NEWS

Eni has reported a new oil and gas discovery in the West Melehia deep exploration prospect, in Egypt's Western Desert. The prospect is located in the Melehia license, 300 km west of Alexandria.

The Melehia West Deep 1X exploration well was drilled to a depth of 4,175m, and encountered a 20m net mineralized accumulation of light oil in the Lower Cretaceous age of the Alam El Bueib formation. The initial flow of the well is approximately 2.1 Mbbl/d (40° API).

Eni will now drill delineation and development wells to develop the discovery and expects production of about 8 Mbbl/d by the end of 2015.

Ownership Melehia license: Eni (76%, operator), Lukoil (24%)

View Eni press release

Santos reported a 6% YoY growth in 2014 production to 54.1 MMBOE (148 MBOE/d). The growth was driven by the successful ramp-up of production from the PNG LNG Project and Cooper Basin. The company reported sales revenue of $4 billion, up 12% YoY.

The company also reported that the GLNG project is more than 90% complete and within budget and schedule.

Santos MD and CEO David Knox said: “Notwithstanding the fall in oil prices, Santos has delivered growth in full-year and quarterly production, and record sales revenue…We look forward to further growth in 2015 with the start-up of GLNG in the second half of this year.”

View Santos press release

WorleyParsons has secured a contract worth $109 million from a Canadian E&P company, to provide fabrication, modularization and construction services. The oil sands mining project will be led and executed by the company from its Edmonton operations location and is scheduled to be completed by mid-2016.

View WorleyParsons press release

Apache named Stephen Riney as CFO. He is scheduled to begin in Feb-2015. He holds a BBA degree in accounting and finance from the University of Notre Dame and an MBA from the University of Chicago Booth School of Business.

Stephen Riney has served BP as the CFO for E&P. Previously he was the global head of M&A in BP and held several management positions in the company. Before the merger of Amoco with BP in 1998, Mr. Riney held various management roles in finance, M&A, planning and marketing in Amoco.

View Apache Corporation press release

Source: 1Derrick

Reuters reports that Petrobras plans to take a $3.9 billion charge in its delayed Q4-2014 results to write down overvalued assets, quoting the Globo newspaper. The company also plans to cut investment by 30% as a part of a plan to preserve cash as a contract-fixing and bribery scandal shuts it out of financial markets and the lower oil price is causing a revenue slump.

The company will write down the value of five refineries and two natural gas pipelines, according to the Globo article.

Source: Reuters

Disclaimer: 1Derrick has not verified this story and does not vouch for its accuracy.

BP announced that it intends to sell its oil storage terminal in Amsterdam. The terminal has a storage capacity of 5.9 MMbbl. The storage terminal has been owned and operated by BP since 1997 and acts as an international trading hub for supplying fuels to and from Europe.

The terminal's assets include more than 70 storage tanks for oil products and butane and propane, three jetties for ocean-going vessels and two jetties for mooring nine inland barges and a loading rack for road tankers.

The sale is expected to take place near the end of 2015.

View BP press release

Saudi Arabia’s King Abdullah died early on 23-Jan-2015. His successor is Salman, the Saudi royal court said in a statement.

"His Highness Salman bin Abdulaziz Al Saud and all members of the family and the nation mourn the Custodian of the Two Holy Mosques King Abdullah bin Abdulaziz, who passed away at exactly 1 a.m. this morning," said the statement.

Abdullah, thought to have been born in 1923, had ruled Saudi Arabia as king since 2006, but had run the country as de facto regent for a decade before that after his predecessor King Fahd suffered a debilitating stroke.

Source: Reuters

Source: Det Norske Ivar Aasen operation webpage

Det Norske has commenced a three-year drilling program on the Ivar Aasen field in the North Sea. The drilling program comprises a total of 15 wells, in addition to three pilot wells. The wells include eight production wells and seven water injection wells.

As part of the program, Det Norske has contracted the Maersk Interceptor rig for a period of five years with an option for additional two years. Three pilot wells will be drilled initially for further mapping and retrieving reservoir information. The drilling of pilot wells will be concluded by the summer of 2015.

The Ivar Aasen field comprises three deposits: Ivar Aasen, West Cable and Hanz. The field is located west of the Johan Sverdrup field and contains 210 MMBOE. Production is expected to commence in Q4-2014.

Ownership: Det Norske (34.78%, operator), Statoil (41.47%), Wintershall (6.46%), VNG (3.02%), Lundin (1.39%) and OMV (0.55%), Bayerngas (12.37%).

View Det Norske press release

View Det Norske Ivar Aasen operation webpage

Source: KrisEnergy Bangladesh operations webpage

KrisEnergy announced that the Binh Minh-2 vessel has completed a 3,146 km 2D seismic acquisition program in Santos-operated SS-11 exploration block offshore Bangladesh. Block SS-11 covers an area of 4,475 sq km in the Bay of Bengal over the Bengal Fan. The majority of the block lies in shallow waters of up to 200m. The program had a duration of 22 days.

Chris Gibson-Robinson, Director E&P, KrisEnergy, commented: “The existing 2D data sets were acquired in the mid-1970s and this program will provide higher resolution data to confirm existing prospects and leads and assess the overall prospectivity of the block. It will also help us determine potential locations for a planned 3D seismic program, to which we are committed under the work program obligations.”

Ownership: Santos (45%, operator), KrisEnergy (45%) and Bangladesh Petroleum Exploration & Production Company (10%).

View KrisEnergy press release

View KrisEnergy Bangladesh operations webpage

Reliance Industries (RIL) announced the pricing of its 4.125% Senior Unsecured Notes offer to raise $1 billion. The notes have been priced at $98.998 and will yield 4.249%. The funds will be utilized for the company’s ongoing capital expenditure.

View Reliance Industries press release

Gulf Keystone has appointed Sami Zouari as the CFO, effective from 22-Jan-2015.

Mr. Zouari had studied in Columbia and Harvard Universities. He has served as the Regional Head of Corporate and Investment Banking for North Africa, Iraq and Oman at BNP Paribas. He has also held different positions in Total EP. He was the Commercial Manager for Total EP Libya in Tripoli.

View Gulf Keystone press release

Kinder Morgan named Steve Kean as CEO, effective from 1-Jun-2015. Mr. Kean replaces Rich Kinder, the co-founder of the company.

Mr. Kean had joined Kinder Morgan in 2002. He has held a number of senior positions including Executive Vice President of operations. He has served as the President of the company since 2013.

View Kinder Morgan press release

Diamondback Energy announced the pricing of a stock offering to raise $106 million. The offer comprises 1,750,000 shares of common stock. The offering is expected to close on 26-Jan-2015.

Diamondback will utilize the net proceeds from this offering to repay a portion of the outstanding borrowings under its revolving credit facility.

View Diamondback Energy press release

Kinder Morgan Buys Bakken-Focused Hiland Partners

Kinder Morgan announced the $3 billion acquisition of Bakken-focused midstream company Hiland Partners from Harold Hamm, the founder of Continental Resources. Hiland’s assets, which are mostly fee based, consist of crude oil gathering and transportation pipelines and gas gathering and processing systems the primarily serve the Bakken Formation in North Dakota and Montana.

Hiland’s crude oil gathering systems, located in North Dakota and Montana, consist of approximately 1,225 miles of gathering pipelines that deliver crude oil to the basin’s major takeaway pipelines and rail terminals. At closing, the crude oil gathering systems will have more than 1.8 million acres dedicated under long-term, fee-based agreements with major Bakken oil producers.

Hiland’s crude oil transportation pipeline, the Double H Pipeline, is a 485-mile pipeline that will transport crude oil from Hiland’s Dore Terminal in North Dakota to Guernsey, Wyoming, where Double H interconnects with Pony Express Pipeline for further transportation to Cushing, Oklahoma. The pipeline is in the final stages of construction and is expected to begin service by the end of Jan-2015. It will have an initial capacity of approximately 84 Mbbl/d, with an expansion to approximately 108 Mbbl/d in 2016.

Hiland’s gas gathering and processing systems in North Dakota and Montana consist of approximately 1,800 miles of gathering pipelines and, upon completion of a plant expansion in 2015, 240 MMcf/d of gas processing capacity and 30 Mbbl/d of fractionation capacity. These systems process associated gas from oil production and have approximately 3.7 million acres dedicated under long-term agreements with major Bakken oil producers. Additionally, Hiland’s Midcontinent systems gather and process gas in the Woodford shale and other areas of Oklahoma.

View Kinder Morgan press release

Eni announced that it will raise up to $2 billion in bonds in one or more tranches by 31-Dec-2015. The bonds are to be placed with institutional investors.

View Eni press release

Oceaneering International secured a contract from Hess to supply umbilicals and umbilical distribution hardware for the Stampede Project in the Green Canyon area of the US Gulf of Mexico.

The contract is for electro-hydraulic, steel tube umbilicals with a total length of 14.3 km, umbilical termination assemblies and other equipment. This hardware will be used to transmit hydraulic control fluids, chemicals, and electrical power signals to operate and monitor subsea wells and manifolds.

Oceaneering will commence equipment deliveries in mid-2016.

View Oceaneering press release

The Venezuelan oil minister Asdrubal Chavez said that the country’s oil exports declined 4% YoY in 2014 to 2.33 MMbbl/d, while oil production averaged 2.9 MMbbl/d during the year. The minister said that the country’s exports to China have reached 536 Mbbl/d, while shipments to India were 363 Mbbl/d.

Mr. Chavez predicted that production from the Orinoco Basin will rise in the near future from an average of 1.25 MMbbl/d in 2014 to 1.37 MMbbl/d in 2015. The region is currently producing with the current production of 1.3 MMbbl/d.

Source: Reuters

Total will cut spending related to US shale production and ageing North Sea fields after the recent plunge in oil prices, its CEO Patrick Pouyanne said. Mr. Pouyanne added that Total planned to reduce capex spending by 10% from the $26 billion spent in 2014. The company will also impose a group-wide freeze for 2015.

Source: Reuters

BHP Billiton announced a cut in the number of rigs it will use in the US, from 26 to 16, by Jun-2015. The company added that it will reveal a revised shale drilling budget, originally set at $4 billion, in Feb-2015. The company has spent approximately $1.9 billion of the original $4 billion budget.

BHP plans to focus on drilling in the liquids-rich Black Hawk Basin, while cutting back in the Permian and Hawkville acreage. The company does not expect the reduction in drilling activity to impact the 50% YoY growth expected in shale liquids volumes.

View BHP Billiton press release

Schlumberger Buys $1.7 Billion Stake in Eurasia Drilling Co

Schlumberger has announced the acquisition of a 45.65% equity stake in Eurasia Drilling Company Limited (EDC) for $1.7 billion. The company added that in connection with the acquisition agreement, the principal EDC shareholders will take the company private. Upon delisting from the London Stock Exchange, Schlumberger will acquire a minority ownership interest of 45.65% in EDC for a consideration of $22 per share.

The total consideration of $1.7 billion also includes a call option which will allow Schlumberger to purchase the remaining shares of EDC during a two-year period commencing three years from closing of the transaction. The transaction is expected to close during Q1-2015.

EDC is the largest provider of onshore drilling services in Russia, as measured by the number of meters drilled, providing onshore integrated well construction services and workover services. The company also provides offshore drilling services in the Caspian Sea and is the largest provider of such services in the sectors where it operates based on the number of jack-up drilling rigs.

View Schlumberger press release

Source: Det Norske press release

Lundin Petroleum announced first oil from the Bøyla field offshore Norway. The Bøyla field, located on PL340 in the Norwegian sector of the North Sea, is a subsea tie-back to the Alvheim. The Bøyla field is estimated to contain gross reserves of 23 MMBOE and is expected to produce at a gross peak rate of approximately 20 MBOE/d once the second production well has been completed, although the plateau rate is expected to be somewhat lower. The drilling operations on the second production well were suspended in late 2014 and the Transocean Winner semi-submersible rig will return to complete the well during Q2-2015 with startup of this well expected by mid-year 2015.

The production facility for the Bøyla field is the Alvheim FPSO which is owned by the Alvheim field partners. In addition to the Alvheim and Bøyla fields, the Volund and Vilje fields are also producing to the Alvheim FPSO.

Ashley Heppenstall, President & CEO of Lundin Petroleum, commented: “With the successful start-up of the Bøyla field on the 19th January 2015 Lundin Petroleum has now successfully brought on-stream two of the four development projects which collectively are forecast to bring Lundin Petroleum's production level to more than 75 MBOE/d by the end of 2015. The two ongoing development projects, Bertam offshore Malaysia and Edvard Grieg offshore Norway, continue to progress according to plan and are scheduled to achieve first oil in the second and fourth quarters of 2015 respectively."

Ownership of PL340: Det Norske (65%, operator), Core Energy (20%) and Lundin (15%).

View Det Norske press release

ExxonMobil announced the start-up of the Arkutun-Dagi field, part of the Sakhalin-1 project. Peak daily production from the field is expected to be 90 Mbbl/d. The field is located off the north-east coast of Sakhalin Island in the Russian Far East. The field will bring total production at Sakhalin-1 project to more than 200 Mbbl/d.

Arkutun-Dagi field is the third field to start production as part of Sakhalin-1 project. The other two fields, Chayvo and Odoptu – began production in 2005 and 2010, respectively. Production from the field will be routed through the existing Chayvo onshore processing facility on Sakhalin Island and delivered through pipelines to the De-Kastri oil export terminal located in Khabarovsk Krai, Russia.

Ownership of Sakhalin-1: ExxonMobil (30%, operator), Sakhalin Oil and Gas Development (30%), Rosneft (20%) and ONGC Videsh (20%).

North Energy to Acquire Noreco Stake in PL 484

Source: Noreco licence portfolio webpage

Norwegian Energy Company (Noreco) has agreed to transfer its 30% ownership in PL 484 in the Norwegian Sea to North Energy. The companies also agreed that Noreco, under certain conditions, has a right to re-enter the licence with a reduced equity share in the future.

The transfer of ownership in PL 484 was originally part of an asset swap deal announced on 14-Aug-2014. This deal involved Noreco transferring a 15% stake in PL 484 to North Energy in return for 10% of PL 616. This agreement has now been cancelled and replaced by the new agreement. Consequently, Noreco will continue owning 20% in PL 616, where an exploration well will be drilled on the Haribo prospect later in 2015.

View Noreco press release

View North Energy press release

View Noreco licence portfolio webpage

Post-transaction ownership of PL 484: North Energy (68%, operator), Dana Petroleum (12%), Explora Petroleum (10%) and E. On (10%).

Ownership of PL 616: Edison International (25%), Noreco (20%), Concedo (20%), Skagen44 (15%), North Energy (15%) and Lime Petroleum (5%).

Source: NPD fact pages

Source: 1Derrick

Reuters reports that BHP is likely to slash planned $4 billion spending on US shale wells and book writedowns on its shale assets as it faces plunging prices for iron ore, oil and copper. The spending cuts could come as soon as 21-Jan-2015 when the company releases its Dec-2015 quarter operational review.

Writedowns on the shale assets, which BHP acquired in 2011 for $17 billion when gas prices were much higher, are also inevitable, analysts and investors said, based on a much weaker outlook for forward prices.

Source: Reuters

Disclaimer: 1Derrick has not verified this story and does not vouch for its accuracy.

Global Deals

Activity was extremely light during this week. The only notable deal during the deal was EnLink Midstream's acquisition of Permian-focused LPC Crude Oil Marketing LLC for approximately $100 million.

Exploration

The week did not witness any notable exploration activity.

Projects & Capex

Canadian Natural Resources (CNRL) revised downwards its 2015 capex budget to $6.2 billion. The new estimate is a 28% cut from its previous forecast in Nov-2014. Most of the reduction is related to drilling activity and related facility capital for North America and International conventional operations.

Later in the week, Total announced that the West Franklin Phase 2 project is now on-stream in the Central Graben area of the UK North Sea. The project will supply 40 MBOE/d to the Elgin/Franklin hub.

Horizon Plugs Nama-1 Well in PNG

Horizon Oil announced that the Nama-1 exploration well located in PPL 259, Western Province, Papua New Guinea, has been unsuccessful. The well, drilled to a total depth of 3,533m, is being plugged and abandoned.

Nama-1 well encountered a total of 77m of the target Early Cretaceous Elevala and Toro sandstones and Late Jurassic Kimu sandstones, which are productive in nearby Stanley field. Subsequently, pressure measurements and sampling were taken in the key prospective zones, followed by the acquisition of side wall cores. The sands, which were considerably thicker than predicted, were calculated as being gas-saturated. However reservoir properties were of poor quality and are not considered to be commercially productive at this location.

Ownership of PPL 259: Horizon Oil (35%, operator), Eaglewood Energy (45%), Osaka Gas (10%) and Mega Fortune International Limited (10%).

View Horizon Oil press release

Shell, GDF Acquire 26% Stake in GAIL LNG Terminal

Shell and GDF Suez have signed an agreement to take 26% stake each in GAIL's proposed 'floating LNG import terminal' at Kakinada in Andhra Pradesh, India.

Andhra Pradesh Gas Distribution Corp (APGDC) - a joint venture of GAIL Gas and Andhra Pradesh Gas Infrastructure Corp (APGIC) will hold the remaining 48%.

Sources said Andhra Pradesh government is pushing for an early start of work on the 3.5 MMTPA floating storage and regasification unit off the Kakinada coast. The partners will bring an FSRU, import gas in its liquefied form in ships to the terminal, pipe it to land and sell in Andhra Pradesh and beyond.

Source: Reuters

Source: Total press release

Total announced that the West Franklin Phase 2 project is now on-stream in the Central Graben area of the UK North Sea. The project will supply 40 MBOE/d to the Elgin/Franklin hub.

The field was discovered in 2003 and is located approximately 240 km east of Aberdeen. Phase 1 production started in 2007 with two wells drilled from the Franklin platform. The Phase 2 project will develop reserves of 85 MMBOE. The project includes the drilling of three new production wells and the installation of two new platforms, the West Franklin wellhead platform and the Elgin B platform which will be also used to drill new wells on Elgin.

Ownership of the Elgin/Franklin, including West Franklin: Total (46.2%, operator), Eni (21.9%), BG (14.1%), E.ON (5.2%), ExxonMobil (4.3%), Chevron (3.9%), Summit (2.2%) and Dyas (2.2%).

View Total press release

A JV between Qatar Petroleum and Shell revealed that it will not proceed with the proposed Al Karaana petrochemicals project in Ras Laffan, Qatar. The project was initiated with a Heads of Agreement (HOA) signed between Shell and Qatar Petroleum in Dec-2011.

Shell says that the decision was finalized after an evaluation of commercial quotations from EPC bidders, which showed high capital costs rendering the project uncommercial, particularly in light of current economic climate in the energy industry.

The complex was to be operated as a stand-alone JV with Qatar Petroleum holding 80% stake and Shell holding the rest.

View Shell press release

EnLink Midstream has signed a definitive agreement to acquire Permian-focused LPC Crude Oil Marketing LLC for approximately $100 million. LPC currently purchases, transports and sells approximately 60,000 barrels per day of crude oil. EnLink says that the transaction will expand its capabilities in the oil producing regions of West Texas and New Mexico.

LPC’s assets include 13 pipeline and refinery injection stations, a fleet of approximately 43 tractor trailers, six crude oil gathering systems totaling 67 miles of pipeline, and an extensive crude oil first purchasing operation.

View EnLink press release

Canadian Natural Resources (CNRL) revised downwards its 2015 capex budget to $6.2 billion. The new estimate is a 28% cut from its previous forecast in Nov-2014. Most of the reduction is related to drilling activity and related facility capital for North America and International conventional operations.

The company has also revised downwards its production growth target from its previous estimate of 11% YoY to 7% YoY. Production is now estimated to be 1,730-1,770 MMcf/d of gas and 552-592 Mbbl/d of crude oil and NGLs.

The company will also defer capex worth $470 million related to the Kirby North Phase 1 thermal in situ project.

The company added that expansion activities on the Horizon Oil Sands Mining an Upgrading project are on track to add 125 Mbbl/d of light, sweet synthetic crude oil capacity. This capacity expansion comprises of 45 Mbbl/d in late 2016 and an additional 80 Mbbl/d in late 2017. The expansion project is approximately 55% complete at the end of 2014.

View CNRL press release

Woodside announced an MoU with Adani Enterprises to identify and develop business initiatives for the Indian LNG market. The agreement was signed by Adani Chairman Mr. Gautam Adani and Woodside CEO and MD Peter Coleman.

Mr. Coleman said, “India is an important emerging LNG market in which we see enormous supply potential as infrastructure is developed... Adani is at the forefront of the LNG industry in India and committed to developing partnerships to support securing reliable long-term supplies of clean energy”.

View Woodside press release

Eni signed a new Concession Agreement to operate in the South-West Melehia Block in the Western Desert of Egypt, following the Egyptian General Petroleum Corporation (EGPC) 2013 international competitive bid round.

The South-West Melehia 100% owned and operated by Eni. The block covers an area of 2,058 sq km and is located immediately south of Melehia license, operated by Agiba, a JV of Eni and EGPC which manages Eni’s operations in the Western Desert.

View Eni press release

Tallgrass Energy Partners LP (TEP) revealed that Tallgrass Development LP has offered the company the right to purchase 33.3% interest in the Tallgrass Pony Express Pipeline LLC. If the transaction is consummated, TEP’s ownership interest will rise to 66.7% in the pipeline.

Pony Express owns an approximately 690-mile crude oil pipeline commencing in Guernsey, Wyoming, and terminating in Cushing, Oklahoma, with delivery points at the Ponca City Refinery and at Deeprock in Cushing. Upon completion of ongoing construction, Pony Express also will own an approximately 66-mile lateral in North-east Colorado that will commence in Weld County, and interconnect with the Pony Express mainline just east of Sterling, Colorado. The lateral is expected to be in service sometime during H1-2015.

Pony Express is currently undergoing open seasons to solicit commitments for incremental crude oil transportation service expected to be operational in H2-2016, with interim capacity of approximately 100 Mbbl/d available beginning in mid-2015.

View Tallgrass Energy Partners press release

The White House said in a statement that President Obama’s advisers will recommend that he veto a House bill approving construction of the Keystone XL oil pipeline if the legislation reaches his desk.

Republican senators started the new US Congress on 6-Jan-2015 with legislation to approve TransCanada’s pipeline from Canada to the United States and White House spokesman Josh Earnest said Obama would not sign it.

The statement said the House bill would circumvent presidential authority and prevent thorough consideration of security, safety and environmental concerns.

Source: Reuters

Source: SM Energy operations webpage

SM Energy announced that it has commenced the process to sell its assets in the Arkoma Basin of Oklahoma and in the Ark-La-Tex area of East Texas and Northern Louisiana. The assets had a net production of approximately 3.4 MMBOE (98% gas). The company expects the sale process to begin in mid-2015, assuming acceptable bids are received.

Tony Best, SM Energy CEO, said, “We had a strong 2014 driven by outstanding well results across the company. This was particularly true in our core Eagle Ford and Bakken/Three Forks development areas where, as previously disclosed, we have economic drilling inventory equating to over 20 years of current company production and 10 years of gross locations at our current pace. As part of our effort to create differential shareholder value, we are launching a process to sell the remainder of our Mid-Continent and Arklatex assets and shift our resources to further focus on the development of these core assets.”

View SM Energy press release

View SM Energy operations webpage

Source: Chevron press release

Chevron announced a significant oil discovery at the Anchor prospect in deep-water US GoM. This is the company’s second discovery in 2014, following the Guadalupe discovery.

The Green Canyon Block 807 Well No. 2 encountered oil pay in multiple Lower Tertiary Wilcox Sands. The well, which was spudded in Aug-2014, is located approximately 225 km off the coast of Louisiana in 1,580m of water and was drilled to a depth of 10,287m. Appraisal drilling will begin in 2015. 

Ownership of Anchor prospect: Chevron (55%, operator), Cobalt International Energy (20%), Samson Offshore Anchor, LLC (12.5%) and Venari Resources LLC (12.5%).

Jay Johnson, Senior VP, Upstream, Chevron, said: "The Anchor discovery, along with the previously announced Guadalupe discovery, are significant finds for us in the deep-water Gulf of Mexico. We had one of our best years with the drill bit in 2014, reporting more than 30 discoveries worldwide and adding an estimated one billion barrels of new resources to our holdings."

View Chevron press release

Eni announced the start-up of the Nené Marine field in the Marine XII Block, approximately 17 km offshore Congo. The field is located at a water depth of 28m and produces from Djeno pre-salt formation 2,500m below the ground level. Production from the first phase is 7.5 MBOE/d and is sent to the Eni-operated Zatchi production platform through a 17-km subsea pipeline.

The development of the field will take place in several stages and will include the installation of production platforms and drilling over 30 wells, with a plateau production of 140 MBOE/d.

Ownership of Nene Marine XII Block: Eni (65%, operator), New Age (25%) and Société Nationale des Pétroles du Congo (10%).

View Eni press release

EcoAtlantic Farms-Out Offshore Namibia Acreage

Source: Eco (Atlantic) Namibia Licenses webpage

Eco (Atlantic) Oil & Gas has entered into an agreement with AziNam Limited to farm-out a part of its offshore Namibian licenses comprising the Cooper License (PEL 30 - Block 2012A), the Sharon License (PEL 33 - Blocks 2013A,B), and the Guy License (PEL 34 - Blocks 2111B, 2211A).

Post-transaction ownership of PEL 30: Eco (Atlantic) Oil & Gas (32.5%, operator), AziNam (32.5%), Tullow Oil (25%) and Namcor (10%).

Post-transaction ownership of PEL 33: Eco (Atlantic) Oil & Gas (60%, operator), AziNam (30%) and Namcor (10%).

Post-transaction ownership of PEL 34: AziNam (40%, operator), Eco (Atlantic) Oil & Gas (50%) and Namcor (10%).

View Eco (Atlantic) press release

View Eco (Atlantic) operations webpage

Source: Total Eldfisk project webpage

ConocoPhillips has announced first oil production from the Eldfisk II project in the Norwegian North Sea. The Eldfisk II project includes plans to drill 40 new production and water injection wells. One of four pre-drilled wells is currently online, with the remaining three anticipated to come on stream in Jan-2015. Production from the field will ramp up over the next three years as additional wells are brought online.

The Greater Ekofisk Area, located approximately 300 km offshore Stavanger, is comprised of four producing fields: Ekofisk, Eldfisk, Embla and Tor. Crude oil from Greater Ekofisk’s producing fields is exported via pipeline to Teesside, England, and natural gas flows via pipeline to Emden, Germany.

Ownership of Greater Ekofisk Area: ConocoPhillips (35.1%, operator), Total (39.9%), Eni (12.4%), Statoil (7.6%) and Petoro (5.0%).

View ConocoPhillips press release

View Total Eldfisk project webpage

Decmil Group has secured an extension from the BG Group for its existing wellsite installation services contract for the QCLNG project. The extension is estimated to be worth $65 million.

As per the contract, Decmil will move from project phase to operational phase, supporting BG subsidiary QGC with wellhead construction, logistics, material management and a range of construction services for 2015.

View Decmil press release

Source: Gulf Keystone Kurdistan Operations Webpage

Gulf Keystone achieved its production target of 40 Mbbl/d at the Shaikan project in Iraq. The project now has seven producing wells with the eight well expected to be online in Jan-2015. Additionally, the company spudded the Shaikan-11 producer well on 24-Dec-2014, which will be tied to existing production facility PF-2, through a 11 km flowline that is already in place.

John Gerstenlauer, Gulf Keystone's Chief Executive Officer commented: "Our immediate focus is to ensure a stable daily production rate of 40 Mbbl/d, which is a base for future production growth, whilst maintaining a regular payment cycle for Shaikan export oil sales by truck and to finalise a pipeline access solution for Shaikan."

Shaikan field ownership: Gulf Keystone (75%, operator), MOL (20%) and Texas Keystone (5%).

View Gulf Keystone press release

Rockhopper Exploration has revealed that the Croatian Hydrocarbon Authority awarded the company, along with Eni, interest in offshore Block 9. Eni will be the operator of the block with 60% interest with Rockhopper holding the rest.

The block is located in the relatively shallow waters of the Northern Adriatic gas province and contains the previously discovered Ksenija accumulation along with the Klaudija prospect. The anticipated work program consists of seismic acquisition, processing and re-processing during the first exploration phase (three years) with the drilling of a well in the second exploration phase (if Rockhopper elects to proceed to the second phase).

Ownership of Block 9: Eni (60%, operator) and Rockhopper (40%).

View Rockhopper press release

Source: KrisEnergy Indonesia operations webpage

Kris Energy announced that the Indonesian Government has approved its Plan of Development (POD) for the Lengo gas field in the Bulu PSC offshore East Java.

The Bulu PSC covers 697 sq km in three separate areas – Bulu A, Bulu B and Bulu C – over the East Java Basin in water depths of 50-60m. The Lengo gas discovery is located in the Bulu A area and will be developed via four development wells and an unmanned wellhead platform. A 20-inch, 65-km export pipeline will transport the gas directly to shore. Production is anticipated to commence approximately 24 months after the JV partners declare FID and is expected to plateau at 70 MMcf/d.

The Bulu PSC lies adjacent to the KrisEnergy-operated East Muriah PSC, which contains the East Lengo gas discovery. The company plans to drill an appraisal well in the East Muriah PSC and, if successful, to develop East Lengo gas via a single well tied back to the Lengo facilities.

Ownership of Bulu PSC: KrisEnergy (42.5%, operator), AWE (42.5%), PT Satria Energindo (10%) and PT Satria Wijayakusuma (5%)

View KrisEnergy press release

View KrisEnergy Indonesia operations webpage

Source: Statoil press release

Statoil announced the commencement of production from the Valemon gas and condensate field on the Norwegian Continental Shelf. Recoverable reserves from the field are estimated at 192 MMBOE.

The expected investment in the Valemon field development project is NOK 22.9 billion (US$2.9 billion). The field will have 10 production wells. Valemon is the second Statoil-operated platform to be put into production in the last nine months and also the first new platform to be operated from Bergen since Kvitebjørn came on-stream 10 years ago. The Valemon platform will be the first Statoil platform remotely controlled from shore, and will become a ‘normally unmanned platform’ when drilling on the field is completed in 2017.

Statoil added that condensate from Valemon will be piped to Kvitebjørn for processing, and from there to Mongstad, whereas the gas will be sent to Heimdal for processing, and then transported to the market.

Ownership of Valemon field: Statoil (53.77%, operator), Petoro (30%), Centrica (13%) and Shell (3.23%).

View Statoil press release

Linn Energy signed a non-binding LoI with GSO Capital Partners LP, which is part of the Blackstone Group LP, to raise up to $500 million with 5-year availability to fund drilling programs.

According to the agreement, GSO will fund 100% of the costs associated with new wells drilled and is expected to receive an 85% WI in these wells until it achieves a 15% internal rate of return on annual groupings of wells. Linn is expected to receive a 15% carried working interest during this period. Upon reaching the internal rate of return target, GSO's interest will be reduced to 5%, while LINN's will increase to 95%.

View Linn Energy press release

Linn Energy announced a 53% YoY reduction in its planned 2015 capex budget to $730 million from approximately $1.55 billion in 2014. The company expects to produce 1.1 – 1.2 MMcfe/d (48% liquids). The company added that the reduction in capex is approximately half in response to lower commodity prices and half as a result of divestiture of Granite Wash assets and the majority of its Midland Basin assets, and reduced investment in other areas.

Mark E. Ellis, Chairman, President and CEO, said: “After careful consideration, Linn's senior management proposed and the Board of Directors approved a 2015 budget that contemplates a significantly lower current crude oil price than in 2014.”

View Linn Energy press release

The Egyptian Government announced that it has paid $2.1 billion of its debt to foreign oil and gas companies. The country still owes the firms $3.1 billion in debt after this payment. The country’s oil minister Sherif Ismail announced that the payment was the third batch to energy firms in 2014.

Source: Reuters

BG Group confirmed that it has received $350 million from the government. After this payment, about $920 million of debt remains outstanding.

View BG press release

DNO Disappointed by Sfax Permit Well, Farms-Down Stake

DNO ASA completed the Jawhara-3 well in the Sfax Offshore Exploration Permit, Tunisia. The well was drilled to a depth of 2,815m. While the Douleb and Bireno fractured carbonates formations proved to be water bearing in the compartment of the structure targeted by the well, two other secondary objectives had oil shows.

The company also announced that Petrogas E&P LLC has farmed-into the Sfax permit by acquiring a 35% participating interest (40% paying interest) in the permit. Under the terms of the agreement, Petrogas will pay a part of DNO's share of the Jawhara-3 well cost in addition to its own paying interest share. Petrogas will also pay its paying interest share of prior expenditures incurred by DNO.

Ownership of Sfax Permit post-farm-out: DNO (52.5%), Petrogas (35%), Atlas Petroleum (6.9%) and Eurogas International (5.6%).

View DNO press release

Saudi Aramco has suspended plans to build a $2 billion clean fuels plant at its largest oil refinery in Ras Tanura. The project is one of the first projects that Saudi Arabia has suspended in response to the halving of oil prices in the last six months.

The Ras Tanura clean fuels project, including a naphtha hydrotreater, was to be part of a second phase of upgrades to Aramco's refineries, and was originally due to go on-stream in 2016.

Source: Reuters