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Pacific Rubiales expects a 16% YoY increase in Q1-2014 production to 147-149 MBOE/d. The rise is forecast on the back of the $1.53 billion Petrominerales acquisition in Sep-2013.

The company added that a part of the higher production was offset by lower volumes produced from the Rubiales field in Colombia due to,

• restrictions in surface water disposal due to the ongoing drought in Colombia; and
• lower than expected capital expenditures on water treatment facilities

Pacific Rubiales is also on track to achieve its 2014 guidance of average net production of approximately 148-162 MBOE/d, an increase of 15% to 25% over 2013 levels.

View Pacific Rubiales press release

Antero Resources has announced that it intends to raise $500 million in aggregate principal amount of senior unsecured notes due 2022.

The company intends to use a portion of the net proceeds to finance the redemption of its outstanding 7.25% senior notes due 2019 and repay a portion of the outstanding borrowings under its credit facility.

View Antero press release

ARKeX has recommenced acquiring a Multi-Client Full Tensor Gravity Gradiometry (FTG) survey within the South Eastern Barents Sea. The survey was started 2013 but postponed due to weather. It will cover 42,784 sq km over the proposed NPD licensing areas.

The principal aim of the survey is to provide a high resolution gravity gradiometry dataset to help delineate complex structural features that can be associated with hydrocarbon-bearing basins and trapping structures. The complete deliverables set will be available from Aug-2014.

View ARKeX press release  

OMV posted a 12% QoQ increase in Q1-2014 to 311 MBOE/d on the back of Norwegian assets bought from Statoil and a partial return of Libyan production. The company said that output was also helped by a resumption of production in New Zealand and the completion of development projects in Pakistan.

OMV's refining margin also rose to $1.63/bbl, an improvement over Q4-2013's $1.16/bbl. The company said that the improvement, was more than offset by lower sales volumes, a lower domestic market price level in Germany and the longer than planned turnaround in its German refinery Bayernoil.

Source: Reuters

Austin Exploration announced that Halcon Resources has commenced drilling two wells (Kaiser 2H and Nemo 1H) in the Eagle Ford Basin in Texas. Each horizontal well will be drilled to a planned depth of approximately 17,500 ft with an 8,000-10,000 ft lateral.

Austin said the drilling program comes on the back of the successful Stifflemire-1H well which started producing at a rate of 1.1 MBOE/d. Halcon believes that its Birch property is in the “sweet spot” of the Eagle Ford shale play.

View Austin Exploration press release

BGP International has commenced 2D seismic surveys on the Cepsa-operated Block 11A and Tullow Oil-operated Block 12B in Kenya.

The survey on Block 11A will cover at least 1,000 line km. Block 11A is located to the north-west of the Lokichar Basin where the significant Ekales-1, Agete-1, Etuka-1, Ngamia-1 and Twiga South-1 oil discoveries were made.

View ERHC press release

View Swala press release

Prysmian Group has been awarded a €30 million (US$41.7 million) submarine cable contract for the Zakum oilfield off Abu Dhabi. The scope of work includes design and manufacture of submarine cable links for the replacement of power feeding systems to the Zakum field.

The Zakum oilfield is the first submarine electrification project planned by Abu Dhabi Marine Operating Company (ADMA-OPCO).

View Prysmian press release

Farstad Shipping has secured multiple charter contracts worth NOK 525 million (US$88.7 million).

Award details

• Total has chartered the PSV Far Spica for four months; the vessel is expected to depart in early May-2014
• Petrobras has hired the PSV Far Swift for two years, with a further two-year option; expected commencement of the contract is Aug-Sep 2014
• Van Oord Serviços de Operações Marítimas has hired AHTS Far Sea for two months
• Petrobras has chartered AHTS Far Sailor for two months
• Gazprom has chartered AHTS Far Fosna and the AHTS Far Grip for 100 days with another 150-day option; contract will commence at end-May-2014 
• Shell has extended the contract for the PSV Far Skimmer for 327 days and the PSV Far Sitella for 360 days
• Shell has also hired AHTS Far Fosna for a 90-day period starting Sep-2014
• Chevron has hired the PSV Far Spirit for a year, with a further one-year option
• PTTEP has chartered AHTS Lady Caroline for a 60-day period
• Sinopec has hired AHTS Lady Astrid and the AHTS Lady Sandra for a month

View Farstad press release

Technip has entered into an agreement to sell a majority stake (51%-75%) in Seamec to HAL Offshore at a consideration of INR 97 (US$1.6) per share. The sale consideration will amount to $28 million for 51% stake and up to $40 million for 75% stake.

Seamec is an Indian company providing diving support vessel (DSV) based diving services globally. It owns and operates a fleet of five DSVs for providing support services including marine, construction and diving services to offshore oilfields. Technip through its wholly owned subsidiary, Coflexip Stena Offshore Mauritius owns 75% equity stake in Seamec.

View Technip press release

Hess has agreed to sell its Thailand assets to PTTEP for $1 billion. Under the agreement, PTTEP will acquire a 15% stake in the Contract 4 gas field off Songkhla Province and a 35% stake in the Sinphuhorm gas field located in the Udon Thani and Khon Kaen provinces.

Contract 4 Gas field

• Covers an area of 3,118 sq km
• Production approximately 387 MMcf/d of natural gas and 17.5 Mbbl/d of condensate
• 2P reserves of 461 MMBOE
• Post-transaction ownership: Chevron (40%, operator) and PTTEP (60%)

Sinphuhorm Gas field

• Covers an area of 231.6 sq km
• Production of 113 MMcf/d of gas and 496 bbl/d of condensate
• 2P reserves are around 45 MMBOE
• Post-transaction ownership: PTTEP (55%, operator), Apico (35%) and ExxonMobil (10%)

Upon the completion of the transaction, PTTEP’s production volume will rise by approximately 17 MBOE/d.

PTTEP President and CEO Tevin Vongvanich said, “The acquisition of Hess Corporation’s interests in Contract 4 and Sinphuhorm Projects is a strategic fit to PTTEP growth strategy by adding producing assets, accretion of volume growth and reserves, and strengthening our investment in Thailand”.

View PTTEP press release

Baker Hughes and Aker Solutions have agreed to form an alliance to develop technology for production solutions that will boost output, increase recovery rates and reduce costs for subsea fields.

The non-incorporated alliance will combine Aker's strengths in subsea production and processing systems with Baker Hughes' expertise in well completions and artificial-lift technology to deliver reliable, integrated in-well and subsea production solutions that will help mitigate risk, accelerate output and extend the life of subsea fields. The alliance team will also focus on advancing the industry's well-intervention capabilities to further optimize efficiency and reduce risks in subsea developments.

Aker Executive Chairman said, “Subsea factory development is a key focus for Aker Solutions and the partnership with Baker Hughes will provide critical capabilities that will help us develop technologies to create a fully-functioning subsea production system which will improve recovery rates and lower costs for oil producers.”

View Aker press release

View Baker Huges press release

ExxonMobil's UK arm Esso has shut a pipeline running from its Fawley oil refinery near Southampton for checks, after a report that thieves tapped into the line.

The company said, "Esso is committed to the very highest standards of safety. The pipeline has therefore been closed down and our specialists are working to check it and, if necessary, effect any repair."

Source: Reuters

Magnum Hunter Resources has executed an agreement to divest its remaining oil and gas properties located in Saskatchewan’s Tableland field for C$75 million (US$67.5 million). The assets sold include 52,520 gross (49,470 net) acres located in Saskatchewan, Canada, with 84 gross producing wells and approximately 630 BOE/d of current net production.

The company said that it continues to focus on core assets, including its Marcellus Shale and Utica Shale properties.

View Magnum Hunter press release

Ocean Installer has secured a contract from Fairfield Energy to provide air diving services and light subsea construction work at the Dunlin field on the UKCS. The field is part of the Dunlin cluster of fields, consisting of Dunlin, Dunlin SW, Osprey and Merlin. The cluster is located in Blocks 211/18, 211/23 and 211/24 of the UKCS, about 500 km north-northeast of Aberdeen, within the East Shetland Basin.

The scope involves air diving services on the Dunlin Alpha platform at -10m LAT for installation of sleeves, clamps and anodes, as well as additional light construction/inspection and repair tasks.

View Ocean Installer press release

Dunlin field ownership: Fairfield Energy (70%, operator) and Mitsubishi Corporation (30%).  

CNOOC posted a 15.5% YoY increase in its Q1-2014 production, primarily driven by its $15.1 billion acquisition of Canadian energy firm Nexen in Feb-2013. The company's net output rose to 108.1 MMBOE in Q1-2014. Excluding the contribution from Nexen, CNOOC's production was largely flat at 88.8 MMBOE.

The company’s revenue also rose 6.9% YoY to CNY 59.15 billion (US$9.5 billion), boosted by higher gas prices. The company’s average realized gas price was $6.33/Mcf, representing an increase of 9.3% YoY.

View CNOOC press release

Lundin Petroleum announced that its Q1-2014 net income will be impacted by $66 million related to exploration expenses. The company spent approximately $127 million in Q1-2014 for completing two exploration wells in Norway and drilling two wells in Indonesia which were announced as either non-commercial or as dry holes. These expenses will be offset by a tax credit of $61 million.

The cost of the drilling of the Langlitinden (PL659) and Torvastad (PL501) wells in Norway amounted to $73 million including certain associated license costs. The company said that the expensed exploration costs in Norway will be offset by a tax credit of $57 million giving an after tax impact of $16 million.

The cost of the drilling of the Balqis and Boni wells and the license costs relating to the Baronang PSC in Indonesia of $45 million will also be expensed. Lundin will also expense $9 million as an exploration costs incurred on the Cakalang PSC in Indonesia.

View Lundin press release

Chile's state-owned oil company Empresa Nacional Del Petróleo (ENAP) has appointed Marcelo Tokman Ramos as the new CEO. Mr. Ramos will replace Julio Bertrand effective 12-May-2014.

Mr. Ramos holds a degree in Economics from Pontificia Universidad Católica de Chile. He also holds a Masters and a Doctorate from the University of California, Berkeley. He was Chief of Staff and Head of Studies of the Budget Department of the Ministry of Finance. Later he was appointed as Minister President of the National Energy Commission. 

View ENAP press release

Cosco has secured contracts worth a total of $100 million to build four emergency response/rescue/field support vessels (ERRVs) and two platform supply vessels (PSVs). Cosco is scheduled to deliver the vessels in H1-2016.

In addition to the PSV construction contract, the ship owner can exercise options to order two additional PSVs within a six month period.

View Cosco press release

Gasol through its subsidiary, AfGen, has formed a marketing JV with Ghana National Gas Company. The JV will be responsible for the sale and marketing in Ghana of regasified LNG. Gas will be sourced from Gasol's LNG Import Project in Benin via the West African Gas Pipeline.

Initial gas volumes to be sold into Ghana are expected to be around 100 MMcf/d for a minimum period of five years.

View Gasol press release

Genel Energy, in its interim management statement, has reported a 35% YoY rise in Q1-2014 net production to 50 Mbbl/d.

Exploration update

• At Kurdistan's Taq Taq field, construction of the second central processing facility on track for completion by end-2014
• Tawke field processing capacity to be doubled to 200 Mbbl/d by end-2014
• First gas production from the Summail field development expected shortly

Kurdistan export infrastructure update

• KRI pipeline commissioning process is 'substantially complete'
• Works to replace a short section of the pipeline in Turkey and install extra compression at Fishkabur expected to be completed in H2-2014

2014 guidance

• Production guidance remains unchanged at 60-70 MBOE/d 
• Capex remains at $550 million to $600 million; capital program optimized to accommodate Angola drilling activity

View Genel press release

Schlumberger has secured from Pemex three multi-year integrated project contracts valued at over $1.9 billion. The contracts are related to ongoing integrated project activity in the South Region and continued activity in Pemex North Region.

Schlumberger added that the award was based on commercial terms, QHSE, and the company's proven technology track record in Mexico in the deep complex well environment.

View Schlumberger Q1-2014 results press release

PetroChina plans to spend more than CNY 10 billion (US$1.6 billion) on shale gas in 2014, sources with knowledge of the matter said. The company's decision to triple its shale gas spending from expenditures on the unconventional fuel over the past few years comes just months after Sinopec lifted hopes that China is near a breakthrough by announcing a commercial find.

PetroChina has also lifted its 2015 shale gas output target to 2.6 Bcm (252 MMcf/d), up 73% YoY, according to a company spokesperson.

Source: Reuters

Indonesian demand for LNG is expected to double to 56 cargoes in 2015, said a senior official with state electricity utility Perusahaan Listrik Negara (PLN).

Of the 56 cargoes, 38 will go to PLN's gas-fired power stations in Jakarta and other West Java cities. The Arun gas project in Aceh, which has been converted into a receiving terminal from an LNG production hub, is expected to take 12 cargoes, while six will be sent to Bali and Makassar in South Sulawesi.

PLN has not yet secured commitments for 22 of the additional cargoes it needs to meet the forecast growth in demand next year. The company hopes the Bontang gas project that processes LNG from the Mahakam field, Indonesia's top gas-producing region, will meet this need when an existing supply contract with the buyer expires.

Source: Reuters  

Halliburton reported Q1-2014 net income of $622 million, up from a loss of $18 million in Q1-2013. 

Q1-2014 segment results

• Completion and Production: Revenue of $4.4 billion, up 8% YoY; results improved due stronger stimulation activity in the US land market, as well as higher completion tools sales in all regions
• Drilling and Evaluation: Revenue of $2.9 billion, up 2% YoY; higher drilling activity in the Eastern Hemisphere and improved testing activity in all regions, which more than offset the decline in Latin America activity

Dave Lesar, Chairman, President and CEO, said: "Our strategy is working well and we intend to stay the course. We expect earnings per share to grow approximately 25% in the second quarter, with further increases to follow."

View Halliburton press release  

Global Deals

There was a flurry of high-profile, billion-dollar deals this week. Anglo-Swiss conglomerate Glencore Xstrata bought Chad-focused Caracal Energy for $1.3 billion. Glencore hopes to add value and expertise to its Africa operations with this acquisition. A day after the Glencore deal, Sinopec snapped up 50% stake in Lukoil’s Kazakhstan operations for a hefty $1.2 billion. Lukoil owns stakes in four producing projects in the Central Asian nation, with a total production of 10.2 MMBOE in 2013. The transaction is part of the Lukoil's optimization of its international portfolio.

Meanwhile, fellow Chinese NOC PetroChina acquired the remaining stake in the Dover Oil Sands project in Alberta from its JV partner, Athabasca Oil, for $1.19 billion.

Exploration

There were two significant discoveries made this week. Total hit 40m of net oil pay in the Saphir-1XB wildcat well in the San Pedro Basin offshore Ivory Coast. This is the first discovery in the frontier basin, and Total plans to further delineate the find to the north and the east. Meanwhile, Shell encountered over 450m of gas pay at the Rosmari-1 exploration well in Block SK318 offshore Malaysia.

This week, Cairn Energy spud the high-impact FAN-1 wildcat well offshore Senegal. The well is targeting approximately 900 MMBOE of gross unrisked prospective resources in the North Fan prospect. FAN-1 is the first well in deep-water Senegal and the first well to be drilled offshore Senegal in 20 years. It will be followed by the SNE-1 wildcat well, which will target about 550 MMBOE of resources on a shelf prospect.

Projects & Capex

Early in the week, Total and its partners made the final investment decision on the 230-Mbbl/d Kaombo project in Angola’s offshore Block 32. The project will develop nearly 650 MMbbl of resources from six of the 12 discoveries made on the block so far. Kaombo will involve 59 subsea vessels connected to 2 FPSOs producing at 115 Mbbl/d each.

Following its $873 million acquisition of Midland basin assets last week, Athlon Energy announced that it is raising its 2014 capex by a whopping $105 million to a total of $700 million. The company expects to produce 23-24.3 MBOE/d this year.

Petrobras attained a new production peak of 428 Mbbl/d of oil from its pre-salt fields located in Campos and Santos basins. The new record is the result of increased production at the P-58 FPSO operating in Parque das Baleias, Campos Basin. 

By end-2014, the company will start up 15 more production wells, of which 11 will be located in the Santos Basin and the remaining in the Campos Basin.

View Petrobras press release

Athabasca Oil has exercised a put option to divest its 40% stake in the Dover oil sands project to its partner PetroChina for C$1.32 billion (US$1.2 billion). The Dover project is operated by Brion Energy, a JV between Athabasca and a subsidiary of PetroChina.

The sale was triggered after the project received final approvals from the government of Alberta.

Project overview

• 150,000 acres (gross); 60,000 acres (net)
• 250 Mbbl/d SAGD comprised of five phases of 50 Mbbl/d
• As of 31-Dec-2012, contingent resources (best estimate) of 1.2 Bbbl (net to Athabasca) 

Athabasca CEO Sveinung Svarte said, "We have today opted to sell our remaining ownership in projects operated by Brion Energy. We have very much appreciated working with our joint venture partner at Brion Energy over the past four years and wish them every success as they proceed with the Dover development."

View Athabasca press release

View Athabasca Dover operations webpage

Baker Hughes reported a profit increase of 23% YoY in Q1-2014 to $328 million, helped by improved margins in its North American operations.

The company increased its North American profit in the first quarter, despite a drop in well count due to poor weather in the Rockies and the north-eastern US over the period.

Baker Hughes also reported that its Q1-2014 revenue rose nearly 10% YoY to $5.73 billion.

View Baker Hughes press release

The partners developing Israel's offshore Leviathan natural gas field are looking to sell gas through a pipeline to Cyprus. The group has bid to supply Cyprus' state-run natural gas company, DEFA, between 0.7-0.95 Bcm (approximately 24.7-33.6 Bcf) of gas annually for up to ten years.

The plan would be to build a pipeline from the field and supply DEFA with gas starting in 2016 or 2017. The deal would last until 2022 or 2025.

Israeli financial daily Globes reported that other bids have come from Vitol, SOCAR, and a Greek consortium. "If Leviathan is chosen to supply gas to DEFA, it would potentially improve relations with Cyprus in the field of natural gas. If a pipeline is already being built, it might open new options," the source said.

Source: Reuters

Schlumberger reported a 33% YoY jump in Q1-2014 net profit to $1.59 billion on the back of improved profitability for Well Services and Well Intervention Technologies, both in North America land and in the International areas.

The improved profitability for Well Services and Well Intervention Technologies was due to peak winter activity in Western Canada as well as from operational efficiencies in US land. However, pricing weakness in US land partially offset rising profits.

The company also reported revenues of $11.24 billion, up 6% YoY, primarily due to higher activity in the Middle East, Asia and North Africa.

Schlumberger CEO Paal Kibsgaard said, “While the sequential results displayed the usual drop in product, software and multi-client license sales following strong year-end figures, our solid year-on-year growth rates were led by the Middle East & Asia and North America Areas although all geographies benefited from an increasing focus on operational excellence and efficiency.”

View Schlumberger press release

BHP Billiton announced a 10% YoY increase in production for the quarter ending 31-Mar-2014. The rise in production, to 60.9 MMBOE (662 MBOE/d, with 45% liquids), is attributed to higher output from the company’s onshore US projects.

Production highlights

• Liquids production of 296 MBOE/d, up 3% YoY; in part due to higher production from onshore US, Atlantis and Pyrenees
• Gas production of 2.2 MMcf/d, down 3% YoY; partially due to successful delivery of first gas from Macedon

The company also reduced its 2014 production guidance by 2% to 245 MMBOE (671 MBOE/d). The reduction reflects lower gas and NGL production in the Hawkville area of the Eagle Ford.

View BHP quarterly report

Athlon Energy has upsized its offering of 6% senior unsecured notes to $650 million from $500 million. The offering is expected to close on 1-May-2014.

The company intends to use the net proceeds, together with net proceeds from a concurrent registered equity offering and/or borrowings under its credit agreement, to fund the purchase price of pending acquisitions and for general corporate purposes.

View Athlon press release

Shell announced that it has encountered more than 450m of gas in the Rosmari-1 well located in Block SK318 offshore Malaysia. The well was drilled to a depth of 2,123m.

Andy Brown, Director Shell Upstream International said, "Rosmari-1 is a testament to our ability to successfully drill and build understanding of new geology within our existing exploration heartlands, adding value to our existing assets in Malaysia. We are expanding and rejuvenating heartlands across our exploration portfolio, including in Brunei, Australia and the Gulf of Mexico."

Block SK318 ownership: Shell (85%, operator) and Petronas (15%).

View Shell press release