|
Sale of Pioneer’s Alaska assets to Caelus closes; includes Oooguruk
Pioneer Natural Resources announced April 15 that it had closed the sale of its Alaska subsidiary, including the Oooguruk oil field, to Caelus Energy Alaska LLC for $300 million. And on the same day Caelus Energy also confirmed the sale, saying that it had formed a strategic partnership with Apollo Global Management, an international investment management company, for the Caelus investments in Alaska.
Apollo, in a press release announcing the agreement with Caelus, said that its funds “have the opportunity” to invest up to $1 billion dollars in Caelus “to develop the company’s existing assets and to pursue acquisitions or other additional investments.”
“We are excited to be working with Apollo to build a world-class, Alaska-focused independent E&P business, beginning with the acquisition of Pioneer’s Alaskan oil and gas operations,” said Jim Musselman, chief executive officer of Caelus. “The current Pioneer Alaska team has the experience to grow and develop the tremendous resource potential they have identified. We believe Alaska offers an enormous geologic opportunity, coupled with a favorable regulatory environment for independent oil and gas companies.”
“We are confident that Caelus can efficiently develop the existing reserves it is acquiring while building a first-rate oil and gas company through add-on acquisitions and new discoveries,” said Greg Beard, Apollo’s global head of natural resources and senior partner. “We are delighted to have the opportunity to invest alongside Jim and his team.”
Pioneer initially announced the sale of its Alaska assets to Caelus in November 2013, with an expected closing date around the end of the year. But the process of tying up the sale took longer than the companies had anticipated. Issues that needed to be resolved included agreements with the state of Alaska over how deal with the dismantling of the field infrastructure at the end of field life, and dealing with royalty relief that has applied to some Oooguruk leases.
In March the companies announced that Pioneer had agreed to drop the price of its Alaska subsidiary from $550 million to $300 million, with the company reporting an accounting cash loss as a consequence. At the same time, Caelus said that it was going to take on a $300 million second-lien term loan and a $115 million asset-based loan facility to fund the purchase and provide working capital for its operations.
Founded in 2011 In November Musselman told Petroleum News that he had founded the company in 2011. Musselman said he had a track record in international oil exploration, going back to the mid-1990s, having formed and successfully managed two companies, Triton Energy and Kosmos Energy, before forming Caelus.
Musselman said that he had been investigating oil exploration opportunities in Alaska when he discovered the opportunity to purchase Oooguruk, an operational oil field that would give his company an entry to the state, with an existing asset that is already creating cash flow. And Caelus sees the continuing development of Oooguruk, including the development of new oil resources in the field, as a priority, Musselman said.
On line Pioneer purchased the Oooguruk leases in the nearshore waters of the Beaufort Sea in 2002 from Armstrong Resources and subsequently embarked on a fast-track development of the field. The field went on line in 2008, and proved successful, with Pioneer discovering field expansion opportunities and, in 2009, increasing the field’s resource estimates by 40 percent.
But, in November 2013, when announcing the sale of Oooguruk, Pioneer’s Chairman and CEO Scott Sheffield said that the sale represented a strategic move, to focus investment on shale development in Texas. Sheffield said that Oooguruk still holds the North Slope record for the shortest time taken from first oil discovery to first oil production.
“It’s been a great experience for us and we thank all our employees,” he said.
—Alan Bailey
|
