Chevron to Add Marcellus Acreage

Chevron to Add Marcellus Acreage

Wednesday, May 04, 2011
Chevron Corp.

Chevron Corp. announced Wednesday that it has agreed to acquire oil and gas assets, primarily 228,000 net leasehold acres, in the Marcellus Shale from Chief Oil & Gas LLC and Tug Hill, Inc. Terms of the transaction, which is expected to close before the end of the second quarter, were not disclosed.

George Kirkland, vice chairman, Chevron Corporation, said, "This opportunity is aligned with our strategy to acquire early-in-life assets with long-term organic growth potential. Over the last year, Chevron has acquired nearly five million net acres of shale gas assets in the United States, Canada, Poland and Romania."

"This expansion of our shale gas portfolio gives us additional high-quality resources with strong growth potential, as well as proximity to and synergy with existing operations," said Gary Luquette, president of Chevron North America Exploration and Production Company.

The acreage, which is principally located in southern Pennsylvania, will give Chevron an estimated five trillion cubic feet of additional natural gas resource in its Marcellus Shale operations.

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W&T Offshore to Add Acreage in West Tx. Permian Basin

W&T Offshore to Add Acreage in West Tx. Permian Basin

Tuesday, April 26, 2011
W&T Offshore Inc.

W&T Offshore has entered into a purchase and sale agreement with private sellers to acquire approximately 21,900 gross leasehold acres (21,500 net acres) in the West Texas Permian Basin for a purchase price of $366 million, subject to adjustments and an effective date of January 1, 2011. The reserves are over 91% oil and natural gas liquids. At January 1, 2011, estimates of proved reserves to be acquired are approximately 27 million barrel equivalents (164 Bcfe); and, estimates of proved and probable reserves to be acquired are approximately 53 million barrel equivalents (318 Bcfe) (both using a 6 to 1 Mcf to barrel equivalency). The current wells produce around 2,800 barrel equivalents per day. Since the effective date of the proposed acquisition, production has increased from about 1,900 barrel equivalents. The sellers have three active rigs drilling in the field and ongoing completions are being made on the new wells. We expect to keep at least three rigs working in the field throughout the remainder of 2011. Accordingly, we would expect daily production to increase.

There is significant upside potential in the acquisition with hundreds of proved undeveloped and probable well locations. Capital expenditures associated with planned development activities for these properties for the rest of 2011 are currently estimated at $35 to $40 million. The closing, which is subject to customary closing conditions and normal closing price adjustments, including effective date adjustments, is anticipated in the second quarter and will be funded from cash on hand and borrowings under our revolving bank credit facility.

Tracy W. Krohn, Chairman and Chief Executive Officer, commented, "The acquisition of the Permian Basin oil properties will allow us to continue with our goals of a steadier growth pattern coupled with good cash flow and positive full cycle economics. We believe that there are many more attractive acquisition opportunities for us both onshore and offshore."

Trinidad Drilling to Add New Rigs to Fleet

Trinidad Drilling to Add New Rigs to Fleet

Friday, April 15, 2011
Trinidad Drilling Ltd.

Trinidad Drilling has agreed to build two new rigs for delivery into operations in 2011.

"Demand for high quality, modern equipment has continued to increase and contract terms have now moved to a point where it is attractive for us to build new equipment," said Lyle Whitmarsh, Trinidad's President and Chief Executive Officer. "The rigs we are adding to our fleet fit well with our strategy of deep, technically advanced equipment and we expect that they will remain competitive long after their initial contracts expire."

Rig No. 139 will be an 18,000 foot (5,500 meter) triple rig with 1,500 horsepower and equipped with Trinidad's industry-leading technology and automation. The rig is expected to cost approximately $18 million and be operational in the Eagle Ford Shale in Texas in the second half of the year. The rig is backed by a three-year, take-or-pay contract that guarantees 100% utilization throughout the duration of the contract.

Rig No. 57 will be an 18,000 foot (5,500 meter) triple rig with 1,500 horsepower and is being built to work in Steam Assisted Gravity Drainage (SAGD) applications in north-eastern Alberta. In addition to Trinidad's usual automation and technical advancements, this rig will include a system that provides improved fluid handling ability while drilling in a pad environment, and a new pipe handling system that removes the need for a crew member to be positioned in the derrick, increasing both the performance and the safety of the rig's operations. Trinidad expects that it will cost approximately $20 million to build the rig and that it will be operational towards the end of 2011. The rig is under a four-year, take-or-pay contract that guarantees a minimum of 1,200 days over a four year period which equates to an 82% average utilization over the term of the contract.

In addition to these two newly-announced rigs, Trinidad is currently building a natural gas powered rig for operations in the Horn River in north-eastern British Columbia. The Company expects that the construction of the three new rigs, the completion of the 2010 rig construction program and capital enhancements planned for a small number of existing rigs will total approximately $80 million of capital expenditures in 2011.

Following the completion of the rigs being constructed in 2011, Trinidad will have 122 drilling rigs with 62 rigs in the US, 57 rigs in Canada and 3 rigs in Mexico. In addition, Trinidad has 22 service rigs, 20 preset and coring rigs and five barge drilling rigs.