Energy Deals of the Week

on October 11, 2013 at 10:00 AM

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Sakhalin Energy, the consortium that operates the Sakhalin II LNG project in Russia, is seeking higher prices for LNG sales from Korea’s Kogas, the world’s largest LNG buyer, sources have told Bloomberg. The contract is linked to Brent crude prices, which have risen substantially since it was signed eight years ago. The article indicates that Kogas is not prepared to accept the increase, though some analysts have said that the global LNG market will remain tight until 2014-2015, which could undermine the Korean firm’s negotiating position.

Billionaire investor Carl Icahn has bought up a large stake in Canada-based Talisman Energy, which has assets throughout North and South America, Asia-Pacific, Algeria and even the Kurdistan Region of IRaq. Icahn’s large (and activist) investments at Transocean and Chesapeake Energy, both within the last two years, have ultimately resulted in the removal of their chief executives. This does not bode well for Talisman’s Hal Kvisle, though it may bode well for the company’s stock, which surged after Icahn’s announcement.

Google has made yet another energy investment – the company’s thirteenth – putting $103 million into the 265.7 megawatt Mount Signal solar farm in California. The company’s previous deals include an agreement to purchase wind from the Happy Hereford wind farm, and an investment of $168 million in the Ivanpah solar facility.

The US and Vietnam have signed the US-Vietnam Civil Nuclear Cooperation Agreement, which allows for the transfer of US nuclear technology to Vietnam, but not for Vietnam to enrich or reprocess US-origin nuclear materials. The agreement must be approved by President Obama, after which it will go into effect unless congress takes action to block it within 90 days.

American Energy – Utica, a subsidiary of Aubrey McClendon’s new venture, American Energy Partners, has raised $1.7 billion in loans and private equity commitments for his new venture for exploration in the Utica Shale. There has been no shortage of commentary on how the Utica is disappointing expectations, but John Kingston at Platts has reported that at least one analyst says it’s too early to say.

Forest Oil is selling assets in the Texas panhandle to Templar Energy for $1 billion, with plans to focus its available resources on the Eagle Ford shale. Forest sold off properties in South Texas for $325 million in January and in South Louisiana for $220 MM in October 2012.

Hess has agreed to sell its network of oil terminals on the US East Coast and in St Lucia to Buckeye Partners for $850 MM as it sheds downstream assets to focus on exploration and production. 

Midstream master limited partnership Regency Energy Partners has agreed to buy midstream MLP PVR Partners for $5.6 billion, including the assumption of $1.8 billion in net debt. The deal will bring together Regency’s Permian Basin, South Texas and North Louisiana assets and PVR’s Appalachia and Mid-Continent holdings.