Energy Acquisition

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Blumenthal opposes UIL gas acquisition

Connecticut Attorney General Richard Blumenthal said Wednesday he opposes the parent company of electric utility United Illuminating‘s proposed $1.3 billion acquisition of three New England natural gas companies.

Blumenthal said Wednesday UIL Holding’s acquisition of Connecticut Natural Gas, Southern Connecticut Gas and Berkshire Gas Co. in Massachusetts from Spanish energy giant Iberdrola SA should only be approved if ratepayers are protected from rate increases.

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“We are seeking an iron-clad promise of protection that ratepayers will be better off — not burdened — by this merger,” Blumenthal, who is a U.S. Senate candidate, said in a statement. “UIL should be required to shield ratepayers from rate increases, share benefits and provide improved service as a result of its takeover of the gas companies. The companies have so far failed to offer any real benefits to consumers, such as cost savings or improved service.”

The parent company of the state’s largest electric utility — Connecticut Light & Power — already owns a natural gas company, Yankee Gas.

On Tuesday, New Haven-based UIL Holdings readied its offer of $470 million worth of stock to finance its acquisition of the trio. The registered public offering covers 17.7 million shares of common stock, and the company expects to grant its underwriters an additional option of 2.7 million common shares.

Announced last May, the acquisitions to be completed in the first quarter of 2011 will more than double UIL’s customer base from 324,000 to 694,000.


Filed under: Mergers & Acquisitions, News

Global Explores Possible Gas Property Acquisition in Kentucky

Global Agri-Med Technologies, Inc. (Pink Sheets: GAGO) announced today that it had begun discussions toward the possible acquisition of a significant gas property in Kentucky in order to expand the resource base of its Quad Energy subsidiary.

Fred DaSilva, President of Global and Quad, stated, “These Knox formation gas properties in Kentucky can be reliable producers and we definitely have an interest in moving forward with our due diligence.”  Mr. DaSilva also noted that, “Quad is aggressively pursuing several acquisitions, both of producing properties and exploration opportunities where we believe the probabilities favor development of commercially viable properties. To that end we are also in discussions with other individuals who we expect to join the team in the coming months.”


Filed under: Exploration, Mergers & Acquisitions, News, Strategy

Alternative Energy Partners (AEGY) Announces Energy Integration Subsidiary

Alternative Energy Partners, a provider of comprehensive alternative energy solutions, today announces the formation of a new subsidiary, Elan Energy Corporation (“Elan Energy”).

Elan Energy, a Florida corporation, will integrate and coordinate the various energy products and services offered by Alternative Energy Partners (“AEGY”) to its clients. AEGY’s operating subsidiaries include Sunarias Corporation (, a solar thermal energy provider, Shovon, LLC, ( a provider of remote-controlled energy management systems, and SkyNet Energy, Inc., which is developing four solar energy power generation projects in Eastern Europe. AEGY has signed letters of intent to acquire three operating energy installation and service companies in Dallas, Texas, Tulsa, Oklahoma and Phoenix, Arizona, which will be managed by Elan Energy, and which are expected to be the first of multiple similar acquisitions designed to expand the reach of AEGY nationwide.

The combined annual gross revenues of the three companies is expected to exceed $15 million, and significant operating expense reductions are anticipated through the central management and control by Elan Energy. AEGY is engaged in due diligence and anticipates closing on the three companies by the end of September, assuming satisfactory results of its due diligence investigations. AEGY also is in continuing discussions to acquire several other companies offering fuel cell, solar thermal, and other alternative energy technologies.

Alternative Energy Partners CEO Gary Reed says, “Our ability to offer comprehensive alternative energy services, products and integrated management will be enhanced by Elan Energy, which will help customers find, access, and implement those parts of our many services which are best suited to their needs. Our purpose is to have a single source (Elan Energy) which is able to sell, install, and service the systems that we own and operate or which we offer to clients.”

Following completion of its due diligence regarding and closing on the acquisitions of the energy service companies, as well as the completion of its annual audit and annual report on Form 10-K for its fiscal year ended July 31, 2010, which is currently underway, AEGY plans to prepare and file a registration statement on Form S-1 with the U.S. Securities and Exchange Commission and appropriate state securities regulatory agencies, to register certain common shares issued by it in connection with prior acquisitions, including Sunarias Corporation and Shovon, LLC, and to raise working capital for its expanding operations.

Filed under: Mergers & Acquisitions, News

Total signs $750M AU LNG agreement with Santos, Petronas

Transaction gives Total further access to rapidly growing Asian market, introduction to coal seam gas

French oil major Total has signed an agreement with Santos and Petronas to acquire a 20% interest in the GLNG project in Australia, for US$750 million, Santos and Petronas transferring 15% and 5% respectively to Total.

Upon completion of this transaction which is subject to the approval of the Australian Foreign Investment Review Board, the project will bring together Santos (45%, operator), Petronas (35%) and Total (20%).

Pursuant to the agreement, Total shall join the whole integrated liquefied natural gas (LNG) chain, with production from coal seam gas fields in Queensland, eastern Australia, to gas liquefaction in a dedicated plant in Gladstone on the eastern coast of Australia. The plant will have a capacity of 7.2 million tonnes a year (Mt/y). Total will have the commitment to offtake 1.5 Mt/y of LNG, depending on the result of ongoing discussions between the GLNG project and several Asian buyers.

“Following the acquisition of an interest in the Ichthys LNG project in 2006, for which a final investment decision shall be taken by end 2011, the GLNG project is a new milestone for Total in Australia. It gives the Group further access to the Asian market, the fastest growing market for gas demand and in particular LNG, offering high value prices linked to oil prices,” said Yves-Louis Darricarrère, president, Total Exploration & Production. “GLNG is also the first coal seam gas project for Total, which is actively pursuing a strategy of investing in high quality unconventional gas assets.”

The multinational energy giant has its hands in many parts of the energy universe, but as company’s chief financial officer, Patrick de la Chevardière, recently told Oil & Gas Financial Journal, the company has reiterated its strategy recently and will concentrate greater attention on the upstream energy sector.

In addition, Total and Santos will explore potential further cooperation between the two companies, with respect to other Santos gas assets in Australia.

“In line with the Group’s strategy to develop new types of partnerships, Total is teaming up with Santos for its expertise in gas production in Australia and with state-owned Malaysian oil and gas company Petronas for its experience in marketing LNG in Asia. Total will bring to the project its experience in successfully managing major projects such as the construction of gas liquefaction plants, and its capacity to market LNG to the Asian market,” added Christophe de Margerie, chairman and CEO.

The GLNG project
The integrated LNG project consists of extracting coal seam gas from the Fairview, Arcadia, Roma, and Scotia fields, located in the Bowen-Surat Basin in Queensland, eastern Australia. The fields’ resources are estimated at over 250 billion cubic metres (9 trillion cubic feet) of gas. The Fairview field already produces 2.4 million cubic metres (80 million cubic feet) a day for the local market. The GLNG project will develop these fields up to a production plateau of 150,000 barrels of oil equivalent per day (9 billion of cubic meters per year (900 million cubic feet per day)), ie 30,000 boe/d in Total’s share.

The project also includes transporting the production over approximately 400 kilometers to a gas liquefaction plant in the industrial port of Gladstone, northeast of Brisbane, on the eastern coast of Australia. The GLNG liquefaction plant will consist of two trains with a total production capacity of 7.2 million tonnes (Mt/y) a year.

With the final investment decision expected in the next few months, the forecast start-up date for the first train is 2014. The LNG plant is expected to reach its plateau production in 2016 for more than 20 years.


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Transeuro Energy Corp.: Purchase of Questerre Beaver River

— Transeuro Energy Corp. (“Transeuro” or the “Company”)(CA:TSU 0.06, +0.01, +10.00%)(OSLO: TSU) announced today that the Company has signed a Letter of Intent with Questerre Energy Corp. to acquire the remaining 50% interest in the Beaver River field in British Columbia and to extinguish approximately $4.3 million of payables owed to Questerre in exchange for forty (40) million shares in Transeuro, equal to approximately 9.5% of the Company. At closing, Transeuro will hold 100% of the Beaver River field.

David Worrall, President and CEO commented, “We are pleased to now have a 100% interest in the Beaver River field and the emerging Besa River shale gas play. This acquisition unblocks the potential at Beaver River and clears the way for continuing the appraisal program as it better positions the asset to attract a farm in partner. Further, it allows Questerre to retain an interest in the field to participate in the upside possible from the Besa River shales, and adds exposure for Questerre to the potential high impact gas assets that Transeuro owns in the Ukraine.”

The transaction will involve the purchase by Transeuro of all the outstanding shares in Questerre Beaver River Inc., a wholly owned subsidiary of Questerre Energy Corp. Transeuro currently holds a 50% interest in the Beaver River field through a wholly owned subsidiary. Closing is subject to final agreements between the parties and all necessary regulatory approvals.

Aage Thoen, Chairman stated, “We have a long and co-operative working relationship with Questerre and we welcome their involvement in Transeuro as our largest single shareholder. Together with the recent debenture repayments this transaction eliminates the remaining major liabilities of Transeuro and brings the debt restructuring to a successful conclusion. The management will now focus on developing its gas assets in Canada and Ukraine. Planning is underway to complete the Karl-101 well in 2010 in co-operation with our Ukraine State partners.”

Transeuro is involved in the acquisition of petroleum and natural gas rights, the exploration for, and development and production of crude oil, condensate and natural gas. The Company’s properties are located in Canada, Armenia, and Ukraine. In addition, the Company owns shares in Eaglewood Energy Corp. and holds a back-in option to their exploration licenses in Papua New Guinea.

Filed under: Mergers & Acquisitions, News, , ,

Behind BHP’s burning energy ambitions

INSIDE STORY: Brett Clegg and Matt Chambers

JUST how big are the ambitions of Marius Kloppers?

Aus Bus Pix Marius Kloppers BHP CEO

Potash Corp isn’t the only blockbuster deal BHP has been actively working on in 2010.

The aggressive and acquisitive chief executive and his team are believed to have also been examining a major oil and gas acquisition in tandem with the encirclement of the $US38.7 billion ($42.5bn) Canadian fertiliser player.

An energy deal has been firmly on the agenda for BHP for several years. The Australian can lift the lid on manoeuvring that occurred between BHP and Royal Dutch Shell last year, when they explored, but then abandoned, a joint $35bn takeover bid for local player Woodside Petroleum.

With Potash and a big energy deal under his belt, BHP would be within reach of Kloppers’ ambition of creating a super major and positioning the group as one of the world’s biggest and most influential companies.

As BHP doubles its iron ore production, brings on Olympic Dam and leaps into potash, oil and gas are likely to diminish in importance to the company. That would reinforce a strategy of expansion through acquisition in energy.

BHP has run the numbers on several Gulf of Mexico assets belonging to the distressed BP, but is understood to have pulled back when former BHP chief — and now BP board member — Paul Anderson made it clear through back channels that BP’s prized gulf assets were not for sale.

Rather, a senior figure in the global energy industry is convinced that the “second target” for BHP is Anadarko Petroleum Corporation, telling The Australian he believed the US oil and gas independent was firmly on BHP’s radar. BHP declined to comment for this article.

Anadarko, which has a market capitalisation is $US24bn, describes itself as one of the largest independent producers in the deepwater Gulf of Mexico, with more than 3 million gross acres and eight operated hubs.

It also has a portfolio of onshore assets in the Rocky Mountains, and exploration efforts and projects across several continents.

Anadarko was exposed to BP’s Macondo well disaster through a 25 per cent passive stake in the well, and its shares had been hit hard, making it vulnerable to a move by BHP or another party.

The stock has, however, rallied since touching a low in early June.

US regulatory scrutiny of deepwater gulf drilling apparently does not deter BHP, which is said to be confident of its operational excellence. It also expects tougher regulations to price smaller players out of valuable deepwater assets.

The Macondo disaster also highlights the need for a better balanced portfolio of petroleum assets, and Anadarko has an excellent operational reputation in the gulf and elsewhere.

Based on Thomson Analytics numbers, Anadarko is trading at a premium to BHP on an enterprise-value-to-EBITDA multiple of 8.7 times, compared with BHP’s 7.8 times. That could make the numbers harder to stack up, especially with Anadarko still holding a liability of as much as $US2bn on Macondo.

Goldman Sachs estimates a Macondo liability of $US14 a share compared with Wednesday’s close of $US48.79, and a share price target of $US62.

Underscoring the desire of Kloppers to bulk up in energy was BHP’s detailed study of a carve-up of Woodside Petroleum between itself and Royal Dutch Shell.

The process started in 2008 and only went off the boil in February last year.

Paul Perry, who runs BHP’s Melbourne-based Australian mergers and acquisitions team, is believed to have been in charge of the project, while UBS and Gilbert + Tobin were advising the Anglo-Dutch energy giant.

Former Shell Australia chairman Russell Caplan admitted to this paper: “It’s an unusual relationship Shell has with Woodside, as a large minority shareholder in an independent company. We don’t have many of those around the world.”

Indeed, it was Shell that in 2008 put Woodside in play by looking at three options:

l Using creep provisions to move up the share register by buying shares on-market,

l Offering to inject assets into Woodside in return for stock, moving it above 50 per cent.

l A full ownership attempt through a takeover offer.

The multinational concluded the only way to win Woodside was through a joint venture with the Global Australian, and so reached out to it.

BHP was very interested, but so soon after the aborted Rio merger, relations with Canberra were still frayed, so Kloppers ultimately dropped the deal in the too-hard basket.

That was despite several months of intensive work and dialogue.

Shell had its own difficulties, including the fact that Caplan was inching toward retirement.

According to a source close to the process, Shell had “stuffed up” in 2001 when a bid for control of Woodside was rejected because it had “tried to run the process by remote control from The Hague”.

“Caplan was the guy who had the pedigree and reputation in Canberra to see another crack at Woodside through the political corridors, but it would have required him staying on” for longer than he wanted, the source says.

Even more of a problem was a growing belief that Woodside chief Don Voelte had got wind of the talks. The Nebraska-born chief executive was talking up the importance of the Pluto project to the national interest, not just Woodside.

There were parallels with the huge North West Shelf projects, and some unsubtle indications that Pluto was not a priority for its 34 per cent shareholder, Shell.

“At Woodside, we not only have a vision for Pluto, we have a vision for Australia. We see that Australia can truly be a global LNG producer,” he told investors at a conference last year.

“Woodside, with its world-class development assets, has the potential to rank alongside the likes of Qatar Petroleum and outrank a host of national and independent oil and gas companies.”

He may be from Nebraska but he was hitting the right notes with a patriotic Australian audience, in public and behind the scenes in Canberra. “It was like trying to catch a wily cat. It ended up just too hard to get your arms around Woodside as Voelte jumped here and there,” one source says.

It was fears that Shell would prioritise its Indonesian LNG projects over the North West Shelf which led to then treasurer Peter Costello blocking its bid to move to control in 2001.

Reviving those memories would not help Shell or its partner.

Another party familiar with the process describes Voelte’s presentations and press interviews at the time as laden with “subliminal messaging”.

BHP is reckoned to have lost interest in bidding for Woodside, but another energy asset to bulk up its oil and gas division, such as Anadarko, is far from being off the agenda.


Filed under: Mergers & Acquisitions, News, , , , , ,

International Thermal Systems acquired by local private equity firm, management team

International Thermal Systems LLC, a West Milwaukee-based manufacturer of ovens, washers and dryers used in beverage canning, commercial laundry equipment and other industrial applications, has been acquired by the PS Capital Partners LLC, a Milwaukee-based private equity firm operated by Paul Stewart and Paul Sweeney, and the company’s management team.

Terms of the acquisition, which closed Aug. 20, were not disclosed. The team’s management team, led by its president and chief executive officer John Zea, purchased a minority stake in the firm, while PS Capital holds a majority position.

The company’s management team is part of what made ITS an attractive purchase, Stewart said.

“They are highly experienced in the industry segment. They work as a team together, and frankly, we like them,” he said.

ITS’ headquarters are based at 4697 W. Greenfield Ave., where its main manufacturing facility is also based. The company also has smaller manufacturing and engineering facilities in China and Europe.

ITS has about $30 million in annual sales now, and the company’s global footprint give it significant long-term growth potential, Stewart said.

“They’re very well known – they have a good reputation with their customer base,” he said. “There is the opportunity for continued expansion as the economy rebounds. (Dollars are) beginning to be freed up in the capital investment sector, and we see opportunities in South America, Mexico, China, the Middle East and Europe.”

Stewart and Sweeney’s firm takes a longer term view on its investments than most private equity firms – many private equity investors look to buy, build and sell their portfolio companies in a five to seven year time frame. PS Capital Partners plans to hold its companies for 10 years or more.

ITS is positioned for significant growth in the next several years, Stewart said, and has a building order backlog over the next six months.

“This company will have one segment of growth following the larger corporations that provide metal packaging products (around the world) as a supplier to those companies,” he said. “The other area is in the general industrial product line, where they address a wide range of applications. As those companies come back, they’re expanding or launching new lines.”


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Mitsubishi Corporation to Invest in Canada’s Penn West Energy Trust’s Shale Gas Development Project

Mitsubishi Corporation (“MC”) has announced that today it has entered into an agreement (the “Agreement”) in connection with investing in a natural gas development project centered on shale gas in the Cordova Embayment of northeastern British Columbia, Canada. The project is owned by a senior independent Canadian oil and natural gas producer, Penn West Energy Trust (“PWE”), which is headquartered in Calgary. The Agreement shall become effective following approval by MC’s Board of Directors at a meeting scheduled for mid-September and approval for the acquisition from the Canadian Federal Government, etc.

After the Agreement coming into effect, Cordova Gas Resources Ltd., a subsidiary established by MC in Calgary, will acquire a 50% interest in shale gas assets, conventional natural gas assets and related natural gas facilities in several sections owned by PWE. An incorporated joint venture (“JV”) to be formed with PWE will actively develop and produce natural gas.

PWE is a promising partner with a significant position in the Cordova Embayment, which boasts a high quality shale gas resource comparable to the top tier shale gas resources in North America. PWE has been conducting initial drilling operations since 2006 and, based upon third party evaluations, Mitsubishi believes that the shale gas resources in this project are approximately 5 – 8 trillion cubic feet (MC estimate, over 100~160 million tons in LNG equivalents). The potential of this enormous resource could greatly exceed Japan’s natural gas annual demand.

Effect of the Agreement will serve as a fillip for development of shale gas in these sections, where the current plans of the JV are to lift current output of approximately 30 million cubic feet per day to approximately 500 million cubic feet per day (approximately 3.5 million tons of LNG equivalents per year) based upon current and anticipated economic, regulatory and market conditions. MCs equity share of production will be 50%. MC will promote development and production in this region for over the next 50 years together with PWE and market natural gas of MC’s equity share of production in the North American market, partly through CIMA Energy Ltd., a U.S.-based gas marketing company in which MC has a 34% equity interest.

MC’s total acquisition cost will be approximately CAD$450 million (approximately JPY 36.2 billion). In addition to approximately CAD$250 million (approximately JPY 20.1 billion) as consideration for the purchase of 50% of existing assets, MC will fund an additional approximately CAD$200 million (approximately JPY 16.1 billion) of the future exploration and development capital expenditures to be born by PWE. Going forward, this project will drill more than hundreds to 1,000 wells for coming 15 years. The cost of MCs contribution to this period is approximately estimated at JPY 300 billion. Subsequent development plan and project cost will be sequentially examined.

RBC Rundle, a division of RBC Capital Markets, acted as exclusive financial advisor to MC in the transaction.

Shale gas can now be produced in large volumes at competitive cost thanks to recent technological innovations. Because shale gas projects tend to establish large reserves, it has attracted attention worldwide as a new natural gas resource. Leveraging today’s investment, MC intends to build up its knowledge and expertise in the shale gas business with the aim of acquiring more assets in North America. As part of its resource and energy strategy going forward, MC also aims to secure a stable supply of energy resources by diversifying its asset holdings, including through the acquisition and development of unconventional natural gas sources such as shale gas.


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Lukoil takes over INA’s Crobenz

Russian oil company Lukoil has taken over INA’s Crobenz in a sale estimated at more than 20 million kunas or €2.8 million.

In additional to Lukoil, Slovenian Petrol and Slovakian fund Slavia Capital were also interested in acquiring the subsidiary.

Crobenz is the INA division – an affiliate of Hungarian oil and gas major MOL – owning and operating the filling station network. The arm had to be sold according to the decision of Croatian Competition Agency.

Slovenian’s offer of only two million kunas (€276,000) was too low, while Slavia did not manage to prove it had sufficient knowledge and experience which would improve Crobenz’s operations, the Croatian daily news sit Index writes.

Lukoil’s network of 21 gas stations will now grow with the acquisition of 14 additional stations previously owned by Crobenz. The transaction could sharpen the competition on the domestic market considering that this is an expansion of a Croatian branch of a huge Russian multinational company. (Croatian Times, BBJ)

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Gadot Chemical Tankers and Terminals Ltd. (“Gadot”) to Acquire Merhav Agro

Ampal-American Israel Corporation (Nasdaq: AMPL)(“Ampal”), a holding company in the business of acquiring and managing interests in various businesses, with emphasis in recent years on energy, chemicals, communications and related fields, announced today that Gadot, Ampal’s wholly owned subsidiary, acquired Merhav Agro Ltd. (“Agro”), a supplier of agricultural protection products in Israel.

Gadot has signed an agreement with Mr. Yosef A. Maiman to acquire the entire issued share capital of Agro for a purchase price of NIS 108,000,000 (approximately $28.4 million). The closing of the transaction is subject to customary closing conditions, including the regulatory approval of the Israeli Antitrust Commissioner (the “IAA”), and is expected to occur on July 1, 2010, unless the approval of the IAA is delayed beyond that date.

The total revenues of Agro in 2009 were approximately 81.3 million NIS (approximately $21.4 million) with a gross profit of approximately 36.5 million NIS (approximately $9.6 million) 1.

Agro is one of the leading suppliers of plant protection products, plant growth regulators and seeds in Israel, with over 50 years of experience. Agro serves as the Israeli representative of many leading multinational corporations, including Du Pont de Nemours, Bayer CropScience, Syngenta, Chemtura and others.

Gadot has identified the agriculture sector as a potential growth driver and Agro will be integrated into Gadot’s agro division. Gadot believes the integration of Agro’s business into its own will create synergies that will allow Gadot to reduce costs and increase profitability, as well as expand its business activities and worldwide relationships with suppliers and customers.

A special committee composed solely of independent directors from Ampal’s Board of Directors approved the acquisition of Agro from Mr. Yosef A. Maiman, the Chairman, President and CEO of Ampal. Houlihan Lokey Howard & Zukin Financial Advisors, Inc. acted as financial advisors to the special committee.

by Benzinga Staff

Filed under: Mergers & Acquisitions, News, , , ,

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