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Colgate’s private equity backers
reportedly planning IPO
PERMIAN BASIN PEARL Energy Investments and NGP, the pri- diminished in recent years as a result of poor
vate equity firms that own Colgate Energy Part- returns and a growing focus on the energy sec-
ners III, are reportedly planning an initial public tor’s environmental impact. However, crude
offering (IPO) for the tight oil producer. Citing prices hit their highest level in seven years in
people familiar with the matter, Reuters reported October 2021, and though they have since fallen
this week that the private equity firms were pre- back slightly, they remain high enough to make
paring to float Colgate on the stock market at a oil and gas stocks a more attractive proposition.
valuation close to $4bn. Additionally, Reuters noted that the S&P energy
If the deal goes ahead, it would be the first index has delivered roughly double the S&P 500’s
major IPO for a US oil producer since 2018, return in 2021, which has also played a part in
when Berry Petroleum raised $182mn. And in bringing back investor confidence.
the Permian Basin, where Colgate’s operations Colgate owns around 108,000 net acres (437
are located, it would be the first major offering square km) in the Permian’s Delaware sub-ba-
since 2017, when Jagged Peak Energy raised sin, with output of around 62,000 barrels of oil
$474mn. equivalent per day (boepd) following the closure
Reuters’ sources said that Pearl and NGP of a previously announced $190mn acreage pur-
were working with Credit Suisse Group on pre- chase, according to a November statement.
paring the New York listing for Colgate, and The Permian Basin is on course to break
could launch it by the middle of 2022. They production records in January. The US Energy
cautioned, though, that the plan had not been Information Administration (EIA) forecast this
finalised. week that oil output in the basin would rise to
The move comes despite the fact that appe- 5.03mn barrels per day in January, up from a pro-
tite to buy stock in oil and gas companies has jected 4.96mn bpd in December.
PERFORMANCE
ConocoPhillips kicks off production at GMT2
ALASKA CONOCOPHILLIPS has announced this week expectations. By contrast, output at CD5 has
that it has begun production at the Greater consistently exceeded expectations.
Mooses Tooth 2 (GMT2) project in the National The company said in its December 14 state-
Petroleum Reserve-Alaska (NPR-A). ment that the $1.4bn project had been brought
GMT2 is the second project in the Greater online on schedule and under budget.
Mooses Tooth unit, located about 8 miles (13 The oil from GMT2 will be processed at the
km) from GMT1, which entered production in existing Alpine production centre in the Colville
2018. It is the westernmost project on Alaska’s River Unit (CRU), to which it is connected via
North Slope, and is a satellite development to GMT1 and CD5 infrastructure. Connecting
ConocoPhillips’ Alpine field. It is also the third infrastructure includes a gravel road and pipe-
project to be developed by the company in the lines to GMT2.
NPR-A, after GMT1 and CD5 – also a satellite ConocoPhillips also continued to pursue the
project of the Alpine field. $8bn Willow project on the North Slope, where
The GMT2 drilling pad is expected to have development has stalled this year owing to legal
up to 36 wells initially, but there is capacity to roadblocks. In August a federal judge voided
expand this to up to 48 wells. Peak production the US Bureau of Land Management’s (BLM)
from the project has been estimated at 30,000 approval for Willow, ruling that the agency had
barrels of oil equivalent per day. ConocoPhillips failed to analyse the project’s impact on down-
has said in the past that it believed GMT2 to be stream greenhouse gas (GHG) emissions. Cono-
capable of reaching 35,000-40,000 boepd, and coPhillips did not appeal against the ruling, but
there was speculation this week that the lower has indicated that it wants to continue with its
peak rate was given based on its experience with plans to develop Willow once the issues with the
GMT1, where some wells have performed below BLM review have been resolved.
Week 50 16•December•2021 www. NEWSBASE .com P7