EOG CEO: Boosts Asset Sale Target to $1.6B, from $1B

- EOG CEO: Boosts Asset Sale Target to $1.6B, from $1B

Friday, August 05, 2011
Dow Jones Newswires
HOUSTON
by Ryan Dezember

EOG Resources Chief Executive Mark Pappa said Friday the oil and gas explorer is increasing the amount of cash it hopes to raise by selling assets this year in order to offset rising oilfield service costs.

The assets being sold "are primarily mature long-lived domestic gas properties and other acreage," Pappa told investors during a conference call to discuss EOG's second-quarter results. Those properties are scattered in east Texas, the mid-continent and in the Gulf of Mexico.

Houston-based EOG posted a profit of $295.6 million, or $1.10 a share, up from $59.9 million, or 24 cents a share, a year earlier. Excluding hedging impacts, write-downs and other impacts, per-share earnings rose to $1.11 from 18 cents.

Revenue jumped 89% to $2.57 billion on a 13% increase in output and oil prices that climbed 37%.

Analysts polled by Thomson Reuters expected a per-share profit of 79 cents and revenue of $2.01 billion. Shares rose 6.22% to $97.86 in early Friday trading.

While EOG's oil and natural-gas liquids production rose in the second-quarter, natural-gas output was about 1% lower to an average of 1,615 million cubic feet per day. EOG has stressed its shift to oil production in recent quarters due to an oversupply-induced natural-gas price slump.

"We're not interested in growing North American gas volumes at current prices unlike most other companies," Pappa said, adding that EOG will drill in natural-gas basins only where necessary to preserve leases.

By mid-year, EOG had completed $944 million worth of gas-asset sales and has another $271 million in deals pending, Pappa said. The divesture target should be reached by the end of the year.

About $400 million of the extra $600 million being raised will be spent on rising oilfield-service costs, Pappa said.

Beyond raising money to cope with oil-patch inflation, Pappa said EOG plans to open a Wisconsin sand mine in the fourth quarter, which will supply sand proppant for "most of our North American resource plays."

Proppant is a crucial component in hydraulic fracturing, a process in which water, sand and chemicals are forced deep underground to crack open energy-bearing rocks, including shales, so that oil and natural gas can seep out. The sand, or proppant, wedges into the resulting fissures to hold them open. Proppant, which comes in grades ranging from raw sand to manufactured ceramic spheres, is in tight supply worldwide.

Supplying much of its own proppant should save EOG some $400 million a year and help reduce the cost of drilling a well in its prolific Eagle Ford wells in south Texas by about $1 million, executives said.

EOG has also signed an agreement for a 70,000-barrel-a-day rail off-loading facility in St. James, La., that will allow it to transport most of its crude oil from the Eagle Ford and North Dakota's Bakken Shale around Cushing, Okla., where congestion has depressed oil prices this year, to the Gulf Coast, where crude oil fetches a premium.

The Louisiana off-loading facility should be able to start taking shipments in the first quarter of 2012 and will enable EOG to take advantage of the difference in regional oil prices, Pappa said.

Pappa, who turns 65 next month, also said Friday that he will remain as CEO for the next 18 months "and, when I do retire, my successor will be a long-tenured EOG employee."

Copyright (c) 2011 Dow Jones & Company, Inc.

Oil & Gas Post

Promote Your Page Too
LINK

Husky Closes $1B Common Share Offering

- Husky Closes $1B Common Share Offering

Wednesday, June 29, 2011
Husky Energy Inc.

Husky has closed its previously announced $1 billion bought-deal public offering of common shares (the "Public Offering") and its $200 million concurrent private placement (the "Private Placement"). The Company has received total gross proceeds of approximately $1.2 billion from the combined Public Offering and Private Placement.

Pursuant to the Public Offering, the Company has issued, through a syndicate of underwriters led by RBC Capital Markets, Goldman Sachs Canada Inc., HSBC Securities (Canada) Inc. and J.P. Morgan Securities Canada Inc., a total of 36,968,500 common shares in the capital of Husky at a price of $27.05 per share for total gross proceeds of approximately $1 billion. The Public Offering was conducted under the Company's universal base shelf prospectus filed November 26, 2010 with the securities regulatory authorities in all provinces of Canada and the Company's universal base shelf prospectus filed June 13, 2011 with the U.S. Securities and Exchange Commission.

Pursuant to the Private Placement, the Company's principal shareholders, L.F. Investments (Barbados) Limited and Hutchison Whampoa Luxembourg Holdings S.a.r.l. have been issued a combined total of 7,393,714 common shares at the same price as the Public Offering, for total gross proceeds of approximately $200 million.

Oil & Gas Post

Promote Your Page Too

Maersk Invests $1B in Golden Eagle Development Plan

- Maersk Invests $1B in Golden Eagle Development Plan

Friday, June 17, 2011
Maersk Oil

Maersk Group has approved its investment of $1 billion in the Field Development Plan for the Golden Eagle Area in the UK North Sea. Maersk Oil has a non-operated interest in the fields of 31.56% and its estimated share of reserves is expected to be around 45 million barrels of oil equivalent.

Subject to partner and regulatory approvals, construction of a platform and other infrastructure will begin in November this year. First oil is expected in 2014 with initial production rates at between 60,000-65,000 barrels of oil a day; Maersk Oil's share is expected to be 19,000-21,000 bpd.

"The approval of the field development plan is an important step towards getting production going in the Golden Eagle Area. The area is home to one of the largest discoveries in the UK North Sea in recent years, and we are pleased to be partners in such a promising field development," said Martin Pedersen, Managing Director of Maersk Oil UK.

The Golden Eagle Area comprises the Golden Eagle and Peregrine fields. Peregrine was known as Pink, while the Hobby discovery is now defined to be part of the Golden Eagle field. The fields were discovered 2007-2009 in Block 20/1 located 110 kilometers North East of Aberdeen. The fields are operated by Nexen (36.5%) with Maersk Oil, Suncor and Edinburgh Oil and Gas as partners.

Operator Nexen has estimated the Golden Eagle Area contains 140-150 million barrels of oil equivalent in gross recoverable contingent resources, making it one of the largest oil discoveries in the UK North Sea in recent years. Maersk Oil's estimated share of reserves is expected to be around 45 millions of barrels of oil equivalent.

Oil & Gas Post

Promote Your Page Too

Laredo to Buy Broad Oak for $1B

- Laredo to Buy Broad Oak for $1B

Thursday, June 16, 2011
Laredo Petroleum Inc.

Laredo and Broad Oak have entered into definitive agreements whereby Broad Oak will become a wholly-owned subsidiary of Laredo in exchange for aggregate consideration of approximately $1 billion.

This aggregate consideration will consist primarily of newly issued units of Laredo. As part of the transaction, Laredo will also pay off the existing Broad Oak bank indebtedness with funds from a revised $1B credit facility. This facility will have an initial borrowing base of $650 million fully underwritten by Wells Fargo and BofA Merrill Lynch as Joint Lead Arrangers. Both Laredo and Broad Oak are privately held companies formed in partnership with their management teams by affiliates of Warburg Pincus LLC.

"Broad Oak is a great company with an impressive track record of success. David Braddock, John Coss, Robert Skinner, Jim Sherrill and their team have don an excellent job building the company and we are excited about the opportunity to combine our technical knowledge and exploitation efforts in the Wolfberry play," said Randy Foutch, Founder and Chief Executive Officer of Laredo Petroleum. "This transaction is a significant event for Laredo, as it meaningfully increases our scale while also deleveraging our balance sheet and adding incremental liquidity."

David Braddock, Founder and Chief Executive Officer of Broad Oak Energy, commented, "This transaction represents a successful outcome for the senior management, employees and shareholders of the company. I am confident that under the ongoing leadership of Randy Foutch and his team, the assets we developed at Broad Oak will continue to create significant value for both Laredo and Broad Oak stakeholders."

"We've built this great team at Broad Oak and were an early mover in identifying the unconventional potential of the extended Wolfberry play," added John Coss, President of Broad Oak Energy. "I'm looking forward to watching the play continue to evolve as Broad Oak joins forces with Laredo."

The transaction is expected to close at the beginning of July and is subject to customary closing conditions.

Tudor, Pickering, Holt & Co. Securities, Inc. served as financial advisor to Laredo Petroleum and rendered a fairness opinion to the Board of Directors of Laredo. J.P. Morgan Securities LLC served as financial advisor to Broad Oak and rendered a fainress option to the Board of Directors of Broad Oak.

Oil & Gas Post

Promote Your Page Too

Weatherford Plans to Sell Up To $1B in Assets -Wells Fargo

- Weatherford Plans to Sell Up To $1B in Assets -Wells Fargo

Wednesday, June 15, 2011
Dow Jones Newswires
HOUSTON
by Ryan Dezember

Weatherford plans to sell between $500 million and $1 billion worth of assets, according to analysts with Wells Fargo Securities, who said company officials briefed them on the plan in a recent meeting.

The divestitures would be of "mostly non-oilfield subsidiaries Weatherford has accumulated through its myriad acquisitions over the years," the analysts wrote in a client note.

Weatherford officials were not immediately available to respond to requests for comment.

Shares of Weatherford were up 0.28%, or 5 cents, at $17.66 in midday trading.

In selling the assets, the company's goals "are to free up both capital and managerial attention currently dedicated to these businesses," the analysts wrote.

Oilfield-service profits have risen rapidly from the recession as producers raced to exploit North America's unconventional onshore reserves amidst high oil prices. Weatherford's earnings, however, have lagged behind competitors Halliburton, Schlumberger, and Baker Hughes.

The Wells Fargo analysts said their meeting with Weatherford officials in Houston on Monday was one of several in which the executives are meeting with investors and "working on rebuilding the company's credibility."

In early March, Weatherford disclosed errors in its tax accounting for 2007 through 2010, which forced the company to adjust previously reported earnings. The March 2 disclosure pushed shares, which had been trading near a 52-week high, down 12.6%.

Late last month, in a rare rebuke, shareholders voted against the company's executive compensation plan in an advisory say-on-pay tally.

Copyright (c) 2011 Dow Jones & Company, Inc.

Oil & Gas Post

Promote Your Page Too

Saipem Secures More Than $1B in E&C Offshore Contracts

- Saipem Secures More Than $1B in E&C Offshore Contracts

Monday, June 13, 2011
Saipem SpA

Saipem has been awarded new E&C Offshore contracts in Egypt, in the North Sea and in Russia, worth in excess of $1 billion.

In Egypt, Burullus Gas Company awarded Saipem the EPIC contract for new subsea developments in the area of the West Delta Deep Marine Concession, located about 90 kilometers offshore the Northwest Nile delta, at water depths between 400 and 1,000 meters.

The development encompasses the engineering, procurement, construction and installation of a total of seven new subsea wellheads and relevant infrastructures, umbilicals and flowlines.

Saipem has already carried out two earlier phases of the West Delta Deep Marine Concession's subsea development. The work will be connected to existing infrastructure. The offshore activities will be carried out mainly by the highly-specialized vessel, Saipem FDS.

Saipem has also been awarded contracts to operate in the Norwegian and British sectors of the North Sea, mainly relevant to the deployment of the Saipem 7000 vessel for platform transportation and installation, and to the deployment of the Castoro 7 vessel for the installation of subsea pipeline and structures.

Among these contracts, some are EPIC and, in addition to the activities mentioned above, include engineering and procurement phases.

Offshore activities will be performed in different periods during summer 2012 and 2013.

In Russia, Caspian Pipeline Consortium (CPC) awarded Saipem the contract for the expansion of the structures relevant to the CPC marine export terminal, near Yuhznaya Ozereyevka on the Black Sea shores in the Krasnodar region of the Russian Federation.

The development includes the engineering, procurement and installation of a new offshore export pipeline for hydrocarbon transportation which will have a diameter of 42 inches and a length of about 5 kilometers and for the installation of a new offshore mooring system for hydrocarbon export. Offshore activities will be carried out during the second half of 2012 by the S355 vessel.

Furthermore, Saipem has agreed to increase the scope of its work on existing contracts in the Caspian sea and the Gulf of Mexico.

Oil & Gas Post

Promote Your Page Too

Sunshine Oilsands Eyes $1B IPO

- Sunshine Oilsands Eyes $1B IPO

Tuesday, June 07, 2011
Dow Jones Newswires
by Yvonne Lee & Edward Welsch

The buzz about Hong Kong's market for initial public offerings is luring Sunshine Oilsands Ltd., an early-stage Canadian oil-sands company that could lose some of its land to a preserve for caribou.

The Calgary-based company wants to raise around US $1 billion through an IPO in the fourth quarter, a person familiar with the situation said Tuesday. It plans to submit its listing application in July and has hired Holdings Ltd. to handle the share sale.

The listing plan comes as Canadian energy companies seek investments from investors in China amid rising demand for energy resources in the country. Last week, Toronto-listed Husky Energy Inc. said it is exploring a potential secondary listing of its shares on the Hong Kong stock exchange, home to the world's busiest IPO market last year and a market that is increasingly attracting companies outside the region.

Sunshine Oilsands, which was incorporated in early 2007 and isn't expected to produce any oil until next year, owns and controls 4,600 square kilometers of oil-sand leases in the Athabasca sands region in the Canadian province of Alberta.

The Athabasca region holds an estimated 170 billion barrels of a type of heavy crude oil that requires heat, steam or chemicals to extract it from sandy deposits. The oil sands make Canada the holder of the world's third-largest oil reserves, after Saudi Arabia and Venezuela.

One risk facing Sunshine is a land conservation plan unveiled by the Alberta government earlier this year that would expropriate a large section of the company's prospective oil sands land in order to preserve it as a caribou habitat. The conservation plan hasn't been finalized, and Sunshine is negotiating with the government over the scope of the conservation plan as well as potential compensation for seized land.

A Sunshine Oilsands executive wasn't immediately available for comment.

According to Sunshine's 2010 financial statement, the company lost 9.1 million Canadian dollars (US $9.2 million) last year, before accounting for future income-tax credits, and has a deficit of C$17.8 million.

China, the world's second-largest oil consumer after the U.S., has been investing aggressively in Canada's energy sector to fuel its rapidly growing economy. Chinese investment in oil sands has jumped as crude prices surged over the past year amid the global economic recovery, with prices now hovering near US $100.

Last year, state-owned Corp. bought a 9% stake in Syncrude, Canada's largest oil-sands project, for US $4.65 billion. In 2009, Co. purchased a stake in an Athabasca Oil Sands Corp. project for C$1.9 billion.

Sunshine Oilsands in March said it had raised C$230 million through investments from China Life Insurance (Overseas) Company Ltd., Bank of China Group Investment Ltd., Cross-Strait Common Development Fund Co., and several other investors.

Copyright (c) 2011 Dow Jones & Company, Inc.

Oil & Gas Post

Promote Your Page Too

Eni Oil Services Unit Lands $1B in China, Brazil Contracts

Eni Oil Services Unit Lands $1B in China, Brazil Contracts

Wednesday, May 04, 2011
Knight Ridder/Tribune Business News

Italian energy giant Eni's oil field services company has been awarded new offshore engineering and construction contracts worth over $1 billion in China and Brazil, Eni said on Tuesday.

Husky Oil China Ltd. awarded Saipem, Europe's biggest oil services company by market value, a contract to drill for gas in the South China Sea.

The work includes the engineering, procurement, construction and installation of pipelines and offshore drilling platforms in 1,500 metres of water depth approximately 300 kilometers south of Hong Kong.

It represents the first offshore field developed in deep water in the South China Sea, the statement said.

In Brazil, state-run oil company Petrobras has awarded Saipem a contract to install gas export pipelines about 260 kilometers off the coasts of the Rio de Janeiro and Sao Paulo States, in water between 2,100 and 2,200 meters deep.

In both countries, the offshore activities will be carried out between 2012 and 2013, Eni said.

Copyright (c) 2011, Adnkronos International, Rome. Distributed by McClatchy-Tribune Information Services.

Oil & Gas Post

Promote Your Page Too

Blackstone, Alta Invest up to $1B to Jointly Develop N. America Assets

Blackstone, Alta Invest up to $1B to Jointly Develop N. America Assets

Tuesday, April 12, 2011
The Blackstone Group

Alta and Blackstone announced the formation of Alta Energy Partners, and a concurrent commitment to invest up to $1 billion via this entity to acquire and develop unconventional oil and gas assets in North America.

Founded in 1999 by Joseph G. Greenberg, its President and CEO, Alta Resources has been a leader in the development of shale gas assets from the Fayetteville shale basin in Arkansas to the Marcellus shale field in Pennsylvania. George P. Mitchell, a partner in Alta Resources, is widely regarded as the father of shale gas for his pioneering role in developing the Barnett shale in Texas.

Alta Resources and Blackstone have worked together recently to evaluate joint investments in unconventional oil & gas assets and have identified a number of potentially attractive investment opportunities to lease or acquire acreage in emerging and developed shale basins in North America.

Mr. Greenberg said, "I am delighted that Blackstone has chosen to partner with Alta Resources. Millions of acres are currently leased for North American shale oil and gas, requiring extraordinary amounts of capital to develop. We believe the combination of Alta's experienced shale gas technical team with Blackstone's strong capital base, network, and industry knowledge will allow Alta Energy Partners to stand apart as the partner of choice for companies seeking joint ventures or exits for their shale oil and gas assets."

David I. Foley, a Senior Managing Director at Blackstone and head of Blackstone's private equity investment activities in the energy and natural resources sector, commented, "Identifying and partnering with exceptional management talent is a fundamental element of Blackstone's investment philosophy and we are very pleased to have the opportunity to back Joe Greenberg and his team in this investment. This management team has worked together successfully for a number of years, has very strong geological and technical skills and a track record of generating outstanding returns for their investors."

Subsea 7 Lands $1B Gig from Petrobras

Subsea 7 Lands $1B Gig from Petrobras

Thursday, April 07, 2011

Subsea 7 Inc.

Subsea 7 announced the award of a contract with Petrobras, as Operator of BM-S-9 and BM-S-11 Consortia to Subsea 7 Inc., a wholly
owned subsidiary of Subsea 7 S.A., of approximately $1 billion for the development of the Pre-Salt deepwater Guará and Lula NE Areas located in the Santos Basin, offshore Brazil, in water depths of approximately 2,200 meters.

The project scope includes the Engineering, Procurement, Installation and Pre-Commissioning of four decoupled riser systems featuring:

• four submerged buoys each of 1,900 tonnes to be installed at approximately 250 meters below the sea level buoy foundations and associated tethers; and
• twenty-seven steel catenary risers of 3.9km and associated pipeline end terminations (PLETs) of which eighteen 7.5” production lines, three 9.5” water injection lines and six 8” gas injection lines, and associated anchor piles and crossings.

Engineering and project management work will commence with immediate effect and will be undertaken at our offices in Rio de Janeiro, Brazil. Fabrication of the rigid pipelines will be carried out at the pipeline fabrication spoolbase, which Subsea 7 are developing at Paranaguá, Paraná in Brazil. Offshore installation is scheduled to commence during the second half of 2012, using Seven Oceans, Seven Seas and Skandi Seven.

Victor Snabaitis Bomfim, Subsea 7's Senior Vice President, Brazil, said, "We are delighted to be awarded this pioneering contract in this new deepwater frontier which is the Santos Basin Pre-Salt area, as it enables us to leverage our newly enhanced capabilities, further develop our strong track record as a local strategic partner to Petrobras, whilst building upon our long-term commitments in Brazil. We look forward to continuing to support Petrobras' developments and bringing our expertise in engineering, project management and installation to the ongoing development of the challenging Pre-Salt Area, offshore Brazil."

Jean Cahuzac, Subsea 7's Chief Executive Officer, said, "This contract, the first EPIC award on the Pre-Salt Areas, represents a significant development. It reflects Subsea 7's capabilities to apply advanced solutions to meet the increasingly challenging needs of our clients in their complex deepwater subsea developments. We look forward to developing further our local content facilities and expertise and build on our already strong presence in Brazil."