Antero Resources Soars With $1.5-billion IPO

Antero Resources Corp., Denver, priced its upsized initial public offering of some 35.7 million shares of its common stock at $44 per share. The shares began trading on the New York Stock Exchange under the symbol “AR” on October 10 and posted significant gains. The company expects net proceeds of $1.5 billion.

Net proceeds will be used to repay outstanding borrowings under its credit facility. The company intends to use any proceeds received pursuant to any exercise by the underwriters of their option to purchase additional shares of the common stock to repay remaining debt outstanding under its credit facility and fund a portion of its drilling and development program.

Barclays, Citigroup, JP Morgan, Credit Suisse and Wells Fargo Securities are book-running managers.

Antero Resources, an independent, is focused on exploitation, development and acquisition of unconventional oil and liquids-rich natural gas properties primarily located in the Appalachian Basin.

Forest To Sell Panhandle Assets

Forest Oil Corp. (NYSE: FST), Denver, has agreed to sell its Texas Panhandle area oil and gas assets to Templar Energy LLC, Oklahoma City, for $1 billion. The divested properties have produced roughly 100 million cu. ft. equivalent per day (MMcfe/d) during 2013, and generated earnings before interest, taxes, depreciation and amortization (EBITDA) of about $180 million for the most recent 12-month period. The assets had estimated proved reserves of 517 billion cu. ft. equivalent (Bcfe) as of Dec. 31, 2012.

Forest intends to use proceeds to reduce debt and enhance financial flexibility.

Patrick R. McDonald, Forest's president and chief executive, said the transaction comprises a major part of the company's deleveraging strategy instituted in mid-2012. The deal follows the sale by Forest of its largely undeveloped acreage position in the Permian Basin for $35 million. That transaction included 52,350 net acres in Crockett County, Texas. Forest retains Permian Basin acreage in Pecos and Reeves counties, Texas, consisting of 63,500 net acres.

JP Morgan Securities LLC advised Forest on the Texas Panhandle transaction.

Early October Midstream Deals Tally $14 Billion

In three quick transactions, midstream deals heated up in early October, with companies committing a combined $14.35 billion for access to blockbuster shale plays.

First, Crestwood Midstream Partners LP (NYSE: CMLP), Houston, announced it would merge with Inergy Midstream for $8 billion. The new Crestwood has assets in every premier shale play in North America.

Three days later, Crestwood announced that it would buy Arrow Midstream Holdings LLC for $750 million.

And, also in early October, Regency Energy Partners LP announced plans to buy PVR Partners LP for $5.6 billion. The transaction would create a gas-gathering and processing platform across North America's unconventional oil and gas plays in Appalachia, West Texas, South Texas, the Midcontinent and North Louisiana.

Advent International To Buy P2 Energy

Private-equity provider Advent International Corp., Boston, has agreed to acquire P2 Energy Solutions, Denver, a software provider to the upstream industry, for an undisclosed sum.

A privately held company previously backed by Vista Equity Partners, P2 serves more than 1,500 companies. The deal gives Advent exposure to the US shales.

In August, P2 bought ISS Group Ltd., a production operations provider, for $45 million.

Advent is a leading investor in the technology sector. It has funded 40 technology and technology services companies since 1990.

Riverstone Invests $300 Million In Carrier Energy

Riverstone Holdings LLC has committed to invest up to $300 million in Carrier Energy Partners LLC. With offices in Sugar Land, Texas, Carrier acquires and exploits upstream assets.

Carrier is led by president and chief executive Mark Clemans. In 2009, Clemans founded Carrier Petroleum, a company that assembled and managed a large portfolio of nonoperated assets across several US basins and plays to serve as a strategic investment for a Fortune 200 company.

Carrier's management team includes Christina Chen as vice president and chief financial officer. She previously was vice president of finance for Carrier Petroleum.

“We are excited to partner with Mark and Christina to deploy a nonoperated oil and gas acquisition approach in today's environment, in which Carrier and we observe a growing need for non-operating working interest partners created by the vast and growing capital requirements inherent to full-scale development of unconventional resources,” Pierre Lapeyre and David Leuschen, co-founders and partners of Riverstone, said.

Riverstone is an energy and power-focused private investment firm with offices in New York, London and Houston.

American Energy-Utica Forges Joint Venture

Aubrey McClendon, the former Chesapeake Energy Corp. chief executive, has raised $1.7 billion in capital and, with a new joint-venture agreement, will pursue Utica shale development.

Red Hill Development, Dover, Ohio, part of the family-owned Kimble Cos., has entered into a JV with McClen - don's American Energy-Utica LLC, Oklahoma City, to develop a portion of Red Hill's Utica shale acreage in eastern Guernsey and western Harrison County, Ohio. Those areas are in the core of the Utica wet-gas window. Reports suggest the development could involve 50,000 acres.

The JV planned to immediately apply for Utica well permits and begin constructing well sites as early as October, with the first well to be spudded before year-end. Plans for additional drilling activity are under way for 2014 through 2016.

Red Hill said it will maintain a “significant ownership position” in its Utica leaseholds included in the JV and will be involved in future investment and drilling operations.

“The joint venture will enhance our ability to fully and expeditiously develop our acreage in Harrison and Guernsey counties while we continue to explore opportunities for development of our additional holdings in the region,” said Keith B. Kimble, manager of RHDK Oil & Gas LLC, doing business as Red Hill Development.

“We've spent a great deal of time and energy studying the Utica shale and the best available technologies to use in order to effectively develop the Utica,” Kimble says. “We have a lot of history drilling through the Utica and know it can be challenging and will require a tremendous amount of capital.”

“Thus far it seems that McClendon has been solely focused on increasing his acreage position in the Utica shale with his land men marching to the orders of 'don't get outbid on leases,' ” said Hsulin Peng, senior analyst, E&P, for Baird Energy.

While still with Chesapeake, McClendon completed a $2.32-billion JV with Total SA that gave the French company a 25% interest in 619,000 net acres in the liquids-rich area of the Utica shale.

In August, McClendon's American Energy was said to be behind the $284.3 million purchase of EV Energy Partners LP (Nasdaq: EVEP) and EnerVest Ltd.'s Utica acreage.

American Energy-Utica is an offshoot of McClendon's American Energy Partners LP, which is privately held.

Quantum Forms Tanos Energy II

Private-equity provider Quantum Energy Partners, Houston, has formed Tanos Energy II with upstream industry veteran Mark Brandon and his executive management team. Tanos II will remain headquartered in Tyler, Texas, and will pursue acquisition and development of oil and gas assets, with a specific focus on horizontal development potential in the Ark-La-Tex region. Quantum and members of the management team have collectively made capital commitments of more than $200 million to the company.

The Tanos II team will be led by Mark Brandon as chief executive and president. The executive team includes Nick Pollard as vice president of exploration, Joe Freeman as vice president of business development, Brian Durman as vice president of land, and Geoff Doke as chief financial officer. Tanos I, formed in 2007 by this management team, pursued a similar business plan and was successfully sold earlier this year.

Contango, Crimson Complete Merger

Contango Oil & Gas Co. (NYSE: MCF) and Crimson Exploration Inc. (Nasdaq: CXPO) closed their merger. The combined company, based in Houston, has a balanced offshore Gulf of Mexico and onshore Texas production profile. In the deal, Crimson becomes a wholly owned direct subsidiary of Con-tango. Contango issued 3.9 million shares of its common stock in exchange for all of Crimson's outstanding capital stock. Allan D. Keel is president and chief executive of the company.

“The new combined company will have a pre-tax SEC PV-10 proved reserve value approximating $1 billion, future resource potential which it hopes to exploit both onshore and offshore, excellent cash flow, approximately $110 million of debt and 19.1 million shares of common stock outstanding after closing,” the companies said in a release.

More M&A news

  • Apache Corp. (NYSE: APA) completed the sale of its Gulf of Mexico Shelf operations and properties to Fieldwood Energy LLC for $3.75 billion in cash.
    Additionally, Fieldwood assumes liabilities for future abandonment costs of the properties with a discounted value of $1.5 billion. Apache retained 50% of its ownership interest in all exploration blocks and in horizons below production in developed blocks, where high-potential deep hydrocarbon plays are being tested.
    The acquisition establishes Fieldwood as owner of the largest operated asset base on the Gulf of Mexico Shelf, with a leasehold comprising greater than 500 blocks and net production of 100,000 BOE per day, 55% oil.
  • Energen Corp. (NYSE: EGN), Birmingham, Alabama, closed the sale of its Black Warrior Basin assets for $160 million to an undisclosed buyer, a limited liability corporation. The buyer assumed Energen's third-party operating agreements. In fourth-quarter 2013, Energen will reflect a noncash gain on the transaction of approximately $33 million.
    Energen plans to use net proceeds to reduce short-term debt.
    The deal should allow Energen to accelerate activity in its numerous high rate-of-return horizontal projects in the Permian Basin, says Gabriele Sorbara, an analyst for Topeka Capital Markets. While the Black Warrior asset sale was small, Energen's management appears receptive to selling other assets and trending towards a pure-play Permian company with more than 300,000 net acres, Sorbara adds.
  • Oasis Petroleum Inc. (NYSE: OAS), Houston, closed acquisitions in the Williston Basin, including assets in and around its position in North Dakota in its West Williston project area, for some $1.5 billion.
    Also, Oasis closed three acquisitions in the East Nesson project area for total consideration of $63 million.
  • Memorial Production Partners LP (Nasdaq: MEMP) closed its acquisition of oil and natural gas properties in the Permian Basin, East Texas and the Rockies from its sponsor, Memorial Resource Development LLC, and affiliates of Natural Gas Partners, for $603 million.
  • Argent Energy (US) Holdings Inc., a wholly owned subsidiary of Argent Energy Trust (TO: AET-UN), Calgary, has agreed to acquire producing properties in Wyoming from a private company for US$105 million. The assets are principally oil properties in Campbell, Johnson, Crook, Weston and Niobrara counties in Wyoming.
    Working interest oil production from the acquired assets is more than 1,000 bbl. of oil equivalent (BOE) per day, with 95% oil and natural gas liquids (NGLs). Argent will operate most of the assets.
  • EnerJex Resources Inc. (OTC: ENRJ), San Antonio, completed its merger with Black Raven Energy Inc. Denver-based Black Raven Energy is now a wholly owned subsidiary of EnerJex. Additionally, EnerJex's senior secured revolving line of credit with Texas Capital Bank has been expanded from $50 million to $100 million. The company's borrowing base increased by nearly 100% to $38 million and its current interest rate decreased to 3.3%. EnerJex has $8 million of immediate liquidity.
    As a result of the merger, EnerJex now owns oil and gas leases covering more than 100,000 acres in multiple hydrocarbon basins in Colorado, Kansas, Nebraska and Texas.
  • Hess Corp. (NYSE: HES), New York, agreed to sell its U.S. East Coast and St. Lucia terminal network to Buckeye Partners LP for $850 million in cash. Hess is divesting assets as part of its plan to become a pure E&P.
  • Sanchez Energy Corp. (NYSE: SN), Houston, closed its Wycross acquisition for $230.1 million. The transaction was funded with net proceeds from its sale of 11 million shares of common stock and $200 million of 7.75% senior notes due 2021.
  • W&T Offshore Inc. (NYSE: WTI), Houston, has sold all of its working interest in West Delta 29 Block (OCS 00385) on the Gulf of Mexico Shelf to EPL Oil & Gas Inc. (NYSE: EPL) for $21.8 million. “The sale of this noncore, nonoperated property allows us to accelerate cash flow from the underlying asset,” says Tracy W. Krohn, W&T Offshore chairman and chief executive.
  • New Source Energy Partners (NYSE: NSLP) has acquired a 37.6% working interest in 25 producing wells and related undeveloped leasehold rights from Scintilla LLC of Tulsa, Okla., for $13.4 million.
    Average three-month production at the properties from May to July 2013 was 383.5 BOE per day. The properties are in Southern Dome Field, Oklahoma County, Oklahoma.
  • Trans Energy Inc. (OTC: TENG), St. Marys, W. Va., has agreed to divest its Marcellus assets in Tyler County, W.Va., for $11.2 million. Included are 1,163 net acres, two pad sites, and one uncompleted horizontal Marcellus well. The acreage represents 6% of Trans Energy's total net acreage position targeting the Marcellus shale.
    After the sale, Trans Energy will continue to own 17,500 net acres in Marshall, Wetzel and Marion counties, West Virginia.

Additional news

  • Heyco Energy Group Inc., Roswell, New Mexico, announced it will install the first liquefied natural gas (LNG) facility dedicated to the energy sector and the southern Gulf Coast. The plant, located in Lavaca County, Texas, to serve the Eagle Ford shale play, should be producing by fourth-quarter 2014.
    “The economic and environmental benefits of LNG will transform the drilling and completion business in the coming years as more and more companies convert from diesel,” George M. Yates, Heyco's chief executive, said in a release. The facility's first-stage production capacity will be 150,000 gallons per day, and expandable to 300,000 gallons per day within six to eight months.
    Heyco's plant will target dual-fuel applications in the energy sector, specifically drilling rigs and hydraulic fracturing units as well as marine applications in the southern Gulf Coast.

People news

  • GE Capital, Fairfield, Conn., has named David Nason president and chief executive of GE Energy Financial Services, Stamford, Conn., the company's energy investing unit. Nason succeeds Alex Urquhart, who is retiring after a 32-year GE career that included 10 years building GE Energy Financial Services into a business with approximately $18 billion in energy assets.
    Also, GE (NYSE: GE) has named Lorenzo Simonelli as president and chief executive of GE Oil & Gas. Simonelli, who currently leads GE Transportation, succeeds Dan Heintzelman as he takes the position of vice chairman of GE. Russell Stokes will succeed Simonelli as president and chief executive of GE Transportation.
  • JP Morgan has named Mike Lister head of its corporate client banking energy group. Based in Dallas, he will directly manage a team of corporate bankers who provide traditional banking services and investment banking to large E&P, midstream and energy service companies. He will also oversee all energy relationships across the firm's commercial banking business.
  • Vaalco Energy Inc. (NYSE: EGY) has named Steven Guidry chief executive. Guidry worked for 33 years at Marathon Oil Corp. in a number of senior executive capacities, most recently serving as vice president of business development. In addition, Guidry was president of Marathon's Libya subsidiary and led the company's central Africa business unit, overseeing project expansions in Equatorial Guinea, Gabon and Angola. He also served as regional vice president for Marathon's U.S. production operations.
  • Sanchez Energy Corp. (NYSE: SN) has named Gleeson Van Riet senior vice president of capital markets and investor relations. Prior to joining Sanchez Energy, Van Riet spent 15 years as an investment banker with Credit Suisse and DLJ in London and Los Angeles.
  • Mark Cranmer has joined Frost Bank, San Antonio, as executive vice president of energy finance with statewide responsibility for energy lending. He has more than 25 years of energy-related experience. “We are poised for growth in this dynamic sector of Texas, especially as we move into the Permian Basin with the acquisition of Western National Bancshares in January,” Frost Bank said in a release.
  • Chevron Corp. (NYSE: CVX) made three appointments to its executive team.
    Effective Jan. 1, 2014, Jay Johnson will become senior vice president of upstream and Joe Geagea will become senior vice president of technology, projects and services. The new roles will report to George Kirkland, vice chairman and executive vice president of upstream. Also effective Jan. 1, 2014, Pierre Breber will become corporate vice president and president of Chevron Gas and Midstream.
  • Terry W. Rathert, a founder, executive vice president and chief financial officer of Newfield Exploration Co. (NYSE: NFX), The Woodlands, Texas, will retire in 2014. Newfield's board of directors intends to appoint Lawrence S. Massaro to succeed Rathert as executive vice president and chief financial officer effective Nov. 11.
  • J. Michael Yeager, the former head of BHP Billiton Ltd.'s oil and gas division, was named chief executive officer of Maverick Drilling & Exploration Ltd., an explorer that's listed in Australia and focused on the U.S. Don Hen-rich will retire as Maverick's executive chairman after running the company for more than 37 years.

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