BUSINESS/MERGERS/ACQUISITIONS

Malaysia’s first TLP ready for Shell’s Malikai field

Shell and the Technip-MMHE JV have concluded onshore fabrication and commissioning of the Malikai deepwater platform. The TLP will make a 1,400-km journey from Pasir Gudang, Malaysia, to Malikai field, 100 km offshore Sabah, where it will be installed in water depths of 500 m. While it is a deepwater project, after the installation has been concluded, Malikai will produce via the Kebabangan (KBB) shallow-water platform, 50 km away. The TLP is designed to partially process the gross production before evacuation to KBB, where it will be processed further before being sent onshore. The Malikai project is a JV between Shell (35%, operator), ConocoPhillips Sabah (35%) and PETRONAS Carigali (30%). 

BP sanctions fast-track development of Egypt’s Atoll discovery

BP, together with the Egyptian Natural Gas Holding Company, has sanctioned development of the Atoll Phase One project, an early production scheme (EPS) that will bring up to 300 MMscfd, gross, of gas to the Egyptian domestic gas market, starting in first-half 2018. BP has a 100% interest in the concession. The company recently completed multiple transportation and processing agreements accelerating the development of Atoll field, which contains an estimated 1.5 Tcfg and 31 MMbbl of condensate. Onshore processing will be handled by the existing West Harbour gas processing facilities. BP announced the Atoll discovery in March 2015. Atoll Phase One will involve recompleting the existing exploration well as a producer, the drilling of two additional wells, and the installation of the necessary tie-ins and facilities required to produce from the field. The wells will be drilled by the DS-6 rig, which is expected to start drilling in August. Success of the Atoll Phase One EPS could lead to further investment in the Atoll Phase Two full-field development.

Southwestern Energy sells W.Va. acreage to Antero

Southwestern Energy entered into a definitive agreement with Antero Resources to sell approximately 55,000 net acres in West Virginia for $450 million. The properties are in Doddridge, Harrison, Marion, Monongalia, Pleasants, Ritchie, Tyler and Wetzel Counties, and are producing from the Marcellus shale. Net production from this acreage is approximately 14 MMcfed, primarily from non-operated wells, and proved reserves on this acreage were 11 Bcfe, as of Dec. 31, 2015. The transaction is expected to close in the third quarter.

Penn West sells Saskatchewan assets to Teine Energy

Penn West Petroleum has entered a definitive agreement for the sale of all of its Saskatchewan assets, including its Dodsland Viking area, for a cash consideration of C$975 million. The Saskatchewan assets are split almost evenly between medium and heavy oil properties in the West and the Dodsland light-oil properties in the East. The purchaser is Teine Energy Ltd., a Viking producer backed by the Canada Pension Plan Investment Board. The transaction is expected to close in the second quarter.

Marathon in $888-million STACK deal

Marathon Oil will acquire PayRock Energy Holdings, LLC, a portfolio company of EnCap Investments, for $888 million. PayRock has approximately 61,000 net surface acres and current production of 9,000 net boed in the oil window of the Anadarko basin STACK play in Oklahoma. The transaction is expected to close in the third quarter, funded with cash on hand.

QEP Resources acquires Permian basin properties

QEP Resources, Inc.’s wholly owned subsidiary, QEP Energy Company, has entered into a definitive agreement with certain individuals and entities to acquire oil and gas properties in the Permian basin for an aggregate purchase price of approximately $600 million. The acquisition properties, which are located in Martin County, Texas, will further broaden the company’s E&P footprint in the core of the northern Midland basin.

BP, Det norske to create new independent

BP and Det norske oljeselskap are to create Aker BP ASA, an independent oil and gas company combining both companies’ Norwegian E&P operations. Aker BP will be independently operated and will be owned jointly by Det norske shareholder Aker (40%), other Det norske shareholders (30%) and BP (30%). The transaction is expected to close by year-end.

PRODUCTION

Pre-salt production exceeds 1 MMbopd, Petrobras says

Pre-salt output now accounts for 40% of the oil produced from facilities operated by Petrobras in Brazil. On May 8, oil production from facilities operated by Petrobras in the Brazilian pre-salt layer broke a new record, surpassing 1 MMbpd. Of this total, more than 70% of the volume produced corresponded to Petrobras’ share. As a result, the pre-salt fields in the Santos and Campos basins now account for around 40% of oil production operated by Petrobras in Brazil. This was achieved less than 10 years after the discovery of these deposits, in 2006, and less than 2 years after production of 500,000 bopd was achieved, in July 2014. The new record was obtained using just 52 production wells.

Woodside approves $1.9-billion Greater Enfield Project

Woodside and Mitsui E&P Australia have approved the $1.9-billion Greater Enfield Project for development. Located 60 km off Exmouth in Western Australia, within Commonwealth waters, the project will develop the Laverda Canyon, Norton over Laverda (WA-59-L) and Cimatti (WA-28-L) oil accumulations. These reserves will be produced, via a 31-km subsea tie-back, to the Ngujima-Yin FPSO at Vincent oil field. The Greater Enfield Project requires development of six subsea production wells and six water injection wells. Production will be supported by subsea multi-phase booster pumps in the Laverda area and gas lift in the Cimatti area. The project is targeting development of gross (100%) 2P reserves of 69 MMboe. Total investment for the project is approximately $1.9 billion, with first oil expected in mid-2019. The Greater Enfield Project is a JV between Woodside Energy (operator, 60%) and Mitsui E&P Australia Pty (40%).

EXPLORATION/DISCOVERIES

BP, Rosneft to target Siberia with new JV

Rosneft and BP will create a new JV, Yermak Neftegaz LLC, to conduct exploration in Russia. The JV will focus on onshore exploration of two Areas of Mutual Interest (AMIs) in the West Siberian and Yenisey-Khatanga basins, covering a combined area of about 260,000 km². Yermak Neftegaz will be owned 51% by Rosneft and 49% by BP. In the initial stage, the JV will carry out further appraisal work on the 2009 Rosneft-discovered Baikalovskiy field, inside the Yenisey-Khatanga AMI, and on exploration of Zapadno-Yarudeiskoye, Kheiginskoye and Anomalnoye licenses in the West Siberian AMI. Exploration activities in the two AMIs will include regional research, acquisition of seismic data and drilling of exploration wells, with the beginning of field works anticipated in the winter season of 2016/2017. The preliminary agreement relating to this project was signed in 2015. BP has committed to provide up to $300 million in two phases as its contribution to the cost of the JV’s activities at the exploration stage. Rosneft will contribute licenses and operational experience in West Siberia and Yenisey-Khatanga, with initial drilling to be performed by Rosneft subsidiaries.

USGS estimates 66 Tcfg in Mancos shale

The Mancos shale, in the Piceance basin of Colorado, contains an estimated mean of 66 Tcf of shale gas, 74 MMbbl of shale oil and 45 MMbbl of NGLs, according to an updated assessment by the U.S. Geological Survey (USGS). This estimate is for undiscovered, technically recoverable resources. A 2003 USGS assessment of the Mancos shale estimated just 1.6 Tcf of shale gas.

Eni, BP in new discovery offshore Egypt

Eni and BP Egypt have made another important gas discovery in the Baltim South Development lease of the East Nile Delta. The Baltim SW-1 exploration well, drilled in a water depth of 25 m by operator IEOC, reached a total depth of 3,750 m and penetrated approximately 62 m of net gas pay in high-quality Messinian sandstones. The discovery, which is 12 km from the shoreline, is a new accumulation along the same trend of Nooros field, which was discovered in July 2015. Further appraisal activities will be required to underpin the full resource potential of the discovery, BP said. BP holds a 50% stake in the lease, and Eni, through its subsidiary IEOC, holds 50%.

Exxon Mobil confirms world-class oil discovery offshore Guyana

Exxon Mobil’s second exploration well—Liza-2—in the Stabroek Block, offshore Guyana, has confirmed a world-class discovery with a recoverable resource of between 800 MMboe and 1.4 Bboe. The Liza wells lie about 120 mi offshore Guyana. Data from the Liza-2 well test is being assessed, Exxon Mobil said in a statement confirming the discovery. The Liza-2 well was drilled by Exxon Mobil affiliate Esso Exploration and Production Guyana Ltd., approximately 2 mi from the Liza-1 discovery well. Liza-2 encountered more than 190 ft of oil-bearing sandstone reservoirs in Upper Cretaceous formations. The well was drilled to 17,963 ft in 5,551 ft of water.

GOVERNMENT/REGULATORY

Total wins stake in Qatar’s Al-Shaheen field

Total has signed an agreement with Qatar Petroleum, granting the company a 30% interest in the concession covering Al-Shaheen oil field, offshore Qatar, for a period of 25 years beginning July 14, 2017. Al-Shaheen field produces 300,000 bopd. The concession will be operated by a new operating company, which will be held 70% by Qatar Petroleum and 30% by Total. Located in Qatari waters, 80 km north of Ras Laffan, Al-Shaheen began production in 1994. The existing development consists of 30 platforms and 300 wells, and production from the field represents about half of Qatar’s oil production. Maersk Oil, the current operator, will continue to operate Al-Shaheen until the end of its current license in July 2017.

Arctic production benefits Alaska and the nation: Murkowski

U.S. Sen. Lisa Murkowski (R – Alaska) has underscored the criticality of oil and gas production in the Arctic Outer Continental Shelf (OCS) to Alaska and the entire nation. In remarks at the Arctic Energy Center’s Offshore Arctic Investment Briefing, Murkowski highlighted the importance of energy development to Alaska communities and the challenges they will face if the Department of the Interior removes Arctic lease sales from its next Five-Year Program. “The problem is that right now, Interior has just two Arctic sales in its next Five-Year Program: one in 2020 for the Beaufort Sea, and one in 2022 for the Chukchi Sea,” Murkowski said. “To me, that’s a bare minimum effort, and a far cry from the area-wide sales that Alaskans have been asking for.”