Daily Archives: February 8, 2011

Sheila McNulty

As US independents invite foreign and major oil and gas companies to invest in their shale assets to fund development, EOG Resources is refusing to follow the trend.

The Houston-based independent is transitioning from producing mostly natural gas to the more expensive business of producing mostly oil, but Mark Papa, EOG’s chairman and chief executive (pictured), told the FT he is not seeking partners for its shale oil assets:

We want to emerge from this transition without diluting these crown jewels and retain 100 percent of our best assets.

Sheila McNulty

The announcement by Chesapeake Energy that it will sell several assets to raise $5bn to put toward paying down debt was warmly greeted by analysts who have been lamenting prospects for a sector under intense pressure by low US natural gas prices.

Indeed,  Standard & Poor’s, the ratings agency, placed a BB rating on Chesapeake, BB senior unsecured issue ratings and B preferred stock issue ratings on CreditWatch with positive implications. Here is what Standard & Poor’s credit analyst Scott Sprinzen had to say:

We placed the ratings on Watch positive because Chesapeake today announced its plan to sell all of its Fayetteville Shale assets, as well as its equity investments in Frac Tech Holdings LLC and Chaparral Energy Inc. and that it plans to reduce its long-term debt through 2012.

Cairn Energy may have the fortitude to search for oil in the Arctic but it has more than met its match in the hotter climes of India. Sub-zero temperatures and pack ice can be no more hostile than an indecisive, glacial regulator.

Seven months on from an offer by Vedanta to buy Cairn Energy’s Rajasthan oilfields for $9.6bn, the Indian government has yet to approve the deal. The last two days of crisis meeting in New Delhi may have helped move the portfolio forward. Bland statements, rather than the hoopla of breakthrough, suggest by an inch or two at most.

FT Energy Source

- UK’s Ensco to acquire rival Pride – FT

- Ensco investors will warm to deal – FT Lex

- Ensco’s bid to spur more drilling mergers – Bloomberg

- Petrobras ends talks with Eni over Galp – FT

- Oil back over $100 on Egypt fears – The Telegraph

- Regal gets improves takeover offer – FT

- Chesapeake to raise $5bn selling Fayetteville shale holdings – Bloomberg

- Northeast-Nstar merger ‘would reduce competition’ – WSJ (£)

- Swiss receive inflow from Russian traders – FT

- Shell said to offer Gazprom assets to gain LNG plant expansion – Bloomberg

- Nabucco pipeline nations want gas pledges – FT

- Iran finds way round petrol sanctions – FT

- Mox proposal would pay nuclear firm to used recycled plutonium – The Guardian

- Industry groups slam EPA regulations – Argus

- Solarworld’s impressive results light up sector – FT

- Evergreen Solar Q4 revenues rise – Reuters

- Huhne accused of green confusion – FT

- ‘It is time to believe in wind power’ – The Times (£)

- Washington invests in making wind pay – NY Times Green blog

- Power groups fined over connection deadlines – FT

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