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Thursday, 12 October 2017 14:20

Appomattox hull arrives in US Gulf

The hull for the Appomattox field development facility arrived last week at the Ingleside, Texas shipyard where it will undergo final construction before installation in the deepwater Gulf of Mexico.

Source: Shell

The Appomattox development project is more than 65% complete, and is on track to achieve first oil by the end of the decade, a Shell spokesperson said in a statement to OE.

Appomattox will add approximately 175,000 boe/d (Shell share) when it reaches peak production, with resources of approximately 650 MMbbl from the Appomattox and Vicksburg fields, and potential to increase in the future through near-field discoveries such as Rydberg. 

The platform will tower more than 20 stories above the ocean once fully assembled. It will float in 7400ft of water, span an area larger than two football fields, and will weigh more than the world’s largest naval aircraft carriers, Shell said.

In early August, the hull set sail for the US Gulf from Geoje, South Korea.

“This deepwater development positions Shell for competitive and sustainable growth in the Gulf of Mexico for years to come,” the company said.

Appomattox is one of three field development projects under construction in the deepwater Gulf of Mexico. The other two are Kaikias and Coulomb Phase 2.

Shell has said its deepwater business is a growth priority for the company. By 2020, Shell expects its deepwater production to grow to over 900,000 boe/d from already discovered, established reservoirs.

The company confirmed to OE that it has filed an exploration plan for Garden Banks Block 962 in the Gulf of Mexico, but the exact timing for drilling the Caramel Keg exploration well has yet to be determined.

Read more:

Appomattox hull sets sail for US Gulf

Still in the game

Thursday, 05 October 2017 10:02

Ensco, Atwood shareholders approve merger

Ensco plc announced today (5 October) that Ensco shareholders voted to approve the allotment and issuance of Ensco Class A ordinary shares to shareholders of Atwood Oceanics in connection with the all-stock acquisition of Atwood at the company’s general meeting of shareholders today.

Atwood Oceanics headquarters. Source: Atwood

The final results of the general meeting of shareholders held today indicate that 65% of the shares cast at the meeting voted in favor of this proposal.

 “We are extremely pleased that Ensco shareholders recognized the strategic and financial merits of our combination with Atwood. This transaction is a significant milestone for Ensco as we continue to execute our strategic plan to emerge from the market downturn as the clear leader in the offshore drilling sector, said Carl Trowell, Ensco’s president and chief executive officer, in a 5 October press statement.

“By acquiring Atwood at a pivotal time in the market cycle, we are purchasing high-quality assets at compelling prices as values for the highest-specification assets are at a critical inflection point. Additionally, these high-specification assets will further our ability to meet increasing customer demand and strengthen our competitive position, which coupled with significant expected synergies, will generate meaningful, long-term value for all shareholders,” Trowell commented.

Separately, Atwood announced today that its shareholders voted to adopt the merger agreement with Ensco at a special meeting of Atwood shareholders.  More than 98 percent of votes cast and 70 percent of shares outstanding were voted in favor of the transaction, Atwood reported in a 5 October press statement.

The companies anticipate the closing of the transaction will occur within one business day, assuming all other customary closing conditions are met.

Under the merger agreement, Atwood shareholders will receive 1.60 shares of Ensco for each share of Atwood common stock for a total value of $10.72 per Atwood share based on Ensco’s closing share price of $6.70 on 26 May 2017. Upon close of the transaction, Ensco and Atwood shareholders will own approximately 69% and 31%, respectively, of the outstanding shares of Ensco plc.

Announced in May of this year, the combined company will have a fleet of 63 rigs, comprised of ultra deepwater drillships, versatile deep- and mid-water semisubmersibles and shallow water jackups, along with a diverse customer base of 27 national oil companies, supermajors and independents.

Within the fleet of 26 floating rigs (semisubmersibles and drillships) are 21 ultra-deepwater drilling rigs, capable of drilling in water depths of 7500ft or greater, with an average age of five years – establishing this fleet among the youngest and most capable in the industry, Ensco said in May. The company also will have the largest jackup fleet worldwide of 37 rigs, including 27 premium units.

Evercore ISI analysts believe Ensco is one of the better positioned offshore drillers for a potential market recovery commencing in 2018. The company successfully navigated through the market downturn and is positioning for the recovery by continuing to high-grade its fleet, aligning with select customers in key geographic basins, and preserving liquidity for additional opportunities.

“With the acquisition of Atwood now complete, we expect the company to execute on its integration plans and achieve increased cost synergy targets of $60 million in 2018 and $80 million in 2019 for more than $585 million in present value of future savings after factoring $100 million of transaction costs,” Evercore-ISI analysts said in a 5 October research note.

“Although the company is advancing capex spending and taking on ATW debt, we expect Ensco to continue generating strong cash flow from operations over the next couple of years as the offshore drilling market works through a slow but steady recovery,” the analysts said.

Read more:

Updated: Ensco to takeover Atwood Oceanics

Ensco, Atwood set shareholder vote meetings

Advisory firm recommends Ensco, Atwood merger

Thursday, 05 October 2017 08:53

ExxonMobil makes fifth Guyana discovery

ExxonMobil has further confirmed the potential of the Stabroek block offshore Guyana with a fifth oil discovery in the Turbot-1 well.

Stena Carron drillship. Image from Stena Drilling.

ExxonMobil affiliate Esso Exploration and Production Guyana started drilling the well on 14 August,  and encountered a 75ft (23m) reservoir of high-quality, oil-bearing sandstone in the primary objective, ExxonMobil reported today (5 October).

Turbot-1 lies in the southeastern portion of the Stabroek Block, approximately 30mi (50km) to the southeast of the Liza phase one project.

Drilled by the Stena Carron drillship in 5912ft (1802m) of water, the well was safely drilled to 18,445ft (5,622m) on 29 September. Stena Carron will next drill the Ranger prospect, and ExxonMobil plans to drill an additional well on the Turbot discovery next year.

The Stabroek Block is 6.6 million acres (26,800sq km). Esso Exploration and Production Guyana Limited is operator and holds 45% interest in the Stabroek Block. Hess Guyana Exploration Ltd. holds 30% interest and CNOOC Nexen Petroleum Guyana Limited holds 25% interest.

ExxonMobil’s previous discoveries on the Stabroek block include Liza, Payara, Snoek and Liza Deep.

Earlier this year, ExxonMobil and partner Hess made the final investment decision for $4.4 billion first phase development of the Liza field offshore Guyana. SBM Offshore has awarded Keppel Shipyard the contract to convert a very large crude carrier into a floating production, storage, and offloading vessel that will be deployed at the Liza field in the Stabroek block.

Earlier today, Keppel Shipyard won a floating production storage and offloading vessel conversion contract from SBM Offshore for ExxonMoibil's Liza development.

The Turbot-1 well indicates that deepwater can still be attractive, said Pablo Medina, Wood Mackenzie's senior analyst, Latin America Upstream, in a 5 October statement. After today's announcement, ExxonMobil's Liza and Payara complex might approach the 2 billion barrel mark in commercial reserves.

This discovery also puts Guyana on the map as the country currently does not produce any oil. Wood Mackenzie expects around 350,000-400,000 b/d of oil production by 2026, making Guyana one of top oil producers in Latin America, said Medina.

"ExxonMobil's Latin America footprint has increased significantly with its recent streak of discoveries in Guyana and its aggressive bidding in Brazil's latest licensing round," Medina added.

Read more:

Updated: Exxon, Hess move forward with Liza

Keppel lands ExxonMobil Liza FPSO conversion

Exxon's hit at Payara-2 ups resources

Updated: Exxon in fresh Guyana discovery

Payara pays off for Exxon in Guyana

Thursday, 21 September 2017 11:19

Providence forging ahead with Barryroe

Providence Resources will proceed with drilling plans for its Barryroe appraisal project offshore Ireland, despite failing to consummate a farm-in agreement with Total.

Providence's Ireland acreage in SEL 1/11. Map from Providence

Citing the significant value associated with Barryroe and low rates for drilling rig and offshore services, Providence last month issued a request for expressions of interest for a drilling rig, and has started to consent process for drilling, said Tony O’Reilly, Providence’s chief executive officer, in the company’s 1H 2017 report issued on 21 September.

Barryroe is in standard exploration license (SEL) 1/11 in the North Celtic Sea Basin. Providence now plans to drill at Barryroe in 2H 2018/1H 2019. The company has extended the first phase of SEL 1/11 to July 2019, and received an overall two-year license extension to July 2021.

Providence also is waiting to see if Total will exercise its option to farm into frontier exploration license (FEL) 2/14, which contains the Druid/Drombeg and Diablo exploration prospects in the Southern Porcupine Basin. Cairn Energy has farmed into FEL 2/14.

Total has farmed into and assumed operatorship of Providence’s Avalon prospect in LO 16/27 in the Porcupine Basin. Cairn also has an option to farm into LO 16/27.

Providence said is in the process of farming out interest in its Newgrange prospect in FEL 6/14 in the Goban Spur Basin.

The commercial transactions with Cairn and Total provided incremental capital in excess of $45 million to be used for the drilling program, allowing Providence to deepen the 53/6-1 exploration well to test the Drombeg prospect, and significantly reducing the company’s financial exposure to the drilling costs.

The farm-outs of interests in Providence’s Atlantic Margin assets are being done in accordance with Providence’s company strategy, the company said.

Read more:

Deepwater Drombeg disappoints

Providence gets Barryroe extension

Total dives into Ireland’s offshore

Providence to spud Druid, Drombeg in June

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