BUSINESS/MERGERS/ACQUISITIONS

Record-length expandable liner run in Eagle Ford

An innovative application of expandable liner technology re-lined a non-sour-gas-compliant wellbore, effectively clearing the way for a gas-lift re-completion and restoring production to a pressure-depleted Eagle Ford oil well. The non-traditional installation, executed by Weatherford and ConocoPhillips, established a world record for a solid-expandable liner run. The expandable liner was run trouble-free to 7,047 ft, effectively isolating the existing casing and casing hanger from H₂S. The well was then completed with 23/8-in. tubing, a retrievable production packer and a traditional side-pocket-mandrel gas lift. The well has since been on continuous gas-lift production with up to triple the pre-reclamation rates, and with zero HSE issues related to wellbore integrity.

PDC Energy enters Delaware basin with $1.5-billion acquisition

PDC Energy has entered into definitive agreements to acquire two privately held companies managed by Kimmeridge Energy Management Company for approximately $1.5 billion. The privately negotiated transaction includes approximately 57,000 net acres in Reeves and Culberson Counties, Texas, with an average working interest of approximately 93%. Current net production is approximately 7,000 boed from 21 horizontal wells, with two additional wells in the completion and flowback phase. The transaction is expected to close in the fourth quarter. “Adding this Delaware position to our Core Wattenberg acreage gives us more than one billion net boe of liquid-rich reserve potential in two of the top-tier U.S. onshore basins,” said Lance Lauck, executive V.P., Corporate Development and Strategy.

Mærsk Gallant in NCS drilling record

Mærsk Gallant has beaten the record for the deepest well ever drilled on the Norwegian Continental Shelf. On July 31, the harsh-environment jackup drilled the Solaris ultra-HPHT well to 5,941 m, TVD. “We have broken a number of records during the Solaris operation. But this achievement is second to none,” said Sadi Ozturk, assistant rig manager, Mærsk Gallant. For the Solaris project, Maersk Drilling took a 15,000-psi rig and adapted the equipment and procedures in order to drill a reservoir section, where predicted pore pressures are well in excess of 15,000 psi. The requirements of the customer—Total E&P Norge—led to a variety of rig modifications. 

Parsley Energy in Midland basin acquisition

Parsley Energy has entered into an agreement to acquire certain undeveloped acreage and producing oil and gas properties in Glasscock County, Texas, as well as associated mineral and overriding royalty interests, for an aggregate purchase price of $400 million in cash. The acquisition includes 11,672 gross (9,140 net) leasehold acres near existing Parsley leasehold acreage in Glasscock County, with estimated net production of approximately 270 boed from 67 gross (60 net) vertical wells. “Offset well performance and initial results on our first horizontal well in the area suggest that the properties to be acquired may compete with the best of our existing horizontal drilling inventory, and the acquisition of associated royalty interests boosts the return profile of these properties,” Bryan Sheffield, CEO of Parsley Energy, said. The deal is scheduled to close on or before Oct. 4.

Shell sells Gulf of Mexico assets for $425 million

Royal Dutch Shell, through its affiliate Shell Offshore, has reached an agreement to sell 100% of its interest in Gulf of Mexico Green Canyon Blocks 114, 158, 202 and 248, referred to as the Brutus/Glider assets, to EnVen Energy Corp., through its affiliate EnVen Energy Ventures. In line with Shell’s global divestment plans, this transaction includes $425 million in cash. The deal is expected to close in October. The Brutus/Glider assets include the Brutus TLP, the Glider subsea production system, and the oil and gas lateral pipelines used to evacuate production from the TLP. The Brutus/Glider assets have an estimated combined production of about 25,000 boed.

BP signs second shale gas contract with CNPC

BP has signed a second production sharing contract (PSC) for shale gas exploration, development and production with CNPC. The PSC, signed on July 27, covers approximately 1,000 km² at Rong Chang Bei in the Sichuan basin. Earlier this year, the two companies signed their first shale gas PSC on the adjoining Neijiang-Dazu Block. As with the earlier contract, CNPC will operate the Rong Chang Bei PSC. The new contract represents another achievement under BP and CNPC’s framework agreement on strategic cooperation that was signed in October 2015.

GOVERNMENT/REGULATORY

Gulf of Mexico lease sale yields just $18 million in high bids

The U.S. Bureau of Ocean Energy Management’s (BOEM) Lease Sale 248 garnered just $18,067,020 in high bids for 24 tracts covering 138,240 acres in the Western Gulf of Mexico Planning Area. According to BOEM, a total of three offshore energy companies participated in 24 bids. The last auction covering the western portion of the Gulf, Lease Sale 246 in August 2015, drew $22,675,212 in high bids, whereas Lease Sale 238, held in August 2014, yielded nearly $110 million in high bids. “Though this sale reflects today’s market conditions and industry’s current development strategy, the bidding confirms that there is continued interest in the deepwater areas of the Gulf,” BOEM Director Abigail Ross Hopper said. In this sale, BOEM offered 23.8 million acres in federal waters offshore Texas for oil and gas exploration and development.

New play boosts West Orphan basin resource estimates

The government of Newfoundland and Labrador, Nalcor Energy and Beicip-Franlab have announced that the in-place oil and gas resource potential is 25.5 Bbbl of oil and 20.6 Tcfg in the West Orphan basin, within the area of the C-NLOPB 2016 Eastern Newfoundland Call for Bids. Nalcor, with its partners TGS and PGS, has been acquiring extensive 2D seismic data in the underexplored slope and deepwater areas of the province’s offshore. To further delineate the West Orphan basin, a 3D seismic survey was acquired over a portion of the area in the summer of 2015, and the data from the new 3D images provided further insight into the area’s resource potential. Through the integration of satellite slick data, 2D long offset seismic, 3D long offset seismic and seabed coring, a new Lower Tertiary play trend was identified in the West Orphan basin. This newly identified prospectivity has resulted in Beicip Franlab’s resource assessment, identifying the in-place resource potential of 25.5 Bbbl of oil and 20.6 Tcfg in this area. The assessment is based on new data covering the nine parcels on offer in the West Orphan basin.

EXPLORATION/DISCOVERIES

Det norske discovers oil at Langfjellet prospect

Det norske oljeselskap, operator of PL442 in the North Sea, has completed exploration well 25/2-18 S on the Langfjellet prospect. The well encountered a gross oil column of 109 m in the Vestland Group. According to a statement announcing the find, the preliminary volume estimate for the discovery is in the range of 24 MMboe to 74 MMboe. The licensees will evaluate the discovery with regards to a potential development together with other discoveries in the area. Following the drilling results at Langfjellet, the licensees have identified further prospectivity within the license. Det norske is operator and holds a 90% working interest in PL442; LOTOS Exploration and Production Norge AS holds the remaining 10%.

New Zohr appraisal well confirms resource potential at 30 Tcf

Eni has drilled a fifth well on the Zohr structure, offshore Egypt, and confirmed the field’s resource estimate of 30 Tcfg. The Zohr 5x well was drilled to a TD of 14,271 ft. The well lies in 1,538 m of water, and is situated 12 km southwest of the Zohr 1x discovery well. According to a statement released by Eni, the new well proved the presence of a carbonate reservoir and gas accumulation in the southwestern part of the Zohr mega-structure. The well encountered about 590 ft of a continuous hydrocarbon column in the carbonate sequence with excellent reservoir characteristics. The well also was successfully tested by opening a 90-m reservoir section to production. The data collected during the test confirmed the potential of the Zohr reservoir. The Zohr drilling campaign will continue in 2016 with the drilling of a sixth well that will ensure the accelerated start up production rate of 1 Bcfd. The field is expected to produce first gas by the end of 2017.

Premier Oil’s Bagpuss well proves oil offshore Scotland

Premier Oil’s 13/25-1 well, which was targeting the Bagpuss prospect, on the Halibut Horst in the Outer Moray Firth, has reached 1,532 ft TVDSS in a granite basement. The well encountered 41 ft of hydrocarbon-bearing sands within a 68-ft hydrocarbon column. The sands have between 25% and 33% porosity and indications are that the oil is heavy. “The Bagpuss well has proven a significant volume of oil in place. We will now work with our partners to carry out a full analysis of the hydrocarbons and reservoir encountered to ascertain whether commerciality can be established,” said Robin Allan, director of exploration and North Sea, Premier Oil.

PRODUCTION

Fram C East satellite starts production to Troll C platform

Statoil has started production from the Fram C East satellite development offshore Norway. The development is targeting recoverable resources estimated at 18.2 MMbbl of oil and 1.6 Bcm of gas. The Fram C East well was drilled from the existing Fram subsea template. Production will be tied back to Troll C. Gas will be transported to Kollsnes, via Troll A, whereas the oil will be piped to Mongstad for further processing. According to Statoil, the development will help to maximize production from the Fram area, in addition to boosting Troll C’s production and activities. “Fram C East is a small development project, but a key element of our plans to capture maximum value in the Fram area,” said Lars Høier, V.P., Operations, Troll and Fram. Also in August, Statoil submitted the Plan for Development and Operation for the Byrding discovery, which lies to the north of Fram. Production from this field, too, will be tied back to the Troll C platform.

Tullow reports first oil from Ghana’s TEN development

Tullow Oil has announced first oil from Tweneboa, Enyenra and Ntomme (TEN) fields offshore Ghana, to the FPSO Prof. John Evans Atta Mills. The company expects oil production to ramp-up gradually towards the FPSO’s capacity of 80,000 bopd through the remainder of 2016. Tullow estimates that TEN’s average annualized production in 2016 will be approximately 23,000 bopd. Tullow is the operator of the TEN fields and holds a 47.175% stake. The company’s JV partners are Anadarko Petroleum (17%), Kosmos Energy (17%), Ghana National Petroleum Corporation (15%) and PetroSA (3.875%).