BUSINESS/MERGERS/ACQUISITIONS

FMC Technologies, Technip to join forces

FMC Technologies and Technip will combine in an all-stock transaction. According to a statement announcing the deal, the combined company, to be called TechnipFMC, will offer a new generation of solutions to reduce the cost of producing and transforming hydrocarbons. Technip Chairman and CEO Thierry Pilenko will serve as the executive chairman of the combined company’s board. Doug Pferdehirt, who was recently named CEO of FMC, effective on Sept. 1, will serve as CEO of the new company. The transaction is expected to close early in 2017. The new company will have its operational headquarters in Paris, Houston and London. According to Rystad Energy, the union will create the second-largest company in the oilfield service industry.

EnerVest acquires $1.3 billion in Eagle Ford assets

EnerVest has announced a series of acquisitions in the Eagle Ford shale. Since September, the company has acquired $1.3 billion of assets from three entities in a concentrated part of Karnes County, Texas. Combined, the acquired properties produce more than 17,000 boed. Most recently, the company signed an agreement to acquire assets, 75% of which are operated, from BlackBrush Oil and Gas, LP, The sellers will retain a minority ownership stake in the remaining assets of BlackBrush and the acquisition is expected to close in June. Second, EnerVest acquired assets from affiliates of GulfTex. The properties are 60% operated, and the acquisition closed April 29. These assets are adjacent to the BlackBrush acquisition. In addition, EnerVest announced, in late 2015, the acquisition of a non-operated position adjacent to the two new acquisitions in Karnes County.

DEA sets up Norwegian group following E.ON E&P Norge acquisition

DEA has set up a new organization—DEA Norge AS—in Norway following a five-month integration process. The move follows the company’s acquisition of E.ON E&P Norge in December. In line with the requirements of Norwegian authorities, the two companies are now legally merged. Hans-Hermann Andreae has been appointed managing director of DEA Norge. His predecessor, Hugo Sandal, will retire at the end of May, while Haakon Haaland, the previous managing director of E.ON E&P Norge, will continue in another leading managerial position at the DEA Group.

Tercel Oilfield Products acquired by Rubicon Oilfield International

Rubicon Oilfield International has acquired Tercel Oilfield Products from Lime Rock Partners. Terms of the transaction were not disclosed. Backed by a significant capital commitment from private-equity firm Warburg Pincus, Rubicon will invest in the accelerated growth of Tercel’s product lines.

BP doubles interest in North Sea’s Culzean field

BP has doubled its interest in the Culzean development, in the UK Central North Sea, following its acquisition of an additional 16% interest from JX Nippon. The acquisition increases BP’s interest in the project from 16% to 32%. The Maersk-operated Culzean development is expected to produce enough gas to meet 5% of total UK demand at peak production in 2020/2021. “Our deepening in Culzean further demonstrates our commitment to supporting the development of another UK field for the future,” said Mark Thomas, BP regional president, North Sea region. Discovered in 2008, the gas/condensate field has resources estimated at 250 MMboe to 300 MMboe. Production should start in 2019 and continue into the 2030s, with plateau output of 60,000 boed to 90,000 boed. 

Range Resources to merge with Memorial Resource Development

Range Resources and Memorial Resource Development (MRD) have entered into a merger agreement, under which Range will acquire all of the outstanding shares of common stock of MRD in an all-stock transaction valued at $4.4 billion. This valuation includes the assumption of MRD’s net debt, which was $1.1 billion as of March 31. “This acquisition will give Range strategic positioning in both the Appalachian and Gulf Coast regions, providing greater marketing capabilities and opportunities, with added beneficial exposure to growing natural gas demand,” Jeff Ventura, Range’s CEO, said. Following the transaction, MRD shareholders are expected to own approximately 31% of the outstanding shares of Range. The transaction is expected to close in second-half 2016.

Total, Oil Search to divide InterOil’s assets

Oil Search said it will buy Papua New Guinea’s InterOil in a deal valued at $2.2 billion. In a separate, additional agreement, Oil Search and Total have executed a Memorandum of Understanding, according to which Oil Search will sell to Total, for cash, 60% of the interest acquired from InterOil in Petroleum Retention License 15 and 62% of InterOil’s exploration assets. Following completion of the InterOil transaction and the MOU with Total, Oil Search’s interest in the Papua LNG Project will increase to 29.0% and Total’s stake will increase to 48.1% (assuming the PNG government exercises its back-in rights of 22.5%). The transaction is expected to close in third-quarter 2016. “As Oil Search has an equity interest in both PNG LNG and Papua LNG, we are well-placed to work with the PNG government and the operators of PNG LNG and Papua LNG, Exxon Mobil and Total, respectively, to promote the most capital-efficient development of PNG’s world-class gas resources. We note that regardless of whether integration of Papua LNG and PNG LNG is achieved, the standalone development of Papua LNG remains extremely robust,” said Oil Search Managing Director Peter Botten.

Husky Energy sells southwestern Saskatchewan assets

Husky Energy has reached an agreement to sell select assets in southwestern Saskatchewan for C$595 million to Whitecap Resources. For the past six years, Husky has been transitioning its Western Canada business from a legacy basin to one with fewer, more material resource plays. Work to advance the planned sale of several other packages in Western Canada continues. The sale of the southwestern Saskatchewan assets, and the continued transformation of the Western Canada business, are expected to deliver financial efficiencies, allowing capital to be deployed more effectively toward higher-return projects in the company’s portfolio. This is Husky’s third asset sale agreement this year.

PRODUCTION/EXPLORATION

Continental Resources reports record STACK oil well

Continental Resources said that it has completed an industry-record well in the over-pressured oil window of Oklahoma’s STACK play. The Verona 1-23-14XH flowed at an initial 24-hr test rate of 3,339 boed, comprised of 2,345 bbl of oil, or 70% of production, and 6.0 MMcf of 1,370-Btu natural gas. The Verona is producing from the Meramec reservoir through a 9,700-ft lateral, at a flowing casing pressure of approximately 2,400 psi, on a 34/64-in. choke. “The Verona is another example of the exceptional results we are getting from wells drilled in the over-pressured oil window of STACK,” said Harold Hamm, chairman and CEO. The Verona is the company’s ninth well completed in the over-pressured oil window of STACK, and all have been strong producers.

Husky starts steam operations at Canadian project

Husky Energy began steam-assisted operations at the Vawn Lloyd Thermal Project in Saskatchewan, Canada. The 10,000-bpd Vawn development is expected to produce first oil early in the third quarter. According to a company statement, the Lloyd thermal projects are a component of Husky’s transition into a low, sustaining capital business. By the end of 2016, more than 40% of the company’s overall production is expected to come from low, sustaining capital projects, compared to 8% in 2010. The 10,000-bopd Edam East development began production in mid-April. The 4,500-bopd Edam West project is set to begin production in third-quarter 2016.

Statoil farms into Turkey acreage

Statoil has entered into a binding agreement for two exploration licenses in the Thrace region of northwest Turkey. Statoil will have a 50% interest in the Banarli licenses, while the operator, Valeura Energy Inc., a Canadian exploration company, will keep the remaining 50%. The shallow formations, above 2,500 m, will be 100% retained by Valeura. The work program in the licenses consists of several phases, where the first phase includes a commitment to drilling one exploration well. The exploration phase will test unconventional gas potential in the deep parts of the basin. The exploration licenses cover an area of approximately 540 km² in proximity to existing infrastructure.

Egyptian field now produces 65,000 boed, says Eni

Following the start of production from the Nidoco North 1X exploration well and the Nidoco North West 4 development well, Eni has brought output from Nooros field, in the Abu Madi West concession, in Egypt’s Nile Delta, to around 65,000 boed. According to Eni, this milestone, which was achieved just 10 months after the initial Nooros discovery, confirms the company’s near-field exploration strategy. Nooros’ daily production, consisting of approximately 10 MMcmg and 5,000 bbl of condensates, will help to reduce Egypt’s gas imports. Eni’s next target is to increase production to 140,000 boed by the end of 2016, through the drilling of additional wells and facility optimization. In addition, Eni will continue exploration within the license area, where more potential was identified.

GOVERNMENT/REGULATORY

Murkowski warns Obama administration on Arctic lease sales

U.S. Sen. Lisa Murkowski (R-Alaska) pressed the U.S. Bureau of Ocean Energy Management to maintain all three lease sales proposed for Alaska’s Outer Continental Shelf (OCS) in its final program for 2017 through 2022. Murkowski’s comments came during a Senate Energy and Natural Resources Committee hearing. “The Interior Department’s treatment of the Alaska OCS has been extremely frustrating,” Murkowski said. “Right now, we have only the shadow of a program for three major planning areas in Alaska. The proposed program for the next five years includes just three sales with targeted acreage, not the area-wide sales that Alaskans have advocated for this past decade. Department officials have even implied there is waning industry interest in Alaska—but above all, it is the chaotic federal regulatory regime that is discouraging investment.”

Norway offers 13 companies licenses in Barents Sea

Norway’s Ministry of Petroleum and Energy has offered new production licenses to 13 companies in the 23rd licensing round on the Norwegian Continental Shelf. The offers cover ten production licenses, all of which are in the Barents Sea. The offers were issued following the authorities’ assessment of applications from 26 companies. For the first time since 1994, new exploration acreage was made available in the southeastern Barents Sea. “I am eagerly awaiting the result of the first exploration well,” said Sissel Eriksen, director of exploration, Norwegian Petroleum Directorate. Overall, Statoil was the most successful bidder. The company was offered operatorship of four licenses; it will participate in five licenses.