2009-09-21-2009-07-20-2009-07-20

Transaction Type
Sellers
Buyers
Announce Date
Post Date
Close Date
Estimated Price
$40.0MM
Description

Acquired assets in CA San Joaquin & Sacramento basins in Kern Co., in Permian Basin, Midland Co., TX, gaining 595 BOE/d, 769,000 BOE proved.

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.