American Oil and Gas Reporter - September 2016 - 121

porated attachments contradict this position, the analysis states. It points out that
in the introduction to the NTL, BOEM
says the new notice discontinues policies
authorized under NTL No. 2008-N07
that said lessees with sufficient financial
strength and reliability need not provide
additional security. Instead, the new notice
says lessees will no longer be granted
waivers, but may be eligible for self-in-

surance to meet some or all or their supplemental bond obligations, Baker
Hostetler details.
"BOEM's position appears to be that
every company must provide supplemental
financial assurance-it's just a matter of
finding the right mix of self-insurance (if
a company qualifies) and bonding through
a tailored financial plan," Baker Hostetler
says. "But this is not merely a change in

policy; it is contrary to the regulations.
BOEM is not permitted by its regulations
to assume that a company lacks adequate
financial capacity. It first must affirmatively
find the lessee does not."
The analysis is available at http://www.bakerlaw.com/alerts/three-reasons-whyboems-updated-financial-assurance-andrisk-management-requirements-are-unenforceable.
❒

Shale M&A Interest Rising, PwC Says
HOUSTON-The number of mergers
and acquisitions in the Permian and Marcellus basins saw a strong upswing in the
second quarter of 2016, PricewaterhouseCoopers says, reporting six deals worth
$2.1 billion in the former and four deals
totaling $1.3 billion in the latter.
PwC's Energy Deals Report notes that
across the country, small deals in the upstream segment pushed up M&A in the
U.S. oil and gas industry slightly. The
majority of the deals announced-35 out
of 51-were in the upstream space, an 84
percent sequential and 94 percent yearon-year increase. PwC points out 27 of
these upstream deals were asset deals
and 23 were shale transactions.
According to the PwC analysis:
* Deal volume in second quarter 2016
increased 31 percent compared with the
first quarter. Companies announced 51
oil and gas deals with values greater than
$50.0 million, totaling $26.1 billion. That
compares with 39 deals worth $28.1
billion in the first quarter of 2016.
* Overall, there were only two
megadeals (worth more than $1.0 billion)
in the second quarter. Those two transactions, worth $10.9 billion, represented
42 percent of total deal value. The
megadeals were in the upstream and oil
field services space.
* Financial investors accounted for
13 transactions, a 60 percent decrease in
total value year-over-year. Equity commitments from private investors accounted
for six of those deals, a $2.0 billion tranche.
* The upstream segment contributed
to the majority of the deals announced in
the second quarter, generating 35 deals
worth a total of $15.3 billion.
Conservative strategies dominated the
second quarter deals market, PwC says,
with companies focusing on core assets,
not long shots. The report describes deal
makers as concentrating on rationalizing
their portfolios and generating more cash
flow. It adds divestiture proceeds are
being earmarked for reducing debt or
reinvesting, either through capital expenditures or acquisitions.

After driving much of the U.S. oil and
gas M&A in 2015, Energy Deals Report
says midstream segment deals continued
to plummet in the second quarter of this
year. There were only eight midstream
deals announced, compared with 11 in
first quarter 2016 and 21 in second quarter
2015. PwC says the $3.3 billion total represents an 81 percent sequential fall and
an 88 percent year-over-year decline.
Midstream companies continue to face
the dual headwinds of constrained cash
flow and reduced access to the debt and
equity markets, the company assesses.
Shale Deals
PwC says shale deals made a strong
comeback in the second quarter, as companies announced 23 transactions, the highest
second-quarter number since the 23 shale
deals reported in second quarter 2014.
The value of the shale transactions
was $7.5 billion, a 37 percent sequential
increase. All the shale-related deals were
in the upstream segment, Energy Deals
Report indicates.
In addition to the Permian and Marcellus transactions, PwC says the Eagle
Ford Shale contributed two deals worth
$626 million, while the Niobrara and the
Bakken each contributed one transaction

worth $505 million and $50 million, respectively. The company notes there were
no reported deals associated with the
Utica or Haynesville basins.
Looking ahead, PwC says with commodity prices rising from historic lows and
global commodity demand beginning to
strengthen, the second half of 2016 could
see an acceleration in deal-making activity.
However, it cautions this uptick is unlikely
to occur across all industry segments.
The upstream sector could benefit most
from the uptick as companies focus on
core assets, reinvesting the proceeds of
divestments back into their businesses or
paying down debt. Midstream M&A may
remain subdued because of the challenges
in accessing the broader capital markets-
the lifeblood of deals in that segment,
Energy Deals Report predicts. It forecasts
that deal activity will continue to be driven
by nontraditional counterparties such as
infrastructure funds, pension plans, and
regulated utility holding companies.
The bid-ask spread and lack of access
to capital is presenting difficulties in
getting deals to materialize in the oil
field services segment, the report adds,
although it says there is a possibility activity levels will increase in the second
half of the year.
❒

Devon Completes Test Of Multiple STACK Wells
OKLAHOMA CITY-Devon Energy
Corp. says it has brought on line another
successful spacing pilot, as well as a
record-setting oil well in the overpressured
window of Oklahoma's STACK play.
The Alma spacing pilot program tested
five wells a section across a single interval
in the upper Meramec, Devon says, delivering 30-day production rates averaging
1,400 barrels of oil equivalent a day per
well, of which 60 percent was light oil. In
addition to the strong initial production
rates, the company reports early flowback
results indicate minimal interference between wells, suggesting potential for tighter
spacing in the overpressured oil window.
The Alma wells were drilled with

5,000-foot laterals, and were conservatively
brought on line with a 12⁄64-inch choke,
which Devon says gradually was increased
to a 20⁄64-inch choke.
According to the company, it also
brought a Kingfisher County well on line.
The Pony Express 27-1H was drilled with
a 5,000-foot lateral, and achieved a 30day average production rate of 2,100 boe/d,
consisting of 1,500 bbl/d of oil. Devon
points out the well's oil productivity on a
per lateral foot basis is the highest of any
Meramec well drilled to date in the play.
"These successful well results help us
further understand the optimal STACK development scheme," says Tony Vaughn,
the company's chief operating officer. ❒
SEPTEMBER 2016 121


https://www.bakerlaw.com/alerts/three-reasons-why-boems-updated-financial-assurance-and-risk-management-requirements-are-unenforceable

American Oil and Gas Reporter - September 2016

Table of Contents for the Digital Edition of American Oil and Gas Reporter - September 2016

Contents
American Oil and Gas Reporter - September 2016 - Cover1
American Oil and Gas Reporter - September 2016 - Cover2
American Oil and Gas Reporter - September 2016 - Contents
American Oil and Gas Reporter - September 2016 - 4
American Oil and Gas Reporter - September 2016 - 5
American Oil and Gas Reporter - September 2016 - 6
American Oil and Gas Reporter - September 2016 - 7
American Oil and Gas Reporter - September 2016 - 8
American Oil and Gas Reporter - September 2016 - 9
American Oil and Gas Reporter - September 2016 - 10
American Oil and Gas Reporter - September 2016 - 11
American Oil and Gas Reporter - September 2016 - 12
American Oil and Gas Reporter - September 2016 - 13
American Oil and Gas Reporter - September 2016 - 14
American Oil and Gas Reporter - September 2016 - 15
American Oil and Gas Reporter - September 2016 - 16
American Oil and Gas Reporter - September 2016 - 17
American Oil and Gas Reporter - September 2016 - 18
American Oil and Gas Reporter - September 2016 - 19
American Oil and Gas Reporter - September 2016 - 20
American Oil and Gas Reporter - September 2016 - 21
American Oil and Gas Reporter - September 2016 - 22
American Oil and Gas Reporter - September 2016 - 23
American Oil and Gas Reporter - September 2016 - 24
American Oil and Gas Reporter - September 2016 - 25
American Oil and Gas Reporter - September 2016 - 26
American Oil and Gas Reporter - September 2016 - 27
American Oil and Gas Reporter - September 2016 - 28
American Oil and Gas Reporter - September 2016 - 29
American Oil and Gas Reporter - September 2016 - 30
American Oil and Gas Reporter - September 2016 - 31
American Oil and Gas Reporter - September 2016 - 32
American Oil and Gas Reporter - September 2016 - 33
American Oil and Gas Reporter - September 2016 - 34
American Oil and Gas Reporter - September 2016 - 35
American Oil and Gas Reporter - September 2016 - 36
American Oil and Gas Reporter - September 2016 - 37
American Oil and Gas Reporter - September 2016 - 38
American Oil and Gas Reporter - September 2016 - 39
American Oil and Gas Reporter - September 2016 - 40
American Oil and Gas Reporter - September 2016 - 41
American Oil and Gas Reporter - September 2016 - 42
American Oil and Gas Reporter - September 2016 - 43
American Oil and Gas Reporter - September 2016 - 44
American Oil and Gas Reporter - September 2016 - 45
American Oil and Gas Reporter - September 2016 - 46
American Oil and Gas Reporter - September 2016 - 47
American Oil and Gas Reporter - September 2016 - 48
American Oil and Gas Reporter - September 2016 - 49
American Oil and Gas Reporter - September 2016 - 50
American Oil and Gas Reporter - September 2016 - 51
American Oil and Gas Reporter - September 2016 - 52
American Oil and Gas Reporter - September 2016 - 53
American Oil and Gas Reporter - September 2016 - 54
American Oil and Gas Reporter - September 2016 - 55
American Oil and Gas Reporter - September 2016 - 56
American Oil and Gas Reporter - September 2016 - 57
American Oil and Gas Reporter - September 2016 - 58
American Oil and Gas Reporter - September 2016 - 59
American Oil and Gas Reporter - September 2016 - 60
American Oil and Gas Reporter - September 2016 - 61
American Oil and Gas Reporter - September 2016 - 62
American Oil and Gas Reporter - September 2016 - 63
American Oil and Gas Reporter - September 2016 - 64
American Oil and Gas Reporter - September 2016 - 65
American Oil and Gas Reporter - September 2016 - 66
American Oil and Gas Reporter - September 2016 - 67
American Oil and Gas Reporter - September 2016 - 68
American Oil and Gas Reporter - September 2016 - 69
American Oil and Gas Reporter - September 2016 - 70
American Oil and Gas Reporter - September 2016 - 71
American Oil and Gas Reporter - September 2016 - 72
American Oil and Gas Reporter - September 2016 - 73
American Oil and Gas Reporter - September 2016 - 74
American Oil and Gas Reporter - September 2016 - 75
American Oil and Gas Reporter - September 2016 - 76
American Oil and Gas Reporter - September 2016 - 77
American Oil and Gas Reporter - September 2016 - 78
American Oil and Gas Reporter - September 2016 - 79
American Oil and Gas Reporter - September 2016 - 80
American Oil and Gas Reporter - September 2016 - 81
American Oil and Gas Reporter - September 2016 - 82
American Oil and Gas Reporter - September 2016 - 83
American Oil and Gas Reporter - September 2016 - 84
American Oil and Gas Reporter - September 2016 - 85
American Oil and Gas Reporter - September 2016 - 86
American Oil and Gas Reporter - September 2016 - 87
American Oil and Gas Reporter - September 2016 - 88
American Oil and Gas Reporter - September 2016 - 89
American Oil and Gas Reporter - September 2016 - 90
American Oil and Gas Reporter - September 2016 - 91
American Oil and Gas Reporter - September 2016 - 92
American Oil and Gas Reporter - September 2016 - 93
American Oil and Gas Reporter - September 2016 - 94
American Oil and Gas Reporter - September 2016 - 95
American Oil and Gas Reporter - September 2016 - 96
American Oil and Gas Reporter - September 2016 - 97
American Oil and Gas Reporter - September 2016 - 98
American Oil and Gas Reporter - September 2016 - 99
American Oil and Gas Reporter - September 2016 - 100
American Oil and Gas Reporter - September 2016 - 101
American Oil and Gas Reporter - September 2016 - 102
American Oil and Gas Reporter - September 2016 - 103
American Oil and Gas Reporter - September 2016 - 104
American Oil and Gas Reporter - September 2016 - 105
American Oil and Gas Reporter - September 2016 - 106
American Oil and Gas Reporter - September 2016 - 107
American Oil and Gas Reporter - September 2016 - 108
American Oil and Gas Reporter - September 2016 - 109
American Oil and Gas Reporter - September 2016 - 110
American Oil and Gas Reporter - September 2016 - 111
American Oil and Gas Reporter - September 2016 - 112
American Oil and Gas Reporter - September 2016 - 113
American Oil and Gas Reporter - September 2016 - 114
American Oil and Gas Reporter - September 2016 - 115
American Oil and Gas Reporter - September 2016 - 116
American Oil and Gas Reporter - September 2016 - 117
American Oil and Gas Reporter - September 2016 - 118
American Oil and Gas Reporter - September 2016 - 119
American Oil and Gas Reporter - September 2016 - 120
American Oil and Gas Reporter - September 2016 - 121
American Oil and Gas Reporter - September 2016 - 122
American Oil and Gas Reporter - September 2016 - 123
American Oil and Gas Reporter - September 2016 - 124
American Oil and Gas Reporter - September 2016 - 125
American Oil and Gas Reporter - September 2016 - 126
American Oil and Gas Reporter - September 2016 - 127
American Oil and Gas Reporter - September 2016 - 128
American Oil and Gas Reporter - September 2016 - 129
American Oil and Gas Reporter - September 2016 - 130
American Oil and Gas Reporter - September 2016 - Cover3
American Oil and Gas Reporter - September 2016 - Cover4
https://www.nxtbook.com/nxtbooks/aogr/202403
https://www.nxtbook.com/nxtbooks/aogr/202402
https://www.nxtbook.com/nxtbooks/aogr/202401
https://www.nxtbook.com/nxtbooks/aogr/202312
https://www.nxtbook.com/nxtbooks/aogr/202311
https://www.nxtbook.com/nxtbooks/aogr/pbios_202310
https://www.nxtbook.com/nxtbooks/aogr/202309
https://www.nxtbook.com/nxtbooks/aogr/202308
https://www.nxtbook.com/nxtbooks/aogr/202307
https://www.nxtbook.com/nxtbooks/aogr/202306
https://www.nxtbook.com/nxtbooks/aogr/202305
https://www.nxtbook.com/nxtbooks/aogr/202304
https://www.nxtbook.com/nxtbooks/aogr/202303
https://www.nxtbook.com/nxtbooks/aogr/202302
https://www.nxtbook.com/nxtbooks/aogr/202301
https://www.nxtbook.com/nxtbooks/aogr/202212
https://www.nxtbook.com/nxtbooks/aogr/202211
https://www.nxtbook.com/nxtbooks/aogr/202210
https://www.nxtbook.com/nxtbooks/aogr/202209
https://www.nxtbook.com/nxtbooks/aogr/202208
https://www.nxtbook.com/nxtbooks/aogr/202207
https://www.nxtbook.com/nxtbooks/aogr/202206
https://www.nxtbook.com/nxtbooks/aogr/202205
https://www.nxtbook.com/nxtbooks/aogr/202204
https://www.nxtbook.com/nxtbooks/aogr/202203
https://www.nxtbook.com/nxtbooks/aogr/202202
https://www.nxtbook.com/nxtbooks/aogr/202201
https://www.nxtbook.com/nxtbooks/aogr/202112
https://www.nxtbook.com/nxtbooks/aogr/202111
https://www.nxtbook.com/nxtbooks/aogr/pbios_202110
https://www.nxtbook.com/nxtbooks/aogr/202109
https://www.nxtbook.com/nxtbooks/aogr/202108
https://www.nxtbook.com/nxtbooks/aogr/202107
https://www.nxtbook.com/nxtbooks/aogr/202106
https://www.nxtbook.com/nxtbooks/aogr/202105
https://www.nxtbook.com/nxtbooks/aogr/202104
https://www.nxtbook.com/nxtbooks/aogr/202103
https://www.nxtbook.com/nxtbooks/aogr/202102
https://www.nxtbook.com/nxtbooks/aogr/202101
https://www.nxtbook.com/nxtbooks/aogr/202012
https://www.nxtbook.com/nxtbooks/aogr/202011
https://www.nxtbook.com/nxtbooks/aogr/202010
https://www.nxtbook.com/nxtbooks/aogr/202009
https://www.nxtbook.com/nxtbooks/aogr/202008
https://www.nxtbook.com/nxtbooks/aogr/202007
https://www.nxtbook.com/nxtbooks/aogr/202006
https://www.nxtbook.com/nxtbooks/aogr/202005
https://www.nxtbook.com/nxtbooks/aogr/202004
https://www.nxtbook.com/nxtbooks/aogr/202003
https://www.nxtbook.com/nxtbooks/aogr/202002
https://www.nxtbook.com/nxtbooks/aogr/202001
https://www.nxtbook.com/nxtbooks/aogr/201912
https://www.nxtbook.com/nxtbooks/aogr/201911
https://www.nxtbook.com/nxtbooks/aogr/201910
https://www.nxtbook.com/nxtbooks/aogr/201909
https://www.nxtbook.com/nxtbooks/aogr/201908
https://www.nxtbook.com/nxtbooks/aogr/201907
https://www.nxtbook.com/nxtbooks/aogr/201906
https://www.nxtbook.com/nxtbooks/aogr/201905
https://www.nxtbook.com/nxtbooks/aogr/201904
https://www.nxtbook.com/nxtbooks/aogr/201903
https://www.nxtbook.com/nxtbooks/aogr/201902
https://www.nxtbook.com/nxtbooks/aogr/201901
https://www.nxtbook.com/nxtbooks/aogr/201812
https://www.nxtbook.com/nxtbooks/aogr/201811
https://www.nxtbook.com/nxtbooks/aogr/201810
https://www.nxtbook.com/nxtbooks/aogr/pbios_201810
https://www.nxtbook.com/nxtbooks/aogr/201809
https://www.nxtbook.com/nxtbooks/aogr/201808
https://www.nxtbook.com/nxtbooks/aogr/201807
https://www.nxtbook.com/nxtbooks/aogr/201806
https://www.nxtbook.com/nxtbooks/aogr/201805
https://www.nxtbook.com/nxtbooks/aogr/201804
https://www.nxtbook.com/nxtbooks/aogr/201803
https://www.nxtbook.com/nxtbooks/aogr/201802
https://www.nxtbook.com/nxtbooks/aogr/201801
https://www.nxtbook.com/nxtbooks/aogr/201712
https://www.nxtbook.com/nxtbooks/aogr/201711
https://www.nxtbook.com/nxtbooks/aogr/201710
https://www.nxtbook.com/nxtbooks/aogr/201709
https://www.nxtbook.com/nxtbooks/aogr/201708
https://www.nxtbook.com/nxtbooks/aogr/201707
https://www.nxtbook.com/nxtbooks/aogr/201706
https://www.nxtbook.com/nxtbooks/aogr/201705
https://www.nxtbook.com/nxtbooks/aogr/201704
https://www.nxtbook.com/nxtbooks/aogr/201703
https://www.nxtbook.com/nxtbooks/aogr/201702
https://www.nxtbook.com/nxtbooks/aogr/201701
https://www.nxtbook.com/nxtbooks/aogr/201612
https://www.nxtbook.com/nxtbooks/aogr/201611
https://www.nxtbook.com/nxtbooks/aogr/201610
https://www.nxtbook.com/nxtbooks/aogr/pbios2016_programguide
https://www.nxtbook.com/nxtbooks/aogr/201609
https://www.nxtbook.com/nxtbooks/aogr/201608
https://www.nxtbook.com/nxtbooks/aogr/201607
https://www.nxtbook.com/nxtbooks/aogr/201606
https://www.nxtbook.com/nxtbooks/aogr/201605
https://www.nxtbook.com/nxtbooks/aogr/201604
https://www.nxtbook.com/nxtbooks/aogr/201603
https://www.nxtbook.com/nxtbooks/aogr/201602
https://www.nxtbook.com/nxtbooks/aogr/201601
https://www.nxtbook.com/nxtbooks/aogr/201512
https://www.nxtbook.com/nxtbooks/aogr/201511
https://www.nxtbook.com/nxtbooks/aogr/201510
https://www.nxtbook.com/nxtbooks/aogr/201509
https://www.nxtbook.com/nxtbooks/aogr/201508
https://www.nxtbook.com/nxtbooks/aogr/201507
https://www.nxtbook.com/nxtbooks/aogr/201506
https://www.nxtbook.com/nxtbooks/aogr/201505
https://www.nxtbook.com/nxtbooks/aogr/201504
https://www.nxtbook.com/nxtbooks/aogr/201503
https://www.nxtbook.com/nxtbooks/aogr/201502
https://www.nxtbook.com/nxtbooks/aogr/201501
https://www.nxtbook.com/nxtbooks/aogr/201412
https://www.nxtbook.com/nxtbooks/aogr/201411
https://www.nxtbook.com/nxtbooks/aogr/201410
https://www.nxtbook.com/nxtbooks/aogr/201409
https://www.nxtbook.com/nxtbooks/aogr/pbios2014_programguide
https://www.nxtbook.com/nxtbooks/aogr/201408
https://www.nxtbook.com/nxtbooks/aogr/201407
https://www.nxtbook.com/nxtbooks/aogr/201406
https://www.nxtbook.com/nxtbooks/aogr/201405
https://www.nxtbook.com/nxtbooks/aogr/201404
https://www.nxtbook.com/nxtbooks/aogr/201403
https://www.nxtbook.com/nxtbooks/aogr/201402
https://www.nxtbook.com/nxtbooks/aogr/201401
https://www.nxtbook.com/nxtbooks/aogr/201312
https://www.nxtbook.com/nxtbooks/aogr/201311
https://www.nxtbook.com/nxtbooks/aogr/201310
https://www.nxtbook.com/nxtbooks/aogr/201309
https://www.nxtbook.com/nxtbooks/aogr/201308
https://www.nxtbook.com/nxtbooks/aogr/201307
https://www.nxtbook.com/nxtbooks/aogr/201306
https://www.nxtbook.com/nxtbooks/aogr/201305
https://www.nxtbook.com/nxtbooks/aogr/201304
https://www.nxtbook.com/nxtbooks/aogr/201303
https://www.nxtbook.com/nxtbooks/aogr/201302
https://www.nxtbook.com/nxtbooks/aogr/201301
https://www.nxtbook.com/nxtbooks/aogr/201212
https://www.nxtbook.com/nxtbooks/aogr/201211
https://www.nxtbook.com/nxtbooks/aogr/201210
https://www.nxtbook.com/nxtbooks/aogr/201209
https://www.nxtbook.com/nxtbooks/aogr/2012_pbios
https://www.nxtbook.com/nxtbooks/aogr/201208
https://www.nxtbook.com/nxtbooks/aogr/201207
https://www.nxtbook.com/nxtbooks/aogr/201206
https://www.nxtbook.com/nxtbooks/aogr/201205
https://www.nxtbook.com/nxtbooks/aogr/201204
https://www.nxtbook.com/nxtbooks/aogr/201203
https://www.nxtbook.com/nxtbooks/aogr/201202
https://www.nxtbook.com/nxtbooks/aogr/201201
https://www.nxtbook.com/nxtbooks/demo/aogr_clone
https://www.nxtbook.com/nxtbooks/aogr/201112
https://www.nxtbookmedia.com