MERGERS & ACQUISITIONS

Shearwater GeoServices buys Schlumberger’s marine seismic business for $650 million

Shearwater GeoServices Holding AS has entered a definitive agreement to acquire the marine seismic acquisition assets and operations of WesternGeco, Schlumberger’s geophysical services product line, for $650 million. The deal consists of 10 seismic acquisition vessels, including seven 3D vessels and three multi-purpose ships, 12 complete streamer sets with spares, as well as two source vessels. Additionally, the acquisition includes WesternGeco proprietary marine seismic technology, and development and manufacturing facilities in Norway and Malaysia. According to Shearwater, the company now has nearly 600 employees and operates in all major offshore basins, worldwide.

Major acquisitions set to position Diamondback Energy as third-largest producer in the Permian

Diamondback Energy, Inc., has entered into an agreement to acquire Energen Corp. for $9.2 billion, including Energen’s net debt of about $830 million. The acquisition consists of more than 266,000 net acres in the Permian basin, with a combined pro forma second-quarter 2018 production of over 222,000 boed. Additionally, it includes 390,000 net acres across the Midland and Delaware basins. Diamondback CEO Travis Stice said, “The synergies provided in this transaction, as well as the opportunities for capital improvements provided by increased size and scale, create a truly outstanding value proposition. The combined company’s expected production growth, capital productivity and cost structure will enhance our free cash flow profile to grow our long-term capital return program.” The acquisition was announced one week after the company’s $900-million purchase of Ajax Resources, which holds 25,000 acres in the Permian. Upon closing of the two deals, Diamondback Energy reportedly will become the third-largest producer in the Permian.

Santos acquires Quadrant Energy for $2.15 billion

Santos has acquired 100% of Quadrant Energy for $2.15 billion, as well as potential contingent payments related to the Bedout basin, offshore Western Australia. “This acquisition delivers increased ownership and operatorship of a high-quality portfolio of low-cost, long-lift conventional Western Australian natural gas assets, which are well known to Santos and significantly strengthens Santos’ offshore operating capability,” said Santos Managing Director and CEO Kevin Gallagher in a release. “It is materially value accretive for Santos shareholders and advances Santos’ aim to be Australia’s leading domestic natural gas supplier.” The acquired assets include Quadrant’s natural gas and oil production, near- and medium-term development, appraisal and exploration assets across more than 52,000 km² of acreage. This acreage is primarily in the Carnarvon basin, offshore Western Australia—the country’s largest offshore oil and gas province. The acquisition also includes a large inventory of discovered resources and a leading position in the highly prospective Bedout basin, which includes the recent, significant Dorado oil discovery (Quadrant, 80%). Dorado is said to be one of the largest resources ever found on the NW Shelf, with an estimated 171 MMbbl of oil.

Kosmos Energy buys Deep Gulf Energy for $1.22 billion

Kosmos Energy has announced that it will acquire Deep Gulf Energy, operating in the deepwater Gulf of Mexico (GOM), for $1.225 billion. The acquisition is expected to help Kosmos double its production in the next four years, according to the company. Andrew G. Inglis, Kosmos president and CEO, said in a release, “With other operators leaving the GOM to chase onshore shale plays, an opportunity has opened in the basin. The best deepwater assets can compete with the best of shale, and now is a good time to enter the GOM.” He said that the transaction, which is set to close by the end of third-quarter 2018, is immediately accretive, delivering sustainable production and free cash flow growth. Deep Gulf Energy’s assets include projects in the East Breaks, Garden Banks, Green Canyon and Mississippi Canyon Blocks of the GOM.

BUSINESS

Norwegian companies partner to strengthen national AI initiative

Companies in Norway are joining forces to strengthen national efforts to become a pioneer in artificial intelligence (AI). Companies—including Telenor, NTNU, SINTEF, DNB, DNV GL, Equinor and Kongsberg—are teaming up to open a new Norwegian Open AI Lab, where industry-specific solutions will be developed. The R&D lab, which is an expansion of the Telenor-NTNU AI Lab in Tronheim, is expected to give Norway a competitive advantage in the global energy market. According to the partners—who will contribute funding, as well as expertise and data—the initiative will strengthen Norway’s position as a leader in AI, machine learning and big data.

Maersk to offload drilling assets separately while exiting energy sector

As it exits the energy industry to focus on its transport and logistics business, A.P. Moller-Maersk A/S announced that it will list its drilling unit separately. The Danish company said that it had explored “all options” for Maersk Drilling before making the decision, determining that a separate listing would “create the best value for [its] shareholders.” In a news release, Maersk Chairman of the Board Jim Hageman said, “The Maersk Drilling team has done a remarkable job operating the business at a time of high uncertainty and is well-positioned to become a successful company on Nasdaq Copenhagen. The announcement of the intention to list Maersk Drilling completes the decision process on the structural solutions for the major oil and oil-related businesses. Yet another important step in delivering on the strategy.” Maersk Drilling’s separate financing reportedly is expected to release cash proceeds of approximately $1.2 billion. 

DISCOVERIES & DEVELOPMENTS

ExxonMobil reports ninth discovery offshore Guyana

ExxonMobil (operator, 45%), alongside partners Hess Guyana Exploration Ltd. (30%) and CNOOC Nexen Petroleum Guyana (25%), struck its ninth find offshore Guyana. The Hammerhead-1 discovery is the company’s fifth find on the Stabroek Block this year, encountering approximately 197 ft of high-quality, oil-bearing sandstone reservoir. It is situated about 13 mi southwest of Liza-1 and adds to a previously estimated recoverable resource of 4 Bboe. The well, drilled by the Stena Carron drillship (pictured), reached a depth of 13,862 ft in 3,373 ft of water.  “The Hammerhead-1 discovery reinforces the potential of the Guyana basin, where ExxonMobil is already maximizing value for all stakeholders through rapid, phased developments and accelerated exploration plans,” Steve Greenlee, president of ExxonMobil Exploration Co., said in a release. “Development options for Hammerhead will take into account ongoing evaluation of reservoir data, including a well test.” 

Nexen receives full sanction for Buzzard Phase II, offshore UK

Nexen said that it received full sanction of the Buzzard Phase II project from its partners—Suncor Energy UK Limited, Chrysaor Limited, Dyas EOG Limited and Oranje-Nassau Energie Resources Limited. Additionally, the company announced that the UK Oil and Gas Authority has approved the Field Development Plan (FDP). Buzzard field—situated nearly 60 mi northeast of Aberdeen, Scotland, in nearly 315 ft of water—is the largest UK North Sea oil discovery in the past two decades. Phase II of the project is a subsea development of the northern Buzzard area, where additional reserves can be developed and new production can be brought onstream. It consists of a 12-slot manifold (eight production slots and four water injectors), tied back to the existing infrastructure with a pipeline bundle assembly that incorporates pipelines, manifolds, subsea controls and chemical injection. According to the company, a brownfield module also will be installed on the production platform for processing and export via current export pipeline routes. First oil reportedly is scheduled for first-quarter 2021.

Yamal LNG sees export of first gas from second LNG train

Novatek (50.1%)—alongside partners Total (20%), CNPC (20%) and Silk Road Fund (9.9%)—started up the second of three trains at the Yamal LNG project, in northern Russia. The first shipment from the train left Sabetta in early August. According to Novatek, the second LNG train was commissioned six months ahead of schedule, operating at a nameplate capacity of 5.5 MMtpa. Start-up of the second train brings the project’s total capacity in operation to 11 MMtpa. “We have not only commissioned the first train at Yamal LNG on time, and on budget, but we have significantly expedited the formal commissioning of the second train,” Leonid Mikhelson, chairman of Novatek’s management board, said in a release. “Presently, the third LNG train start-up is also expected to be launched significantly ahead of original schedule—an unprecedented achievement for the LNG industry. The total operating capacity of the two working LNG trains already approximates about 3.5% of the global LNG market and becomes a significant project in the context of the global LNG landscape. Our strategic goal is to produce between 55 and 60 MMtpa by 2020.”

Savannah Petroleum reports its fourth oil discovery in southeastern Niger

Savannah Petroleum reported its fourth consecutive discovery in its ongoing exploration campaign in the R3 portion of the R3/R4 PSC Area, in the Agadem Rift basin of southeastern Niger. The Eridal-1 well, drilled by the GW 215 rig, reached a total MD of nearly 8,340 ft and encountered an estimated 44.6 ft of net oil-bearing reservoir sandstones in the E1 reservoir unit, within the primary Eocene Sokor Alternances objective. According to the company, production tests will be performed on at least two of its discovery wells as a precursor to implementing its Niger Early Production Scheme (EPS). Until the well test program has been carried out, the company said it will not disclose a discovered resource and volumes report. The GW 215 rig will now mobilize to the Zomo-1 well site, on the R3 portion of the R3/R4 PSC Area, about 7.5 mi from Eridal-1.