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Ensco and Atwood Oceanics have filed definitive proxy materials with the US Securities and Exchange Commission (SEC) for the proposed merger announced in late-May.

Atwood Oceanics headquarters. Image from Atwood.

The two companies will each hold shareholders meeting to discuss the proposed merger on 5 October.

Ensco said in a statement last week that both Ensco and Atwood boards of directors unanimously recommend that shareholders vote “FOR” each company’s respective proposals set forth in the joint proxy statement/prospectus at their respective shareholder meetings.

“This transaction is a unique opportunity to significantly strengthen and renew Ensco’s fleet at a key juncture in the market recovery cycle by adding high-specification, complementary assets at attractive valuations,” said Ensco CEO and President Carl Trowell. “By combining our fleets, we further our position as the offshore driller of choice and expect to create significant shareholder value with substantial upside relative to stand-alone scenarios, while maintaining financial flexibility through 2024.”

Ensco’s shareholders is scheduled to take place on 5 October at 3:00 p.m. (London time), while Atwood’s 2017 special meeting of shareholders is scheduled for 5 October at 9:00 a.m. (Houston time).

On 30 May, Ensco and Atwood announced the two had entered into a definitive merger agreement worth about US$839 million that would see Ensco acquire Atwood in an all-stock transaction that was unanimously approved by each company’s board of directors. 

Under the terms of 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. 

Ensco expects the deal to close in the first week of October 2017.

Read more: 

Ensco to takeover Atwood Oceanics

The US Bureau of Ocean Energy Management (BOEM) has published the draft Environmental Impact Statement (EIS) for Alaska’s manmade island, the Liberty Project, in the Beaufort Sea. 

Map of Liberty. From Hilcorp.

Houston’s Hilcorp submitted its plan for the self-contained island for drilling operations to BOEM in December 2015.

The Liberty Partners,  Hilcorp Alaska, the Arctic Slope Regional Corp., and BP Alaska, have proposed the development of a gravel island in the shallow waters of the Beaufort Sea, a region where safe exploration and development dates back to the mid-1970’s.

It’s estimated that the Liberty unit contains approximately 150 MMbbl of recoverable, high-quality crude oil. Hilcorp believes the Liberty oilfield contains one of the largest potential sources of new light oil production on the North Slope. At peak production, the company anticipates an estimated 60,000 b/d from a total of five production wells. 

The partners have built their project upon many years of safe operations and proven technology used in previous Beaufort Sea offshore projects, BOEM says. 

In the development plan, the partners have proposed that the 9.3-acre Liberty Island will be connected to land by a subsea pipeline, then through a newly constructed 1.5mi conventional pipeline that ties into the Badami pipeline, and eventually the trans-Alaska pipeline. The subsea pipeline will be a pipe-in-pipe, with a 12in diameter inner pipe and a 16in diameter outer pipeline similar to other offshore installations. The marine segment will be 5.6mi in length, buried and installed during winter.

It is set to be located 15mi east of Prudhoe Bay in Foggy Island Bay, and will be approximately 6mi offshore, in 19ft water depth. 

The project is similar to the four other artificial islands currently in operation: Spy Island, Northstar Island, Endicott Island, and Oooguruk Island.

BOEM says it has deemed the Liberty Development and Production Plan (DPP) complete in 2015 and today’s draft EIS is an important next step in permitting development. 

“The creation of more jobs and greater tax revenue is a huge win for all Alaskans and the development of Liberty will generate much needed oil for TAPS; an energy lifeline not only important to the state of Alaska, but to America’s energy security,” says Arctic Energy Center spokesperson Lucas Frances. 

The EIS initiates a 90-day public comment submission period.

Read more:

Hilcorp aims for Alaska manmade island

Thursday, 17 August 2017 09:22

KBR bags Tortue pre-FEED

KBR has confirmed that the company has been awarded the pre-front end engineering design (FEED) and project support services contracts for the development of the Tortue / Ahmeyim field, offshore Mauritania and Senegal.

OE reported in the July 2017 edition that KBR was awarded the pre-FEED work, with sources saying the company is also preparing to carry out FEED studies.

Map of the Greater Tortue area, from Kosmos.

Under KBR's global services agreement with BP, KBR has won these new contracts to provide pre-FEED and project support covering design of the subsea, pre-treatment floating production storage and offloading (FPSO) facility, inshore hub/terminal, and interfaces for floating liquefied natural gas (FLNG) for the Tortue Project.

This new work will build on the earlier concept phase work for the development of the field already completed by KBR's subsidiary Granherne for BP's partner, Kosmos.

KBR's pre-FEED work is expected to be performed over the next six months, with KBR supporting BP in the optimize stage of the Tortue field development.   The work will be executed from KBR's London office which has played a key role in multiple recent BP projects including the Glen Lyon FPSO and Shah Deniz Phase II projects.

"KBR is pleased to offer our world-class engineering design expertise to continue to support this significant project from its early stages and to help BP and its partners develop an LNG hub for Mauritania and Senegal," says Jay Ibrahim, KBR president, Europe, Middle East and Africa (EMEA).  "This award confirms KBR's strategic commitment to and builds upon our ongoing relationship with BP for engineering services around the globe."

Revenue from this contract is undisclosed and will be booked into backlog for KBR's Engineering & Construction business segment in Q3 of 2017.

Kosmos Energy and BP are expected to reveal the final investment decision for Tortue next year, with first gas targeted in 2021. 

Andrew Scutter, EIC's upstream sector analyst, said in OE's July 2017 magazine edition that KBR was awarded the pre-FEED contract for the upstream aspects of the project.

"Sources suggest that the company is preparing to carry out FEED studies," Scutter said last month.

Scutter said a development concept most likely be a near-shore, 2.5 MPTA FLNG vessel, with a pre-treatment platform and a condensate offload vessel.  

The Greater Tortue Complex that has a Pmean gross resource estimate of 25 Tcf of gas.

Due to the continued exploration success, Scutter said there has been increasing interest from companies to explore the region, including Erin Energy and Total.

"Significant challenges will need to be overcome to develop these fields as Senegal and Mauritania lack the infrastructure and capabilities required for these billion dollar projects," Scutter said. "Senegal and Mauritania are realistic about their capabilities, and are keen to utilize experienced foreign suppliers, so long as some form of local partnership is made. This provides opportunities for UK supply chain companies with extensive offshore experience to offer their services."

Kosmos and BP created their partnership in December 2016, to advance the development of the discovered gas resources offshore Mauritania and Senegal, with an aim to find more.  

In the JV deal, BP agreed to take a 62% stake in Kosmos Energy's gas Mauritanian exploration blocks plus a 32.49% effective working interest in the independent's Senegal exploration blocks - totaling some 33,000sq km. 

BP said it would invest nearly US$1 billion, mostly in the form of a multi-year exploration and development carry, to acquire the 62% interest and operatorship of offshore Blocks C-6, C-8, C-12 and C-13 in Mauritania and an effective 32.49% interest in the Saint-Louis Profond and Cayar Profond blocks in Senegal.

The duo is using Atwood Oceanics's Atwood Achiever drillship until 12 November 2018 for Senegal and Mauritania. 

Read more:

 

The last frontier

Kosmos to accelerate off West Africa

Wednesday, 16 August 2017 14:36

US Lease Sale 249 reaches US$121 million

The US Bureau of Ocean Management's (BOEM) Lease Sale 249 brought in high bids of US$121 million from 27 companies with a total of 99 bids earlier today (16 August).

Image from BOEM Facebook.

A total of 90 blocks were offered, spanning nearly 76 million acres offshore Texas, Louisiana, Mississippi, Alabama, and Florida for oil and gas exploration and development.

France’s Total E&P made the highest bid at $12.1 million for Garden Banks Block 1003, beating out Cobalt International Energy’s bid of $3.5 million.

Garden Banks 1003 is adjacent to Cobalt’s North Platte appraised discovery.

In addition, Total also won East Breaks Blocks 588, 589, 633, and 678; and Garden Banks Blocks 1007.

Chevron, which made the highest sum (15) of high bids at a total of $27.9 million, won a total of 15 blocks, including: Garden Banks 978; Alaminos Canyon Blocks 647, 770, 814, 858, 860, and 862; Keathley Canyon Blocks 53, 97, 213, 256, and 257; Mississippi Canyon 35; and Green Canyon Blocks 508 and 979.

Supermajor Shell won a total of 19 blocks, including: Alaminos Canyon Blocks 336, 337, 381, 685, 729, and 816; Mississippi Canyon Blocks 302, 829, and 849; Garden Banks Blocks 719, 720, 763, and 807; and Keathley Canyon Blocks 149, 150, 193, 194, 214, and 215.

"Deepwater (400+ m depth) blocks won the day today, with 76 blocks receiving 98% of high bid value at $118 million. The deepwater industry is emphasizing short-cycle, low-risk prospects above high-impact, wildcat drilling. Today we saw operators continue to focus on areas near existing infrastructure with a majority of bids close to existing hubs or appraised developments," says WoodMac Senior Research Analyst William Turner.“

Bids from Chevron, Shell and Total near pre-FID discoveries, Guadalupe and North Platte, were a vote of confidence in higher-risk, standalone developments with potential for higher rewards," says Turner.

Exxon made the second and third highest bids for Mississippi Canyon blocks. Exxon won Block 779 with a high bid of $10.8 million; and Block 823 with a high bid of $5.7 million.

Exxon made a total of seven high bids, and won East Breaks 634, and several other Mississippi Canyon Blocks including 824, 866, 868, and 912.

Anadarko won a total of 10 blocks, including East Breaks Blocks 818 and 862; Mississippi Canyon Blocks 40, 83, and 337; Grenn Canyon Blocks 429, 451, and 473; and Walker Ridge Blocks 881 and 925.

LLOG won three blocks in Mississippi Canyon, 476, 545, and 629. And LLOG Bluewater won six blocks; three in Green Canyon (568, 612, 955), and three in Walker Ridge (23, 28, 72).

Statoil subsidiary Statoil Gulf of Mexico won four blocks in Keathley Canyon, including Blocks 481, 525, 569, and 613.

Repsol won four blocks in Garden Banks Blocks (77, 78, 121, and 122).   

BP E&P won two Mississippi Canyon blocks, Blocks 820 and 864.

Arena Energy won two blocks in the Eugene Island, South Addition (Blocks 324 and 325); and Deep Gulf Energy III won Block 745 in Mississippi Canyon, and Block 705 in De Soto Canyon.

Companies that won one block each include: W&T Offshore (Ship Shoal Area, South Edition Block 346); Houston Energy (South Timbalier Block 235); Murphy E&P (Mississippi Canyon Block 556); Byron Energy (Grand Isle Area Block 95); Peregrine Oil & Gas (Galveston Area South Addition Block A133); Fieldwood Energy (Ship Shoal Area, South Addition Block 358); Apache Deepwater (Viosca Knoll Block 992); GufSlope Energy (Ship Shoal Area, South Addition Block 351); Topco Offshore (Vermilion Area 152); and Creatceous (East Cameron Area 37).

Today’s lease sale is shadowed by Lease Sale 247’s total value of $137 million for 90 blocks.

According to Turner, activity is down by roughly half from Central Lease Sale 247, with operators submitting a total bid value of $137 million for 90 blocks, a decrease of 57% and 45% respectively. The decrease in activity comes after the first increase in five years seen during the last sale in March. Lease Sale 249 marks the first lease sale under the Trump Administration’s new Outer Continental Shelf Oil and Gas Leasing Program for 2017-2022 (Five Year Program).

“While the results of today’s Gulf of Mexico oil and gas lease sale reflect market realities, they also demonstrate the offshore oil and gas industry’s commitment to the US Gulf of Mexico, even with extended low commodity prices and lingering regulatory dysfunction.  Industry has continually demonstrated a commitment to providing tremendous economic and energy benefits for our nation, despite the fact that unwise energy policies have closed over 94% of US offshore areas to leasing and exploratory activities.  Offshore lease sales in the Gulf of Mexico contributed $80 billion to the US Treasury between 2005 and 2014 alone,” says National Ocean Industries Association (NOIA) President Randall Luthi.

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