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Thursday, 14 September 2017 10:16

Ophir still reaching for Fortuna FID

Ophir Energy is holding out hope that the Fortuna FLNG project offshore Equatorial Guinea will reach final investment decision (FID) by the end of the year, however, the company still has a few hurdles to pass.

Fortuna FLNG. Illustration from Ophir.

“Given that the remaining milestones are dependent on multiple stakeholders, it has proven difficult to precisely forecast FID timing,” Ophir said in its 1H 2017 report. “However, with the strong progress seen in the first half of 2017 and the current intensive effort from all parties, we presently still expect FID of the Fortuna Project to be achieved in Q4 2017.” 

During 1H 2017, project partners signed an umbrella agreement that established the full legal and fiscal framework for the Fortuna FLNG project. The key milestone outstanding prior to FID is the completion of the project funding, which Ophir expects to be completed ahead of an FID decision during 4Q 2017.

“Our priorities in 2017 are achieving the Fortuna FLNG Project FID and realizing incremental value across our operated production base. Fortuna has made significant progress in the first half of 2017 and now has one primary milestone outstanding: namely the project financing. Once this is achieved, we will seek shareholder approval and the formal decree from the President of Equatorial Guinea,” Ophir Chief Executive Nick Cooper said.

In the meantime, Ophir is allocating its capital to projects that the company believes will offer the best risk weighted return on capital.  The company said it will focus on monetizing its net 1 billion boe of discovered resources.

The Ophir board plans to follow this plan for the next two to three years, which it expects to deliver material returns to shareholders in the current environment. Plans include directing exploration efforts on a smaller number of high quality opportunities that can be paced in a way that matches the company’s financial capacity and strategic priorities.

“A comprehensive board review in 1H 2017 identified that in a ‘lower for longer’ commodity cycle, Ophir’s competitive advantages were its material discovered resources and its healthy balance sheet. The careful use of this balance sheet to monetize our four resource plays offer a differentiated proposition of lower risk and quicker returns to Ophir’s shareholders,” Cooper said.

“The board has prioritized this monetization of our resource plays and since May we have streamlined the organization, further reduced our overhead costs and concentrated our exploration activities on to a smaller number of high quality plays that can be paced in a way that matches our financial capacity,” he said.

During the 1H period, Ophir posted a revenue of US$88.3 million, up from 1H 2016’s $52.1 million. Its full year2017 capital expenditure forecast remains at about $160 million.

Read more:

 

Ophir nears Fortuna FID, cuts workforce by 15%

Wednesday, 13 September 2017 13:23

Video: Shell's Prelude storm safe

Shell has secured its Prelude floating liquefied natural gas (FLNG) facility to the seabed offshore Western Australia, after completing the installation of eight of the 16 mooring lines.

Illustration of Prelude's turret mooring system. From SBM Offshore. 

In a video released by the supermajor, Shell showcases the mooring of leg number eight on the largest floating facility ever built, which has made the FLNG storm safe.

The Prelude is situated 200km off the coast of north-western Australia in the Prelude field, an area known for extreme weather conditions.

The Prelude FLNG facility has been designed to produce 3.6 MTPA of LNG, 1.3 MTPA of condensate and 0.4 MTPA of LPG. Prelude is 488m long and 74m wide, and weighs 660,000-tonne when fully loaded.

“The need for this mooring system to work is critical. We could hit the cyclones and this mooring system will hold us in place,” says Damian Wake, Shell offshore installation lead.

To keep the Prelude in place, Shell says that its Prelude project team created one of the strongest mooring systems ever built.

According to the company, deep inside Prelude is a turret that allows the facility to rotate or weathervane. Beneath Prelude, is one of the largest chains in the world with nearly 25,000 links attached to mooring piles drilled deep into the ocean floor.

As the video shows, the connecting of chain number eight of 16 to the seabed for the next 25 years, has made Prelude officially storm safe.

The operation to moor Prelude began with the rigging team making the steep descent into the bowels of the turret. Outside, three tugs held the Prelude in position. A crew on the Deep Orient constructon vessel retrieved the mooring line, while on the Prelude, a giant winch stood by to haul in the chain.

According to SBM Offshore, the turret mooring system’s primary function is to keep the Prelude facility on station, and limit excursions to protect its riser-system, which receives gas from the subsea architecture. Four groups of four mooring lines secure the Prelude FLNG to anchor points at water depths of 250m. The turret mooring system is designed to withstand category 5 cyclonic conditions.

The Prelude FLNG facility is operated by Shell (67.5%) in joint venture with INPEX (17.5%), KOGAS (10%) and OPIC (5%).

Read more:

VIDEO: Prelude FLNG arrives in Australia

Prelude FLNG sets sail for Australia

Wednesday, 13 September 2017 10:37

Seadrill files for bankruptcy

Seadrill has filed for bankruptcy protection, as investors fork up US$1.06 billion of new capital for the company.

Anton Dibowitz. Image from Seadrill.

The company signed deals with more than 97% of its secured bank lenders, about 40% of its bondholders, and a consortium of investors led by its largest shareholder, Hemen Holding Ltd. that delivers $1.06 billion of new capital comprised of $860 million of secured notes and $200 million of equity, the company said yesterday (12 September).

Banks have agreed to defer maturities of all secured credit facilities, totaling $5.7 billion, by approximately five years with no amortization payments until 2020 and significant covenant relief.

Additionally, Seadrill’s $2.3 billion of unsecured bonds and other unsecured claims will be converted into approximately 15% of the post-restructured equity.

By extending and re-profiling the secured bank debt, reducing leverage and delivering a significant amount of new capital, this agreement provides Seadrill with a five-year runway.

Post-restructuring, Seadrill expects to have a strong cash position and good liquidity to take advantage when the market recovers, the company said.

To implement the restructuring agreement, Seadrill filed prearranged chapter 11 cases in the Southern District of Texas together with the agreed restructuring plan yesterday.

As part of the chapter 11 cases, the Seadrill filed “first day” motions that, when granted, will enable the company’s day-to-day operations to continue as usual.

Seadrill requested authority to pay its key trade creditors and employee wages and benefits without change or interruption. Additionally, the company expects it will pay all suppliers and vendors in full under normal terms for goods and services provided during the chapter 11 cases.

“This is a testament to our position in the sector, having a large, modern fleet, a top-quality customer base and a proven operating track record. With our improved capital structure, we will be in a strong position to capitalize when the market recovers,” Anton Dibowitz, CEO and president of Seadrill Management Ltd. said. “The continued focus and dedication of all our employees throughout this process has been exceptional. It is due to our people’s commitment to deliver safe, efficient operations day in, day out that we have succeeded in reaching this restructuring agreement.”

Wednesday, 13 September 2017 10:03

Isle of Man launches licensing round

The Isle of Man has launched an offshore licensing round for acreage that has not been reviewed in more than 20 years.  

Isle of Man. Image from iStock.

Earlier this week, the state’s Department of Economic Development opened the round for hydrocarbon exploration in the Island’s waters, which is in the Irish Sea between England and Ireland.

The Island’s licensing round coincides with the UK 30th round, which includes the Irish Sea area, allowing exploration teams to take a holistic view of the potential of the region. The licensing round will close on 10 December 2017. 

“It is my pleasure to announce this important step forward in the Department’s efforts to maximize the social and economic value of the Island’s territorial seabed, which is one of the commitments made in the Program for Government,” Lawrie Hooper MHK, Department Member with responsibility for Energy Policy said. “The subsurface of the seabed is an amazing natural resource which if harnessed could generate a significant source of revenue and help to further diversify the economy.’ 

The Department’s technical advisors, British Geological Survey (BGS), have a data room available for interested companies to view seismic data at their offices in Edinburgh. 

“The opening of the Isle of Man licensing round represents a great opportunity for developers. This acreage has not been looked at for more than 20 years, when gas was identified but not extracted,” Darren Jones, Petroleum Geologist with the BGS said. “Since then, there have been huge technological advances that mean any hydrocarbons in Isle of Man territorial seas may now be economically viable to extract.”

The Isle of Man has ownership of its territorial seas, and the seabed beneath those seas, up to the 12nm limit or the median line where the distance between the UK and Isle of Man baselines is less than 24nm. The Island has control of more than 4000sq km or the Irish Sea, representing more than 87% of the Island’s territory. Within this area, the government has an opportunity to produce offshore energy for export from wind, marine renewables and hydrocarbon resources.