Hanover Compressor completed its previously announced acquisition from Schlumberger Ltd. of the Production Operators Corp. natural gas compression business as well as ownership interests in certain joint venture projects in South America and related assets for $761 million. Schlumberger received $270 million in cash, $150 million in long-term subordinated notes and 8.7 million shares of newly issued restricted Hanover common stock having a nominal value of $283 million. It also is entitled to receive a distribution of up to $58 million upon the occurrence of certain events relating to one of the joint ventures acquired by Hanover in the transaction. Hanover management reconfirmed its belief that the transaction will add annual revenue and EBITDA of at least $200 million and $90 million, respectively, within one year. As a part of a five-year alliance, Schlumberger has agreed to hold its ownership stake in Hanover for at least three years. In addition, Hanover has agreed to add a senior executive of Schlumberger to its board of directors. The initial designee is Rene Huck, president of reservoir evaluation and development for Schlumberger Oilfield Services. The transaction considerably enhances Hanover’s position in the global compression services and gas handling industry, significantly extends its reach and anticipated growth in large, newly opened markets overseas, and adds 900,000 hp to its compression fleet and an additional 800,000 hp through the South American joint ventures. “We believe this accretive multi-faceted transaction will generate strong revenue growth for Hanover over the next five years,” said Hanover CEO Michael J. McGhan.

BP Canada continues to work to regain control of a remaining well on fire at its Fort Saskatchewan Natural Gas Liquids (NGL) facility. An explosion at the facility on Aug. 26 sparked two wells to catch fire (see Daily GPI, Sept. 4; Aug. 30). Most of the pipeline systems from the facility were affected by the fire, but BP said most now are fully or partially operational. Larry Jardine, BP’s field incident commander, said the Peace and AEGS pipeline systems are operating normally, and said the Co-Ed system is running at 80%. The Cochin system remains “partially in operation.” To learn more information, BP has set up an information line at (780) 992-6268, which is manned 24 hours a day.

Houston-based energy consultant Groppe, Long & Littell has released its annual comprehensive study on North American natural gas, which indicates that long-term pricing fundamentals are the “strongest in history.” The study, distributed to the firm’s clients, offers a technical and economic analysis of the North American natural gas supply and demand, including a forecast of production and prices for the next 10 years. Partner Henry Groppe said the report shows that the United States has entered a new era in natural gas supply and demand. “The unrelenting growth of demand for gas is providing a serious challenge to our natural gas producers and transporters. Despite the recent spike in natural gas prices and surging capital investment, production has barely increased as we face massive investment in our power generation infrastructure,” said Groppe. To learn more about the report, visit the company’s web site at www.groppelong.com.

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