Silvermere Shareholders Approve Mustang Interest Purchase

- Silvermere Shareholders Approve Mustang Interest Purchase

Wednesday, August 31, 2011
Rigzone Staff
by Karen Boman

Silvermere shares began trading on Aug. 31 in London after shareholders approved the acquisition of interest in the Mustang asset in the Gulf of Mexico and other resolutions.

The company announced in early August that it had conditionally risen £1.52 million via a placing at 25p her share, the proceeds of which would provide working capital for the Group and pay the costs associated with acquiring interest in the Mustang Island 818-L field and admission to trading on AIM, the London Stock Exchange's international market for smaller growing companies.

The development of the Mustang Island 818-L field, located in Kleberg County offshore Texas in the U.S. Gulf, is a field rehabilitation project targeting bypassed or only partially produced gas-condensate.

The field was drilled and produced by Samedan Oil Corp. in the 1980s, based on 2-D seismic mapping. From January 1980 to February 1995, the field had produced a total of 138.9 Bcf of gas. This includes production from the D1 and D2 wells, which are outside of the seismic area and therefore not taken into consideration for this evaluation. Total historic production from the wells within the seismic coverage is 125.6 Bcf.

At abandonment, some 25 wells had been drilled targeting several stacked clastic reservoir sands grouped as the A, B, G, and I sands. The I sands, which lie at depths of more than 11,000 feet, are the primary targets for the initial phases of development of wells within the Mustang asset.

The company is recommending three new wells in the outline field development plan to test and produce remaining gas, based on the fact that each of the three fault blocks mapped has a structural high that has not been drilled, supporting the idea of remaining attic gas being present.

Drilling and tie-in costs have been estimated between US $5 million and US $8 million, including the costs of connecting the wells into the existing infrastructure which is itself connected to the Six Pigs processing facility onshore on Padre Island, Texas. The infrastructure, including mini platform, flowlines, main 20-inch export line to Six Pigs and the Six Pigs processing facility, is believed to be in good order.

The Mustang asset comprises a 33.3 percent working interest and a 20.83 percent net entitlement interest (after deductions of overriding royalties) in the Mustang license area.

Silvermere, previously known as Chalkwell Investments Plc, initiated discussions last year with Core Oil and Gas Inc. which had agreed to terms to acquire the Mustang asset. Since November 2010, the company has made a series of loans to Core, which now total £2.595 million, which Core has used principally to finance its share of the costs for the re-entering and subsequent testing of the I-1 well, which lies within the Mustang license area, and to pay the consideration due from Core for the Mustang asset. On April 29, the company entered into the option agreement with Core, superseding a previous option between the parties.

Shareholders also approved a new board of directors for the company. Under the new board's guidance, Silvermere will pursue a strategy of acquiring a portfolio of U.S. oil and gas license interests onshore and in shallow offshore water, characterized by relatively low risk and low cost with the potential for near term production. The company said in a statement that the acquisition will provide a good base from which to develop this strategy.

"We are very pleased to be bringing the company back to the market with a promising and attractive asset," said Chief Executive Andy Morrison earlier this month. "The area surrounding the Mustang Asset has a proven producing history and continues to have significant potential."

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NRG Energy Inc. To Purchase Energy Plus

- NRG Energy Inc. To Purchase Energy Plus



Aug 16, 2011

NRG Energy Inc. (NYSE:NRG) plans to purchase a Philadelphia retail electricity and natural-gas provider for $190 million in cash.

Based in Princeton, New Jersey NRG announced Tuesday that acquiring Energy Plus Holdings LLC would give the company an opportunity to widen its retail business in the Northeast.

The deal requires regulatory approvals from the Justice Department and the Federal Energy Regulatory Commission. It is expected to close in October.

NRG Energy (NYSE:NRG) has a potential upside of 21.1% based on a current price of $22.57 and an average consensus analyst price target of $27.33.

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Vanguard to Purchase Remaining Encore Assets for $998MM

- Vanguard to Purchase Remaining Encore Assets for $998MM

Monday, July 11, 2011
Encore Energy Partners LP

Vanguard Natural Resources and Encore Energy announced the execution of a definitive agreement that would result in a merger whereby Encore would become a wholly-owned subsidiary of Vanguard's operating company, Vanguard Natural Gas, LLC, through a unit-for-unit exchange. Under the terms of the definitive agreement, Encore's public unitholders would receive 0.75 Vanguard common units in exchange for each Encore common unit they own at closing, representing a premium of approximately 4.4% based on the closing prices of Encore common units and Vanguard common units on March 24, 2011, the last trading day before Vanguard announced its initial proposal to acquire all of the common units of Encore owned by the public and an approximately 51% premium over the December 31, 2010 purchase price paid to Denbury for 45.6% of the Encore common units. The transaction would result in approximately 18.4 million additional common units being issued by Vanguard. The deal is valued at an approx. $998 million. The terms of the definitive agreement were unanimously approved by the members of the Encore Conflicts Committee, who negotiated the terms on behalf of Encore and is comprised solely of independent directors. In addition, Jefferies & Company, Inc., has issued a fairness opinion to the Encore Conflicts Committee stating that they believe the exchange ratio is fair, from a financial point of view, to the unaffiliated unitholders of Encore. The members of the Vanguard Conflicts Committee, which is also comprised solely of independent directors, negotiated the terms on behalf of Vanguard and also voted unanimously in favor of the merger. In addition, RBC Capital Markets has issued a fairness opinion to the Vanguard Conflicts Committee stating that they believe the exchange ratio is fair, from a financial point of view, to Vanguard.

"We are pleased to announce our agreement to combine these two companies in a transaction that would simplify our commercial activities and organizational structure as well as lower our overall cost of capital," said Scott W. Smith, president and chief executive officer of Vanguard.

The merger is expected to provide benefits to current Vanguard unitholders by, among other things:

• streamlining Vanguard's organizational structure, which enhances transparency for investors, while also reducing operating complexity and the company's overall cost of capital;
• creating an enterprise of significantly increased size and scale, improved overall operating reach and greater cash flow stability;
• realizing meaningful cost synergies primarily from eliminating public company expenses associated with Encore;
• expanding geographic reach and diversification from an operational and employee perspective, which should improve Vanguard's ability to compete more aggressively for future acquisitions; and
• maintaining Vanguard's strong credit profile and liquidity position by completing the merger on the basis of an all-equity, unit-for-unit exchange.

"We fully support the combination of these two successful companies," said John Jackson, chairman of the Encore Conflicts Committee. "We believe Encore's public unitholders will benefit from Vanguard's future growth potential."

The merger is expected to benefit Encore's public unitholders by, among other things:

• providing Encore unitholders with a premium of approximately 4.4% through the exchange of 0.75 Vanguard common units for each Encore common unit based on the closing prices of Encore and Vanguard common units on March 24, 2011, the last trading day before Vanguard announced its initial proposal to acquire all of the common units of Encore owned by the public and an approximately 51% premium over the December 31, 2010 purchase price Vanguard paid to Denbury Resources, Inc. for 45.6% of the Encore common units;
• eliminating the administrative services agreement, which currently requires Encore to pay an annual fee of approximately $6.5 million to its general partner in connection with providing certain administrative services;
• providing Encore unitholders with ownership in a much larger and more diverse entity with an enterprise value of approximately $2.0 billion that has a stronger balance sheet and is capable of pursuing significantly larger and more meaningful growth opportunities; and
• providing Encore unitholders with an opportunity to benefit from potential future unit price appreciation and increased cash distributions through ownership of Vanguard common units.

The completion of the merger is subject to approval by a majority of the outstanding Encore common units. Vanguard's operating company, Vanguard Natural Gas, LLC, already owns Encore's general partner and approximately 45.6% of the Encore outstanding common units and has also executed the definitive agreement between Vanguard and Encore. The completion of the merger is also subject to the approval of the issuance of additional Vanguard common units in connection with the merger by the affirmative vote of a majority of the votes cast by Vanguard unitholders. Completion of the merger, assuming the requisite unitholder votes are obtained and subject to other customary terms and conditions, is expected to occur during the fourth quarter of 2011. Distributions will continue to be paid by each company pursuant to their own cash distribution policies while the merger is pending.

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FET Expands Capabilities with SVP Products Purchase

- FET Expands Capabilities with SVP Products Purchase

Friday, July 08, 2011
Forum Energy Technologies Inc.

Forum Energy Technologies (FET) announced the acquisition of SVP Products. The company sells Forum's Wood Flowline and Phoinix product lines, including swivels, plug valves, relief valves, chokes, pup joints and manifold trailers from three facilities in North, East and West Texas. SVP also performs critical repair and recertification services of these products from its locations as well as from its fleet of mobile units. SVP's customer relationships and service capabilities strengthen Forum's Production and Infrastructure division, which provides completion products, engineered process and production systems, measurement and monitoring systems, construction and field services, and a full range of valve and other flow control products. Terms of the transaction were not disclosed.

Cris Gaut, FET's chairman and chief executive officer, explained the importance of the acquisition. "SVP significantly expands the sales channel and service capabilities for our completion products offering and complements our Wood Flowline and Phoinix completion product offerings. SVP has an excellent reputation in the marketplace for customer service, knowledge and dependability. We are very pleased to partner with Jay Nabors, SVP's founder, and the team at SVP. Our goal is to help expand SVP's business to serve clients across the North American shale plays."

Jay Nabors, President of SVP, commented on becoming part of Forum. "Forum is building a great company with a compelling offering to our pressure pumping customers. We are pleased to become part of an energetic, growing organization."

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Encore, Vanguard Purchase Permian Basin Assets

- Encore, Vanguard Purchase Permian Basin Assets

Thursday, June 23, 2011
Encore Energy Partners LP

Encore has entered into a definitive agreement to acquire an undivided fifty percent interest in producing oil and gas assets in the Permian Basin of West Texas for a net purchase price of $42.5 million from a private seller. The other fifty percent interest in the assets is being acquired by Vanguard Natural Resources for $42.5 . Vanguard is the general partner of ENP. The interests to be acquired by ENP have estimated total net proved reserves of 2.74 million barrels of oil equivalent, of which approximately 70% are oil and natural gas liquids reserves. The properties being acquired are 100% proved developed. At closing of this transaction, net production to ENP attributable to the assets being acquired should be approximately 500 Boe/d. The effective date of the acquisition is May 1, 2011 and the Company anticipates closing this acquisition on or before August 1, 2011.

Scott W. Smith, President and Chief Executive Officer, commented, "This acquisition is an excellent MLP type asset and is a great addition to our Permian Basin portfolio. This acquisition was done jointly with Vanguard Natural Resources, LLC pursuant to the Business Opportunity Policy in place between the two companies. These assets are expected to generate very stable cash flows and production for the next several years. Upon execution of the purchase and sale agreement for this transaction, we entered into hedges covering a substantial portion of the estimated production from this acquisition for the next several years."

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TransAtlantic Finalizes TBNG Purchase

- TransAtlantic Finalizes TBNG Purchase

Wednesday, June 08, 2011
TransAtlantic Petroleum Ltd.

TransAtlantic has closed on the previously announced acquisition of Thrace Basin Natural Gas (Turkiye) Corporation ("TBNG"). TransAtlantic Worldwide, Ltd., a wholly owned subsidiary of the Company, acquired 100% of the shares of TBNG from Mustafa Mehmet Corporation ("MMC") in exchange for 18,500,000 of the Company's common shares, the transfer of certain overriding royalty interests (ranging from 1.0% to 2.5% of the working interests owned by TBNG on specified exploration licenses) to an affiliate of MMC and $10.0 million in cash, which was paid in November 2010 as an option fee and applied to the purchase price at closing.

With the acquisition, the Company has effectively acquired 41.5% of the total production (approximately 10.0 million cubic feet of natural gas per day, before royalty) and acreage of TBNG and Pinnacle Turkey, Inc. ("PTI") as well as all of the oilfield service assets of TBNG. The acquisition of TBNG closed contemporaneously with the closing of the purchase of PTI by Pinnacle Turkey Holding Company, LLC ("Pinnacle") and the purchase of another affiliate of MMC by Valeura Energy, Inc. ("Valeura"). Valeura and Pinnacle have effectively acquired 40.0% and 18.5%, respectively, of the production, acreage, and other assets held by TBNG and PTI.

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Petsec Enters Sale, Purchase Agreement with Horizon

- Petsec Enters Sale, Purchase Agreement with Horizon

Friday, June 03, 2011
Petsec Energy Ltd.

Petsec Energy has agreed to sell 100% of the company's wholly owned subsidiary, Petsec Petroleum LLC, which holds Petsec Energy's entire interest (25% working interest) in Block 22/12, Beibu Gulf, China.

Petsec Energy has entered into a Sale and Purchase Agreement with Horizon for a A $38 million cash payment, plus options with a 3 year term and exercise price of 37 cents/share over 15 million Horizon Oil.

The sale –which is expected to be completed during June 2011 –follows previous advice from Petsec Energy that it had decided to put the China interests on the market and to use sale proceeds to fund a significant expansion of the Company's USA petroleum operations.

Petsec's Chairman, Mr. Terry Fern, said the sale of the China interests, combined with Petsec's existing Gulf of Mexico gas production, would provide funds to launch the Company into a new era of growth in the USA.

"Our Board took the view that the required funding of US $37 million to develop the Company's 12.25% interest in the 6.12/12.8W oil fields, in Block 22/12, would deliver better and earlier returns if applied to shale oil operations in the USA," Mr. Fern said.

"As well as our strategy of moving into areas where the shale source rocks are liquid rich, Petsec is also making the structured transition to greater focus on oil exploration generally –in particular since there is currently an oversupply of natural gas in the USA and a relatively low price as a consequence," he said.

"This includes our previously stated move away from the exploration and production of smaller, natural gas targets, which at current US natural gas prices are marginally economic. Instead, we have set a minimum prospect target of greater than 20 billion cubic feet of gas equivalent (Bcfe) and with concentration on those prospects that are likely to have higher hydrocarbon liquids content and hold associated oil."

Petsec, which last week announced that it was debt free after eliminating US $100 million of debt during the past three years, plans to accelerate its move into the shale oil business as well as transitioning its traditional Gulf of Mexico oil and gas exploration and production focus to the Gulf Coast and onshore Louisiana and Texas.

Last year the Company participated in the Marathon gas/condensate discovery onshore Louisiana with a well drilled to 18,800 feet. The follow-up Marathon No 2 well is currently drilling ahead at 17,300 feet, with a target total depth of 21,000 feet.

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Marathon Oil to Purchase Eagle Ford Assets for $3.5B

- Marathon Oil to Purchase Eagle Ford Assets for $3.5B

Wednesday, June 01, 2011
Marathon Oil Corp.

Marathon has reached a definitive agreement with Hilcorp Resources Holdings, LP to purchase its assets in the core of the Eagle Ford shale formation in Texas in a transaction valued at $3.5 billion subject to closing adjustments, customary terms and conditions, and Hart-Scott-Rodino approval. Hilcorp Resources Holdings is a partnership between affiliates of Hilcorp Energy Company and Kohlberg Kravis Roberts & Co. LP. Along with other transactions expected to close by the end of 2011, Marathon's Eagle Ford acreage position is expected to more than double to 285,000 net acres. The Hilcorp transaction is expected to close Nov. 1, 2011 with an effective date of May 1, 2011.

Hilcorp acreage acquisition highlights:

• Approximately 141,000 net acres (217,000 gross) primarily in Atascosa, Karnes, Gonzales and DeWitt counties in Texas
• Potential opportunity to acquire approximately 14,000 additional net acres through tag-along rights and other leasing
• Approximately 90 percent operated with 65 percent average working interest
• As of May 1 there were 36 wells producing approximately 7,000 net (17,000 gross) barrels of oil equivalent (boe) per day, of which 80 percent is liquids (three-fourths of which is crude oil and condensate)
  • 10 additional wells drilled and awaiting completion
  • Six rigs currently operating and two dedicated hydraulic fracturing crews
  • Year-end production expected to be approximately 12,000 net boe per day
• Total net risked resource potential of 400 - 500 million boe with upside potential from additional downspacing and other stacked pay potential
• Potential to book up to 100 million boe of proved reserves by the end of 2011
• Production expected to increase to approximately 80,000 net boe per day by 2016

"Marathon has captured a top-five acreage position in the core of the premier resource play in the U.S. since first entering the Eagle Ford in November 2010. This transaction enhances our already strong North America position focused on unconventional, liquids-rich resource plays that provide low-risk, scalable and profitable growth," said Clarence P. Cazalot Jr., Marathon president and CEO. "This and other projects under development serve as a catalyst for Marathon to increase our projected Upstream production growth to 5 - 7 percent on a compound average annual growth rate (CAGR) during the period 2010 - 2016.

"In addition to establishing our position in the highest value oil and condensate core area of the Eagle Ford shale, these assets will deliver immediate production and reserve additions, an active Company-operated drilling program, significant resource potential, as well as solid economic returns and profitability that are immediately accretive to earnings and operating cash flow, and expected to be self-funding by 2014.

"With our technical expertise and best-in-class drilling, along with our project execution skills, we are poised to maximize profitable reserve and production growth across our liquids-rich resource plays, particularly in the Eagle Ford. Importantly, our financial flexibility enables us to pursue this growth while maintaining a strong balance sheet," Cazalot said.

Marathon will use cash on hand and cash generated from operations to fund the transaction. With an anticipated fourth quarter closing, the Company's Upstream capital, investment and exploration spending for 2011 (excluding acquisitions) is not anticipated to increase materially as a result of this transaction.

Increased Production Growth Across North America

In addition to the six rigs currently under contract related to this acquisition and two in Marathon's other Eagle Ford acreage, Marathon has five drilling rigs on order and expects to be operating at least 20 drilling rigs in the Eagle Ford within 12 months of closing this transaction. As a result, the Company expects to grow production from its total Eagle Ford acreage position to a peak of approximately 100,000 net boe per day by 2016. A summary of the total Eagle Ford acreage listed by county is included below.

County	Net Acres
Wilson	98,000
Atascosa	47,000
Karnes	46,000
Gonzales	34,000
Frio	22,000
DeWitt	11,000
Bee	10,000
Lavaca	9,000
Live Oak	6,000
McMullen	2,000
Total	285,000

This acquisition brings Marathon's holdings to nearly 1 million net acres across North American liquids-rich resource plays in the Eagle Ford, North Dakota Bakken, Oklahoma Anadarko Woodford, the emerging Niobrara in Colorado and Wyoming, and an in-situ position in Alberta Canada - with plans to continue to grow acreage and increase drilling activity in each of the U.S. basins. Within 12 months of closing this transaction, Marathon expects to be operating 35 - 40 rigs across the U.S. This drilling activity, along with a potential phased development of the Company's Birchwood in-situ acreage, provides a defined growth trajectory to achieve production from the Company's unconventional portfolio of approximately 175,000 net boe per day in the 2016 - 2017 timeframe.

The legal advisor to Marathon for this transaction is Baker Botts and the financial advisor is Barclays Capital. The legal advisor to Hilcorp Energy for this transaction is Andrews Kurth LLP and the legal advisor to KKR is Simpson, Thacher & Bartlett, LLP. Jefferies & Company, Inc. served as exclusive financial advisor to Hilcorp Resources Holdings for this transaction.

All production growth targets listed in this release are based on current estimates and exclude additional acquisitions or divestitures.

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