Anadarko Enters Eaglebine Joint Venture with KKR & Co - $442 Million

November 14, 2014 Kirk Eggleston

During the third-quarter of 2014, Woodlands, TX-based Anadarko Corp. entered into a joint venture (JV) with private equity firm KKR & Co. to develop a portion of Anadarko's East Texas/Eaglebine acreage.

Under the terms of the deal, KKR agreed to carry $442-million of Anadarko's future capital expenditures in Brazos, Burleson, and Robertson Counties, situated northwest of Houston, TX. In exchange, KKR received 36,000 net acres in the JV area of mutual interest (AMI) and 40% of Anadarko's working interest (WI) in 33 wells. In a prepared release, KKR company officials said through long-term development of the field, they expect to participate in more than 500 wells.

“We see the Eaglebine as a really exciting and potentially explosive area, Anadarko CEO Al Walker said on an investor conference call in late October of 2014.”

Anadarko will remain the operator of the acreage with an average post-transaction WI of approximately 51% in the JV AMI. Anadarko company officials say the transaction will enable the company to more rapidly develop this short-cycle oil opportunity with the addition of incremental drilling rigs, while further enhancing Anadarko’s capital efficiency and flexibility.

During the third-quarter, Anadarko spud five wells with one rig in the Eaglebine. Production from these new wells increased the company's net sales volumes to more than 3,000 boe/d, with a 90% oil cut, according to Anadarko's third-quarter operations update.

Statoil - Talisman Sale of Eagle Ford JV Tabled

July 11, 2014 Kirk Eggleston

Statoil and Talisman Eagle Ford Acreage Map

Talisman Energy Inc. and Statoil ASA have tabled plans to to sell their joint venture in the Eagle Ford Shale after offers came in lower than expected, Bloomberg reported in early July of 2014.

The companies were seeking around $4-billion for a 50-50 partnership, according to Bloomberg, which cited unidentified sources knowledgeable on the matter. Bids fell short in part because the venture produces especially light condensate, rather than crude oil, which commands more money, the article noted.

In June of 2013, our site reported (via Reuters) that Talisman Energy had retained the Royal Bank of Canada to determine if buyers were interested in the company’s Eagle Ford acreage. Talisman has approximately 70,000 net acres in the play according to a company spokesman.

Talisman said in March it plans to sell $2-billion of assets in 18 months to re-direct its focus on a smaller number of areas. In July of 2014, the company announced plans to unload its Australian operations.

Talisman and Statoil entered their joint venture in 2010. Last year, Statoil took over operations of the eastern portion of the JV. Statoil has approximately 73,000 net acres in the play.

Recent Eagle Ford Deal Closings

Recently, several other notable deals have closed as early Eagle Ford players cashed out on their investments in South Texas. Encana closed its acquisition of ~45,000 net Eagle Ford acres from Freeport McMoran on June 20, 2014 for $3.1 billion. Sanchez Energy also closed its $639 million deal with Shell for 106,000 net Eagle Ford acres on June 30th. Earlier this year, Devon Energy closed on its $6 billion Eagle Ford acreage acquisition with Geo Southern.

Read more: Eagle Ford Deal Closings

Titanium Exploration Partners and Castlelake Form Joint Venture - Press Release

May 29, 2014 Kirk Eggleston

Dallas and Minneapolis – May 29, 2014 – Titanium Exploration Partners, LLC (TEP) and Castlelake, L.P., a global institutional alternative investment firm, today announced the formation of a joint venture to pursue investments in non-operated oil and gas assets in unconventional resource plays in the United States. The joint venture will make investments via acquisitions from sellers of non-operated working interests, strategic partnerships with operators and organic leasing. The joint venture will initially focus on the Eagle Ford Shale and may expand to other opportunities over time.

“This joint venture combines the expertise of Titanium Exploration Partners with the resources of Castlelake and the capital they manage,” said Chip Simmons, CEO of Titanium. “Having a strong capital partner like Castlelake will allow us to expedite the investment and acquisition process for the benefit of our operating partners, sellers of non-operated working interests and landowners.”

TEP will act as asset manager in the joint venture, responsible for sourcing opportunities, negotiating and structuring the investments, and managing acquired assets. Through its funds, Castlelake will provide capital together with its expertise in the energy industry. The firm will also guide sourcing, as well as provide strategic and economic direction for the joint venture.

“The joint venture brings together Titanium’s specialized expertise and our unique approach to investing in illiquid assets where long-term capital is of significant value,” said Luke Beltnick, Managing Director of Castlelake. “As development in the Eagle Ford Shale grows, so too does the need for capital to facilitate these transactions, and Castlelake is in a unique position to meet the needs of all parties involved.”

Castlelake has invested more than $600 million in the energy industry. Formed in 2005, the global institutional alternative investment firm has $3.6 billion in assets under management and focuses on deep value, asset rich opportunities across capital structures, industries, and geographies.

About Titanium Exploration Partners

Titanium Exploration Partners is a Dallas-based investment firm focused on the acquisition and development of non-operated oil and gas assets in leading unconventional resource plays across the United States. Titanium is building a diverse portfolio of assets through partnerships with established operators, acquisitions of non-operated working interests and royalty interests and leasing. Titanium is currently focused on the Eagle Ford Shale, while also considering investments in other top unconventional resource plays, including the Bakken, Marcellus, Utica and Niobrara formations, and the Permian Basin. Titanium was founded by Chip Simmons, CEO; Peter Halloran, Managing Director; and Brennan Potts, Managing Director.

About Castlelake, L.P.

Castlelake, L.P. is a global institutional alternative investment firm focused on deep value, asset rich opportunities. Castlelake today has $3.6 billion of assets under management. Castlelake has more than 60 professionals based in its Minneapolis, Minnesota and London offices. For more information please visit www.castlelake.com or contact Castlelake at (612) 851-3150.

Contacts: Titanium Exploration Partners Brennan Potts, Managing Director, 214-549-3652 potts@titaniumep.com

Castlelake, L.P. Peter H. Glerum, 612-851-3100 Investor.Relations@castlelake.com

Tom Laughran, 312-729-3719 tom.laughran@fleishman.com

ZaZa Energy Continues Laying Groundwork for Eagle Ford Growth

May 14, 2014 Kirk Eggleston

ZaZa's first quarter 2014 average combined production in the Eagle Ford (South Texas) and Eaglebine (East Texas) was 630 boe/d. The company has re-focused its attention to the Eaglebine, after divesting 10,300 net Eagle Ford acres in July of 2013 to a subsidiary of Sanchez Energy for $28.8 million. Approximately 82% of ZaZa's first quarter production came from the Eaglebine.

During the first-quarter, the company continued to position itself for growth across its portfolio. In May of 2014, ZaZa announced that its CEO, Todd Brooks, will be taking a salary of $1 dollar for the next two years. During that time frame, Brooks' compensation will consist of equity grants or other equity-related compensation.

“Through a series of transactions over the last two years, we have transformed ZaZa into a growth vehicle for emerging unconventional plays, particularly in East Texas. The elimination of my salary and adoption of STI and LTI performance hurdles for the next two years further aligns me with shareholders as we look forward to the delivery of continued production and reserves growth.”

— Todd Brooks

ZaZa Energy is currently operating at a net loss of $1.4 million, compared to $2.9 million last year at this time.

ZaZa Energy Eagle Ford First Quarter 2014 Operations Update

During the quarter, one of ZaZa's joint venture partners, Sabine South Texas LLC, completed its commitments to drill two horizontal wells in ZaZa's Sweet Home Prospect. The first commitment well was completed on February 14th and the second on March 11th. Sabine has now been assigned a 75% interest in 7600 net acres in the Sweet Home Prospect, and a well that ZaZa refers to as the "Boening well." Participating interests in any additional drilling or acquired lease acreage in the Sweet Home Prospect will be shared 75% by Sabine and 25% by ZaZa under an area of mutual interest agreement (AMI) that will expire during the third quarter.

ZaZa Energy Eaglebine First Quarter 2014 Operations Update

ZaZa entered into a further amendment of its joint venture with EOG Resources in the Eaglebine during the first quarter. Under the ammendment, ZaZa will receive ~$14 million and a two-well drilling commitment from EOG. As part of the agreement, EOG must begin drilling the first of two wells by July 1, 2014. In exchange, EOG will gain a 75% working interest in all of Zaza’s remaining acreage (9,600 net acres).

During the quarter, ZaZa acquired 5,000 net acres in Houston County and Southeastern Leon County in its core East Texas area. This acreage is currently held 100% by ZaZa.

Swift Energy - PT Saka Energi Eagle Ford Joint Venture

May 8, 2014 Kirk Eggleston

Houston-based Swift Energy announced in early May of 2014 that it has entered a joint venture agreement with Indonesian-based PT Saka Energi to develop 8,300 Eagle Ford acres in the Fasken area of Webb County.

In March of 2014, Swift revealed it was in negotiations for a joint venture to accelerate development in the Fasken area, after completing three Eagle Ford test wells with average initial production (IP) rates of 22.1 mmcf/d.

Under the companies' agreements, effective January 1, 2014, Saka will pay Swift $175 million to acquire a 36% full participating interest in Swift Energy's Fasken properties. $50 million will be used to carry a portion of Swift's future field development costs. Swift will remain the operator of the properties, and be responsible for conducting all drilling, completion and production operations.

“Saka recognizes the opportunity in the Fasken area to create value through highly productive natural gas drilling, and is aligned with Swift Energy in its assessment of the valuation of our Fasken acreage. Both parties are committed to rapidly realize the full value of this asset through an aggressive, disciplined development program.”

— Terry Swift, CEO of Swift Energy

The closing date is anticipated at the end of June of 2014. Per the agreements, the companies will jointly determine development plans for the field.