Page 7 - NorthAmOil Week 50 2021
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NorthAmOil                                   INVESTMENT                                          NorthAmOil


       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.™



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