KNOC Sells 29% Interest in Ankor Oil Field for $308M

Korea National Oil Corp (KNOC) has sold 29% interest in the Ankor oil field to Korea Investment Management Co, Samsung Securities Co and Daewoo Securities Co for $308 million. Continue reading here..

$2 - $3 Billion Worth of Eagle Ford Shale Assets Up For Sale as of July 2011

Derrick Petroleum's "Deals in Play' database has recorded $2 - $3 billion worth of Eagle Ford Shale assets for sale as on July 2011. The Eagle Ford Shale is becoming prized property for oil and gas companies in 2011. The shale play area starts at the Texas-Mexico border in Webb and Maverick counties and extends 400 miles toward East Texas. The play is 50 miles wide, an average of 250 feet thick at a depth between 4000 and 12,000 feet, and has high carbonate content making it easier to fracture than other shales. In addition, it is also more liquid rich than other shales. The $/acre of the shale has been increasing rapidly over the last few years due to increasing successes of companies exploring this play. The high present $/acre relative to previous years is also bringing capital to firms who want to sell non-core Eagle Ford assets to focus on their core assets.

The following table from Derrick Petroleum’s ‘Deals in Play’ database shows opportunities available with respect to Eagle Ford assets as on 4 July 2011.

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Table 1: Is an interactive chart/ table showing data recorded from Derrick Petroleum's 'Deals in Play' database. Only deals above $10 million are shown. Net undeveloped acres have been sorted from highest (up) to lowest (down). Subscribers can click on the relevant bar to view detailed information from the database. 

The following table shows recent transactions involving the Eagle Ford Shale for insight into its recent $/Acre.

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Table 2: X axis shows Buyer-Seller. Y axis is deal value. $/acre is given above the bar's in the chart. Data is sorted by month and quarter. Only deals above $100 million in Q1 and Q2 2011 have been shown. Click on the bars for more detail on individual deals.

Analyst Comments
1. Total deal value involving Eagle Ford shales has been among the highest relative to the other US shales.
2. Number of deals involving Eagle Ford shale have been the highest so far in 2011 as compared to other shales (~25 deals), as recorded in Derrick's Deals database.
3. Eagle Ford shale looks set to dominate the deals market for unconventionals in 2011. 

KNOC acquires Eagle Ford acreage for ~$14,000/acre through $1.55 billion JV with Anadarko. KNOC hungry for foreign oil assets!!

Anadarko signed a joint-venture agreement with KNOC, whereby KNOC will earn approximately one-third of Anadarko's 71% interest in the company's Maverick Basin assets, located in southwest Texas. KNOC's $1.55 billion investment will be made entirely in the form of a carry, funding approximately 100% of Anadarko's 2011 post-closing capital costs in the basin, and up to 90% thereafter until the carry is exhausted, which is expected to occur by year-end 2013. KNOC will also reimburse Anadarko for net cash outflows, relative to their acquired interest, subsequent to the effective date, which are expected to be approximately $50 million. The transaction differs from other recent joint ventures with the fact that there is no up-front cash consideration.

Through this JV, KNOC will receive:

-- Approximately 80,000 net acres in the liquids-rich Eagleford Shale play

-- Approximately 16,000 additional prospective net acres for the deeper dry-gas Pearsall Shale, as well as Pearsall opportunities underlying the aforementioned Eagleford acreage

-- Reserves of 116 million barrels of oil equivalent and production of 6,628 barrels a day.

A look at the Eagle Ford acreage metrics

KNOC is believed to pay ~$14,000 per Eagle Ford acre after allocating a value for the reserves and Pearsall shale acreage. This $14,000/acre is the highest price per acre paid till date in the Eagle Ford and represents a premium of 27% when compared with the recent Eagle Ford transactions. The following data source from Derrick Petroleum Services shows the acreage metrics of the 2010 Eagle Ford transactions.

Recently, KNOC acquired 95% of Altius Holdings Inc for $515 million. Altius Holdings owns four oil blocks in Kazakhstan- Akzhar, Besbolek, Karataikyz and Alimbai - with reserves totaling 56.9 million barrels, the South Korean ministry said. Altius is the Kazakh arm of Arawak Energy.

KNOC in shopping spree!!!

KNOC said in February that it plans to invest as much as $4 billion in overseas oilfields this year to secure supplies for an economy that relies on imports for almost all its oil needs. The company aims to raise daily output by 60,000 barrels to 240,000 barrels by the year-end. These two recent acquisitions may boost KNOC’s output by 16,500 barrels a day. KNOC Vice-President Kim Seong-hoon said, “KNOC is focusing on acquiring assets with high upside potential and little investment risk.” This is in line with their production milestone, with the acquisition train starting from Kazakhstan and US. The acquisition train might stop in US (Bakken and Niobrara shales) for a while or it might travel towards the upcoming oil frontiers like Brazil and West Africa.