizontal Wolfcamp & Cline upside.Holdings sub Sovereign Oil Inc. agreed acquire a combination of conventionalto acquire a 120-acre lease in southeast and unconventional producing Permian properties covering 2,455 net acres (73%Kansas holding nine producing oil wells WI, 100% HBP) with Q3 net production of 208 boepd. Resolute will finance the deal and five wells scheduled for with debt and expects to close by December 21 with an effective date of August 1. secondary recovery work from “We plan to realize the growth potential from these new assets, which [are] largely Ad Astra Oil. Sovereign will self-funded, with a drilling program over the next four to five years,” said Resoluteassume ownership in the producing chief Nicholas J. Sutton. “The Permian Basin is an area we have long targeted aswells in Miami Co. upon closing an important growth engine for the company, and this most recent expansion furtherscheduled for December 15 and then strengthens our visible growth potential in this multi-pay, multi-play oil-prone region.”begin rework on the five additionalwells at an estimated cost of $10,000/well for an added annual revenue Resolutes PDP-Weighted Permian Oil Acquisitionstream of ~$250,000. • 3Q12 average production: 1,418 net Boe/d VES ES ES COCHRAN COCHRAN COCHRAN COCHRAN COCHRAN HOCKLEY HOCKLEY HOCKLEY HOCKLEY HOCKLEY HOCKLEY LUBBOCK LUBBOCK LUBBOCK LUBBOCK LUBBOCK CROSBY CROSBY CROSBY CROSBY CROSBY CROSBY DICKENS DICKENS DICKENS DICKENS DICKENS DICKENS • Bakken producer Stratex Oil & ES ES VES • Estimated proved reserves of 4.1 million Boe GladiolaGas Holdings acquired non-op interests Northwest • 73% oil, 63% proved developed & 63% operated Shelf Denton YOAKUM YOAKUM YOAKUM YOAKUM YOAKUM TERRY TERRY TERRY TERRY LYNN LYNN LYNN LYNN GARZA GARZA GARZA GARZA GARZA GARZA KENT KENT KENT KENT KENT KENTin six producing wells (ranging 0.14- Block A-0007 Eastern • 9,654 gross (6,532 net) acres across several fields Knowles Shelf5.00% WI), three wells being drilled Dupree LEA LEA LEA San Simon LEA LEA LEA Seminole GAINES DAWSON DAWSON DAWSON DAWSON DAWSON BORDEN BORDEN BORDEN BORDEN BORDEN BORDEN SCURRY SCURRY SCURRY SCURRY SCURRY SCURRYand several permitted well locations • 90% HBP Channel W & NW Jo-Mill DY DY DY DY DY DY Midland Luther SEin Stark, Williams and Sheridan Cos., • Conventional & unconventional assets with ANDREWS ANDREWS ANDREWS Basin MARTIN MARTIN MARTIN HOWARD HOWARD HOWARD Enterprise MITCHELL MITCHELL MITCHELL identified upside development projects ANDREWS ANDREWS MARTIN MARTIN MARTIN HOWARD HOWARD HOWARD MITCHELL MITCHELL MITCHELLNorth Dakota. Stratex is paying the Central Basin Howard Coundisclosed seller $250,000 cash plus • Howard–Wolfberry play (non-op) – Platform 44% of reserves LOVING LOVING LOVING STERLING STERLING STERLING LOVING LOVING LOVING ECTOR ECTOR ECTOR ECTOR ECTOR ECTOR MIDLAND MIDLAND MIDLAND MIDLAND MIDLAND GLASSCOCK STERLING GLASSCOCK STERLING GLASSCOCK STERLING GLASSCOCK GLASSCOCK GLASSCOCK C C250,000 common shares for a total WINKLER WINKLER WINKLER WINKLER WINKLER WINKLERvalue of $600,000 based on the prior- • Denton–conventional field in N N N N N N Vermejo E WARD WARD WARD WARD WARD WARD War-Wink Lea County, NM with secondary recovery CRANE CRANE CRANE CRANE CRANEday close of $1.40/share. Operators upside –36% of reserves REEVES REEVES REEVES UPTON UPTON UPTON UPTON UPTON REAGAN REAGAN REAGAN REAGAN REAGAN REAGAN IRION IRION IRION IRION IRION IRION T T T Ton the 3,850 acres (on which Stratex REEVES REEVES REEVES Delaware • Other fields –20% of reservesacquired 2.3% WI) are Whiting, XTO Basin Ozona SCHL SCHL SCH SCH SCHL SCHLand Continental. PECOS PECOS PECOS PECOS PECOS PECOS Acquired properties Arch EFF DAVIS EFF DAVIS EFF DAVIS EFF DAVIS EFF DAVIS EFF DAVIS CROCKETT CROCKETT (red outline denotes key fields) Sheffield CROCKETT CROCKETT CROCKETT Channel SU SU SU SU SU SUFor general inquiries, e-mail info@plsx.com Source: Resolute December 3 Presentation via PLS docFinder www.plsx.com/finder
  6. 6. Transactions 6 December 5, 2012A&D News Whats On the Market Briefs Shoreline buys Wattenberg royalty stakes for $12.5 million • Australian-listed Incremental Oil Alberta-focused Shoreline Energy stepped across the border to acquire non-op & Gas has enlisted Envoi’s assistance inWattenberg field royalty interests in Colorado’s DJ Basin for $12.5 million from finding a partner to drill its Raven Passan undisclosed private US-based company. The interests range up to 1.45% and exploration prospect (100% WI) in Kern are located on more than 150 land tracks totaling over 22,000 acres Co., California. IOG is offering a majority interest—complete with operatorship predominantly in Weld County. The primary targets are the Niobrara if desired—in exchange for an equity and Codell formations which Expects assets to deliver $4.6 million contribution to past costs and a one-wellare already penetrated by more than 20 cash flow in first year—over 30% IRR. commitment (~$1.3 million gross) to testhorizontal wells on the royalty acreage the shallow Cretaceous and penetratewith nearly 60 additional locations permitted and scheduled for drilling during the deeper Cretaceous reservoir. Learn1H13. Shoreline estimates the assets to hold an additional 400-700 drilling locations. more from PLS Listing No. DV 1828 orBesides the horizontal potential, the deal brings royalty revenue from 300 low-rate contact the broker.producing vertical oil wells. • Mantle Resources has engaged Shoreline projects average cash flow of $375,000/month from the properties next EnergyNet to sell a package of 29year with a 2013 exit of $750,000/month—providing what CEO Trevor Folk called operated wells located in three Texas“the highest return of any project we have evaluated whether in Canada or the US.” counties and in Allen Parish, Louisiana. NetThe deal closed November 20. proved reserves are ~337,000 boe (77% oil) with estimated PV-10 of $9.56 million.Kabe Exploration enters Mississippian with 1,500-acre buy Gross oil production from six wells was 101 San Diego-based Kabe Exploration agreed to buy at least 1,500 acres in Cowley bopd for the last six months and averageCo., Kansas from an unnamed seller, marking the new company’s first step in a 12-month cash flow was $173,882/month.proposed development of up to 50 horizontal Mississippi Lime wells. The company Refugio Co. upside includes 12 proved andsaid it plans to expand its position in the 17 probable and possible behind-pipe Newly launched E&P firm plans toplay by as much as 15,000 acres. zones and one PUD location. Request expand its position by 15,000 acres. “Kabe’s field acquisitions were PLS Listing No. PP1801DV or contact theselected due to the tremendous potential of developing substantial oil and natural gas broker for more information.reserves in a regional area which rivals any of the US oil shale plays,” said Kabe chief • Texas Tech Foundation retainedErik Ulsteen. “Results of Mississippian Lime horizontally drilled wells demonstrate EnergyNet to sell its 2.5% ORRI in thethe potential for 300,000-400,000 boe per well at relatively shallow drilling depths of SandRidge-operated South Fuhrman~4,000 ft, with high oil quality of 35-38°API gravity.” Kabe’s acquired acreage is east Mascho unit located in sections 5, 8, 9of the generally accepted “sweet spot” of the play. and 15-17 of University School Lands Survey Block 10. Gross production isLime Rock drops $21 million in Oklahoma reserves to MLP 758 boepd (85% oil). For more, check Upstream MLP LRR Energy is acquiring its second drop-down from sponsor out PLS Listing No. RR 1856PP or get inLime Rock Resources, this time getting mature oil-weighted producing assets in touch with the agent.Oklahoma for $21 million. In June the companies closed a $67 million transfer of • Wildhorse Resources hiredconventional Permian properties in Texas and New Mexico—also oil-weighted. EnergyNet to divest some of its interests The Oklahoma properties have estimated net proved reserves of 1.99 MMboe in operated properties at Lisbon field in(55% oil and NGLs, 53% PDP) as of October 1, with current production of 350 boepd Claiborne Parish, Louisiana. Wildhorse from 124 wells (32 operated) for an implied reserve life of 15.6 years. is selling stakes of ~32-100% WI in Annual maintenance capex of nine wells including five producing $1.0 million is anticipated to QPi ppboe/g or $60,000sponsor $11 LRR Energy pays ppboe/d. with 12-month average net income of $82,028/month. Request PLS Listinghold production of 270 boepd flat through No. PP 1859 for details.2015. According to LRR Energy co-CEO Eric Mullins, the acquisition in Dewey andCuster Cos. have a large inventory of low-risk development opportunities. “This transaction fits our operational strategy of acquiring long life properties andis a bolt-on to one of our core areas where we have extensive operating expertise and Increase deal scale,” said co-chief Charlie Adcock. flow & business The purchase price is subject to adjustment based in part on the value at closing opportunities.(expected around January 3) of hedge contracts included in the deal, which arecurrently valued at ~$1.7 million. Tudor, Pickering Holt & Co. and Bracewell & Subscribe to PLS! For available options,Giuliani LLP advised LRR Energy on the deal, which the MLP plans to finance with e-mail memberservices@plsx.comborrowings under its existing revolving credit facility.Find more on the A&D arena at www.plsx.com To learn more about PLS, call 713-650-1212
  7. 7. Volume 23, No. 16 7 A&DWhats On the Market Magnum Hunter markets Eagle Ford, seeks Utica JVChesapeake markets gas Topping Magnum Hunter Resources’ list of options to “harvest a lot of the potential” of its asset base is selling the company’s Eagle Ford acreage, companyproperty in North Texas management said in a Q3 conference call. Magnum has hired an undisclosed Chesapeake has hired Meagher investment bank to shop its 26,000-acre Eagle Ford position concentrated in GonzalesEnergy Advisors to help divest yet and Lavaca Cos., Texas. The company has already shown the assets to more than 15another Texas property, this one in companies including other leaseholders in the counties. However, chairman Grayson Co. on the and CEO Gary Evans told Oil & Gas Financial Journal that Magnum is under Oklahoma border. The no duress to sell its Eagle Ford ~3,235-net-acre property At $25,000 per Eagle Ford acre, acreage. “It’s just that we see our upside(100% HBP, 84% NRI) had net Magnum’s 26,000 acres would net $650MM. [in the Eagle Ford] as being defined,”production of ~1,070 Mcfed (23% oil) Evans explained. “We’ve done about as well as we can do in this play … [It] is a well-during the 12 months ending July 31 oiled machine, and it might be better suited for someone with a lower cost of capital.”from 14 wells (12 operated, 81% WI, When asked during the conference call about value of the Eagle Ford acreage,68% NRI). Net operating cash flow Evans confirmed “that we’re in that range” of $20,000-$30,000/acre. At the midpointduring that period was $165,121/month. this would raise $650 million—allowing According to the Meagher offering Magnum excited by drilling results of Magnum to pare debt, fund capex andmemorandum, producing zones are the Utica neighbors Anadarko & Gulfport. possibly redeem some preferred shares.Oil Creek, Dornick Hills, Viola and Davis. Although Magnum Hunter allocated 40% of its 2012 drilling budget to the EagleUpside potential exists through infill drilling Ford with solid production and reserves results, the company’s two other core plays Produces 1.07 MMcfed with upside from have a lower cost of capital and larger reserve bases. At 26,000 acres, the Eagle Ford infill drilling, waterflood & recompletions. is Magnum’s smallest holding and accounts for only 15% of reserves. The company’s ~467,000 net acres in the Appalachian Basin account for 45% of reserves while itsopportunities, recompletions in existing ~138,000 net Williston acres hold the remaining 40% of reserves.wells, waterflood potential over multiple Meanwhile, Magnum is also discussing a JV to cash in on its Utica potential withzones, and exploration into deeper horizons several companies including foreign partners. The company said a deal could beof the Woodford shale and Viola lime. announced in January or February. Its Utica holdings are in Washington, Noble, and Offers are due December 14 with an Monroe Cos., Ohio and in Tyler Co., West Virginia.effective date of December 1 and closingby February 15. For more details, askfor PLS Listing No. PP 1864DV or Hurricane-impaired GOM royalty interests on the blockcontact the agent. As managing general partner of Tel Offshore Trust, Chevron has retained EnergyNet to market and auction the partnership’s ORRI in shallow-water Gulf of Mexico properties. The ORRI is equivalent to 80% of a 25% net profit interest inWestern offers royalty the Ship Shoal 182 and 183, South Timbalier 36 and 37, and Eugene Island 339 andstakes in 100% stock sale 342 blocks. Although the entire royalty is up for sale, the trust partnership Dallas-based Western Petroleum reserves the right to retain aResources engaged EnergyNet to sell all ORRI equals 80% of a 25% net profit portion of its ORRI.of the company’s assets in a 100% stock interest in six shallow-water blocks. Damage inflicted by Hurricane Ike indivestment. Over 30 years the company 2008 shut down production at Tel Offshore’s two most significant royalty properties.has built a diversified portfolio of non-op Ike destroyed Eugene Island 339 platforms and wells—and Chevron is still pluggingORRI and royalty interests in 118 wells in and abandoning wells and cleaning debris with completion expected by year’s end.Texas, Oklahoma, Louisiana, Kansas and Chevron has inked a participation agreement with an unnamed company to fundMississippi with an average ~29 MMcfed redevelopment of the EI-339 platformsgross production (36% oil). That total Ike destroyed Eugene Island 339; Chevron partner will earn up to 65% WI to redevelop. and wells for up to 65% of Chevron’sdoesn’t include five new wells producing working interest.288 boepd (75% oil). Another key Tel Offshore property, Ship Shoal 182 and 183, was also impacted Western has three wells in completion by Ike mainly through the 10-month shutdown of a third-party gas pipeline.stages and funding in place to drill four Production was also shut in for several weeks in 2010 due to a leak in an oil pipelinewells through January. Average net cash and tank replacement.flow and net revenue over the first nine Tel already sold 20% of its ORRI to RNR Production, Land & Cattle in Octobermonths of 2012 were $33,985/month and 2011 for net proceeds of ~$1.49 million. The trust instructed Chevron to sell more of$52,391/month. For further information the ORRI after RNR declined to exercise its option to purchase an additional 5.0%request PLS Listing No. RR 1861PP or royalty interest. The auction is set for December 12.contact the broker.For general inquiries, e-mail info@plsx.com Access PLS’ A&D Transactions archive for previous A&D news
  8. 8. Transactions 8 December 5, 2012BHP builds up Permian & Eagle Ford presence BHP Billiton has been picking up small Permian bolt-on assets and is negotiating EAST TEXASlarger packages up to 25,000 acres in the heart of its operations, says the head of the CHEROKEE CO., TX PROPERTYAustralian mining giant’s oil and gas division. Since its August 2011 acquisition of US 2,700-HBP Acres.unconventional player Petrohawk the company has increased its Permian position 16% COON CREEK FIELD from 378,000 to 440,000 acres Cretaceous, Rodessa Hill, Pettit-- PP Has added small packages since buying -- & Travis Peak Sands according to a September Petrohawk, now looking at bigger prizes. Test Depth: 9,000 Ft. investor presentation. BHP is Total Production: 8.299 BCFG & 152 MBCalso looking to grow its Eagle Ford position when acreage becomes available—with Total Reserves: 13.0 BCFG & 203 MBC CRETACEOUSparticular interest in adding leasehold around its Black Hawk and Hawkville fields. Dry Hole Cost: $500,000 CONTACT SELLER FOR MORE INFO Petroleum chief executive Mike Yeager told Upstream that the company thus far has PP 1177DVbeen mostly adding assets of 1,000-5,000 acres in the Permian. In the Eagle Ford it hasbeen making small deals to consolidate its position and buying out minor stakeholders. SAN AUGUSTINE CO., TX PROPERTY The Upstream article suggested one of the larger Permian deals BHP might be looking 1-Active Well. 624-Net Acres. HBP at is a 22,000-acre Midland Basin package REBECCA JAMES LIME FIELD J Cleo’s Reeves Co., Texas package in being marketed by J Cleo Thompson. The OIL & LIQUIDS RICH PLAY PP heart of Wolfcamp is a likely BHP target. New James Lime. 13,375 Ft. (TD) property in Wolfcamp-prospective Reeves Wells Currently Being Drilled on AdjacentCo. produces 5,000 boepd and is valued by PLS at over $500 million. J Cleo is the -- Lands Targeting James Lime Liquids.county’s most active driller at 10 rigs as of November 30 according to Smith Bits with BHP ~97% OPERATED WI; 74.5% NRI 120and Petrohawk collectively coming in second at five rigs. Bids were due in mid-October. Gross Prod: 7.0 BOPD & 120 MCFD MCFD Total AFE Cost: ~$7,000,000BHP not going after Yates, & other bidders rejected— CONTACT GENERATOR FOR DETAILS One Permian prize Yeager said BHP is not seeking is privately held Yates Petroleum PP 1927which has retained JP Morgan Chase to find a buyer for the company. Yates’ Permianoperations are focused in New Mexico where the company is a top-10 producer for both NORTH LOUISIANAoil and gas. However, Yeager said BHP is ill-equipped to hold Yates’ sizeable acreage CLAIBORNE PH, LA PROPERTYposition. “If we bought Yates we would have to put 10 rigs on it because it would have 5-Active Wells. 4-NonProducing.rig obligations and we don’t have the people to do it,” Yeager said. LISBON FIELD PP ~32%-100% OPERATED WI FOR SALE Yates has already rejected offers from Occidental and Concho Resources, the Avg Production: 44 BOPD & 580 MCFD 580Albuquerque Journal reported. The Yates family’s demand that the buyer maintain a Avg Net Income: $82,028/Month MCFDlarge presence in Artesia, N.M. where it is headquartered and their structure of the deal CONTACT AGENT FOR UPDATEas a stock sale may have suppressed the offer prices. PP 1859 ALABAMA petrocap.com | feplp.com TUSCALOOSA CO., AL PROPERTY Capital that Preserves 500-Wells (CBM). ~43,000-Net Acres. BLACK WARRIOR BASIN Your Independence ROBINSON’S BEND FIELD PP 100% OPERATED WI; 75% NRI We invest as your working interest Daily Production: 16,000 MCFD Average Cash Flow: $1,000,000/Month partner, not your boss. Total Proved Reserves: 280.4 BCF 16,000 Total Proved Rsrvs (PV8): $85,600,000 MCFD We are looking for acquisition and AGENT IS ASSEMBLING PACKAGE DATA development opportunities with current PP 8999L production AND drilling upside. If your project needs up to $40 million in capital call us at 214-871-7967. No Commission Get Listed! Dick Rinehart | Doug Evans | John Sears David Hopson | Alec Neville | Lane Britain For the past 20 year, PLS has been the central access point for buyers & sellers. List with PLS today! It works! For more information on listing, e-mail Falcon E&P Opportunities Fund, L.P. listingmgr@plsx.com To learn more about PLS, call 713-650-1212