Last week, Realm Energy announced a Farmount Agreement struck with ConocoPhillips for possible shale oil exploration in France.
Realm Energy has applied for exploration licenses for 1.65 million acres in Paris Basin, France. The applications consist of nine separate exploration permits inclusive of all rights for exploration of oil and gas in all formations underlying the land. Realm Energy struck a farmout agreement with ConocoPhillips to conduct joint exploration activities on selected exploration licenses which may be awarded as a result of these applications. Realm Energy will be the designated operator for the initial exploration phase, while ConocoPhillips has the option to operate thereafter.
On July 19th, there was more news regarding ConocoPhillips and it’s new objective to discover shale gas.
Houston, USA – ConocoPhillips no longer will rank among the major international oil companies after it spins off its refining business next year, but it will be the largest independent oil and gas player in the U.S. by a wide margin.
And its entry into that group will make waves.
Most notably, the move could put more pressure on smaller players to bulk up by acquiring assets or finding merger partners, analysts said.
That may be especially true of small and midsize companies in North America that have positions in highly sought-after shale gas formations but lack the capital and scale to develop them.
That scenario emerged Thursday — the same day ConocoPhillips announced its plans – when BHP Billiton Petroleum, a U.S.-based oil and natural gas arm of the Australian mining giant, said it will acquire Houston’s Petrohawk Energy Corp. for $12.1 billion.
The deal may not be the last of its kind.
“This is feeling to me like we’re getting to the consolidation phase,” said Andrew Coleman, a managing director of oil and gas exploration and production research at Raymond James in Houston.
That trend may have begun before ConocoPhillips announced plans to create two separate publicly traded companies out of its refining and exploration-production units. The separation is expected to be complete by the second quarter of 2012.
But the Houston oil giant’s move into the category of U.S. oil and gas independents underscores how companies in that group are only getting larger, even as oil majors like Chevron, Shell and BP are trimming down.
Houston’s Apache Corp., for instance, spent $11 billion last year acquiring Mariner Energy and assets from BP and Devon Energy Corp.
And Marathon Oil Corp., which completed a spinoff of its refining business last month and relaunched as an independent, recently agreed to pay $3.5 billion for a swath of acreage in South Texas’ Eagle Ford Shale.
Major oil companies including Exxon Mobil Corp. and Shell, along with state-owned oil giants like Norway’s Statoil, have also been writing big checks to buy small companies or acreage stakes in U.S. shale formations – thought to hold 100 years’ worth of natural gas as well as large quantities of oil and valuable natural gas liquids.
More than $120 billion has been spent on shale deals in the last three years, said Bob Fryklund, a vice president with IHS-Cambridge, who sees still more ahead.
“I don’t think we are done, as size is everything in shale if you are a long-term player,” he said.
The deals have greatly boosted the cost of entry into U.S. shales and other emerging oil and gas areas and driven up the cost of services, making it harder for little guys to compete.
“The North American exploration and production business is in the very early stages of evolving from a highly fragmented business comprised of a myriad of mid, small and private E&P companies” to one increasingly run by “world-class energy concerns,” said Bill Herbert, a managing director at Houston investment bank Simmons & Company International .
Still, convincing investors that a behemoth like Conoco-Phillips is a better bet than smaller independents with more aggressive growth plans may be a tall order, said Fadel Gheit, industry analyst with Oppenheimer & Co.
“Size is no longer really a prerequisite for investors,” he said. They just want a stock that performs well, he added.




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