Year-End Sales
Imminent Annual Report-Making Contributed To An Active December Marketplace

Clearly, buyers and sellers were better able to see eye to eye in the last few weeks of 2003 than during a lot of the year. News of deal
agreements and closings across North America reversed from sluggish during most of 2003 to full speed. More than 1.3 trillion cubic
feet equivalent is involved in just 13 of the deals.
Some of the activity was the result of producers’ pursuit of year-end reserve replacement, heating the acquisitions and divestitures
marketplace. Transaction-advisory firms were reporting a busy season, and hoping the market would remain active through 2004, which
started with a few announcements by The Oil & Gas Asset Clearinghouse, Petroleum Place Energy Advisors and Waterous & Co.
Following are some of just the U.S. deals from the last weeks of the fourth quarter:
• Floyd Wilson has found a vehicle for bulking up his new Petrohawk Energy LLC.Wilson, whose 3Tec Energy was started as a
private firm that bought out an existing public company and eventually became 3Tec, which was sold in June, will gain control of publicly
held Beta Oil & Gas, which has been struggling to profitably grow. Mitchell Energy Advisors is financial advisor to Petrohawk.
Proved reserves involved: approximately 18 billion cubic feet equivalent.
• Jim Flores, a founder of Ocean Energy and now a major shareholder in Plains E&P and in Plains Resources, has bid to take over
Plains Resources. Partners in the bid are Vulcan Capital and John Raymond, Plains E&P and Plains Resources president. Petrie
Pa rkman & Co. is advising Plains Resources.
• Newly private Exco Resources plans to purchase North Coast Energy, which had been on the market during most of 2003.
Robert W. Baird & Co. advised North Coast. P roved reserves involved: approximately 176 billion cubic feet equivalent.
• Quest Resource Corp. bought Devon Energy’s Cherokee Basin assets, making Quest the largest operator in the basin. Energy
Capital Solutions was financial advisor to Quest. P roved reserves involved: approximately 96 billion cubic feet equivalent.
• Range Resources bought properties in Conger Field in West Texas, making it the largest operator in the field. P roved reserves
involved: approximately 80 billion cubic feet equivalent.
• Forest Oil, Westport Resources, Chesapeake Energy, Legend Natural Gas and Whittier Energy each made significant South
Texas purchases. P roved reserves involved: more than 500 billion cubic feet equivalent.
• Chesapeake added another deal to its already-long 2003 roster of purchases, announcing the purchase of Concho Resources Inc.
and two assets from other sellers, for a total of $510 million. P roved reserves involved: approximately 320 billion cubic feet equivalent.
• Toreador Resources let go of its U.S. mineral and royalty assets to Black Stone Acquisition Pa rtners I LP, which Joe Mills of
El Paso Corp. and Hallie Vanderhider of EnCap Investments recently joined.
• Privately held Medicine Bow Energy finished its purchase of Ensign Oil & Gas. Rivington Capital Advisors was financial
advisor to Medicine Bow. (In early January, Medicine Bow announced another corporate transaction—the purchase of Edison Mission Energy Oil & Gas, which owns a 30% interest in Four Star Oil & Gas.)
• Five States Energy acquired producing royalty interests in the San Juan Basin
from Pulte Homes. Wells Fa rgo Energy Advisors represented Pulte.
• Harken Energy got the sale of most of its Texas Panhandle properties done, after
the first buyer backed out. Petrie Pa rkman & Co. advised Harken.
• Contango Oil & Gas and Republic Exploration divested some Gulf of Mexico
assets.
• Edge Petroleum closed its merger with Miller Exploration. Proved reserves
involved: approximately 7 billion cubic feet equivalent.
• Oneok Energy Resources bought East Texas producing assets from Wagner &
Brown. Proved reserves involved: approximately 177 billion cubic feet equivalent.
• Petroleum Development closed a DJ Basin purchase. P roved reserves involved:
approximately 5 billion cubic feet equivalent.
• Australia-based Novus Petroleum bought shallow Gulf of Mexico producing
assets. P roved reserves involved: approximately 33 billion cubic feet equivalent.
Will there be enough business in 2004 to satiate the dozens of E&P transaction-advisory
firms, many of them formed just this past year? Is there room for so many firms?
“There can’t be,” says Geoff Roberts, former owner of transaction-advisory firm
Madison Energy Advisors (now known as Oil & Gas Journal Exchange/Madison
Energy Advisors) and who is launching a new E&P company. Will there be enough business in 2004
to satiate the dozens of E&P transaction-advisory firms,
many of them formed just this past year?
Is there room for so many firms? The firms fall into four categories, Robert says:
• The well-established companies, which will continue to do well in most any market.
They have good reputations and good track records and they provide a good service,
Roberts says.
• Dot-com-era entrants that “just haven’t given up yet or have tried to morph themselves
into something more acceptable and are still plugged in because of their tenacity
or the deep pockets of their primary financing source.”
• The investment bankers and commercial bankers.
• And, the start-ups.
“The dot-comers are eventually going to fade. The commercial banks seem to come
and go regularly, and I think they’re going to continue to come and go. The well-established
firms are here to stay unless sold or merged. And the new guys are going to be
like any start-ups—a percentage will make it and a larger percentage won’t.”
No matter the deal volume in 2004, there is a certain promise that the A&D market
will continue to be an interesting place.
Happy new year, and viva reserves!