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Showing posts with label EnCana. Show all posts
Showing posts with label EnCana. Show all posts
[NORTH AMERICA] EnCana splitting into two companies
Published | 15-May-2008
Canadian oil and gas giant EnCana Corp. said Sunday it's splitting into two companies, but operations in Colorado are likely to remain "business as usual," a Denver-based spokesman said Monday.
EnCana is based in Calgary, Alberta, Canada. Its U.S. division is based in Denver.
"It's driven by shareholder value," said Doug Hock, spokesman for Denver's EnCana Oil & Gas (USA) Inc. "It shouldn't affect our operations at all. It's business as usual in terms of exploring for and producing natural gas."
EnCana is one of Colorado's largest natural gas producers, with operations in the rich Piceance Basin on Colorado's Western Slope and north of Denver in the Denver-Julesburg Basin.
The parent company announced Sunday that the board of directors had unanimously approved a proposal to split EnCana into two energy companies -- one a natural gas company with assets in Canada and the United States, and the second a fully integrated oil company focused on producing oil from oilsands in Canada and running refineries in a joint venture with ConocoPhillips in Texas and Illinois.
The natural gas company is expected to retain the EnCana name, while the oil company will operate under a new name, tentatively called "IntegratedOilCo." or IOCo.
The natural gas company represents about two-thirds of EnCana's current production and proved reserves.
Shares of EnCana rose in early trading Monday in response to the news.
EnCana is based in Calgary, Alberta, Canada. Its U.S. division is based in Denver.
"It's driven by shareholder value," said Doug Hock, spokesman for Denver's EnCana Oil & Gas (USA) Inc. "It shouldn't affect our operations at all. It's business as usual in terms of exploring for and producing natural gas."
EnCana is one of Colorado's largest natural gas producers, with operations in the rich Piceance Basin on Colorado's Western Slope and north of Denver in the Denver-Julesburg Basin.
The parent company announced Sunday that the board of directors had unanimously approved a proposal to split EnCana into two energy companies -- one a natural gas company with assets in Canada and the United States, and the second a fully integrated oil company focused on producing oil from oilsands in Canada and running refineries in a joint venture with ConocoPhillips in Texas and Illinois.
The natural gas company is expected to retain the EnCana name, while the oil company will operate under a new name, tentatively called "IntegratedOilCo." or IOCo.
The natural gas company represents about two-thirds of EnCana's current production and proved reserves.
Shares of EnCana rose in early trading Monday in response to the news.
Source: Denver Business Journal | By Cathy Proctor Denver
[UNITED STATES] New discovery leads to riches and concerns. Gas boom or bust?
Published | 04-May-2008The recent announcement of a large natural gas deposit in northwest Louisiana, called the Haynesville Shale, could be this century's gold rush - or a fool's gold of hype. The only certainty at this point is that some fortunate landowners already are grinning all the way to the bank.
The Haynesville Shale in northwest Louisiana is being described as one of the richest fields of natural gas ever discovered in this region. But most experts and those connected to the industry agree it's too early to say if the discovery will transform the landscape and economy of parishes that sit atop it.
The shale's boundaries are still up for interpretation. But the hot zones appear to include all of DeSoto Parish, the mid to southern regions of Caddo and Bossier parishes, the southern tip of Webster, the western end of Bienville Parish, most of Red River Parish, the upper parts of Sabine and Natchitoches parishes and sections of East Texas.
If the shale holds the amount of natural gas that is being predicted, it could mean millions for some landowners, a boom in the natural gas production business in this region, and a trickle-down bounty for communities, schools and others.
"The economic impact will be absolutely monstrous if it's as big as it can be," said Don Briggs, president of the Louisiana Oil and Gas Association.
What if the Haynesville Shale turns out to overshadow the East Texas Barnett Shale, which until now has been the granddaddy of all natural gas fields?
"We don't know how that will look. It's going to take a little time," Briggs said. "However, there's obviously enough evidence with the preliminary test that certainly has sparked an immense fever of excitement about drilling in the Haynesville Shale, and it could be very big. The economic impact to the northwest part of the state and the state of Louisiana will be very substantial."
He added: "I think ... you will see at least 70 rigs running up there next year. That's a good number, with about 40 running now. You'll see that almost double. Every rig has a direct employment rate of 184 jobs, so indirectly you're talking about a lot of new employment, sales taxes to the parishes. You're talking about royalty payments to the landowners and you're talking about leasing to the landowners."
The need for more energy in the United States is behind the push to explore these natural gas fields. Louisiana is a net consumer of natural gas, consuming all of what's produced in state.
"We have a tremendous need for it with all of the petrochemical industry that we have. That's a power source. ... The heart of the natural gas industry flows through all of Louisiana and flows through the rest of the country. Twenty-five percent of all natural gas for the country flows through Louisiana," Briggs said.
It could take several years before the potential, or lack thereof, of the Haynesville Shale is fully realized. Drilling likely will shift from the standard vertical wells to more expensive horizontal wells, requiring more manpower, equipment, expertise and time. Predictions are it will take another year or so before knowing if it's a viable commercial opportunity.
But in the interim, the quick influx of lease bonus checks probably means new homes, cars and shopping sprees.
Still, the frenzy has landowners already in a quandary. Some who snapped up early lease offers before word of the Haynesville Shale leaked out are kicking themselves for accepting what they now believe were low payments.
"I saw my neighbors were getting not so good deals so I decided to start people talking," said Stonewall area property owner Kassi Fitzgerald, who on April 26 led an informal gathering to share what she learned through her own research. "I'm concerned about the small landowner."
The registered nurse expected only her neighbors would show up. The 300 to 400 people who descended upon Stonewall were evidence of the interest. Another 500 to 600 people turned out for a separate seminar led by a Texas oil and gas consultant that afternoon near Mansfield.
The announcement
The race for the play - an oil and gas industry term for staking out opportunity - quietly has been under way for about two years with one company, Oklahoma-based Chesapeake Energy, putting more than 200,000 acres in northwest Louisiana under lease with plans to add another 300,000 acres. Industry officials say another company, Cubic Energy, has been drilling on the shale for four years.
With Chesapeake ahead in the play for land, other companies are wasting little time catching up. Petrohawk Energy Corp of Houston has acquired more than 70,000 acres in northwest Louisiana.
Other companies snatching up lease acreage include Encana, Questar, Camterra, Fossil Operating and Shell Western, according to information from the Louisiana Office of Conservation. An informal list at the DeSoto clerk's office adds Comstock, El Paso, Pin Oak, Sun Coast, Audubon Gas and Winchester.
The Louisiana Office of Conservation will not weigh in on the natural gas leasing fever, Commissioner James "Jim" Welsh said. The state office issues drilling permits and holds public hearings to establish production units but it does not regulate leasing activity, the location or the payouts.
"The companies furnish to us what they are required to furnish. A lot of the information that's being circulated right now, we can't verify," Welsh said.
That's one of the issues that makes the Haynesville Shale a still unknown. With no independent verification of the significance of the underground natural gas reserve, the general public, and more specifically landowners, are relying upon industry officials for information.
Well operators are understandably guarded about their production efforts and thus the potential commercial aspect. Information gathered in the test holes is proprietary. Companies do not have to begin reporting production numbers to the state until after the well is completed, its infrastructure is in place and the harvesting begins. Sometimes that can take two months, said Todd Keating, Office of Conservation engineering director.
All is not rosy
Quick riches and visions of bulging bank accounts are foremost in the minds of many. But some folks in Frierson don't see dollar signs. Instead, it's the opposite end of the rosy picture - the belching machines, congested traffic, bright lights and unexplained rumblings that well activity brings.
And the prospect of even more wells popping up across DeSoto Parish only opens the door to the potential of more problems. More than two dozen Frierson families are only four months removed from a well explosion that kept them from their homes between Christmas and New Year's.
"We're afraid of what's going to happen. ... We thought we could sell and get out of here. But we contacted an appraiser and she said it's definitely going to be a deduction because of what's in the back yard. So we probably couldn't get for it what we owe. We benefit absolutely none from what's going on. Our property is devalued," said Dawn Williams, whose family was one of those displaced by the well explosion on Stonewall-Frierson Road.
In November, Interstate 10 near Baton Rouge was closed for more than a week after a well blew. Proposed legislation that would have prohibited new drilling within 1,000 feet of interstates has been killed.
However, a moratorium restricting new drilling operations within a quarter-mile of interstates is in effect until the end of May. An ad hoc committee is working under state conservation office commissioner Jim Welsh's direction to come up with drilling safety regulations. Nothing has been finalized to this point, Welsh said.
Fitzgerald, who hopes to organize her Stonewall area neighbors in their dealings with the oil and gas companies, also cautions those who sign leases to include clauses that will address safety concerns, such as fencing and the location of access roads. She has suggested that photographs be taken of the house and property so that it can be restored if damage occurs.
"We just need to stop and think, talk to our neighbors. We don't need to get so overly greedy that we forget to look at the whole picture," Fitzgerald said.
Billy K. Lemons, principal consultant with Resource Analyt and Management Group of Nacogdoches, Texas, believes it's important to remember that the "oil and gas industry is not our enemy. Much to the contrary is true."
"It takes two to tango, and we are strong believers in free enterprise and the free market system. We champion those ideals, and we admire anyone who is brave and determined enough to sink millions of dollars into a hole in the ground without knowing for certain what's going to come out of it, if anything but salt water."
With all parties working together, the Haynesville Shale likely could "blow the socks off of northwest Louisiana," Lemons said.
The Haynesville Shale in northwest Louisiana is being described as one of the richest fields of natural gas ever discovered in this region. But most experts and those connected to the industry agree it's too early to say if the discovery will transform the landscape and economy of parishes that sit atop it.
The shale's boundaries are still up for interpretation. But the hot zones appear to include all of DeSoto Parish, the mid to southern regions of Caddo and Bossier parishes, the southern tip of Webster, the western end of Bienville Parish, most of Red River Parish, the upper parts of Sabine and Natchitoches parishes and sections of East Texas.
If the shale holds the amount of natural gas that is being predicted, it could mean millions for some landowners, a boom in the natural gas production business in this region, and a trickle-down bounty for communities, schools and others.
"The economic impact will be absolutely monstrous if it's as big as it can be," said Don Briggs, president of the Louisiana Oil and Gas Association.
What if the Haynesville Shale turns out to overshadow the East Texas Barnett Shale, which until now has been the granddaddy of all natural gas fields?
"We don't know how that will look. It's going to take a little time," Briggs said. "However, there's obviously enough evidence with the preliminary test that certainly has sparked an immense fever of excitement about drilling in the Haynesville Shale, and it could be very big. The economic impact to the northwest part of the state and the state of Louisiana will be very substantial."
He added: "I think ... you will see at least 70 rigs running up there next year. That's a good number, with about 40 running now. You'll see that almost double. Every rig has a direct employment rate of 184 jobs, so indirectly you're talking about a lot of new employment, sales taxes to the parishes. You're talking about royalty payments to the landowners and you're talking about leasing to the landowners."
The need for more energy in the United States is behind the push to explore these natural gas fields. Louisiana is a net consumer of natural gas, consuming all of what's produced in state.
"We have a tremendous need for it with all of the petrochemical industry that we have. That's a power source. ... The heart of the natural gas industry flows through all of Louisiana and flows through the rest of the country. Twenty-five percent of all natural gas for the country flows through Louisiana," Briggs said.
It could take several years before the potential, or lack thereof, of the Haynesville Shale is fully realized. Drilling likely will shift from the standard vertical wells to more expensive horizontal wells, requiring more manpower, equipment, expertise and time. Predictions are it will take another year or so before knowing if it's a viable commercial opportunity.
But in the interim, the quick influx of lease bonus checks probably means new homes, cars and shopping sprees.
Still, the frenzy has landowners already in a quandary. Some who snapped up early lease offers before word of the Haynesville Shale leaked out are kicking themselves for accepting what they now believe were low payments.
"I saw my neighbors were getting not so good deals so I decided to start people talking," said Stonewall area property owner Kassi Fitzgerald, who on April 26 led an informal gathering to share what she learned through her own research. "I'm concerned about the small landowner."
The registered nurse expected only her neighbors would show up. The 300 to 400 people who descended upon Stonewall were evidence of the interest. Another 500 to 600 people turned out for a separate seminar led by a Texas oil and gas consultant that afternoon near Mansfield.
The announcement
The race for the play - an oil and gas industry term for staking out opportunity - quietly has been under way for about two years with one company, Oklahoma-based Chesapeake Energy, putting more than 200,000 acres in northwest Louisiana under lease with plans to add another 300,000 acres. Industry officials say another company, Cubic Energy, has been drilling on the shale for four years.
With Chesapeake ahead in the play for land, other companies are wasting little time catching up. Petrohawk Energy Corp of Houston has acquired more than 70,000 acres in northwest Louisiana.
Other companies snatching up lease acreage include Encana, Questar, Camterra, Fossil Operating and Shell Western, according to information from the Louisiana Office of Conservation. An informal list at the DeSoto clerk's office adds Comstock, El Paso, Pin Oak, Sun Coast, Audubon Gas and Winchester.
The Louisiana Office of Conservation will not weigh in on the natural gas leasing fever, Commissioner James "Jim" Welsh said. The state office issues drilling permits and holds public hearings to establish production units but it does not regulate leasing activity, the location or the payouts.
"The companies furnish to us what they are required to furnish. A lot of the information that's being circulated right now, we can't verify," Welsh said.
That's one of the issues that makes the Haynesville Shale a still unknown. With no independent verification of the significance of the underground natural gas reserve, the general public, and more specifically landowners, are relying upon industry officials for information.
Well operators are understandably guarded about their production efforts and thus the potential commercial aspect. Information gathered in the test holes is proprietary. Companies do not have to begin reporting production numbers to the state until after the well is completed, its infrastructure is in place and the harvesting begins. Sometimes that can take two months, said Todd Keating, Office of Conservation engineering director.
All is not rosy
Quick riches and visions of bulging bank accounts are foremost in the minds of many. But some folks in Frierson don't see dollar signs. Instead, it's the opposite end of the rosy picture - the belching machines, congested traffic, bright lights and unexplained rumblings that well activity brings.
And the prospect of even more wells popping up across DeSoto Parish only opens the door to the potential of more problems. More than two dozen Frierson families are only four months removed from a well explosion that kept them from their homes between Christmas and New Year's.
"We're afraid of what's going to happen. ... We thought we could sell and get out of here. But we contacted an appraiser and she said it's definitely going to be a deduction because of what's in the back yard. So we probably couldn't get for it what we owe. We benefit absolutely none from what's going on. Our property is devalued," said Dawn Williams, whose family was one of those displaced by the well explosion on Stonewall-Frierson Road.
In November, Interstate 10 near Baton Rouge was closed for more than a week after a well blew. Proposed legislation that would have prohibited new drilling within 1,000 feet of interstates has been killed.
However, a moratorium restricting new drilling operations within a quarter-mile of interstates is in effect until the end of May. An ad hoc committee is working under state conservation office commissioner Jim Welsh's direction to come up with drilling safety regulations. Nothing has been finalized to this point, Welsh said.
Fitzgerald, who hopes to organize her Stonewall area neighbors in their dealings with the oil and gas companies, also cautions those who sign leases to include clauses that will address safety concerns, such as fencing and the location of access roads. She has suggested that photographs be taken of the house and property so that it can be restored if damage occurs.
"We just need to stop and think, talk to our neighbors. We don't need to get so overly greedy that we forget to look at the whole picture," Fitzgerald said.
Billy K. Lemons, principal consultant with Resource Analyt and Management Group of Nacogdoches, Texas, believes it's important to remember that the "oil and gas industry is not our enemy. Much to the contrary is true."
"It takes two to tango, and we are strong believers in free enterprise and the free market system. We champion those ideals, and we admire anyone who is brave and determined enough to sink millions of dollars into a hole in the ground without knowing for certain what's going to come out of it, if anything but salt water."
With all parties working together, the Haynesville Shale likely could "blow the socks off of northwest Louisiana," Lemons said.
Source: TheAdvertiser
NORTH AMERICA: Energy prices expected to benefit Nexen and Talisman most
Published | 18-Feb-2008
Nexen Inc. and Talisman Energy Inc. stand to benefit most from a sizeable uptick in oil and natural gas prices last quarter, according to Blackmont Capital. A handful of Canada’s senior producers are set to roll out fourth quarter earnings, starting Wednesday with EnCana Corp. and Nexen. Talisman and Canadian Natural Resources Ltd. report in two weeks.
Trends that shaped results include oil prices rallying 20% from the third quarter and a 12% lift in natural gas prices. Benchmark West Texas Intermediate oil averaged US$90.48 last quarter, a full 51% higher than the same quarter in 2006, Blackmont’s energy team said in a research note.
Countering gains from those higher prices was the loonie’s appreciation next to the U.S. dollar, which cuts into price realizations for Canadian producers. Other negatives include the usual decline in demand and pricing for heavier oil blends over the winter months and a similar seasonal decrease in refining margins.
Blackmont is forecasting earnings per share (fully diluted) for Nexen will jump 43% from 62 cents in the third quarter to 89 cents, while earnings per share (fully diluted) for Talisman should rise 36% between quarters, from 24 cents to 32 cents.
As for EnCana, Blackmont expects earnings per share (fully diluted) of $1.23 in the quarter, down 3% from $1.27 in the previous quarter.
Trends that shaped results include oil prices rallying 20% from the third quarter and a 12% lift in natural gas prices. Benchmark West Texas Intermediate oil averaged US$90.48 last quarter, a full 51% higher than the same quarter in 2006, Blackmont’s energy team said in a research note.
Countering gains from those higher prices was the loonie’s appreciation next to the U.S. dollar, which cuts into price realizations for Canadian producers. Other negatives include the usual decline in demand and pricing for heavier oil blends over the winter months and a similar seasonal decrease in refining margins.
Blackmont is forecasting earnings per share (fully diluted) for Nexen will jump 43% from 62 cents in the third quarter to 89 cents, while earnings per share (fully diluted) for Talisman should rise 36% between quarters, from 24 cents to 32 cents.
As for EnCana, Blackmont expects earnings per share (fully diluted) of $1.23 in the quarter, down 3% from $1.27 in the previous quarter.
Canadian Natural said Tuesday costs to build the first phase of its Horizon oilsands project have risen for a third time in 12 months and will come in almost $2-billion higher than original projections of $6.8-billion.
The company, which like all the others except EnCana has sizeable oil and gas assets outside of North America, should generate earnings per share (fully diluted) of $1.11, down almost 5% from $1.17 in the third quarter, Blackmont said.
The company, which like all the others except EnCana has sizeable oil and gas assets outside of North America, should generate earnings per share (fully diluted) of $1.11, down almost 5% from $1.17 in the third quarter, Blackmont said.
Source: National Post|by Jon Harding
eNergySTOCKS: British Petroleum go for oil-sands
Published | 05-Dec-2007 BP rose on plans to venture into the Canadian oil sands on Tuesday amid a surge in energy stocks on tight oil inventories and plans by OPEC to hold production steady.
The overall market also provided a big lift, with the Dow Jones Industrial Average ($DJ:13,444.96, +196.23, +1.5%) rallying nearly 200 points in midday action on strong U.S. productivity gains and private-sector hiring. Crude-oil stocks fell by 8 million barrels to 305.2 million barrels in the past week, well below the forecast for a dip of 1.7 million barrels. Crude-oil futures rose 50 cents to $88.82.
In a move to tap into what's often regarded as the largest oil reserves in the world outside Saudi Arabia, BP (BP:73.68, +1.33, +1.8%) said it will exchange half of a stake in its Toledo refinery for a half share of Husky Energy's Sunrise field in Alberta.
"BP's move into oil sands is an opportunity to build a strategic, material position and the huge potential of Sunrise is the ideal entry point for BP into Canadian oil sands," said Tony Hayward, BP's group chief executive.
BP shares rose 2.2% to $73.93. Oil sands specialists Suncor Energy (SU:100.80, +3.06, +3.1%) and Encana (ECA:65.50, +1.21, +1.9%) rose 3.3% and 2.3%, respectively. The Amex Oil Index (XOI:1,445.74, +23.02, +1.6%) rose 1.9% to 1, 450 as it outpaced the 1.4% jump in the Dow Jones Industrial Average and the gain of 1.5% by the S&P 500 ($SPX:1,485.01, +22.22, +1.5%) . Hess Corp. (HES:74.62, +2.02, +2.8%) added 3.4% to $75.04, Chevron (CVX:89.30, +2.14, +2.5%) added 2.6% to $89.44 and Exxon Mobil (XOM:288.58, +1.43, +0.5%) advanced 1.1% to 290. Standouts in the group included Weatherford , up 3.3% to $65.83, and Schlumberger (SLB:95.80, +1.96, +2.1%) , up 3.1% to $96.72.
The Amex Natural Gas Index (XNG: 551.54, +10.59, +2.0%) advanced 2% to 552. Southwestern Energy jumped 4.2% to $53.08 as a leading gainer from the gauge. ConocoPhillips (COP:81.36, +1.66, +2.1%) added 2.3% to $81.55. The oil giant said Alaska may select the builder of a pipeline system to transport natural gas from the North Slope to the lower 48 states by June 2008, according to reports. Last week, ConocoPhillips proposed a $30 billion pipeline to link deposits in the North Slope to the lower 48 states and Canada.
Hercules Offshore (HERO: 23.65, +0.21, +0.9%) rose 2.7% to $24.07 after it announced two new three-year drilling contracts for operations in India. The contracts are expected to generate $156 million in revenue per year.
Teekay LNG Partners LP rose 1.1% to $30.25 after Citi Investment Research upgraded the company to buy from hold.
"Our upgrade is essentially a valuation call and is driven by the nearly 11% drop in unit prices since early November despite fundamentals remaining unchanged," Citi said.
Via: MarketWatch|by Steve Gelsi
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NORTH AMERICA: in Canada, EnCana gets OK for $700M Deep Panuke
Published | 04-Oct-2007
Canadian federal and provincial regulators have said ”okay” to Calgary-based EnCana’s C$700-million Deep Panuke gas development offshore Atlantic Canada.
Halifax Premier Rodney McDonald made the announcement today at a Halifax, although EnCana itself has not yet approved the project’s cost and benefits plan, newspaper The Globe & Mail reported citing the Canadian Press.
The company has said tax changes far away in the oil province of Alberta could hit finances enough to alter “future investments”.
Last week, EnCana managers warned government that if all tax changes proposed by the Alberta Royalty Review Panel are adopted, the company might cull by 40 percent its investments in the prairie province.
Halifax Premier Rodney McDonald made the announcement today at a Halifax, although EnCana itself has not yet approved the project’s cost and benefits plan, newspaper The Globe & Mail reported citing the Canadian Press.
The company has said tax changes far away in the oil province of Alberta could hit finances enough to alter “future investments”.
Last week, EnCana managers warned government that if all tax changes proposed by the Alberta Royalty Review Panel are adopted, the company might cull by 40 percent its investments in the prairie province.
Via: Scandinavian Oil and Gas
BRASIL: Videocon And BPCL are in shoppings
Published | 14-Sep-2007
The transaction is for interests in ten deep water offshore exploration blocks in four concessions in Brazil. The sale has an effective date of January 01, 2007 and is subject to normal closing conditions, regulatory approvals, pre-emptive rights associated with certain assets, and is expected to close in the first quarter of 2008.
A consortium of oil refiner Bharat Petroleum Corp Limited (BPCL) and Videocon Industries has decided to buy Brazil´s EnCana Brasil Petroleo Limitada for about $165 million (about Rs 675 crore).
Videocon, a diversified group whose businesses range from power to home appliances, and Bharat PetroResources Ltd (a subsidiary of BPCL) are equal partners in the consortium that will buy EnCana Brasil Petroleo from Canadian natural gas producer EnCana Corp and 749793 Alberta Ltd, the companies said in separate statements to the Bombay Stock Exchange.
BPCL, which did not disclose financial details, said the deal was for interests in 10 deepwater offshore exploration blocks in four concessions in Brazil.
The sale, which will be effective retrospectively from January 1, 2007, is subject to regulatory approval, pre-emptive right associated with certain assets, and is expected to close in the first quarter of 2008.
Indian companies have stepped up the pace of foreign acquisitions, striking deals worth more than $16 billion (about Rs 65,600 crore) to late-August this year, up from $6.2 billion (about Rs 25,400 crore) in the same period a year earlier, data from Dealogic showed. State-run BPCL, the country�s third-biggest refiner, said earlier this month that it would spend up to $370 million (about Rs 1,500 crore) on exploration over two-three years, targeting small stakes in development and producing fields in West Africa, Brazil, South America and Australia.
BPCL, which has stakes in 14 oil and gas blocks in India and abroad, had set up Bharat PetroResources to spearhead its exploration drive, which it expects will offset under-recoveries in refining and marketing.
Shares in Videocon closed 0.48 per cent down at Rs 366 on the Bombay Stock Exchange, whereas BPCL was among the top gainers, up 0.5 per cent on the BSE at 310.60 in a generally firm market.
Videocon, a diversified group whose businesses range from power to home appliances, and Bharat PetroResources Ltd (a subsidiary of BPCL) are equal partners in the consortium that will buy EnCana Brasil Petroleo from Canadian natural gas producer EnCana Corp and 749793 Alberta Ltd, the companies said in separate statements to the Bombay Stock Exchange.
BPCL, which did not disclose financial details, said the deal was for interests in 10 deepwater offshore exploration blocks in four concessions in Brazil.
The sale, which will be effective retrospectively from January 1, 2007, is subject to regulatory approval, pre-emptive right associated with certain assets, and is expected to close in the first quarter of 2008.
Indian companies have stepped up the pace of foreign acquisitions, striking deals worth more than $16 billion (about Rs 65,600 crore) to late-August this year, up from $6.2 billion (about Rs 25,400 crore) in the same period a year earlier, data from Dealogic showed. State-run BPCL, the country�s third-biggest refiner, said earlier this month that it would spend up to $370 million (about Rs 1,500 crore) on exploration over two-three years, targeting small stakes in development and producing fields in West Africa, Brazil, South America and Australia.
BPCL, which has stakes in 14 oil and gas blocks in India and abroad, had set up Bharat PetroResources to spearhead its exploration drive, which it expects will offset under-recoveries in refining and marketing.
Shares in Videocon closed 0.48 per cent down at Rs 366 on the Bombay Stock Exchange, whereas BPCL was among the top gainers, up 0.5 per cent on the BSE at 310.60 in a generally firm market.
Via| Business-standard
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SPAIN - AMERICAS : Repsol Unit Plans to Sell Gulf of Mexico Assets
Published | 01-Sep-2007Maxus Energy Corp., a unit of Spain's Repsol YPF SA, plans to sell oil and natural-gas assets in the Gulf of Mexico that may be worth as much as $7.38 billion, according to sale adviser Tristone Capital Inc.
Maxus owns the Guppy Wake prospect on the Mississippi Canyon 974 and Atwater Valley 6 blocks, and holds a 90 percent interest in the Green Canyon 470 block, which includes the Ra Deep and Ra Shallow prospects, documents on Tristone's Web site show.
The fields, which are located in water depths of 2,200 feet (670 meters) to 3,400 feet, are estimated to have a combined resource potential of 455 million barrels of oil equivalent, according to the documents, which were posted yesterday.
Maxus is selling because it may not be able to develop the assets before some of the leases expire, Tristone Vice President Tom Duncan said today in an interview from Houston. The Green Canyon lease expires in 2009 without development and Mississippi Canyon's and Atwater Valley's end in 2015, the documents show.
``They have quite a substantial leasehold in the deepwater Gulf of Mexico,'' he said. ``They just prioritized and said `we only have so much capital and so much time, we need to move some of these and try to monetize these for investments somewhere else.'''
`Quite Strategic'
The estimated value is ``unrisked,'' Duncan said. ``Most people will apply some risk factor'' to the value. Maxus prefers cash and an overriding royalty interest for the assets to benefit from a potential upside in the prospects and would consider selling the blocks separately, he said.
``This is a very sizeable set of deepwater assets that could be quite strategic to some offshore operators,'' said Pavel Molchanov, an analyst at Raymond James & Associates Inc. in Houston. The purchase price ``is not going to be anywhere near what it would have been if these were proved reserves.''
He said Gulf of Mexico assets have sold for an average of $18 to $24 a barrel of proved reserves in the past 12 months. Based on Tristone's valuation, the Maxus assets would be worth about $16.23 a barrel, if all the oil were produced.
Guppy Wake is in the vicinity of projects such as Mars, owned by Royal Dutch Shell Plc and BP Plc. The Ra prospects are within 4 miles of Chevron Corp.'s Knotty Head discovery, which includes the deepest well ever drilled in the Gulf of Mexico.
Shenzi
Madrid-based Repsol in July 2006 bought BP's 28 percent stake in the Shenzi deepwater Gulf project for $2.15 billion to help stem a three-year decline in reserves and almost quintuple its production in the region. Shenzi will add 28,000 barrels a day to output by 2009 to the daily 7,500 barrels Repsol expects to begin pumping elsewhere in the Gulf this year.
Companies which are expanding in the Gulf include Italy's Eni SpA, which in July paid about $4.7 billion for properties there from Dominion Resources Inc., and Norway's Statoil ASA, which in 2005 bought Gulf fields from EnCana Corp. for about $2 billion.
Ra Deep and Ra Shallow are 86 percent and 97 percent oil respectively, the documents show. Hess Corp. owns the remaining 10 percent of Ra. Guppy Wake is 86 percent oil.
A data room will open Sept. 4. Final offers are due by Sept. 27 and the transaction is expected to close in early November, the documents show. The effective date of the sale is Oct. 1.
Tristone is providing transaction and technical advisory services for the sale. A Repsol spokesman in Madrid, who declined to be identified, was unable to immediately provide more details nor to confirm the sale plan.
