EXPLORATION 

CGG starts new multi-client survey offshore Norway

CGG has announced a western extension of the Horda BroadSeis-BroadSource 3D multi-client program, which it began acquiring in the Northern North Sea, offshore Norway, in 2014. The extension, known as Tampen, is in the Northern Viking Graben, offshore Norway and the UK, and is expected to be completed in 2016. It will add a further 17,000 km² of data to the initial 18,000-km² Horda survey that CGG will complete this season, to provide a total of 35,000 km² of contiguous and uniform broadband seismic data coverage in one of the world’s most prolific petroleum provinces. The Tampen survey will cover a mature, high-potential area encompassing fields, such as Statfjord, Gullfaks, Snorre and Osberg in Norway, in addition to several fields in the UK.  

Talisman wildcat comes up dry north of Varg field

Talisman Energy Norge AS, operator of production license 672, has concluded the drilling of wildcat well 15/12-24 S, the Norwegian Petroleum Directorate reported May 20. The well was drilled in the central part of the North Sea, about 6 km north of Varg field. The well encountered about 195 m of sandstone mixed with siltstone in the Ula formation, of which 155 m were sandstone of good to very good reservoir quality. The well also encountered 85 m of sandstone mixed with siltstone in the Skagerrak formation, of which 45 m were sandstone of generally poor reservoir quality. The well had weak traces of petroleum in sandstone rocks in both the Ula and Skagerrak formations. The well was classified as dry. 

Shell gets green light for Chukchi Sea exploration program

The U.S. Bureau of Ocean Energy Management has conditionally approved Shell Gulf of Mexico, Inc.’s revised multi-year exploration plan (EP) for the Chukchi Sea. The EP describes all exploration activities planned by Shell, including the timing of these activities, information concerning drilling vessels, the location of each planned well, and actions to be taken to meet safety and environmental standards, and to protect workers, resources, wildlife and access to subsistence use areas. Shell’s revised EP proposes the drilling of up to six wells within the Burger Prospect, in approximately 140 ft of water, about 70 mi northwest of the village of Wainwright, Alaska. Shell will conduct its operations using the M/V Noble Discoverer drillship and the Polar Pioneer semisubmersible.

TGS announces major 2D survey offshore Mexico

TGS has announced Gigante, a 181,500-km, regional, 2D seismic survey in the Gulf of Mexico. This survey will utilize four Seabird vessels to acquire an extensive regional grid of 2D multi-client seismic with 12,000-m offsets. Gigante will cover the vast offshore sector of Mexico, including world-class producing trends, such as the Perdido fold belt and Campeche Bay, and line ties will be made into the U.S. Gulf of Mexico regional grids previously acquired by TGS. TGS will commence acquisition in second-quarter 2015. Data processing will be performed by TGS, with initial fast-track data available in third-quarter 2015. Gigante will also include gravity and magnetic data with a regional seismic structural interpretation.

PGS begins 2D survey offshore Mexico

Petroleum Geo-Services (PGS) commenced operations on a multi-client, 2D seismic program offshore Mexico on May 16. The 2D vessels, Atlantic Explorer and Sanco Spirit, will acquire multiple projects recently approved by the Mexican government. The first program to be acquired is the Mexico Well Tie MC2D, which will provide clients with grounding for understanding the hydrocarbon prospectivity in the area. Fast-track products will be available this month. The surveys will be acquired, using PGS’ proprietary GeoStreamer technology, and are supported by industry pre-funding.  

GOVERNMENT/REGULATORY 

Canada’s NEB approves WesPac Midstream LNG export license

Canada’s National Energy Board has approved the application of WesPac Midstream - Vancouver LLC for a 25-year natural gas export license, with a maximum term quantity of 116.44 Bcm. The issuance of this license is subject to the approval of the Governor in Council. The NEB determined that the quantity of gas proposed to be exported by WesPac is surplus to Canadian needs. The approved export points are: the outlet of the loading arm at the WesPac LNG Marine Terminal in Delta, B.C.; the marine cargo terminals in the metropolitan area of Vancouver, B.C.; as well as the highway border crossings along the international boundary between B.C. and the U.S.

Bipartisan congressional coalition introduces bill to end U.S. oil export ban

U.S. Sens. Lisa Murkowski (R – Alaska), and Heidi Heitkamp (D - N.D.), along with 11 of their Senate colleagues, introduced the Energy Supply and Distribution Act of 2015 last month. This bipartisan legislation would modernize federal energy policy by ending the ban on crude oil exports. “America’s energy landscape has changed dramatically since the export ban was put in place in the 1970s. We have moved from energy scarcity to energy abundance. Unfortunately, our energy policies have not kept pace,” Sen. Murkowski said. “This legislation builds from bipartisan ideas, linking energy security and infrastructure to expanding exports and helping our allies.” Murkowski, chairman of the Senate Energy and Natural Resources Committee, has long supported ending the ban on American crude oil exports.

Senators introduce bills to increase states’ share of oil and gas revenues

U.S. Sens. Lisa Murkowski (R – Alaska), Bill Cassidy (R - La.), and Tim Scott (R - S.C.), have introduced separate proposals to increase energy production on the Outer Continental Shelf (OCS) and increase revenue sharing with states that support offshore energy production activities. The targeted bills reflect the priorities of their sponsors. Murkowski’s bill would focus on Alaska’s OCS, while Cassidy’s bill would focus on Gulf Coast states. Scott’s bill would focus on the Atlantic OCS. 

DISCOVERIES

1.5 Bbbl of gross prospective resources identified on Irish license

Europa Oil & Gas has announced the completion of a report on prospective resources in Frontier Exploration License (FEL) 3/13 in the Porcupine basin, offshore western Ireland. The Competent Persons Report (CPR) details total, gross, unrisked, mean prospective resources of 1.49 Bboe on FEL 3/13, including a net 225 MMboe to Europa. The CPR has upgraded Shaw, previously classified as a lead, into a prospect with gross, mean, unrisked, prospective resources of 315 MMboe. Europa holds a 15% interest in FEL 3/13, with the operator, Kosmos Energy, holding the remaining 85%.  

Exxon Mobil in deepwater find offshore Guyana

Exxon Mobil has announced a significant oil discovery on the Stabroek Block, approximately 120 mi offshore Guyana. The well was drilled by Exxon Mobil affiliate, Esso Exploration and Production Guyana Ltd., and encountered more than 295 ft of high-quality, oil-bearing sandstone reservoirs. The well was drilled to 17,825 ft in 5,719 ft of water. The Stabroek Block totals 6.6 million acres. “Over the coming months, we will work to determine the commercial viability of the discovered resource, as well as evaluate other resource potential on the block,” Stephen M. Greenlee, president of Exxon Mobil Exploration Company, said. Esso Exploration and Production Guyana Ltd. holds a 45% interest. Hess Guyana Exploration Limited holds a 30% interest, and CNOOC Nexen Petroleum Guyana Limited holds the remaining 25%.

BUSINESS

Halliburton reaches agreement with BP on Deepwater Horizon claims

Halliburton has reached an agreement with BP to resolve remaining issues, which include indemnities between the parties and dismissal of all claims against each other, relating to the 2010 Deepwater Horizon well incident in the Gulf of Mexico. Terms of the agreement were not disclosed. “We are pleased to have reached an amicable resolution with BP, our valued customer, that allows us to close another chapter in the Deepwater Horizon case for Halliburton,” said Dave Lesar, chairman and CEO of Halliburton. “This agreement allows Halliburton to strengthen its relationship with BP by negotiating a global master services agreement between the companies.”

NOV scores $395K from Mud King over stolen trade secrets

National Oilwell Varco has won nearly $400,000 from Mud King Products Inc., after a bankruptcy judge found that Mud King paid an NOV employee to steal hundreds of NOV’s secret mud pump blueprints. The smaller firm was using these blueprints to start manufacturing Chinese knock-offs, when the scheme was uncovered. The court ruling against Houston-based Mud King was issued in its bankruptcy proceeding, which was filed soon after NOV sued the company for trade secret theft. U.S. Bankruptcy Judge Karen Brown ruled that Mud King violated the Texas Theft Liability Act and was liable for misappropriation of trade secrets, awarding $395,327 in damages and attorneys’ fees to NOV.

BG takes full operational control of QCLNG

BG Group has announced that operational control of Train 1 at its Queensland Curtis LNG (QCLNG) plant has been formally transferred to QGC, BG Group’s Australian subsidiary, from Bechtel Australia, which constructed the facility. In addition, BG said that approval for the sale of its QCLNG gas pipeline has been received from BG Group’s Train 1 equity partner, China National Offshore Oil Corporation (CNOOC). As a result, the preconditions for sale of the QCLNG pipeline to APA Group have been satisfied in full. The sale of the pipeline remains on track for completion in second-quarter 2015. The transfer of operational control of Train 1 marks the start of commercial operations at QCLNG. First production from Train 1 occurred in December 2014, with 16 cargoes shipped to date. QCLNG’s Train 2 is currently under construction, and is expected to start operations in third-quarter 2015.

Verisk Analytics closes $2.8-billion Wood Mac acquisition

Verisk Analytics, Inc. has completed the acquisition of Wood Mackenzie Ltd. The purchase price was £1.85 billion (approximately $2.8 billion, net of foreign currency hedges). Scott Stephenson, president and CEO of Verisk Analytics, said, “This is a strategic acquisition that adds another Verisk-like business in a large, dynamic and global vertical. We expect a quick and smooth integration, and are ready to pursue a range of combined company opportunities, starting immediately.” 

PRODUCTION

Exxon Mobil’s Cold Lake project expansion starts output

Bitumen production began on schedule at the $2-billion Cold Lake Nabiye project expansion in northeastern Alberta, Exxon Mobil announced last month. The expansion is producing about 20,000 bpd, and volumes are expected to increase during the year to a peak daily production of 40,000 bbl. Nabiye will access 280 MMbbl of recoverable resources during its expected 30-year lifespan. Exxon Mobil expects to increase production volumes this year 2%, to 4.1 MMboed, driven by 7% liquids growth. The volume increase is supported by the ramp-up of several projects completed in 2014 and the expected start-up of seven new major developments in 2015. The project was planned and executed by Exxon Mobil Development Company on behalf of the Cold Lake project operator, Imperial Oil Limited, Exxon Mobil’s majority-owned Canada affiliate.

Petrobras’ operated pre-salt production exceeds 800,000 bopd

Petrobras said that on April 11, oil production in the fields it operates in the pre-salt province of the Santos and Campos basins reached the milestone of 800,000 bpd, constituting a new daily production record. Of this volume, around 74% (590,000 bopd) corresponds to Petrobras’ share, and the remainder belongs to its partner companies in different pre-salt layer production areas.

Total brings Russian gas field onstream

Total has started-up gas and condensate production from the onshore Termokarstovoye field, in the Yamalo Nenets Autonomous District of Russia. The field will produce around 6.6 MMcmgd and 20,000 bcpd, with a combined production capacity of 65,000 boed. The project infrastructure is adapted to arctic conditions and includes a gas gathering network, a gas treatment plant, a gas condensate de-ethanization facility and export pipelines. Termokarstovoye field is operated by Terneftegas, a JV between Novatek (51%), Russia’s second-biggest natural gas producer, and Total (49%).

Husky Energy starts steam operations at Rush Lake

Husky Energy began commercial steam operations at the 10,000-bpd Rush Lake heavy oil thermal project in Saskatchewan. Rush Lake was expected to ramp up to full production in a short time period, according to a company statement dated May 21. “Rush Lake is the latest in a series of long-life, low sustaining capital thermal projects we are advancing in our heavy oil business,” said CEO Asim Ghosh. Current production from thermal projects is approximately 44,000 bopd. Including Rush Lake, heavy oil thermal production is expected to add another 34,500 bopd over the next 18 months.

Total hits 2-Bbbl mark on Angola’s deepwater Block 17

Total has achieved the significant milestone of producing a cumulative 2 Bbbl from its operated deepwater Block 17, 150 km off the coast of Angola. Block 17 has become Total’s most prolific site, with production of over 700,000 bopd. The Group operates four FPSO units on the major production zones of the block: Girassol, Dalia, Pazflor and CLOV.

MERGERS/ACQUISITIONS

Noble Energy buys into Eagle Ford with $2.1-billion acquisition

Noble Energy and Rosetta Resources have announced a definitive merger agreement, whereby Noble Energy will acquire all of the common stock of Rosetta in an all-stock transaction valued at $2.1 billion, plus the assumption of Rosetta’s net debt of $1.8 billion, as of March 31, 2015. Rosetta’s liquids-rich asset base includes approximately 50,000 net acres in the Eagle Ford shale and 56,000 net acres in the Permian (46,000 acres in the Delaware basin and 10,000 acres in the Midland basin). Noble Energy has identified in excess of 1,800 gross horizontal drilling locations for development, providing net, unrisked resource potential of approximately 1 Bboe. 

Vanguard Natural Resources to acquire Eagle Rock Energy Partners

Vanguard Natural Resources and Eagle Rock Energy Partners have entered into an agreement and Plan of Merger, pursuant to which a subsidiary of Vanguard will merge into Eagle Rock for total consideration of $474 million in Vanguard common units and the assumption of Eagle Rock’s net debt of $140 million as of March 31. As a result of the transaction, Eagle Rock will become a wholly owned indirect subsidiary of Vanguard.