Land Rigs: Jul 19, 2013

Friday, July 19, 2013

New Wells to Pump Up Maari Profits

Oil production from Taranaki's offshore Maari field picked up in the March quarter after interruptions during the December quarter, as partners prepare for the big second phase of field development later this year.

Maari is New Zealand's largest producing oilfield. Maari's main 69 percent shareholder OMV is bringing two drilling rigs to New Zealand in coming months, while United States-based Anadarko is also bringing a rig late this year to explore deep water prospects.

The highly successful Maari field produces about 10,000 barrels of oil per day (bpd) and has now pumped out 21.5 million barrels in total since it started in 2009, after hitting an initial peak of 40,000 bpd.

It has already paid back its development costs of more than $854 million (NZ$1 billion). In 2011 OMV paid royalties of almost $70 million (NZ$82 million) to the government and tax of $107.6 million (NZ$126 million), making a profit of $276 million (NZ$324 million).

The Maari/Manaia field is operated by Austrian-based OMV which carried out a series of well workovers last year to fix electrical pumps to improve the field's performance.

Horizon Oil, a 10 percent shareholder in the Maari field, has announced its share of production in the March quarter was 77,409 barrels, up from almost 63,000 barrels in the December quarter.

But partners are aiming to lift production further with new production wells at Maari, and two new exploration wells at nearby Manaia. Later an exploration well is planned for the nearby Whio prospect.

The Ensco drilling rig is due to arrive in New Zealand waters in the December quarter, to drill extra production wells at Maari and the adjacent Manaia fields.

The programme will take about 12 months to complete and is expected to increase the field's production rate by perhaps a couple of thousand barrels a day in the medium term, and lift total oil recovery in the longer term.

In the September quarter, the semi- submersible Kan Tan IV drilling rig is due to arrive and start drilling two exploration wells, before later returning to drill the Whio prospect.

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Chesapeake Says Goodbye to Director, Names Replacement

Chesapeake Energy Corporation announced Friday that its board of directors has accepted the resignation of director Louis A. Simpson. Thomas L. Ryan, president and chief executive officer of Service Corporation International (SCI), has been elected to fill the vacancy and has been appointed to the audit committee. He will stand for election at the 2013 annual meeting of shareholders on June 14. Ryan replaces R. Brad Martin on the audit committee, with Martin becoming chair of the nominating, corporate governance and social responsibility committee.

Chairman Archie Dunham said, "The Board has greatly appreciated and benefited from Lou’s service to Chesapeake over the past two years. He was elected to our Board in June 2011 and has chaired the nominating, corporate governance and social responsibility committee since the 2012 annual meeting of shareholders. Lou has made significant contributions to strengthening Chesapeake’s corporate governance. We wish him the very best as he leaves the board to pursue his business interests."

Regarding the election of Ryan, Dunham stated, "Tom was recommended by our largest shareholder, Southeastern Asset Management, to replace Lou on Chesapeake’s board. With his extensive management experience and financial expertise in running a leading North American public company, Tom will be a great addition to our audit committee and a terrific resource for our board and management team. We are pleased to welcome Tom and are confident that his insight and experience will benefit the company and all of our shareholders."

Ryan commented, "It is a privilege to be selected to join the board of one of our country’s leading energy producers – a company that has played a pivotal role in changing the U.S. energy supply paradigm through its pioneering of unconventional natural gas and oil exploration and development. I look forward to learning more about Chesapeake’s world-class assets which clearly have tremendous potential for future value creation."

Ryan has been chief executive officer of Service Corporation International (SCI) since 2005 and has served as president of SCI since 2002. SCI is North America's leading provider of deathcare products and services, with more than 21,000 employees. From 2002 to 2005, Ryan was also chief operating officer of SCI, and from 2000 to 2002 he was chief executive officer of SCI’s European operations. He served in a variety of financial management roles from the time he joined SCI in 1996 until 2000. Before joining SCI, Ryan was a certified public accountant with Coopers & Lybrand LLP for eight years. He holds a bachelor’s degree in business administration from the University of Texas at Austin. Ryan is a member of the Board of Trust Managers of Weingarten Realty Investors and serves as a director of Texas Industries, Inc. He also serves as Chairman of the Board of Trustees of the United Way of Greater Houston and on the Board of Directors of the Greater Houston Partnership, Greater Houston Community Foundation Governing Board and the University of Texas McCombs Business School Advisory Council.

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EMAS AMC Awarded Smorbukk South Contract by Statoil

Subsea services firm EMAS AMC reported Thursday that it has been awarded a $75-million contract from Statoil for its Smørbukk South extension project in the Norwegian Sea.

The contract will see EMAS AMC supply subsea engineering, procurement and offshore construction services to the project. This will include the installation of flexible flowlines, tie-in spools, manifolds and umbilicals, as well as associated abandonment and removal activities. The extension will be developed with a new subsea template connected to existing infrastructure in the area.

Offshore activities will start in the second quarter of 2014, with the project being expected to last through 2015.

EMAS Managing Director Lionel Lee commented in a statement:

"We have been investing heavily in building up our global engineering expertise as well as technologically advanced and game-changing assets. This has borne fruit and I am extremely pleased with this latest win by EMAS AMC. It demonstrates an ever growing confidence in our project execution capabilities and validates EMAS."

Discovered in 1985, the Smørbukk South Extension holds estimated recoverable reserves of 16.5 million barrels of oil equivalent.

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Sete Brasil Remains in Talks with OSX to Build Two Drilling Rigs

RIO DE JANEIRO--Sete Brasil said late Friday that shipbuilder OSX Brasil S/A (OSXB3.BR), part of billionaire entrepreneur Eike Batista's industrial empire, remains in the hunt to build two drilling rigs for the company.

Sete Brasil, a holding company that is building 28 high-tech drill rigs for state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), said it still wants to add two more rigs to its portfolio. Sete Brasil was created in 2011 by several Brazilian pension funds and banks, with Petrobras also holding a 10% stake.

"The priority in this negotiation continues to be OSX," Sete Brasil said.

Earlier Friday, a local press report indicated that Sete Brasil had dropped out of talks with OSX. OSX, which is building a shipyard at the Acu port in northeastern Rio de Janeiro state, has been in talks with Sete Brasil since mid-2012. The two rigs Sete Brasil wants to add to its fleet would be rented out on the spot market, a spokeswoman for the company said.

OSX declined to comment about talks with Sete Brasil.

"The company is attentive to new business opportunities with an outlook toward expanding its client list and portfolio of deliveries," OSX said. OSX currently has contracts to build vessels for sister-company OGX (OGXP3.BR), Petrobras, Sapura and Kingfish.

OSX shares closed down 5.8% at BRL2.76 in trading on the Sao Paulo Stock Exchange.

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Shell CEO Will Retire in 2014

Royal Dutch Shell plc announced Thursday that CEO Peter Voser will retire from the company during the first half of 2014. The decision is being seen as surprise move by Voser, since he has served just four years in the post.

Shell said that its board's nomination and succession committee will now lead a "structured and comprehensive" review of candidates to enable an orderly transition to a new CEO.

The departure will not mean a change in strategy for the company and Voser's decision to retire was a personal one, a Shell spokesperson told Rigzone. The company's succession committee would search both internally and externally for a candidate to replace Voser, but that an internal candidate would be preferable, the spokesperson added.

Voser commented in a statement:

"After almost 10 years as CEO and CFO and more than 25 years in Shell, I have elected to retire in the first half of 2014.

"After such an exciting executive career I feel it is time for a change in my lifestyle and I am looking forward to having more time available for my family and private life in the years to come."

Shell's first quarter results revealed that current cost of supplies (CCS) earnings for the 1Q 2013 improved 3 percent over 1Q 2012 to $7.5 billion.

In its Upstream business, the firm said that its first de-bottlenecking project for the Athabasca oil sands project in Canada has been completed. The project, in which Shell has a 60-percent stake, is expected to add some 10,000 barrels per day of capacity.

In Nigeria, the firm took the decision in 1Q 2013 to develop the deepwater project, Erha North Phase 2, some 65 miles off the Nigerian coast. This is expected to produce some 60,000 barrels of oil equivalent per day at peak production.

In Oman, the Amal steam-enhanced oil recovery project has been brought on stream, with this project expected to ramp up to some 20,000 barrels of oil per day (bopd) over the next few years.

In the United States, the firm announced its intention to form a joint venture with Kinder Morgan to develop a natural gas liquefaction plant in two phases at the existing Elba Island LNG terminal to export LNG, while it also took the final investment decision for two natural gas liquefaction units in Louisiana, U.S. and Ontario, Canada.

Elsewhere during the first quarter, Shell entered into an agreement to acquire part of Repsol's LNG portfolio outside of North America for $4.4 billion, while in the UK it completed the acquisition of a further 5.9 percent of the offshore Shiehallion field while also acquiring additional interests in the Beryl area fields.

Shell's Upstream business segment produced 3.56 million barrels of oil equivalent per day during the first quarter of 2013, compared with 3.55 million boepd during 1Q 2012.

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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ConocoPhillips Donates to University of Houston's Energy Research Park

Continuing its commitment to education at the University of Houston, ConocoPhillips is donating $1 million to UH's growing Energy Research Park (ERP) and $125,000 to various engineering, science and business programs.

The $1 million gift will support the ConocoPhillips Petroleum Engineering Building, which serves an expanding number of undergraduate and graduate students. ConocoPhillips has now given a total of $3 million to this facility, with previous gifts of $1 million in 2012 and also in 2011.

UH Energy is a key strategic focus for faculty research and teaching, and the ERP is at the heart of these efforts. The vision for the ERP is to build a premier research and education facility for students and faculty, as well as establish a unique environment for the best minds to forge new business approaches to the way energy is created, delivered and used.

An important element of this vision is the ConocoPhillips Petroleum Engineering Building, which in 2011 became the new home for UH's popular petroleum engineering program. The building houses three teaching laboratories, three classrooms, a computer lab, faculty offices and a student lounge.

"ConocoPhillips is pleased to continue our support of the University of Houston's Energy Research Park and the petroleum engineering program," said Jeff Sheets, ConocoPhillips' Chief Financial Officer and the company's executive sponsor for the University of Houston. "The University of Houston plays a vital role in educating the next generation of top-quality and diverse engineering graduates for the energy industry."

In addition to its long-standing master's degree option, UH's petroleum engineering program launched a bachelor's degree option in fall 2009. The undergraduate program, which is designed to fill the gaps in the industry's aging workforce and equip graduates with the skills needed in the evolving energy world, has grown from about 20 students in the inaugural semester to more than 400 students this spring.

"We are grateful to ConocoPhillips for making this important investment in the university," said Dow Chair Professor Ramanan Krishnamoorti, special assistant to the president/chancellor for UH Energy. "This is a tremendous commitment to a number of great energy initiatives we have here at UH. We are truly fortunate to have ConocoPhillips' continued support in helping us achieve our goal of becoming 'the energy university.'"

ConocoPhillips also is giving $125,000 to UH to help fund a number of programs in the Cullen College of Engineering, the C.T. Bauer College of Business and the College of Natural Sciences and Mathematics (NSM).

"We appreciate the unwavering commitment that ConocoPhillips has for our programs, particularly our petroleum engineering program and the ever-expanding Energy Research Park," said Joseph W. Tedesco, dean of the UH Cullen College of Engineering. "The unique partnership we forged in 2011 continues to be a win-win. It's a win for the industry because we are helping to provide the workforce they need to compete in 21st century technologies. And it's a win for the university because it further validates our mission."

Cullen programs receiving money include the Program for Mastery in Engineering Studies, the Society of Women Engineers, the National Society of Black Engineers and the Society of Hispanic Professional Engineers. At Bauer, the Emerging Leaders Academic Success Program, Beta Alpha Psi and the Diversity Case Competition are among the groups receiving some of the funds. The NSM program beneficiaries are the Scholar Enrichment Program, the American Association of Petroleum Geologists (ABSA) and the Society of Exploration Geophysicists.

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Andy Brown Joins BMT as VP of Business Development

BMT Scientific Marine Services (BMT), a subsidiary of BMT Group Ltd, is pleased to announce that Andy Brown has been appointed as vice president of business development.

Andy has worked in the offshore oil and gas sector for over 25 years and has wide ranging experience in business development, marketing, commercial documentation, project management, cost control, corporate finances and personnel management. His technical experience includes the management, design and development of numerous multidisciplinary oceanographic projects including oceanographic data acquisition systems, deepwater oceanographic moorings and buoyed systems on behalf of governments, oil and gas operators, engineering firms and construction companies worldwide. Andy has previously held senior management positions at large consultancies in the offshore sector, with responsibility for operations throughout the Americas and SE Asia.

In his new BMT role based in Houston, Andy will oversee the development and implementation of sales plans for all geographic regions and participate in identification, promotion and implementation of new products and services that will best benefit our clients.

Tom Johnson, President of BMT Scientific Marine Services, said on this new appointment: “I am delighted that Andy has joined BMT Scientific Marine Services. I expect that Andy’s technical expertise and management experience will allow him to lead our dynamic business development team as we expand our global sales efforts. Our goal, as always, is to serve our client’s needs and to be able to deliver locally in many of the major oil basins worldwide.”

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Top Interior Official To Leave In June, Creating Key Opening

WASHINGTON - The Interior Department's second-in-command plans to leave the agency at the end of June, creating a high-level opening at the agency responsible for oil and natural gas production on U.S. lands.

David Hayes, the deputy secretary who served under former secretary Ken Salazar, announced his departure Tuesday.

Mr. Hayes surfaced earlier this year as one of many possible candidates who could replace Mr. Salazar, who stepped down earlier this month. The job has gone to former REI Chief Executive Sally Jewell.

Mr. Hayes will serve as a senior fellow at the Hewlett Foundation, a non-profit group that awards grants to address environmental problems, and will teach at Stanford Law School.

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Proxy Firm Sides With Dissidents in Battle For Hess Board Seats

HOUSTON--Proxy advisory firm ISS said Friday it is recommending shareholders vote for directors nominated by a dissident Hess Corp. (HES) investor, delivering a blow to the oil company's incumbent board less than two weeks before its annual meeting.

The move is the latest in a months-long proxy contest between Hess and Elliott Management Corp., a hedge fund that owns about 4.52% of the company's shares. ISS's opinion is weighty in a conflict that has come down to a referendum on the credibility of Hess's management and on the motivations and independence of nominees put forward by the fund.

Elliott argues that Hess's board sat by as the company has zigged and zagged, allowing management to pursue costly and ineffective strategies that have eroded the company's value. Hess says it is on track to transforming itself into a more focused exploration and production company, and that Elliott is pursuing a destructive and flawed plan to break up the company. New York-based Hess will hold its annual meeting May 16 in Houston.

Citing the company's "significant underperformance," and what it said are signs that the board's "new-found attentiveness to the business is a response to the proxy contest," ISS said that Hess's transformation appears to have occurred only on the surface, and that a slate of board members already aligned with the company's management isn't in the best position to oversee the company.

Hess has argued that Elliott's nominees will be beholden to the hedge fund and its proposal to split Hess into two companies, because Elliott has offered to pay bonuses based on how Hess's shares perform compared to its peers. But ISS said the dissident nominees have not committed to the break-up plan and that their independence from the company's management is what is needed in Hess's boardroom.

In a strongly-worded response, Hess said ISS's analysis was "flawed and shoddy" and accused the firm of breaching its duty to its clients.

"At a time that we are delivering real value, blindly following ISS's recommendations introduces an irresponsible level of risk for Hess shareholders," the company wrote.

Two other proxy firms have weighed in. Glass Lewis and Co. on Wednesday sided with the dissidents, concluding that while the shift toward becoming a pure exploration and production company may be the right one, "we find little cause to suggest that the current board is best suited to oversee that change."

Egan-Jones Proxy Services, however, said that Hess's efforts at transformation are translating into lower spending and driving production growth, and that the dissidents haven't offered a persuasive strategy.

"We strongly believe that the management and the Board has clearly demonstrated and executed its plans of transformation for the Company," Egan-Jones wrote.

Hess shares rose 2.23% Friday morning to $73.81.

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Friday, July 19, 2013

New Wells to Pump Up Maari Profits

Chesapeake Says Goodbye to Director, Names Replacement

EMAS AMC Awarded Smorbukk South Contract by Statoil

Sete Brasil Remains in Talks with OSX to Build Two Drilling Rigs

Shell CEO Will Retire in 2014

ConocoPhillips Donates to University of Houston's Energy Research Park

Andy Brown Joins BMT as VP of Business Development

Top Interior Official To Leave In June, Creating Key Opening

Proxy Firm Sides With Dissidents in Battle For Hess Board Seats

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Friday, July 19, 2013

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