Helix Energy Solutions Group, Inc. reported net income of $44.6 million, or $0.42 per diluted share, for the second quarter of 2012 compared with net income of $41.3 million, or $0.39 per diluted share, for the same period in 2011, and net income of $65.7 million, or $0.62 per diluted share, in the first quarter of 2012.
The net income for the six months ended June 30, 2012 was $110.4 million, or $1.04 per diluted share, compared with net income of $67.2 million, or $0.63 per diluted share, for the six months ended June 30, 2011.
Second quarter 2012 results were impacted by a $14.6 million pre-tax charge ($0.09 per share after-tax) related to the decision to “cold stack” the Subsea Construction vessel, Intrepid, to reduce the book value to the vessel’s estimated fair value.
In addition, Helix Energy reached an agreement to acquire the Discoverer 534 drillship (D534). After closing and delivery to Singapore, the drillship will be converted into a well intervention vessel. The D534 is expected to enter service in the Gulf of Mexico in the first half of 2013.
Owen Kratz, President and Chief Executive Officer of Helix, stated, “Notwithstanding that both the Q4000 and the Seawell were out of service for a good portion of the second quarter due to longer than anticipated regulatory dry docks, Helix managed a fairly good second quarter, resulting in much stronger financial performance for the first half of 2012 compared to last year. Activity levels for both our Well Intervention and Robotics businesses remain strong as we continue to grow backlog. The addition of the D534 to our fleet will allow us to address the robust demand for well intervention services in the near term. In addition, we are pleased to report success on our Danny II exploratory well.”
Helix Energy Solutions Group is talking to US officials about providing a capping stack to Repsol to respond to any blowout and spill from its deepwater well off Cuba‘s coast, the company confirmed Friday.
Helix would have to secure special licenses from the Commerce Department to export technology to Cuba as well as permission from the Treasury Department for its personnel to travel to Cuban waters to assist in responding to a blowout.
While the company would not specifically say it had applied for those licenses, spokesman Cameron Wallace did say that Helix was “currently engaged with relevant US regulatory agencies regarding the possibility of providing spill containment solutions for use in Cuban waters. The ultimate scope of services to be offered is still under consideration, and no firm commitments have yet been made,” Wallace said.
The Commerce Department’s Bureau of Industry and Security has already issued licenses for the use of some equipment, including booms and skimmers, by US companies in Cuban waters, Michael Bromwich, director of the Bureau of Safety and Environmental Enforcement told a Senate committee on Tuesday.
Bromwich told the Senate Energy and Natural Resources Committee that the Treasury and Commerce departments are reviewing applications for licenses to provide a subsea well containment system, remotely operated vehicles and intervention vessels in case of a massive blowout and spill.
Helix already owns a deepwater capping stack, one of two that are part of the Helix Well Containment Group, a consortium of companies drilling in the US Gulf of Mexico. The two stacks, one of which is owned by HWCG, are rated to a depth of 10,000 feet and are staged for use by any of the member companies in case of a major oil spill.
Wallace said Helix would build a third capping stack, designed to meet the specific parameters of Repsol’s Cuban well, if it secures the necessary permissions.
“The goal of the operation is to protect the nation’s coastlines,” Wallace said. “We need to be able to act in the event that our coasts are threatened and this is one means of doing that.”
While the capping stack would initially be designed and built for the Repsol well, it would be available for other projects in the future, Wallace said.
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- Want to drill in Cuban waters ? (uwtreasures.wordpress.com)
Susan Buchanan Sunday, September 11, 2011
Marine Management, LLC managing member Cliffe Laborde (left), with Peter Laborde
As seen in the August edition of MarineNews, Susan Buchanan updates readers on the GOM oil production situation.
BP’s gushing well was capped more than a year ago but life is hardly back to normal in the U.S. Gulf–where rigs and vessels remain underutilized. At least ten rigs have moved overseas since last summer. Gulf oil production is below pre-spill levels and won’t recover anytime soon, analysts say. Issuance of drilling permits picked up this spring as operators agreed to use oil-containment systems but permitting lags earlier rates.
Paul Candies, president and CEO of Otto Candies, LLC, in Des Allemands, La., said offshore activity has increased recently, and “we expect to see a slow trend toward more drilling “ But the marine industry shouldn’t get lulled into a false sense of security. “We need to continue to push for more permitting of rigs and simplification of that process,” he said. Candies gave a positive report about his company, saying “all of our platform supply vessels are committed at present for extended periods. We have three inspection, maintenance and repair vessels on long-term commitments, and should have a fourth IMR vessel committed by year end.” Otto Candies is a marine transportation and offshore services company.
At Laborde Marine Management, LLC, in New Orleans, managing member Cliffe Laborde said “I think the worst is over, but we’re a long way from getting back to where we were shortly before the Macondo spill.” Laborde Marine, with operations in Morgan City, La., services the deep and shallow water drilling industry.
- Gulf Assets Move Overseas
Laborde provided some recent history, and explained how promising times in the Gulf had turned sour. “In early 2010, as the economy emerged from a two-year recession, the Gulf energy industry was beginning to bloom,” he said. “Utilization rates for deepwater support vessels were high, and charter rates were rising again. The outlook was very good, but then came the spill and the market has languished since.”
Laborde continued, saying “many deepwater vessels and rigs have moved out of the GOM to foreign areas, and many vessels and rigs that stayed in the Gulf are idle now, waiting on BOEMRE to issue new permits.” The granting of new drill permits has been “alarmingly anemic,” he added.
Rigs are underutilized in the Gulf this summer. The fleet utilization rate for all 52, offshore Gulf platforms was 40.4% on July 22, less than half the worldwide usage rate for platforms, according to ODS-Petrodata, Inc. Utilization of mobile rigs in the Gulf stood at 53.7% on July 22.
Meanwhile, other drilling regions in the world are closer to full capacity. In Europe and the Mediterranean, 96.3% of all platform rigs and 87.7% of mobile rigs were in use in late July. Oil and marine companies can’t afford to keep assets in waters where they’re not needed. Since the start of the deepwater moratorium in May 2010, at least ten rigs have left the Gulf of Mexico, and headed to Angola, Egypt, Congo, Nigeria, French Guiana, Liberia, Brazil and Vietnam. One of those rigs returned to the Gulf in March, however, and another is slated to come back this fall.
- Shallow Water Activity Could Slow Further At Late Year
In Morgan City, La., Dave Barousse, business development director at Fleet Operators, Inc., said “in the shelf market, or non-deep water at depths of 1,000 feet and less, we have not seen an increase in business because of the end of the moratorium. However, business has been steady as a result of the normal construction and maintenance work offshore that generally takes place during the summer months.” But, he said, activity is considerably slower than before the deepwater moratorium.” Fleet Operators owns and charters supply vessels for the offshore oil and gas industry. And Barousse said “we’re preparing for things to slow down tremendously once winter weather is upon us. The outlook is not very positive at the moment, and will be even worse by the end of the year.”
- Gulf Oil Output Projected To Decline This Year and Next
Crude oil production from the federal Gulf of Mexico is expected to shrink from 1.64 million barrels per day in 2010 to 1.49 million bpd this year and 1.38 million bpd in 2012, according to the U.S. Energy Information Administration‘s short-term energy outlook, released in July. Gulf output should drop by 150,000 barrels a day this year and another 110,000 bpd in 2012.
The EIA said this year’s decline stems from lower production in existing fields, last year’s drilling moratorium and a subsequent delay in issuing new drilling permits. Even before the BP spill and the drilling ban, the EIA expected Gulf oil output to fall this year.
- Issuance of Drilling Permits Lags Pre-Moratorium Pace
Jim Adams, president and chief executive of Offshore Marine Service Association, an industry group in Harahan, La., said the Administration’s approval rate for exploration and development plans is down 85% from pre-moratorium levels, and the number of drilling permits covered by exploration and development plans is off nearly 65%. He cited a study called “Restarting the Engine–Securing American Jobs, Investment and Energy Security,” released by IHS CERA and IHS Global Insight in late July.
Adams said “no industry can operate with that kind of shutdown.” He said the Obama Administration is sending rigs, boats and jobs overseas in an indefensible policy. OMSA represents more than 250 member companies, including about 100 firms that own and operate marine-service vessels. “The offshore marine industry remains in a state of crisis, almost as if the drilling moratorium was never lifted, and the only relief from excess capacity is overseas opportunities,” Adams said. “The Administration has strangled offshore drilling, and until that changes, we can’t look for better times in the marine industry.”
Adams said Washington has choked the Gulf shallow sector though it never had any significant spills. “There’s no reason that shallow water permits shouldn’t be 100% of what they were in the spring of last year, but we’re not even close,” he said. “The Administration isn’t interested in shallow-water or deepwater exploration.”
OMSA sent a letter to President Obama in February complaining about suspended offshore drilling and its impact on marine industry jobs. “We never heard back from the Administration and that’s because they know we’re right,” Adams said. According to OMSA, more than 50,000 wells have been safely drilled in the Gulf of Mexico over the past fifty years.
- Problems with Rig Permit Numbers
Adams said “BOEMRE numbers on Gulf drilling permits are completely misleading. We need to know how many wells are brand new that will lead to exploration and how many wells are being re-permitted from last year.” Someone looking at BOEMRE’s website might think that new wells are keeping pace with pre-moratorium levels, but they aren’t, he said. He added that oil and marine industries need to be able to compare how many exploratory wells are permitted. “It takes an average seven permits for a well to start producing,” he noted. In March, Senator David Vitter (R-La.) also sent a letter to U.S/ Interior Dept. Secretary Ken Salazar and BOEMRE director Michael Bromwich, complaining about inaccurate, federal information on Gulf drilling permits.
In their July study, IHS CERA and IHS Global Insight said an analysis of BOEMRE data provided several findings. “The current pace of plan and permit approvals is significantly below historical norms and indicates that the process is not working smoothly,” researchers said. And “the growing backlog of plans awaiting approval indicates that the industry remains ready to invest as quickly as it is permitted to do so.”
- Rigs and Vessels Adopt Oil Containment Systems
One way to get your vessel hired in the Gulf is to outfit it with spill-response equipment. After BP’s accident, BOEMRE issued new regulations requiring that rig operators be able to respond to subsea leaks and surface spills. In late July of this year, two Hornbeck Offshore Services vessels were added to the fleet of ships that can respond to a Gulf accident, the Marine Spill Response Corp. said. MSRC is a non-profit company that was established in 1990. Hornbeck’s HOS Centerline and HOS Strongline are vessels with oil-skimming systems, ocean boom, support boats and navigational systems that can support skimming at night and in stormy weather.
Hornbeck, based in Covington, La., in late May posted its first quarterly loss in over six years, but said it was diversifying by moving vessels into foreign markets. This summer, BOEMRE director Bromwich said his agency will issue more safety measures for Gulf rigs soon. At the fifth, annual World National Oil Companies Congress in the U.K. in late June, he said “offshore drilling in the U.S. and around the world will never be the same as it was a year ago. Changes that we have put in place will endure because they were urgent, necessary and appropriate.” More regulations will be issued, but not at the frantic pace of the past year, he said.
- Report Delayed On Who’s To Blame for Spill
In late July, a U.S. team examining the causes of the BP spill delayed the release of a final report as it continued weighing evidence. BOEMRE and the U.S. Coast Guard were expected to issue results of a joint investigation on July 27 but said they needed more time. The Gulf marine industry wants additional rigs to start drilling soon. Laborde said “the oil companies, the rig operators and the energy-service companies are all anxious and ready to get back to work. This would create jobs, improve the economy, increase government revenues through royalty income and taxes, and enhance our national security by lessening dependence on foreign oil.” Where the Gulf oil and marine industries go from here is up to decision makers in Washington, he said.
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By Trent Jacobs, Helix Energy Solutions
Currently there are more than 5,000 subsea wells scattered across the globe, with more being drilled every day. Many of those wells are already a decade old with many more not far behind. That’s why in the last several years the techniques offered through well intervention have become ever more necessary to keep up with rising global demand for oil and gas.
Well intervention holds the potential to extend the productive life of aging wells and repair damaged or underperforming wells. Well intervention can bring oil and gas companies substantially higher profits off otherwise non-economical wells. Helix ESG’s well intervention unit, Helix Well Ops, is the global leader in this specialized arena of offshore work and boasts some of the most advanced assets the industry has to offer.
But what exactly is well intervention?
Generally speaking, well intervention is any process that enhances the quality of the subsea well, provides data to help manage the production rate of the well or shuts off and safely abandons a flowing well.
One of the biggest challenges in subsea well intervention is keeping costs down. So rigorous and extensive preplanning is used to identify the best potential solutions while mitigating a multitude of known and unknown risks.
After assessing a particular well’s condition and selecting a proper treatment, which could involve a number of different procedures and contingency plans, a specific type of vessel is then selected to carry out the task. Most operations can be carried out using light and medium intervention vessels equipped with dynamic positioning like Helix ESG’s monohull vessels the Seawell and the Well Enhancer, but for heavy intervention work, like redrilling an under-producing well, an offshore drilling unit is needed.
Among all the various types of well intervention operations, through tubing is the most commonly applied. Through-tubing enables recompletion, stimulation or repair work to be done inside a flowing oil or gas production line for the entire length of the well.
This procedure is used to complete many different tasks including the removal of obstructions inside the well that may be blocking the flow of hydrocarbons, simply evaluating the well’s condition, stimulating the well chemically or repairing a damaged well casing. Each job requires a specific type of tool that can be delivered down inside the well itself and in light intervention procedures the systems used include coiled tubing, electric line (e-line), slickline and braided wireline.
Slickline is an unbraided wire used to deliver a wide array of specialized tools down into the well for maintenance and data collection. E-lines provide more flexibility for mechanical and electrical operations and can also send back real time logging data which means engineers don’t have to wait for the tool to be pulled back out of the well to learn of its condition.
E-lines can include the use of a braided line which is more complex than slickline and requires a special grease injection system to ensure there is enough pressure for the blowout preventer to seal around the wire as it goes down into the well.
Braided lines are stronger that slicklines and can be used to perforate wellbores with explosive charges or fish out logging and monitoring tools placed deep inside the well. Both slickline and e-line jobs can be completed without the use of a rigid riser that connects the subsea well head to a vessel floating on the surface.
Coiled tubing is by far the most effective and versatile tool for well intervention. Coiled tubing is a continuous string of tubing that can be rolled onto a spool and is used is often used to pump chemicals or gasses directly into the well to relieve blockage and increase flow. But coiled tubing is used for a wide variety of other tasks such as drilling, logging, cleaning, cementing,” fishing” out tools and well completion and production. In many cases coiled tubing requires a riser or a subsea tool known as an injector head that is placed on top of the well and can cut through the coil to shut off the flow of oil or gas if an unexpected problem arises. To perform these types of operations offshore,
Well Ops has a world class fleet of three purpose built vessels and an arsenal of heavy well intervention equipment that can be mobilized for work in all of the world’s major offshore oil and gas fields.
The mono-hull Seawell pioneered the light well intervention market with its inception over 20 years ago and continues to provide riser-less well intervention solutions in the North Sea. The Seawell is capable of conducting wireline and e-line operations and utilizes its diving capabilities for wells that can only be accessed by divers.
The cutting-edge Well Enhancer, launched in 2009 and also based in the North Sea, provides open water and riser based intervention services supported by diving and ROV capabilities.
Well Ops flagship, the Q4000, is one of the world’s most unique multi-service vessels and entered into service in the Gulf of Mexico in 2002. As a highly cost-effective alternative to using a drilling rig, the Q4000 is capable of virtually every type of well intervention operation, including subsea oil spill containment, and is can work in water depths beyond 10,000 feet.
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Rapid technological and market developments in the offshore industry over the past five years have put pressure on class to develop rules and notations for a new generation of specialized well-intervention offshore vessels.
Driven by insatiable global demand for energy, subsea exploration and well construction has experienced a boom in the past decade. According to consultants Infield Systems and Douglas Westwood, the total number of subsea wells will balloon to more than 5,500 by the end of 2010. While some projects may be delayed in some areas due to financing issues related to the global financial downturn, the rapid construction of new wells is likely to continue, if not accelerate, in the years to come.
This remarkable growth has created challenges for energy companies and suppliers alike. Increased demand for energy has forced many energy companies to re-evaluate stranded or marginal fields, work in deeper waters, use more complex tie-back solutions and improve recovery rates for aging wells, which are about 10-20 per cent less than platform wells.
These emerging demands have pushed operators of well intervention units to develop new technologies to improve access to subsea wells, creating a demand for more efficient subsea well intervention systems, including Riserless Light Well intervention (RLWI) units. While not appropriate for deep water, RLWI units are optimal for repair, scale removal, installation and manipulation of some equipment (such as valves, plugs, screens etc.), re-perforations, zone isolation, fluid sampling, PLT, chemical treatment and well abandonment, among other services.
In the past, this work was performed by mammoth, slow-moving semisubmersible drilling rigs, but developments in dynamic positioning systems, ROVs and onboard systems on smaller, mono-hulled vessels which can move quickly from one well to the next, helping to reduce chartering costs and improving well recovery rates by up to 50 percent. Riser well intervention units are still preferred for some kinds of work and in depths below 500 meters, but new composites now being developed for wire lines may soon allow RLWI units to work in deeper waters.
A vessel or an offshore unit?
The first monohull well intervention unit (Seawell) was built in 1986 by WellOps. The concept proved a success, and over the next ten years, demand for LWI units grew. However, because these units are often similar in design to Offshore Supply, Support or Multi Purpose vessels, there was uncertainty on how to class them: Are they vessels or mobile offshore units?
Based on its extensive experience in the North Sea offshore industry (home to about 40 per cent of the world’s subsea wells) and other regions, DNV moved quickly to manage these issues. According to Per Jahre Nilsen, DNV’s Business Development Manager (Well Intervention) the development project, which began in 2007, created some unique challenges.
“At the time, there wasn’t a lot of useful data out there to help us develop the right approach,” he says. “But based on our experience, technical research and feedback from the industry, we concluded that if the unit is capable of taking control of subsea equipment, such as opening or closing valves on a producing well, it would be classed as offshore, not maritime.”
Nilsen says that these criteria are consistent with the way many national authorities differentiate between offshore operation and maritime ships/vessels operation and notes that Mobile Offshore Development Units (MODUs) code compliance applies to offshore. Once developed, the new rules were then submitted to external hearings for review and comments were solicited from owners and operators.
At present, DNV is the only class society offering the Well Intervention Unit class notation. And based on experience gained by developing the new rules, DNV released a new, optional notation known as WELL Intervention in October, 2009.
Nilsen says that defining the parameters for a mandatory class notation for well intervention units required an exhaustive review of different technical elements and a broad range of safety principles, which covered ventilation, areas classification, shut down & gas detection, escape, evacuation and communication. The organisation sourced in-house expertise on structural design, which took into account substructure and foundations for well intervention equipment and drill floors when applicable. Other issues included fire protection, dynamic positioning, and a number of supplementary requirements, ranging from gas treatment in the event of a leakage to rescue ladders in the moon pool.
Nilsen explains that the scope the WELL class notation include design verification of the well intervention equipment and systems and survey and follow up during fabrication. Once completed or certified, the equipment will follow traditional classification principles and be inspected on a regular basis.
“By introducing the new voluntary WELL class notation together with the revised and mandatory Well Intervention Unit notation, DNV was able to offer owners and operators of well intervention units the same options that owners of drilling units have had in the past,” says Nilsen. “We believe the WELL class notation will gain recognition as a mark of quality — an assurance to charterers that the vessel follows internationally recognized standards for well intervention equipment.”
Today, DNV has issued certification for six well intervention vessels, including four optional WELL notations for a number of subsea services companies. While the commercial benefits for owners sailing with the optional WELL notation is difficult to measure, some well intervention unit operators are hopeful the notation will not only ensure the safe operation of their vessels, but help their bottom line.
One early adopter of the new DNV rules was Aker Oilfield Services. Established in 2006 to meet the rapidly growing global demand for services to subsea fields, the company offers fully integrated services ranging from subsea installation and completion to advanced well intervention operations provided by the company’s state-of-the-art monohull well intervention units. The company’s ambitious newbuilding programme will allow Aker Oilfield Services will provide subsea intervention, light drilling, and riser and riserless well intervention services.
Alf Kristensen project manager for Aker Oilfield Services, says that the company has two well intervention units classed by DNV – the newbuild Skandi Aker, and its sister vessel, Skandi Santos, now under charter with Petrobras in Brazil. “While there are many components to winning a contract, we felt the DNV notations gave us an advantage over competing oilfield services companies,” says Kristensen. “The DNV notation helped strengthen the charterer’s confidence in our offering and is consistent with our focus on reliability and advanced technology.”
While the Skandi Santos and Skandi Aker are well intervention units and will work without risers, Kristensen says DNV worked to modify the optional WELL notation to fit their needs. “We recognize increased demand for well intervention in deeper water where there is a need for using risers and with riser units we can offer coiled tubing services,” says Kristensen. “If we see the notation has a positive operational or commercial impact, we will consider working with DNV on other units in our newbuilding programme.”
Looking ahead, rising demand for subsea oilfield services places DNV in a unique position among class societies in this growing industry segment. “We feel the optional WELL notation has intrinsic value and believe owners will recognize the commercial potential in time — not just for newbuildings, but for existing tonnage.”
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