BUSINESS, MERGERS AND ACQUISITIONS

Gulf Publishing Company leads energy industry media coverage with acquisition of Oildom Publishing Company

Gulf Publishing Company (GPC), publisher of World Oil, has acquired Oildom Publishing Company of Texas, Inc., publisher of Pipeline & Gas Journal. Oildom Publishing is a family-owned company that was founded 109 years ago. Cleve Hogarth will continue on in his role as publisher. The acquisition adds Pipeline & Gas Journal, Pipeline News and Underground Construction to GPC’s portfolio of energy publications—World Oil, Hydrocarbon Processing and Gas Processing. Through a management buyout last year, GPC also added London-based oil and gas business and strategy journal Petroleum Economist to its stable of energy publications. With the acquisition of Oildom, GPC is now regarded as the world’s largest independent media company, devoted exclusively to the international energy industry. “The addition of Oildom is part of our strategic plan to expand as the leading provider of business and technical knowledge in the global oil and gas industry,” said John Royall, president and CEO of Gulf Publishing Company. “We are the go-to resource for our clients and Oildom’s people, products and services are an excellent complement to our organization, as they extend our global leadership to the midstream and utility sectors.”

Noble Energy acquires Clayton Williams Energy, divests Marcellus assets

Noble Energy, Inc., closed on its acquisition of Clayton Williams Energy, Inc., in late April, significantly expanding its position in the Delaware basin. Concurrently, Clayton Williams Energy has become a wholly owned subsidiary of Noble Energy, under the name NBL Permian LLC. Acquired assets include 71,000 net acres in the Southern Delaware basin, which neighbors Noble’s original Reeves County properties in Texas. Noble also has acquired 100,000 net acres in other areas of the Permian basin, as well as more than 300 mi of oil, natural gas and produced water gathering pipelines. Production from the acquired assets reportedly totals about 10,000 boed. Following the acquisition, Noble announced the divestiture of all its upstream assets in northern West Virginia and southern Pennsylvania. An undisclosed buyer purchased the Marcellus assets for a total of $1.225 billion. Proceeds from the divestiture will reportedly be used to pay down the debt accrued from the company’s Clayton Williams transaction. “[We have] significantly expanded the inventory of investment opportunities in our liquids-rich, higher-margin onshore assets, which has led us to now divest our Marcellus position,” David Stover, chairman, president and CEO at Noble, explained. The assets divested include a current production rate of approximately 415 MMcfged, as well as a 100% working interest in about 385,000 acres. At year-end 2016, total proved reserves associated with the assets were reportedly 1.5 Tcfge. According to Noble Energy, the transaction is expected to close by the end of second-quarter 2017, with an effective date of Jan. 1, 2017. 

GOVERNMENTAL/REGULATORY

U.S. on track to become net LNG exporter

In addition to President Trump’s efforts toward U.S. energy independence, the administration is said to be working toward an upsurge in exports, as well. Gary Cohn, director of the White House’s National Economic Council, said there are plans to step up approvals for LNG export terminals in the United States—which could start with a rumored project in the Pacific Northwest. While Cheniere Energy has served as the country’s only LNG exporter, of late, more than 20 applications from companies interested in sending U.S. gas overseas are said to be under review by federal regulators. In late April, the U.S. Department of Energy announced the authorization of domestic exports from the Golden Pass Terminal, in Texas. This development could further brand the U.S. as a net exporter of natural gas, as early as 2018. “We could be, and should be, the largest exporter of LNG in the world,” Cohn—who is also the former president of Goldman Sachs Group—said at the Institute of International Finance Forum in Washington. “We’re going to permit more and more of these LNG plants.”

Trump administration pursues U.S. energy independence

In President Trump’s latest push for U.S. energy independence, he has reportedly been preparing the issuance of an Executive Order that would give oil companies more offshore drilling opportunities. News of the drilling directive was issued by Secretary of the Interior Ryan Zinke in early April. The order reportedly will urge the Interior Department to move forward with sales of new offshore oil and gas rights in the U.S. Atlantic and Arctic. This would amend a five-year leasing plan set forth by the Obama administration, which prohibited offshore auctions in those areas. The Executive Order is also said to begin the reversal process of former President Obama’s decision to exempt approximately 125 million acres of the U.S. Arctic, as well as about 4 million acres of the Atlantic Ocean, from any future leasing programs. President Trump reportedly will expose Pacific waters to new drilling possibilities, as well. He is expected to order the review of locations off the coast of California for oil and gas exploration drilling, which includes the potential sale of drilling rights in territories that were restricted by the former administration. At the Offshore Technology Conference in Houston, in front of an audience of offshore energy professionals, Secretary Zinke signed two Secretarial Orders, in accord with Trump’s strategy. Secretarial Order 3550 carries out President Trump’s Executive Order directing BOEM to develop a new five-year offshore leasing program. The order will also see BOEM and BSEE review a number of other offshore rules, including those that could expedite the approval of requests for seismic surveys.

Texas Supreme Court issues ruling in environmental contamination dispute

In late April, the Texas Supreme Court, affirming the Court of Appeals of Texas, First District, issued a unanimous ruling in the case of Forest Oil Corporation v. El Rucio Land and Cattle Company, Inc., et al—which involves claims of environmental contamination caused by oil and gas operations at McAllen Ranch, and whether the Texas Railroad Commission (TRC) holds primary jurisdiction to retort the claims. The Court ruled that there is nothing in the Texas Water Code, or in other statutory provisions, that gives the TRC primary jurisdiction over the contamination disputes, if the parties involved employ their common law remedies in court.

DISCOVERIES/DEVELOPMENTS

Gazprom Neft drills first-ever multi-hole “fishbone” well on Russian Arctic shelf

Gazprom Neft has completed drilling of the first-ever multi-hole “fishbone” well, involving multiple horizontal branches. The well was drilled and commissioned at the Prirazlomnaya offshore rig. The multi-hole well, with a fishbone trajectory, reportedly does not require the construction of separate wells for each horizontal shaft. As a result, the extent of obligatory works, as well as subsequent drilling cost, is reduced. The company reported that each horizontal section, directed at a specific oil-bearing section of the strata, increases the injection capacity of the well, as well as the drainage area. According to Gazprom Neft, this new well represents the fourth injection well at Prirazlomnaya. Overall, the platform has 11 wells presently in operation. Andrey Patrushev, deputy CEO for offshore development at Gazprom Neft, said, “The most cutting-edge technologies—which are both effective and safe—have been used in developing what is a unique project on the Russian Arctic shelf.” 

A seismic imaging “breakthrough” leads to 200 MMbbl of additional resources at BP’s Atlantis field

Through a new development in seismic imaging, BP has identified more than 200 MMbbl of additional resources at Atlantis field in the Gulf of Mexico. The company has reported plans to use the same method at others fields in the Gulf of Mexico, as well as in Azerbaijan, Angola, and Trinidad and Tobago. “This technological breakthrough has essentially allowed our team to find a new oil field within our existing Atlantis field,” said Bernard Looney, CEO of BP global upstream business. “Given the overwhelming success of this project, we are now deploying this technology across BP’s global operations.” The innovation is said to enhance the clarity of seismic images, particularly those captured below the earth’s surface, where they tend be indistinct due to composite salt structures. These clearer images reportedly allow BP to drill new development wells in deepwater reservoirs with more confidence and accuracy. Additionally, BP reported that proprietary algorithms developed by its Subsurface Technical Center were applied to seismic data at its Center for High Performance Computing. This allowed data, which would customarily take a year to be fully analyzed, to be processed in a few weeks. These advancements purportedly accelerated BP’s ability to make faster development decisions.

Wintershall Noordzee reports first oil at Ravn field in the Danish North Sea

Wintershall Noordzee B.V. has announced first oil at Ravn field, in the Danish North Sea. The field, which is situated in Block 5/06, is producing from a depth of about 13,123 ft, via a newly-constructed production platform 186.5 mi north of Den Helder. According to Wintershall, the crude oil being produced from Ravn field is transported via a subsea pipeline to Wintershall Noordzee’s A6-A processing platform, which lies about 11 mi from the Ravn platform. It is then carried into the existing export network to The Netherlands. The field is reportedly being developed in several phases, which is said to facilitate the continuous gathering of valuable performance data on well productivity and the lateral extent of the reservoir. Analysis of the data provides a basis for the company’s field development decisions. Wintershall Noordzee B.V. holds a 63.64% share in Ravn field, while the Danish state-owned company Nordsøfonden holds the remaining 36.36%.

SDX Energy strikes pay at its South Disouq concession in Egypt

After reaching its first target depth, SDX Energy announced that its SD-1X well struck 65 ft of net pay, with an average porosity of 25%. The well, which is situated in the central Nile Delta area of Egypt, was drilled to a TD of 7,777 ft. As part of SDX’s South Disouq concession, the well was reportedly targeting gas in the upper Abu-Madi section, and oil from the deeper Abu Roash and AEB horizon. According to the company, results are consistent with pre-drill estimates, and additional evaluation work is underway. Following further evaluation, the company reportedly hopes to gain a more accurate recoverable volume estimate. The South Disouq concession’s Abu-Madi-Baltim trend consists of 10 discoveries, to date. These finds are said to contain approximately 6.3 Tcfg and 100 MMbbl of liquids.