EPL Oil & Gas, Inc. (EPL or the Company) announced it has executed a purchase and sale agreement to acquire certain shallow water Gulf of Mexico (GOM) shelf oil and natural gas interests from Hilcorp Energy GOM Holdings, LLC (Hilcorp) for $550 million.
The assets are currently producing approximately 10,000 barrels of oil equivalent (boe) per day, about 50% of which are oil. Estimated proved reserves as of the July 1, 2012 economic effective date totaled approximately 36.3 million boe, 54% of which are oil. The properties include three fields that Hilcorp had acquired from Chevron Corporation in Ship Shoal Block 208, South Pass 78, and South Marsh Island 239, which are all on the Central GOM shelf in the vicinity of EPL’s existing core field areas. These three fields account for 64% of the current proved reserves, and approximately 82% of the total proved acquisition PV10 value estimated at $626 million using strip prices as of August 31, 2012 (see discussion of PV10 in appendix). The currently estimated asset retirement obligation to be assumed by EPL in the acquisition is expected to total approximately $120 million.
Gary Hanna, EPL’s President and CEO commented, “This is the fourth acquisition we have made since 2011, and it is the most transformational. This accretive acquisition provides scale and diversification while continuing to focus the value of our Company in the Central gulf, which is the most prolific, oil bearing region of the GOM. These underdeveloped, legacy Chevron assets allow us to leverage our proven strengths as an efficient exploiter of shallow water shelf assets.
The high operating control of 95% will permit us timely access to the development opportunities that exist on these properties. There are already over 90 low-risk, oil-rich shallow behind pipe and drilling opportunities, as well as numerous optimization projects that our operational teams will vigorously pursue. Meanwhile, as our successful strategy has demonstrated with prior acquisitions, we will apply our proven regional knowledge and technical skills to identify and exploit the upside potential of these acquired properties in short order.”
Gary Hanna continued, “This transaction nearly doubles our proved reserves to approximately 74 million boe. Additionally, it drives our production above 20,000 boe per day, supports EBITDAX generation in 2013 in the range of $450 million to $500 million and is very accretive to our key operational and valuation metrics. This transformational acquisition fits all of our acquisition criteria.”
In conjunction with signing the purchase and sale agreement, EPL will add to its crude oil and natural gas hedge positions to provide downside protection. The Company is planning to hedge 80% of the forecasted proved producing oil and natural gas production of the assets being acquired for years 2013 through 2015, with 2013 hedges scheduled to be secured early this week representing approximately 80% of forecasted proved production. Approximately 50% of EPL’s existing oil production is hedged for 2013.
In addition to utilizing cash on hand to finance the purchase, EPL has obtained committed financing from Bank of Montreal to complete the transaction, including an increase in its senior secured credit facility from $250 million to $750 million. The borrowing base under this expanded credit facility has been increased from $200 million to $450 million in conjunction with the acquisition. Additionally, Bank of Montreal and BMO Capital Markets have provided the Company a commitment for $200 million in the form of a senior unsecured bridge loan, which is expected to remain unutilized as the Company plans to access the high yield market for permanent financing before the anticipated closing date in late October.
The purchase is subject to customary closing conditions and adjustments. Hilcorp has indicated to EPL that this sale represents their exit from the GOM shelf. The economic effective date is July 1, 2012, with closing expected by October 31, 2012. EPL has submitted a 10 percent cash deposit to Hilcorp under the terms of the purchase agreement.
- Energy Partners (EPL) Changes Name to EPL Oil & Gas (streetinsider.com)
GMC and Horton Wison Deepwater confirmed their Joint Venture established to design and supply innovative Buoyant Towers for shallow water fields.
Kevin Chell, CEO of the joint venture, stated “The Buoyant Tower concept draws on the proven technology of the cellspar and the design provides multiple benefits for fields where other concepts would be problematic requiring high capital costs and expensive crane barges for installation. The buoyant tower can operate in water depths up to 600 feet and can be relocated allowing small marginal plays to be exploited in a cost effective manner. The design allows for hydrocarbon storage if needed, can eliminate separate shallow water drilling units and provides a high level of flexibility for the operator.”
The benefits of the design were recognized and adopted by BPZ Energy for their new platform at the Corvina field offshore Peru. The tower is composed of four cylindrical cells and is connected to the seabed by a single suction pile which is integral to the hull structure. The tower and decks with the production equipment will be transported from the fabrication yard to Corvina on a submersible heavy lift ship. After upending, fixed and variable ballast will be pumped into the hull to provide stability for the platform.
The CX-15 shallow water tower is well on track for a summer 2012 installation and will be the first application of this design. The platform is designed for 12,200 barrels of oil per day, gas compression capacity of 12.8 million standard cubic feet per day and produced water handling and injection capacity of 3,500 barrels per day. A total of 24 drill slots will be available, some of which will be used for gas and water reinjection wells. The CX-15 platform will be located about one mile from the existing CX-11 Corvina platform, with both platforms interconnected via a series of subsea pipelines.
The JV completed the FEED scope in 2011 which led to detailed design for the buoyant tower. Fabrication is underway at Wison Offshore and Marine’s yard in Nantong, China. GMC are also providing project management and installation services for the CX-15 platform.
Jim Maher, COO of the JV, commented “We are pleased to be working with BPZ Energy on this important project which draws upon deepwater technology and applies it in the shallow water arena.”
Friday, April 20, 2012 – by Staff Report
Huge’ water resource exists under Africa … Scientists say the notoriously dry continent of Africa is sitting on a vast reservoir of groundwater. They argue that the total volume of water in aquifers underground is 100 times the amount found on the surface. The team have produced the most detailed map yet of the scale and potential of this hidden resource. Writing in the journal Environmental Research Letters, they stress that large scale drilling might not be the best way of increasing water supplies. Across Africa more than 300 million people are said not to have access to safe drinking water. Demand for water is set to grow markedly in coming decades due to population growth and the need for irrigation to grow crops. – BBC
Dominant Social Theme: Water, water everywhere … it’s a miracle! Who would have thunk …
Free-Market Analysis: We’ve charted this elite meme for several years – water scarcity. The powers-that-be create fear-based scarcity promotions and then propose globalist solutions. Water scarcity is a big promotion for them – and this meme is a central one these days.
Right on schedule, it’s been determined that Africa has water after all. Of course, Western scientists had to make this determination. This is part of the larger “cult of the expert” that the elites seek to inculcate. Until it can be documented by elite facilities, it doesn’t exist.
But now it does. There’s LOTS of water in Africa after all (just as there is LOTS of oil in the world, and lots of food as well, if the powers-that-be would only stop tampering with seeds). Here’s some more from the article:
Now scientists have for the first time been able to carry out a continent-wide analysis of the water that is hidden under the surface in aquifers. Researchers from the British Geological Survey and University College London (UCL) have mapped in detail the amount and potential yield of this groundwater resource across the continent.
Helen Bonsor from the BGS is one of the authors of the paper. She says that up until now groundwater was out of sight and out of mind. She hopes the new maps will open people’s eyes to the potential.
“Where there’s greatest ground water storage is in northern Africa, in the large sedimentary basins, in Libya, Algeria and Chad,” she said.
“The amount of storage in those basins is equivalent to 75m thickness of water across that area – it’s a huge amount.” Due to changes in climate that have turned the Sahara into a desert over centuries many of the aquifers underneath were last filled with water over 5,000 years ago.
The scientists collated their information from existing hydro-geological maps from national governments as well as 283 aquifer studies. The researchers say their new maps indicate that many countries currently designated as “water scarce” have substantial groundwater reserves.
Note: the scientists didn’t really discover anything new. They “collated” their findings “from existing hydro-geological maps from national governments as well as 283 aquifer studies.” In other words, it was all a promotion, folks. “Parched Africa” was never more than an elite scarcity campaign. The maps showing plenty of water were there all along.
So what now? Having discovered that Africa has plenty of water, will the private market be left to make its magic? Not so fast.
A simple Internet search shows us that the other shoe may be dropped. That shoe, of course, would be globalist involvement. The whole point of creating scarcity memes is to propose globalist solutions that bring us closer to the world government so avidly sought by the powers-that-be.
Here’s an excerpt from a World Bank report, courtesy of Businessdayonline:
Finance required to raise infrastructure in Sub Saharan Africa to a reasonable level within the next decade is estimated at $93 Billion every year, a World Bank report has shown. The estimates cover the Information Communication Technology, Irrigation, Power, Transport and Water Supply and Sanitation sectors.
Of the total required, existing expenditure is estimated at $45 Billion per annum and after accounting for efficiency gains of $17 Billion, the funding gap remains at about $31Billion. ‘Infrastructure is a cardinal challenge facing Africa, thereby creating room for the inability of Africa to key into the avalanche of economic and commercial opportunities available in the continent,’ says Kenneth Okpara, Commissioner for Economic Planning, Delta State during March Breakfast forum of Nigerian-South African Chamber of Commerce sponsored by Warri Industrial Business Park.
Okpara noted that Africa’s infrastructure stocks and quality is among the least in the world, noting that lack of good governance is a major problem that prevents the continent from taking its rightful place as regards socio-economics. ‘One approach to address this challenge is to facilitate the increase of private provision of Public–Private Partnership (PPP),’ he notes, saying that the partnership assumes transactions where the private sector retains a considerable portion of commercial and financial risks associated with a project.
Okpara added that leveraging private sector financing through public private partnership and capital market (bonds) are the means through which the gap can be addressed.
It is fairly predictable, is it not? Africa suffers from a water problem – that turns out not to exist. But having raised the alarm, Western facilities stand ready to help. Chief among them is the World Bank that will provide much needed cash to reap the benefits of these aquifers, etc.
What may occur is wearily predictable. The World Bank lends cash to corrupt governments that squander or loot resources. The “country” is eventually unable to pay and the IMF arrives to impose “austerity” – including higher taxes and an asset sale.
Thus the powers-that-be consolidate command and control. Global governance – or at least its influence – expands.
Conclusion: Thanks to the Internet, we can clearly see the patterns now. Africa, in our view, is being readied for significant Western exploitation and it is no coincidence they are reappearing here – and now.
- Africa Has Incredible Amount Of Untapped Water Aquifers (inquisitr.com)
On March 16th, President Obama signed a new Executive Order which expands upon a prior order issued in 1950 for Disaster Preparedness, and gives the office of the President complete control over all the resources in the United States in times of war or emergency.
The National Defense Resources Preparedness order gives the Executive Branch the power to control and allocate energy, production, transportation, food, and even water resources by decree under the auspices of national defense and national security. The order is not limited to wartime implementation, as one of the order’s functions includes the command and control of resources in peacetime determinations.
Section 101. Purpose. This order delegates authorities and addresses national defense resource policies and programs under the Defense Production Act of 1950, as amended (the “Act”).
(b) assess on an ongoing basis the capability of the domestic industrial and technological base to satisfy requirements in peacetime and times of national emergency, specifically evaluating the availability of the most critical resource and production sources, including subcontractors and suppliers, materials, skilled labor, and professional and technical personnel; – White House
Additionally, each cabinet under the Executive Branch has been given specific powers when the order is executed, and include the absolute control over food, water, and other resource distributions.
Sec. 201. Priorities and Allocations Authorities. (a) The authority of the President conferred by section 101 of the Act, 50 U.S.C. App. 2071, to require acceptance and priority performance of contracts or orders (other than contracts of employment) to promote the national defense over performance of any other contracts or orders, and to allocate materials, services, and facilities as deemed necessary or appropriate to promote the national defense, is delegated to the following agency heads:
(1) the Secretary of Agriculture with respect to food resources, food resource facilities, livestock resources, veterinary resources, plant health resources, and the domestic distribution of farm equipment and commercial fertilizer;
(2) the Secretary of Energy with respect to all forms of energy;
(3) the Secretary of Health and Human Services with respect to health resources;
(4) the Secretary of Transportation with respect to all forms of civil transportation;
(5) the Secretary of Defense with respect to water resources; and
(6) the Secretary of Commerce with respect to all other materials, services, and facilities, including construction materials.
(e) “Food resources” means all commodities and products, (simple, mixed, or compound), or complements to such commodities or products, that are capable of being ingested by either human beings or animals, irrespective of other uses to which such commodities or products may be put, at all stages of processing from the raw commodity to the products thereof in vendible form for human or animal consumption. “Food resources” also means potable water packaged in commercially marketable containers, all starches, sugars, vegetable and animal or marine fats and oils, seed, cotton, hemp, and flax fiber, but does not mean any such material after it loses its identity as an agricultural commodity or agricultural product.
Executive Orders created for national defense and national preparedness are not new in American history, but in each instance they brought about a Constitutional crisis that nearly led standing Presidents to hold dictatorial power over the citizenry. During the Civil War, President Lincoln halted freedom of speech and freedom of the press, while at the same time revoking Habeas Corpus and the right to a fair trial under the sixth amendment. During World War I, when Congress refused to grant Woodrow Wilson extended power over resources to help the war effort, he invoked an Executive Order which allowed him complete control over businesses, industry, transportation, food, and other economic policies.
In both cases, it was only after the death of each President that full Constitutional powers were restored to the citizens of the United States.
The economy of the United States is based on the free flow of resources, energy, and the rights of consumers to buy and sell as they see fit. Any interference in this economic process quickly leads to shortages, rising prices, and civil unrest. The purpose of President Obama signing this new Executive Order is yet unclear, however, it may coincide with information coming out of Israel yesterday that plans for a tactical or strategic strike on Iran are accelerating. Oil prices in Europe rose over $3 a barrel for Brent crude after the Israeli actions, and US oil prices rose $2 for WTI.
The Obama administration appears to be preparing for a long drawn out war in the Middle East, or at the very least, an expected crisis that will require the need to override Constitutional authority and claim dominion over all resources in the United States under the guise of national defense. With the rise in Disaster Preparedness growing for both individuals and states leading up to yesterday’s Executive Order, the mood of the nation points strongly towards some event or disaster that will require massive preparations on a national as well as local scale.
Continue reading on Examiner.com
- Obama Prepares for “National Emergency”: nationalize everything (even you) w/o congressional oversight (atlasshrugs2000.typepad.com)
- Obama Prepares for “National Emergency”: nationalize everything (even you) w/o congressional oversight (kajunman.wordpress.com)
- Executive Order – National Defense Resources Preparedness | The White House (2012indyinfo.com)
- Obama Executive Order: Peacetime Martial Law! (Another shoe drops) (nebraskaenergyobserver.wordpress.com)
- Obama Signs Agenda 21-Related Executive Order (johnmalcolm.me)
- Obama issues Executive Order of effective Martial Law (genomega1.wordpress.com)