FormCap acquiring Cowley County prospect in Kansas

FormCap Corp. (OTCQB: FRMC) is making payments to Keta Oil & Gas and Kerr Energy toward the purchase of oil and gas exploration and development leases in Cowley County, Kansas. Formcap will pay Kerr and Keta $200 per acre for up to 2,400 acres of leases, at a cost not to exceed $480,000 (the purchase price) unless agreed otherwise by the company.

Formcap is evaluating a specific block of 875 acres (from the 2,400 acre total) of prospective oil leases to acquire from Kerr and Keta. The company will own 100% of the leases (80% net revenue to FormCap; 20% freehold royalty), and will be operator. FormCap will also have the option to purchase additional leases in Cowley County from Kerr and Keta under an Area of Mutual Interest, the terms of which are set forth in the agreement.

Per the agreement, FormCap is required to drill one well in each of the first two years of the lease term to maintain its interest in the leases, and will have the option to participate in the drilling of up to six exploration or development wells on lands currently owned by Keta and Kerr.

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Noble Energy signs MoU regarding Leviathan partnership

Noble Energy Inc. (NYSE: NBL) has signed a non-binding memorandum of understanding (MoU) regarding the sale of interest in the Leviathan licenses, offshore Israel, to Woodside Petroleum. Each of the existing Leviathan partners – Noble Energy, Delek Drilling, Avner Oil Exploration, and Ratio Oil Exploration – are participating as sellers of a 25% interest in the licenses to Woodside. Noble Energy will convey a 9.66% working interest and will continue as upstream operator with a 30% working interest. Following completion of the transaction, Woodside will become the operator of any LNG development of the field.

Total compensation to Noble Energy is anticipated to include $525 million in cash payments plus $502 million in shared future revenues. The initial cash payment of $390 million is payable at closing of the transaction, which is expected in 2014. The remaining cash amount of $135 million is due when a final investment decision is made in relation to an LNG or FLNG development or as regional export contracts are executed in excess of a threshold volume amount, whichever occurs earlier. The shared future revenue represents 5.75% of export revenue attributable to Woodside's net export sales, commencing once the gross exported volume from the Leviathan field exceeds 2.0 trillion cubic feet (Tcf) of natural gas. 

An additional payment of $19 million, net to Noble Energy, will be made should ultimate recoverable Leviathan resources be determined to be in excess of 20 Tcf gross of natural gas. The determination and payment will occur no earlier than when cumulative field production reaches 4 Tcf.  In addition, the sellers will receive a royalty of 2.5% of Woodside's future oil revenues associated with the deep Mesozoic, should a commercial discovery and development result on the licenses. The royalty would go into effect following net payout of investment.

The MoU includes the agreed-upon commercial terms of the farm-out transaction and sets the time frame for execution of definitive agreements. The Leviathan project is located on the Rachel and Amit licenses offshore Israel in 5,550 feet of water. It has an estimated 19 Tcf of discovered natural gas resources.

Following completion of the transaction, working interests in the Leviathan project will be Noble Energy (30%), Delek Drilling (16.94%), Avner Oil Exploration (16.94%), Woodside Petroleum (25%), and Ratio Oil Exploration (11.12%).

The deal is viewed as positive by Global Hunter Securities analyst Mike Kelly who says that Noble “fetches > $1B (vs. $802 MM previously expected) and gains a world-class partner on the LNG development front, bringing the Leviathan project closer to sanction.”

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Residential Real Estate Firm Douglas Elliman Expands to Los Angeles

9440 Santa Monica Blvd., Beverly Hills

The Los Angeles real estate boom is attracting not only global buyers but real estate brokerages eager to get in on the market as well. Douglas Elliman Real Estate has announced its entrance into the Southern California market with plans to open offices in Beverly Hills by mid-March of this year.

The company is the largest residential brokerage firm in New York, with offices throughout New York City, Long Island, the Hamptons and South Florida. In total, more than 4,000 real estate agents work for the firm.

Elliman will launch its L.A. operations from 2,500-square-foot offices at 9440 Santa Monica Blvd. in Beverly Hills. Plans also include the rollout of additional Westside offices by the end of 2014.

STORY: Real Housewife Marisa Zanuck Opens Beverly Hills Real Estate Firm 

Real estate agents Tom Dunlap, who worked most recently as manager and executive vice president of John Aaroe Group, and Cory Weiss, who worked as a partner and director of Partner’s Trust, will head the office.  

“This company knows their clients and knows what type of agents they want and aren’t rushing this,” said Weiss, who is known for selling some of L.A.’s most architecturally significant homes, including landmark properties designed by John Lautner, Rudolph Schindler, Ray Kappe and Paul Williams.

And even though the offices have yet to open, the company already is trading in top-tier homes. "We have a major sale already under contract and an upcoming listing of one of L.A.’s most iconic architecturally significant houses," Weiss said.

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FormCap acquiring Cowley County prospect in Kansas

FormCap Corp. (OTCQB: FRMC) is making payments to Keta Oil & Gas and Kerr Energy toward the purchase of oil and gas exploration and development leases in Cowley County, Kansas. Formcap will pay Kerr and Keta $200 per acre for up to 2,400 acres of leases, at a cost not to exceed $480,000 (the purchase price) unless agreed otherwise by the company.

Formcap is evaluating a specific block of 875 acres (from the 2,400 acre total) of prospective oil leases to acquire from Kerr and Keta. The company will own 100% of the leases (80% net revenue to FormCap; 20% freehold royalty), and will be operator. FormCap will also have the option to purchase additional leases in Cowley County from Kerr and Keta under an Area of Mutual Interest, the terms of which are set forth in the agreement.

Per the agreement, FormCap is required to drill one well in each of the first two years of the lease term to maintain its interest in the leases, and will have the option to participate in the drilling of up to six exploration or development wells on lands currently owned by Keta and Kerr.

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Halliburton announces unconventional resource development partnership

Halliburton (NYSE: HAL) announces the signing of a partnership agreement with Gubkin Russian State University of Oil and Gas for the development of unconventional resources in Russia, including the Bazhenov shale. A signing ceremony took place on January 30 at the university.

As part of the agreement, Halliburton will provide senior technical and management staff to serve on Gubkin's Industry Advisory Boards, as well as provide the foundation material for Gubkin's unconventional curriculum that will become the basis for student and industry training. In addition, Halliburton will work with Gubkin to explore basic applied research opportunities in conventional and unconventional resource development, provide assistance with student projects, and pursue R&D opportunities with Russian industry partners.

According to Brady Murphy, Halliburton’s Senior Vice President of Business Development, “Halliburton is positioned to provide the most recent ideas in unconventional development as well as state-of-the-art research and development solutions for the Bazhenov in Russia.” Speaking at the signing ceremony, university Rector Viktor Martynov noted that "by collaborating with Halliburton, Gubkin will be able to offer students and industry personnel real-world experience in unconventional resource development.”

According to published reports Russia may hold as many as 680 trillion cubic meters of unconventional resources, which include gas from shale, sandstones and coal beds. Konstantin Schilin, Halliburton’s Vice President for Russia, noted that Halliburton, as well as local companies, will require new graduates with the requisite knowledge and training to tackle the challenges of the Bazhenov and other unconventional resources.

Professor Mikhail Silin, university Vice Rector in charge of innovation activity and commercialization of new developments, noted that "by partnering with Halliburton, Gubkin is now in a position to create a collaborative framework to strengthen our educational curriculum and learning environment and to prepare students to contribute more to their employers upon graduation.”

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Baytex to acquire Aurora for $2.6 billion

Baytex Energy Corp., Calgary, has agreed to acquire Aurora Oil & Gas Ltd., Subiaco, Western Australia, for $2.6 billion, providing Baytex with 22,200 net contiguous acres in the Sugarkane field in the Eagle Ford shale of South Texas.

Aurora’s fourth-quarter 2013 gross production was 24,678 boe/d (82% liquids) of predominantly light, high-quality crude oil. The company forecasted this year’s average gross production at 29,000-32,000 boe/d, about a 43% increase from 2013.

Baytex said Sugarkane field has been largely delineated with infrastructure in place, facilitating low-risk future annual production growth. The company added that the assets have future reserves upside potential from well downspacing, improving completion techniques, and new development targets in additional zones.

Following the purchase, Baytex’s 2014 production is expected to reach 85,000 boe/d, comprised of 53% heavy oil, 34% light oil and liquids, and 13% natural gas.

The deal gives Baytex additional proved reserves of 106.7 million boe and proved plus probable reserves of 166.6 million boe.

Baytex in 2012 purchased 100% working interest in 46 sections of undeveloped oil sands leases in the Cold Lake region of northeastern Alberta for $120 million (OGJ Online, Oct. 4, 2012). Provincial authorities had conditionally approved the company’s 1,200 steam-assisted gravity drainage (SAGD) pilot and a 10,000-b/d development that was expected to launch in 2013.

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