• Pogo Producing Co., Houston, (NYSE: PPP) plans to acquire west Texas assets from a private company for $208 million, including approximately $35 million of assumed debt. The company will finance the acquisition with available cash and bank debt. The assets include an estimated 90 billion cu. ft. of gas equivalent (Bcfe) proven reserves yielding production of 16.5 million equivalent per day. Pogo will become the operator of a portion of these properties covering more than 50,000 leasehold acres. The current reserves-to-production index is 15 years. Pogo plans to drill more than 100 wells on the properties during 2005 and 2006. Closing is expected in December. Chairman and chief executive Paul G. Van Wagenen says, "The acquisition features repeatable low-risk development drilling, many recompletion opportunities and significant exploratory drilling potential. "Beyond the proven reserves, Pogo believes that these properties additionally contain approximately 100 (billion equivalent) of very high-quality probable reserves available for immediate exploitation. Thus, we hope to more than double the current daily production rate from these properties by the end of 2005." • Privately held start-up Resolute Natural Resources Co. and Navajo Nation Oil and Gas Co. (NNOG) plan to purchase assets in the Greater Aneth Field in southeast Utah from ChevronTexaco for an undisclosed price. The assets include a 70% operated working interest in the Aneth unit, smaller nonoperated interests in the McElmo Creek and Ratherford units, and ChevronTexaco's interest in the Aneth gathering system and the operating portion of the Aneth gas plant. The Aneth unit contains 146 active producing wells and 120 active injection wells. Resolute will acquire 75% of the ChevronTexaco assets and NNOG will acquire 25%. Resolute will assume operations of the Aneth unit and gathering system. Resolute was founded by HS Resources Inc. executives and by Natural Gas Partners VII LP. HS Resources was sold to Kerr-McGee in 2001 for $1.8 billion. • Woodside Petroleum Ltd. says it will "get competitive or get out" of the Gulf of Mexico, says Betsy Donaghey, director, strategic planning. The company's "decision is pending," she adds. Woodside has a 20% nonoperating interest in Neptune Field in the Atwater Foldbelt region of Central. BHP Billiton is the operator. At year-end 2003, Woodside owned 129 Gulf leases and no bookable U.S. reserves. The company hopes to make northern Iraq a new focus area. • Utility Alliant Energy Corp. has divested its remaining shares of Denver-based producer Whiting Petroleum Corp. (NYSE: WLL), which it spun out in 2003 in an initial public offering. "Free at last," one Whiting executive said of the closure. The roughly 1 million shares were sold for $29.02 each. Merrill Lynch & Co. was book-running manager. Another utility, KeySpan Corp., Brooklyn, N.Y., (NYSE: KSE) has sold its stake in an E&P company, The Houston Exploration Co. (NYSE: THX). The roughly 6.6 million shares were sold for $56.25 each for gross proceeds of $369 million. Morgan Stanley was the sole underwriter. Standard & Poor's Ratings Services says KeySpan's divestment is favorable to its credit quality, as the sale is a monetization of its interest in Houston Exploration, its business risk is reduced by disposing of noncore assets, and proceeds will be used to reduce debt. • EnCana Oil & Gas (USA) Inc. plans to buy certain oil and gas interests and related assets in the Fort Worth Basin, Texas, for $255 million in cash from Progress Fuels Corp., Raleigh, N.C., a subsidiary of Progress Energy (NYSE: PGN). Progress will use proceeds to reduce debt. The transaction was expected to close by year-end 2004. At the completion of the sale, Progress Fuels will have annual net gas production of approximately 22 billion cu. ft. of gas equivalent with proven developed and proven undeveloped reserves along the East Texas and Louisiana border. "We capitalized on the favorable market conditions to realize substantial value from our natural gas portfolio that will be used to pay down debt," says Tom Kilgore, president of Progress Energy Ventures. • Viking Energy Royalty Trust, Calgary, (Toronto: VKR) will buy Calpine Natural Gas Trust, (Toronto: CXT) for two Viking units per CNG unit. The transaction is valued at about C$379 million, and is expected to close in February. The combined company will have current production of approximately 23,000 BOE per day and an enterprise value of approximately C$1.3 billion. The transaction will extend Viking's proved-plus-probable reserve-life index from 8.1 years to 9.3 years. • Pioneer Drilling Co., San Antonio (Amex: PDC), plans to acquire five drilling rigs and related equipment from Allen Drilling Co. for $7.2 million in cash. Allen Drilling owns a yard in Woodward, Okla., and operates five mechanical 550- to 800-horsepower rigs, capable of drilling to depths of 6,000 to 10,000 feet. The transaction is expected to close in late December 2004. Separately, Pioneer Drilling has completed the previously announced acquisition of seven drilling rigs and related equipment from Wolverine Drilling Inc., Kenmare, N.D. Upon completing the Allen Drilling acquisition and completion of construction of a new, 1,000-horsepower electric rig, Pioneer will have a fleet of 49 land drilling rigs. • Onshore/offshore driller Helmerich & Payne Inc., Tulsa, Okla., (NYSE: HP) sold two idle, conventional, 2,000-horsepower U.S.-based land rigs to an undisclosed foreign company for a total of $23.0 million. The rigs last worked in 1998 in Venezuela. Both rigs needed sizeable investment before being put back to work, H&P reports. "...The economic return for this particular selling opportunity was too compelling to turn down," says Hans Helmerich, H&P president and chief executive. H&P now owns 128 rigs. • Stone Energy Corp., Lafayette, La., (NYSE: SGY) made a preferential-rights acquisition of additional working interests in South Timbalier blocks 143, 164, 165, 166 and 171 in the Gulf of Mexico for approximately $106 million. The deal was financed with bank debt. The acquisition cost averaged $1.90 per thousand cu. ft. of gas equivalent of reserves. Current net production on the properties is estimated to be approximately 56 million cu. ft. of gas equivalent per day. • Petrohawk Energy Corp., Houston, (Nasdaq: HAWK) has closed the $425-million acquisition of Texas-based Wynn-Crosby Energy Inc. and affiliated limited partnerships, gaining some 200 billion cu. ft. equivalent of proved reserves onshore the U.S. With the acquisition, newly formed Petrohawk owns approximately 233 billion equivalent in proved reserves (74% gas) with average current production of approximately 57 million cu. ft. of gas per day. The transaction was funded with cash, proceeds from a $200-million private-equity placement and $210 million in borrowings from the company's commercial bank group. Petrohawk's private-equity sponsor is EnCap Investments. • Storm Cat Energy Corp., Calgary, (Toronto Venture: SME) has acquired 18,369 acres of oil and gas leases in the Cook Inlet region of Alaska for US$203,901 from the Alaskan Mental Health Trust. The acquired lands are prospective for coalbed-methane as well as conventional gas. • The X-Change Corp., Dallas, (OTCBB: XCHC) has acquired Texas-based Kolt Oil & Gas Inc. The acquisition includes 75 wells and several future, underdeveloped projects, and approximately 10 million BOE on approximately 3,000 acres of leases in the East Texas Field, Gregg County, Texas. • The Oil & Gas Asset Clearinghouse, Houston, sold more than $39 million in properties at its hybrid auction Nov. 10, with a total offering of 282 lots. Notable sales include the Johnson Field in Ector County, Texas, $675,000; Bill Barrett's Montana royalty package, $650,000; and J.M. Huber's various coalbed-methane packages in Campbell County, Wyoming, $1.7 million. • World Oil Properties Inc., Casper, Wyo., and Lario Oil & Gas Co. have acquired an operated working interest in the Sun Ranch and Saddle Rock units, Wyoming, and the Maudlin Gulch and Danforth Hills fields, Colorado, from an undisclosed party. The acquisition includes nonoperated interests in the Session Mountain Field and North Grieve unit, Wyoming. The companies have gained an interest in 22 producing wells and seven other nonoperated wells. Net daily production is approximately 1.4 million cu. ft. of gas and 200 bbl. of oil. Net proved producing reserves are estimated at 758,500 BOE. • Petrofund Energy Trust, Calgary, (Amex, Toronto: PTF) has closed a C$28-million acquisition of properties in the Willesden Green area of Alberta from an undisclosed party. Total proven plus probable reserves acquired are approximately 3 million BOE (82% oil). Production on the properties is currently more than 450 BOE per day. This acquisition expands the company's existing assets in the Willesden Green area. • Cadence Resources Corp., Washington, (OTCBB: CDNR) plans to purchase Aurora Energy Ltd., a privately held company based in Traverse City, Michigan, in exchange for shares of common stock of Cadence. Aurora Energy has oil and gas leases in the Antrim Shale natural gas trend in Michigan and also has holdings of over 400,000 acres in the New Albany Shale gas trend in Southern Indiana. • Texas Quest Oil Corp., Arlington, Texas, (OTCBB: QOIL) plans to acquire privately held, Illinois-based Graham Petroleum Corp., whose assets include 10 prospects in the Illinois Basin and seven oil-producing wells. • Trans Energy Inc., St. Marys, W. Va., (OTCBB: TSRG) has purchased oil and gas leases in Wetzel, Marion, and Doddridge counties, West Virginia, from Texas Energy Trust Co. for $1.98 million in cash and restricted common stock. The purchase includes the acquisition of Cobham Gas Industries Inc. The assets include approximately 15,000 leased acres and 229 wells. Trans Energy has identified more than 100 drill sites that will be developed in 2005. • EnerGulf Resources Inc., Houston, (Toronto Venture: ENG) plans to acquire Houston-based Median Oil and Gas LLC. EnerGulf will gain a large geological data set covering specific areas of West Africa. EnerGulf will issue 450,000 units at C$0.65 to fund this acquisition. • Quest Oil Corp. (OTCBB: QOIL) has decided to abandon its opportunities in Papua New Guinea in favor of more immediate prospects in Alberta and Illinois. Quest has opened a Canadian subsidiary in Edmonton, Alberta, Quest Canada Corp. • Hawker Resources Inc., Calgary, (Toronto: HKR) is considering restructuring alternatives. Peters & Co. Ltd. is advisor. • EOG Resources Inc., Houston, (NYSE: EOG) has purchased interests in 65 producing wells in Texas from Canadex Resources Inc., the U.S. oil and gas subsidiary of Canadex Resources Ltd., Toronto, (Toronto: CDX) for US$6.8 million. The acquisition also includes the Canadex interests in 3-R Production Inc. • Whittier Energy Corp., Houston, (OTCBB: WHIT) has entered into a leasing agreement for the Rachal prospect, a 386-acre tract directly offsetting Owen Field in Webb County, Texas. The Owen field contains gas and has more than 160 wells. Whittier has also taken a 30% operated working interest in the Amber prospect in Iberia Parish, Louisiana. This prospect is comprised of approximately 200 acres along the southeast edge of the New Iberia salt dome. Whittier has also acquired an additional 11% average working interest in the Rayne Field, Acadia Parish, Louisiana, for approximately $174,000. The acquisition increases Whittier's operated working interest in the field to approximately 33%. Gross production is approximately 35 bbl. of oil per day and 770,00 cu. ft. of gas per day. • Paladin Oil & Gas (Australia) Pty Ltd., a subsidiary of U.K.-based Paladin Resources Plc, will buy Australia-based BHP Billiton's interests in the Laminaria and Corallina oil fields in the Timor Sea for US$150 million. The fields, which are neighboring, were discovered in 1994 and 1995 in offshore production licenses AC/L5 and WA-18-L. The fields share a floating production, storage and offloading facility, the Northern Endeavour, which is moored in 385 meters of water. The deal may close in early 2005. BHP has a 32.6125% interest in Laminaria. The other participants are Woodside Energy Ltd. (operator, 44.925%) and Shell Development (Australia) PT (22.4625%). BHP has a 25% interest in Corallina. The other participants are Woodside (operator, 50%) and Shell Development (25%). • Endeavour Energy Norge As, the Norwegian subsidiary of Endeavour International Corp., Houston, (Amex: END) has acquired the remaining interest in Oslo-based OER Oil AS, a privately held Norwegian E&P company. Endeavour purchased an approximate 76% interest in OER from Lundin Petroleum BV earlier. The majority of the remaining interest was held by OER management and will be purchased with Endeavour common stock and cash. Through this acquisition, Endeavour will gain a production base and a technical and commercial team. • GB Gas Holdings Ltd., an affiliate of Centrica Plc, has acquired 50% of Tullow Oil Plc (London: TLW) subsidiary Hawkeye Exploration Ltd., which holds a 50% interest in the Horne and Wren fields in the southern U.K. North Sea, for £7.1 million of which £4.6 million was paid immediately. Tullow obtained its initial 9% interest in these fields as part of an acquisition from BP Plc in 2001 and increased its interest to 50% through transactions with BP, Enterprise Oil Ltd. and GB Gas. The fields, in blocks 53/3c and 53/4b, will be developed with an unmanned platform, the Thames offshore infrastructure of which Tullow owns 66.7% and Centrica owns 10%, and onshore Bacton Terminal (Tullow, 38.8%; Centrica, 23.15%). First gas is expected in second-quarter 2005. The fields will initially produce more than 150 million cu. ft. per day. Centrica's share of development costs will run £24 million. • Connacher Oil and Gas Ltd., Calgary, (Toronto: CLL) has retained Toronto-based PowerOne Capital Markets Ltd. to transfer its Argentine oil and gas interests to a new public company. In conjunction with the proposed reorganization, Connacher has acquired the remaining 50% working interest in its Puesto Morales/Rinconada concession in the Neuquen Basin, Argentina, for US$1.5 million. This acquisition will result in the new company owning and operating 100% of the 95,000-acre onshore concession, which has current production of approximately 360 BOE per day, and proved and probable reserves of 577,000 bbl. of oil and 3 billion cu. ft. of gas. The concession is in the Neuquen Basin, approximately 600 miles southwest of Buenos Aires, Argentina. It contains the Puesto Morales Sur oil field and the Puesto Morales Norte gas field, as well as the PMX-1001 La Ramona oil discovery drilled by Connacher and privately held Ingenieria Alpa. -A&D Watch