DISCOVERIES & DEVELOPMENTS

Talos Energy reports successful well test at Zama discovery 

Talos Energy—alongside consortium partners Sierra Oil & Gas and Premier Oil—has provided an update on the Zama appraisal program in Mexico’s Block 7, in the prolific Sureste basin. To better define the resource potential of the Zama discovery, the consortium is drilling three appraisal wells. The Zama-2 ST1 sidetrack well was drilled 589 ft updip of the Zama-2 well and approximately 1.4 mi north of the Zama-1 exploration well. The primary goals of the 11,643-ft (TD) well were to test the northern limits of the reservoir; to acquire a whole core to collect detailed rock properties; and to perform a well test in several perforated intervals. An unprecedented 714 ft of whole core, with 98% recovery, also were captured. This is the longest whole core to ever be acquired in a single well offshore Mexico, according to Talos. Following DST operations, a combined flowrate of 7,426 bopd was achieved from two separate flow tests over a total perforated interval of 248 ft. Flow and pressure measurements reportedly indicate a prolific reservoir. The rig will now move to drill the third and final appraisal well (Zama-3) on Block 7. The goal will be to confirm lateral reservoir continuity and quality in the field’s southern region. Photo: Talos Energy.

ExxonMobil announces another discovery offshore Guyana 

ExxonMobil’s latest oil discovery marks its 13th find offshore Guyana. The discovery adds to a previously announced estimate of 5.5 Bboe of recoverable resources on the Stabroek Block. Yellowtail-1, which was drilled by the Noble Tom Maddendrillship (pictured) about 6 mi northwest of the Tilapia discovery, encountered approximately 292 ft of high-quality oil-bearing sandstone reservoir and was drilled to a depth of 18,445 ft in 6,046 ft of water. It is the company’s fifth discovery in the Turbot area, which it expects to become a major development hub. Meanwhile, ExxonMobil has reported that other exploration and development activities on the block are moving forward. The Stena Carronis completing a well test at the Longtail-1 discovery and upon completion will drill the Hammerhead-3 well. Later this year, the drillship is scheduled to drill a second well at the Ranger discovery. Additionally, the Noble Bob Douglasdrillship is presently completing drilling operations for the Liza Phase 1 development. ExxonMobil says that it also is evaluating plans to add another exploration drillship to the region, bringing its total number of drillships offshore Guyana to four. The company is aiming to produce more than 750,000 bopd on the Stabroek Block by 2025. Photo: Noble Corp.

Energean Oil & Gas reports discovery offshore northern Israel 

Energean Oil & Gas has announced a significant gas find at its Karish North exploration well. The well was drilled to a TD of more than 16,010 ft, encountering a gross hydrocarbon column of nearly 817 ft. An 88.5-ft core also was recovered. Initial gas-in-place has been estimated between 1 Tcf and 1.5 Tcf. Further evaluation will be undertaken, however, to refine resource potential and determine the liquids content of the discovery, the company reported. Energean will now deepen the well to evaluate hydrocarbon potential at the D4 horizon. The Karish North discovery reportedly will be commercialized via a tie-back to the Energean Power FPSO, situated about 3.3 mi from the Karish North well. Energean CEO Mathios Rigas said, “We are building the Energean PowerFPSO with spare capacity, which will enable us to quickly, safely and economically develop both Karish North and future discoveries. We have already signed a contingent contract to sell 0.2 Tcf of this new resource, and our strategy is now to secure the offtake for remaining volumes.”

Total, partners move forward with framework for Papua LNG project 

Total—alongside partners ExxonMobil (28.3%) and Oil Search (17.7%)—has signed a gas agreement with the Independent State of Papua New Guinea, outlining the fiscal framework for the Papua LNG project. According to the project partners, the agreement allows the project to enter the FEED phase of study, which will lead to FID in 2020. The Papua LNG project, which boasts a capacity of 5.4 MMtpa, will consist of two LNG trains of 2.7 MMtpa capacity, each. It is expected to unlock more than 1 Bboe. According to Total—operator of the Elk and Antelope onshore fields and the largest shareholder of the PRL-15 permit (31.1%)—the project’s LNG plant will be developed in cooperation with the ExxonMobil-operated PNG LNG project, through an expansion of the existing plant at Caution Bay. 

Shell reports deepwater discovery at Blacktip prospect in the U.S. GOM

Shell Offshore Inc. has reported a significant discovery at the Blacktip prospect, in the deepwater U.S. Gulf of Mexico. Blacktip is in the Perdido thrust belt and was found in the Alaminos Canyon Block 380, approximately 30 mi from the Perdido platform and Whale discovery. The company says that the find is an opportunity to enhance existing production in the Perdido area, where its Great White, Silvertip and Tobago fields are already producing. In a release, Shell’s Upstream Director Andy Brown said, “Blacktip is Shell’s second material discovery in the Perdido Corridor and is part of a continuing exploration strategy to add competitive deepwater options to extend our heartlands.” Drilling at the initial Blacktip well reportedly is still underway, encountering more than 400 ft of net oil pay, to date. Evaluation of the discovery is ongoing and appraisal planning is underway, according to Shell. Shell is operator of Blacktip, with a 52.375% interest. Partners include Chevron (20%), Equinor Gulf of Mexico (19.125%) and Repsol E&P USA Inc. (8.5%).

Zennor gives positive update from Finlaggan field

Zennor Petroleum has reported several positive developments at Finlaggan field, in the UK Central North Sea (Block 21/05c and 21/05d, License P2013). The project reportedly is targeting 30 MMboe of gas condensate reserves from two subsea production wells, which are tied back to the ConocoPhillips-operated Britannia platform. Both production wells (F1 and F2) have reportedly been drilled and cased to their target depths, with long and highly productive lateral sections through the Lower Cretaceous reservoirs. Zennor said that both well results have been “very encouraging,” with F1 indicating high-quality hydrocarbon-bearing sands in the northern extension of Finlaggan. Likewise, F2 proved sand continuity over the previously interpreted fault between the southern two segments of the field.

MERGERS & ACQUISITIONS

Bidding war heats up between Oxy, Chevron in Anadarko takeover 

In early April, Chevron announced that it would acquire Anadarko Petroleum for $33 billion. The company said that the acquisition would significantly enhance its upstream portfolio and further strengthen its position in large, attractive shale, deepwater and natural gas resource basins. Shortly thereafter, however, Occidental Petroleum entered a $38-billion counteroffer in an effort to derail Chevron’s proposed takeover. Although tempting, Bloomberg reported that that it may not be enough for Anadarko, as Oxy’s smaller size and balance sheet means more uncertainty. Nevertheless, by the end of the month, rumors began to swirl, and it was reported that Anadarko was “preparing to endorse” Oxy’s offer. Oxy President and CEO Vicki Hollub said that the company “is a leader in using technological innovation to create value,” and it will use its expertise “to enhance the performance and productivity of Anadarko’s assets, not only in the Permian, but globally.” With operations spanning three continents, Anadarko also is one of the largest independent U.S. oil producers, with substantial assets in the prolific Permian basin. Photo: Anadarko Petroleum.

Chrysaor buys ConocoPhillips’ UK oil, gas business for $2.675 billion 

Chrysaor Holdings Limited is set to acquire ConocoPhillips’ UK oil and gas business for $2.675 billion. The assets acquired reportedly produced about 72,000 boed in 2018, boosting Chrysaor’s pro forma 2018 production to 177,000 boed. Additionally, ConocoPhillips’ UK assets contain more than 280 MMboe of proved and probable oil and gas reserves, with a further significant contingent resource base. According to a release, the acquisition makes the company one of the largest oil and gas producers in the UK North Sea. With the acquired assets, Chrysaor’s pro forma 2P reserves reportedly total 600 MMboe, and production in 2019 is expected to exceed 185,000 boed. The company said that the acquisition adds three key material assets to its portfolio, as well, including two new operated hubs in the UK Central North Sea—Britannia and J-Block. The third asset is an interest in the Clair field area, situated in the highly prospective West of Shetlands region. 

Murphy Oil acquires deepwater GOM assets from LLOG 

Murphy Exploration & Production Company, a subsidiary of Murphy Oil Corp., has agreed to acquire deepwater Gulf of Mexico assets from LLOG Exploration Offshore and LLOG Bluewater Holdings for a cash consideration of $1.375 billion. The acquired assets—consisting of 26 GOM blocks containing seven producing fields and four development projects, with future start-ups in the Mississippi and Green Canyon areas—reportedly are expected to add approximately 66 MMboe of proven reserves and 122 MMboe of proven and probable reserves. It adds approximately 32,000 to 35,000 net boed to Murphy’s GOM production, which is anticipated to reach about 85,000 net boed in 2019. There are additional contingent consideration payments, which are based on up to $200 million, in the event that revenue from certain properties exceeds certain contractual thresholds between 2019 and 2022; and $50 million, following first oil from certain development projects. 

REGULATORY

Trump administration issues Executive Orders for energy infrastructure  

While visiting the Houston area last month, President Trump issued an Executive Order (EO), promoting energy infrastructure and economic growth. As “a dominant energy force,” Trump says that the U.S. will continue as an undisputed global leader in crude oil and natural gas production. According to the U.S. Chamber of Commerce’s Global Energy Institute, the administration’s actions will help increase “predictability and transparency, which are both necessary to drive investment in energy infrastructure.” Likewise, IPAA Executive V.P. Lee Fuller said, “In particular, IPAA supports the aspect of the EO that calls on EPA to update the interim 2010 guidance over permitting under Section 401 of the Clean Water Act (CWA). This guidance, overdue for updating, has allowed for implementation of the CWA in a manner inconsistent with the statute and to inhibit projects that are clearly in interstate commerce. IPAA is encouraged that, with the EO, the updated guidance will reinstate the cooperative federalism that allows for the distinct roles of federal and state governments in certifying federally-permitted or licensed activities. Sec. 401 governs vital stream crossing permits for interstate natural gas pipelines. IPAA believes that the updated guidance will prevent any future misuse by certain states in their reviews and unwarranted denials of Sec. 401 permits.”