Houston-based Ajax Resources, a new exploration and production company backed by Kelso & Co. of New York, acquired 25,800 net acres in the Permian Basin from another Houston company, W&T Offshore, for $376.1 million. The assets are located in the Yellow Rose field in Andrews, Martin, Gaines and Dawson counties. The property includes 200 vertical and horizontal drilled and producting wells with 3,000 boed in July. “This sale will allow us to strengthen our balance sheet and improve our financial flexibility to pursue the acquisition of Gulf of Mexico assets while valuations are favorable,” Tracy Krohn, CEO and chairman of W&T Offshore, said in the company’s announcement Sept. 1. The transaction is expected to close in 2015Q3 with an effective date of Jan. 1, 2015. Ajax will be led by Forrest Wylie, chairman, and Harvey Klingensmith, CEO.
Dallas-based Gulf Coast Western acquired Frac Restraints of Midland in 2014 and CND Energy Services of Weatherford in 2015 and combined them into a new energy services subsidiary, Gulf Coast Western Energy Services. The new company will provide well completion and safety services in south and west Texas and the Macellus and Utica shale fields in Pennsylvania. Gulf Coast Western Energy Services operates facilities in Midland, San Angelo and Pittsburgh. “We are excited with the potential for growth in this sector of the oil and gas industry,” Matthew H. Fleeger, Gulf Coast Western CEO, said in the company’s announcement Aug. 17. Operations of the new company include oilfield spill and frac tank containment systems, water transfer, flow back water recovery services, well cleanup services, onsite cold clean equipment cleaning services, and high pressure pipe restraints.
Oklahoma City-based Red Bluff Resources Holdings was formed with a $300 million line of equity investment from Pine Brook Partners of New York to acquire, explore and develop crude oil and natural gas reserves in the Permian Basin and mid-continent. Timothy Haddican, CEO of Red Bluff, told the Midland Reporter Telegram that Red Bluff will pursue opportunities to acquire distressed assets from companies seeking to raise cash and from healthy companies looking to divest non-core assets. He said Red Bluff plans to leverage its expertise in horizontal drilling and fracturing completion technology to exploit its new properties. In the company’s announcement Aug. 5, Andre Burba, managing director, added, “Red Bluff has a well-thought-out strategy for identifying and accessing attractive opportunities and the local knowledge required for success.”
Six consecutive weeks of increases in the rig count for oil-directed, land-based units in the U.S. ended Sept. 4 with a decline of 13 rigs to 662, according to oilfield services firm Baker Hughes of Houston. Baker Hughes said the overall rig counts declined as of Sept. 4 for the previous week in the Permian Basin, Texas and the U.S. The overall declines were two in the Permian Basin to 253 (563 at this time last year), 11 in Texas to 375 (907 last year) and 13 in the U.S. to 864 (1,925 last year).
The other top states as of Sept. 4 were Oklahoma at 106 (up one from last week, down 107 from last year), Louisiana at 75 (up four from last week, down 42 from last year), North Dakota at 71 (down one from last week, down 112 from last year) and New Mexico at 48 (down two from last week, down 48 from last year).
The other top basins as of Sept. 4 were Eagle Ford at 93 (down four from last week, down 109 from last year), Williston at 72 (down one from last week, down 120 from last year), Marcellus at 51 (unchanged from last week, down 31 from last year) and Cana Woodford at 39 (down one from last week, up two from last year).
According to Baker Hughes counts, 67.5 percent of rigs in Texas are in the Permian Basin, 43.4 percent of rigs in the U.S. are in Texas, and 76.3 percent of rigs in the U.S. are horizontal.
Raymond James & Associates said it does not expect a meaningful rebound in the U.S. total rig count until late 2016. RJA told the Oil & Gas Journal that “the next 12 months in U.S. oilfield activity should be ugly, but look for a robust recovery in 2017.” RJA also noted the steady shift toward more productive horizontal drilling. “We estimate that horizontal rigs will represent about 92 percent of the total rigs added from July 2015 through December 2017, representing 83 percent of active U.S. rigs at the end of 2017.”
A federal judge in the U.S. District Court for the western district of Texas overturned the “threatened” listing by the U.S. Fish and Wildlife Service for the lesser prairie chicken. The court said the U.S. Department of the Interior failed to follow its own evaluation procedures for conservation efforts already underway. According to the Oil & Gas Journal, judge Robert Junell said Sept. 1 that the Fish and Wildlife Service acted arbitrarily and capriciously in disregarding conservation efforts on millions of acres across five states, including Texas, to improve habitat and diminish threats to the bird. Ben Shepperd, president of the Permian Basin Petroleum Association, said, “This ruling serves as vindication of the unprecedented stakeholder participation across the lesser prairie chicken range. Our members’ good-faith efforts to conserve habitat and recover the species through the range-wide plan began long before this listing decision was made and will continue unabated now that the court has thrown it out.”
The decision could affect a long-awaited decision by Fish and Wildlife Service on a potential “threatened” or “endangered” listing for the greater sage grouse under the Endangered Species Act. Both birds dwell in oil- and gas-producing areas. David Porter, chairman of the Railroad Commission of Texas, added, “Hopefully, this ruling sets a precedent for other pending cases… Texas oil and gas producers have made commendable, successful efforts in good faith to conserve and protect the lesser prairie chicken and its habitat and do not need additional rules and restrictions that inhibit them from conducting business efficiently and economically.”