Calgary-based junior independents Terraquest Energy Corp. and Masters Energy Inc. have agreed to merge and create a new public company that will be led by Masters’ current management team. Terraquest is a public company; Masters is a private oil and gas company formed in October 2003 by the former management team of Sunfire Energy Corp. In early December, Masters acquiring some Little Bow assets in southern Alberta for C$7 million, which are now producing 450 boe/d. On a pro forma basis, the merged company will have a production base of 950 boe/d, of which 60% is oil and 40% is natural gas. The merged company will hold approximately 85,000 net acres of undeveloped land in Alberta, with an inventory of natural gas prospects in West Central Alberta and oil and gas prospects in southern Alberta. The company, to be called Masters Energy Inc., will have no debt and working capital surplus of approximately C$2 million.

Offshore drilling contractor Transocean Inc. has acquired ConocoPhillips’ 50% interest in the joint venture Deepwater Drilling LLC, which owns the drillship Deepwater Pathfinder. No financial details were disclosed, however, Transocean had said in early December that it was in negotiations to buy the stake with cash on hand. Transocean, based in Houston, originally owned 10% of the venture, but in May, it completed a similar deal with ConocoPhillips, buying a 40% stake for $4.5 million and assuming $80 million of the entity’s debt. Deepwater Drilling LLC will become a subsidiary of Transocean and will be consolidated in its financial statements. Transocean has more than 160 full or partially owned and managed mobile offshore drilling units, inland drilling barges and other assets utilized in the support of offshore drilling activities worldwide. The company’s mobile offshore drilling fleet includes 13 fifth-generation semisubmersibles and drillships, 15 other deepwater semisubmersibles and drillships, 31 mid-water semisubmersibles and drillships and 50 jackup drilling rigs.

Getting out of the natural gas liquids business, Houston-based Link Energy said that it has sold all of its remaining natural gas liquids assets to a subsidiary of Valero Energy Corp. for approximately $20 million plus inventory value, effective Dec. 31, 2003. The assets include 10 million barrels of underground salt dome storage and a 120-mile pipeline grid near Mont Belvieu, TX, as well as Link Energy’s processing facility and former MTBE plant at Morgan’s Point near LaPorte, TX. The Link Energy employees associated with its liquids group will transfer to Valero. “We phased out of MTBE production at Morgan’s Point earlier this fall and were focusing on strengthening our liquids business in Mont Belvieu, when Valero indicated to us an interest in our liquids assets,” said Tom Matthews, Link Energy’s CEO. “With this sale, we exit the NGL business completely to focus on our core crude oil transportation and marketing business. The proceeds will be used to pay down debt and help us improve our balance sheet.”

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