Baker & McKenzie LLP Advised Repsol YPF, S.A. and its Subsidiary Repsol E&P USA, INC. in Acquisition and Joint Venture in Alaska
Deal Announcement
5 March 2011
Chicago, USA, March 5, 2011 – Baker & McKenzie advised Repsol YPF, S.A. and its subsidiary Repsol E&P USA Inc. ("Repsol") in connection with an acquisition and an exploration joint venture entered into with 70 & 148 LLC (“70”) and GMT Exploration LLC (“GMT”), in each case, affiliates of Armstrong Oil & Gas Inc. Under this transaction Repsol agrees to a broad-reaching exploration and development program on leasehold held by 70 and GMT on the North Slope of Alaska, with Repsol and 70 collaborating on all aspects of the program, Repsol's working interest after this transaction will be 70%.
The blocks are located close to large producing fields and cover an area of 2,000 square kilometers. Repsol has agreed to carry out the investment necessary to explore and evaluate the economic viability of the resources contained in these blocks.
The estimated minimum exposure of this investment for Repsol, including amounts to be paid to its partners and the cost of exploration to be carried out over several years, amounts to $768 million. The start of exploratory work is scheduled for next winter.
Repsol sought advice from José A. Morán, partner of Baker & McKenzie LLP’s Project Finance group in Chicago; Ben H. Welmaker, Jr., partner in the Oil & Gas practice group in Houston; William D. Davis II, partner in the Corporate & Securities practice in Houston; and Brian F. Burke, a partner in the Antitrust practice group in Washington, D.C. Associate John J. Fedele in Washington DC also advised on certain Antitrust-law aspects.
Commenting on this project, Baker & McKenzie partner José A. Morán said: “We are delighted to have worked with Repsol on this high-profile strategic acquisition and joint venture. We look forward to supporting Repsol as it further expands its business in the United States, where Repsol has already successfully explored for and developed hydrocarbons production in the Gulf of Mexico."
Repsol is the leader oil and gas company in Spain and Argentina, operates in more than 30 countries, is one of the 10 major private companies in the world and the largest private energy company in Latin America in terms of assets. Its business activity entails all the different stages of the oil industry, namely exploration, production, refining and marketing. Repsol has significantly boosted its onshore and offshore exploration activities in the last five years, resulting in some of the world’s largest oil and gas discoveries. Repsol’s upstream unit in 2010 posted a record reserve replacement ratio of 131% and incorporated resources that have significantly boosted the company’s future prospects.