MERGERS/ACQUISITIONS/BUSINESS

Rice Energy acquires Vantage Energy in $2.7-billion deal

Rice Energy has entered into a purchase-and-sale agreement to acquire Vantage Energy, LLC, and Vantage Energy II, LLC, for approximately $2.7 billion, including the assumption of debt. In connection with the acquisition, Rice Midstream Partners will purchase the acquired midstream assets from Rice Energy for $600 million. The E&P assets to be acquired by Rice Energy include approximately 85,000 net, core Marcellus acres in Greene County, Pa., with rights to the deeper Utica shale on approximately 52,000 net acres, and 37,000 net acres in the Barnett shale. Second-quarter 2016 net production from the acquired assets was 399 MMcfed (approximately 65% Appalachia, 35% Barnett). The transaction is expected to close in the fourth quarter.

M-I SWACO gets green light for barite mine Scotland

Proposals to develop a world-class barite resource at Duntanlich, Scotland, have been approved, subject to conditions, by the local authority. The mine, proposed by M-I SWACO, is a replacement for the company’s mine at Foss, which has operated since 1985. Yet, the new mine will have a much smaller surface footprint. The Duntanlich orebody is unique in the UK; it is the only known, significant barite deposit that is economic to work and will enable the UK to become self-sufficient in a mineral vital to the North Sea oil and gas industry. The Foss barite deposit has a complex geological structure, which has made it increasingly difficult to mine. In comparison, a mine at Duntanlich, which has a simple geological structure, will supply the whole of the UK’s requirements for 50 years at planned production rates. A previous planning application to develop the Duntanlich resource was turned down in 1996.

Saipem awarded contracts worth $430 million

Saipem has been awarded new contracts and extensions to existing contracts in the onshore drilling segment of the Middle East and South America. The awards have an overall value of $430 million. In Saudi Arabia, Saipem has been awarded a three-year extension to drilling activities being carried out by ten 2,000-hp drilling rigs. In South America, in addition to various extensions ranging in duration from two to 24 months for medium- and high-power rigs in Peru, Colombia, Bolivia and Chile, Saipem has been awarded a new contract for operations in Argentina, which will be carried out by a hydraulic rig over a period of 18 months.

Anadarko in $2-billion, deepwater GOM buy

Anadarko Petroleum has entered into a definitive agreement to acquire the deepwater Gulf of Mexico assets of Freeport McMoRan Oil & Gas for $2 billion. The transaction, which will have an effective date of Aug. 1, is expected to close prior to year-end. The acquisition will double the company’s ownership in the Lucius spar development to approximately 49%. “We expect these acquired assets to generate substantial free cash flow, enhancing our ability to increase U.S. onshore activity in the Delaware and DJ basins,” said Anadarko Chairman, President and CEO Al Walker. “Our current plans are to add two rigs in each play later this year, and to increase activity further thereafter, with an expectation of more than doubling our production to at least 600,000 boed, collectively, from these two basins over the next five years.”

DISCOVERIES/EXPLORATION

Gazprom discovers new gas field on Sea of Okhotsk shelf

Gazprom has reported a new gas and condensate field in the Sea of Okhotsk, near Russia’s Sakhalin island. The company was drilling an exploration and appraisal well, as part of the Sakhalin III project, in the Yuzhno-Lunskaya structure, in the Kirinsky Block, when the discovery was made. “As soon as the well is tested and the geological information is analyzed, the reserves estimates for the new field will be submitted to the Federal Subsurface Use Agency for the purpose of their approval and inclusion into the State Register of Mineral Reserves of the Russian Federation,” the company said in a statement announcing the discovery. As part of the Sakhalin III project, Gazprom is engaged in exploration of three licensed blocks: Kirinsky, Ayashsky, and Vostochno-Odoptinsky. Within the Kirinsky Block, Gazprom also has discovered Yuzhno-Kirinskoye and Mynginskoye fields.

Schlumberger, Petronas execute seismic contract

Petronas, through its wholly owned subsidiary, Petronas (E&P) Overseas Ventures SDN. BHD., has signed an agreement to license a significant part of WesternGeco’s Campeche WAZ deepwater, multi-client seismic survey in the southern Gulf of Mexico. “The WAZ seismic will help unravel the hydrocarbon potential in the complex and underexplored Mexican deepwater basins,” said Emeliana Rice-Oxley, V.P. of exploration, Petronas. The project follows the Mexican government’s opening of licensing rounds to non-government companies for the first time. More than 80,000 km² of newly imaged subsurface data, which have been acquired in the last 12 months, are available for companies participating in exploration in Mexico.

Eni, BP boost potential of Baltim Southwest to 1 Tcf

Eni has upgraded the potential of Baltim Southwest field to 1 Tcf of gas-in-place, following the results of the Baltim Southwest 2X appraisal well, which was drilled immediately after the discovery well. Baltim Southwest field is in the Nile Delta. The field, which has a water depth of 25 m, lies 12 km from the coastline and 10 km from Nooros field, which was discovered in July 2015 and is already onstream. With this new well, the gas potential of the Great Nooros Area stands at 3 Tcf of gas-in-place, of which about 2 Tcf are in Nooros field. Eni and its partner, BP, are already working on the development options for this new discovery. As with Nooros, the aim is to maximize synergies with existing infrastructure in the area, Eni said in a statement. Eni, through its subsidiary IEOC, holds a 50% stake in the Baltim South license, while BP holds the remaining 50%. The operator is Petrobel, a JV between IEOC and Egyptian General Petroleum Corporation.

REGULATORY/TRENDS

Marginal wells still vital to U.S. production

The Interstate Oil and Gas Compact Commission (IOGCC) has released the 2015 Marginal Well Report that documents marginal well activity and the economic contribution of marginal production in the U.S. Despite the downturn, marginal wells remain in widespread operation across the country, and continue to reliably produce a meaningful share of the nation’s hydrocarbons. According to the report, 72.2% of all operating wells in the U.S. in 2015 were marginal. The total number of producing marginal wells, which IOGCC defines as a well that produces 10 bbl of oil or 60 Mcfg per day or less, increased by nearly 24,000 since the prior survey in 2012, an increase of 3%. The report, which includes 29 states, is based on data collected from the IOGCC marginal well survey that covers production activity for 2013, 2014 and 2015.

Aker Solutions, Det norske, Subsea 7 form development alliance

Aker Solutions, Det norske oljeselskap and Subsea 7 have agreed on a “one for all, all for one” collaboration model that marks a major shift in how an operator and its suppliers work together. According to a statement announcing the initiative, the alliance will enable the operator and suppliers to work as one integrated team to find the most cost-effective solutions for developing Det norske’s Norwegian subsea field portfolio. “This alliance enables a holistic approach to our subsea developments that will promote an effective reuse of solutions and best practices across the portfolio to significantly save time and reduce costs,” said Karl Johnny Hersvik, CEO of Det norske. The companies will form an integrated project management team, led by a manager from Det norske, with experts from each firm. Overall management of the alliance will be through a steering committee comprised of senior management from each company. 

Alberta greenlights three new oil sands developments

Three proposed oil sands developments in Canada have cleared an important early step in the regulatory process. The Alberta government has approved the proposals for Blackpearl Resources’ Blackrod SAGD development; Surmont Energy’s Wildwood SAGD project; and Husky’s Saleski oil sands development. Collectively, these projects represent about C$4 billion of potential investment into Alberta’s economy and about 95,000 bopd of production. The Blackrod oil sands project is about 200 km southwest of Fort McMurray; the Wildwood project is 65 km south of Fort McMurray; and the Saleski project is 100 km to the west of Fort McMurray. Final investment decisions on the projects are at the discretion of the companies.

PRODUCTION

Eni restarts Goliat after gas leak

Eni has resumed production from Goliat field, the company said in a statement dated Sept. 27. Production from the field was halted in August after a gas leak. The incident was investigated internally and a number of organizational and technical improvements were implemented, Eni said. Goliat lies in PL229, in the southwestern section of the Barents Sea, 80 km northwest of Hammerfest, Norway. Eni Norge (65%) is the operator with Statoil (35%) as its partner.

CNOOC begins output at oil field offshore China

CNOOC’s Enping 18-1 oil field, which lies in the Pearl River Mouth basin of the South China Sea and has an average water depth of approximately 90 m, has commenced production. According to CNOOC, three wells are producing about 2,010 bopd at the field. However, the project is expected to reach peak production, of about 11,800 bopd, within the year. CNOOC holds a 100% interest in the field and acts as the operator.

PDVSA to start drilling in Orinoco belt

PDVSA is to start a major drilling program in the Orinoco heavy crude belt. The Caracas-based NOC is planning to drill 480 wells, with the aim of adding 250,000 bopd of new production over the next 30 months.

Shell starts production at Stones field

Shell has started production from the Stones development in the U.S. Gulf of Mexico. Stones is expected to produce around 50,000 boed when fully ramped up at the end of 2017. The host facility for the development is the Turritella FPSO vessel, which produces through subsea infrastructure situated under 9,500 ft of water. Stones, which is 100%-owned and operated by Shell, is the company’s second producing field in the Lower Tertiary geologic frontier in the Gulf of Mexico, following the start-up of Perdido in 2010.