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8-K - FORM 8-K - ENDEAVOUR INTERNATIONAL CORP | h83513e8vk.htm |
EX-99.1 - EX-99.1 - ENDEAVOUR INTERNATIONAL CORP | h83513exv99w1.htm |
EX-99.3 - EX-99.3 - ENDEAVOUR INTERNATIONAL CORP | h83513exv99w3.htm |
Exhibit 99.2
For immediate release
Endeavour to Acquire Operated Interests
Expanding its Position in Pennsylvania Marcellus Shale
Expanding its Position in Pennsylvania Marcellus Shale
Transaction strengthens companys position
in one of the most active and lowest cost U.S. onshore shale plays
in one of the most active and lowest cost U.S. onshore shale plays
Endeavour also provides operational and financial update
Houston, July 18, 2011 Endeavour International Corporation (NYSE: END) (LSE: ENDV)
announced today that it has entered into purchase and sale agreements with SM Energy Company
(NYSE:SM) and certain other minority owners to acquire the leasehold and producing interests held
by SM Energy and its partners in the Marcellus shale in north central Pennsylvania, as well as a
pipeline and related facilities for aggregate consideration of $110 million. The transaction
provides Endeavour with significant production and reserve potential on acreage that is adjacent to
the Companys existing Marcellus acreage and readily available for development in one of the most
economically attractive shale gas plays in the United States.
The assets include the following:
| Approximately 50,000 net acres of leasehold with 100 percent operated working interests in McKean and Potter counties; | ||
| Current production from three existing wells of approximately three to four million cubic feet of natural gas per day, including the Potato Creek #3H well that initially flowed 11 million cubic feet of gas per day and is expected to recover in excess of 4 billion cubic feet of gas; | ||
| 100 percent ownership of Potato Creek LLC, which owns a midstream gathering system and related facilities in southern McKean County, including a 10-mile 16 trunkline connected and flowing to Tennessee Gas Pipelines 24 mainline; and | ||
| Proprietary and fully processed 3-D seismic survey covering the entire Potato Creek lease block. |
Following the completion of the transaction, Endeavours leasehold interests in the Marcellus Shale
will total approximately 93,000 gross (68,000 net) acres. A new 7-year lease will be issued at
closing on the key 21,000 net acre Potato Creek block that requires only five wells to be drilled
in the first three years. Minimal capital is required over the next three years to hold all
acreage in McKean County, including the key Potato Creek leasehold. The transaction is expected to
close within 90 days and is expected to be financed with proceeds from the issuance of debt
securities.
This acquisition represents a significant step forward in the growth of our domestic onshore
business in a play that offers some of the highest returns in the United States today, said
William L. Transier, chairman, chief executive officer and president. The acreage is located on
trend with several major industry developments and complements our existing acreage position in
Cameron County
immediately to the south. Our development model indicates recoverable natural gas potential from
1.0
to 1.3 trillion cubic feet with more than 300 identified drilling locations on our McKean and
Cameron County leasehold. As operator of these assets, including the gathering infrastructure, we
have the opportunity to accelerate our development plans in an effort to realize the value of our
investment while expanding our position in this three county area.
Operational and Financial Update
Bacchus Update
The Rowan Gorilla VII rig has arrived at the Bacchus field and has commenced drilling operations
for the three planned development wells. The Bacchus development is located in the Central UK
North Sea and Endeavour has a 30% working interest in the field.
Senior Term Loan
In support of the Companys growth plans, Cyan Partners and certain lenders of the Senior Term Loan
have amended the terms of the Companys Senior Term Loan and agreed to expand the facility by $75
million. Endeavour intends to use this additional capital to accelerate its development activities
throughout the Company, particularly its Greater Rochelle development and its expanded position in
Pennsylvania following the Marcellus acquisition.
Endeavour International Corporation is an oil and gas exploration and production company
focused on the acquisition, exploration and development of energy reserves in the North Sea and the
United States. For more information, visit www.endeavourcorp.com.
Additional information for investors:
This press release contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements include statements that express a belief, expectation, or intention, as
well as those that are not statements of historical fact, and may include projections and estimates
concerning the timing and success of specific projects and our future production, revenues, income
and capital spending. Our forward-looking statements are generally accompanied by words such as
estimate, project, predict, believe, expect, anticipate, potential, plan, goal or
other words that convey the uncertainty of future events or outcomes. We caution you not to rely on
them unduly. We have based these forward-looking statements on our current expectations and
assumptions about future events. While our management considers these expectations and assumptions
to be reasonable, they are inherently subject to significant business, economic, competitive,
regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict
and many of which are beyond our control. These risks, contingencies and uncertainties, which may
not be exhaustive, relate to, among other matters, the following: discovery, estimation,
development and replacement of oil and gas reserves; decreases in proved reserves due to technical
or economic factors; drilling of wells and other planned exploitation activities; timing and amount
of future production of oil and gas; the volatility of oil and gas prices; availability and terms
of capital; operating costs such as lease operating expenses, administrative costs and other
expenses; our future operating or financial results; amount, nature and timing of capital
expenditures, including future development costs; cash flow and anticipated liquidity; availability
of drilling and production equipment; uncertainties related to drilling and production operations
in a new region; cost and access to natural gas gathering, treatment and pipeline facilities;
business strategy and the availability of acquisition opportunities; and factors not
known to us at this time. Any of these factors, or any combination of these factors, could
materially affect our future financial condition or results of operations and the ultimate accuracy
of a forward-looking statement. The forward-looking statements are not guarantees of our future
performance, and our actual results and future developments may differ materially from those
projected in the forward-looking statements. In addition, any or all of our forward-looking
statements included in this release may turn out to be incorrect. They can be affected by
inaccurate assumptions we might make or by known or unknown risks and uncertainties, including
those included in our Annual Report on Form 10-K for the year ended December 31, 2010.
Reserve engineering is a process of estimating underground accumulations of oil and natural gas
that cannot be measured in an exact way. The accuracy of any reserve estimate depends on the
quality of available data, the interpretation of such data and price and cost assumptions made by
our reserve engineers. In addition, the results of drilling, testing and production activities may
justify revisions of estimates that were made previously. If significant, such revisions would
change the schedule of any further production and development drilling. Accordingly, reserve
estimates may differ from the quantities of oil and natural gas that are ultimately recovered. We
use may use certain terms in our news releases, such as
resource potential, that the SECs guidelines strictly prohibit us from including in filings with
the SEC. Investors are urged to also consider closely the disclosure in our filings with the SEC,
available from our website at www.endeavourcorp.com.
Endeavour is also subject to the requirements
of the London Stock Exchange and considers the disclosures in this release to be appropriate and/or
required under the guidelines of that exchange.
For further information:
Endeavour Investor Relations
Mike Kirksey 713.307.8788
Darcey Matthews 713.307.8711
Darcey Matthews 713.307.8711
Pelham Public Relations UK Media
Philip Dennis +44 (0)207 861 3919
Henry Lerwill +44 (0)207 861 3169
Henry Lerwill +44 (0)207 861 3169