Fuel Systems Solutions Acquires Gas Equipment /Technology
Source: Fuel Systems Solutions, Inc. SANTA
ANA, Calif., Dec. 19, 2008
Fuel Systems Solutions Inc. Enters a
Definitive Agreement to Acquire Argentine Gaseous Fuels Equipment and
Technology Manufacturer Distribuidora Shopping S.A. for $22 Million
Expands global
manufacturing and distribution platform in growing alternative fuel
vehicle segment
Furthers multi-brand strategy creating a comprehensive
product range in the transportation market
Fuel Systems Solutions Inc. comprises
2 subsidiaries, industrial under IMPCO
Technologies and transportation under BRC.
Fuel Systems Solutions, Inc. (Nasdaq:FSYS) is pleased to announce that
its Italian operating subsidiary, MTM S.r.L., signed an agreement to
acquire Distribuidora Shopping S.A. (DS), a privately held manufacturer
of components and systems for the compressed natural gas (CNG) vehicle
market. The transaction, which is expected to close in January 2009, is
subject to customary closing conditions. The transaction value of $22
million is subject to adjustment for any closing indebtedness and the
selling shareholders will receive $10.0 million of Fuel Systems common
stock as part of the purchase consideration.
Based in Buenos Aires, DS was founded in 1992 and will continue to sell
its products under the well-known Tomasetto Achille brand. For its
fiscal year ending April 30, 2008, DS achieved consolidated revenues of
$33 million with export sales accounting for over 75% of consolidated
revenue.
"This acquisition furthers our strategic plan in many ways," said
Matthew Beale, president of Fuel Systems Solutions. "DS is an
outstanding fit with our transportation business. The transaction
reinforces our natural gas vehicle product line and expands our global
manufacturing and distribution footprint. With this acquisition, we
believe that our combined companies will offer a comprehensive product
range in the market for alternative fuel systems. In addition, DS's
similar business model and entrepreneurial culture will facilitate
integration and the activation of important operating efficiencies
across our international production platform. We are also fortunate to
welcome a top quality management team led by DS's founder, Carlo Evi.
Despite the current challenging economic environment, we continue to
take the steps necessary to position our business to capture the clear
medium term growth opportunity in our markets."
About Distribuidora Shopping S.A. (DS)
Distribuidora Shopping S.A. was founded in 1992 beginning as an
installation workshop of natural gas equipment for vehicles and
acquiring significant experience in handling this fuel. In 1996, DS
started to manufacture its own technology for CNG, thus giving origin
to the Tomasetto Achille brand. With over 10 years of CNG experience,
Tomasetto Achille is known for its quality and its own advanced
technology. DS operates in a 14,000 square meter production facility
with over 250 employees in Argentina.
About Fuel Systems Solutions
Fuel Systems Solutions, Inc. (Nasdaq:FSYS), a U.S.-based company,
through its U.S. and foreign subsidiaries, delivers alternative fuel
solutions for transportation and industrial applications that reduce
emissions, displace petroleum and generate savings, which is extremely
relevant today. The company is comprised of two subsidiaries,
industrial under IMPCO Technologies and transportation under BRC.
IMPCO designs, manufactures, markets and supplies advanced products and
systems to enable internal combustion engines to run on clean burning
gaseous fuels such as natural gas, propane and biogas. IMPCO is a
leader in the heavy duty, industrial, power generation and stationary
engines sectors. Headquartered in Santa Ana, California, IMPCO has
offices throughout Asia, Europe and North America.
BRC, through its subsidiaries, produces a complete range of systems for
converting vehicles to gaseous fuel to meet market requirements. BRC is
a leader in the light duty and automobile alternative fuel sectors and
has established alliances with several major automobile manufacturers
for OEM projects. Headquartered in Cherasco, Italy, BRC has offices
throughout Asia, Europe, Australia and South America. Additional
information is available at www.fuelsystemssolutions.com.
Janney Montgomery Scott initiates coverage on Fuel Systems Solutions
(Nasdaq: FSYS) with a Buy rating and a $48 fair value.December
19, 2008
Janney analyst says, "The company is well positioned to take advantage
of the drive to cleaner transportation alternatives. In Europe, propane
and natural gas vehicles grew 24% in 2008 with ten major OEMs producing
vehicles in conjunction with Fuel Systems. In the U.S., natural gas
vehicles have been hampered by the low price of unleaded. However, with
the 2008 run up to over $4.00 a gallon as a
reminder, we expect fleet operators to accelerate up their move to
natural gas vehicles. While some may be concerned about the current
economic outlook, we believe the desire to build out a green world will
win out (both FSYS and Landi Renzo, its largest competitor, raised
their guidance in the last two months). We believe Fuel Systems will
not need to raise additional capital. Investments by governments across
the globe are pushing all of Fuel Systems’ OEM customers to sell
greener products. This is right in Fuel Systems’ sweet spot – cleaner
and greener engines and vehicles."
Fuel Systems Solutions, Inc. (Fuel Systems) designs, manufactures and
supplies alternative fuel components and systems for use in the
transportation, industrial and power generation industries on a global
basis.
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Wisconsin Regulators told 2 utilities cut natural gas rates
leadertelegram.com 12/19/08
MADISON - Wisconsin regulators have told two utilities to cut their
natural gas rates and keep their electric rates unchanged for 2009.
Wisconsin Public Service Corp. had asked the Public Service Commission
to increase electric rates by $85 million and natural gas rates by
$15.7 million. Wisconsin Power and Light had asked the commission for a
$93 million increase in electric rates and a $1 million decrease in gas
rates.
The commission on Thursday told WPSC to cut gas rates by $3 million and
WPandL to cut gas rates by $4 million. It ordered both utilities to
keep their electric rates at current levels. WPSC customers will save
$7 a year; WPandL customers will save $15 annually.
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Alaska, Flint Hills
to jointly consider North Pole
refinery fate
OGJ.com 12/19/08
Alaska's state government and Flint Hill Resources will begin a joint
effort to position the company's refinery at North Pole for long-term
success, Gov. Sarah H. Palin announced on Dec. 10.
"The Flint Hills Resources Alaska refinery in North Pole has a
significantly positive economic impact throughout our state. The
refining operation is a major employer in Alaska and is vital to the
operations of Anchorage International Airport, the Port of Anchorage
and the Alaska Railroad," Palin said.
The move came following Flint Hills' announcement in May that it was
reviewing alternatives for the refinery due to financial challenges.
The plant is Alaska's largest oil refinery with a 240,000 bbl daily
processing capacity, according to information at the company's website.
About 60% of its products are destined for the aviation market, it
noted.
Palin said that the state and Flint Hills would evaluate options aimed
at improving the plant's ability to respond to volatile energy costs,
varying product demands and volatile refining margins as well as
facilitating upgrades to position the installation for long-term
success. She said that Flint Hills has agreed to provide data to
the state's Department of Natural Resources, which has assured that it
will remain confidential. The data will let the state agency analyze
refinery economics over 3-6 months, Palin said.
The Alaska Railroad and Flint Hills also will review potential
opportunities to structure refinery ownership and/or operations as part
of a corporation similar to, or part of, the Alaska Railroad, she
indicated.
The state will consider
impacts on other Alaska refineries in all case, she emphasized.
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Italy Sorgenia to regasify LNG offshore
Uchenna Izundu OGJ.com International Editor BARCELONA, Dec. 18
Private Italian energy firm Sorgenia SPA has awarded a contract to Torp
Technology AS to develop an offshore Italian receiving and
regasification terminal that could start operations by 2014. The
as-yet-undetermined import site would be off central or southern Italy.
Lars Odeskaug, chief executive of Torp Technology, told OGJ the
terminal would use its HiLoad concept, a floating, L-shaped terminal
that can dock with any LNG carrier to regasify the LNG offshore. No
modifications are required on the LNG vessels, which would be moored
via a single leg mooring system. Natural gas would then be piped to
shore. The terminal would use ambient air to heat the LNG.
The baseload terminal would have a peak sendout capacity of 1.4 bcfd
into Italy, and two units would feed into Italy's national grid system
via 20-km of 30 in. pipelines to shore. It would take 2-3 hours to
connect the carrier to the HiLoad terminal, and the ship would be
emptied in 2.5 days. He said the system is half the cost of onshore
terminals, but declined to give details. "HiLoad has been under
development since 2000; we have a long-term view on the business and a
solid capital base to work from. Companies spend typically about $1
billion for 1 bcfd of LNG regasification."
Engineering activities are under way and expected to complete in 2009.
The partners will apply to the Ministero Sviluppo Economico in
first-quarter 2009 and hope to receive authorization in 2011.
The first HiLoad is under construction in Haugesund, Norway, with
trials scheduled for spring.
Sorgenia, which bought 6 billion cu m of gas in 2008 from the Italian
market, plans to increase purchases to 8 billion cu m in 2012,
importing some as LNG. Sorgenia would use all the capacity in the
Italian HiLoad system and is talking to potential suppliers in Qatar,
Nigeria, and North Africa. A source told OGJ the company is willing to
work with partners to develop the project. However, it faces obstacles
because new technology takes time to accept. In addition, it said, the
LNG import permitting process in Italy is difficult.
Other import projects
Sorgenia also is pursuing an LNG project at Gioia Tauro in Calabria,
which will have a regasification capacity of 12 billion cu m/year. That
proposed terminal is due on stream in 2013, if approval by Italian
government authorities is granted in a timely manner (OGJ Online, May,
2, 2008). The company also is considering construction of an 8-12
billion cu m/year regasification terminal at Trinitapoli in southern
Italy.
The HiLoad import proposal is one of several other plans to import gas
into Italy, including terminals at Rovigo, Brindisi, and Trieste; the
Interconnect Greece-Italy pipeline; the Galsi pipeline; and the North
Adriatic terminal, which is expected to start operations next year. If
all these are built, Italy could have an oversupply of gas unless it
positions itself as a transit corridor to France and Germany (OGJ
Online, Dec.1, 2008).
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 Georgia Frontera Drills Ahead at Mtsare Khevi
Field
Frontera Resources Corp. 12/18/2008
Frontera has announced an update of its ongoing development drilling
program at the Mtsare Khevi Field within its Shallow Fields Production
Unit, Block 12, in the country of Georgia.
Progress has continued in the development of the Mtsare Khevi Field
since drilling operations commenced in August. Since the last
operations update in November, three wells have been drilled in
addition to the ten wells previously announced, each targeting the
Upper Pliocene age Akchagil formation as part of a rolling development
program.
All 13 wells drilled to date have reached total measured depths of
approximately 355 meters (1,170 feet) and each has encountered multiple
hydrocarbon bearing zones situated between 200 meters and 315 meters in
depth. Well log analysis continues to indicate approximately 20-30
meters of gross pay in each well.
Since the start of the development drilling campaign, ten wells have
been tested as oil wells with initial rates from single horizons as
high as 40 barrels per day of 21 degree to 28 degree API oil. In
addition, two wells located high on the field structure have tested gas
with initial rates of as much as 1.2 million cubic feet of gas per day.
The Akchagil formation of the Mtsare Khevi Field has three main
reservoirs for development: Horizons I, II and III. The wells drilled
to date are first being brought into production from Horizon I, the
deepest of these reservoirs, with each well undergoing planned
production and optimization tests over a 30-60 day period prior to
being placed on production. Daily production from the field is
currently approximately 130 barrels per day. Production is expected to
increase as a result of ongoing efforts that include optimization of
pump performance and the addition of perforations to currently
producing horizons. In addition, work plans are in progress to
co-mingle production from the shallower Horizons II and III, which is
expected to significantly enhance production. The company is also
examining the feasibility of adding gas development to the
commercialization agenda for the Mtsare Khevi Field, given the
discovery of gas. Rigs and equipment sourced from within Georgia are
being utilized to undertake the ongoing development program.
The Mtsare Khevi Field is located in the western portion of Block 12
with multiple objective reservoirs situated at depths between 200
meters and 1,100 meters. The field was discovered and partially
delineated with multiple exploration wells from 1989 to 1994, but never
developed and produced. After completing a field study in 2007 that
indicated this field potentially contains as much as 5 million barrels
of recoverable oil reserves, Frontera designed a plan to bring the
shallow reservoirs from the Akchagil formation into production.
Additional potential exists in deeper Miocene age sandstone horizons
that have previously tested and flowed oil. This potential is currently
under study and will become a focus of future operations to fully
develop the Mtsare Khevi Field.
Steve C. Nicandros, Chairman and Chief Executive Officer, commented,
"We have been delighted with the results from the continued efficient,
low-cost development progress that has been made to date in our Mtsare
Khevi Field operations. As this field continues to come to life,
results are supporting our belief in the substantial value contained
within this asset."
Frontera's Shallow Fields Production Unit is located in the central
portion of Block 12 and represents what the company believes to be an
extensive trend of low-cost, low-risk undeveloped oil and gas reserves.
Containing four discovered yet undeveloped or underdeveloped fields
that have additional exploration potential, objectives are considered
to be traditional, well-known reservoirs of Pliocene and Miocene age
that are situated at depths from 10 meters to 1,500 meters.
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Colorado East --
Nighthawk Energy Shale O/G production
Jolly Ranch Operational Update
The directors of Nighthawk Energy plc (“Nighthawk” or “the Company”)
(AIM: HAWK), the US focused hydrocarbon production and development
company, are pleased to announce an operational update in respect of
the Jolly Ranch Group project, located in Elbert, Lincoln and
Washington Counties, Colorado. Nighthawk holds a 50% interest in the
project and the operator, Running Foxes Petroleum Inc. (“Running
Foxes”), holds the remaining interest.
Highlights
Jolly 10-5 well encounters hydrocarbons in multiple formations and is
cased for production. Ten commercial wells drilled at Jolly Ranch –
100% success rate
Craig 15-32 well on three week production test from the Tebo shale bed
of the Cherokee formation presently producing 110 to 120 barrels of oil
per day
Four well drilling programme to test the prolific Codell and J Sand
formations commencing
The Jolly Ranch Group project is a major hydrocarbon production and
development venture which includes Jolly Ranch, currently the core
area, Middle Mist and Mustang Creek, to the north and west of Jolly
Ranch respectively. The current project area comprises 370,578 gross
acres (281,069 acres on a net basis).
Drilling results to date have established Jolly Ranch as a significant
new oil and natural gas field, particularly in the Atoka and Cherokee
shales. These shales are laterally extensive and are believed to be
continuous over the entire project area. In addition, several oil
bearing conventional zones have been penetrated during drilling,
including the Marmaton, Morrow, Spergen, St Louis and Codell formations.
Jolly 10-5 well
The Jolly 10-5 well, the tenth of the drilling programme, has reached
Target Depth and encountered several hydrocarbon-bearing formations,
both conventional and unconventional. The well has been cased for
production and will be put on production in January 2009.
Craig 15-32 well
The Craig 15-32 well commenced production at the start of December from
a four foot Tebo shale, a component of the Cherokee shales, the first
test applied to this formation on the project. The oil is 38 API
gravity, low paraffin sweet crude and has a -10 degree pour point and
no sulphur. The well commenced production at 50 to 60 bbls of oil per
day and has increased to 110 to 120 bbls of oil per day with less than
10% water.
As a result of this positive result from the Cherokee formation, two
previously drilled wells, the Craig 8-1 and Craig 4-4, have been
completed in the Tebo shale, are making oil and are presently being
swab tested. The wells will then be completed in the V and Excello
shales also within the Cherokee formation during the last two weeks of
December and then placed on full production in January 2009.
The Cherokee formation comprises four shales varying from three to six
feet thick for a net thickness of 15 to 22 feet. These shales contain
40% to 80% quartz and carbonates, which, based on detailed analysis,
are heavily fractured and saturated with hydrocarbons. The Tebo B,
Tebo, V and Excello shales all have the same reservoir features. In
addition, Omnilabs, a division of Weatherford International, has
indicated in detailed reports, that both the Atoka and Cherokee shales
in the project area are generating and expelling hydrocarbons and
showing characteristics typical of a successful shale play.
Codell and J Sand drilling programme
Black Gold Inc., a local drilling company, is commencing a four well
drilling programme to test the shallower Codell and J Sand formations,
both prolific producing zones in the region. Three wells, the Jolly
9C-1, Jolly 16C-1 and Jolly 7-1 will test the Codell formation and the
Fischer 14-20 will test the J Sand formation in the Middle Mist Project.
These formations are of Cretaceous age and are located at depths of
between 3,000 and 4,000 feet. The J Sand is a prolific producer in the
central part of the Denver Basin.
David Racher B.Sc (Hons) Geology, who is a consultant to Nighthawk and
has over 37 years of experience in the hydrocarbons industry and
previously managed the Lasmo plc onshore US portfolio in Kansas,
Louisiana, South Dakota, Texas and Wyoming, has approved the technical
information contained in this announcement.
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More West Texas
Overthrust exploration set
By OGJ editors HOUSTON, Dec. 11
Cantex Energy Corp., San Antonio, in partnership with Big Canyon
Energy, signed an exploration and development agreement with Slawson
Exploration Inc., Wichita, covering the Big Canyon prospect in Terrell
County, Tex. Slawson Exploration will earn a 45% working interest
in operating the project, which covers an initial 17,151 acres of
prospective natural gas lease held by Big Canyon Energy and 7,680 acres
of lease option. Beyond the lease and option coverage, the total area
of mutual interest between the parties totals 89,929 acres.
Cantex Energy has the right to participate throughout the area of
mutual interest based on Cantex's payment of future pro rata drilling
and any further lease-option costs. Big Canyon Energy et al. retains a
39.375% working interest, with Cantex Energy holding the remaining
15.625% working interest.
The acreage is in the West
Texas Overthrust area of the Val Verde basin.
Cantex Energy earned the right to participate in the Big
Canyon prospect by funding and deploying a seismic survey in 2004-05.
Interpretation suggests the presence of at least five large imbricate
fault closures that cover 10 sq miles or more, highly similar to the
character of Pinon field in Pecos County 40 miles northwest of and on
trend with the prospect (see cross sections, OGJ, Nov. 24, 2008, pp.
34-35).
The Big Canyon prospect is further set up by the presence of
potentially commercial quantities of gas as close as 5 miles from the
leasehold, and in the AMI, a discovery well drilled in 2004 by
SandRidge Energy Inc.'s predecessor Riata Energy Inc., that flowed
almost 2 MMcfd on a 16/64-in. choke. This "show" is believed to have
occurred in the objective thrusted Pinon field-type Caballos reservoirs.
Pending working interest decisions and actions, the companies expect to
participate in exploratory wells on two of the five imbricate closures
in 2009.
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Bolivia
to sign natgas deal with Paraguay, Uruguay
Tue Dec 16, 2008 By Eduardo Garcia LA PAZ, Reuters
Bolivia will sign on Tuesday agreements to export natural gas and
liquefied petroleum gas to Paraguay and Uruguay, an energy ministry
official told Reuters. The official did not provide details of
timing or quantities, but said that high ranking officials from Uruguay
and Paraguay will meet on Tuesday afternoon in La Paz with Bolivian
Energy Minister Saul Avalos to sign the deals.
Although Bolivia has been struggling to meet the demand for natural gas
of neighboring Argentina and Brazil, the official said the Andean
country is confident hydrocarbons output will increase significantly
next year. "We'll produce more through increasing output in some
existing fields, but also some new ones," the energy official told
Reuters in a telephone interview.
Bolivia, the poorest country in South America, produces about 40
million cubic meters of natural gas per day, exporting most of it to
Brazil and Argentina. Both Paraguay and Uruguay are rich in
hydro-electric power but import all their fossil fuels.
Leftist President Evo Morales nationalized Bolivia's energy industry in
May 2006, seeking to boost state revenue from the country's vast
natural gas reserves, the second largest in the region after
Venezuela's. After months of negotiations, all the energy companies
with investments in Bolivia agreed to pay more taxes and keep operating
in the poor South American country under the government's new rules in
late 2006.
But recently the government has complained that foreign energy
companies are not investing to increase energy output in the country
and has pledged to invest up to $1.5 billion next year in new, as well
as existing fields through state-run energy company YPFB.
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Energy
Co.s cuts capital
spending budgets -- again
by David Page The Journal Record December 18, 2008
OKLAHOMA CITY – SandRidge Energy has reduced its 2009 capital
expenditure budget for the second time.
The natural gas and oil exploration and production company reduced
planned capital expenditures for 2009 to $500 million from $1 billion.
The most recent reduction came after the Oklahoma City-based company
cut planned capital spending on Oct. 2 to $1 billion from $2 billion in
an earlier guidance. The $500 million in capital spending allocates
$410 million for exploration and production, down from $1.8 billion in
2008. SandRidge reduced the capital spending budget because of weak
commodity prices and the general economic environment, said Tom Ward,
CEO.
Oil prices have declined sharply after peaking at $147.27 a barrel in
July on the New York Mercantile Exchange. Oil settled on Wednesday at
$40.06 on the Nymex. In New York Stock Exchange trading Wednesday,
SandRidge closed down 18 cents, or 2.7 percent, at $6.40. The 52-week
range is $69.41 and $4.85.
Other major Oklahoma energy companies also reduced 2009 capital
spending plans.
In late November, Chesapeake Energy of Oklahoma City reduced its
drilling capital expenditure budget for 2009 and 2010 by a combined
$2.9 billion, or 31 percent.
GMX Resources of Oklahoma City reduced its 2009 capital expenditure
budget 45 percent, citing credit market woes and lower natural gas
prices. GMX reduced planned capital spending for 2009 to $220 million
from a previously announced $400 million.
Devon Energy Corp. on Tuesday said it plans to disclose its 2009
capital expenditures budget in early 2009 in conjunction with the
release of 2008 results. “With the markets experiencing so much
volatility, we have chosen to see how conditions continue to evolve
before we announce our 2009 capital plans,” said John Richels, Devon
president. “Although we are not yet ready to announce our 2009 budget,
we intend to roughly match our capital expenditures to cash flow. This
will result in decreased activity as compared to 2008.”
Even with the reduced capital spending, SandRidge expects production
for 2009 to increase 10 percent from 2008. Projected production for
2009 totals 110 billion cubic feet equivalent. “We are very
pleased that even with a reduction of our capex to $500 million, we can
grow our production by 10 percent,” Ward said. The reduced budget
allows SandRidge to operate within its cash resources. SandRidge
operated 47 drilling rigs in September but plans to operate only 12
rigs by the end of 2008.
SandRidge also adjusted plans to sell assets.
In July, SandRidge offered to sell its east Texas and north Louisiana
assets. Several bids were received for the east Texas properties that
would have been accepted if there had been more certainty of available
capital. SandRidge now plans to retain and develop its Cotton
Valley assets in east Texas while it is negotiating an agreement to
sell its undeveloped deep rights in east Texas.
SandRidge also announced that it is on schedule to open its Century
Plant during the second quarter of 2010. In June, SandRidge announced
an agreement with Occidental Petroleum Corp. to build and operate the
carbon dioxide plant in Pecos County, Texas, along with associated
pipelines.
Occidental will pay $1.1 billion for the construction of the Century
Plant, pipelines and additional pipelines not associated with the plant.
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