Japan’s presence in the Canadian shale sector increased this week with Tokyo Gas, Osaka Gas, Chubu Electric and JOGMEC all joining Mitsubishi in their Horn River shale joint venture with Penn West Energy. The move coincided with a report from the BC Ministry of Energy and Mines that put an estimate of potential resources in the play at 61–97 TCF of gas with a mid-case estimate of 78 TCF. The new entrants will join existing Asian Pacific companies PetroChina, Mitsubishi and Korea Gas Corp in the sector. These companies all hold shale gas assets in British Columbia which are ideally positioned to either export production via the currently under production Kitimat LNG terminal on the west coast, or to use the production as a hedge against fluctuating gas prices.
The largest E&P deal of the week saw Westfire Energy Ltd acquire Orion Oil & Gas for C$364 million. Click here for Evaluate Energy’s full analysis of the deal (clients only). The acquisition was a friendly takeover that offered virtually no premium on the 1-day prior trading price of Orion Oil & Gas. The resulting entity will look to benefit from the combination of Orion’s highly developed cash generating assets with Westfire’s large inventory of undeveloped land in the promising Viking light oil play in Alberta and Saskatchewan.
In Nigeria the Neconde consortium (comprised of Kulczyk Oil Ventures, Neste Oil Aries Energy & Petroleum Co and VP Global Limited) reached an agreement to acquire a 45% interest in OML 42 in Nigeria from Shell, Total and ENI. OML 42 is a large field in the impoverished Niger Delta region that was producing 63,000 boe/d prior to the security issues that led to the field to be shut-in in 2005. The price was undisclosed but has been mentioned within African press to be as high as $600 million. Although troubles in the area still remain, there is increased optimism that they can be resolved after Nigeria last month elected Goodluck Jonathan their first President to come from the Niger Delta region.
Linn Energy continued their 2011 acquisition spree, adding 10 million boe of proved reserves in Texas and Oklahoma for $220 million. The deal marks the fourth acquisition for the company this year and brings expenditure to over $800 million. The aggressive small cap company may be in line to surpass their previous year’s spending of $1.17 billion in 5 separate deals all in the Permian and Michigan Basins of the United States.
Top Deals of the Week
| Acquirer | Target Company | Target Business Segment | Brief Description | Total Acquisition Cost ($000) |
| Spectra Energy Partners, LP | EQT Corporation | Midstream | Spectra Energy Partners acquires the Big Sandy Pipeline from EQT Corp | 390,000 |
| WestFire Energy Ltd | Orion Oil & Gas Ltd | E&P | Westfire Energy Ltd acquires Orion Oil and Gas, a subsidiary of Sprott Resources | 380,545 |
| Tokyo Gas, Osaka Gas, Chubu Electric Power Company and JOGMEC | Mitsubishi Corporation | E&P | Tokyo Gas, Osaka Gas, Chubu Electric and JOGMEC each acquires a 7.5% interest in Cordova Gas Resources from Mitsubishi’s Corp, Cordova was set up as part of Mitsubishi’s previous farm in with Penn West in the Horn River shale play in Canada | 313,752 |
| Linn Energy | Panther Energy Company, LLC and Red Willow Mid-Continent, LLC | E&P | Linn Energy acquires a 40% interest in natural gas properties located in Ochiltree and Lipscomb Counties, Texas and Ellis County, Oklahoma from Panther Energy Company, LLC and Red Willow Mid-Continent, LLC | 220,000 |
| Bill Barrett Corporation | Unspecified | E&P | Bill Barrett acquires properties in the Uinta basin of Colorado | 120,000 |
| EnQuest PLC | Fairfield Energy | E&P | Enquest PLC farms into a 32% interest in Fairfield Energy’s UKCS Block 9/28a – Area B, which contains the Crawford oil field and the 9/28a-18 Porter discovery | 57,512 |
| Enterprise Energy Resources Ltd. | Cerda Capital Corporation | E&P | Enterprise Energy Resources acquires Basin Petroleum Ltd., a subsidiary of Unconventional Energy Partners L.P.. Basin, through a subsidiary, is party to a program agreement with Cisk Ventures Ltd. under which Cisk is assisting Basin in currently leasing lands in the Williston Basin, Montana. | 10,803 |
| Denbury Resources Inc | Elk Petroleum Ltd | E&P | Denbury Resources farms into the Grieve EOR Project located in Natrona County, Wyoming from Elk Petroleum Ltd | 9,975 |
| Enterprise Energy Resources Ltd. | Basin Petroleum Ltd. | E&P | Enterprise Energy Resources acquires Cerda Capital Corporation, a subsidiary of EVO Energy Ltd. Cerda’s main asset is a purchase and sale agreement to acquire approximately 30,840 net acres in the Williston Basin, Montana | 5,225 |
| Kulczyk Oil Ventures Inc. | Shell, Total and ENI | E&P | The Neconde Energy Limited consortium reaches an agreement with Shell, Total and Eni for the acquisition of a 45% interest in OML 42 in Nigeria | - |
EvaluateEnergy tracks every global upstream deal on a daily basis, estimating normalised deal value, in-depth financial and operating detail behind each deal and an explanation and opinion on deal rationale . Normalised deal value reveals underlying reserve values.
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