NEWS

EnLink Midstream has signed a definitive agreement to acquire Permian-focused LPC Crude Oil Marketing LLC for approximately $100 million. LPC currently purchases, transports and sells approximately 60,000 barrels per day of crude oil. EnLink says that the transaction will expand its capabilities in the oil producing regions of West Texas and New Mexico.

LPC’s assets include 13 pipeline and refinery injection stations, a fleet of approximately 43 tractor trailers, six crude oil gathering systems totaling 67 miles of pipeline, and an extensive crude oil first purchasing operation.

View EnLink press release

STW Pipeline, a subsidiary of STW Resources Holding, has signed a $7 million contract with a major midstream pipeline company to repair and maintain oil and gas pipelines in the Permian Basin of west Texas over the next 12 months.

Adam Jennings, STW Pipeline President, said: “STW Pipeline is poised to grow with new projects and contracts in the second half of this year. The contract with this major midstream company is just the initial business we can get from this customer. We can do this amount of work and increase the business from this customer over the next twelve months significantly. We are also submitting proposals and bids for this type of work from the other mid-stream pipeline companies.”

View STW Resources press release

Oxy Buys Permian Acreage and EOR Assets for $2 Billion

Occidental Petroleum (Oxy) has acquired producing and non-producing leasehold acreage in the Permian Basin from private sellers. Separately, the company acquired interests in several Permian Basin enhanced oil recovery (EOR) and CO2 properties, and related infrastructure. The total purchase price for these transactions is approximately $2 billion.

Acquisition Highlights-

Permian Resources:

• The leasehold acquisition includes approximately 35,000 net acres in Reeves and Pecos counties, Texas, in the Southern Delaware Basin, in areas where Occidental currently operates or has working interests
• Approximately 7 MBOE/d of net production (72% oil) from 68 horizontal wells
• A minimum of 700 gross estimated horizontal drilling locations targeting the Wolfcamp A, Wolfcamp B and Bone Spring, with meaningful upside potential through infill drilling and additional intervals
• Proximity to other key Occidental development areas, such as Barilla Draw, allows for cost and infrastructure efficiencies and contiguous position enables longer lateral well development
• Enables efficient development by gaining operatorship and provides capital flexibility as a high percentage of the acreage is held by production
• Including this transaction, Occidental’s overall position in the leasehold area encompasses nearly 59,000 acres with an aggregate acquisition cost, inclusive of value given to current production and infrastructure, of approximately $2 billion

Permian EOR:

• Acquired working interests in producing oil and gas CO2 floods and related EOR infrastructure, increasing Occidental’s ownership in several properties where it is currently the operator or an existing working interest partner
• These properties have current production of approximately 4 MBOE/d (80% oil), with estimated net proved developed producing reserves of approximately 25 MMBOE and total proved reserves of approximately 41 MMBOE

View Occidental press release

• Diamondback Energy to acquire all outstanding equity interests in Windsor Permian LLC, a subsidiary of Gulport Energy, for $64 million in debt plus an equity interest in Diamondback
• Windsor Permian holds all of Gulfport's interests in the Permian basin.

View transaction in the Global M&A Database

Windsors' asset highlights:

• Located across Andrews, Howard, Ector, Upton, Midland and Crockett counties in Texas
• Reserves: 1P - 12.885 MMBOE (84% liquids, 23% PDP), 2P - 23.82 MMBOE and 3P - 26.17 MMBOE
• Average Q1-2012 production: 997 BOE/d (86% liquids)
• 11,190 Net undeveloped acreage as of 31-Dec-2011

View recent Permian (unconventional) deals in the Global M&A Database

COP Permian Production Forecast Source: COP Aug-2012 presentation

In its investor presentation dated 1-Aug-2012, ConocoPhillips (COP) provided an update on its Permian operations. The company:

• Plans to drill more than 300 wells
• Holds drilling inventory of over 7,000 gross identified locations
• Looks to invest $600 million
• Plans to reach ~55 MBOE/d in 2012 and ~85 MBOE/d by 2016