Divestment

Pioneer Natural Resources Co. is pursuing the divestment of its Barnett Shale properties in order to focus on more lucrative plays.

Water services company Heckmann Corp. reiterated its emphasis on serving shale gas and oil developers in the United States in announcing the divestment of China Water & Drinks Inc. through the sale of nine of its 25 Chinese legal entities to Pacific Water & Drinks (HK) Group Ltd. (PWD). The deal closed Sept. 30, and Heckmann will no longer have business exposure in China except through its equity holding in PWD. “With our positive view of our current core water business and the growth opportunities in the United States, we are pleased to put the China experience behind us,” said CEO Richard J. Heckmann. “We now have almost 1,100 employees in the U.S., up from fewer than 30 a year ago. We believe that the water business as it relates to shale gas and shale oil production will continue to drive our growth. In addition, the customer reaction to our conversion to LNG [liquefied natural gas] powered vehicles [see Shale Daily, Aug. 23], which we are now putting in service, has been very positive.”

PetroSales announced a new oil and gas divestment package including 7,465 net acres under lease in the Anadarko Basin of Oklahoma. Reserves include six oil and gas properties and 14 possible drilling locations, plus facilities including gathering and production equipment. Antares Energy Co. retained PetroSales to conduct a negotiated divestiture of these assets. As an Australian company venturing into the United States, Antares and its partners first acquired the acreage in 2004, drilling four wells including two redrills of undeveloped and unproduced Morrow discoveries. Antares has elected to divest all of its interests, which are in Ellis and Beaver Counties, OK, and Lipscomb County, TX, and focus on its present core area of operations along the Texas Gulf Coast. The combined gross production averaged over the three months ending Dec. 31, 2006, was 1,648 Mcf/d of natural gas and 74 b/d of crude with net production of 536 Mcf/d of gas and 23 b/d of crude. Antares’ net operating income has averaged $118,175 per month. Active zones from the company’s six wells include the Lower Morrow gas sand, the Upper Des Moines oil sand, the Atoka condensate sand and the Tonkawa sand. Additional behind pipe potential has been identified in the Des Moines on two wells, and also 14 possible drilling locations to test the Morrow, Atoka, Des Moines, Cleveland and Tonkawa potential on their acreage. Recent horizontal drilling in the Cleveland formation nearby has yielded flow rate up to 1200 b/d of oil with 3.3 MMcf/d of gas resulting in a significant increase in reserves for this play, PetroSales said. Offers have been requested by March 23. See www.petrosales.com to download an offering summary.

Continuing its march toward realizing its $3.4 billion asset divestment plan for 2003, El Paso Corp. on Thursday sold various Mid-Continent and northern Louisiana midstream assets to Regency Gas Services LLC, an affiliate of Charlesbank Capital Partners LLC. Subject to closing conditions, El Paso valued the transaction at $120 million. The deal is expected to close by the end of the second quarter 2003.

Continuing its march towards realizing its $3.4 billion asset divestment plan for 2003, El Paso Corp. on Thursday sold various Mid-Continent and Northern Louisiana midstream assets to Regency Gas Services LLC, an affiliate of Charlesbank Capital Partners LLC. Subject to closing conditions, El Paso valued the transaction at $120 million. The deal is expected to close by the end of the second quarter 2003.

As part of Duke Energy’s ongoing divestment of non-core assets, the company announced Friday that it will exit the merchant finance business at its wholly-owned subsidiary, Duke Capital Partners LLC. The unit provides capital and financial advisory services to other companies within the energy industry.

As part of Duke Energy’s ongoing divestment of non-core assets, the company announced Friday that it will exit the merchant finance business at its wholly-owned subsidiary, Duke Capital Partners LLC. The unit provides capital and financial advisory services to other companies within the energy industry.

Pioneer Natural Resources announced the closing of a number ofasset and property sales yesterday totaling $286 million. TheIrving, TX-based exploration and production company said $256million of the total will be used to reduce outstanding bank debt.

ARCO announced a major cost reduction program last week thatwill chop $500 million in before-tax expenses and 900 employeesfrom it operations over the next two years. The majority of thecut-backs, $350 million, are expected in 1999.