Schilling Robotics, Gregg Marine Complete Subsea Drilling Test Offshore BC

- Schilling Robotics, Gregg Marine Complete Subsea Drilling Test Offshore BC

Thursday, August 18, 2011
Schilling Robotics LLC

Schilling Robotics and Gregg Marine announced the successful completion of the field testing of their subsea drill in the waters offshore of Vancouver, British Columbia.

The Seafloor Drill was conceived by John Gregg, owner of Gregg Marine, and completed its Factory Acceptance Testing at Schilling Robotics in June 2011. The four week sea trials took place last month in St. Vincent's Bay outside of Vancouver, Canada, in water depths up to 250 meters. The sea trials allowed Gregg to work closely with Schilling technicians to fine tune the control systems and train the drill's operators. The drill testing has exceeded Gregg's expectations, as well as the clients that attended the demonstrations.

When speaking of the sea trials, John Gregg commented, "The seafloor drill system is a complex and expanded technology over the current systems in the market today. By leveraging the proven technologies by Schilling Robotics, the Seafloor Drill offers robust telemetry and controls that will maximize the efficiency and effectiveness of the system. To demonstrate our confidence, we invited our industry colleagues to the sea trials in order to see the demonstrations first hand." The drill was able to successfully retrieve core samples of both unconsolidated soft sediment as well as granitic rock. Many in attendance were impressed with the flexibility of the drill compared to other equipment on the market. One of the clients for a major US energy company remarked that "Not many companies are willing to open themselves to outsiders during such an important phase of their development program. It appears to me that the team has put a lot of thought into the design of these tools and I am certain it will pay off with many successful projects."

The system is currently being mobilized to drill near Australia where it will begin work in the coming months. "I am very thankful to Apache Oil for the Seafloor Drill's first job. Their commitment to innovation is shown in their excitement about the system," said Gregg. "We are pleased that the sea trials for the Seafloor Drill were successful," said Tyler Schilling, CEO of Schilling Robotics. "With this technology, and the Cone Penetration Testing unit, Gregg Marine is uniquely equipped for seabed sampling worldwide."

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Petronas Purchases $1.1B Stake in BC Shale Assets

- Petronas Purchases $1.1B Stake in BC Shale Assets

Thursday, June 02, 2011
Progress Energy Resources Corp.

Progress Energy has executed a binding framework agreement to create a strategic partnership with the Malaysian national oil company, Petronas, to develop a portion of Progress' Montney shale assets in the Foothills of northeast British Columbia. Progress will sell 50 percent of its working interest in its Altares, Lily and Kahta properties (the "North Montney Joint Venture") to Petronas for $1.1B (CDN $1.07 billion). The agreement also reflects the desire by both parties to explore additional opportunities to develop liquefied natural gas (LNG) export capacity in British Columbia.

"This is a breakthrough transaction for Progress: the partnership we are launching will enable us to accelerate our growth strategy," said Michael Culbert, President and Chief Executive Officer of Progress. "We are very pleased to form this long-term partnership with Petronas. They share our belief that our North Montney shale assets are a world-class resource that deserves significant investment. We look forward to benefitting from Petronas' significant global expertise including their leadership in developing infrastructure and accessing LNG markets. As well as enhancing Progress shareholder value, this partnership will also generate substantial economic benefits for local communities and the province of British Columbia, while leveraging the environmental benefits of Canada's abundant and clean-burning natural gas resources globally."

Under the terms of the framework agreement, Petronas will pay 25 percent of the total consideration (CDN $267.5 million) in cash at closing and 75 percent of the total consideration in the form of a capital carry whereby Petronas will pay 75 percent of Progress' share of future capital expenditures in the North Montney Joint Venture over the next five years to a total of CDN $802.5 million. The Transaction provides Progress with the capital required to accelerate the development of its unconventional assets and unlock the value underlying the Company's vast Montney land holdings.

In addition to the above Transaction, Petronas and Progress will establish an LNG export joint venture (the "LNG Export Joint Venture") to be 80 percent and 20 percent owned, respectively. The LNG Export Joint Venture will launch a feasibility study to evaluate building and operating a new LNG export facility on the West Coast of British Columbia. PETRONAS would be the operator of this facility, and Petronas and Progress would jointly market the LNG utilizing Petronas' well-established and extensive network of customers in the largest LNG markets globally.

"Canada is poised to take a larger role on the world's energy stage. Developing new export options for Canadian natural gas producers is a logical step in connecting our vast resources with growing Asian demand for environmentally responsible energy sources like natural gas," said Mr. Culbert. "We look forward to working with West Coast British Columbia communities as we pursue this opportunity to build a new facility that will add value to British Columbia's natural resources while creating considerable long-term local economic benefits."

In connection with the LNG Export Joint Venture, Petronas will provide a standby equity financing commitment of up to $600 million, for Progress' capital requirements arising from the North Montney and LNG Export joint ventures from which Progress can draw down at the time of a successful LNG final investment decision.

The North Montney Joint Venture comprises 149,910 working interest acres in which Petronas will acquire a 50 percent interest and Progress will be the operator. The North Montney Joint Venture lands represent approximately 20 percent of Progress' rights in its northeast British Columbia Foothills land holdings, which total approximately 700,000 net acres. Progress holds approximately 900,000 net acres of Montney rights over its entire British Columbia and Alberta land base, making it one of the largest Montney land rights holders. The joint venture properties include five wells with minimal production at this time.

The closing of the transaction is subject to the execution of definitive agreements and receipt of regulatory approval. BMO Capital Markets acted as exclusive financial advisor to Progress on this transaction.

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