EXPLORATION

Schlumberger acquires surveys for deepwater GOM

Schlumberger has completed the acquisition of approximately 2,750 km² of two, new, full-azimuth multi-client seismic surveys over the Garden Banks and Green Canyon areas in the Gulf of Mexico. These acquisitions are the initial phase of the Revolution X and Revolution XI surveys, and will provide full-azimuth, high-density broadband data to optimize future operational decisions. When completed, the Revolution X and Revolution XI surveys will provide more than 3,800 km² and 2,940 km² of 3D data, respectively, for suprasalt and subsalt targets, and deeper subsalt Miocene and Wilcox formations.

CGG kicks off Davros survey in Northern Carnarvon basin

CGG has started acquiring the Davros 3D BroadSeis and BroadSource multi-client survey in the Northern Carnarvon basin, on the North West Shelf of Western Australia, the company said. Covering in excess of 11,000 km², Davros is the largest seismic survey ever to be acquired by CGG in the Asia-Pacific region. The survey is being conducted by the Viking Vision. The vessel is equipped with 12 Sercel Sentinel RD 2 Hz streamers, each measuring 8,250 m. The data will be imaged by CGG. The Davros multi-client solution was designed to address the imaging challenges of the Rankin Trend, such as the effects of the high-velocity carbonate overburden, steeply dipping structures, fault shadow and structural complexity at depth, all of which are critical for the optimal selection of drilling targets in this area. Once complete, Davros will provide clear images of this high-potential area.

Fugro takes delivery of survey vessel Fugro Americas

Fugro has taken delivery of Fugro Americas, a newbuild shallow-draft survey vessel. Fugro Americas is optimized for working in the Gulf of Mexico, but the vessel is also suitable for other geographical areas. It is permanently mobilized and available for rapid deployment to locations throughout North and South America, as well as the Caribbean. The 59-m-long vessel can carry out a wide range of offshore services, including high-resolution geophysical and light geotechnical surveys in water depths of up to 4,500 m. Image courtesy of Fugro.

ION expands West African data library

ION Geophysical has completed the seismic acquisition stage of the company’s NamibiaSPAN program, which extends over the full length of Namibia’s offshore continental margin. Acquisition was conducted in cooperation with BGP. With an estimated 100 Bbbl of oil remaining to be discovered and produced in Africa’s offshore waters, NamibiaSPAN helps establish a contiguous dataset for the full West Africa margin, extending from Mossel Bay to the Bight of Benin. NamibiaSPAN comprises over 10,000 km of 2D multi-client data and represents the newest addition to ION’s BasinSPAN library. Data processing and imaging are underway, with pre-stack time migration data scheduled for availability by July 2015 and pre-stack depth migration data available by October 2015. “In conjunction with existing and planned BasinSPAN surveys in adjacent countries, NamibiaSPAN should help lift offshore activity in one of the world’s most important regions for oil and gas production,” Joe Gagliardi, senior V.P. of ION’s GeoVentures group, said.

Myanmar inks offshore PSCs with several firms

Woodside signed production sharing contracts (PSCs) for Blocks AD-2 (55%, operated), AD-5 (45%, operated), A-4 (45%) and A-7 (45%), which were awarded to the company in the Myanmar Offshore Block Bidding Round-2013. In addition, Eni SPA has signed PSCs for Blocks MD2 and MD4 offshore Myanmar following participation in the same bidding round. Eni (80%) will operate the blocks, and Petrovietnam will hold the remaining 20%. India’s Reliance Industries (96%, operator) also signed PSCs for Blocks M17 and M18. The remaining 4% will be held by Myanmar-based United National Resources Development Services Co. Ltd.

GOVERNMENT/REGULATORY

Central Gulf of Mexico lease sale yields $539 million in high bids

The U.S. Department of the Interior’s Bureau of Ocean Energy Management (BOEM) held a lease sale in March for the Central Gulf of Mexico that drew $538.8 million in high bids for tracts on the U.S. Outer Continental Shelf, offshore Louisiana, Mississippi and Alabama. Forty two companies submitted 195 bids on 169 tracts, covering about 923,700 acres. The sum of all bids received totaled $583.2 million. Lease Sale 235 offered 7,788 unleased blocks, covering about 41.2 million acres, located from 3 to 230 nautical miles offshore, in water depths ranging from 9 ft to more than 11,115 ft. BOEM estimates the sale could result in the production of 460 MMbbl to 890 MMbbl of oil, and 1.9 Tcfg to 3.9 Tcfg. The sale also included 201 blocks located, or partially located, within the 3-statute-mile U.S.-Mexico Boundary Area, as well as blocks within the former Western Gap that lies within 1.4 nautical mi north of the Continental Shelf Boundary between the U.S. and Mexico. These areas are subject to the terms of the U.S.-Mexico Transboundary Hydrocarbon Agreement, which entered into force on July 18, 2014. None of those blocks received bids.

Interior releases final rule for fracing on public, tribal lands

Final standards for hydraulic fracturing on public and American Indian lands were release on March 20 by U.S. Interior Secretary Sally Jewell. The final rule applies only to development on public and tribal lands, and includes a process so that states and tribes may request variances from provisions for which they have equal or more protective regulation in place. The rule met with immediate opposition from industry groups, including API and IPAA. Erik Milito, API’s director of upstream and industry operations, said the rule “is just one more barrier to growth,” adding that it would stand “in the way of further progress.” Meanwhile, IPAA and the Western Energy Alliance responded to the final rule by filing a lawsuit against Secretary Jewell and the Bureau of Land Management (BLM). The lawsuit, filed in federal district court in Wyoming, characterizes BLM’s rulemaking
as “a reaction to unsubstantiated concerns” and requests the regulations be set aside, because the administrative record lacks the factual, scientific or engineering evidence necessary to sustain the agency’s action.

DISCOVERIES

BP in second deepwater gas find offshore Egypt

BP Egypt has struck a deepwater gas discovery in the North Damietta Offshore Concession in the East Nile Delta. The Atoll-1 exploration well, drilled by the sixth-generation semisubmersible, Maersk Discoverer, reached a 6,400-m depth and penetrated approximately 50 m of gas pay in high-quality Oligocene sandstones, the company said in a March 9 statement. Expected to be the deepest well ever drilled in Egypt, the Atoll well still had another 1,000 m to drill, to test the same reservoir section found to be gas-bearing in the company’s 2013 Salamat discovery, 15 km to the south. BP Group CEO Bob Dudley commented, “This is the second significant discovery in the license after Salamat. The estimated potential in the concession exceeds 5 Tcf, and we now have a positive starting point for the next possible major project in Egypt after BP’s West Nile Delta project.” BP has 100% equity in the discovery. Image courtesy of Maersk Drilling.

GDF Suez in Central North Sea oil discovery

GDF Suez E&P UK and its co-venturers have hit a discovery in the UK Central North Sea. Well 22/16-6, on the Dalziel structure, flowed at rates in excess of 8,000 boed. The well was being sidetracked to appraise the extent of this discovery, according to a March 12 GDF statement. Block 22/16 is part of GDF Suez-operated license P-1799. Well 22/16-6 was drilled by the Transocean Galaxy II jackup. The co-venturers are GDF Suez E&P (30%), RWE DEA (25%), JX Nippon Exploration and Production (25%) and Total E&P (20%).

Petrobras reports large hydrocarbon column at Libra extension well

The Libra consortium has finished drilling extension well C1, Petrobras reported on March 24. Drilling results confirmed the presence of a hydrocarbon column approximately 200 m deep, in reservoirs with good permeability and porosity characteristics. The C1 well is in the central part of the Libra Block, in the Santos basin. The final depth reached was 5,780 m, including a water depth of 2,160 m. This is the second well drilled successfully by the Libra consortium, and it is 18 km from the first well. The consortium will continue with the exploration plan by drilling new wells, to evaluate the Libra area.

Statoil boosts Aasta Hansteen with new gas find

Statoil has found gas in the Snefrid Nord prospect of the Norwegian Sea. The discovery is an important contribution to the Aasta Hansteen field development project and Polarled pipeline utilization, the company said. The Snefrid Nord discovery is in the deepwater Vøring area, in the immediate proximity of the three gas discoveries comprising the Aasta Hansteen field development. Statoil estimates the volumes in Snefrid Nord to be in the range of 31 MMbbl to 57 MMbbl of recoverable oil equivalent. 

BUSINESS

Schlumberger to pay $233 million fine in Iran, Sudan sanctions case

Schlumberger Oilfield Holdings Ltd. (SOHL), a wholly owned subsidiary of Schlumberger Ltd., has agreed to enter a guilty plea and pay a $232,708,356 penalty to the U.S. government for conspiring to violate the International Emergency Economic Powers Act by willfully facilitating illegal transactions and engaging in trade with Iran and Sudan. The plea agreement, which is contingent upon the court’s approval, also requires SOHL to submit to a three-year period of corporate probation and agree to continue to cooperate with the government, and not commit any additional felony violations of U.S. federal law. 

Statoil delays Castberg, Snorre projects to cut costs

The licensees in the Johan Castberg and Snorre 2040 licenses have decided to spend more time on the projects, Statoil announced on March 6. The Johan Castberg partnership has decided to postpone the decision to continue the so-called DG2, until the second half of 2016, with expectations for an investment decision in 2017. The Snorre partnership has decided to extend the progress plan for Snorre 2040. The new schedule for the preliminary decision to implement is the fourth quarter of 2016.

Southwestern sells assets in East Texas, Arkoma basin

Southwestern Energy has executed a definitive agreement with a private buyer to sell Southwestern’s conventional assets in East Texas and the Arkoma basin for approximately $218 million. The proceeds from the transaction will be used to reduce debt. The transaction is expected to close in the second quarter of 2015.

PRODUCTION

BG produces first oil from Knarr field, offshore Norway

BG Group’s Petrojarl Knarr FPSO has started production from Knarr oil field in the North Sea. The FPSO has been leased from Teekay Corp. and is moored approximately 120 km off the Norwegian coast. It has a production capacity of 63,000 boed and a storage capacity of 800,000 bbl. Discovered in 2008, Knarr field has estimated, gross recoverable reserves of around 80 MMboe, with a production life of at least 10 years. In 2011, Knarr field was merged with Knarr West field into an integrated development. BG operates the field with a 45% working interest. Image courtesy of BG Group. 

Exxon resumes drilling at Alaskan field

Exxon Mobil has resumed drilling at Point Thomson on Alaska’s North Slope, as construction continues toward bringing the initial production system online. “The initial production will give us invaluable insight into the potential development of the reservoir, and help provide Alaskans with economic benefits,” said Jim Flood, Exxon Mobil Development Company’s Arctic V.P. The initial production system is designed to produce up to 10,000 bcpd and is scheduled for start-up in 2016. Two injection wells will work in tandem with a production well, cycling up to 200 MMcfgd through an onsite central processing facility. The condensate will then be transported by a 22-mi pipeline to the Trans-Alaska Pipeline System. The Point Thomson reservoir holds an estimated 8 Tcfg and associated condensate.

First gas reported from Indonesian field

Premier Oil has begun gas output from Pelikan field in Natuna Sea Block A, offshore Indonesia. This follows first gas from Naga field, also on Natuna Sea Block A, in November 2014. Pelikan and Naga will deliver additional reserves into the Singapore and Indonesian domestic market, under the company’s long-term gas contracts. Premier—with a 28.67% equity stake—operates Natuna Sea Block A on behalf of its partners KUFPEC, Pertamina, PTT and Petronas.

Husky Energy brings Alberta’s Sunrise Energy project online

Husky Energy has started oil production at the Sunrise Energy project in northern Alberta, the company reported on March 11. Steam operations began in December 2014. Production is expected to ramp up to full capacity at 60,000 bopd around the end of 2016. Husky is the operator of Sunrise, which is approximately 60 km northeast of Fort McMurray. The company has a 50% working interest in the SAGD project with BP, which operates the jointly-owned BP-Husky Toledo refinery, where bitumen from Sunrise can be processed. Husky Energy CEO Asim Ghosh said, “We are expecting more than 40 years of production from this reservoir, with very low, ongoing capital costs.”

MERGERS/ACQUISITIONS

C&J Energy, Nabors complete merger

C&J Energy Services, Inc. and Nabors Industries Ltd. have completed the combination of C&J with Nabors’ completion and production services business. The resulting combined company, which has been renamed C&J Energy Services Ltd., is one of the largest completion and production services providers in North America, led by the current C&J management team, with Josh Comstock serving as CEO and chairman of the board, and Randy McMullen serving as president and CFO. Nabors received approximately $688 million in cash from C&J as a portion of the consideration for the transaction and now owns approximately 53% of the outstanding and issued common shares of C&J Energy Services Ltd., with the remainder held by former C&J shareholders.

Quicksilver Resources files for bankruptcy protection

Quicksilver Resources said that the company and its U.S. subsidiaries have each filed a voluntary petition under Chapter 11, as the first step in a financial restructuring. Quicksilver’s Canadian subsidiaries were not included in the Chapter 11 filing and will not be subject to the U.S. requirements. Quicksilver Resources Canada Inc. (“QRCI”) has reached an agreement with its first lien secured lenders, regarding a forbearance for a period up to, and including, June 16, 2015, of any default under QRCI’s first lien credit agreement arising due to the filing. The company does not anticipate that U.S. and Canadian operations will be interrupted as a result of the filing. Quicksilver has filed a series of motions with the court to ensure the continuation of normal operations, including requesting court approval to continue paying employee wages and salaries, and providing employee benefits without interruption. The company also has asked for authority to continue honoring royalty obligations, working interest obligations, and other obligations related to oil and gas leases.