Daily Archives: November 1, 2011

South Korea: Rowan Companies Inc, Announces Option to Build GustoMSC Drillship

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Rowan Companies Inc, announced today that it has exercised its option to build a third GustoMSC P10000 design ultra-deepwater drillship with Hyundai Heavy Industries Co., Ltd. (“HHI”) with delivery scheduled for the fourth quarter of 2014.

The cost for this rig, including commissioning, project management and spares, but excluding capitalized interest is estimated to be approximately $600 million, or slightly below the cost of the first two, similarly equipped drillships ordered by the Company. As in the case of those rigs, the cost of the additional owner furnished equipment plus training and ramp-up costs is estimated to be approximately $50 million, and total costs are anticipated to be paid out of cash flow and available funds. The agreement with HHI also includes an option, exercisable in February of 2012, for an additional drillship of the same specification for delivery in the first half of 2015.

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Cove Energy: Rovuma Block Off Mozambique May Have 40 TCF of Gas

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Britain’s Cove Energy PLC believes its offshore Mozambique Rovuma block it is exploring has an upside potential of 40 trillion cubic feet of gas, almost triple the 11 tcf it has proven, the company’s chairman said on Tuesday.

We believe to date that we have already proven up more than 11 tcf, however Cove estimates the overall potential of the (Rovuma offshore Mozambique) block only to be more 40 tcf . and the total potential for East Africa is easily 100 tcf,” Michael Blaha, executive chairman of Cove Energy, told an African oil and gas conference on Tuesday.

Oil and gas companies, including U.S. firm Anadarko , are flocking to the southern African nation following huge gas finds.

Blaha said the first gas from Mozambique was eyed for 2018, with the first LNG gas trains likely to supply the growing Asian market.

The Mozambique LNG project alone could be a game-changer for the LNG industry,” he said.

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Cyprus: Deep Sea Supply Provides October Fleet Status Update

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In October 2011 Deep Sea Supply`s AHTS fleet (all 12 AHTS Vessels) had an average gross income of approx. USD 19,600 per ship per day compared to USD 15,800 in September.

The PSV fleet (all 8 PSVs) had an average gross income of approx. USD 20,000 per ship per day compared to USD 20,200 in September.

The AHTS Sea Tiger has been approx 50% off hire in October due to scheduled maintenance program.

Sea Vixen, which was delivered from the yard in October, is not included in the figures.

Deep Sea Supply ship owner and operator of a substantial number of Anchor Handling Tug Supply vessels (AHTS vessels) and Platform Supply Vessel (PSV) with extensive newbuild program.

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DOF Subsea’s Skandi Singapore Bags Gig Offshore New Zealand

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DOF Subsea​, a subsidiary of DOF ASA​ advises that it has secured a campaign of work in the New Zealand Taranaki Basin for the new build DSV Skandi Singapore for an undisclosed sum. The vessel will mobilize for New Zealand on completion of the current work program in Indonesia for Conoco Philips.

Work in the Taranaki Basin involves diving and ROV operations for for AWE Limited, Shell Todd Oil Services Limited and Origin Energy. The program of work will be completed in February 2012.

Steve Brown, EVP, Asia Pacific said

“The Skandi Singapore is an ideal vessel for the work in the Taranaki Basin. The vessel is the newest DSV in the DOF Subsea fleet and is equipped for extreme weather operation in environmentally sensitive areas. Since delivery, the Skandi Singapore has proven to be a highly capable vessel and is building an excellent reputation with our regional clients.

With the delivery of new vessels into the region, DOF Subsea continues to build a strong project focused organization based in Perth, Australia and Singapore. With a regional project management and engineering capability based around 220 permanently employed engineers and support staff and the highest quality vessels in the region DOF Subsea continues to pursue growth across all subsea market sectors”

Mons Aase, CEO said that the contract awards in Asia Pacific are great news and that the investment in new assets is positive for further growth in the region.

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Norway-based Aker Solutions Increases its Middle East Presence with X3M Acquisition

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Aker Solutions has signed an agreement to acquire the well intervention technology business from X3M (pronounced “Extreme”) International. The acquisition will grow Aker Solutions’ well intervention technology and service portfolio worldwide as well as increase the company’s presence in the important Middle East market.

X3M is an international niche provider of down-hole intervention service tools and technology products. Its core products are innovative down-hole tools like plugs, packers, hangers, valves and a complete range of setting and recovery tools.

Well intervention services are operations carried out in an oil or gas well, with the objective of maximising production and increasing the recovery rate of oil and gas.

“Today we are buying plug products and hiring the plug-setting services from third parties. Through this acquisition we will expand our product portfolio and be able to offer our customers a more complete – and thereby more competitive – service offering,” says Wolfgang Puennel, head of well intervention services in Aker Solutions.

X3M has a solid portfolio of proprietary technologies. The plugs and packers for HPHT (high pressure-high temperature) and sour gas, have a potential to capture a significant market share in the coming years. The tools have been used successfully in gas wells with extremely high concentrations of H2S and CO2. X3M is also developing a new metal to metal seal technology that could prove to be a future industry game-changer in certain areas.

“We are acquiring an exciting product portfolio. However, we are planning to invest to rapidly expand and further improve on our technology position within this segment,” says Puennel.

X3M is well established in the Middle East, with operations in Oman Saudi Arabia and United Arab Emirates. Aker Solutions already has well service set-ups in Saudi-Arabia and Oman, which will merge its operations with X3M’s. X3M also has a design engineering team based in Narvik, Norway. The research and development (R&D) set-up in Narvik will not only support X3M’s activities but also strengthen Aker Solutions’ existing R&D function within wireline tractors and application tools.

“Today Aker Solutions is a major provider of well intervention services in the British and Norwegian sectors of the North Sea. However, we have the potential to grow our business significantly by introducing X3M’s plug products to our service portfolio in the North Sea. Equally, we will seek to capitalise on X3M’s position in the Middle East to gain a stronger foothold there. All in all this acquisition offers a complementary technological and geographical footprint,” says Puennel.

Aker Solutions is acquiring the well intervention technology business from X3M International, whose main owners are the Middle East-based Catalyst Private Equity Fund and X3M’s original founders. Transaction value is approximately USD 8 million. X3M had operating revenues of USD 6 million in 2010. The transaction is expected to be completed early November 2011.

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USA: EPL Increases its Stake in Core Main Pass Area

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Energy Partners, Ltd. yesterday announced it has executed a purchase and sale agreement to acquire oil and natural gas assets in the shallow-water central Gulf of Mexico (GOM) from a subsidiary of Stone Energy Corporation for $80.0 million.

The transaction involves additional interests in the Main Pass (MP) 296/311 complex that was included in the assets EPL purchased from Anglo-Suisse Offshore Partners, LLC (ASOP) in February 2011, along with other unit interests in the MP complex and an interest in a MP 295 primary term lease. The assets are currently producing approximately 900 net barrels of oil equivalent (boe) per day, about 96% of which is oil. EPL estimates the proved reserves as of the November 1, 2011 effective date totals approximately 2.6 million boe, consisting of 96% oil and 100% proved developed producing. The Company also estimates the asset retirement obligation to be assumed in the acquisition is expected to total approximately $4 million.

Gary Hanna, EPL’s President and CEO commented, “The original ASOP property acquisition was an excellent transaction for EPL, and the acquisition announced today will more than double our interests in the MP complex. This purchase  adds another layer of long-lived oil production to our current asset base, and additional upside without incremental overhead. We plan to increase our activity levels in this prolific area that we believe holds untapped potential. Post  transaction, we will maintain substantial liquidity through our expanded revolving credit facility and the generation of free cash flow. Today’s announcement is representative of the type of acquisition we seek as an acquirer of quality assets in the central GOM.”

EPL intends to fund the acquisition with cash on hand, currently estimated to be in excess of $90 million. Additionally, the Company has worked with its lenders to expand the borrowing base under its undrawn senior secured credit facility  from $150 million to $200 million, which maintains substantial liquidity for the Company. EPL has begun implementing additional oil hedges to provide further downside protection in conjunction with the acquisition. The purchase is subject to preferential rights-to-purchase held by the operator of the properties, and the closing of the transaction is subject to customary closing conditions and adjustments. The economic effective date is November 1, 2011, with closing expected in November.

Founded in 1998, EPL is an independent oil and natural gas exploration and production company based in New Orleans, LA and Houston, TX. The Company’s operations are concentrated in the shallow to moderate depth waters in  the Gulf of Mexico focusing on the state and federal waters offshore Louisiana.

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Genesis Energy to Buy U.S. Gulf of Mexico Pipelines from Marathon

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Genesis Energy, L.P.  announced yesterday that it has entered into definitive agreements to acquire from Marathon Oil Company interests in several Gulf of Mexico crude oil pipeline systems, including its 28% interest in Poseidon Oil Pipeline Company, L.L.C., its 29% interest in Odyssey Pipeline L.L.C., and its 23% interest in the Eugene Island Pipeline System.

Marathon Oil Company is a wholly-owned subsidiary of Marathon Oil Corporation . The Poseidon and Odyssey interests are subject to the expiration or waiver of rights of first refusal, and Genesis is not obligated to consummate any transaction unless it is ultimately successful in acquiring the interest in Poseidon. Additionally, Marathon Oil has the right to dispose of certain of the other oil pipeline assets prior to any final closing of a transaction with Genesis.

The purchase consideration for all of the assets, subject to usual and customary adjustments for debt, working capital, etc., is $205.76 million, which includes an estimated $29 million valuation of crude oil line fill at current market prices owned by the interests to be acquired. Genesis intends to finance the transaction with the more than $400 million of funds available under its revolving credit facility and expects the transaction to close before year end.

The Poseidon system is comprised of a 367-mile network of crude oil pipelines, varying in diameter from 16 to 24 inches, with capacity to deliver approximately 400,000 barrels per day of crude oil from developments in the central and western offshore Gulf of Mexico to other pipelines and terminals onshore and offshore Louisiana. Affiliates of Enterprise Products Partners L.P. and Shell Oil Company each own a 36% interest in Poseidon. An affiliate of Enterprise will continue in its role as operator of Poseidon.

The Odyssey system is comprised of a 120-mile network of crude oil pipelines, varying in diameter from 12 to 20 inches, with capacity to deliver up to 300,000 barrels per day of crude oil from developments in the eastern Gulf of Mexico to other pipelines and terminals onshore Louisiana. An affiliate of Shell owns the remaining 71% interest in Odyssey. An affiliate of Shell will continue to serve as the operator.

The Eugene Island Pipeline System is comprised of a 183-mile network of crude oil pipelines, the main pipeline of which is 20 inches in diameter, with capacity to deliver approximately 200,000 barrels per day of crude oil from developments in the central Gulf of Mexico to other pipelines and terminals onshore Louisiana. Other owners in Eugene Island include affiliates of Exxon-Mobil, Chevron-Texaco, ConocoPhillips and Shell Oil Company. An affiliate of Shell will continue to serve as the operator.

“This acquisition represents another exciting growth opportunity for Genesis,” said Grant Sims, Genesis’ Chief Executive Officer. “These pipelines, especially Poseidon, would complement our existing infrastructure in the Gulf of Mexico, and enhance our ability to provide attractive capacity and market optionality to producers for their existing and future developments as well as our refining customers onshore Texas and Louisiana. The Gulf of Mexico is an important and growing resource basin in the U.S. that we are convinced will be safely, responsibly and efficiently developed for many years to come.”

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