E&P A&D - U.S.

Adventure Energy Inc., St. Petersburg, Fla., (OTCBB: ADVE) has acquired three previously drilled wells in the Munfordville Quadrangle in Hart County, Kentucky, from and undisclosed seller for an undisclosed price.

The wells are adjacent to Logsdon Valley Field. The Byler #1 was drilled in 2002 to a total depth of 782 feet with production from the Coniferous formation. Adventure Energy has placed the well into production and projections are for three to five barrels of oil per day. Byler #2 was drilled to a depth of approximately 700 to 800 feet and was shut-in approximately three years ago. Prior to ceasing production, the well was producing four to five barrels per day.

The company plans to obtain an electric log of the well and will analyze the results to determine if a stimulation procedure is warranted prior to placing the well back into production. The third well obtained in the acquisition is a gas well which currently supplies structures on the leasehold. Adventure Energy plans are to construct a pipeline to enable gas produced from this well to be sold to nearby factories or transmission lines.

Greenhouse supply company Agrotech Greenhouses Inc., Vancouver, via subsidiary Contact Oil & Gas USA Inc., plans to acquire a 75% working interest in Sugg Ranch Field in Irion County, Texas, from Texas-based Maxwell Operating Inc. for US$2 million in cash plus stock consideration.

Agrotech will pay US$2 million and the issuance of 400,000 shares of 0856348 B.C. Ltd., a privately held British Columbia company in which Agrotech is in the process of acquiring and which currently owns Contact, and a drilling commitment of US$2.5 million to be incurred within three months of closing on the first five wells drilled. Maxwell will be operator.

The assets include approximately 1,326 gross acres in the Permian Basin of West Texas, in which the company expects to target the Canyon sands. Upside includes 32 locations on 40-acre spacing.

American Oil & Gas Inc., Denver, (NYSE Amex: AEZ) has acquired an additional 45% working interest to a total of 95% interest in approximately 63,000 net acres in Williams and Dunn counties, North Dakota, from Teton Energy Corp. and privately held Evertson Energy Partners in two deals valued in excess of $900,000.

American purchased Teton’s interests in the Goliath project, which comprises approximately 14,900 net undeveloped acres, Teton’s 25% ownership in the Champion 1-25H well, 17% ownership in Viall 1-30, 6% ownership in Solberg 32-2, and Teton’s interest in seven gross (approximately 0.12 net) producing Bakken wells for $900,000 in cash.

American also closed on an acreage exchange at Goliath with Evertson which resulted in American receiving approximately 11,600 net acres and Evertson receiving a 50% working interest in Champion 1-25H, a 34% working interest in Viall 1-30, an 11.9% working interest in Solberg 32-2 and American’s rights to formations below the Three Forks in four 640-acre sections for an undisclosed price.

American now controls approximately 60,000 net undeveloped acres at Goliath, a 25% working interest in Champion 1-25H, a 17% working interest in Viall 1-30, a 6% working interest in Solberg 32-2, and an interest in seven gross (approximately 0.36 net) other producing Bakken wells.

Pat O’Brien, CEO of American, says, “We believe our Goliath acreage has the potential to demonstrate results similar to commercial wells being drilled by other operators in the North Dakota portion of the basin and are extremely pleased to have been able to increase our ownership interest at what we think are attractive terms.”

Avro Energy Inc., West Sussex, U.K., (OTCBB: AVOE) plans to acquire 11 oil wells and equipment on 800 acres near Fouke, Ark., in Miller County from an undisclosed private company for an undisclosed price. Past production in these wells has come from formations at depths of 3,800 feet and 6,800 feet.

U.K.-based international energy company BG Group Plc (London: BG) has closed its acquisition of 50% interest in certain Haynesville shale play assets in East Texas and North Louisiana from Dallas-based explorer Exco Resources Inc. (NYSE: XCO) in a deal valued at US$1.4 billion.

BG Group paid $727 million in cash at closing, an increase from the original $655 million, for a 50% interest in its producing and nonproducing assets in an area of mutual interest (AMI) involving approximately 120,000 net acres, and will pay 75% of Exco’s drilling and completion costs on developing the deep rights up to $400 million. In addition, BG acquired a 50% interest in related gas-gathering and transportation assets for $269.2 million, an increase from the original $249 million.

Exco will use the total cash proceeds of $996.2 million to pay Exco Operating Co. LP’s $300-million senior unsecured term loan with the remainder applied to the outstanding balances under Exco’s credit facilities.

The drilling and completion cost commitment is expected to be satisfied in 2011 or 2012. Exco and BG Group will share equally in additional leasehold and asset acquisition opportunities within the AMI.

The deal involves most of Exco’s holdings in East Texas and North Louisiana including Oakhill, Holly, Kingston, Caspiana, Danville, Longwood/Waskom, Carthage and Minden fields. The existing assets within the AMI include some 120,000 net acres with approximately 65,000 net acres in East Texas and 55,000 net acres in Louisiana. Approximately 84,000 net acres are prospective for Haynesville shale development in DeSoto and Caddo parishes in Louisiana and Harrison County, Texas. The companies will enter into a joint-development agreement for the Haynesville, Bossier and other deep horizons as well as the Cotton Valley, Hosston and other shallow horizons. Exco will continue as operator.

The deal excludes Exco’s Vernon Field in Jackson Parish, Louisiana, Redland Field in Bossier and Webster parishes, Louisiana, and the Gladewater and Overton fields in Gregg, Rusk and Smith counties in Texas.

Production is approximately 95 million cubic feet per day from the Cotton Valley and other shallower horizons and approximately 60 million per day from the Haynesville shale, with 78 million cubic feet net to BG Group, which expects net production to increase to 250 million cubic feet per day by 2012. As of year-end 2008, the Cotton Valley and other shallow rights included approximately 414 billion cubic feet equivalent of net proved reserves and approximately 445 billion equivalent of net probable and possible reserves.

BG Group values the Haynesville interests at $19,000 per acre. It reports the acquisition adds some 2.6 trillion cubic feet to its resources.

Exco chief executive Douglas H. Miller says, “We are very pleased with our joint development transactions with BG Group and expect outstanding growth in our upstream and midstream businesses in the East Texas/North Louisiana area. BG Group will be an excellent partner and we look forward to a long and successful relationship.”

BG Group chief executive Frank Chapman says, “This alliance brings material new resources and supply to our existing U.S. business at a competitive price and in a prime location at the heart of the world’s largest gas market. These domestic exploration and production activities yield strong synergies with the group’s established LNG import and 3.5 billion standard cubic feet per day U.S. gas-marketing business. Furthermore, the transaction increases BG Group’s exposure to long-term unconventional gas resources and skills. We look forward to working with Exco on this strategic partnership to deliver the significant growth potential of these assets.”

The Haynesville/Bossier shale acreage is under development, and Exco estimates that its current acreage position, most of which is held by shallow production, includes some 1,600 undrilled Haynesville locations containing net potential reserves of 4 trillion to 6 trillion cubic feet equivalent, with significant additional potential in the Bossier shale. Exco and BG Group plan an aggressive development program, particularly in the Haynesville shale, for the remainder of 2009 and in future years. To date, Exco has completed eight horizontal wells in DeSoto Parish with an average initial production rate of 23 million cubic feet per day on restricted chokes. Exco plans to drill an additional 34 horizontal Haynesville wells in 2009, of which 27 will be operated.

The companies plan to jointly develop and grow the midstream business as well. Exco currently owns more than 700 miles of pipeline and gathering assets in the area and is constructing a 29-mile, 36-inch header system to transport its Haynesville gas production. Throughput in the midstream business to be contributed to the joint venture is approximately 440 million cubic feet per day of which approximately 50% is Exco gas and 50% is third-party gas.

BG Group will be a valuable partner in Exco’s gas-marketing efforts as well, Miller says, as BG currently markets approximately 3.5 billion cubic feet per day through 66 major interstate and intrastate pipelines serving markets throughout the Midwest and Eastern U.S. “BG Group will be an extremely valuable partner in our gas-marketing efforts,” he says.

The effective date is Jan. 1, 2009. Goldman, Sachs & Co. was financial advisor to Exco. Deutsche Bank was financial advisor to BG Group.

The Los Angeles-based upstream MLP BreitBurn Energy Partners LP, (Nasdaq: BBEP) continuing its efforts to stay ahead of a potential borrowing-base reduction in the fall, has sold its Lazy JL Field in the Permian Basin of West Texas to an undisclosed privately held buyer for $23 million. Proceeds will be used to pay debt.

The company values the deal at approximately $94,000 per flowing barrel per day.

The properties produced approximately 245 barrels of oil equivalent per day during the first five months of 2009 (96% oil). As of year-end 2008, estimated proved reserves were 1.2 million barrels equivalent, or approximately 1% of the partnership’s total estimated proved reserves of 103.6 million barrels equivalent.

Following the sale, BreitBurn’s borrowing base was reduced from $735 million to $732 million.

Hal Washburn, BreitBurn’s chairman and co-chief executive, says, “With the sale of the Lazy JL Field at this attractive price, the partnership realized significant value for its noncore Permian Basin assets…The sale accelerates our 2009 debt reduction efforts and provides the partnership with additional financial flexibility given the transaction’s limited impact on our borrowing base.”

He adds the company will continue to consider “all reasonable alternatives” for further debt reduction.

BreitBurn has interests in the Antrim shale in Michigan, the Los Angeles Basin in California, the Wind River and Big Horn basins in central Wyoming, the Sunniland trend in Florida, and the New Albany shale in Indiana and Kentucky.

Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) has sold its fifth volumetric production payment (VPP) in a deal involving South Texas producing assets to an undisclosed buyer for $371 million.

The assets include proved reserves of approximately 68 billion cubic feet equivalent and current net production of approximately 55 million cubic feet equivalent per day. The company values the deal at $5.46 per Mcfe of proved reserves. No other information was available.

In its quarterly report, Chesapeake announced that since March 31 the company has sold or agreed to sell approximately $900 million of assets including producing properties and gathering assets primarily in Louisiana for $208 million, which closed June 30; certain midstream and real-estate surface assets for $172 million closed on various dates in the second quarter; producing properties in central Texas for $75 million closed July 1; and certain other midstream assets in multiple transactions for a total of approximately $70 million with closings still pending.

Chesapeake is also planning to sell certain non-Haynesville shale producing assets in Louisiana in its sixth VPP in the next 90 days for approximately $225 million to $250 million, and other mature producing assets in the second half of 2009 for approximately $200 million.

The company is also working to finalize agreements with a private-equity investor to sell a 50% minority interest in its Barnett shale and Midcontinent gas-gathering and -processing assets in the company’s midstream subsidiary, Chesapeake Midstream Partners, for more than $550 million. Further, Chesapeake is in continued discussions with several companies about a possible joint venture on some or all of its Barnett shale leasehold in a transaction targeted for completion by year-end 2009.

During 2009 and 2010, Chesapeake plans to monetize leasehold, producing properties, midstream assets and other assets for some $2.35 billion to $3.05 billion in 2009 and $1.25 billion to $1.80 billion in 2010. The company anticipates using the proceeds for capital expenditures and to reduce debt.

Aubrey K. McClendon, Chesapeake chief executive, says, “We anticipate this (asset monetization) program, combined with strong operating cash flow, will enable the company to continue funding its highly economic investment program solely from internal resources while at the same time reducing the company’s debt levels both absolutely and on a per proved Mcfe basis.”

Pittsburg-based CNX Gas Corp. (NYSE: CXG) has acquired nearly 40,000 acres having Marcellus shale potential in two separate transactions for an undisclosed price, raising its interest in the Marcellus to 230,000 acres.

In the first transaction, CNX Gas acquire 20,000 largely contiguous acres from NiSource Energy Ventures LLC, a subsidiary of Columbia Energy Group, in Washington and Greene counties, Pennsylvania, and in Marshall County, West Virginia.

J. Brett Harvey, CNX Gas chairman and chief executive, says, “It is unusual in Appalachia to be able to lease such a large parcel from a single lessor. We are excited about this acreage because it is in close proximity to our existing Marcellus shale program, which has been very successful in its early stages.”

In the second transaction, CNX Gas has acquired 20,000 acres from its majority owner, Consol Energy Inc. (NYSE: CNX). These acres, though not contiguous, are generally near Consol’s coal operations in Washington and Greene counties, Pennsylvania, and in Marshall, Monongalia and Wetzel counties, West Virginia.

Harvey adds, “The acres in the second transaction, though somewhat scattered, will significantly improve our footprint in what we believe is a key area for the future growth of CNX Gas. When combined with the acres from the first transaction, they have the potential to provide CNX Gas with many hundreds of additional Marcellus shale drilling sites in an area where we have averaged about 3.5 billion cubic feet in proved reserves per horizontal well for each of the first eight wells drilled.

He says results of micro-seismic data analysis have enabled CNX Gas to begin utilizing 40-acre well spacing for the horizontal Marcellus program.

Cobra Oil & Gas Co., Houston, (OTCBB: CGCA) plans to purchase a 62.5% title and working interest covering 640 gross acres adjacent to the Utah Oil Sands prospect in the P.R. Spring Deposit in Uintah County, Utah, from Enercor Inc. for approximately $330,000 in stock. Cobra will pay 300,000 shares. Other title holders include Questar Corp.

Cobra Oil & Gas Co., Houston, (OTCBB: CGCA) has increased its plans to acquire a 20% working interest on the Utah Oil Sands Project in Uintah County, Utah, from Enercor Inc. to a 40% working interest and will pay $5 million in cash, stock and drilling commitments.

These deal involves 33,632 acres on 23 federal leases owned by the Bureau of Land Management and under lease by ExxonMobil Corp., Irving, Texas, (NYSE: XOM). Enercor holds a contract with ExxonMobil to convert those leases into combined hydrocarbon leases for the right to exploit the tar sands, paying a 1/16 royalty to ExxonMobil on top of the 8% royalty that is due to the BLM. The leases are in the central region of the P.R. Spring bituminous sandstone deposit in southern Uintah County. The tar sands have an estimated potential of 4 billion to 4.5 billion barrels of oil on Cobra’s leases, according to the U.S. Bureau of Mines.

The contract stipulates that Cobra will pay $4 million in stock and $100,000 in cash. Cobra will be required to pay $100,000 in cash every 30 days until the obligated payments have been covered.

DK True Energy Development Ltd. has entered a joint-venture agreement to earn up to an 85% working interest in a coal-bed methane project in southeastern Kansas from JayHawk Energy Inc., Post Falls, Idaho, (OTCBB: JYHW) for a total value of up to $1.8 million. True Energy will pay $500,000 plus a minimum of $1.3 million over a three year period. True Energy has a right to use patented Short Radius Stimulation hydra-jet drilling technology for enhanced recovery.

Doral Energy Corp., Midland, Texas, (OTCBB: DEGY) has sold its rights to purchase the Miltex assets in Cochran County, Texas, per the April 21 purchase and sale agreement between itself and Texas-based Miltex Oil Co. for a total of $750,000 in cash.

Doral vice president and chief executive E. Will Gray II says, “Our primary strategy remains to purchase and monetize assets within the Permian Basin, our core area of expertise. In some cases we will monetize these assets through enhancement, and in other cases through divestiture and recognition of the gain. This transaction demonstrates our strategy, whereby we were able to utilize our common stock, as well as cash, to secure an acquisition, evaluate the property and then determine how to proceed. In this case, Doral was able to realize a profit while recouping our initial investment by divesting Doral’s rights to purchase these Permian Basin assets.”

Doral has also entered into a forbearance agreement with Macquarie Bank Ltd., on its $50-million credit facility, which changes the maturity date of the facility from July 31 to Aug. 31. Doral Energy’s management will update shareholders as to the progress of its refinancing efforts as this will be a key component in Doral’s efforts to list on a senior exchange as well as increase daily production.

Doral Energy has oil and gas assets in Permian Basin of Texas and New Mexico.

Empire Petroleum Corp., Tulsa, Okla., (OTCBB: EMPR) plans to acquire interests in the Okie Draw and South Okie prospects in Natrona County, Wyoming, from Viking Exploration LLC, Littleton, Colo., for an undisclosed price. The assets include 2,630 net acres targeting the Tensleep sands at 3,300 feet to 4,500 feet.

Encore Acquisition Co., Fort Worth, Texas, (NYSE: EAC) has closed its acquisition of properties in the Midcontinent and East Texas from Exco Resources Inc., Dallas, (NYSE: XCO) for $356.1 million in cash.

As of year-end 2008, according to Exco estimates, the total estimated proved reserves were 4.7 million barrels of oil and 148 billion cubic feet of gas (176 billion cubic feet of gas equivalent). Current net production includes 1,194 barrels of oil per day and 28.8 million cubic feet of gas per day (36 million cubic feet of gas equivalent per day). Encore estimates total proved reserves to be 24.6 million barrels equivalent (100% proved developed producing; 72% gas), production of 5,795 barrels per day, and a reserve-to-production ratio of 11.6 years. The sale includes approximately 66,700 net acres, of which approximately 7,000 acres are undeveloped, as well as gathering systems and compression facilities. The effective date is April 1.

The Midcontinent properties are comprised of assets primarily in the Norge Marchand Unit in Grady County, Oklahoma, a waterflood that produces from the Marchand sandstone and has estimated original oil in place of 200 million barrels. Forecast production for the unit is 1,955 barrels of oil equivalent per day, and the field is 100% operated. The acquired properties also include assets in the Texas Panhandle, southwestern Kansas, and western Oklahoma. The Midcontinent package has estimated proved developed reserves of approximately 12.8 million barrels equivalent (50% oil and gas liquids; 100% proved developed producing) with a reserve-to-production ratio of 12.1 years. The Norge Marchand reserves represent approximately 63% of the Midcontinent package.

The East Texas properties include long-life assets in Gregg, Upshur and Smith counties, mainly in Gladewater Field and including Overton field which produce primarily from the Cotton Valley sands. The East Texas properties include 495 gross wells with forecasted production of approximately 17.3 million cubic feet equivalent of gas per day (2,889 barrels equivalent). Gladewater’s estimated proved developed reserves are approximately 10.3 million barrels equivalent (95% gas; 100% proved developed producing), with total East Texas reserves of 11.8 million barrels equivalent. The East Texas reserve-to-production ratio is 11.1 years.

Encore chief executive and president Jon S. Brumley says, “Purchasing long-life properties at a time when prices are below long-term marginal costs has been a tried and true strategy Encore has been practicing for the past 11 years. Acquisition opportunities like this do not happen very often, so when they become available you must be ready…The industry is in a state of underinvestment and with unconventional horizontal plays becoming a larger percentage of Lower 48 gas production, we believe that the market will be ripe for prices to increase in 2010. This acquisition has a production profile that in today’s poor price environment is much safer and more desirable than a drilling program.”

He says the properties will contribute approximately $40 million in cash flow in 2009 and $65 million in 2010, including hedges entered into in conjunction with the acquisition.

Encore financed the acquisition through proceeds from the sale of certain properties in the Rockies and Permian Basin to MLP subsidiary Encore Energy Partners LP (NYSE: ENP) for $190 million in cash and borrowings under its revolving credit facility for the remaining amount.

In connection with the acquisition, Encore entered into derivative contracts on more than 90% of the acquisition’s proved developed producing volumes for 2010 through 2012. The company purchased oil puts for 625 barrels per day at a strike price of $67 per barrel for 2010 and $65 per barrel for 2011 and 2012. Additionally, the company entered into oil swap contracts for 625 barrels per day at an average price of $76.21 per barrel for 2010, $79.18 per barrel for 2011, and $81.04 per barrel for 2012. Encore additionally entered into gas swap contracts for $6.99 per Mcf for 20 million cubic feet per day for 2010 through 2012.

The acquisition was completed as a tax-free like-kind exchange.

Scotia Waterous (USA) Inc. and Tristone Capital LLC were advisors to Exco.

Analysts at Tudor, Pickering, Holt & Co. Securities Inc. valued the deal at $65,000 per flowing barrel. Pritchard Capital Partners analysts valued the deal at $15.25 per barrel of proved reserves and $64,710 per flowing barrel, “about in-line with the industry average metrics.”

Mitchell Wurschmidt, vice president of KeyBanc Capital Markets Inc., says Encore Acquisition paid approximately $15.24 per proved barrel equivalent (based on 24.6 million barrels equivalent proved), and $64,711 per flowing barrel (based on 5,795 net barrels equivalent per day). “We note that EAC conservatively only booked the PDPs from the deal; Exco had estimated 29.3 million barrels equivalent of proved reserves from the properties (including PUDs), which would work out to a price of $12.78 per proved BOE (or $2.13 per Mcfe).”

He adds, “We also note that EAC has identified over 100 locations across East Texas and Oklahoma with 8.5 million barrels of oil equivalent of upside potential. Our guess is this is a very early estimate of upside potential and more than likely EAC will identify further upside over time.”

The MLP Encore Energy Partners LP, Fort Worth, (NYSE: ENP) has closed its acquisition of producing properties in the Rockies and the Permian Basin in a drop down from parent company Encore Acquisition Co. (NYSE: EAC) for $190 million in cash.

The properties involve shallow-declining mature assets in the Big Horn Basin in Wyoming, the Permian Basin in West Texas and New Mexico and the Williston Basin in Montana and North Dakota. Estimated total proved reserves are approximately 12.4 million barrels of oil equivalent (93% proved developed producing; 84% oil). Currently production is approximately 2,129 barrels of oil per day. The reserve-to-production ratio is approximately 16 years. Encore properties are 96% operated.

For the Big Horn Basin package, proved reserves are 4.3 million barrels equivalent (100% proved developed producing; 100% oil) with production of 729 barrels per day. The Permian package involves 5.5 million barrels equivalent proved (91% PDP; 69% oil) with production of 885 barrels equivalent. The Williston package involves 2.5 million barrels equivalent proved (85% PDP; 90% oil) with production of 515 barrels equivalent per day.

Jon S. Brumley, Encore Energy Partners GP LLC chief executive, says, “While other upstream MLPs are struggling to find their footing in this marketplace, Encore Energy Partners has been able to make two significant acquisitions in 2009. These Rocky Mountain and Permian Basin oil properties are a perfect fit for ENP. They are high margin and predictable. We expect this drop down to be 8% to 11% accretive to 2010 distributable cash flow and to enhance an already healthy partnership. We are excited about increasing our oil exposure to the upside, but with our savvy hedging program we were able to protect the downside risk while retaining half of the upside exposure.”

Encore funded the acquisition with proceeds from its recently completed public offering of common units and borrowings under its revolving credit facility.

In connection with the acquisition, Encore Energy has hedged some 90% of the acquisition’s proved developed producing volumes for 2010 through 2012. The partnership purchased oil puts for 760 barrels per day at a strike price of $67 per barrel for 2010 and $65 per barrel for 2011 and 2012. Additionally, the partnership entered into oil swap contracts for 760 barrels per day at an average price of $75.43 per barrel for 2010, $78.46 per barrel for 2011, and $80.30 per barrel for 2012. Encore Energy entered into swap contracts with an average price of $7.99 per Mcf for 2,100 Mcf per day for 2010 through 2012.

Additionally, Encore Energy expects its annualized distribution rate to increase from an estimated $2.05 per unit for second-quarter 2009 to $2.15 per unit beginning with the distribution for third-quarter 2009.

Mitchell Wurschmidt, vice president of KeyBanc Capital Markets Inc., calculates EAC is receiving $15.32 per barrel equivalent proved, and $89,244 per flowing barrel. “All in all, we view this as a continuation of EAC’s strategy to drop down assets to its MLP and believe EAC received a fair price, considering the current credit and commodity environment.”

Endeavor Power Corp., Kennesaw, Georgia, (OTCBB: EDVP) has entered into a joint venture with Togs Energy Inc., a subsidiary of Texas-based TXO Plc (London AIM: TXO) to rework, further develop and complete six wells in the Randle Fair Christian lease in Gregg County, Texas, in a deal valued at approximately $600,000.

In exchange for a cash investment of $600,000, Endeavor will receive a 75% working interest. The joint venture joint venture may be expanded to include other leases. All operations will be conducted by M-C Production & Drilling Co. Inc.

Endeavor Power Corp., Kennesaw, Georgia, (OTCBB: EDVP) plans to acquire producing assets in Bexar County, Texas, from General Gas Corp. (Pink Sheets: CNGA) for an undisclosed price.

The assets included 279 acres with nine wells on the Beck Lease, including three producing wells and six soon be in production. All wells will be stimulated as part of a rework program by a third-party operator.

Energas Resources Inc., Oklahoma City, (OTCBB: EGSR) has signed an option to acquire a 50% operating working interest in 10,218.96 acres in the Natural Buttes Field in the Uinta Basin, Uintah County, Utah, from an undisclosed seller for approximately $80,000 in stock. Energas will pay 2 million shares.

Energas Resources Inc., Oklahoma City, (OTCBB: EGSR) has acquired a Uintah Basin well in Uintah County, Utah, from an undisclosed private company for approximately $72,000 in cash and stock. Energas paid $42,500 in cash and 1,000,000 shares to acquire an 80% working interest (73.835% net revenue interest). The well is already drilled to a depth of approximately 20,000 feet, logged, tested and has casing set but is capped waiting to be hooked into a pipeline for natural gas sales.

Enterra Energy Trust, Calgary, (Toronto: ENT.UN) has purchased approximately 270 barrels of oil equivalent per day of production from partners in its existing Hunton development operation in Oklahoma for approximately US$8.64 million in cash and stock.

Enterra paid US$6 million and 2 million trust units. All of the production is from well bores which are operated by Enterra and in which the trust has an existing interest. The acquisition also allows for a larger go-forward interest in future drilling in this area.

“This acquisition is valuable to Enterra because it increases the trust’s working interest in well bores already operated by the trust and will enhance Enterra’s working interest in future drilling in the Hunton area,” says Don Klapko, Enterra chief executive. “Enterra’s Oklahoma operation, and specifically the Hunton resource play, is a key focus area currently representing approximately half of Enterra’s total production. The economics of this play have proved very positive for Enterra, with a 97% drilling success rate in the area to date and low finding and development costs.” He adds the trust also has more than 50 drilling prospects identified in this area.

EV Energy Partners LP, Houston, (Nasdaq: EVEP) plans to acquire a 15.15% interest in properties in the Austin chalk in Texas from an undisclosed seller for $5.3 million.

The assets include a 90% average working interest in more than 24,000 net acres with 67 wells producing primarily from the Austin chalk formation in Fayette, Grimes, Lee, Washington and Burleson counties. Estimated proved reserves as of April 1, net to EVEP and based on current strip prices, are approximately 3.35 billion cubic feet equivalent (100% proved developed producing; 83% gas; 88% operated). Net daily production is approximately 1 million cubic feet equivalent.

EV Energy chairman and chief executive John B. Walker says, “This is the second Austin chalk add-on acquisition we have announced during the past two months. As we have previously noted, the Austin chalk is EnerVest’s largest and most successful area of operation and this purchase highlights our continuing focus on acquisitions in our core areas. We only paid for producing reserves, but believe that each of the 67 well bores offers the opportunity to exploit additional Austin chalk zones. Our recently completed equity offering and reduction in our outstanding debt by 25% during 2009 provides EVEP with the flexibility to continue to pursue acquisition opportunities at attractive rates of return.”

Closing is expected by Sept. 1.

Force Energy Corp., Denver, (OTCBB: FORC) has closed its acquisition of a 50% working interest in the Diamond Springs prospect in the Wind River Basin in Fremont County, Wyoming, from G2 Petroleum LLC for a deal value of approximately $225,000. Force released G2 from all obligations relating to a $175,000 loan provided to G2 in December 2008 and a $50,000 deposit advanced by Force related to a March 2008 agreement between the companies. The Diamond Springs prospect is a 3,300-acre shallow oil prospect with the potential for 4.3 million barrels of oil all from depths of less than 1,100 feet.

Two undisclosed buyers plan to acquire operated and nonoperated properties in West Texas and New Mexico in two separate agreements from Forest Oil Corp., Denver, (NYSE: FST) for approximately $118 million. Current production is 9 million cubic feet equivalent per day. No other details were available. Closing is expected in the third quarter.

Gastem Inc., Montreal, (Toronto Venture: GMR) plans to acquire an 80% interest in the 34,150 acres in New York State from Utica Energy LLC for approximately $1.54 million. Gastem will pay US$35,000 and 3.5 million shares vested over six months in return for paying 100% to drill and complete one exploratory vertical well. Utica Energy will retain a 2% overriding royalty interest in existing leases and in new leases within the AMI in New York State. Utica Energy also retains the option to participate up to 20% working interest in new land acquisitions within the AMI.

The special-purpose acquisition company Hicks Acquisition Co. I (AMEX: TOH) plans to acquire private-equity-backed Resolute Natural Resources Co., Denver, a portfolio company of Natural Gas Partners, in a merger valued at $582 million that will take the company public.

Following completion, the combined enterprise will be renamed Resolute Energy Corp. and will apply for listing on the New York Stock Exchange.

Resolute, founded in 2004, focuses on long-lived onshore U.S. opportunities. The company’s principal assets are a tertiary oil project in southeastern Utah and a conventional gas field in the Powder River Basin of Wyoming. The company owns the majority of the interests in and operates virtually all of its wells. In addition to its producing properties, Resolute owns exploratory acreage in the Big Horn Basin of Wyoming and the Black Warrior Basin of Alabama.

Resolute’s assets are 91% oil with proved reserves of 49.3 million barrels of oil equivalent, and a proved reserves-to-production ratio of 18 years at year-end 2008. In first-quarter 2009, Resolute produced an average 7,626 barrels of oil equivalent per day net (85% oil).

Hicks values the deal at $11.80 per barrel of oil equivalent proved, and an enterprise value to 2010 estimated EBITDA multiple of 6.5x.

Hicks Acquisition founder and sponsor Thomas O. Hicks says, “Resolute has all of the characteristics that we believe are essential for a company to succeed in the public markets: a high-quality management team with extensive experience and success in the upstream oil and gas business, a strong and flexible balance sheet, and a focused asset play in a sector poised for significant activity. In addition, Hicks Acquisition shareholders benefit from acquiring Resolute at a compelling valuation relative to its publicly traded peers. We look forward to completing the transaction and supporting the management team going forward in order to realize Resolute’s full operational, financial and investment potential.”

The NGP and Resolute management team will contribute their entire equity position to Resolute. Following the completion of the transaction, Thomas Hicks, NGP and management will together own approximately 26% of Resolute. Hicks Acquisition public shareholders will own approximately 74%. After completion, Hicks Acquisition stockholders, including Thomas Hicks, will own approximately 82% of Resolute.

Nicholas J. Sutton, chairman and chief executive of Resolute, who will continue as CEO of the combined entity, says, “As a result of this transaction, Resolute will be well positioned to generate strong returns for investors through the combination of its long-lived properties, a management team with extensive experience and proven results in upstream operations, the expected strong growth in demand for oil and gas, the potential for positive pricing trends, and a greatly improved balance sheet. We are pleased to partner with Hicks Acquisition, a group of experienced investment professionals with a demonstrated successful track record in the energy industry, and to have the continued support of NGP, a leading energy industry investment firm, both of which will remain significant investors in Resolute.”

Sutton and the majority of the Resolute senior management team previously worked together as the management of HS Resources Inc., an independent oil and gas company that was listed on the New York Stock Exchange prior to being sold to Kerr-McGee Corp. for $1.8 billion.

“Given Resolute’s high-quality asset base and management’s strong track record of success, we are pleased to contribute our entire equity ownership in support of Resolute’s significant growth potential as a public company,” says Kenneth A. Hersh, managing partner of Natural Gas Partners. “Nick and his senior management team are among the best in the business and NGP’s relationship with them dates back more than 18 years to when we made our first investment in HS Resources. At that time, HS Resources was a small, private company co-founded by Nick that grew to be a highly successful independent oil and gas company. We look forward to participating in their continued success and to working with the Hicks team which has a very strong history of investing in energy related businesses.”

The management of Resolute and NGP will contribute their entire equity ownership and will receive 9.2 million Resolute common shares, representing approximately 18% of the pro forma outstanding shares, and additional equity ownership consisting of 1.4 million earn-out shares and 6.9 million warrants. Also as part of the transaction, the Hicks-led sponsor will agree to eliminate approximately 53% of its founder shares, convert another approximately 14% of its founder shares to earn-out shares with a $15 per share trigger price and five-year maturity, and transfer approximately 33% of both its founder warrants and its sponsor “at risk” warrants to the seller, with the sponsor warrants being transferred in exchange for $0.50 per sponsor warrant. The founder and sponsor warrants will have an exercise price of $13 per share and an expiration date five years from closing.

The deal is expected to close during third-quarter 2009. Proceeds will be used to pay Resolute’s outstanding debt.

Citigroup Global Markets Inc. is financial advisor for Hicks Acquisition. BMO Capital Markets, Deutsche Bank Securities Inc. and UBS Investment Bank are financial advisors to Resolute.

Houston-based MLP Linn Energy LLC (Nasdaq: LINE) has entered two agreements to acquire certain oil and gas properties in the Permian Basin in West Texas and New Mexico from undisclosed sellers for a combined price of $118 million.

These assets include proved reserves of more than 12 million barrels of oil equivalent (86% oil; 58% proved developed). Current production is approximately 1,350 barrels of oil equivalent per day. The reserve-life index is more than 24 years. Upside includes approximately 180 proved infill development and low-risk optimization projects.

Linn chairman and chief executive Michael C. Linn says, “These acquisitions represent a strategic entry into the Permian Basin and demonstrate our commitment to grow through accretive acquisitions. The oil properties fit well within our current portfolio of long-life, low-risk assets and we believe that the Permian Basin will provide us with numerous acquisition opportunities for future growth.”

Closing is expected by Oct. 1 and will be financed with borrowings under the company’s existing credit facility. Linn holds approximately 1.7 trillion cubic feet equivalent of proved reserves.

North American Energy Resources Inc., Austin, Texas, (OTCBB: NAEY) plans to acquire 480 acres in Washington Co., Oklahoma, from and undisclosed seller for an undisclosed price. The leases include 14 existing oil producing wells producing three to five barrels of oil per day each.

North American Energy Resources Inc., Austin, Texas, (OTCBB: NAEY) plans to acquire 120 acres in Washington Co., Oklahoma, from Alt Energy Inc. for an undisclosed price. Assets include six wells, of which four are shut in, but produce gas from the Mulkey formation. The company plans to drill eight additional gas wells and recomplete two existing wells.

North American Energy Resources Inc., Austin, Texas, (OTCBB: NAEY) plans to acquire 37 mineral acres in Washington County, Oklahoma, from CLM Oil Production Inc. for an undisclosed price. The assets include four wells, two of which produce oil from two separate zones. The company plans to recomplete two existing wells and drill two additional wells.

Privately held, Houston-based Northstar Offshore Energy Partners LLC has acquired the remaining Gulf of Mexico shelf assets from Pioneer Natural Resources Co., Dallas, (NYSE: PXD) for an undisclosed price.

The assets include seven fields and 32 producing wells. Current production is 1,400 barrels of oil per day. The production remains curtailed due damage to third-party pipeline facilities by hurricanes Gustav and Ike. Following the hurricanes, Pioneer reported curtailing approximately 3,000 barrels oil equivalent per day of production due to shutting in of production related to the hurricanes.

Northstar is a portfolio company of private-equity company Natural Gas Partners. The acquisition was funded in part with a new $100-million senior secured credit facility from BNP Paribas.

Nostra Terra Oil & Gas Co. Plc (London: NTOG) plans to acquire three Kansas properties from Hewitt Petroleum Inc. for US$235,000. Nostra Terra, which holds assets in Ukraine, is expanding interests in the U.S. to diversify. The deal involves a 50% working interest in Koelsch Field with two producing wells in Russell County; a 25% working interest in Hoffman Field with five producing wells in Barton and Russell counties; and a 50% working interest in Bloom Field with nine producing wells in Russell County.

Pavilion Energy Resources Inc., Beverly Hills, Calif., (Pink Sheets: PVRE) plans to acquire working interests in 13 gas wells in Fentress County, Tennessee, from privately held Leland Energy Inc. for an undisclosed price in stock. The wells were drilled in 2006 and 2007 and are low pressure, long-life with two separate engineering reserve reports that show more than 8.5 billion cubic feet in recoverable reserves. Pavilion expects to bring the wells back online in the next quarter.

Petro Uno Resources Ltd., Calgary, (Toronto Venture: PUP) plans to acquire interest in McKinney Field in Renville County, North Dakota, from Ward Williston Oil Co. for US$1.85 million.

The assets include 14 wells in the Sherwood subinterval of the Mission Canyon formation. Current production is 39 barrels of oil per day. Proved reserves are 140,000 barrels of oil. Petro Uno estimates it paid US$47,400 per flowing barrel and US$13 per barrel proved.

Closing is expected by Sept. 15. Petro Uno focuses has operations in Alberta and the Williston Basin in northeastern Saskatchewan and North Dakota.

Petrohawk Energy Corp., Houston, (NYSE: HK) has acquired a 34.4% interest in the Phoenix Unit in East Texas from JKX Oil & Gas Plc, London, (London: JKX) for $10.1 million. The Phoenix Unit was formerly known as the West Huxley Deep Federal Unit. JKX focuses on central and eastern Europe.

Amending the terms to its $3.3-billion Haynesville shale deal with Chesapeake Energy Corp., Oklahoma City, (NYSE: CHK) Plains Exploration & Production Co., Houston, (NYSE: PXP) has agreed to prepay the remainder of its three-year drilling carry in exchange for a 12% discount.

Plains will pay approximately $1.1 billion up front instead of an estimated $1.25 billion in remaining carried drilling costs that it would have been paid over the next three years under the original agreement. Chesapeake has agreed to maintain a minimum level of activity on the jointly owned Haynesville acreage by drilling a minimum of 150 wells during each of the next three 12-month periods beginning Oct. 1. After closing the amendment, scheduled for the end of September, Chesapeake and Plains will each pay their proportionate working interest costs on future drilling.

In addition, Chesapeake and Plains have agreed to terminate a previous joint-venture amendment that granted Plains a one-time option in June 2010 to avoid paying the last $800 million of the drilling carry obligations in exchange for returning the rights to 50% of its Haynesville shale assets to Chesapeake.

The original deal terms when announced in July 2008 were for Plains to acquire a 20% interest in Chesapeake’s 550,000 net Haynesville shale acres in northern Louisiana and East Texas for $1.65 billion in cash and to fund 50% of Chesapeake’s 80% share of drilling and completion costs for future Haynesville joint-venture wells until an additional $1.65 billion had been paid. The 20% interested extended to any additional acres acquired in the play.

The adjusted deal value is approximately $3.15 billion.

Plains president and chief executive James C. Flores says, “By pre-paying this carry, we unlock potential capital for Plains’ other high-quality assets and allow Plains to achieve an appropriate long-term financing structure that correlates with our tremendous Haynesville shale assets. This structure maintains our balance-sheet strength and increases our financial flexibility on a go-forward basis to increase investment in our existing oil and gas leasehold.”

Aubrey K. McClendon, Chesapeake chief executive, says, “This agreement modification provides substantial upfront capital to Chesapeake, reduces Plains’ total investment in the Haynesville, and further aligns the incentives between the partners. The Haynesville joint venture has been highly successful. (The amendment) greatly benefits both companies.”

Morgan Stanley Research analyst Stephen Richardson calls the prepay a win for Chesapeake. “The amendment to the Plains partnership allows Chesapeake to bring forward cash, improve near-term financial flexibility, and likely capture the benefits of lower drilling costs in the Haynesville.”

Michael Hall, an analyst with Stifel, Nicolaus & Co. Inc., says, “Getting the money today makes sense to us as it reduces counterparty risk and increases financial flexibility.” Hall estimates Chesapeake’s net Haynesville leasehold investment is approximately $3,000 per acre following the amendment, “quite a bit below the headline acreage values of 2008.”

Precision Petroleum Corp., Oklahoma City, (OTCBB: PPTO) has acquired overriding royalty interests in two adjacent leases, East and West Moreland, in Nowata County, Oklahoma from an undisclosed seller for an undisclosed price.

The Moreland leases consist of 14 producing wells from the Bartlesville sand including a salt-water disposal wastewater injection facility.

Rich Talley’s Primary Natural Resources III LLC has secured its first deal, acquiring properties and associated equipment in Ellis County, Oklahoma, from Citrus Energy for an undisclosed price.

The deal involves 4,700 net acres in 18 sections including 19 producing wells and two gathering systems, all operated. Primary III will retain the field personnel associated with the properties.

“We are pleased by our first acquisition,” says Talley, CEO of Primary III. “We expect these fields to have good production upside and will give us a foothold in an area of the Anadarko Basin that we know well.”

Primary III, a portfolio company of Quantum Energy Partners, was formed in January with an initial equity commitment of more than $100 million. It is focused on acquiring conventional producing properties with upside re-completion potential and development drilling opportunities or potential for using enhanced recovery methods with valued at $25 million to $250 million in the Midcontinent, Oklahoma/Texas Panhandle and Permian Basin.

Meagher Oil & Gas Properties Inc. was advisor to Primary III.

Seneca Resources Corp., the E&P arm of northeastern integrated energy company National Fuel Gas Co., Williamsville, N.Y., (NYSE: NFG) and via subsidiary Seneca South Midway LLC, has acquired all of the U.S. assets of Ivanhoe Energy Inc. (Nasdaq: IVAN; Toronto: IE) in California and Texas for approximately US$40 million.

As of year-end 2008, Ivanhoe Energy U.S. assets included interests in California’s San Joaquin Basin and Sacramento Basin primarily in Kern County in South Midway Field, and the Permian Basin in Texas primarily in Midland County. As of June, these assets produced approximately 645 gross barrels of oil per day (595 barrels net). Total U.S. proved reserves year-end 2008 was 769,000 barrels of oil equivalent. The purchase also includes exploration acreage in California.

“As we remain focused on evaluating and developing our assets in the Appalachian region, we also remain alert to growth opportunities in other areas. This acquisition adds to our valuable oil producing assets in the Midway Sunset Field in California, where Seneca already has significant oil production,” says David F. Smith, president and chief executive of National Fuel Gas.

“Seneca has grown production from our properties in California for the past two years and this acquisition ensures we will continue that growth,” adds Matt Cabell, president of Seneca Resources. “This is a logical bolt-on to our existing California assets. We believe there is significant potential to boost production from the new assets through the same steaming techniques that have allowed us to increase production from our existing properties.”

Ivanhoe Energy’s operations now will be concentrated on the development of its first two HTL (heavy-to-light) heavy-oil projects, Tamarack in Canada and Pungarayacu in Ecuador, and the pursuit of additional heavy-oil opportunities in Canada, South America, the Middle East and North Africa. In addition, Ivanhoe Energy will continue with oil and gas operations in China under its wholly-owned subsidiary, Sunwing Energy Ltd.

Ivanhoe Energy president and chief executive Robert Friedland says, “This sale allows Ivanhoe Energy to focus our financial and human resources on our true competitive strengths. We currently have two world-class heavy-oil projects underway driven by the application of our game-changing HTL technology, and we have significant additional opportunities in our sights.”

Tristone Capital advised Ivanhoe Energy.

Houston-based MLP Vanguard Natural Resources LLC (NYSE: VNR) has acquired producing oil and natural gas properties in South Texas from an affiliate of privately held San Antonio-based Lewis Energy Group LP for $52.25 million.

Total estimated proved reserves are 27 billion cubic feet equivalent as of July 1 (94 gas; 74% proved developed). Current net daily production is approximately 5 million cubic feet equivalent. The reserve-to-production ratio is approximately 15 years. Lewis will be operator.

Vanguard chief executive Scott W. Smith says, “We are very pleased to be able to announce this transaction with Lewis, our South Texas operating partner. When we closed our initial South Texas acquisition last summer, we indicated one of our goals was to add additional assets through subsequent acquisitions as Lewis looked to monetize mature assets to fund their exploration efforts. With an enviable leasehold position in the emerging Eagle Ford shale play, this transaction provides Lewis the opportunity to monetize a small percentage of its assets to provide capital for an exciting exploration opportunity. For Vanguard, this acquisition will increase our production and reserves and will increase the value of the collateral backing our reserve-based credit facility.”

The effective date is July 1.

At closing, Vanguard assumed natural gas puts and swaps based on Nymex pricing for approximately 61% of the estimated gas production from existing producing wells for the period beginning August 2009 through 2010. In addition, Vanguard entered into a costless collar for certain volumes in 2010 and a series of costless collars for a substantial portion of the expected gas production for 2011. In total, approximately 90% of the estimated gas production from existing producing wells was hedged through 2011 in a range of $7.50 to $8.50 per MMBtu.

Vanguard has interests in the southern portion of the Appalachian Basin, the Permian Basin and South Texas. Lewis focuses on South Texas.

Williams Cos., Houston, (NYSE: WMB) plans to acquire additional properties in the Piceance Valley in Colorado east of the company’s existing assets from an undisclosed private company for approximately $258 million in cash.

The assets include 21,800 net acres, with 28 wells, related gas- and water-gathering facilities, 94 approved drilling permits and more than 800 drillable locations at 10-acre spacing. Proved reserves are approximately 150 billion cubic feet equivalent, with up to 795 billion cubic feet equivalent of estimated total net reserves. Current production is currently 24 million cubic feet equivalent per day. In addition, the properties contain exploration upside from deeper formations and additional potential locations.

Not including the new properties, Williams currently owns approximately 190,000 net acres in the Piceance Basin.

Williams president and chief executive Steve Malcolm says, “We’ve identified an opportunistic bolt-on acquisition that allows us to quickly add meaningful reserves, production, cash flows and earnings per share by leveraging off of the strength of our low-cost structure in the Piceance Basin…The anticipated production also can be an important additional supply source for our Northwest Pipeline.”

Williams has entered into new gas price hedges at a Rockies fixed price of $5.23 for 2010 and $5.90 for 2011. The hedges represent about 80% of projected gas revenues from the new properties. The company plans to incrementally add drilling rigs to its Piceance operations, with one additional rig tentatively slated for fourth-quarter 2009, followed by one more in 2010 and two more in 2011. Williams is currently running a total of eight rigs in western Colorado.

“This is a rare find,” says Ralph Hill, president of Williams’ exploration and production business. “The existing wells in the area we’re acquiring are very productive, producing a third more gas than Williams’ existing prolific Piceance Valley wells for a similar cost.”

The deal is expected to close near the end of the third quarter.