Hess Boosts Utica Position with $750MM Acquisition

- Hess Boosts Utica Position with $750MM Acquisition

Thursday, September 08, 2011
Hess Corp.

Hess has acquired Marquette Exploration LLC and other leases in Ohio's Utica Shale, boosting its acreage position by 85,000 net acres at a cost of approximately $750 million.

The leases, in which Hess will have a 100 percent working interest, are in Jefferson, Harrison and Belmont counties. Appraisal activities on this acreage are planned to commence in the fourth quarter. Together with the previously announced joint venture with CONSOL Energy, the transactions provide Hess with approximately 185,000 net acres in the Utica Shale play.

"With these transactions, we have built a strategic acreage position in the Utica Shale, allowing us to strengthen our portfolio of unconventional resources in high quality assets, leverage our operating expertise and create significant potential for future growth in reserves and production," said John Hess, Chairman and CEO of Hess Corporation.

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Nigeria, Iran Battle for OPEC's No.2 Position

- Nigeria, Iran Battle for OPEC's No.2 Position

Thursday, July 28, 2011
OilPrice.com
by Charles Kennedy

Iran retains its position as the second-largest producer in the Organization of Petroleum Exporting Countries, despite a recent OPEC report that Nigeria moved from the organization's third to second place, OPEC Governor Mohammad Ali Khatibi said.

OPECs' Annual Statistical Bulletin had put Nigeria ahead of Iran, but Iranian experts said they were examining the report, This Day newspaper reported.

Khatibi contended that OPEC's rankings were not based on export but determined by production data, commenting, "OPEC rationing is based on production, not export, and Iran still holds the second-largest OPEC producer status and no change has happened in this regard. In the report, Iran's oil income exceeds that of Nigeria in 2010. Then how would it be possible for Nigeria's oil income to be less than that of Iran despite having boosted its exports?"

Khatibi added that Iranian experts had found ambiguities in some of the figures in the OPEC report and accordingly the Iranian analysts "did not confirm Nigeria's export increase."

Reserves are one of the criteria OPEC has used to set output targets. Iran and Iraq were rivals in the past over OPEC quotas and OPEC in the next few years is expected to address the issue of bringing Iraq back into the quota system, from which it is currently exempted.

(Charles Kennedy is Deputy Editor of OilPrice.com. The original article appears here.)

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Farstad Strengthens Brazil Position with Acquisition

- Farstad Strengthens Brazil Position with Acquisition

Monday, July 18, 2011
Farstad Shipping

Farstad Shipping ASA has reached an agreement with Petroserv S.A. in Brazil, on certain conditions, to buy Petroserv's 50% share in BOS Navegação S.A. Farstad Shipping will after the purchase have 100% ownership of BOS. The net purchase price for the 50% share is USD 56.5 million. The acquisition is expected to be consolidated in Farstad Shipping's accounts as from 1 July 2011.

BOS was established in June 1999 as a joint venture between Farstad Shipping and Petroserv. Today the company owns 3 AHTS on contracts with Petrobras. In addition BOS operates 10 Farstad vessels in Brazil. BOS' offices in Rio de Janeiro and Macaé employ 35 people onshore and 325 people offshore.

To Farstad Shipping this agreement represents a strengthening of our position in Brazil, a market of considerable growth.

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Nextraction Increases Position in Provost Viking Play

- Nextraction Increases Position in Provost Viking Play

Thursday, July 14, 2011
Nextraction Energy Corp.

Nextraction has substantially increased its leasehold position in the Provost Viking A oil pool by 92%, increasing its net acreage position from 1.625 to 3.125 sections (1040 acres to 2000 acres). Nextraction acquired one section at a 100% working interest (640 acres net to Nextraction) at a cost of $701,584, and one section at a 50% working interest (320 acres net to Nextraction) at a cost of $401,088. The two newly acquired sections are contiguous to each other and are one mile from the Company's existing 50/50 joint venture acreage, allowing for the potential to use existing infrastructure. The acquisition essentially doubles the Company's drilling inventory of horizontal locations up to 36 wells. Nextraction has identified 21 locations on 400 meter spacing whereby the Company could drill at least 4 wells owning 100% interest, and own a 50% interest in 17 locations (resulting in a further 8.5 net wells). In addition, another 15 locations may be drilled at a 50% interest (7.5 net wells), should down spacing be warranted.

The acreage is also prospective for light oil production from the Dina formation that is approximately 150 meters below the Viking formation. A historical well on the acreage produced 18 Mbbls of oil from the Dina formation.

The Company is also pleased to announce that it participated in the successful re-completion of a well on its existing acreage. The well had not been previously fracture stimulated, so the well was fractured using the same technique the Company plans to use on its first horizontal well. Prior to re-completion of the well in mid-June, it produced three barrels of oil per day and is now currently producing 29 barrels of light oil per day, a ten-fold increase. Payout is projected at three months.

The Company is encouraged by the results of the frac as it confirms the high productivity potential of the Company's acreage. The well has been producing for two years and is located directly between two wells that have cumulatively produced 520 Mbbls to date and continue to produce 20 bbls per day of oil. Reservoir pressure measured after completion was near original pressure, suggesting little depletion. The high production rates from the well are consistent with the high pressure and indicate good quality reservoir, as expected. The Company is currently drilling its first horizontal well in the pool offsetting these wells and plans to multi-stage fracture this first horizontal well in the Viking zone in the coming days. The Company also plans to drill a second horizontal well on this joint venture acreage in the third quarter of 2011.

Mark S. Dolar, President & CEO of Nextraction, commented, "We value the Crown leases acquired yesterday as a strategic asset to our Company's growth. We believe the acreage to be very prospective for a multi-well development program and will expand our ability to focus on developing the Viking formation for value added reserves. With our experience and expertise in developing the Viking sand by horizontal drilling and multi-stage fracturing, we see this project as an excellent way to add significant oil reserves as we move towards our goal of being 80% light oil weighted by the end of this year."

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Sevan Marine Briefs Financial Position

- Sevan Marine Briefs Financial Position

Monday, July 11, 2011
Sevan Marine ASA

The Board of Directors of Sevan Marine continues to hold constructive dialogue with bondholders and other relevant parties regarding a global restructuring of the Company's balance sheet. In particular, the Board is in dialogue with the advisors to Norsk Tillitsmann ASA (the bond trustee for the Company's bond issues) and an informal group of the Company's largest bondholders. The dialogue with the bondholder group regarding a global restructuring currently assumes that the restructuring would involve:

• a full equitisation of the Company's existing unsecured bonds;
• a partial but reasonably material equitisation of each of the series of the Company's existing secured bonds;
• a corresponding substantial dilution of the Company's existing shareholders;
• a capital raise for the Company, likely in the form of new equity, currently estimated to be at least USD 200 million, to be funded primarily by bondholders, but with a right for existing shareholders to participate;
• extension of maturities for the Company's existing secured bonds; and
• a revision of interest rates and amortization schedules of the Company's secured bonds to correspond with the Company's cash flow profile and debt service capacity.

The above assumptions, and the detailed terms and conditions of a global restructuring proposal, remain to be finally determined and negotiated, and will, inter alia, be affected by the contents of a revised business plan currently being prepared by the Company, and the final cost estimate and schedule developments for the FPSO Sevan Voyageur upgrade project. Any global restructuring proposal will be subject to obtaining necessary agreements with, and consents from, the Company's bondholders, shareholders and other key stakeholders and counterparties to the Company and its subsidiaries.

The Company continues to be under serious short term liquidity pressure, and the Board is currently in discussions regarding bridge financing of at least USD 35 million. Further, the Company intends to request deferrals of interest payments due under the relevant bond loans up to at least end of September 2011, and bondholders who have been approached on a confidential basis have expressed their support in principle to such proposal. The Board is optimistic that its short-term liquidity issues will be resolved and that a long-term solution to the financial challenges facing the Company can be obtained by the end of September 2011.

As for the FPSO Sevan Voyageur upgrade project, further detailed project reviews and assessments have identified additional costs to be incurred by the Company, resulting in a current cost estimate for the project in the range of USD 160-170 million. The increase from the previously announced cost estimate of USD 135 million is mainly a result of time related costs due to additional delays, certain increased procurement costs for equipment, yard services and additional contingencies. First oil is currently expected to take place during the second quarter of 2012. The review is ongoing in close cooperation with the charterer.

The Company's financial situation remains challenging. In connection with the ongoing processes, renewed scrutiny and assessment of booked assets has been required. The Board has initiated a process to impairment test the Company's asset base, which is expected to result in substantial write-downs in the closing of half-year accounts of 2011.

Notwithstanding the ongoing dialogue with lenders, FPSO Sevan Voyageur stakeholders and others, no assurance can be given that a viable global solution can be found in a timely manner, failing which the Board will be required to file for bankruptcy.

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Expro Strengthens Position with New Investment Program

- Expro Strengthens Position with New Investment Program

Tuesday, June 21, 2011
Expro International Group

Expro has announced a major new investment program that will reinforce the company's leading position as a supplier of innovative technology and specialist services to the upstream oil and gas sector.

The program includes expanding Expro's established fleet of subsea safety systems and well test packages, as well as globalization of the group's strong drill stem testing (DST) heritage and emerging, innovative telemetry capability.

Investments are also being made to fuel specific customer growth initiatives in the wireline and production systems product lines as well as new product developments in production surveillance (multi-phase metering) and fluid analysis.

The funds for the program are being provided by a $250MM equity injection from the company's shareholders. Additional flexibility and the opportunity to accelerate growth have also been provided by increased covenant headroom under the Mezzanine Facility and the expansion of the group's Revolving Credit Facility from $100MM to $160MM.

Commenting upon the investment program, Charles Woodburn CEO said, "This is excellent news for Expro and our customers and demonstrates the shareholders continued confidence in Expro. We are now even better positioned to deliver our market-leading technology and uniquely personalized customer service to the highest standards of safety and quality.

"Last year they backed the acquisition of PTI entirely from new equity, this year they are backing our organic growth plans in the same way. This puts us in a strong position to invest in our business to take full advantage of the upturn in the market."

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Strike Updates Unconventional Position at Southern Cooper

- Strike Updates Unconventional Position at Southern Cooper

Tuesday, May 31, 2011
Strike Energy Ltd.

Strike announced an update on its Southern Cooper unconventional petroleum position in South Australia.

In addition to Strike's recently announced move into the unconventional Eagle Ford shale play in the US, the Southern Cooper position in South Australia demonstrates Strike's high level of exposure to the developing unconventional opportunity space.

Strike holds substantial working interests in PEL 94 (STX: 35%), PEL 95 (STX: 50%) and PEL 96 (STX: 66.67%) which cover an area of 8,400 square kilometers, or two million acres. These permits contain the Permian coal measure and shale sequences that are being evaluated for unconventional gas and liquids hydrocarbons to the north by Beach Energy and more recently by Senex.

In Strike's permits the prospective sequences are predominately less than 2,500 meters in depth and in the early stage thermal maturity window for both gas and oil.

Forward exploration programs in PEL's 94, 95 and 96 are currently being planned with the possibility of drilling in all permits commencing later in 2011 or early 2012. The potential exists for a combined drilling program in the region to take advantage of operating efficiencies. Strike is the operator of PEL 96 and Beach Energy is the operator of PEL's 94 and 95.

Senex Energy announced last week the spudding of its Vintage Crop 1 well, in PEL 516. The well is located 2.5 kilometers east of the PEL 95 permit boundary. Senex Energy intends deepening the well below the Cretaceous and Jurassic Eromanga sequences to evaluate the unconventional gas potential of underlying coals and shales. The well is interpreted to penetrate a similar geological sequence to that which exists in PEL 95. Information from the well will add substantially to the understanding of the unconventional and conventional potential in the region.

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Forum Expands Completions Products Position

Forum Expands Completions Products Position

Friday, May 06, 2011
Forum Energy Technologies, Inc.

Forum Energy Technologies, Inc. (FET) announced Thursday the acquisition of Phoinix Global LLC, a leading provider of high pressure flow control equipment and products utilized in hydraulic fracturing and flow back of oil and gas wells.

The company provides a complete product line including fluid ends, plug valves, relief valves, chokes, manifolds, manifold trailers and iron transport trucks from its facility in Alice, Texas. Phoinix's products and services 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. "Phoinix Global significantly expands our completion products offering and complements our existing Wood Flowline product offering. Phoinix Global has an excellent reputation in the marketplace for customer service, engineering capability and reliability. We are very pleased to partner with the founders of Phoinix, Wade Pinkston, Scott Reeves, Kirk Baxter, and John Farias. Our goal is to help expand Phoinix' business to serve clients across the North American shale plays."

Wade Pinkston, President of Phoinix Global, commented on becoming a part of Forum. "FET is building a great company, and we are pleased to become part of an energetic, growing organization."
Forum Energy Technologies Inc., headquartered in Houston TX., is a global provider of manufactured equipment and applied products to the energy industry. FET's over 2,200 employees provide the products and technologies essential to solving the increasingly complex challenges of the oil and gas industry.

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Ante5 Bolsters N.D. Position

Ante5 Bolsters N.D. Position

Ante5, Inc.

Ante5, Inc. announced Wednesday that it has entered into agreements to purchase certain oil & gas leases covering approximately 8,023 net acres in the counties of Dunn, Billings and Stark, North Dakota. With the addition of these new leaseholds, Ante5 will control approximately 13,800 net acres in the growing North Dakota Bakken and Three Forks trend.

"These acquisitions materially increase our exposure to the North Dakota Bakken and Three Forks play," said Bradley Berman, Chief Executive Officer of Ante5. "Leading exploration companies continue to have significant Bakken and Three Forks success south of Mountrail. Ante5's newly acquired acreage appears to be in the fairway of that success."

"Our focus on strategic acreage acquisition continues to provide opportunities for Ante5 to expand our leasehold interest," stated Mr. Berman. "We plan to continue to acquire prospective acreage in the expanding Bakken and Three Forks trend and develop our leasehold interest with our drilling partners in the region. The speed of development continues to accelerate in North Dakota and we expect to increase our production significantly throughout 2011."

Ante5, Inc. is an oil and gas exploration and production company based in Minnetonka, Minnesota. Ante5's focus is the Williston Basin Bakken and Three Forks trend in North Dakota and Montana. Ante5 controls, or has under contract, approximately 13,800 net mineral acres in North Dakota.

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TGS Strengthens PMS Position with Stingray Acquisition

TGS Strengthens PMS Position with Stingray Acquisition

Monday, April 11, 2011
TGS-NOPEC Geophysical Co. ASA

TGS has entered into an agreement to acquire 100% of the shares of Stingray Geophysical Limited (Stingray). The transaction will provide TGS with a strong position in the rapidly growing market for Permanent Reservoir Monitoring (PRM) solutions. The acquisition will substantially increase TGS' addressable market through access to production seismic spending from large international oil companies as well as national oil companies (NOCs), while maintaining its successful asset light model.

Robert Hobbs, CEO of TGS said, "The age of "easy to find" oil is over, forcing oil companies to increase investment in their existing fields to extend production and increase recovery factors. The acquisition of Stingray allows TGS to access a larger portion of the reservoir optimization market. The combination of TGS and Stingray will leverage both companies' strengths to create a powerful PRM offering to the industry."

Martin Bett, Managing Director of Stingray added, "TGS brings complementary capabilities, a global organization, established seismic project management skills and financial strength to Stingray. As a part of TGS, Stingray is now well positioned to deliver innovative PRM solutions that will assist our clients to increase production and reserves whilst decreasing risk and costs of their Enhanced Oil Recovery programs."

The 4D seismic market, of which PRM is an integral and increasing part, was estimated to be over USD 1 billion in 2010 with the majority of data being acquired by towed streamers (source: ODS PetroData). Expectations are for the 4D market to exceed USD 2.5 billion within the next four years (source: Stingray estimate). New PRM installations are expected to trend towards optical versus electrical solutions due to the expected increase in reliability and flexibility that this technology offers, especially in deep water.

The transferred assets include 11 employees and an extensive portfolio of intellectual property. All management team members and employees of Stingray will continue as employees of TGS.

The consideration for 100% of the shares is based on an initial payment of USD 45 million and incremental payments of up to USD 35 million based on the success in commercializing the technology.

The transaction is expected to complete in April 2011.