Caelus Confirms Large-Scale Discovery on the North Slope of Alaska

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For Immediate Release:

Caelus Confirms Large-Scale Discovery on the North Slope of Alaska

New find could deliver significant oil production, jobs and state revenue

(Anchorage, AK – October 4, 2016) Caelus Energy Alaska, LLC announced Tuesday that its subsidiary, Caelus Energy Alaska Smith Bay LLC, has made a significant light oil discovery on its Smith Bay state leases on the North Slope of Alaska.

Based on two wells drilled in early 2016, as well as 126 square miles of existing 3D seismic, Caelus estimates the oil in place under the current leasehold to be 6 billion barrels. Furthermore, the Smith Bay fan complex may contain upwards of 10 billion barrels of oil in place when the adjoining acreage is included. Due to the favorable fluids contained in the reservoir, Caelus expects to achieve recovery factors in the range of 30-40%. Additional drilling and seismic should improve estimates of oil in place via delineation of undrilled fan lobes and channel complexes imaged on the original 3D seismic.

Caelus CEO Jim Musselman said: “This discovery could be really exciting for the State of Alaska. It has the size and scale to play a meaningful role in sustaining the Alaskan oil business over the next three or four decades. Fiscal stability going forward is critical for a project of this magnitude. Without the state tax credit programs, none of this would’ve happened, and I’m not sure Caelus would’ve come to explore in Alaska. We’re proof that the credit programs work.”

The Smith Bay development has the potential to provide 200,000 barrels per day of light, highly mobile oil, which would both increase Trans-Alaska Pipeline System (TAPS) throughput volumes and reduce the average viscosity of oil in the pipeline, extending its long term viability.

The two exploration wells, Caelus-Tulimaniq #1 (“CT-1”) and step-out Caelus-Tulimaniq #2 (“CT-2”), targeted a large Brookian submarine fan complex spanning over 300 square miles. The fan was successfully drilled and logged in both wells, encountering an extension of the accumulation 5.25 miles northwest of the CT-1 discovery at the CT-2 location. Gross hydrocarbon columns in excess of 1,000 feet were encountered in each well; with CT-1 and CT-2 logging 183 and 223 feet of net pay, respectively. Neither well was flow tested due to seasonal time constraints, but extensive sidewall coring and subsequent lab analyses confirm the presence of reservoir-quality sandstones containing light oil ranging from 40-45 degree API gravity.

Caelus is currently planning an appraisal, program which will include drilling an additional appraisal well and acquiring a new 3D seismic survey over outboard acreage. The appraisal program will enable Caelus to confirm reservoir continuity, optimize future drilling locations, and ultimately increase reserves. In parallel, Caelus is studying and planning the facilities’ build-out which will process and transport the oil to TAPS.

About Caelus Energy Alaska
Caelus Energy Alaska, LLC (“Caelus”), is a privately-held independent exploration and production company headquartered in Dallas with offices and operations in Alaska. Caelus is Operator of the Oooguruk Unit on Alaska’s North Slope, and also holds a large portfolio of exploration acreage across the ANS region.

About Caelus Energy Alaska Smith Bay
Caelus Energy Alaska Smith Bay is a 75 percent working interest owner in the State of Alaska oil leases at Smith Bay. Caelus indirectly owns 100% of the equity in Caelus Energy Alaska Smith Bay LLC, with Caelus Energy Alaska O3 LLC, a subsidiary of Caelus, indirectly owning 42% of the equity in Caelus Energy Smith Bay.

Caelus’ partners in Smith Bay include NordAq Energy, Inc. (17.5% working interest) and L71 Resources, LLC (7.5% working interest).

MEDIA CONTACT

Dani Myren, Media Support
Dani@msialaska.com , (907) 569-7070 or Cell (907) 244-0759

Casey Sullivan, Public Affairs, Caelus Energy Alaska, LLC
Cell 907-230-9614, casey.sullivan@caelusenergy.com

 

Caelus Energy Alaska Acquires Majority Ownership in Smith Bay Oil Leases

Caelus Energy Alaska Acquires Majority Ownership in Smith Bay Oil Leases

‘Tulimaniq’ represents highly prospective play – exploration drilling planned for this winter

(June 17, 2015, Anchorage, AK) Caelus Energy Alaska, LLC (‘Caelus’) is pleased to announce the acquisition of a 75 percent working-interest ownership in NordAq Energy Inc.’s Tulimaniq leases located in Smith Bay on the North Slope of Alaska.  Smith Bay is approximately 150 miles west of Prudhoe Bay and is well documented for its extensive hydrocarbon potential.  Slightly more than 117,000 acres (gross), the 26 leases were assigned to Caelus Energy Alaska Smith Bay, LLC a wholly owned subsidiary of Caelus.  As a result, Caelus becomes the operator and will lead the exploration drilling program this winter season.

The agreement, set to be finalized June 18, 2015, follows on the heels of other recent announcements from Caelus including the sanction of its onshore oil development project Nuna, and the acquisition of 323,000 acres in the State of Alaska’s fall lease sale.

Caelus President and CEO James Musselman commented on Caelus’ newest addition to its Alaska portfolio: “We’re extremely excited. The NordAq Energy team has done a great job of defining the geologic potential in Smith Bay.  Our team is ready to take the helm and get to work on exploring and appraising the Tulimaniq play.  What we see in this region has us all pretty motivated.”

“Our winter exploration operation planning is underway. Caelus looks forward to continuing our strong working relationships with the local communities of the North Slope, the North Slope Borough, as well as our state and federal regulatory partners to ensure a smooth transition. We’re also extremely fortunate to be supported in our efforts by North Slope veterans Doyon Drilling and Cruz Construction. The winter exploration operation will require upwards of 400 personnel to drill 1-2 exploration/appraisal wells – it’s a large-scale program” Musselman said,

“Alaska’s current oil fiscal system, including its exploration incentive credits, attracted Caelus to Alaska in 2013 and has been a key component in the company’s recent business decisions,” Musselman emphasized.  “We have a lot of work to do in Alaska. Having a stable policy that encourages finding and producing more oil for Alaska, including credits, will be pivotal in future investments decisions.“

NordAq Energy chief executive officer Paul L. Devine said his company is encouraged by Caelus’ commitment to Alaska and the experience they bring to the project.  “NordAq is very grateful to have a partner of their caliber to operate on our behalf, and commit the energy and capital to a significant play like Tulimaniq.”

“We are also very grateful to CIRI Energy, NordAq’s secured lender, for the role it played in facilitating this important transaction.”  Devine said

 About Caelus Energy Alaska, LLC

Caelus Energy Alaska, LLC (‘Caelus’) is a privately held independent exploration and production company that currently operates the Oooguruk unit on the North Slope of Alaska. The company specializes in exploration, development, and production of oil and gas. Caelus is currently focused on the pursuit, identification, and development of strategic opportunities across Alaska. Caelus prides itself on agility, state-of-the-art strategies and a unique approach to exploration and project development.

Headquartered in Dallas, with an office and operations in Alaska, the team at Caelus has earned a reputation of integrity and innovation, and is a leader in developing world-class operations.

About NordAq Energy Inc.

NordAq Energy Inc. (NordAq) is an independent oil and gas company based in Anchorage, Alaska. The company was established by the present Board and management team in 2008 to explore, appraise and develop hydrocarbon reserves in the State of Alaska. Its portfolio includes prospects and resources in the Kenai Peninsula on the Cook Inlet and Smith Bay on the North Slope.out Nordaq Energy Inc.

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Media Inquiries:

Casey Sullivan,

Caelus Energy Alaska, LLC

907-343-2101

www.caelusenergy.com

 

Caelus Energy Alaska and Apollo Global Management Announce Partnership and Acquisition Of Pioneer Alaska

Dallas, Texas, April 15, 2014

Caelus Energy Alaska LLC (“Caelus”) and affiliates of Apollo Global Management, LLC (NYSE:APO) (together with its consolidated subsidiaries, “Apollo”) have formed a strategic partnership to invest in oil and gas properties in Alaska. Today Caelus has closed its first transaction, the acquisition of Pioneer Natural Resources’ Alaskan oil and gas business, for $300 million in cash, subject to adjustments, plus other consideration. Caelus, headquartered in Dallas, TX, has an executive management team led by Chief Executive Officer James C. Musselman and a technical team led by Chief Technical Officer Kenny Goh. Among other things, Mr. Musselman previously led Kosmos Energy, which discovered the 1 billion-plus barrel Jubilee field off the West African coast, and Triton Energy, which was acquired by Amerada Hess for $3.2 billion. Apollo funds have the opportunity to invest up to $1 billion in Caelus (in the aggregate) to develop the company’s existing assets and to pursue acquisitions or other additional investments.

Mr. Musselman said, “We are excited to be working with Apollo to build a world-class, Alaska- focused independent E&P business, beginning with the acquisition Pioneer’s Alaskan oil and gas operations. The current Pioneer Alaska team has the experience to grow and develop the tremendous resource potential they have identified. We believe Alaska offers an enormous geologic opportunity, coupled with a favorable regulatory environment for independent oil and gas companies.”

Greg Beard, Global Head of Natural Resources and Senior Partner at Apollo, said, “We look forward to working with Jim and the rest of his team as we seek attractive investment opportunities in resource-rich Alaska.” Geoffrey Strong, Partner at Apollo, added, “We are confident that Caelus can efficiently develop the existing reserves it is acquiring while building a first-rate oil and gas company through add-on acquisitions and new discoveries. We are delighted to have the opportunity to invest alongside Jim and his team.”

About Caelus Energy Alaska LLC

Caelus Energy Alaska LLC is an Alaska-focused energy group based in Dallas, Texas. Caelus is backed by investment funds affiliated with Apollo Global Management and the Caelus management team.

About Apollo Global Management, LLC

Apollo is a leading global alternative investment manager with offices in New York, Los Angeles, Houston, Toronto, London, Frankfurt, Luxembourg, Singapore, Mumbai and Hong Kong. Apollo had assets under management of approximately $161 billion as of December 31, 2013 in private equity, credit and real estate funds invested across a core group of nine industries where Apollo has considerable knowledge and resources. For more information about Apollo, please visit www.agm.com.

Forward Looking Statements

This press release may contain forward looking statements with respect to Apollo that are within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, discussions related to Apollo’s expectations regarding the performance of its business, its liquidity and capital resources and the other non-historical statements contained herein. These forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. When used in this press release, the words “believe,” “anticipate,” “estimate,” “expect,” “intend” and similar expressions are intended to identify forward-looking statements. Although management believes that the expectations reflected in these forward-looking statements are reasonable, it can give no assurance that these expectations will prove to have been correct. These statements are subject to certain risks, uncertainties and assumptions. We believe these factors include but are not limited to those described under the section entitled “Risk Factors” in Apollo’s Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 3, 2014, as such factors may be updated from time to time in Apollo’s periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this press release and in other SEC filings. We undertake no obligation to publicly update or review any forward- looking statements, whether as a result of new information, future developments or otherwise, except as required by applicable law. This press release does not constitute an offer of any Apollo fund.

Contacts

For Caelus:
Jennifer Galliher
214-368-6050
jgalliher@caelusenergy.com

For investor inquiries regarding Apollo:
Gary M. Stein
Head of Corporate Communications
212-822-0467
gstein@apollolp.com

Noah Gunn
Investor Relations Manager
212-822-0540
ngunn@apollolp.com

For media inquiries regarding Apollo:
Charles Zehren
Rubenstein Associates, Inc.
212-843-8590
czehren@rubenstein.com

Pioneer Natural Resources Announces Sale of Alaska Subsidiary to Caelus Energy Alaska for $550 Million

Dallas, Texas, October 25, 2013 – Pioneer Natural Resources Company (NYSE:PXD) (“Pioneer” or “the Company”) today announced that the Company has entered into a purchase and sale agreement with Caelus Energy Alaska LLC to sell 100% of the equity in Pioneer’s subsidiary, Pioneer Natural Resources Alaska, Inc., for cash proceeds of $550 million, subject to normal closing adjustments. The transaction has an effective date of October 1, 2013 and is expected to close by the end of the year.

Scott D. Sheffield, Chairman and CEO, stated, “The sale of our Alaska asset will allow us to strategically redeploy capital to our core, oil-related Spraberry/Wolfcamp asset. We are currently delineating multiple prospective horizontal targets (Wolfcamp, Jo Mill and Spraberry shales) across more than 600,000 gross acres in the northern part of this asset. We believe this area holds recoverable resource potential of more than three billion barrels oil equivalent. The current drilling program for the northern Spraberry/Wolfcamp calls for an increase from five horizontal rigs during the second half of 2013 to eight horizontal rigs in 2014. With the redeployment of capital from the Alaska asset sale to the northern Spraberry/Wolfcamp, we plan to increase the horizontal rig count to ten rigs in 2014 and will ramp up this rig count faster than originally anticipated thereafter.”

Mr. Sheffield continued, “I want to personally thank all of our Alaska employees for their hard work and dedication that contributed to our success in becoming the first independent E&P company to operate on the North Slope. I am pleased that Caelus plans to build on this success.”

The sale of Pioneer’s Alaska subsidiary is expected to result in a noncash loss of approximately $350 million which will be recorded in the fourth quarter of 2013. The financial and operating results related to Pioneer’s Alaska activities will be reflected as discontinued operations for the quarter ending December 31, 2013, and for all prior periods that will be presented in the Company’s December 31, 2013 Form 10- K. Net production from the Alaska subsidiary averaged approximately 4,000 barrels oil equivalent per day over the first nine months of 2013.

James C. Musselman, President and CEO of Caelus Energy Alaska LLC, stated, “We are excited to enter the North Slope through the purchase of Pioneer’s assets. The current Pioneer Alaska team is very impressive and has the experience to develop the significant resource potential they have identified and help us grow the business in the future. We are attracted to Alaska because of the enormous geologic opportunity as well as the incentives the state has put in place to encourage energy investment by independent oil and gas companies.”

Pioneer Natural Resources Company is a large independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations in the United States. For more information, visit Pioneer’s website at www.pxd.com.

Caelus Energy LLC is a privately held diversified international energy group focused on the identification, pursuit and development of unique opportunities across the energy sector. The company is involved in a wide range of energy projects including conventional and unconventional exploration and production projects. Headquartered in Dallas, Texas, Caelus Energy has an experienced management and technical team with domestic and international experience. Prior to establishing Caelus in 2011, Mr. Musselman was Chairman and CEO of Kosmos Energy and President and CEO of Triton Energy, both

independent international oil and gas exploration companies. For more information, visit Caelus Energy’s website at www.caelusenergy.com.

Except for historical information contained herein, the statements in this news release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business prospects of Pioneer are subject to a number of risks and uncertainties that may cause Pioneer’s actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of commodity prices, product supply and demand, competition, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, the ability to obtain approvals from third parties and negotiate agreements with third parties on mutually acceptable terms, litigation, the costs and results of drilling and operations, availability of equipment, services, resources and personnel required to complete the Company’s operating activities, access to and availability of transportation, processing, fractionation and refining facilities, Pioneer’s ability to replace reserves, implement its business plans or complete its development activities as scheduled, access to and cost of capital, the financial strength of counterparties to Pioneer’s credit facility and derivative contracts and the purchasers of Pioneer’s oil, NGL and gas production, uncertainties about estimates of reserves and resource potential and the ability to add proved reserves in the future, the assumptions underlying production forecasts, quality of technical data, environmental and weather risks, including the possible impacts of climate change, the risks associated with the ownership and operation of an industrial sand mining business and acts of war or terrorism. These and other risks are described in Pioneer’s 10-K and 10-Q Reports and other filings with the U.S. Securities and Exchange Commission (SEC). In addition, Pioneer may be subject to currently unforeseen risks that may have a materially adverse impact on it. Pioneer undertakes no duty to publicly update these statements except as required by law.

Cautionary Note to U.S. Investors –The SEC prohibits oil and gas companies, in their filings with the SEC, from disclosing estimates of oil or gas resources other than “reserves,” as that term is defined by the SEC. In this news release, Pioneer includes estimates of quantities of oil and gas using certain terms, such as “resource potential,” “estimated ultimate recovery,” “EUR” or other descriptions of volumes of reserves, which terms include quantities of oil and gas that may not meet the SEC’s definitions of proved, probable and possible reserves, and which the SEC’s guidelines strictly prohibit Pioneer from including in filings with the SEC. These estimates are by their nature more speculative than estimates of proved reserves and accordingly are subject to substantially greater risk of being recovered by Pioneer. U.S. investors are urged to consider closely the disclosures in the Company’s periodic filings with the SEC. Such filings are available from the Company at 5205 N. O’Connor Blvd., Suite 200, Irving, Texas 75039, Attention: Investor Relations, and the Company’s website at www.pxd.com. These filings also can be obtained from the SEC by calling 1-800-SEC-0330.

Pioneer Natural Resources Contacts:

Investors

Frank Hopkins – 972-969-4065
Josh Jones – 972-969-5822
Mike Bandy – 972-969-4513

Media and Public Affairs

Susan Spratlen – 972-969-4018
Suzanne Hicks – 972-969-4020