Petrofac Enters 2013 with 'Record' Backlog

UK oilfield services firm Petrofac reported Wednesday that it has entered 2013 with a "record" backlog of orders in its Offshore Projects & Operations business, and that it continues to see high levels of bidding activity in both operations support contracts and offshore capital projects.

Announcing its final results for 2012, Petrofac also highlighted that it has a strong pipeline of bidding opportunities for onshore engineering and construction projects, particularly in the Middle East, Africa and the Commonwealth of Independent States (the former Soviet Union).

In its Integrated Engineering Services division, Petrofac said that this year it will be focused on delivering important milestones on several projects. The firm said it is making good progress on its transition activities on the Pánuco and Arenque contract areas in Mexico, where it expects to commence field operations during the first half of 2013. On Block PM304 in Malaysia, Petrofac expects to begin production from the West Desaru fault block and the second phase of the Cendor field during 2013.

Petrofac added that it is also seeing strong industry demand for commercially-innovative integrated oilfield services and that it is looking at a number of additional opportunities with both national oil companies and niche explorers.

Oil sector analysts at JP Morgan Cazenove commented that while Petrofac did not announce any new orders in its 2012 financial report, it hoped to see confirmed of the award of three large contracts this month. These include the estimated $500 million EPC-3 package on Sarb in Abu Dhabi, the $1.5 billion EPC-2 package on Upper Zakum in Abu Dhabi and the $1 billion Jurassic gas project in Kuwait.

In its results, Petrofac reported that its revenue for last year increased nine percent to $6.3 billion, while its net profit improved 17 percent to $632 million.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Sound Oil Revises Schedule to Accelerate Cash Flow

Italy-focused Sound Oil announced Wednesday that it has revised its near-term drilling program to accelerate cash flow from its onshore Nervesa discovery and to preserve cash for the company's most material prospects.

Sound plans to drill its Badile prospect as originally scheduled in 2014, but now with a 100-percent equity position in the prospect and Sound operatorship. It also plans to drill the Zibido prospect, a second material exploration prospect in the Po Valley, northern Italy, where Sound's Nervesa discovery is located.

At Nervesa itself Sound is planning to address the northern extension of the discovery by drilling a second well in the fourth quarter of 2013 with a very to accelerating production and cash flow from what the firm describes as its flagship asset.

Meanwhile, Sound confirmed that it would drill the Laura discovery as originally scheduled in 4Q 2014 using a long-reach deviated well from onshore.

Sound will contract a 2,000 to 3,000 horsepower electric rig on an exclusive basis for a period of 18 months beginning in 1Q 2014 in order to cover the Badile, Laura and Zibido drills.

Sound will defer the Strombone appraisal well in order to free up an operational window for its second Nervesa well in 3Q/4Q 2013 and to free up $9 million in cash to fund its increased equity stake in Badile. The firm may also include the Casa Tiberi field development in its 3Q 2014 operational window.

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Repsol Boosts Funds for Upstream with LNG Asset Sale

Spain's Repsol announced late Tuesday that it is selling several of its LNG assets for $6.7 billion to Royal Dutch Shell. The funds will be used by the firm to boost organic growth in its upstream division as detailed in its

2012-2016 strategic plan

published last May.

The agreement, which will generate a $3.5 billion pre-tax capital gain for Repsol, will see assets in Trinidad & Tobago (Atlantic LNG), Peru LNG and Bahia de Bizkala Electricidad pass over to Shell. Repsol and Shell have also agreed a 10-year LNG supply contract to the Canaport regasification terminal in Saint John, Canada, which will remain with Repsol.

Repsol said that its exploration and production unit is now the company's main growth engine, centered on 10 key growth projects that include some of Repsol's most significant exploration successes of recent years.

The firm pointed out that it will continue to maintain significant exploration and production activity in the countries where it has sold LNG assets. In Peru it recently made an important discovery at Sagari, in block 57, with preliminary resources estimates of up to two trillion cubic feet of gas. In Trinidad and Tobago production is ongoing and Repsol is drilling new wells and exploring options to obtain new licenses to added to the seven blocks where it is already active.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Senex Starts Fracture Stimulation Project Onshore Southern Cooper Basin

Senex Energy, the operator of the onshore PEL 115 permit, disclosed Wednesday that it has started fracture stimulation operations at the Kingston Rule-1 unconventional gas exploration well in the Southern Cooper basin.

The company has also started work over and zone perforation operations at the Hornet-1 well sited in the same permit.
The fracture stimulation program over the wells will be completed over a two-month period, with flow testing to continue into June this year.

Kingston Rule-1 was drilled by Senex late last year and intersected 174 feet (53 meters)of net gas pay, with 30 feet (nine meters) in the Epsilon Formation and 144 feet (44 meters) in the Patchawarra Formation tight gas sands. The well also intersected 492 feet (150 meters) of Murteree and Roseneath Shales. Mud logs confirmed the presence of liquid hydrocarbons throughout the Permian section.

The multi-stage fracture stimulation of Kingston Rule-1 targets tight gas sands within the Patchawarra and Epsilon formations. At present, three of a total six zones have been fracture stimulated with bridge plugs set between each zone. The forward operation will be to fracture stimulate the remaining three zones.

Hornet-1 was drilled by Victoria Petroleum in 2004 and intersected gas shows in the Epsilon Formation and 91 feet (28 meters) of net gas pay in the Patchawarra Formation. Two drill stem tests were conducted on Hornet-1 and resulted in gas flowing to surface. The multi-stage stimulation of Hornet-1 will target additional gas sands within the Patchawarra Formation.

As Hornet-1 was a pre-existing well, a work over rig was brought onto the site, to prepare the well for fracture stimulation and perforate the zones in advance of the fracture stimulation equipment arriving onsite.

"We are very pleased that the stimulation of Kingston Rule-1 has commenced and look forward to evaluating the results, along with those from Hornet-1, over the coming months. There is a lot of interest in the unconventional gas potential which is believed to exist in the Cooper Basin and we are excited to be part of it," Orca Energy's Executive Director, Greg Bandy, said in a statement.

Senex has an 80 percent interest in both of the wells, while Ocra Energy holds the remaining 20 percent stake.

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Aker Closes Enovate Acquisition

Norwegian oilfield services company Aker Solutions announced Wednesday that it has closed a deal to buy a majority stake in Enovate Systems – a specialist in subsea well control equipment. Aker announced at the end of January that it had agreed to buy a controlling stake in the Aberdeen-based firm.

Enovate has developed a range of patented components and products for use in open water workover systems as well as in riser workover systems, rigless intervention systems and drilling safety systems.

Founded in 2002 and now employing 62 people, Ennovate had revenues of approximately $23.6 million in 2012 and an EBITDA profit of $7.8 million.

Aker intends to see Enovate continue to be developed as an independent supplier of well control equipment.

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API Addresses Record-High Gasoline Prices

American Petroleum Institute (API) held a press conference Tuesday addressing high gasoline prices and noted that more crude oil production and efficient consumption of oil products are key to addressing higher gasoline prices, API's Chief Economist John Felmy told reporters.

"We have very large oil resources here in the United States and technologies that are making more of them accessible and economic to produce," he said. "Given reasonable regulations, expanded access to resources on federal lands and waters, and fair tax policy, we can bring several million more barrels per day of crude oil to market. It could create more than one million new jobs, reduce our dependence on foreign energy, and increase revenue to the government by billions of dollars a year."

API reported that as of last week, the average U.S. retail price for regular gasoline was $3.78, about 56 cents per gallon higher than two months ago. Crude oil prices are largely set on international exchanges which are determined by global supply and demand. Crude oil prices increased $12 a barrel, or 29 cents per gallon, between December and February, stated API. During that same period, the price of gasoline increased.

Due to a strong demand for world supplies, crude oil prices have increased. There's more optimism about the global economy, which is growing faster and demanding more oil, according to the Energy Information Administration's short-term outlook. However, crude supplies fail to keep up with the demand. In January, domestic crude oil production went above 7 million barrels of oil per day in the United States for the first time in more than 20 years but international production has been less robust, API stated.

"We have not done a good job of expanding opportunities for domestic oil and gas development in federal areas," he said. "The vast majority of the nation's offshore oil resources continue to be off limits."

The organization also stated that if the United States approves the Keystone XL pipeline, the increase in capacity for bringing Canadian oil into the United States would encourage more production into Canada's rich oil sands region. API also reiterated that if supply is increased, than demand is reduced.

"With gasoline prices already approaching $4.00 per gallon and projected to reach all-time record highs during the upcoming driving season, the economy continuing to struggle and unemployment rates refusing to come down, developing domestic energy resources is more important now than ever," said Michael Whatley, executive vice president of Consumer Energy Alliance, to Rigzone.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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Centrica Mulls North American Shale Investment

UK utility giant Centrica said Wednesday that it is likely to invest further in North America, possibly in shale gas, as it seeks to diversify its production portfolio.

In its results statement for 2012, Centrica confirmed that the UK and Norway will remain an important part of its investment and activity as it looks to maintain an appropriate energy hedge in the future and it highlighted its involvement in the Cygnus and Valemon large-scale gas field development projects currently taking place in the North Sea. But while the firm also expects to make decisions regarding drilling opportunities in both the east Irish Sea and the North Sea in 2013, Centrica noted that the increasingly small and more expensive nature of North Sea projects means it is looking to diversify its production portfolio.

"This is likely to include further investment in North America, possibly in shale gas, and there is also the potential for gas exports later in the decade," the firm said in its results statement.

"We have built a good platform for growth in North America, with strong capabilities in energy sourcing and supply, risk management, energy services and upstream gas and power."

Centrica's North American total proven and probable gas and liquids reserves were 108 million barrels of oil equivalent (boe) at the end of 2012. The firm's total 2P reserves stood at 525 million boe after it added 170 million boe during the year.

Centrica reported that its total gas and liquids production in 2012 amounted to 56.7 million boe – up 18 percent on the 48.2 million barrels it reported for 2011. For the next few years the firm expects to deliver between 75 and 100 million barrels annually.

In a separate statement Wednesday, Centrica Energy Upstream Managing Director Jonathan Roger commented:

"Centrica Energy Upstream has seen another successful year, delivering against our commitment to grow the business through a combination of acquisitions and exploration activity. We have made important steps to secure and develop our cornerstone assets, as well as recruit talented people.

"Following record investment in the oil and gas industry last year, the strongest for more than three decades, Centrica Energy Upstream increased its profits by 20 percent for the third consecutive year. We are now well positioned to optimise and develop our portfolio, both in the North Sea and internationally, and will invest to increase our annual production up to 100 million boe." 

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

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Petrofac Enters 2013 with 'Record' Backlog

UK oilfield services firm Petrofac reported Wednesday that it has entered 2013 with a "record" backlog of orders in its Offshore Projects & Operations business, and that it continues to see high levels of bidding activity in both operations support contracts and offshore capital projects.

Announcing its final results for 2012, Petrofac also highlighted that it has a strong pipeline of bidding opportunities for onshore engineering and construction projects, particularly in the Middle East, Africa and the Commonwealth of Independent States (the former Soviet Union).

In its Integrated Engineering Services division, Petrofac said that this year it will be focused on delivering important milestones on several projects. The firm said it is making good progress on its transition activities on the Pánuco and Arenque contract areas in Mexico, where it expects to commence field operations during the first half of 2013. On Block PM304 in Malaysia, Petrofac expects to begin production from the West Desaru fault block and the second phase of the Cendor field during 2013.

Petrofac added that it is also seeing strong industry demand for commercially-innovative integrated oilfield services and that it is looking at a number of additional opportunities with both national oil companies and niche explorers.

Oil sector analysts at JP Morgan Cazenove commented that while Petrofac did not announce any new orders in its 2012 financial report, it hoped to see confirmed of the award of three large contracts this month. These include the estimated $500 million EPC-3 package on Sarb in Abu Dhabi, the $1.5 billion EPC-2 package on Upper Zakum in Abu Dhabi and the $1 billion Jurassic gas project in Kuwait.

In its results, Petrofac reported that its revenue for last year increased nine percent to $6.3 billion, while its net profit improved 17 percent to $632 million.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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DOF Subsea Wins Statoil Work

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Norwegian-based specialist subsea service company DOF Subsea Norway AS has secured a contract with Statoil Petroleum AS for Mooring Installation Services utilizing DOF Subsea's support vessel the Skandi Skolten.

The scope of work is to change out mooring segments on the Njord B FSU and Norne FPSO installations in the Norwegian sector of the North Sea while these are in production. The offshore operations part of the project will commence in 3Q 2013 and will last for approximately 40 days.

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