Developments/Discoveries

InterMoor announces mooring of first non-Pemex rig offshore Mexico

InterMoor, an Acteon company, announced that it has moored the first privately-operated rig offshore Mexico since 1938. Talos Energy contracted the company to moor semisubmersible ENSCO 8503, which is presently in Mexico’s Campeche Bay. This reportedly is the first privately-operated rig to be moored in the region since the country’s 2013 energy reform opened the offshore area to private business. In addition to mooring services, InterMoor also provided Talos Energy with engineering services, mooring equipment, shorebase loadout services, and experienced personnel to perform the services. The company reported that the installation and hook-up were carried out on time, and with zero incidents. 

Hansa Hydrocarbons reports significant discovery offshore the Netherlands

Hansa Hydrocarbons—along with partners Oranje-Nassau Energie BV and Energie Beheer Nederland BV—has reported a significant discovery on its Gems licences, offshore the Netherlands. The company announced last month that the N05-1 exploration well encountered gas in the target basal Rotliegend sandstones. According to the company’s press release, the reservoir interval was cored throughout, and 78 ft of net sand were encountered with high permeability. Following a DST in the vertical well, a maximum sustained flowrate of 53 MMscfd was confirmed. According to Hansa, the results exceeded pre-drill expectations. The Ruby discovery reportedly extends across the N04, N05, N08 and Geldsackplate licences in the Dutch and German sectors of the North Sea.

Northwest Energy encounters hydrocarbons in Western Australia’s Xanadu prospect

Northwest Energy has reported a hydrocarbon discovery at its Xanadu-1 exploration well, nearly 25 mi south of Dongara, in Western Australia. Shallow-water drilling operations reportedly have made significant progress since the well was spudded on Sept. 4, 2017. The company reported that, after reaching TD, the well encountered hydrocarbon-bearing reservoirs. In addition to a pending logging program, which will include pressure testing and fluid sampling, the company reported that a 7-in. casing string is being deployed, lest logging results are positive. Following the conclusion of final planning and approvals, the company says that the well will be cased and suspended prior to an extended well test. The company also says that its JV has agreed to extend drilling beyond the base of the High Cliff Sandstone to include the deeper sandstones of the Holmwood shale.

Eni upgrades resource potential of Mexico’s Contractual Area 1 to 1.4 Bboe

Eni has announced that it has successfully drilled the Miztón-2 well, in the shallow waters of Mexico’s Campeche Bay. As a result, the company has increased estimates of the resource in place for Contractual Area 1 to over 1.4 Bboe. The well—which is situated nearly 125 mi west of Ciudad del Carmen and more than 6 mi from the Amoca discovery—encountered 606 ft of net oil pay in the Orca formation, after reaching a depth of 11,253 ft. Well data reportedly shows a single 918-ft thick oil column in excellent quality sandstone reservoirs. The company says that Miztón field is now estimated to contain 350 MMboe in place and it will be included in the Area 1 development plan. Eni's exploration campaign reportedly will move forward with a well to be drilled on the Tecoalli discovery.

Mergers and Acquisitions 

BP, Bridas Corp. form new, integrated energy company in Latin America

BP and Bridas Corp. have entered into an agreement to form a new, integrated energy company. This will be accomplished by combining their interests in Pan American Energy (PAE)—owned 60% by BP and 40% by Bridas—and Bridas’ wholly-owned Axion Energy. It reportedly will be the largest privately-owned, integrated energy company operating in Argentina. The new company, called Pan American Energy Group (PAEG), will be owned equally by the two companies. BP CEO Bob Dudley said, “Supported by the combined skills and expertise of BP and Bridas, this new integrated business will be able to pursue growth and development opportunities in Argentina, Uruguay, Paraguay and Mexico.”

ExxonMobil adds 22,000 acres to Permian portfolio

ExxonMobil Corp. has, through a series of acquisitions and acreage trades, added 22,000 acres to its portfolio in the prolific Permian basin over the last six months. The acreage, which is situated primarily in the Delaware and Midland basins, increases the company’s existing 6-Bboe resource base in the Permian. According to ExxonMobil, the recent transactions have doubled its core operated Midland basin acreage to more than 130,000 acres of late. Presently, the company is operating 19 rigs in the Permian. The majority of these rigs are drilling horizontal wells in the Midland basin. Four of the rigs, however, are drilling horizontal wells in New Mexico’s Delaware basin. “We continue to build on our strong position in the Permian,” Jack Williams, senior V.P. at ExxonMobil, said. “Our leading presence in the Permian, from equity production through to Gulf Coast refining capacity, positions us well for the future.”

Beach Energy to buy Origin’s Lattice Energy in $1.25-billion deal

Australia's Beach Energy has agreed to buy Origin Energy’s conventional upstream oil and gas business, Lattice Energy, for more than $1.25 billion. According to Origin, proceeds from the transaction will help pay down debt. It says it expects the transaction to adjust the company’s net debt to below A$7 billion by June 30, 2018. “Certainly it puts their balance sheet in a position where if there was some concern previously, it should be gone now,” Simon Mawhinney, chief investment officer of Origin shareholder Allan Gray Australia, told Bloomberg. The purchase agreement reportedly will increase Beach Energy’s proved and probable reserves to 232 MMboe, and will raise its 2018 production guidance to between 25 MMbbl and 27 MMbbl. Subject to satisfaction of customary conditions—which include approvals from the New Zealand Minister of Energy and Resources, as well as the New Zealand Overseas Investment Office—the transaction reportedly will have an effective date of July 1, 2017.

REGULATORY

Republican senators seek to end 37-year drilling ban in Alaskan refuge

Senate Republicans, including Alaska Senators Dan Sullivan and Lisa Murkowski, are encouraging a provision to the budget resolution that will make it easier for Congress to allow oil and gas drilling in the Arctic National Wildlife Refuge (ANWR), where fossil fuel development has been prohibited since 1980. It reportedly would allow the chamber to pass the drilling rule with a majority vote, and with no need for Democratic support. The reported strategy is to use the budget resolution to streamline consideration of a tax overhaul plan. Royalties from oil and gas production in the wildlife reserve would then be used to raise revenue and, accordingly, offset some of the GOP’s proposed tax cuts. Development of the 2,000-acre subdivision reportedly could yield as much as 12 Bbbl of oil, which major oil companies have already expressed interest in pursuing. However, environmentalists have fought for years to prevent drilling in the area, arguing that its tenuous ecosystem should not be disturbed.

API Pennsylvania speaks out against proposed ban on fracing in the Marcellus

Commissioners from Pennsylvania, New York and Delaware, have approved a resolution proposed by the Delaware River Basin Commission that could lead to a ban on hydraulic fracturing in the Marcellus’ Delaware River basin. API Pennsylvania (API-PA), a division of API, expressed its stark opposition. “Common-sense regulations must strike an appropriate balance between deferring to state jurisdictions and ensuring protection of the Delaware River basin and its communities. We oppose the Delaware River Basin Commission’s proposal to adopt regulations that are duplicative and contradict existing state regulations in surrounding states and Pennsylvania, where state officials and communities have worked hard to create a robust regulatory regime that ensures the environment, public health and local communities are well-protected,” Stephanie Catarino Wissman, API-PA director, said in a statement. She went on to tout the industry as an important source of income for the state and its residents. The 3-1-1 vote, which approved the resolution, reportedly begins a legislative process that could last into next year.

DRILLING/PRODUCTION

Hurricane season wreaks havoc on America’s principal energy hub

After Hurricanes Harvey and Irma made landfall last month, ripping through the heart of America’s main oil processing region, numerous refinery shutdowns were reported. According to Goldman Sachs Group, the storms’ impact amounted to approximately 600,000 bopd in demand. The massive amount of destruction left by the storms resulted in an immediate need for relief funds. A number of oil companies—including Devon Energy, Hess Corp., Chevron and Noble Energy—reportedly contributed up to $1 million, each, to relief efforts.

BP begins producing from giant Khazzan field in Oman

BP, in partnership with Oman Oil Company E&P, has announced that production has begun at Oman’s giant Khazzan gas field. The project is situated in Block 61, approximately 217 mi southwest of the capital city, Muscat. The field’s tight gas reserves, which lie at depths up to 5 km, reportedly require specialized drilling equipment. BP CEO Bob Dudley said, “The start of production from Khazzan, BP’s sixth and largest major project start-up so far this year, is an important milestone in our strategic partnership with Oman. With further development already planned, this giant field has the potential to produce gas for Oman for decades to come.” (For more info, see MENA Regional Report.)

Burisma Group employs powerful drilling rig in Ukraine

Burisma Group has announced its purchase of U.S. drilling rig SK 3000 for approximately $40 million. The rig—which reportedly was brought into operation in May 2017 at Vodyanovske field, in the Kharkiv region of Ukraine—has a load capacity of 680 tonnes. This is said to be one of the most powerful drilling rigs operating in Ukraine, able to drill wells more than 32,800 ft deep. It was built by Service King Manufacturing, Inc., a drilling rig manufacturer with seven factories that produce a variety of equipment components. With purchase of the SK 3000, Taras Burdeinyi, CEO of Burisma’s Ukrainian operations, said that the company has “set an ambitious goal, to drill 20 new wells” this year. He said that this will allow the company to significantly increase domestic gas production. Likewise, it is expected to “strengthen Ukraine’s energy security.”