Nigeria has agreed a one-month ceasefire with militants including the Niger Delta Avengers in the oil-producing southern region, a petroleum ministry official said on Tuesday.

Militant groups including the Avengers, who have claimed responsibility for a string of attacks on oil and gas facilities in recent weeks, could not immediately be reached for comment.

They say they want a greater share of Nigeria's oil wealth to go to the impoverished Delta region. Crude sales make up about 70 percent of national income and the vast majority of that oil comes from the southern swampland.

The latest attacks have pushed production to a 30-year low.

Last week the Avengers said they would negotiate with the government if independent foreign mediators were involved.

"It was very difficult getting the Niger Delta Avengers to the negotiating table but we eventually did through a proxy channel and achieved the truce," said the official, who asked not to be identified.

A second government official, who also wished to remain anonymous, said a "a truce was agreed" with militants.

http://www.reuters.com/article/nigeria-security-idUSL8N19D1US

Russia beat out Saudi Arabia as China's largest oil supplier in May, customs data showed on Tuesday, marking the third month in a row the world's biggest oil producer has topped the world's biggest oil exporter in feeding China's market.

Russia's exports to the world's No. 2 oil consumer hit a fresh record and reflect continuing strong demand from China's independent refiners.

China imported 5.245 million tonnes, or around 1.24 million barrels per day (bpd) of crude oil from Russia last month, up 33.7 percent year on year, and beating the previous record in April of 1.17 million bpd.

Russian imports surpassed Saudi Arabian imports for the first time on a cumulative basis. For the first five months of 2016, Russian imports are 41.8 percent higher than a year ago at 1.06 million bpd, while Saudi Arabian imports averaged 1.05 million bpd.

"Russian oil remains the teapots' top pick, suiting them in the way that teapots' throughput planning was often shorter-term that requires prompt deliveries," said a senior China-based trader with a global supplier who frequently deals with independent plants.

Crude imports from Saudi Arabia jumped 33.6 percent in May from a year ago to 961,000 bpd, data showed, but easing off the 1.0 million bpd level in the previous month.

Nicknamed "teapots" due to their relative smaller scale versus state refiners, these refineries helped boost China's crude demand by more than 1 million bpd in the first five months of the year.

Russia's low-sulphur ESPO grade has been a favourite for these plants due to the smaller cargo size and geographical proximity, while higher sulphur grades from Saudi Arabia and Iraq has not been as appealing because of larger shipment sizes and because they typically are sold under long-term contracts.

China is also speeding up approvals for crude import licenses and quotas for independent refiners. Shandong-based Haiyou Petrochemical Group was granted a crude import licence on June 14, while two other refineries were given import quotas in May.

Imports from Iran rose 19.5 percent in May from a year earlier to 619,300 bpd, compared with April's 671,176 bpd. Imports for the first five months held largely flat.

Iraqi exports to China rose 56.6 percent in May from a year ago to 801,120 bpd. Imports for the first five months rose 18.4 percent.

China's total crude oil imports expanded 39 percent last month from a year earlier to 7.59 million bpd, the biggest jump in more than six years.

China's refiners also continued to fuel an ongoing glut in Asia's fuel products markets, especially in gasoline and diesel, contributing to a sharp decline in regional profit margins this year.

China's diesel exports rose more than four-fold in May from a year earlier to a record 1.48 million tonnes, customs data showed, reflecting a slowdown in China's heavy industry which typically uses diesel and continuing growth in throughput at independent refineries.

Exports of gasoline, used mostly by passenger vehicles, more than doubled in May from a year earlier to 780,000 tonnes as China's newly licensed independent refiners churned out more petrol than the domestic market can handle.

As a result of China's surging refined product exports, overall benchmark Singapore refinery margins, or cracks, have fallen by more than half this year to under $4.90 per barrel.

http://www.reuters.com/article/china-crude-imports-idUSL4N19D2NW

Nigeria kept exporting crude oil at a largely steady pace in May, though below historical levels, despite repeated militant attacks on its infrastructure that drove output down to 30-year lows this spring and helped global prices rise, data showed.

Data from maritime intelligence firm Windward and Thomson Reuters showed a far smaller drop in exports from April to May than most in the market had expected. It suggested that Nigerian oil production is more resilient than many thought.

Its oil industry has been grappling with a spate of militant attacks that took out the Forcados crude oil stream in February and affected Bonny Light, Brass River and Escravos in May mainly by targeting pipelines taking crude to export terminals.

An accident on the terminal exporting Qua Iboe, its largest oil stream, further knocked production and led the International Energy Agency (IEA) to declare May production at 30-year lows of 1.37 million bpd.

But Windward showed May exports dropping by just 62,000 barrels per day (bpd) from April, with exports still reaching 1.89 million bpd.

Windward tracks all exports coming from Nigeria including crude oil, condensates and ship-to-ship transfers, so its figures are nearly always higher than estimates of crude oil production alone.

But its figures indicate that Nigeria exported between 300,000-500,0000 bpd more than what OPEC and other agencies thought it had produced in May.

"It was the gains from small fields that offset declines from others," said James Davis, head of crude supply at FGE Energy. "The disruptions in the fields that were out was pretty much what we expected. What we didn't expect was the marginal increases in other fields."

Reuters data showed total exports in May at roughly 1.67 million bpd, down from 1.77 million bpd in April, and also a rise in exports of grades including Bonga, Agbami, Antan, Amenam, Okwori that helped to offset the losses.

The figures remain substantially below the close to 2 million bpd Nigeria has exported in the best of times.

Still, they suggest that many industry observers, for example the "secondary sources" polled by OPEC that pegged Nigeria's May production at around 1.4 million bpd, were overly pessimistic about its ability to keep pumping.

Trade sources noted that some of the oil could have come from crude stored at export terminals and on ships offshore.

But these volumes are not typically substantial in Nigeria, and most traders noted that oil kept flowing from streams that had been repeatedly attacked, including Bonny Light and Brass River, while the Qua Iboe outage was shorter-lived than expected.

According to Windward data, 22 million barrels exported in the last 10 days of May pushed exports closer to par with April.

http://www.reuters.com/article/nigeria-oil-disruptions-idUSL8N19D2CQ

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Internal PDVSA report seen by Platts shows fall in Venezuela oil prod. is accelerating. 2,468,200 b/d in May, down 194,500 b/d frm Jan.

@HermsTheWord

Forces loyal to Libya's eastern leadership launched attacks near the town of Ajdabiya on Tuesday against a newly formed rival brigade, in fighting that threatens to prolong the country's conflict and expose divisions in a U.N.-backed unity government.

Libya has been blighted by a power vacuum over the past two years, in which loose alliances of armed groups aligned with rival parliaments and governments in Tripoli and the east have fought for supremacy.

On one side of the most recent air and ground battle are Libyan National Army (LNA) units loyal to eastern commander Khalifa Haftar, who has been waging a campaign against Islamists and other opponents in Benghazi since 2014.

On the other are several hundred men from the recently named Benghazi Defense Forces (BDF), which says it wants to take back control of Libya's second city. They include members of the al Qaeda-linked militant group Ansar al Sharia.

Ajdabiya is situated about 150 km (93 miles) south of Benghazi, close to major oil terminals and fields and the site of power and water facilities.

The BDF attacked Haftar's forces on the southern outskirts of Ajdabiya on Saturday, claiming to have taken control of several LNA positions. On Monday and Tuesday, LNA war planes retaliated with strikes near a flour mill south of the town, military officials said.

A medical source said a number of civilians in Ajdabiya had been wounded by mortar fire, some seriously.

A separate force that controls the oil terminals, the Petroleum Facilities Guard (PFG), said on Monday that an LNA strike had hit a PFG training camp, causing damage. A spokesman for the Guard, Ali al-Hassi, promised a "harsh response".

The PFG used to be allied to the eastern military but has now switched its allegiance to the U.N.-backed Government of National Accord (GNA).

The GNA was designed to replace Libya's two other competing administrations, and has been trying to assert its authority from the capital Tripoli, which lies hundreds of kilometres west of Benghazi, since March.

It has yet to win crucial backing from allies of Haftar in the eastern parliament.

The GNA's Presidency Council issued a statement on Sunday condemning the attack by the BDF, but at least one member of the Council later distanced himself from the statement. Two members of the Council associated with eastern factions have already suspended their membership.

The fighting in Ajdabiya comes as brigades aligned with the GNA are engaged in a campaign to recapture Islamic State's Libyan stronghold of Sirte, some 370 km to the west.

Brigades based in the city of Misrata have advanced to the edge of Sirte from the west, and the PFG has retaken coastal territory from the jihadist group to the east.

http://www.reuters.com/article/libya-security-east-idUSL8N19D4GK

Workers on Norwegian offshore oil drilling rigs signed a new wage deal on Wednesday, avoiding a strike, labour unions and employers said in separate statements.

Some 280 rig workers had threatened to strike if the talks failed, including staff on Rowan Companies' Viking and Gorilla rigs, and on the Statoil-operated Heidrun, Statfjord, Aasgard, Volve and Oseberg fields.

Labour disputes on drilling rigs typically halt oil and gas exploration and drilling of new production wells at existing fields, but do not affect current production at wells.

Workers will get a 0.5 percent pay rise, said Norway's state-appointed mediator, who brokered the deal.

The price of North Sea crude oil, Norway's top export, has fallen by some 60 percent since 2014, resulting in about 40,000 layoffs in the industry, according to the Norwegian Shipowners' Association, which negotiated on behalf of rig firms.

"It's estimated that another 15,000 will lose their jobs before activity levels recover, which at the earliest will happen two years from now," it added.

As part of the wage deal, it was agreed that those being laid off will have the right for a two-year period to be rehired if an employer increases staffing.

In return, both unions and employers will contribute to identifying potential cost cuts, the state mediator said.

"We had wished for a better outcome on wages than this mediation gave us," said Hilde-Marit Rysst, who heads the Safe trade union, one of three organisations negotiating on behalf of workers.

"But given the situation this industry is in, we've shown moderation in order to win acceptance for our key priority, the right to reinstatement. We expect markets to improve, and if they do this victory will allow many of our members to win back their jobs," she added.

Separately, oil and gas companies are due to negotiate with production workers from June 30 to July 1. If no agreement is found, a strike hitting the output of crude and natural gas could begin on July 2.

http://www.reuters.com/article/norway-oil-rowan-idUSL8N19E0A5

Birchcliff Buys Encana’s Gordondale Montney for $488 Million

Birchcliff Energy Ltd., the company backed by Canadian businessman Seymour Schulich, has agreed to buy natural gas producing properties from Encana Corp. for C$625 million ($488 million) in cash.

The assets include 54,200 net acres (21,900 hectares) of land and infrastructure in the Gordondale Montney region near Grande Prairie, Alberta, according to statements from the Calgary-based companies on Tuesday. Birchcliff will partially fund the purchase through a C$530 million stock offering and a C$18.75 million investment by Schulich, the company said. Schulich is the largest shareholder of Birchcliff, with a 28 percent stake as of a March filing, according to data compiled by Bloomberg.

The deal is sizable for Birchcliff, a company that dropped efforts to sell itself just over four years ago. The purchase price is equivalent to more than half of Birchcliff’s current market value of about C$1 billion and will allow the company to boost production to an estimated 65,000 equivalent barrels of oil a day, from about 42,000 in the first quarter. Birchcliff is buying the assets even as it contends with the lowest Canadian gas prices for the start of the year since 1996 and hasn’t hedged for the slump.

With the transfer of contracts to Birchcliff, Encana estimates it will reduce commitments to other companies tied to the processing and use of its gas by C$100 million. Encana has been selling assets to pay down debt and is seeking to continue reining in costs with U.S. crude still down almost 55 percent from its mid-2014 high. The company was in the midst of reorienting toward production of oil and liquids through a host of deals when the market collapsed, and it has continued to struggle with some pricier gas output than its peers.

National Bank of Canada and Cormark Securities Inc. advised Birchcliff on the deal, and are also co-leading the equity financing along with GMP Capital Inc. and Bank of Nova Scotia. Royal Bank of Canada advised Encana on the agreement.

http://www.bloomberg.com/news/articles/2016-06-21/birchcliff-buys-encana-s-gordondale-montney-for-488-million

India's Essar Oil Ltd. emerged as the country's largest unconventional gas player as itsRaniganj (East) Block in West Bengal crossed an important milestone when it became the first local coal bed methane (CBM) asset to produce 35.3 million standard cubic per day (MMscf/d) or 1 million standard cubic meters per day (MMscf/m).

The company expected peak production from the Raniganj (East) Block to reach 105.9 MMscf/d (3 MMscf/d). According to the 2016 NSAI (Netherland Sewell & Associates, Inc.) report, the proven, probable and possible gross CBM reserves in the block is around 1.09 trillion cubic feet (Tcf), while contingent resources was estimated at around 270 billion cubic feet (Bcf).

“We married talent with technology to transform reserves to production. In the last 12 months, the average well productivity has more than doubled, the gas break-out time in new wells has reduced to days instead of months, and the workover cycle has reduced to a fifth. Our collaborative relationship with international service providers has resulted in win-win solutions,” Essar Oil CEO for Exploration and Production Manish Maheshwari said in the press release.

Essar Oil is supplying 5.29 MMscf/d (150,000 scm/d) of CBM gas to Matix Fertilisers for its pre-commissioning activities, while industrial consumers in the catchment area of Durgapur also received the fuel from the company.

“There are tremendous opportunities in the domestic unconventional hydrocarbon sector. The Hydrocarbon Exploration Licensing Policy (HELP), which was announced by the Government in March 2016, recognizes this potential in contributing towards national energy security,” Maheshwari added.

Essar Oil revealed that a U.S. Trade & Development Agency-supported study by an independent U.S. firm with expertise in shale has assessed that the original in-place shale gas resources in the Raniganj (East) Block is estimated at around 8 Tcf.

In February, Essar Oil awarded Greka Drilling Ltd. a $8 million one year contract for the provision of drilling services for its Raniganj (East) Block. Greka deploys two semi-automated GD75 rigs for the drilling operations, which commenced May 8 and June 5, respectively.

Excluding its Raniganj (East) Block, Essar Oil's CBM portfolio in India includes more than 1,042 square miles of acreage.

http://world.einnews.com/article/332087615/k7eMHg8m8ILuC9Po

Oil futures climbed past $50 a barrel in electronic trading Tuesday after the American Petroleum Institute reported that U.S. crude supplies dropped by 5.2 million barrels for the week ended June 17, according to sources. Analysts polled by S&P Global

Platts forecast a fall of 1.4 million barrels for crude inventories. "The slow movement on the pipeline from Canada means we are just starting to see the impact from the [recent] wildfires" which disrupted production, said Phil Flynn, senior market analyst at Price Futures Group. The closely watched Energy Information Administration report will be released Wednesday.

http://www.marketwatch.com/story/oil-prices-climb-sources-say-api-data-show-52-million-barrel-drop-in-crude-supplies-2016-06-21

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Energen Corporation today announced that it has closed or signed purchase and sale agreements (PSAs) for its non-core Delaware Basin and San Juan Basin assets. Including all sales transactions with multiple, undisclosed buyers, the total gross proceeds of $551.7 million are subject to standard closing costs and transaction fees. Asset sales not yet closed are expected to close by mid-August. The company expects to incur minimal taxes in association with these transactions.

Net production associated with all the non-core properties being sold averaged 9.0 thousand oil-equivalent barrels per day (mboepd) in April 2016, of which only 34 percent was oil; the majority of the production is in the San Juan Basin. In the Delaware Basin, the non-core assets for which sales are closed or pending largely reflect unproved leasehold of approximately 55,000 net acres previously designated as Tier 1 or Tier 2. At December 31, 2015, proved reserves associated with all non-core asset sales totaled approximately 55 million oil-equivalent barrels (BOE).

'We are very pleased with the success of our non-core asset sales,' said James McManus, Energen's chairman and chief executive officer. 'The proceeds have exceeded our expectations and, as a result, our balance sheet is even stronger. This position of financial strength allows us a great deal of flexibility to pursue additional capital investment opportunities in the Permian Basin in 2016 and 2017, including increased drilling and development and acquisitions.

'To that end, we are increasing our capital investment in 2016 to approximately $450 million to further build up our inventory of drilled but uncompleted wells (DUCs) at year end,' McManus added. 'Up to $130 million will now target the Delaware Basin, where we plan to drill 17-19 net DUCs in the second half of 2016. In total, we now expect to end the year with approximately 54-58 net DUCs in the Permian Basin. [Prior capital guidance was $350-$400 million and 37-50 net DUCs.]

'Not only does our balance sheet support the completion of these wells in 2017 but it also places us in an excellent financial position to undertake additional drilling and development activities in 2017.'

With the sale of the remainder of its San Juan Basin assets, Energen has completed its transition to a pure Permian Basin operator. Its focus is on drilling and developing its high-quality acreage positions in the Midland and Delaware basins, where it estimates a remaining net resource potential of 2.0 billion BOE.

In the core Midland Basin, the company has approximately 68,500 net acres with 2,546 net identified locations in seven horizontal formations. After all the transactions have closed, Energen will have approximately 42,200 net acres in the Delaware Basin in Texas and New Mexico with 954 net identified locations in four Wolfcamp shale formations.

The company's primary focus in the Delaware Basin will be on bringing forward the value on approximately 31,200 net acres in Loving and parts of Reeves and Ward counties. On this core acreage position, the company has identified 675 net locations, including 148 net locations with at least 10,000 foot laterals and another 217 net locations with average lateral lengths of 7,500 feet.

http://www.oilvoice.com/n/Energen-completes-sale-of-Delaware-and-San-Juan-Basin-assets/3ce3de580f62.aspx

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The US Department of Energy’s (DOE) Office of Fossil Energy has released LNG import and export data for the US for the first four months of 2016.

According to the data, Sabine Pass Liquefaction LLC exported a total of 21 508 223 million ft3 of LNG since the first shipment to Brazil onboard the Asia Vision tanker in February 2016. Following that shipment, a further six cargoes of LNG departed the terminal up until 25 April 2016, delivering to India, the United Arab Emirates (UAE), Argentina and Portugal. The price at export point ranged from US$3.35/million Btu to US$4.10/million Btu.

The data also shows that American LNG Marketing LLC exported a total of 7432 million ft3 of LNG in ISO containers from Miami, Florida, US to Barbados in the first four months of 2016.

The US also imported 34.8 billion ft3 of LNG from Trinidad in the first four months of 2016, according to the data. This figure stedily declined from 12 billion ft3 of LNG in January 2016 to just 4.7 billion ft3 of LNG in April 2016.

http://www.lngindustry.com/liquefaction/21062016/DOE-releases-US-LNG-export-data-2639/

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Tokyo Gas Co  said on Tuesday it has bought a 25 percent stake in an Eagle Ford shale gas formation, in what could be among the first shale investments in the United States by a Japanese firm since the tumble in energy prices.

Japan's biggest city gas supplier said it purchased the stake from VirTex Producing Co. The company did not give a break-down of the value of the stake but said it expects to spend up to 8 billion yen ($76.64 million) for the stake plus investments in subsequent drilling combined.

The Nikkei newspaper said earlier on Tuesday the company plans to buy a 25 percent interest in an Eagle Ford shale development for more than 5 billion yen.

The project, which already is under commercial production, is expected to supply gas equivalent to 200,000 tonnes per year (tpy) of liquefied natural gas (LNG) output for 20 years, Tokyo Gas said.

Tokyo Gas in 2013 bought a shale gas stake in Texas' Barnett Basin from Quicksilver Resources that gave it gas output equivalent to 0.35 million to 0.5 million tpy of LNG output for $485 million. But hurt by falling energy prices, the company has posted impairment losses for the project twice.

The company's senior general manager of global business department, Hisashi Nakamura, told Reuters after a briefing the firm is considering buying more U.S. stakes in future.

"We would look for more deals if there are good ones, but only the cost-competitive projects that are profitable even at low prices would survive, so they are not found everywhere," he said.

http://www.reuters.com/article/tokyo-gas-investment-shalegas-idUSL4N19D1R7

The new Pipeline Safety Act has come into force in Canada, heralding a new era of absolute liability for pipeline owners and operators and setting out financial resource requirements to pay for all costs related to a spill or rupture. 

The National Energy Board (NEB) on Monday welcomed the Pipeline Safety Act, which first received Royal Assent on June 18, 2015. This also resulted in changes to the NEB Act and to some extent the Canada Oil and Gas Operations Act. 

“These legislative changes enhance and strengthen our mandate to provide lifecycle oversight of federally-regulated pipelines, from construction through abandonment,” NEB chairperson Peter Watson stated. 

According to the NEB, the most significant changes to the the Pipeline Safety Act (Bill C-46) related to absolute liability and financial resource requirements, abandonment, pipeline releases, damage prevention, as well as audit and enforcement powers. 

The absolute liability provisions in the Pipeline Safety Act applied to the company that owned the pipeline, not landowners or other companies such as incorporated farms. The NEB stated that it would hold the company that owns the pipeline, and not farmers or other parties, responsible for any clean-up costs in the event of a spill or rupture. 

The Pipeline Safety Act put in place new measures to help ensure that pipeline companies held enough financial resources to pay these types of costs in the event of a spill or rupture. NEB-regulated companies operating pipelines that had the capacity to transport at least 250 000 bbl/d of oil would from now on be liable for all costs and damages for an unintended release, of up to C$1-billion, regardless of fault. 

Currently, five companies would be subject to the C$1-billion absolute liability, including Enbridge Pipelines, Enbridge Pipelines (Westspur), Express Pipeline, TransCanada Keystone Pipeline and Trans Mountain Pipeline. Other projects that would fall under the new liability regulations, should they be approved, included TransCanada's Energy East pipeline project and Kinder Morgan's Trans Mountain pipeline expansion project. 

According to the NEB, each of these companies had submitted a plan explaining how it proposed to meet the C$1-billion of financial resources. The remaining pipeline companies under NEB jurisdiction would have absolute liability limits set through regulations currently being developed by Natural Resources Canada. 

The new regulations also provided improved provisions for damage prevention, which laid out obligations of those planning construction of facilities, ground disturbance activities or vehicle or mobile equipment crossings in the area of an NEB-regulated pipeline, as well as the obligations of pipeline companies. 

Further, the NEB’s jurisdiction had also been expanded to provide oversight of pipelines post-abandonment. Companies will remain liable for post-abandonment costs and damages.

It also provided the NEB with new powers for inspection officers, and new authority to assume control of an abandoned pipeline if a company is not complying with a NEB order. 

Under the new regulations, the Governor in Council had also been provided the authority, in the event of a pipeline release, to ‘designate’ a company if it either did not have the ability to pay for the release, or did not comply with a board order, and for the NEB to take over spill response.

http://www.miningweekly.com/article/canadas-pipeline-operators-on-the-hook-as-absolute-liability-provisions-kick-in-2016-06-21

The first natural gas producers to go broke are being put up for sale in Canada during the worst start for prices in two decades.

Mosaic Energy Ltd., which is backed by Irving, Texas-based NGP Energy Capital Management LLC, is set to be shopped around by Royal Bank of Canada through a receivership that began in late April, while Endurance Energy Ltd., majority owned by New York-based Warburg Pincus LLC, is being marketed by Bank of Montreal through a restructuring that started at the end of May, court documents show.

The two gas-focused producers join oil companies also grappling with insolvency two years into a crude market rout, including Connacher Oil and Gas Ltd. and Anterra Energy Inc. They may be the first of a series of Canadian gas companies being forced to sell as they navigate what will probably be a summer of tough prices, according to FirstEnergy Capital Corp.

“It’s another lesson that even when you’re an all-private firm with private-backed money, that’s no guarantee of success,” said Martin King, an analyst at FirstEnergy in Calgary. “There are still probably too many small, independent natural gas producers out there who are just simply not going to make it through this cycle, or are going to come through it deeply wounded.”

Canada Discount

Spot gas prices in Canada are being hit with a confluence of short- and long-term challenges. A warmer winter reduced demand, pushing record volumes into storage for the season, just as the industry is up against stiffer competition from U.S. producers. Demand lost from oil-sands projects shut down by a wildfire in May has been another blow. The storage supplies are widening the discount for Canadian gas relative to the U.S. benchmark, which typically reflects transportation costs.

Gas at Canada’s AECO hub has averaged $1.1529 per million British thermal units in 2016, the worst start since 1996, according to data compiled by Bloomberg. Gas at 53 cents on May 9 was the lowest daily price since October 1997. While the fuel has almost tripled since then, it’s trading at about little more than half the price at the Henry Hub in Louisiana.

Service Providers

Mosaic, a Calgary-based company focused on producing gas and gas liquids in Alberta, had daily production of about 8,190 equivalent barrels of oil a day in February, 74 percent of which was gas, according to court documents. The company, negatively affected by the drop in gas prices and its fuel transportation and processing commitments, defaulted on terms of its agreement with lenders in March and didn’t repay debts, triggering the receivership filing, the documents show.

A representative for Ernst & Young, the receiver for Mosaic, didn’t return phone and e-mail requests for comment. NGP declined to comment.


In a unique twist for an insolvent producer, Mosaic could be acquired by one of its service providers. Pembina Pipeline Corp. has a contract to process Mosaic’s gas at its Resthaven plant for minimum charges of C$2 million ($1.6 million) a month for a 15-year term that began in October 2015, the documents show. If the contract isn’t assumed by a purchaser of Mosaic’s assets, Pembina would become a large unsecured creditor. To satisfy a contract currently worth an estimated C$200 million, Pembina may end up bidding for Mosaic, according to people familiar with the sales process who asked not to be identified discussing non-public information.

First Refusal

Pembina said the impact of Mosaic’s receivership is “financially immaterial” to the company, declining to comment on details regarding its contract and whether it could acquire Mosaic.

Endurance, also based in Calgary, produces about 85 million cubic feet of gas a day from its main Sierra Field asset in northeast British Columbia. The decline in gas prices and a reduction of credit available from lenders resulted in a “liquidity crisis” for Endurance, whereby it could no longer pay its debts, according to court filings.

Warburg Pincus, which bought its initial holdings in Endurance 2012 and now owns 84 percent of the shares, could end up taking the company out of the restructuring. By providing interim financing, the investor has the right of first refusal on any bids for Endurance in the sales process, the documents show.

Summer Struggle

Protection from creditors was sought so the company could undergo an orderly restructuring, Endurance Chief Executive Officer Steve VanSickle said in an e-mail. Warburg Pincus declined to comment.

“There’s got to be a few more guys on the ropes,” said FirstEnergy’s King. Canadian gas producers will probably have to wait for the winter heating season to draw down supplies enough to significantly boost prices, he said. “For the balance of the summer, it’s going to be something of a struggle for Canadian gas.

http://www.bloomberg.com/news/articles/2016-06-21/warburg-among-private-equity-sideswiped-by-canada-gas-plunge

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