Business/Mergers/Acquisitions

Gulfport Energy enters SCOOP play with $1.85-billion deal

Gulfport Energy Corporation has entered into a definitive agreement with Vitruvian II Woodford, LLC, a portfolio company of Quantum Energy Partners, to acquire approximately 46,400 net surface acres in the core of Oklahoma’s SCOOP play, including approximately 183 MMcfged of net production (during October 2016), for a total purchase price of $1.85 billion. The acquisition includes a substantially contiguous acreage position, totaling approximately 85,000 net effective acres, which includes rights to 46,400 Woodford acres and 38,600 Springer acres, in Grady, Stephens and Garvin counties, Okla. The acquisition is expected to close in February 2017.

Anadarko sells Marcellus assets to Alta Resources

Anadarko Petroleum has agreed to sell its operated and non-operated upstream assets, and operated midstream assets, in the Marcellus shale of north-central Pennsylvania to Alta Marcellus Development, a wholly owned subsidiary of Alta Resources Development, for approximately $1.24 billion. The midstream assets in the Marcellus owned by Western Gas Partners, Anadarko's sponsored master limited partnership, are excluded from the agreement. The Marcellus shale divestiture includes approximately 195,000 net acres and, at the end of third-quarter 2016, sales volumes from these properties totaled approximately 470 MMcfd. The transaction is expected to close during first-quarter 2017. Image: Anadarko.

Diamondback expands in Permian with $2.43-billion buy

Diamondback Energy has entered into a definitive purchase agreement to acquire all leasehold interests and related assets of Brigham Resources Operating and Brigham Resources Midstream for an aggregate purchase price of $2.43 billion. Upon completion, the pending acquisition will provide Diamondback with primarily operated leasehold interests on 76,319 net acres in Pecos and Reeves counties, Texas.  It will bring Diamondback’s total leasehold interests to approximately 182,000 net surface acres in the Permian basin. The acquisition is expected to close at the end of February, and the effective date of the transaction is Jan. 1, 2017.

Legacy pressure pumping company BJ Services re-emerges

BJ Services has re-emerged as North America’s largest pure-play oilfield pressure pumping company. Founded in 1872 by Byron Jackson, the BJ brand is built upon a 145-year history, which will continue under the newly independent company. The transaction to create the new BJ Services was announced on Nov. 29 and completed on Dec. 30. In that deal, Baker Hughes contributed its North American land cementing and hydraulic fracturing businesses, and CSL Capital Management (CSL) and West Street Energy Partners—a fund managed by the Merchant Banking Division of Goldman Sachs—contributed cash along with CSL contributing its Allied and ALTCem pressure pumping services platform. With a combined capacity of 1.9 million hydraulic horsepower and 240 cementers, BJ Services will be headquartered in Tomball, Texas. “I believe our focus on execution, broad expertise and strong capital discipline combined with the second largest cementing and fracturing fleets in North America will result in the new BJ Services being a fierce competitor," said Warren Zemlak, president and CEO, BJ Services.

Chesapeake to sell Haynesville position for $465 million

Chesapeake Energy has signed an agreement to sell a portion of the company's acreage and producing properties in its Haynesville shale operating area, in northern Louisiana, for approximately $465 million to an affiliate of Covey Park Energy. The sale includes approximately 41,500 net acres and 326 operated and non-operated wells producing approximately 50 MMcfgd, net to Chesapeake. The company expects the transaction to close in first-quarter 2017.

Schlumberger, Transocean ink long-term service agreements

Cameron, a Schlumberger company, has signed two 10-year pressure control equipment management service contracts on behalf of Transocean. The first contract calls for Schlumberger to manage Transocean’s Cameron risers in the Gulf of Mexico. Through the second contract, Schlumberger will provide a suite of solutions to maintain and service BOP systems and other pressure control equipment for nine of Transocean’s ultra-deepwater and harsh-environment rigs. These programs will help to reduce total cost of ownership for the offshore equipment, and increase uptime associated with pressure control equipment, through integrated technical, operational and commercial solutions. “This agreement leverages the core competencies of Transocean and Schlumberger’s capabilities as an original equipment manufacturer,” said Hunter Jones, president, Drilling Systems, Schlumberger.

Exploration/Discoveries

Oil Search, Exxon Mobil in Papua New Guinea gas find

Oil Search has made a natural gas discovery in the Papua New Guinea North Highlands, 13 mi northwest of Hides gas field. The Muruk-1 well encountered high-quality sandstone reservoirs, similar to those found at Hides field, and was in line with pre-drill expectations. The well was drilled to 10,630 ft and is being evaluated to determine the size of the discovery, Exxon said in a statement. The interest owners are Exxon Mobil (42.5%), Oil Search (operator, 37.5%) and Barracuda Limited, a subsidiary of Santos Limited (20%). “We are excited by the results of the Muruk-1 exploration well, which confirms the presence of hydrocarbons in the same high-quality sandstone reservoirs as the Hides field that underpins the PNG LNG project,” said Steve Greenlee, president of Exxon Mobil Exploration Company. “Over the coming months, we will work with our co-venturers to better determine the full resource potential.” The well lies in petroleum prospecting license 402, which covers 126,000 acres.

Continental Resources reports record STACK well

Continental Resources has announced a new company record well in the over-pressured oil window of Oklahoma’s STACK play. The Angus Trust 1-4-33XH produced 4,642 boe, comprised of 2,088 bbl of oil and 15.3 MMcf of natural gas, in a 24-hr test. During this initial production test, the Angus Trust well flowed at 5,200 psi. Continental has a 78% working interest in the well, which lies immediately north of the company’s Boden 1-15-10XH well in south central Blaine County. The Boden produced an initial 24-hr test rate of 3,508 boe—28% oil—at a flowing casing pressure of more than 5,000 psi. The Boden was Continental's first completion in the condensate window of the over-pressured STACK. In just over a year, the Boden well has produced 591,000 boe—26% oil—and it is currently producing 1,815 boed, 22% oil, at a flowing casing pressure of 2,900 psi.  “The Angus Trust is another tremendous STACK Meramec well," said Harold Hamm, chairman and CEO. "Aside from being a company-record well, it further validates our perspective of the extent of the over-pressured oil window."

Production

Maersk Oil set to shutter Denmark's Tyra gas field

Maersk Oil plans to halt production from Tyra field, Denmark’s largest gas field, late next year. According to the Copenhagen-based company, an economically viable solution for full recovery of the field’s remaining resources has not yet been identified, and production is consequently expected to cease on Oct. 1, 2018. “In January 2017, we will have to reallocate resources, from Tyra rebuild planning to engineering work for a detailed plan to discontinue the Tyra field as the Danish hub for gas processing,” added Martin Rune Pedersen, COO, Maersk Oil. Tyra is operated by Maersk Oil on behalf of the Danish Underground Consortium, a partnership between A.P. Moller – Maersk (31.2%), Shell (36.8%), Nordsøfonden (20%) and Chevron (12.0%).

Aker BP starts production at Ivar Aasen field

Aker BP has reported first oil from Ivar Aasen field in the Norwegian portion of the North Sea. The field has an expected economic life of 20 years, depending on oil prices and production development, the company said. The field lies in the northern North Sea, about 175 km west of Karmøy, Norway, and contains around 186 MMboe, excluding Hanz. The latter will be developed in phase two of the Ivar Aasen development, and amounts to about 18 MMboe. The development of Ivar Aasen includes deposits for five licenses—001B, PL028 B, PL242, PL338 and PL457. The unitization of the licenses covers deposits in Ivar Aasen and West Cable. The Hanz deposit, in license PL028 B, is not covered by the unitization. In alignment with the Norwegian government’s desire, Ivar Aasen is a coordinated development with the neighboring Edvard Grieg field. Oil and gas from Ivar Aasen is processed and exported from the Grieg platform, which also supplies power to Ivar Aasen. Image: Aker BP.

ENGIE achieves first gas from North Sea’s Cygnus field

The first gas from the Cygnus development in the UK North Sea has been exported to the Bacton gas terminal in North Norfolk, said ENGIE E&P, the field’s operator. Cygnus, in license areas P1055 and P1731, 150 km off the coast of Lincolnshire, is expected to contribute 5% of the UK's gas production. The Cygnus complex, with four platforms, a total of 10 wells and two subsea structures, serves an estimated field size of 250 mi², from which it is expected to achieve plateau production of 250 MMcfd. Interest-holders include ENGIE E&P UK Limited (operator, 38.75%), Centrica (48.75%) and Bayerngas (12.5%). The partners are evaluating further opportunities in the Greater Cygnus area, with the aim of bringing additional volumes through Cygnus, when capacity becomes available.

Shell starts production from Malikai TLP

Shell has started oil production from the Malikai TLP, 100 km off the coast of the Malaysian state of Sabah. Situated in waters up to 500 m deep, Malikai is Shell’s second deepwater project in Malaysia, following the successful start-up of the Gumusut-Kakap platform in 2014. Malikai is expected to achieve peak production of 60,000 bopd. The Malikai project is a JV between Shell (operator, 35%), ConocoPhillips Sabah (35%) and PETRONAS Carigali (30%). “The project has demonstrated our capability in delivering competitive deepwater projects utilizing our global expertise.” said Andy Brown, upstream director, Shell.

Government/Regulatory

Obama administration bars future leasing in Arctic/Atlantic

In one of its final parting shots, the Obama administration has declared huge swathes of U.S. federally-owned waters in the Arctic and Atlantic Oceans off-limits indefinitely to future exploration. Meanwhile, Canadian Prime Minister Justin Trudeau has designated all of his country’s Arctic waters indefinitely off-limits to future licensing, a status which will be reviewed every five years. The U.S. withdrawal areas encompass 3.8 million acres in the north and mid-Atlantic Ocean and 115 million acres in the Arctic Ocean. The move drew criticism from industry groups. “We are extremely disappointed in President Obama’s eleventh-hour decision to shut down economic development and lock away America’s true energy potential for communities that need it most—and the real jobs, royalty dollars, and national energy security that come along with it,” said Dan Naatz senior V.P. of government relations and political affairs, Independent Petroleum Association of America. “President Obama’s puzzling actions fly in the face of what his own Energy Information Administration and international data analysts confirmed: the demand for oil and natural gas will continue to grow until 2040, if not beyond.”