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Worldwide Field Development News Dec 8 – Dec 14, 2012

This week the SubseaIQ team added 1 new projects and updated 15 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.

Africa – West

Ophir Subsidiary to Participate in Starfish

Dec 13, 2012 – A subsidiary of Ophir Energy has assumed operatorship of the Offshore Accra Contract Area through a farmout agreement with Tap Oil. Under the agreement, the Accra Contractor Group consists of: Ophir Energy (20%), Afex Oil (20%), Vitol Upstream (30%), Rialto Energy (12.5%), Tap Oil (17.5%). The farmout and transfer of operatorship have been approved by Ghana National Petroleum Corporation and the Ministry of Energy. Contract terms dictate that an exploration well must be drilled before September 23, 2013 and the Group has identified the Starfish prospect as the target of that well. Starfish is a deepwater prospect that is structurally similar to the Jubilee field. It is estimated to hold P50 reserves on the order of 431 Mmbbls.

Hess Hits Pay in Pecan-1

Dec 12, 2012 – A notice of discovery was filed with the Ghana National Petroleum Corporation on behalf of Hess Corporation for the Pecan-1 exploration well. Drilled in the Deepwater Tano / Cape Three Points license, a total depth of 15,420 feet was reached and 245 net feet of oil pay was discovered in two separate intervals. An extensive logging program was carried out and the well was sidetracked to obtain additional reservoir cores. Drilling was carried out by the Stena DrillMAX (UDW drillship) in 8,245 feet of water. The rig is now in the process of suspending the well before sailing to the Cob prospect 15 miles away.

Jubilee Phase 1A Production Underway

Dec 12, 2012 – Production has commenced from Jubilee Phase 1A offshore Ghana. The first production well is onstream and has helped bring total field production to over 90,000 bopd. Phase 1A consists of five production wells, three injection wells and general expansion of the existing subsea infrastructure and should take 18 months to complete. A second Phase 1A well is expected to be brought into production before the end of the year but the Sedco Energy (DW semisub) must first perform remedial work on some of the Phase 1 wells.

Project Details: Jubilee

Asia – SouthEast

Pathum-1 Exploration Spuds Off Thailand

Dec 13, 2012 – Tap Oil announced the spud of its Pathum-1 exploration well in the G3/48 concession offshore Thailand. The well is being drilled by the Ensco 85 (300′ ILC) to a proposed total depth of 8,667 feet. Pathum is thought to hold perspective resources in the range of 5 million barrels. Barring any issues, the well should reach TD in a maximum of 11 days.

MEO Abandons Gurame Sidetrack

Dec 13, 2012 – Difficulties have plagued MEO Australia at its 100% owned Gurame prospect in the Seruway PSC off Northern Sumatra. After loosing over 100 feet of BHA in the Gurame SE-1X appraisal, the decision was made to plug back and sidetrack the well. More progress was made in Gurame SE-1XST but significant mud losses caused MEO to plug back into the liner at 9,599 feet. A 187 foot section of the Baong sands was perforated at 8,858 feet MDRT. No flow was observed and attempts to stimulate the well with nitrogen were made with no effect. The Ensco 85 (200′ ILC) will plug and abandon the well and will be released soon after.

Project Details: Gurame

Keppel Kicks-Off Malampaya Phase 3

Dec 12, 2012 – A steel cutting ceremony held at Keppel Subic Shipyard marked the start of construction of a Depletion Compression Platform (DCP) to be deployed at the Malampaya gas field near Palawan Island in the Philippines. Installation of the DCP represents Phase 3 of the Malampaya Gas-to-Power project which is led by the Philippine Department of Energy. Once complete the DCP will be stationed next to the existing Malampaya production platform. Supporting the project are Shell, as operator, and joint venture partners Chevron and Philippine National Oil Company. Keppel is responsible for building the base and topsides as well as a bridge connecting the new facility to the production platform. The DCP is expected to be installed by 2015.

Project Details: Malampaya

Coastal Tests Fracking at Bua Ban South

Dec 12, 2012 – Coastal Energy recently tested a three stage pilot hydraulic fracturing program in the Bua Ban South A-1 well. The fracked zones flowed back oil at a combined rate of 800 Bopd under natural conditions during well cleanup. Plans call for the well to be re-completed with an electric submersible pump for long term production testing. Next, the company will focus its efforts on the Bua Ban South A-3 sidetrack well in an effort to improve recovery rates. If successful, Coastal will continue the fracking program in order to unlock the full potential of the Songkhla Basin which is characterized by sands with lower porosity and permeability.

Project Details: Songkhla

Europe – North Sea

Breagh Production Test Update

Dec 14, 2012 – Production testing has been completed on three initial development wells at the Breagh field in the UK North Sea. Results from the tests are in-line with reservoir stimulation models run by development partners RWE Dea and Sterling Resources. Once normalized to reflect expected the sales level of wellhead pressure, the current three well capacity is estimated at 88 Mmscfd. The newly drilled A3 well is the most prolific producer with a flow rate of 58 Mmscfd under initial production conditions. Performance of the development wells is being monitored so that future production can be optimized. Five wells are expected to be available by early May 2013 with an estimated total production capacity of 150 Mmscfd.

Project Details: Breagh

Seismic Cables to Increase Snorre and Grane Recovery

Dec 13, 2012 – Norwegian oil major Statoil announced Thursday that it plans to use seismic cables on the seabed to help produce 30 million additional barrels of oil from its Snorre and Grane fields. The company has signed contracts worth $160 million with U.S. firm Geospace Technologies to deliver the cables, which will be part of a permanent reservoir monitoring (PRM) program. Statoil believes the technology will allow it to better understand the reservoirs because they are stable and able to provide a more accurate picture of the subsurface than cables that are towed on the surface and which are subjected to wind, waves and currents. Statoil plans to lay more than 400 miles of seismic cables. Statoil currently recovers around 50 percent of the oil from its operated fields on the Norwegian continental shelf.

Project Details: Greater Snorre Area

Wintershall Spuds Rodriguez

Dec 11, 2012 – The Transocean Arctic (mid-water semisub) is drilling ahead at Wintershall’s Rodriguez prospect in the Halten Terrace area off Norway’s coast. Well 6407/1-6S is seeking oil in the Middle Jurassic Garn, Ile and Tilje formations. It should take roughly 75 days to reach the planned total depth of 13,254 feet. Rodriguez is located in PL475 near the Tyrihans field and Faroe’s 2010 Maria discovery. Wintershall maintains a 50 percent operating interest in the license with Faroe Petroleum and Centrica sharing 30 and 20 percent interest respectively.

Africa – Other

Ophir Updates Jodari and Mzia Ops

Dec 13, 2012 – A recent three well appraisal drilling program undertaken by BG Group and Ophir Energy on the Jodari field off Tanzania successfully achieved its objectives. The wells proved high quality reservoir across the field and reconfirmed the 3.4 Tcf mean recoverable resource estimate. In addition, the joint venture was able verify that high-angle drilling within Jodari may be a viable option to reduce development costs. Drilling was carried out by the Deepsea Metro I (UDW drillship) which is currently drilling the Mzia-2 appraisal well. Upon completion of the Mzia appraisal, the rig will return to Jodari to perform a drill stem test and then move on to continue exploratory drilling in Block 1.

Project Details: Jodari

Black Sea

Gas Discovery Off Romania

Dec 14, 2012 – Sterling Resources, operator of Block 13 Pelican in the Romanian Black Sea, announced a gas discovery at the Eugenia-1 exploration well. The well was drilled by the GSP Jupiter (300′ ILC) to a measured depth of 7,375 feet. Initial results indicate 72 feet of net gas pay in Late Cretaceous sandstones. Data is still being studied but open-hole logging confirmed the presence of moveable gas. The company is also interested in a 65 foot zone of Eocene limestone which presented gas shows. Attempts to collect pressure data were unsuccessful which is not uncommon in carbonates where matrix porosity is limited. The same Eocene interval turned out to be producible in an adjacent well.

Asia – South

Eni Expands Deepwater Footprint in Pakistan

Dec 13, 2012 – Through an agreement with Pakistani authorities and OGDCL, the state oil company, Eni acquired 25% and operatorship of Indus Block G in the offshore area of the Indus Basin. The block is situated in an under explored deepwater area and covers roughly 2,895 square miles. To start, Eni will initiate a multi-disciplinary study in order to establish a suitable exploration approach. Eni has maintained a presence in Pakistan since 2000 and this acquisition further strengthens its position in the country.

Australia

Kan Tan IV Secured for Offshore Taranaki Exploration

Dec 12, 2012 – OMV, operator of PEP 51906, secured the Kan Tan IV (mid-water semisub) for the third quarter of 2013 to drill the Matuku prospect offshore New Zealand. Matuku is estimated to hold 65 million barrels of mean recoverable resources. The company has undertaken several studies to de-risk the prospect. Results of the studies indicate the presence of suitable reservoir rock, and adequate seal and a mature source kitchen. Partners in the license include OMV with a 65%interest, Octanex with a 22.5% interest and NZOG who recently farmed-in for a 12.5% stake.

Worldwide Field Development News Oct 20 – Oct 26, 2012

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This week the SubseaIQ team added 2 new projects and updated 15 projects. You can see all the updates made over any time period via the Project Update History search. The latest offshore field develoment news and activities are listed below for your convenience.

N. America – US GOM

Noble Anticipates Second Gunflint Appraisal

Oct 26, 2012 – Noble Energy expects the Ensco 8501 (UDW semisub) to be available to drill the second Gunflint appraisal well in early 2013 after it finishes exploratory drilling at the Big Bend prospect in the US Gulf of Mexico. Gunflint, situated in Mississippi Canyon Block 948, was appraised and confirmed commercial earlier in the year and represents the company’s largest Gulf of Mexico discovery to-date. The discovery well intersected several reservoirs netting more than 550 feet of high-quality pay. Gunflint is believed to hold up to 500 Mmboe.

Project Details: Gunflint (Freedom)

Australia

Boreas-1 Tests Well

Oct 24, 2012 – Karoon Gas Australia believes the Boreas discovery in permit WA-315-P could be commercial based on well test results. The company feels that future production wells drilled adjacent to Boreas-1 could flow in excess of 100 MMscf/d. Results from the well will be combined with data gathered from Kronos-1, the Poseidon wells and Poseidon 3D seismic to further characterize the size and structure of the Greater Poseidon Trend. The company’s assessment of contingent resources will be independently assessed upon completion of the drilling program.

Project Details: Poseidon

Europe – North Sea

Lundin Receives Boyla PDO Approval

Oct 26, 2012 – The Norwegian Ministry of Petroleum and Energy granted approval to Lundin Petroleum for the Plan of Development and Operation of the Boyla field in PL 340 offshore Norway. Estimated gross reserves are roughly 21Mmboe with gross peak production of 19,000 Boepd. Boyla will be developed via a subsea tie-back to the Alvheim FPSO. Technip was awarded the field development contract and will handle construction and installation of the subsea equipment.

Project Details: Alvheim

Partners Strike Oil at Garantiana

Oct 26, 2012 – Well 34/6-2S on the Garantiana prospect offshore Norway has been drilled to a total depth of 13,287 feet by the Borgland Dolphin (mid-water semisub). The well, located in Production License 554, penetrated good quality oil-bearing reservoir rock in the Cook formation. Further analysis is needed for an accurate resource estimate but initial flow rates of 4,000 barrels per day were achieved through a 28/24-inch choke. Pending available contracted rig days, the partners in the Total-operated license may elect to drill a sidetrack well to define the oil-water contact.

Project Details: Garantiana

Shell Takes Hess’ Spot at Beryl

Oct 25, 2012 – Royal Dutch Shell and Hess Corporation have reached an agreement whereby Shell will buy Hess’ stake in the Scottish Area Gas Evacuation Pipeline and the fields that comprise the Beryl Area. Beryl is operated by Apache and is made up of 12 producing fields on the UK continental shelf northeast of Aberdeen. Hess’ net daily production from the area through the first three quarters of 2012 was about 14,000 boepd. Shell plans to extend the production life of its new assets potentially by 20 years. The $525 million deal is expected to close during the first quarter of 2013, pending regulatory approval.

Wintershall Spuds Asha/Noor Exploration

Oct 25, 2012 – Exploration of the Wintershall-operated Asha/Noor prospect in the Norwegian North Sea has commenced on board the Bredford Dolphin (mid-water semisub). Well 16/1-16 is being drilled in 370 feet of water on the western edge of the Utsira High area and is targeting four reservoirs assumed to be Upper Jurassic sandstones. In addition, the well has the potential to appraise the neighboring Ivar Aasen and Apollo discoveries. If the reservoirs are deemed commercially viable the prospect could be developed via the Grane Field processing facilities.

Project Details: Noor

Nexen Spuds Polecat Appraisal

Oct 24, 2012 – Atlantic Petroleum announced the commencement of appraisal drilling at the Polecat prospect in UK license P1100. Well 20/4a-11 is being drilled in 370 feet of water by the Transocean GSF Arctic III (mid-water semisub) in the vicinity of the Ettrick and Blackbird fields. The well is targeting Upper Jurassic reservoirs and is expected to take 50 days to reach total depth. Nexen and Atlantic Petroleum hold 80% and 20% stakes respectively while Nexen maintains operatorship of the license.

Initial Contender Results Look Promising

Oct 23, 2012 – JV partner Antrim Energy announced positive initial results from the Contender well 211/21-N94 in the UK North Sea. Drilling took place on the TAQA Bratani-operated North Cormorant platform and reached a total depth of 16,903 feet. Preliminary results suggest a net oil pay in excess of 60 feet was encountered in the Tarbert member of the Jurassic Brent sandstones. Ongoing testing has revealed greater than expected porosity and hydrocarbon saturation. If Contender is determined to be commercial, it will be developed from North Cormorant under the name Cormorant East.

Project Details: Falcon

Shell Gets Go-Ahead for UK Fram

Oct 23, 2012 – Shell received consent from the UK government to proceed with the development of the Fram field in the UK sector of the North Sea. The development, one of the largest to be approved in five years, is expected to contribute 35,000 Boepd to the country’s production with a field life of 20 to 30 years. Although Shell is the operator, JV partner Esso Exploration & Production UK is the major equity holder with a 68% interest. Fram was discovered in 1969 and is unrelated to the Norwegian field of the same name. The gas condensate field is located in blocks 29/3a and 29/8c in roughly 300 feet of water.

Project Details: Fram

More Delays for Breagh

Oct 22, 2012 – Sterling Resources announced a delay in production start-up at the Breagh field in the UK North Sea. Late design completion, rework of certain systems and late material deliveries combined to cause construction delays which have pushed the anticipated start-up date to the end of 1Q 2013. Breagh Phase 1 development costs have risen to $825 million which is 1.4 percent above initial estimates. Development drilling at the field has not been hampered by the construction delays. The first three wells will be flow-tested before the end of the year. A fourth well is expected to come on stream once field production is established.

Project Details: Breagh

Mediterranean

Sara Disappoints

Oct 23, 2012 – GeoGlobal Resources received disappointing results from the Sara-1 well offshore Israel. Approximately 321 feet of high quality reservoir sands were encountered but proved to be wet without commercial quantities of hydrocarbons. Logging runs provided evidence that gas had once migrated through the system. The Noble Homer Ferrington (DW semisub) drilled the well to a total vertical depth of 12,887 feet and is in the process of plugging and abandoning the well before being released. Data collected during the operation will be used to refine the geologic model of the area and to further evaluate other possible targets within the license.

Leviathan Licensees Seeking Additional Partner

Oct 23, 2012 – The partners in the Leviathan gas field offshore Israel are taking bids to add an international partner to the group to help distribute field development costs. Being offered is up to a 30% stake in the field. Sources indicate Australia’s Woodside Petroleum and Russia’s Gazprom are likely finalists in the bidding round. Leviathan holds an estimated 17 trillion cubic feet of gas and is expected to be brought into production in 2017. The bidding round is due to end in the coming month.

Project Details: Leviathan

Samuel Resource Report Released

Oct 22, 2012 – NSAI released an independent resource report covering the Adira Energy-owned Samuel License offshore Israel. The report indicates P50 estimates of 65.8 MMbbl of oil and 65.8 Bcf of gas in four structures within the license. “The initial well will target the Cretaceous section which is estimated to contain almost 38 million barrels of prospective oil equivalent,” CEO Jeffrey Walter said. Samuel comprises an area of 223 square miles in waters up to 330 feet deep.

Project Details: Samuel

Asia – SouthEast

New Bualuang Facility Ready for Installation

Oct 25, 2012 – Salamander Energy’s Bualuang Bravo Platform construction project is on track to finish on time and within budget. The platform’s jacket has been fabricated and is en route to the Bualuang field where it will be positioned. Topside installation will begin shortly thereafter. Thai Nippon Steel was awarded the construction contract for the 16-slot platform in 1Q 2011. Through the Bravo platform, Salamander plans to double the amount of horizontal production wells currently in use and feels that production will increase from the current level of 11,500 bopd to 15,000 bopd in 2013. The Atwood Mako (400′ ILC) is scheduled to begin development drilling from the platform at the end of November.

Project Details: Bualuang

ROC Announces Successful Balai Cluster Appraisal

Oct 24, 2012 – Appraisal drilling activities at the Bentara-2 well in the Balai Cluster SFRSC have come to a stop upon reaching a total vertical depth of 9,038 feet. BC Petroleum was incorporated to manage the Balai Cluster Small Field Risk Service Contract and is comprised of ROC (48%), Dialog Group (32%) and Petronas (20%). Early results indicated and estimated net hydrocarbon pay in excess of 328 feet across a total interval of 2,132 feet. The well will now be cased and completed in preparation for well testing. Appraisal drilling is the first phase in pre-development of the license and is scheduled to take 18 months to execute. If pre-development is completed successfully the partners in BC Petroleum will submit a field development plan and work towards bringing the Balai Cluster into production.

S. America – Brazil

Statoil Wins at Peregrino South

Oct 24, 2012 – Statoil, together with partner Sinochem, has completed drilling an appraisal well at the Peregrino South prospect offshore Brazil. Well 3-STAT-8-RJS intersected approximately 278 feet of high-quality oil-saturated sandstone reservoir in the Carapebus formation. Goals of the operation were to validate previous volume estimates and establish an optimal development plan. The joint venture will use the positive results from the appraisal to guide the Peregrino Phase II development.

Project Details: Peregrino

USA: Technip Rings Tubular Bells

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Technip has received a lump sum contract by Hess Corporation for the development of the Tubular Bells field, located in the Mississippi Canyon area of the Gulf of Mexico at a water depth of approximately 4,500 feet (1,370 meters).

The contract covers the design, engineering, fabrication and subsea installation of more than 28 miles (45 kilometers) of flowlines, steel catenary risers, pipeline end terminations, piles and structures.

Technip’s operating center in Houston, Texas will perform the overall project management. The flowlines and risers will be welded at the Group’s spoolbase in Mobile, Alabama.

Offshore installation is scheduled to be completed with the Deep Blue, one of Technip’s deepwater pipelay vessel, during the first half of 2013.

On October 25, 2011, Hess announced it would proceed with the development of the Tubular Bells field. Total estimated recoverable resources for Tubular Bells are estimated at more than 120 million barrels of oil equivalent. The development is estimated to cost $2.3 billion.

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USA: Hess to Splash USD 6.8 Billion in 2012

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Hess Corporation, with headquarters in New York announced today a 2012 capital and exploratory budget of $6.8 billion, nearly all of which is targeted for Exploration and Production: $2.5 billion for unconventionals, $1.6 billion for production, $1.8 billion for developments and $800 million for exploration.

John B. Hess, Chairman and CEO, stated, “We believe that the investments we are making in unconventionals are lower risk and will generate long term profitable growth for shareholders. We expect to fund the majority of our 2012 program from internally generated cash flow and asset sales.”

Greg Hill, President of Worldwide Exploration and Production, said, “Our focus in 2012 will be on execution. We are committed to creating value and delivering sustainable growth in production and reserves from both our unconventional and conventional portfolios.”

Production expenditures of approximately $1.6 billion include:

  • Drilling production and water injection wells at Shenzi (Hess 28 percent), and drilling production wells at the Llano Field (Hess 50 percent) in the deepwater Gulf of Mexico
  • Drilling production wells on Block G (Hess 85 percent – operator) in Equatorial Guinea

Development expenditures of approximately $1.8 billion include:

  • Commencing development drilling at the Tubular Bells Field (Hess 57 percent – operator) in the deepwater Gulf of Mexico
  • Completion of field redevelopment and gas lift projects at the Valhall Field (Hess 64 percent) in Norway
  • Concluding appraisal activities and progressing front end engineering and design work at WA-390-P (Hess 100 percent – operator) offshore Western Australia
  • Progressing development of Block A-18 (Hess 50 percent) in the Joint Development Area (JDA) in the Gulf of Thailand, including wellhead platform installations and ongoing drilling activities

Exploration expenditures of approximately $800 million include:

  • Drilling exploration wells in Ghana, Indonesia, Brunei and the deepwater Gulf of Mexico
  • Acquiring seismic at the Dinarta and Shakrok Blocks (Hess 80 percent – operator) in Iraqi Kurdistan

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USA: Alliance Engineering to Design Topsides for Tubular Bells Field Spar Platform

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Alliance Engineering, a subsidiary of Wood Group, has been awarded the detailed engineering and design of the topside facilities and deck for Williams Partners’ Gulfstar FPS™ spar production platform. This wet-tree platform will be installed in block 768 of the Gulf of Mexico’s Mississippi Canyon area to produce oil and gas from the Tubular Bells field, which is owned by Hess Corporation​ (Operator) and Chevron U.S.A. Inc.

The Gulfstar spar platform will be located in 4,300 feet of water and designed to process 60,000 barrels of oil per day and 200 MMscf of gas per day. The single-lift topsides will have three deck levels and include processing equipment, seawater injection equipment, utilities, an accommodation building with helideck, and pumping and compression equipment to export the treated oil and gas through departing pipelines. The completed deck will weigh approximately 7,000 short tons. Initial production is scheduled to commence in 2014.

“Alliance has been working with Williams Partners to develop their standard Gulfstar floating production system concept (FPS),” said Edmund Lunde, president of Alliance. “With concept development and FEED completed, we are pleased to continue working with Williams Partners on the detailed design of their first Gulfstar FPS. We are confident Williams, Hess and Chevron will benefit from our focus, skill, and experience in developing the Tubular Bells topsides.”

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USA: Atwood Oceanics Wins Contract for Atwood Condor Rig

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ATWOOD OCEANICS, INC., announced today that one of its subsidiaries has been awarded a drilling services contract by Hess Corporation for work in the Gulf of Mexico for the Atwood Condor, Atwood’s ultra-deepwater, dynamically positioned Friede & Goldman ExD Millennium semisubmersible drilling unit currently under construction at Jurong Shipyard Pte. Ltd. in Singapore.The contract has a firm duration of 21 months, exclusive of the mobilization period from Singapore to the Gulf of Mexico, and includes two one-year options with pricing subject to mutual agreement.

The Atwood Condor is expected to be delivered from the shipyard in June 2012 and will mobilize to the Gulf of Mexico with expected arrival in September 2012. The commitment for the Atwood Condor is expected to run until June 2014, excluding well in progress. With this contract, Atwood’s total revenue backlog increases by $329 million to approximately $1.9 billion, excluding approximately $32 million in mobilization revenue.

Rob Saltiel, Atwood President and CEO, commented, “We are extremely pleased with the opportunity for the Atwood Condor to work with Hess Corporation in the Gulf of Mexico. We look forward to demonstrating the Condor’s extensive capabilities as we contribute to our client’s success in the region.”

Atwood Oceanics, Inc., is an international offshore drilling contractor engaged in the drilling and completion of exploratory and developmental oil and gas wells. The company currently owns ten mobile offshore drilling units located in the U.S. Gulf of Mexico, South America, the Mediterranean Sea, West Africa, Southeast Asia and Australia, and is constructing an ultra-deepwater semisubmersible, an ultra-deepwater drillship and three high-specification jack ups for deliveries in 2012 and 2013. The company was founded in 1968 and is headquartered in Houston, Texas. Atwood Oceanics, Inc. ordinary shares are traded on the New York Stock Exchange under the symbol “ATW”.

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