All Standard Disclaimers & Seller Rights Apply. February 6, 2017 • Volume 07, No. 01 O ILFIELD S ERVICES Serving the marketplace with news, analysis and business opportunities VERMILION PH., LA PROPERTY 1-Producing Well. 4-Behind Pipe. 1-PUD. EAST WHITE LAKE FIELD PP Depths Are >11,000 Ft. Varying NonOperated WI & NRI ~370 Net Production: ~370 MCFED (98% Gas) MCFED Avg Net Cash Flow: ~$27,000/Mn Total Proved Rsvrs: 24 MBO & 1,878 MMcf PP 1303DV BARNETT SHALE ASSET SALE 209-Wells. ~35,000-Net Acres. WISE, DENTON & TARRANT CO., TX PP ~250 Remaining Barrett HZ Locations 90% OPERATED WI; 69% NRI ~100 Current Production: ~100 MMCFED MMCFED Production Is 85% Gas Operating Cash Flow: $4,166,666/Month AGENT WANTS OFFERS MID FEB 2017 PP 2878DV DEALS FOR SALE Baker Hughes posts first revenue increase since 2014 Baker Hughes increased revenue sequentially for the first time in two years as Q4 revenue climbed 2% from Q3 to $2.41 billion. Chairman and CEO Martin Craighead attributed the rise to increased US onshore activity, better- than-expected year-end product sales and “pockets of growth” internationally. The company posted an operating loss of $173 million, compared with losses of $321 million in 3Q16 and $1.38 billion in 4Q15. Revenue was also down by 29% YOY. In North America, revenue was up 15% sequentially to $775 million. The increase was driven by improved activity in the US onshore, seasonal improvements in Canada and project deliveries in the Gulf of Mexico. Despite the increased revenue, the company reported an operating loss of $86 million before taxes, compared to a loss of $65 million in Q3. GE’s O&G segment posts loss, but equipment orders up GE’s Q4 revenue took a beating from its oil and gas division, and the industrial giant doesn’t expect improvement in 2017. The segment’s revenue fell 22% YOY to $3.40 billion and profit fell 43% to $411 million. For the whole company, Q4 revenue fell 2.4% to $33.1 billion. GE SVP and CFO Jeff Bornstein said, “2016 was an extremely difficult year for oil and gas, and the business expects the first half of 2017 will continue to remain challenging with sequential improvements in the second half of the year.” GE Chairman and CEO Jeff Immelt said GE’s segment organic growth rose 4% YOY in Q4, but the number would have been 8% “without the headwind of oil and gas.” He did note that oil and gas equipment orders grew by 2% organically—“our first growth in two years.” “Oil and gas equipment grew by 10% with services down slightly,” Immelt said. “And for the year, oil and gas digital orders grew by 30%.” Immelt praised the pending merger of GE Oil & Gas with Baker Hughes as a “good move for investors and customers.” Bornstein said GE has more than 200 people dedicated to integrating Baker Hughes. Schlumberger sees challenges internationally in 2017 Schlumberger will continue to struggle against sluggish international E&P, Chairman and CEO Paal Kibsgaard said. North America will lead growth in E&P investments in 2017, he said, but outside of that region and the Gulf countries, oil prices will keep capex lower for a third-straight year even though producible oil reserves are declining. “This is equivalent to borrowing barrels from the future,” Kibsgaard said. “As a result, the activity and capex required going forward to replenish reserves in order to uphold production for the medium to long term will be much higher than the current decline rates may suggest.” One part of Schlumberger’s business that Kibsgaard said could boost revenue was the directional drilling segment. He said that in Q3 he reported that the company had sold out of its PowerDrive Orbit rotary steerable systems in the US. “We have added pretty significant capacity in Q4 and we’re still sold out,” he said. Halliburton earnings show optimism in US upstream market While Halliburton continues to experience weak markets outside of the US, the service provider says that its North American results were up quarter-over-quarter. For Q4, the segment reported revenue of $1.8 billion, up 9% sequentially but down 16% YOY. Operating results came in at income of $28 million compared with a loss of $66 million in Q3 and income of $41 million YOY. The results were driven primarily by increased pricing and utilization in the US onshore segment as well as cost management. Overall, Halliburton reported a loss in net income of $153 million in 4Q16, down from a $26 million loss in 4Q15. Total revenue was $4.02 billion, down 20.9% YOY. Total operating income for the quarter was $53 million, a decrease from $85 million YOY. “These results were primarily driven by increased activity in North America, the continued impact of our global cost savings initiatives and end-of-year software and product sales,” CFO and EVP Mark A. McCollum said. PLS tracks thousands of deals for sale at www.plsx.com/listings N. American revenue was up 9% in Q4 vs. Q3 due to higher prices & utilization. Sold out of PowerDrive Orbit rotary steerable systems in the US. Q4 revenue down 22% and profit off 43% compared to last year. More activity onshore US & seasonal improvements in Canada helped results. Continues On Pg 4 Continues On Pg 6 Continues On Pg 17 Continues On Pg 12
Transcript
All Standard Disclaimers & Seller Rights Apply.
February 6, 2017 • Volume 07, No. 01
OilfieldServiceSServing the marketplace with news, analysis and business opportunities
VERMILION PH., LA PROPERTY 1-Producing Well. 4-Behind Pipe. 1-PUD.EAST WHITE LAKE FIELD PPDepths Are >11,000 Ft.Varying NonOperated WI & NRI ~370Net Production: ~370 MCFED (98% Gas) MCFEDAvg Net Cash Flow: ~$27,000/MnTotal Proved Rsvrs: 24 MBO & 1,878 MMcfPP 1303DV
Baker Hughes posts first revenue increase since 2014
Baker Hughes increased revenue sequentially for the first time in two years as Q4 revenue climbed 2% from Q3 to $2.41 billion. Chairman and CEO Martin Craighead attributed the rise to increased US onshore activity, better-than-expected year-end product sales and
“pockets of growth” internationally. The company posted an operating loss of $173
million, compared with losses of $321 million in 3Q16 and $1.38 billion in 4Q15. Revenue was also down by 29% YOY.
In North America, revenue was up 15% sequentially to $775 million. The increase was driven by improved activity in the US onshore, seasonal improvements in Canada and project deliveries in the Gulf of Mexico. Despite the increased revenue, the company reported an operating loss of $86 million before taxes, compared to a loss of $65 million in Q3.
GE’s O&G segment posts loss, but equipment orders up GE’s Q4 revenue took a beating from its oil and gas division, and the industrial
giant doesn’t expect improvement in 2017. The segment’s revenue fell 22% YOY to $3.40 billion and profit fell 43% to $411 million. For the whole company, Q4 revenue
fell 2.4% to $33.1 billion.GE SVP and CFO Jeff
Bornstein said, “2016 was an extremely difficult year for oil and gas, and the business expects the first half of 2017 will continue to remain challenging with sequential improvements in the second half of the year.”
GE Chairman and CEO Jeff Immelt said GE’s segment organic growth rose 4% YOY in Q4, but the number would have been 8% “without the headwind of oil and gas.” He did note that oil and gas equipment orders grew by 2% organically—“our first growth in two years.”
“Oil and gas equipment grew by 10% with services down slightly,” Immelt said. “And for the year, oil and gas digital orders grew by 30%.”
Immelt praised the pending merger of GE Oil & Gas with Baker Hughes as a “good move for investors and customers.” Bornstein said GE has more than 200 people dedicated to integrating Baker Hughes.
Schlumberger sees challenges internationally in 2017Schlumberger will continue to struggle against sluggish international E&P,
Chairman and CEO Paal Kibsgaard said. North America will lead growth in E&P investments in 2017, he said, but outside of that region and the Gulf countries, oil prices will keep capex lower for a third-straight year even though producible oil
reserves are declining. “This is equivalent
to borrowing barrels from the future,” Kibsgaard said. “As a result, the activity and capex required going forward to replenish reserves in order to uphold production for the medium to long term will be much higher than the current decline rates may suggest.”
One part of Schlumberger’s business that Kibsgaard said could boost revenue was the directional drilling segment. He said that in Q3 he reported that the company had sold out of its PowerDrive Orbit rotary steerable systems in the US. “We have added pretty significant capacity in Q4 and we’re still sold out,” he said.
Halliburton earnings show optimism in US upstream marketWhile Halliburton continues to experience weak markets outside of the US, the
service provider says that its North American results were up quarter-over-quarter. For Q4, the segment reported revenue of $1.8 billion, up 9% sequentially but down 16%
YOY. Operating results came in at income of $28 million compared with a loss of $66 million in Q3 and income of $41 million YOY. The results
were driven primarily by increased pricing and utilization in the US onshore segment as well as cost management.
Overall, Halliburton reported a loss in net income of $153 million in 4Q16, down from a $26 million loss in 4Q15. Total revenue was $4.02 billion, down 20.9% YOY. Total operating income for the quarter was $53 million, a decrease from $85 million YOY.
“These results were primarily driven by increased activity in North America, the continued impact of our global cost savings initiatives and end-of-year software and product sales,” CFO and EVP Mark A. McCollum said.
PLS tracks thousands of deals for sale at www.plsx.com/listings
N. American revenue was up 9% in Q4 vs. Q3 due to higher prices & utilization.
Sold out of PowerDrive Orbit rotary steerable systems in the US.
Q4 revenue down 22% and profit off 43% compared to last year.
More activity onshore US & seasonal improvements in Canada helped results.
To learn more about PLS, call 713-650-1212Find more on the oilfield sector at
OilfieldServiceS 2 February 6, 2017
Savanna urgers shareholders to reject Total offerContact driller Savanna Energy Services is urging its shareholders to reject a bid
from competitor Total Energy Services (TOT). In its most recent proposal, TOT offered 0.13 of its share per Savanna share—a 16% increase from its initial November offer.
Savanna said TOT’s offer implies a current discount of 5% when over the past five years transactions of this nature have carried a premium of approximately 40%. It continued that Peters & Co. analyzed the offer and
deemed it financially inadequate to Savanna shareholders.TOT disputed Savanna’s calculation
of the offer premium and also questioned how Savanna has estimated its own value. CEO Daniel Halyk defended the company’s offer as: “a unique opportunity to achieve industry consolidation and economies and efficiencies of scale under a proven management team with a track record of creating sustainable shareholder value.”
Other offers on the table—After the TOT offer, Savanna received expressions of interest from other parties. As
such, it is opening a confidential financial data room for potential buyers. “The opening of the data room is an important step forward in Savanna’s exploration of the full range
of strategic alternatives," said Chairman Jim Saunders. “There can be no certainty of a transaction, but the alternatives may
include a merger or partnership with strategic or financial partners, a sale reflecting full and fair value for shareholders of Savanna, or an acquisition by Savanna."Savanna increases ’17 capex budget on Permian activity—
Savanna plans to boost its capex budget to $22 million in 2017, which would be centered on rig reactivations, rig upgrades, maintenance capital and finalizing system upgrades initiated in 2016. The company spent $20 million in 2016 after resuming activity in the Permian Basin.
For 2017, Savanna has budgeted to reactivate three drilling rigs in the Permian Basin, which are additional to the seven drilling rigs recently reactivated in the region. Also, in conjunction with the 18-month contracts recently secured for two of its high-specification AC double drilling rigs in the Marcellus, Savanna will upgrade pumping capacity for each of these two
rigs to 7,500 psi.Savanna adjusted its maintenance
capital budget in anticipation of increased activity levels in 2017. Like many in its sector, the company suffered from lower utilization rates for much of 2016. However, Savanna touted a recent uptick in this area, noting Canadian long-reach drilling rose from 8% in 2Q16 and 24% in 4Q15 to 32% in 4Q16. Upgrades and reactivation of drilling rigs in the Permian Basin increased US utilization from 12% in 4Q15 to 26% in 4Q16. Drilling rates in Australia were at 46% for 4Q16, well below 63% in 4Q15 but higher than the 19% posted in 3Q16. For more on Total Energy Services see PG. 5.
■ Patterson-UTI expects revenue and earnings in 4Q16 to be down YOY, according to a preliminary results statement. The Houston-based driller expects revenue of $247 million, down 26.5% YOY, and a net loss of $78.1 million, down from a $58.7 million net loss in 4Q15. Final 4Q16 results are to be announced Feb. 9. The company also said it had 77 rigs in the US on Jan. 22, six higher than the December 2016 average. It reactivated two frac spreads since mid-December for ~$2.0 million per spread, including both opex and capex.
■ Weatherford International and Nabors Industries agreed on an alliance for integrated drilling solutions in a non-binding MOU. Under the alliance, Weatherford will offer its expertise in construction, directional drilling and managed pressure drilling with Nabors’ fleet of MPD-ready SmartRigs and land-optimized measurement-while-drilling systems.
Earnings & Capex
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Volume 07, No. 01 3 ServiceSectOrEarnings & Capex 2017 to bring more barroom
brawls & hangoversThe resounding sentiment in the
oilfield services sector is that the worst is over, but 2017 will still be difficult.
Halliburton has been optimistic about the North American market since Q3, and by Q4 the company saw
improved results in the segment (PG. 1) However, results were down YOY.
The company noted that during Q4 the company gained the highest North American market share it had ever had, but it still expects a “brawl” for business in 2017.
Schlumberger reported a 4% increase in North American revenue in Q4, driven by double-digit growth
in land revenue and strong fracking
activity (PG. 1). The company plans to grow its North American investments in 2017 due to the recovery but expects the international market to be sluggish.
US onshore activity led Baker Hughes to its first increase in revenue since 4Q14 (PG. 1). Revenue was up 15% in North America due to improved onshore US activity, seasonal improvements in Canada and deliveries in the GOM.
Even Weatherford, which struggled during the boom, saw an 8% improvement in North America and despite shutting
down its fracking business on the continent (PG. 4). As suspected, the company
plans to sell its pressure pumping segments, which includes fracking. It also plans to sell its land rigs business.
A number of companies are still experiencing hangovers from 2016 with Forbes Energy Services filing for bankruptcy (PG. 8) and CGG likely to do the same (PG. 7). CGG Energy Services gets to start the new year fresh, having exited bankruptcy (PG 7). Paragon Offshore is also likely to emerge in Q1, after spending a year in restructuring (PG. 5).
IN THIS ISSUE
Carbo still in the red, but CEO touts uptick in revenueCarbo Ceramics reported a net loss of $15.2 million in Q4, but CEO Gary Kolstad
pointed to a 44% increase in revenue from Q3 as a sign of improving fortunes. Ceramic sales volumes were up 41% sequentially. The company has struggled as E&Ps try to
save costs by turning to sand proppant instead of Carbo’s higher-margin ceramics. In Q4,
revenue fell 48.8% YOY to $29.1 million. Carbo’s worldwide ceramic and sand proppant sales volumes totaled 667 million lb for YE16, a YOY decrease of 59%.
While YE16 revenue fell $176.5 million YOY to $103.0 million, Carbo lost less money—$80.1 million in YE16 compared with $109.5 million in YE15. Kolstad said in a statement that Carbo responded to a difficult market in 2016 by “focusing on what we could control” including cutting costs.
Looking ahead, Kolstad predicted only “modest” growth in ceramics as oil fields still look for low-cost options. The company is also trying to build its industrial sales base, where the sales cycle is longer than in the oil field, Kolstad said.
Only 'modest' growth expected in ceramics from oil field consumers.
H&P nearly doubles capex despite quarterly lossHelmerich & Payne reported a net loss of $35.1 million for Q1 of its fiscal year, but
the driller is betting on growing demand by nearly doubling its FY17 capex budget to ~$350 million from the ~$200 million announced three months ago. President and CEO John Lindsay said H&P is seeing increased activity and higher expenses, which reflect
the improved demand for onshore US drilling.Operating costs rose 15.5% from the previous quarter, and Lindsey
predicted another temporary rise in daily costs as H&P reactivates cold-stacked rigs. H&P expects revenue days in US land drilling to increase by 30-35% in the current quarter from the previous one.
“Spot pricing remains low, although we continue to see some pricing improvements for high-quality, high-performing AC drive rigs,” Lindsay said.
The Tulsa-based driller reported Q1 revenue of $368.5 million, an increase of 11.1% from the previous quarter but a YOY decrease of 24.4%. H&P posted a net loss of $72.8 million in Q4 of FY16 and net income of $16.0 million in Q1 of FY16.
H&P Well Positioned to Gain Market Share
Note: The above estimates are derived from multiple sources including Rig Data and corporate filings.* Includes ~170 FlexRigsthat have been or can be upgraded to what some industry followers refer to as “super-spec” rigs.
Idle 1,500 hp AC Drive Land Rigs (as of December 2016)
*HP* NBR PTEN PDS UNT
250
200
150
100
50
0
Estim
ated
Num
ber
of Id
le 1
,500
hp
AC D
rive
Land
Rig
s in
US
Source: H&P Dec. 7 Presentation via PLS docFinder www.plsx.com/finder
H&P has more than 15% of the US land rig market.
H&P currently has 140 contracted and 210 idle rigs.
To learn more about PLS, call 713-650-1212Find more on the oilfield sector at
OilfieldServiceS 4 February 6, 2017
Weatherford sees 8% increase in North American revenue
Weatherford International’s realignment started to show progress in Q4 as its revenue rose 3.7% from Q3 and its net loss was cut by 69.2%. North American revenue rose 8.0% sequentially despite the shutdown of the US fracking business during the quarter.
Weatherford’s Q4 revenue was $1.41 billion, up from $1.36 billion in Q3 but down 30.1% YOY. Net loss for 4Q16 was $549 million, an improvement from $1.78 billion in Q3 and $1.21 billion YOY.
The North American segment had revenue of $485 million in Q4, down 30.6% YOY, and an operating loss of $58 million in 4Q16 compared with $95 million in Q3 and $152 million YOY.
Weatherford’s YE16 results showed sharp drops in revenue and a rise in net loss. YE16 revenue was $5.75 billion, down from $9.43 billion in YE15. Net loss for YE16 was $2.88 billion compared with $2.10 billion.
Interim CEO Krishna Shivram told investors on Feb. 2 that his company is looking to sell its pressure drilling business, which includes fracking, or spin it off. The business lost Weatherford $27 million in Q4 before it was shut down and would have lost another $20 million if it had been kept open, the CEO said. However, North American revenue would have risen 17% from Q3 if Weatherford had continued, Shivram said.
Weatherford also expects to lay off another 2,000 workers in 2017 and sell its land drilling rigs business, which is based mainly in the Middle East and North Africa. The moves will be latest in several years of cost cutting that included Weatherford cutting capex $478 million in 2016, or 70% from 2015 and slashing more than half its workforce.
Earnings & Capex
CEO David Lesar said Halliburton successfully executed its strategy in Q4, which helped North American operations return to profitability after three quarters of losses.
“We continued to clearly gain market share as we outgrew our primary competitor in not only North America but Latin America and the Eastern Hemisphere. We gained significant market share throughout the downturn, coming out of it with the highest
market share in North America that we’ve ever had,” Lesar said.The CEO said the higher market share gave Halliburton the “power
of choice,” allowing the company to focus on selecting the “most efficient customers who value what we do and who reward us for helping them make better wells.”
A $4.0 billion termination fee from the failed merger attempt with Baker Hughes skewed Halliburton’s YE16 results. For YE16, Halliburton posted a net loss of $5.77 billion, up from a YE15 net loss of $667 million. Total revenue was $15.89 billion, a 32.8% drop. The company posted a $6.79 billion operating loss versus a $165 million loss YOY.
Looking into 2017, Halliburton expects to be to busier with cold-stacked equipment going back to work. Revenue is expected to meet or exceed rig count growth, but they are concerned about the cost of reactivating spreads and inflation as demand grows.
President Jeffrey Allen Miller summed up: “In many ways, 2016 was like a barroom brawl where everyone, and I mean everyone, took a punch. But it’s 2017 now and the brawl will continue, but I like our chances in that fight.”
Halliburton CEO: North America revival not yet global—In announcing its 4Q16 results, Lesar warned that the green shoots seen in North
America were not translating to the rest of the world. “It is important to remember that our world is still a tale of two cycles,” he said during the Q4 conference call.
“While the North America market appears to have rounded the corner and is on the upswing, the international downswing is still playing out,” wrapping up what Lesar called the most difficult time for the industry in his 40 years’ experience.
In international markets, “low commodity prices have stressed budgets and impacted economics across deepwater and mature field markets, which led to decreased activity and pricing throughout 2016,” Lesar said, adding that Halliburton did not expect a turnaround internationally until 2H17.
Philadelphia Stock Exchange’s Oil Service Sector Index Vs. S&P 500
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Volume 07, No. 01 5 ServiceSectOr
Paragon’s reorg plan cuts debt, leaves out shareholders
Paragon Offshore plc will file a new bankruptcy reorganization plan that sheds an additional $1.3 billion of debt, will give lenders a mix of cash, debt and new-to-be-issued equity and leave nothing for
existing shareholders.The Houston-based offshore
driller entered Chapter 11 bankruptcy protection in February 2016. The original reorg plan was rejected later that year as unfeasible.
President and CEO Dean E. Taylor said Paragon’s revised its business plan to focus on the company’s core regions of the North Sea, the Middle East and India and used more conservative dayrate and utilization projections. A committee of secured debtholders agreed in principle to the new plan, which will eliminate $2.4 billion in debt.
“Under our new business plan, our operations will be focused on markets where we have an installed base, strong customer relationships, and that we believe are ripe for a recovery,” said Taylor, who took over as CEO in November after the original plan fell apart.
The original plan would have shed $1.1 billion of debt and given shareholders 65% of the company and bondholders 35%.
Taylor said Paragon was “disappointed” that equity holders got left out.
“Unfortunately, during the course of our most recent negotiations, it became clear that there was no viable way forward that included a recovery component for our current shareholders,” he said.
The plan will be filed with the US Bankruptcy Court in Delaware and submitted to a vote of creditors. Barring any complications, Paragon could leave Chapter 11 during H1.
Capital
Paragon set to emerge from Chapter 11 with $190 million in cash.
Original bankruptcy plan rejected as unfeasible.
New reorg to eliminate $2.4B in debt, up from $1.1B in 2016 plan.
Trican cashes out of NOV, anticipates Keane IPO windfallTrican Well Service has sold its shares in National Oilwell Varco, raising US$21.4
million. The Calgary company received 558,221 common shares of NOV when it sold its completion tools business last June, a sale that also netted Trican C$30 million in cash.
The Keane Group IPO should also raise Trican more than C$70 million. Keane announced on Jan. 20 that it will
be pricing 26.76 million shares at $19 per share with 11,060,000 shares being offered by the selling stockholder group, which includes Trican. The underwriters have a 4,014,000-share greenshoe as well. Trican's net proceeds from the secondary offering and exercise of the greenshoe are expected to be US$28.4 million.
The shareholder group will also hold 72,354,019 shares of common stock of Keane after the IPO that no members cannot sell until 180 days after the IPO. The total expected proceeds from these transactions are ~C$73.5 million.
Trican intends to use the cash from these transactions to reduce its outstanding debt. At the end of 3Q16, Trican reported a net debt of $175 million.
Trican raising millions in cash to pay down debt
Earnings & Capex
Total Energy Services focuses on access mats in 2017 capexTotal Energy Services unveiled a preliminary 2017 capex budget of $22.8
million, down 11% from its final 2016 budget of $25.5 million. The Calgary company plans to spend $9.0 million of that budget to significantly expand its access mat business in Canada. The
plan would increase the company’s holdings to approximately 17,000 access mats. This investment is being made
to support existing demand from conventional upstream oil and gas customers as well as in response to the company’s success in expanding its presence in other
industries such as mining and utilities.The capex also includes $6.6
million for continued growth in Total’s Compression and Process Services (CPS) segment. The CPS segment is expanding its gas compression fabrication capacity into the northeast US through its Bidell Gas Compression subsidiary.
Bidell has identified several potential locations and expects to enter into a lease agreement for a minimum of 100,000 sq ft of fabrication space shortly. Fabrication operations are expected to commence during 2Q17. The addition of this facility will increase the CPS’ fabrication capacity by approximately 50%. Bidell President Sean Ulmer said the facility will meet customer demand of a new local supplier in the Marcellus and Utica shale gas plays.
The $7.2 million budget for maintenance and equipment upgrades includes $2.0 million of capital leases
related to the replacement and addition of light-duty vehicles in all business segments. The remaining $5.2 million will be directed toward equipment upgrades and maintenance primarily within Total’s Contract Drilling Services and RTS segments.
Total Energy said it intends to finance all of the capex with the exception of the capital leases with cash on hand and cash flow from operations. Total said it has a $65 million credit facility that is currently undrawn and available if required.
Capex budget for 2017 declining 11% from 2016 spending.
Capex to be funded through cash on hand and cash flow from operations.
Company plans to have ~17,000 access mats.
Total looking to buy Savanna Energy Services. See PG. 2.
January 15, 2015 • Volume 06, No. 01
CanadianCapitalServing the marketplace with news, analysis and business opportunities
ALBERTA PROPERTIES SALE5-Non-Core PropertiesCENTRAL & WESTERN ALBERTA PPAbee, Highvale, Kakut, Majeau & MorinvilleUp to 100% OPERATED WI FOR SALE 5.7Net Production: ~400 BOED (82% Gas) MMCFEDAvg Net Operating Income: ~$189,166/MoCALL AGENT FOR MORE INFOPP 14403DV
CANADIAN JOINT VENTURE1-Prospect. 43,000-Acres. 67-Sq Miles.MAGDALEN BASIN. GULF OF ST LAWRENCE DV80-km West of SW Tip of Newfoundland.Water Depth 470 m. Drill Depth 2,500 m.>1,000 km 2D Defines FourWay Closure. MAGDALEN100% OPERATED WI; JOINT VENTURETotal Resource Potential: 5.0 BBO or --- 7.0 TCF Carboniferous Clastic Targets.CALL AGENT FOR UPDATEDV 15009
FEATURED DEALS
Eagle Energy Trust becomes a Canadian asset holder
Eagle Energy Trust unitholders have approved a special resolution to amend the investment restrictions in Eagle's trust indenture, enabling it to invest in energy assets in Canada. Eagle had been previously been limited to investing on non-Canadian assets—the company currently has production of 1,900 boepd from properties in Texas and Oklahoma. The changes won’t have any impact
on its US operations or the taxes on distributions from those operations; the company’s Canadian investments will be structured so that its Canadian operations will be taxed in the same manner as other Canadian energy companies.
Eagle wasted no time taking advantage of the change, signing a deal with Spyglass Resources Corp. to buy a 50% non-op interest in producing properties under waterflood in the Dixonville Montney C oil pool in north central Alberta, paying $100 million. The acquisition adds 1,250 boepd of low-decline production.
Producers banking on service company savingsAs producers scale back their capital spending plans in the wake of falling oil
prices, many are looking to the service sector to help them prop up their bottom lines. Crescent Point Energy is already factoring a 10% reduction in service costs into its 2015 budget and will be pushing for more if prices remain low. Others are expected
to approach their capital budgets with the same mindset.
According to a survey con-ducted by Barclays, capital spending in the US and Canada is expected to fall by as much as 30% from last year to $138.1 billion. In turn, about half of producers expect drilling and completion costs to fall 10% in 2015, including in areas such as pressure pumping, drilling fluids and directional drilling. And while producers may see the service savings as a slight respite from the decline in oil prices, the news is doubly disheartening for those service providers. Not only are they seeing declines in their own businesses, they’re being asked to take less for the services they do provide.
Service companies are already feeling the impact.
Crescent Point banking on service cost & efficiency savingsHalf of oil hedged at US$90/bbl for 2015
Although Crescent Point Energy is setting its capital budget for 2015 about 28% lower than 2014, the company expects the slimmed down budget to deliver 9% YOY production growth to 152,500 boepd. The company set its budget for the year at $1.45 million, down 28% from the $2.0 billion
forecast for 2014. The budget assumes an
initial 10% reduction in service costs. Crescent Point expects to see even greater cost reductions if low prices persist. The company is looking at ways to improve its operational efficiency and is working on a number of drilling and completion technologies that could cut costs even further.
“When prices fell dramatically in 2008 to 2009, we were able to realize a 30% reduction in our Bakken drilling and completions costs,” said CEO Scott Saxberg.
“We'll be working hard with our service providers and fully expect to see rates come down even more than they already have.”
Canadian Natural Resources cuts capex by $2.4 billionOil sands player Canadian Natural Resources is the latest producer to revisit its
capital spending plan for 2015, cutting it back by $2.4 billion to $6.2 billion. That’s down 30% from the $8.6 billion budget it laid out in November 2014 and about half
the $12 billion it expected to spend in 2014. The bulk of the reductions will come via reduced drilling and related facility capital for its North
America and International conventional operations. The company will also defer $470 million in spending at its Kirby North Phase 1 in situ oil sands project, cutting spending by 82% to $105 million from its previous forecast of $575 million. The reduced budget wasn’t a complete surprise; when it released the original budget the company warned that it was prepared to cut $2.0 billion from that if conditions warranted. CNRL said the reduced spending would allow it to continue its dividend unchanged.
CFO Corey Bieber told the Globe and Mail he did not know when spending at Kirby North might be restored.
Will defer $470 million in spending at Kirby North Phase 1 project.
Viewfield Bakken & Shaunavon plays to get nearly half of spending.
Half of producers expect drilling & completion costs to fall 10% in 2015.
Continues On Pg 6
Continues On Pg 8
Continues On Pg 13
To be taxed at rate other E&P firms pay, not at prior 34% on distributions.
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OilfieldServiceS 6 February 6, 2017
Keane launches IPO, will trade on NYSE as FRAC
Integrated well completion company Keane Group priced its Jan. 20 IPO of 26.76 million shares at $19 per share. The company is offering 15.7 million shares with another 11.06 million shares being offered by the selling stockholder. The selling stockholder has also granted the underwriters a 30-day overallotment option to purchase an additional 4.014 million shares of the company’s common stock. Keane will trade on the NYSE under the ticker symbol FRAC.
Active in the Bakken, Eagle Ford, SCOOP/STACK, Marcellus, Utica and Permian, Keane focuses on complex, technically demanding solutions that include longer lateral segments, higher pressure rates, increased proppant and multiple frac stages. Initial market demand for the IPO was robust, with more than 19 million shares of the company trading on its first day. Shares of the company closed up more than 13% in opening-day trading.
In early January, Keane announced it would offer 15.3 million shares at an anticipated price of between $17 and $19 a share, which it said would raise gross proceeds of $275.4 million at midpoint. The company said it will use the net proceeds from the offering to repay outstanding debt and pay fees and expenses related to the offering. The remainder will be used for general corporate purposes. The company will not receive any proceeds from the offering of the common stock by the selling stockholder.
Capital
“So this is the market segment that we’re actually seeing the biggest price increase.”However, the fracking side still needs a pricing boost for Schlumberger. “Yes,
pricing is moving now. We need significantly more pricing before we are getting into [what] I would say a sustainable operating environment, but that trend has been kicked off,” Kibsgaard said.
Reports net loss of $204MM in Q4—For YE16, Schlumberger’s net income came out to a loss of $1.69 billion, a
dramatic change from the $2.14 billion gain in YE15, and operations income was a loss of $1.91 billion compared with YE15’s $2.88 billion gain. The difference mostly came in the revenue row, where YE16 revenue
of $27.81 billion was $7.67 billion below YE15’s result.
The company posted a net income loss of $204 million in Q4, a sharp improvement from the YOY loss of $1.02 billion. Operations income posted a loss of $213 million in 4Q16, an improvement from the 4Q15 loss of $1.10 billion. Q4 revenue dipped to $7.11 billion, a decline of 8.2% YOY
but up $88 million sequentially.Kibsgaard touted Schlumberger’s 1%
revenue improvement in Q4 versus Q3 as “growth in North America land and robust activity in the Middle East largely offset continued weakness in Latin America and seasonal declines in other parts of the world.”
The company’s North American segment saw revenue rise 4% sequentially in Q4 to $1.765 billion, driven by double-digit growth in land revenue on strong fracking activity and higher uptake of Drilling & Measurements, Bits & Drilling Tools and M-I SWACO products and services as rig count increased. The US recovery was aided by slightly improved prices while Western Canadian activity ticked up from winter ramp-up activity.
In the Middle East and Asia segment, Q4 revenue rose 5% to $2.494 billion. Activity in Saudi Arabia, Egypt and Qatar led the increase. For more on SLB, see PG. 1 and 11.
Earnings & Capex
Oilfield Services Stock Movers—Last 30 Days Source: CapIQ
Company Ticker$/Share2/2/17
$/Share 1/3/17
% Change
% Change
YOY
Top
5
Exterran EXTN $30.49 $24.76 23% 110%
Archrock AROC $14.55 $13.75 6% 181%
RPC RES $21.37 $20.48 4% 76%
Halliburton HAL $56.29 $55.68 1% 76%
Superior Energy SPN $17.65 $17.56 1% 90%
Bott
om 5
Bristow Group BRS $17.06 $21.10 -19% -14%
Pioneer Energy PES $5.95 $7.10 -16% 358%
Helix Energy HLX $8.04 $9.36 -14% 113%
Helmerich & Payne HP $70.07 $78.76 -11% 42%
Atwood Oceanics ATW $12.12 $13.62 -11% 116%
Note: Data includes public, US & Canadian-listed companies operating in the oilfield service space, limited to companies >$1.00/share and market cap >$100 million.
Schlumberger faces E&P headwinds Continued From Pg 1
Fracking prices rising but is still well short of 'sustainable' pricing.
Schlumberger's YE16 revenue declined 21.6% YOY to $27.81 billion.
4Q16 net income loss just one-fourth of net loss in Q415.
More than 19 million shares of the company traded on its first day.
Primary use of net proceeds will be to pay down debt.
All Standard Disclaimers & Seller Rights Apply.
January 13, 2015 • Volume 08, No. 02
CapitalMarketsServing the marketplace with news, analysis and business opportunities
NORTH TEXAS SALE PACKAGE 18-Wells. ~4,000-Gross Acres.PARKER, JACK & ERATH COUNTIESBig Saline, Marble Falls, Atoka Sand, PP-- & Conglomerate Reservoirs.Behind-Pipe Potential In Each WellAdditional Barnett Shale PotentialAll Acreage HBP. 18 Leases. 19275-100% Operated WI; 80% Lease NRI MCFDGross Production: 271 MCFD & 33 NGLsNet Production: 192 MCFD & 23 NGLPP 3426DV
After a fairly banner 2014 for energy IPOs on the whole but a significant dry spell for all segments other than midstream through the last few months of the year, Rice Energy put a nice bow on 2014 with its buzzer beater Rice Midstream Partners IPO. Rice sold 28.75 million units at $16.50, for total gross proceeds of $474.4 million, and $441.6 million net. Units priced 17.5% below the midpoint of the
targeted price range of $19-$21/unit, probably reflecting the challenges the energy sector has seen of late in terms of obtaining financing. However, in an interesting turn for an underpriced IPO, subsequent demand was strong enough to merit full exercise of a 3.75 million unit option (included in the above gross proceed total) which boosted proceeds by $61.9 million.
Upstream MLPs under fire as distributions cut Upstream MLPs have been the subject of much discussion of late as a particularly
at-risk segment of the energy patch, and these concerns have in fact been realized for at least some partnerships with distribution and capex cuts. MLPs in general have been favored for their bond-like, high-yield distributions, stemming from preferential tax treatment for reinvesting a high percentage of profits back into the business. However, they also generally rely heavily on debt to fuel growth. And unlike their midstream brethren which are better positioned to weather recent commodity volatility with long-term, fixed-price contracts, upstream MLPs face full exposure to the recent oil and gas price declines, except to the degree they make use of hedges. However, hedges will largely peel off over the course of the year, and many of these partnerships will soon face the difficult decision of using cash to cover interest requirements and maintaining what may have become unsustainable payouts, or slashing the distributions which drew investors to them in the first place so they can make debt levels more reflective of current economics.
Concho dials capex back $1.0 billion in second look In a rather noteworthy example of what many companies which announced 2015
spending plans early are dealing with these days, Concho Resources revised its capex for this year to more accurately reflect current market conditions. In early November
when WTI was still trading above $78/bbl, Concho had announced a $3.0 billion 2015 budget targeting ~30% production growth, but warned that it would ease spending if oil prices didn’t firm up over the next few months.
With oil now near $45, that clearly hasn’t happened, and Concho has proceeded accordingly with a new $2.0 billion plan which is 33% lower than prior guidance and down 23% YOY vs. 2014’s $2.6 billion.
The new plan contemplates $1.8 billion in D&C spend (down 33% from the prior $2.7 billion), with ~$1.3 billion or 72% of spend targeting the Delaware Basin (down 25% vs. prior budget, up from 64% of total spend), $300 million or 17% targeting the Midland Basin (down 49% vs. prior budget and 22% of total) and the remaining $200 million or 11% targeting the New Mexico Shelf (down 47% from prior budget and 14% of total).
Southwestern plans multibillion equity raise to fund buys The implications of Southwestern Energy’s $4.98 billion acquisition of West
Virginia and southwest Pennsylvania assets from Chesapeake Energy (plus another $394 million in add-ons in the region from Statoil) are beginning to become apparent for the company, with impacts on both Southwestern’s capital structure and capex.
The company is finally providing a clearer picture of how it plans to permanently fund the Chesapeake deal. The acquisition was funded
at closure with a $4.5 billion bridge loan and a two-year $500 million unsecured term loan, but significant sums of longer-term debt and equity were clearly needed.
In line with its previously announced intentions, Southwestern announced a proposed equity sale which should raise $1.8- $2.1 billion, depending on whether options are exercised. Specifically, the company plans to sell 20.26 million shares of common with a 3.04 million share option, and 26 million depositary shares (each amounting to a 1/20th interest in Series B mandatory preferred shares) with 3.9 million shares in possible options.
Should raise $1.8-$2.1 billion in equity depending on whether options go.
Boosting focus on Delaware Basin from 64% of prior budget to 72%.
Upstream MLPs are choosing between debt loads & distributions.
Units priced 17.5% below midpoint at $16.50 but option fully exercised.
Access PLS’ archive for previous oilfield services newsFor general inquiries, email [email protected]
Volume 07, No. 01 7 ServiceSectOr
Rowan announces final results of cash tender offersRowan Companies has announced the final results of several cash tender offers
totaling up to $750 million to purchase the outstanding senior notes of the global drilling company. The noteholders to which Rowan directed the tender offers hold 5% senior notes
due 2017, of which $357.73 million is outstanding; 7.875% senior notes due 2019, of which $396.52 million is outstanding; 4.875% senior
notes due 2022, of which $700 million is outstanding; and 4.75% senior notes due 2024, of which $400 million is outstanding. The tender offers were subject to market conditions and other factors, including a $100 million cap on the 2019s, a $235 million cap on the 2022s and a $50 million cap on the 2024s.
As of midnight Jan. 3—the expiration of the tender offer—Rowan had received valid tenders from holders of the notes totaling more than $498 million. That included offers totaling $265.68 million for the notes due 2017, $187.59 million for the 2019s, $43.4 million for the 2022s, and $1.88 million for the 2024s.
Capital
Rowan received valid tenders of more than $498 million.
Facing high debt, CGG hints at financial restructuring
Faced with what it says are unsustainably high debt levels, the French geophysical company CGG said
it will begin discussions with stakeholders to pave the way for a financial restructuring.
The objective of the restructuring, the company said, would be to provide a level of indebtedness and cost of debt that is substantially reduced and sustainably adapted to its revenue.
CGG said that 4Q16 multi-client sales are estimated at roughly $135 million, with a level of prefunding in line with target, but with an after-sales volume below expectations. The company said its net debt was $2.315 billion as of Dec. 31 (based on September exchange rates), in line with its target to be below $2.4 billion at the end of 2016. However, with a difficult market environment expected to continue in 2017, the company said it considers the debt level to be too high. CGG said it began discussions in December with its lenders, and they agreed to disapply the maintenance covenants (leverage ratio and coverage ratio) on its debt.
CEO Jean-Georges Malcor said because market conditions are expected to remain difficult, the company’s priority is now to improve its balance sheet and quickly restore financial flexibility. “At the same time, we remain fully committed to our commercial efforts, customer satisfaction, operational excellence, strict cost management and preservation of our liquidity level,” he said.
The company’s net debt was expected to be $2.315 billion as of Dec. 31.
Seadrill seeks $1B in capital, could be weeks from bankruptcySeadrill Ltd. wants to raise $1 billion in capital as part of a last-ditch effort to
restructure its $8.2 billion secured debt without filing for bankruptcy. The driller said talks are ongoing with banks are to extend bank maturities set to mature from 2021 to 2023, reduce fixed amortization and amend financial covenants, and extend the maturity of
unsecured claims to mature from 2025 to 2028.
"These negotiations have proved to be more complex than we had originally anticipated. Nevertheless, key stakeholders have demonstrated a clear desire to be part of a solution and with the right structure and terms we believe there is significant capital available to us,” said Per Wullf, CEO and president of Seadrill Management Ltd.
Seadrill told bondholders that if a restructuring plan was not in place by mid-February, the company would head to Chapter 11 bankruptcy reorganization, Carnegie Investment Bank analyst Frederik Lunde told Reuters. “So this means they will be negotiating in overtime over the next two weeks,” Lunde said.
The offshore driller also has unsecured debt of $2.3 billion and contingent liabilities of $3.5 billion. In 3Q16, Seadrill reported a net loss of $656 million on revenue of $743 million.
‘They will be negotiating in overtime over the next two weeks.’
C&J Energy Services emerges from Chapter 11 C&J Energy Services said it has completed its financial restructuring, emerged
from Chapter 11 bankruptcy and satisfied the conditions of its reorg plan. The Houston-based company said it has significantly improved its financial position by eliminating roughly $1.4 billion of debt from its balance sheet, as well as more than $80 million of
annual interest expense. The company said it has
entered into a new $100 million revolving credit facility and paid off outstanding amounts under its prior debtor-in-possession facility with proceeds from a $200 million equity rights offering. Combining its cash balance with the borrowing capacity under the new credit facility, the company said it is exiting its restructuring with more than $220 million of total liquidity.
C&J filed for bankruptcy in July 2016, prompting the NYSE to delist the company. It now trades on the Pink Sheets. Per the restructuring plan, C&J will issue one series of seven-year warrants to common stockholders, based on their pro rata share, exercisable for up to an aggregate of 6% of new common stock for a combined strike price of $1.55 billion. Under the restructuring, C&J also has a new board consisting of Chairman Patrick Murray and directors Stuart Brightman, John Kennedy, Steven Mueller, Michael Roemer and Michael Zawadzki, in addition to CEO and President Don Gawick.
Eliminated roughly $1.4 billion of debt from its balance sheet.
' We remain fully committed to our commercial efforts.'
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OilfieldServiceS 8 February 6, 2017
Cordy sells Cordy Tank rights to Cordy board memberCordy Oilfield Services has sold its intellectual property rights and patent for
its Cordy Tank to Lyncorp International for $272,107. Cordy’s new management team decided that the additional investment required to bring the Cordy Tank to
commercialization did not match the company’s strategic direction.
The Cordy Tank is a mobile water tank for oil fields. The tank with a 600,000L capacity can be erected within six hours by four trained employees with no rigging or cranes required.
Lyncorp is wholly owned by David Mullen, who is also a member of the Cordy board of directors.
At the end of Q3, Cordy said there was material uncertainty that the company could continue as a going concern. Since then it raised C$1.03 million though a private placement of 33.33 million units; Dave Mullen bought 10 million of the units.
Select Sands expands Arkansas sand mineSelect Sands sub American Select completed the purchase of an additional
457 acres in northeastern Arkansas that Select Sands believes lies over the St. Peters Sandstone formation. The location, called the Bell Farm, is about 3 miles from its 520-
acre Sandtown location. The total purchase price was $950,560.The St. Peters formation is a source of Northern White Tier-1 frac sand
near many major shale plays. The Vancouver-based silica company intends to do further work to determine the quality and quantity of sand on the Bell Farm, and cannot confirm yet whether it has an economically viable amount of sand.
About a month ago, the company also closed its previously disclosed deal to buy the Ozark Premium Sand’s wet/dry processing plants, operating equipment, saleable inventory, real estate and customers lists from Tutle Holding, Steve Hackmann and Ozark Premium Sands. Following this transaction, Select has name-plate capacity of 800,000 tons per year of finer-mesh silica products. Following a previously paid $250,000 option, Select paid $3.317 million.
At the end of 2016, Select Sands announced the appointment of Zig Vitols as president and CEO of the company. He replaces Rasool Mohammed, who is taking the new role of COO of Select Sands and president of sub American Select.
Buyer Lyncorp is owned by Dave Mullen, who holds over 8% of Cordy.
Helix Energy Solutions raises $220 million
Helix Energy Solutions Group has completed its public offering of 23 million shares of its common stock at $8.65 per share. The 23 million-share offering represented a 2 million-share upsize to the company’s previously proposed 21 million-share offering. Helix also granted the public offering underwriters a 30-day option to purchase up to 3.45 million additional shares of its common stock at the public offering share price. Total gross proceeds of the offering was around $219.6 million.
The company said it intends to use the net proceeds from the offering for general corporate purposes, which may include debt repayment, capital expenditures, working capital, acquisitions or investments in its subsidiaries. Credit Suisse Securities, Wells Fargo Securities and BofA Merrill Lynch are joint book-running managers for the offering.
■ Dril-Quip has acquired riser maker OilPatch Technologies (OPT) for $20 million in cash. Houston-based OPT is a provider of offshore riser systems and components, proprietary threaded connections and other products, with a focus on deepwater Spar and TLP Systems. Dril-Quip manufactures offshore drilling and production equipment for use in deepwater, harsh-environment and severe-service applications.
■ Mid-South Technologies sold sister company Mid-South Rental and Completion Services to GATE Energy for an undisclosed amount. MSRCS will become part of GATE sub BlueFin, expanding the engineering company’s completions offerings. GATE founder and CEO Grant Gibson said the deal will increase revenue from capex and opex.
■ Java Offshore Sdh Bhd has completed its acquisition of a majority stake in Asian Geos, an offshore geotechnical and geophysical advisor, from Gardline Geosciences Ltd and Helms Geomarine Sdn Bhd. Rizal Shah, CEO of Java Offshore, said combined companies would save money for customers through efficiency.
A&D
Forbes files for Chapter 11 bankruptcy protectionForbes Energy Services Ltd. will exchange $280 million in debt for new equity
under its bankruptcy reorg plan. The Alice, Texas-based oilfield contractor said it filed for Chapter 11 protection with the US Bankruptcy Court in Corpus Christi, Texas, on Jan. 23.
Under the plan, current equity holders including stockholder will see their interests “extinguished without recovery.” Holders
of senior unsecured notes will split $20 million in cash and all of the common stock in the reorganized Forbes. Other holders of general unsecured claims such as vendors will be paid in full.
Forbes said it has ample cash to continue operations while the plan is in court and has secured $50 million credit facility as well.
The company entered into a restructuring support agreement with certain noteholders on Dec. 21. Under a backstop agreement, the company agreed to file for voluntary Chapter 11 protection on or before Jan. 23 or else pay a $2.5 million termination fee.
Forbes has about $300 million in debt. Forbes operates 173 workover rigs, six coil tubing spreads and 14 swabbing rigs in Texas, Louisiana and Pennsylvania. It also transports and disposes of fluids used in drilling using 556 heavy trucks and 447 vacuum trucks.
Capital
Company has enough cash, credit to continue operations.
Access PLS’ archive for previous oilfield services newsFor general inquiries, email [email protected]
Volume 07, No. 01 9 ServiceSectOr
Date Location AbstractEurope
Jan. 31 Norway- Johan Sverdrup
Aibel has been awarded a NOK 400MM contract for hook-up of the drilling platform. In addition, the contract includes options for hook-up of further 2 platforms.
Jan. 31 UK- Montrose Repsol Sinopec extended its contract for the semi Safe Boreas to include a firm 17-day period for work at the Montrose A facility, beginning on Feb. 27.
Jan. 26 UK- Elgin & Franklin
Total has awarded Prosafe a contract for the provision of the Safe Caledonia semi-sub accommoda-tion vessel. The contract has a firm period of 134 days plus an additional 30 days option. Total value of the contract is estimated at $10MM.
Jan. 23 UK- Skene & Nevis Apache has contracted Xodus Group to provide subsea engineering services for 2 new infill well developments.
Jan. 23 Netherlands- A12 Block
Maersk Drilling has been awarded new contract with Petrogas E&P for the JU Maersk Resolute. Firm contract covers drilling of two wells, A8 & A9.
Jan. 19 Norway- Utgard OneSubsea has been awarded an EPC contract by Statoil to supply the subsea production system.Middle East/North Africa
Feb. 2 Israel- Karish & Tanin fields Energean has signed a deal with TechnipFMC to help develop the fields.
Feb. 2 Egypt- South Disouq
SDX confirmed that Zenith Energy has been appointed to provide technical assistance for the drilling operations.
Feb. 27 Qatar- Al-Khalij McDermott has been awarded a contract covering installation of two offshore pipelines. The work is expected to be finished by 3Q18.
Feb. 25 Saudi Arabia- Zuluf & Safaniya
McDermott has been awarded an EPCI contract for services in the Safaniya & Zuluf fields. The contract includes the design, procurement, fabrication, transportation, installation, testing and pre-commissioning of 9 slipover jackets and decks, subsea pipelines and cables, as well as one single well observation platform in the Zuluf field.
Jan. 24 Saudi Arabia- Marjan & Berri
Saudi Aramco has awarded the NNCC two new contracts for 17 jackets in Berri & Marjan oilfields. These contracts for Berri & Marjan oilfields include EPC, transportation & installation of 9 & 8 jackets, respectively. Carrying out these 2 new contracts will take 11 months.
Jan. 20 Egypt- ZohrSchlumberger has been awarded a $70MM contract for the EPCC and operation of a facility that will provide accelerated production of gas during the first phase of the project. The facility will be com-pleted 11 months from the date of the award.
Jan. 20 Iraq- Majnoon Shell has signed a $210MM contract with Halliburton to drill 30 wells at the field over the next 3 years.Latin AmericaJan. 27 T&T- Kapok BPTT will add three wells at the Kapok field using the jack-up Rowan EXL II, starting in 1Q17.Russia & FSU
Jan. 24 Kazakhstan- multiple
Fluor has been awarded a two-year engineering services framework agreement with North Caspian Operating Company for conceptual studies and front-end engineering for its projects in the Caspian region, including Kashagan, Kalamkas, Aktoty and Kairan.
South Pacific
Jan. 27 Indonesia- multiple
Premier Oil Indonesia has contracted GE Oil & Gas to supply subsea trees and wellheads for the Bison, Iguana, and Gajah Puteri field developments. Deliveries are expected by early 1Q18.
Jan. 27 Vietnam- Ca Rong Do Floatec has been selected by Repsol as the preferred contractor for the tension-leg wellhead platform.
Jan. 26 Australia- Ichthys TechnipFMC has entered into an agreement with INPEX for Riserless Light Well Intervention services in the field.
Jan. 25 Philipinnes- Galoc Nido has signed a binding rig contract with Golden Close Maritime for the drillship Deepsea Metro I to drill the Galoc-7/7ST appraisal well.
Jan. 20 Indonesia- Jangkrik
Solstad Offshore has been awarded a contract with Saipem for offshore installation works for the Jangkrik FPU utilizing the CSV Normand Installer.
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Database Drilling, Construction & Service Contracts More coverage at wire.plsx.com
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OilfieldServiceS 10 February 6, 2017
Technip, FMC complete merger, now TechnipFMCA merger creating an integrated subsea giant with $18 billion in combined
revenues is complete as FMC Technologies and Technip are now doing business as TechnipFMC. The company employs 44,000 people on 48 countries and 21 vessels
including four under construction.The merger was announced in May 2016 in an all-stock deal and has
passed extensive regulatory hurdles including antitrust reviews in the US, EU and Brazil. The head office is in London with operational headquarters in Paris, Houston and London.
TechnipFMC expects to save pre-tax $400 million through synergies in 2017. It will trade on the NYSE and the Euronext Paris Stock Exchange under the symbol FTI.
“As one company, we can make oil and gas projects more viable, driving value for our clients and shareholders,” said Thierry Pilenko, executive chairman of TechnipFMC and former chairman CEO of Technip. Former FMC Technologies president and COO Doug Pferdehirt is TechnipFMC CEO.
In terms of 2015 combined revenue, TechnipFNC is larger than Baker Hughes, but considerably smaller than the $32 billion combined company that would be created by the merger of Baker Hughes and GE Oil & Gas that was announced in October.
A&D
Estimated $16B combined backlog at end of 3Q16.
Technology firm buys Horizon Well Testing for $5.5MM
Seeking software synergies, Alpine 4 Technologies bought Horizon Well Testing, a privately held company out of McAlester, Oklahoma, for $5.5 million. Consideration will be paid in cash, debt and stock. The Phoenix-based technology company plans to adapt its 6th Sense Auto inventory management system to create inventory management software for HWT’s heavy equipment. Alpine 4 expects the new SaaS software package will allow HWT to lead its industry in real-time reporting of equipment in the field, and would be a first in the oil service industry. HWT will also use BrakeActive, an automobile safety system from one of Alpine 4’s subsidiaries. Alpine 4 has also arranged for $2.0 million in credit to help grow HWT, which is now a subsidiary of Alpine 4.
Alpine 4 described the deal as a long-sought-after addition to its portfolio as it expects the industrial and petroleum services industry to post strong growth in 2017 and 2018. The technology company also said it had hired Michael Steele as president.
Essential and Precision close $28 million asset swap
Essential Energy Services and Precision Drilling Corp. closed their $28 million swap of Essential’s service rig business for Precision's coil tubing and pumping assets. In addition to the swap of assets, Precision will make a cash payment of $12 million to Essential.
Essential CEO Garnet Amundson said the deal will be a “transformative transaction” for the company. The transaction leaves Essential with two remaining businesses: coil well service and downhole tools and rentals. The company said narrowing its focus will result in workforce and training efficiencies and is expected to create stronger sales synergies between those two businesses.
In addition to the swap, Precision will pay $12 million to Essential.
North American Rotary Rig Count as of Feb. 3 Source: Baker Hughes
Access PLS’ archive for previous oilfield services newsFor general inquiries, email [email protected]
Volume 07, No. 01 11 ServiceSectOr
Greenwell acquires Exclusive Energy ServicesGreenwell Energy Solutions, an independent specialty provider of completion
and production services for the upstream energy industry, has acquired Exclusive Energy Services. Exclusive provides highly automated, Data Acquisition System (DAS) mixing plants that enable optimal chemical mixing and delivery for coil-tubing, work-over and frac jobs. Terms of the deal were not disclosed. With the acquisition, Greenwell now operates 16 mixing plants, seven of them equipped with data acquisition systems.
Greenwell President James Kiser said combining Exclusive’s DAS mixing plants with Greenwell’s chemical portfolio would bring down costs for customers. “The DAS systems more accurately dose specialty chemicals, using the right quantities, at the right time,” Kiser said. “And we test well fluids in our in-house laboratory, so we know ahead of time the most effective chemicals to use. Customers use lower chemical volumes, more effective chemicals and have quality data to make better decisions."
Flotek Industries optimistic on 2017 industry outlook
Increased oilfield activity in 4Q16 could signal a more constructive industry operating environment in 2017, Flotek
Industries said in a recent analysis. Flotek CEO John Chisholm said while
significant uncertainty remains, the company has seen operator behavior that suggests oilfield activity is beginning to experience an upswing. The company
said drilling and completion measures have begun to trend higher, while a holiday slowdown it cited as an earlier concern does not appear to be as significant as expected. “While it is far too early to suggest an industry recovery is underway, we are optimistic that the opportunity set will continue to improve into 2017,” Chisholm said.
Flotek also said it expects its own 4Q16 total energy chemistry segment revenue to increase by 10-15% over 3Q16, while it expects gross margins
for 4Q16 to decline modestly. Flotek said revenue from its Consumer and Industrial Chemistry segment will likely decline by $2.5-3.5 million in 4Q16 when compared to 3Q16. The company attributed the revenue decline to seasonal demand fluctuations, changes to its product offerings and a greater focus on terpene development for its energy chemistry business. Even with the 4Q16 decline, Flotek said the CICT segment should post record annual revenue for 2016.
The company said drilling and completion measures have begun to trend higher and a holiday slowdown it cited as an earlier concern does not appear to be as significant as expected.
Flotek said it expects its own 4Q16 total energy chemistry segment revenue to increase by 10-15% over 3Q16.
Developments & Trends
'The opportunity set will continue to improve into 2017.'
Consumer and Industrial Chemistry segment should post record revenues.
Ideal closes acquisition of Cathedral assetsIdeal Completion Services completed the purchase of Cathedral Energy Services’
flowback and production testing assets in Canada and the US, which will be Ideal’s initial operations. Ideal management and Dallas private equity firm Edge Natural Resources funded the $17.8 million acquisition.
Ideal said the company was well suited for the operations because of a management team with extensive experience in the field, including at Cathedral. The management team includes Brad Gabel (executive chairman), Rutger Niers (president), Richard Defreitas (VP) and Scott Marshall (VP, operations). Ideal has said it would provide business continuity to Cathedral's customers and intends to retain the majority of Cathedral's employees.
Cathedral said it will use the proceeds to reduce debt and support its growing directional drilling business. The company said its bank debt will be ~$11.3 million after closing. Cathedral also negotiated amendments to its credit facility with the Bank of Nova Scotia and Export Development Canada, revising it to $23.0 million.
Members of Ideal’s management used to work at Cathedral.
Schlumberger acquires Peak Well SystemsSchlumberger has acquired Peak Well Systems, a provider of flow control
technologies, from private equity firm Summit Partners. Peak Well Systems designs and manufactures advanced downhole tools designed to isolate, extend well life,
restore well integrity and enhance well performance. The companies said existing Peak customers will continue to have access to Peak’s products and will now benefit from Schlumberger’s global distribution network. Terms of the deal were not disclosed.
“In the past few years, Peak has developed a portfolio of flow control technologies that are recognized as some of the leading products in the industry largely due to
their simplicity, performance, reliability and ease of retrievability,” said Hinda Gharbi, president of Schlumberger’s
Wireline segment. “Bringing Peak technologies into our existing production services portfolio will give us the opportunity to offer our customers fully integrated well intervention solutions on electric line, mechanical slickline or digital slickline.”
Peak Well Systems CEO Nigel Avern said the companies have been working closely on several initiatives over the past year. “This is a natural fit for both companies and one which will ultimately benefit our customers,” he said.
Peak customers will continue to have access to Peak’s products.
Read more about Schlumberger on PG. 1 and PG. 12.
A&D
With the acquisition, Greenwell now operates 16 mixing plants.
To learn more about PLS, call 713-650-1212Find more on the oilfield sector at
OilfieldServiceS 12 February 6, 2017
Xtreme to spend $33MM for upgrade of three rigs
Xtreme Drilling said that its board had approved a $33 million upgrade to turn three XDR 400 rigs into its 850XE design. The upgraded rigs will have a new proprietary design mast and substructure which has a rated depth capacity of 27,500 ft.
The upgrade will also include an AC electric 1,500hp drawworks, patent-pending X/Y walking system, 7,500
psi quintuplex mud pumps, integrated high-torque top-drive and other leading-edge components. The first of the upgraded rigs should return to operations in 3Q17.
The Calgary-based driller also reported that utilization rates for its 21-rig fleet rose to 25% in 4Q16 from 22% in 3Q16. Xtreme said it had 479 operation days in the quarter with seven rigs producing revenue in the US and Canada. This compares to 433 operating days and six rigs running in the US and Canada during Q3.
Nigeria's NNPC partners with Schlumberger for explorationNigerian National Petroleum Corp. has announced it will partner with
Schlumberger in exploration and reservoir management operations. A statement from the Nigerian NOC said the partnership would focus on finding commercial hydrocarbon deposits in the Chad Basin and other inland sedimentary basins.
Babatunde Adeniran, COO of ventures at NNPC, said the initial focus of the partnership will be on the exploration and risk assessment studies of the Nigerian frontier basins, which include the Upper Benue where NNPC
is carrying out exploration work. Other areas of interest will be formation damage prevention to improve oil and gas recovery and economic viability of the reservoir, risk reduction, complex depositional systems and drilling challenges.
Schlumberger has established a $1 billion research fund that NNPC also hopes to take advantage of, NNPC said in its statement. For more on SLB, see PG. 1 and 11.
Developments & Trends
• NIG
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■ Gradiant Energy Services, which provides water-management solutions, has secured financial backing from Turnbridge Capital to help fund US onshore growth. GES plans to deploy three service lines in major basins: Selective Chemical Extraction, a clean brine treatment for flowback and produced water; Carrier Gas Concentration, a mobile evaporative disposal service; and Free Radical Disinfection, a mobile disinfection service.
■ Field operations are underway for TGS’ first 3D seismic survey in the Permian Basin. The West Kermit survey will cover at least 150 sq mi of the Delaware Basin in Loving and Winkler counties, Texas. The TGS survey should help evaluate and develop multiple-zone potential including the Wolfcamp and Bone Spring intervals. The Norwegian geophysical company said data acquisition is expected to begin in early Q2 with final data from the high-resolution survey will be available to clients in Q4.
Rig utilization improved from 22% to 25% from Q3 to Q4.
In the YE16 results, Baker Hughes’ revenue was down 37.5% YOY from $15.74 billion to $9.84 billion. The oilfield services giant also reported a net loss of $2.74 billion in YE16 compared with $1.97 billion in YE15.
Craighead praised the company’s strategy as good for investors. “In the second half of 2016, we reduced annualized costs by nearly $700 million, exceeding our initial goal by almost 40%, paid down $1.0
billion in debt, repurchased more than $750 million in shares, accelerated innovation with nearly 70 new product introductions, and built new sales channels for our products and technology,” the CEO said in a statement.
However, his assessment for 1H17 has its share of dark clouds. Craighead said Baker Hughes forecasts declines in international activity with more severe declines deepwater. Onshore revenue in North America is expected to rise, but overcapacity will limit price increases. “As such, we remain focused on managing our costs and aggressively identifying revenue opportunities for our products and technology,” he said.
The last time Baker Hughes’ revenue rose sequentially was 4Q14, when revenue set a record of $6.64 billion for that quarter.
Merger with GE Oil & Gas expected to close in mid-2017.
Baker Hughes Q4 North American Results
Revenue $775 million Up 15% sequentially
Adjusted Operating Loss Before Tax
$56 million Improves $18 millionsequentially
Operating PBT Margin (7.2%) Up 375 bps sequentially
• Activity increase in U.S. onshore, seasonal activity uptick in Canada, and completions deliveries in the Gulf of Mexico
• Reduced losses driven largely by additional revenue and cost reductions, which were partially offset by Q3 non-recurring benefits
Source: Baker Hughes Jan. 26 Presentation via PLS docFinder www.plsx.com/finder
Baker Hughes posts sequential revenue Continued From Pg 1
Access PLS’ archive for previous oilfield services newsFor general inquiries, email [email protected]
Volume 07, No. 01 13 ServiceSectOrGE Oil & Gas makes $180MM service deal with Transocean
GE Oil & Gas has reached a $180 million service contract with Transocean, which will have GE providing condition-based monitoring and maintenance services on seven Transocean rigs over the next 10-12 years. The agreement should increase
productivity and lower operating costs for Transocean.
GE said its technologies will help Transocean with parts forecasting and service scheduling, which will allow the driller to better plan maintenance by considering the well conditions
instead of a calendar. “This agreement builds on the
new service model we introduced last year to address today’s industry shift toward maximizing productivity and lowering operating costs while also maintaining operating flexibility,” said Lorenzo Simonelli, president and CEO, GE Oil & Gas. “When cost and risk are at the top of operators’ minds, we share the responsibility by investing in equipment uptime and performance.”
The announcement did not mention the location of the seven rigs. Transocean has 60 rigs around the world.
In November, GE Oil & Gas agreed to merge with Baker Hughes. Regulatory approval is still needed. For more on GE, see PG. 1.
■ IKM has reached a deal with Subsea 7 to work on Culzean field in the North Sea near Aberdeen, Scotland.
Maersk Oil awarded a SURF contract to Subsea 7 to make and install equipment 90 m
underwater in the Culzean. Engineering work is underway for the project with the first stage of offshore operations to begin in Q2.
■ Maersk Drilling has entered into a new contract with Petrogas E&P Netherlands for the jackup Maersk
Resolute. The jackup will drill two wells in the A12 block of the Dutch continental shelf,
a job that should last 75 days. The contact includes an option for up to five additional wells. Operations are expected to start in June.
■ North Atlantic Drilling Ltd has been awarded a one-well contract for the
semi-submersible rig West Phoenix in the UK West of Shetland. The unit is a rig
type semi-sub rated for up to 10,000 ft of water. The contract is a continuation of West Phoenix's existing contract, and the total backlog is estimated to be $17 million.
■ Statoil has awarded a firm one-well extension plus one optional well for the jackup West Elara to North Atlantic Drilling. The agreement continues West Elara’s existing contract with Statoil and the backlog for the firm portion of the extension is estimated to be $10 million. Located in Norway, the West Elara has worked for Statoil since 2011. North Atlantic also announced it has secured a one-well contract for the semi-submersible West Phoenix for work in the United Kingdom West of Shetland. The contract extends the existing West Phoenix deal, and the total backlog is estimated to be $17 million.
Contracts
One year after shake-up, Aveda expanding againThe fortunes of Aveda Transportation and Energy Services were revived in
4Q16 as the Calgary-based oilfield hauler announced a wave of expansions including the reopening of operations in the
northeastern US.The company said it
had reopened and re-staffed in Williamsport, Pennsylvania, through the informal sponsorship of a major customer. Aveda’s 2017 plans include adding a satellite yard in the northeastern US, which it had left due to declining rig counts.
Aveda has opened a new terminal in Casper, Wyoming, which will become fully operational in January. In addition,
Aveda’s expansion of operations in Pecos, Texas, to a second terminal is proceeding as planned, the company said. As part of the company’s goal to increase service to the Delaware Basin, Aveda spent ~$1.7 million to buy two 100-ton crawler cranes and two large loaders for the Pecos expansion.
The hauler also said it had activated 50 trucks and 72 trailers that were part of the Hodges acquisition in 2015. Through these moves, Aveda said it has the largest fleet of rig-moving equipment as well as one
of the most modern in North America.Aveda also shared preliminary
revenue results for October ($9.1 million), November ($10.7 million) and December ($11.2 million), a total of $31.0 million. The company said more than $2.0 million of the December revenue came from the Williamsport operations. 4Q15 final revenue was $17.5 million.
The company launched an aggressive cost-cutting plan in 4Q15 and also shook up its senior management, hiring Ronnie Witherspoon as president and CEO in February 2016.
Moved most of Houston office to Calgary in 2015 cuts.
Pennsylvania operations re-staffed as company returns to US northeast.
Opened terminal in Casper, Wyo., and expanding in Pecos, Texas.
GE providing new service model based on conditions not event/calendar.
Service contract covers seven rigs in undisclosed locations.
Developments & Trends
Aveda Q4 revenue nearly doubled from last year.
GE-Transocean contract to run for as long as 12 years.
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SOUTH TEXAS PROPERTIES~250-Producing Wells. ~51,000-Net Acres.EAGLE FORD SHALEAll Rights & All Depths PPLower Eagle Ford, Austin Chalk & BudaAcreage Is 93% Held By Production.>275 Gross Drilling Locations Identified. 4,400Operated & NonOperated WI Available BOEDCurrent Net Production: 4,400 BOEDProduction Is >90% Oil12-Mn Cash Flow: ~$3,750,000/MonthCONTACT AGENT FOR MORE INFOPP 2560DV
SOUTH TEXAS SALE PACKAGE93,381-Contiguous Net Acres.LEE & BASTROP COUNTIESCARBONATE RICH EAGLE FORD PP32,000-Net Acres in ‘’Development Core’’>250 Operated Horizontal Locations.26-HZ Wells Completed Across PositionAvg 6,800 ft. Stimulated Lateral Length 81589% OPERATED WI; 79% NRI BOEDNet Production: 815 BOED (94% Oil)Est 2017 Cash Flow: $1,916,666/MonthTotal Developed Reserves: 6.7 MMBOETotal Developed PV10: $106,000,000AGENT WANTS OFFERS FEB 28, 2017PP 2610DV
TEXAS & LOUISIANA SALE PACKAGE24-Producing Wells. ~4,231-Net Acres.PROLIFIC NORTH MILTON FIELDSTACKED PAY OPPORTUNITY PPWilcox Sands. 9,800-15,000 Ft.-- in Wilcox L-2, L-4, L-5, L-7 & L-8 Sands 3.3Upside in Opossum & Pinehurst Fields MMCFED100% OPERATED WI; 81.2% NRIMay 2016 Net Production: 3.3 MMCFEDTotal Proved Reserves: 20,625 MMCFECONTACT AGENT FOR UPDATEPP 1891DV
JASPER CO., TX PROPERTY1-Producing Well. 60-Acres. PPProducing From Y-8 Sand.Leases Are Surface To 7,710 Ft. 30100% OPERATED WI; 73% NRI BOPDAvg Gross Production: ~15 BOPDAvg Lease Operations: ~$4,000/MnCONTACT SELLER FOR MORE INFOPP 1213DV
CALCASIEU PH., LA PROPERTY14-Wells. 735-Gross/Net Acres.GILLIS-ENGLISH BAYOU UNITOLIGEOCENE FRIO PLAY PPHackberry Frio 1-4 Sands At 9,800’-10,000’100% OPERATED WI; 81.35% NRI ~120Net Production: 45 BOPD & 450 MCFD BOEDMonthly Cash Flow: ~$100,000+/MonthNet Well Rsrvs: 178 MMBO & 1,753 MMCFProject Rsrvs: 1,396 MBO & 12,511 MMCFCONTACT SELLER FOR MORE INFOPP 2716DV
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■ Canadian Equipment Rentals announced that former COO Skip Kerr has died. Kerr passed away on Dec. 27, 2016 after a lengthy battle with various health ailments.
■ Flotek Industries has appointed Michelle Adams to its board of directors. Adams is currently worldwide VP for IBM Watson Platform. Before joining IBM in 2005, she began her career in software sales working with pre-IPO companies.
■ Danny Jimenez has been named CEO of Gradiant Energy Services, a spin-off owned by original parent Gradiant Corp. and PE firm Turnbridge Capital. Jimenez will lead GES from its new headquarters in Denver. He has held various leadership and operational roles at several other oilfield services companies. GES became a Gradiant subsidiary in Sept. 2016.
■ Precision Drilling announced that Niels Espeland, president, international, has retired effective Precision Drilling has announced that President, International, Niels Espeland has retired effective immediately. Espeland, who has 35 years of industry experience including five at Precision, will continue to serve the Calgary-based company as a consultant. President of Drilling Operations Gene Stahl will take full responsibility of Precision’s global drilling operations.
■ Select Sands COO Zigurds "Zig" Vitols will replace replacing Rasool Mohammad as president and CEO. Mohammad will become COO of Select Sands and president of sub American Select.
“Zig's skill set and experience will serve the company well as we work to achieve full production status in 2017,” Mohammad said. “More importantly, we continue to share a common vision of what the company can achieve in the coming years.”
Mohammad will relocate from Vancouver to Houston this year while Vitols will remain in Houston.
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Halliburton has announced a technology cooperation agreement with Petrobras designed to advance collaboration in a diverse set of projects targeting complex reservoirs such as deepwater pre-salt and mature fields. The companies said the multi-
year agreement will facilitate the development of innovative solutions in geophysics, drilling and completions, reservoir characterization, well
testing, flow assurance and production. The project portfolio will focus on three main challenges: reducing well construction investment, long-term reservoir monitoring and increasing well productivity. The latest project collaboration will use Halliburton's Brazil Technology Center in Rio de Janeiro.
This is the second phase in the technology cooperation between Halliburton and Petrobras in Brazil. During the first phase, which began in 2009, the companies collaborated on 11 projects. That agreement iincluded pre-stack seismic attributes for carbonates, new algorithms for better estimation of fluid sampling contamination and a new cementing system for salt and CO2 environments. “Collaboration is a Halliburton strategic mainstay that drives our engagement with customers to develop new technologies,” said Francisco Tarazona, VP of Halliburton Latin America. “This agreement will enable experts from both companies to share knowledge and accelerate the development of tailored solutions.” For more on HAL, see PG. 1.
■ Saudi Aramco has extended the contracts of two Noble Corp. rigs offshore Saudi Arabia for five years.
The Noble Scott Marks has been extended until July 2022 while the Noble Roger Lewis
has been extended until March 2022. The report also said that the Noble Max Smith off the coast of Brunei could finish its project a year early and might be available in 1H18.
■ Statoil issued a one-well contract extension with Fred. Olsen Energy
sub Dolphin Drilling. The 35-day extension for the semi-submersible
drilling rig Bideford Dolphin on the Norwegian Continental Shelf is valued at $6.1 million.
■ A subsidiary of TechnipFMC will provide well intervention work for INPEX Operations Australia and the Ichthys LNG Project. TechnipFMC will deploy its deepwater riserless light well intervention stack and two Schilling Robotics ROVs to work on up to 20 subsea wells in the Ichthys field,
~ 220 km offshore of Western Australia starting this year.
Contracts
2nd phase in the tech. cooperation between Halliburton & Petrobras.
Schlumberger to submit study of Iranian oil fields Schlumberger will submit in February its proposal on how to develop three
oilfields in Khuzestan province, part of the oilfield service giant’s return to Iran. The Houston-based company left Iran in 2010 to comply with European sanctions.
National Iranian South Oil Co. and Schlumberger signed the agreement in November, under which Schlumberger would study the
Shadegan, Rag Sefid and Parsi oilfields, according to the Financial Tribune of Tehran.Schlumberger will submit its technical findings to NISOC and offer a master plan
for the fields in Khuzestan, which borders Iraq and the Persian Gulf. The MOU does not commit Schlumberger to the execution of the plan. While most other countries have lifted their sanctions on Iran’s energy industry, the US has a ban on companies investing in Iranian oil fields. Schlumberger’s headquarters are in Houston, but the company is incorporated in the Dutch Antilles.
In November, France’s Total, China National Petroleum Corp. and Iran’s Petropars reached a $6 billion deal to develop part of South Pars gas field in the Persian Gulf, and Norwegian operator DNO ASA has signed a MOU to conduct a development study for the Changuleh oil field on the Iran-Iraq border.
SapuraKencana and Proserv join forces in Asia PacificSapuraKencana Technology and Proserv are joining forces in an effort to provide
enhanced technology services to clients in Asia Pacific. The companies said they will jointly provide a range of services across the drilling, production, maintenance and decommissioning market sectors with a strong focus on subsea production and subsea
maintenance services. SK Technology is a subsidiary of Malaysia-based SapuraKencana Petroleum Berhad.
The companies said the partnership will allow them to combine Proserv’s suite of advanced subsea production equipment and controls and SK Technology’s technical support, resources and assets. Proserv CEO David Lamont said, “Our specialist capabilities complement SKPB’s diverse range of services, allowing us to further enhance our offering to clients particularly in the subsea services sector, whilst continuing to grow our presence in Malaysia and throughout the Asia Pacific region.”
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January 29, 2016
InternatIonal ScoutServing the international upstream industry with information, analysis & prospects for sale Volume 08, No. 02
All Standard Disclaimers & Seller Rights Apply.
CARIBBEAN LEASES 4-Key Blocks.FOR SALE OR JV DVOFFSHORE GAS PLAY2014 3-D Seismic On Blocks. CARIBBEANGas Infrastructure Nearby.Analogous To Major Fields In Trinidad.OPERATED WI AVAILABLEEstimated Recoverable: 15+ TCFDV 5350L
SOUTH AMERICA OPPORTUNITY Massive Acreage Position.SHALLOW ONSHORE2-D Seismic Defined. EXOffsets Prolific Basin.Emerging Province. Low Cost.Access To Local Markets. EXPLORATIONOPERATED WI AVAILABLEOperatorship To Buyer If Qualified.$15 Oil Breakeven Projected.EX 1033L
FEATURED DEALS
Eni’s third West Hub field on stream in Angolan deepwater Eni started up the Mpungi oil field offshore Angola in Block 15/06. Mpungi is part of
the West Hub development project, which lies 350 km northwest of Luanda, and its start-up follows that of Sangos field in November 2014 and Cinguvu field in April 2015. With three fields now producing to the N'Goma FPSO, West Hub’s output is projected to grow to 100,000 bo/d during 1Q16. The field was brought on stream on time and on budget.
Approved in 2010, West Hub taps or will tap Block 15/06’s Sangos, Cinguvu, Mpungi,
Mpungi North and Vandumbu fields. They hold a gross 3 Bbbl (24-34° API), all in Lower-Middle Miocene formations that feature normal pressure and temperature ranges. Of the oil in place, 850 MMbbl can be recovered via 21 planned wells, all producing to the project FPSO anchored at Sangos field. Future plans include the addition of the Mpungi North and Vandumbu finds after start-up of West Hub’s sister project, East Hub.
East Hub in turn aims to develop 230 MMbbl at the Cabaca Norte and Cabaca South East discoveries, which also lie in Block 15/06.
Premier expands Falklands potential with Isobel Deep re-drillOff the Falkland Islands, Premier Oil’s Well 12/20-2 re-drill confirmed the
Isobel Deep discovery as well as found pay in additional sandstones. Drilled to 3,014 m, the well intersected oil-bearing intervals in a number of reservoir sands between
2,564-2,861 m. No oil-water contact was detected by the deepened well, and Premier estimates that it has found gross oil pay of ~300 m. The partners will plug and abandon the well and combine these results with existing 3D
seismic to better estimate the size of the discovered reservoir.
Isobel Deep lies in the North Falkland Basin in the southern part of PL 004a, just 30 km south of Premier’s undeveloped, 400 MMbbl Sea Lion field in PL 032. In May 2015, exploration Well 14/20-1 reached 2,526 m in water 400-450 m deep and intersected the top 23 m of an oil-bearing reservoir in the F3 sands. The formation’s oil is similar to Sea Lion’s hydrocarbons (26-29°API), but the well registered higher-than-expected pressure that resulted in borehole influx.
ExxonMobil leads work in hot Guyanese offshoreOffshore work is on the decline most everywhere in 2016, but Guyana is
continuing to attract interest because of ExxonMobil’s Liza-1 discovery in the Stabroek Block. The supermajor will drill four wells there this year starting in
1Q16, assisted by more than 6,000 sq km of 3D data recently collected by CGG and Fugro. In addition to determining Liza’s
size, the campaign will target the separate Ranger prospect—an Upper Jurassic-Lower Cretaceous carbonate build-up with draped Lower Tertiary clastics that could support up to 20,000 bo/d per well.
Exxon has been tight-lipped about how much oil Liza-1 found, saying only that the well intersected a 90-m pay column. However, signs indirectly point to a substantial find. The Guyanese government estimates peg the find at 700 MMbbl-1.5 Bbbl, and officials have said hydrocarbons worth 12 times Guyana’s entire economy likely lie there. Another clue is that Exxon is reportedly fast-tracking development of Liza and is looking at a 60,000 bo/d early-production FPSO that would later be replaced by a 150,000-200,000 bo/d offshore unit.
Re-drill extends initial 23-m gross oil column to 300 m.
Start of Mpungi will bring West Hub to 100,000 bo/d during 1Q16.
Drilling program will size up Liza find in the deepwater Stabroek block.
Continues On Pg 10
Continues On Pg 6
Continues On Pg 10More listings at plsx.com/listings
Who dat?Readers will notice a change in the
mastheads for our international products. Changing the “Explorer” name to
“Scout” is the first step in bringing our international report in step with our U.S. reports, where we have been publishing Regional Scouts for three-plus years in plays like the Bakken and Eagle Ford. The new name is also an effort to dovetail our global E&P report with our
acquisition of Paris-based PetroWire last April, and PLS plans to integrate Twitter-like abstracts, original content and research archives in the perfect complement to the new (wire.PetroWire.com) and the old (traditional publishing).
Herein we are also adding new content like page 13, which shows additional permit data taken from PetroWire that might not be worthy of a story but interesting just the same.
Mardi Gras offers the promise that the good times will roll again.
A Unique & Valuable Timesaver!docFinder Plus is a proprietary database and web application that places more than a 1.5 million individual slides from over 50,000 industry PowerPoint presentations at your fingertips.
Now with Numerical Data Search The Advanced Search option now captures numerical data for 21 key industry statistics. Including lateral length, sand volumes, IP, EUR, well costs, IRR, API, B-Factor, wells on a map, etc. The module makes slides searchable by E&P metrics such as well economics, EUR, IP rates and wellbore characteristics. docFinder Plus is a must-have tool for oil and gas executives, financial professionals, explorationists, landmen, engineers and M&A teams offering immediate access to critical business information required for market analysis, peer-group studies, new trends, best-in-class producers and production anomalies.
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Volume 07, No. 01 17 ServiceSectOrTechnology
Exxon develops new technology to dehydrate natural gasExxonMobil has developed a technology that dehydrates natural gas using a
patented absorption system inside pipes and aims to replace the need for conventional dehydration tower technology. The company said the cMIST technology could
be deployed at both land-based and offshore natural gas
production operations.Exxon said the field-tested technology
more efficiently removes water vapor present during the production of natural gas—something typically accomplished using large and expensive dehydration towers. Removing water vapor reduces corrosion and equipment interference, helping to ensure the safe and efficient transport of natural gas through the supply infrastructure
and ultimately to consumers. The company said its cMIST system
reduces the size, weight and cost of dehydration, resulting in reductions of surface footprint by 70 percent and the overall dehydration system’s weight by half, which has significant added benefits on offshore applications. ExxonMobil has licensed the technology to the Chemtech division of Sulzer, a leading player in separation technologies, to facilitate deployment across the oil and gas industry.
Exxon has licensed the technology to the Chemtech division of Sulzer.
The deal is expected to close in mid-year. GE would have 62%WI in what would be the world’s second-largest oilfield service provider and equipment maker.
Bornstein said oil and gas is expected to deliver lower earnings in 2017, with E&P spending in the sector “flat to modestly up,”
and offshore drilling and subsea activity are likely to remain low.
“Increased activity in North America onshore and stabilization in the Middle East and Europe are needed to drive improvement in our shorter cycle and surface businesses in the second half,” the CFO said.
For YE16, GE revenue was $123.7 billion, an increase of 5% YOY. Net earnings posted an $8.5 billion gain in YE16 versus a $5.8 billion loss in YE15. The oil and gas segment showed $12.9 billion revenue (down 22% from YE15) and a $1.4 billion profit in YE16 (lower 43% from YE15). For more on GE, see PG. 13.
GE’s O&G equipment orders up Continued From Pg 1
GE Oil & Gas' YE16 profit fell 43% year over year.
• Segment margin (430) bps. as cost - out actions were more than o�set by volume and price declines
Source: GE
Technology replaces large and expensive dehydration towers.
Contracts
GE expects E&P spending in oil and gas to be 'flat to modestly up.'
PERMIAN BASINMIDLAND BASIN PROPERTIES33-Vertical Wells. 2,520-Net Acres (HBP)REAGAN & MIDLAND CO., TEXASLower Spraberry, Wolfcamp A & B PPUpside in Upper & Lower Spraberry,-- and Wolfcamp A, B, C & DInfield Development 80-100 LocationsOPERATED WI AVAILABLE 175Net Production: 175 BOED BOED40-50% IRR Across LeaseholdPDP Reserves: 419 MBOETotal Resource Potential: 23.4 MMBOECONTACT AGENT FOR UPDATEPP 2091DV
TEXAS & NEW MEXICO PROPERTY 41-Wellbores. 1,987-Net Acres.PERMIAN & DELAWARE BASIN PPMultiple Counties.Devonian, Wolfcamp & San AndresAvg 75% OPERATED WI; 54% NRI 100Est Oct 2016 Net Prod: 100 BOED BOEDNet P+P Reserves: 7.7 MMBOENet P+P PV9: $114,277,000ORIGINALLY Q4 2016 SALECONTACT AGENT FOR UPDATEPP 2172DV
TEXAS & NEW MEXICO ASSET SALE5-Producing Wells. 12,434-Net Acres.ANDREWS, GAINES & LEA COUNTIES PPCENTRAL BASIN PLATFORM265 Undeveloped Locations IdentifiedOPERATED WI FOR SALE ~300Current Net Production: 307 BOED BOEDEstimated 2017 EBITDA: $11,000,000Potential EUR: 570 MBOEAGENT WANTS OFFERS FEB 28, 2017PP 2849DV
ANDREWS CO., TX ASSET SALE73-Producing Wells. 17,458-Net Acres.CENTRAL BASIN PLATFORM PP162 Undeveloped Locations IdentifiedOPERATED WI FOR SALECurrent Net Production: 1,887 BOED ~1,900Estimated 2017 EBITDA: $31,000,000 BOEDPotential EUR: 365 MBOEAGENT WANTS OFFERS FEB 28, 2017PP 2851DV
LOVING CO., TX PROPERTY22-Producing Wells. ~1,477-Gross Acres.PERMIAN BASINSurface To Base Of Cherry Canyon PPTarget Depth 6,800 Feet~28 Locations To Develop On 20-Ac Spacing 70Develop Infill Drilling Locations On Lease BOEDAvg 76.8% OPERATED WI; 77.46% NRICurrent Production: 65 BOPD & 30 MCFDCONTACT SELLER FOR MORE INFOPP 2841DV
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MIDCONTINENTGRAYSON CO., TX PROPERTY86-Active Wells.BIG MINERAL CREEK FIELD PP29 Behind Pipe OpportunitiesEst Jan 2017 Net Cash Flow: $103,000 MIDCONNet Proved Reserves: 681 MBOE5 PUD LocationsCONTACT AGENT FOR UPDATEPP 2754
NORTH TEXAS PROPERTY SALE53-Total Wells. >2,500 Net Acres.PALO PINTO, PARKER, JACK PPBarnett Shale, Marble Falls, Strawn &Conglomerate At 1,000-6,000 Ft. BARNETTSignficant Marble Falls PUD Upside.84%-100% OPERATED WI; 60%-80% NRINet Production: 10 BOPD & 376 MCFDCONTACT SELLER FOR MORE INFOPP 1357
NORTH TEXAS SALE PACKAGE158-Producing Wells. 82,000-Net AcresFORT WORTH BASIN PPJACK & PALO PINTO COUNTIESMarble Falls & Barnett ProductionContiguous Acreage Held By Production.99% OPERATED WI; 78% NRI 3,600Net Production: 3,600 BOED BOED15% Oil, 40% NGL & 45% GasNet Cash Flow: $825,000/MonthAGENT WANTS OFFERS MID FEB 2017PP 2187DV
ATOKA CO., OK PROSPECT3-Active Wells. ~15,634-Net Acres.MIDCONTINENT PPBig Fork & Polk Creek ProductionUpper Polk Creek, Lower Womble, BigFork, Stanley & Novaculite Potential MIDCONNo Depth Limitations & Drilling ObligationsOPERATED WI FOR SALECONTACT AGENT FOR UPDATEPP 1903DV
CADDO CO., OK PROPERTY20-Active Wells. 1,576-Net Acres.SCOOP PLAY - CADDO FIELDProducing From Merchand At 6,500 Ft. PP60 Infill Locations.Defined By Subsurface Geology99% OPERATED WI; 79% NRI 280Net Production: 280 BOPD BOPDCash Flow: $375,000/MonthEst Net Reserves: 60 MBOEst Net Project Reserves: 1,213 MBOTotal Net PV10: $18,500,000CONTACT SELLER FOR MORE INFOPP 2732
PERMIAN BASINMIDLAND BASIN SALE PACKAGE90-Producing Wells. 10,487-Net Acres.DAWSON, MARTIN & ANDREWS CO., TXMiddle & Lower Spraberry, Wolfcamp PP-- A & B Shale Targets745 Drilling Locations Identified. ~1,2401-Operated Rigs Running. BOEDAvg 75% OPERATED WI; 75% NRIOctober 2016 Net Production: 1,239 BOEDTotal EUR: 2,755 MBOEORIGINALLY Q4 2016 SALECONTACT AGENT FOR UPDATEPP 1782DV
PECOS CO., TX SALE PACKAGE60+ Well Package. ~4,250-Gross Acres.PERMIAN BASIN PP49-Producing Wells. 1-SWD.17-NonProducing Wells w/Recompletion.~1,200-Net Acres Include Deep Rights. PERMIANUpside Potential.25-100% OPERATED WI; ~19-77% NRIGross Production: 24 BOPD & 235 MCFDORIGINALLY Q4 2016 SALECONTACT AGENT FOR UPDATEPP 1693DV
REEVES & PECOS CO., TX ASSETS10-Producing Horizontal Wells.PERMIAN BASIN PPHORIZONTAL WOLFCAMP SHALE6-Operated Wells. 4-NonOperated Wells.OPERATED & NonOperated WI WOLFCAMP75% Working Interest; 58.5% NRIGross Prod: 329 BOPD & 1,916 MCFD12-Mn Avg Net Income: $128,253/MonthCONTACT AGENT FOR UPDATEPP 2265
REEVES CO., TX PROPERTY SALE~10,000-Net Acres.SOUTHERN DELAWARE BASIN PPWolfcamp A/B/C, Bone Spring, Avalon.Attractive Blocked Up Acreage Position. ~1,600>500 Horizontal Drilling Locations. BOEDAvg ~80% OPERATED WI AVAILABLENet Production: ~1,600 BOEDCONTACT AGENT FOR UPDATEPP 1183DV
REEVES CO., TX SALE PACKAGE2-Producers. 9,050-Net Acres on Trend.PERMIAN - DELAWARE BASINMostly Undeveloped Acreage. PPMultiple Proven Wolfcamp Benches.Additional Upside in Bone Spring. 150All Depths Retained in Primary Term. BOEDPotential 350+ Horizontal Wolfcamp Wells100% OPERATED WI; 75% NRIGross Production: 150 BOEDCONTACT SELLER FOR UPDATEPP 2112L
PERMIAN BASINWEST TEXAS CO2 SALE PACKAGE57,000+ Gross Acres. CO2 Pipeline.YATES, GLSAU, KATZ & TALL COTTON PPResidual Oil From San AndresVarying Operated WI & NRI Available ~14,000Current Net Production: ~14,000 BOED BOEDTotal 3P Reserves: 240.9 MBOOriginal Oil In Place: 6,000+ MMBOCONTACT AGENT FOR MORE INFOPP 2506G
WEST TEXAS CO2 SALE PACKAGE405-Active Producers. 50,000+ Gross Ac.SACROC FIELD PPCanyon Reef Formation97% OPERATED WI; 83% NRICurrent Net Production: ~28,000 BOED ~28,000Gas Plant Production: ~30 MMCFD BOEDTotal 3P Reserves: 184.4 MBOEOriginal Oil In Place: ~2,800 MMBOCONTACT AGENT FOR MORE INFOPP 2505G
TOM GREEN & IRION CO., TX ASSETS114-Producers. 22,000+ Net Acres.PERMIAN BASIN EASTERN SHELFSTACKED PAY UPSIDE PPCanyon, Cisco, San Andres & EllenbergerClear Fork, Wolfcamp, Strawn & Cline>500 Vertical PUD Locations. ~860OPERATED WI FOR SALE BOEDProjected Dec 2016 Net Prod: 810 BOEDAverage Net Cash Flow LTM: ~$500,000/MnProjected Net Cash Flow: $650,000/MnCONTACT AGENT FOR UPDATEPP 2068DV
DELAWARE BASIN SALE PACKAGE5-Producing Wells. 20,462-Net Acres.REEVES & WARD COUNTY, TEXASAvalon, Upper Wolfcamp A & B Targets PPLower Wolfcamp B & 2nd Bone Spring760 Drilling Locations Identified.Avg 83% OPERATED WI; 75% NRI ~2,175October 2016 Net Production: 2,176 BOED BOEDTotal EUR: 2,061 MBOE (Wolfcamp A)Total EUR: 2,034 MBOE (Wolfcamp B)ORIGINALLY Q4 2016 SALECONTACT AGENT FOR UPDATEPP 1781DV
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Volume 07, No. 01 19 ServiceSectOr
ROCKIESWESTERN COLORADO PROPERTIES109-Total Wells.GARFIELD COUNTY PPPICEANCE BASINVarying NonOperated WI Available. PICEANCECurrent Existing Production.CONTACT SELLER FOR C.A. SIGNINGPP 1813
COLORADO & UTAH SALE PACKAGE190+ Wells. 68,334-Net Leasehold Acres.PARADOX BASIN PPPotential PUD Development.0.0439-7.5% ORRI AVAILABLE50-100% OPERATED WI; ~24-80% NRI ORRIGross Prod: 182 BOPD & 13,311 MCFDOperates ~262 Miles Of Gathering Pipelines.CONTACT AGENT FOR UPDATEPP 1963RR
WILLIAMS CO., ND PROPERTY6-Producing Wells. 1-NonProducing Well.BAKKEN - THREE FORKS PP4-Middle Bakken Wells. 3-Three Forks Wells.17 PUD Locations Identified.Varying NonOperated WI & NRI NONOPGross Prod: 1,877 BOPD & 4,341 MCFD10-Mn Avg Net Income: $15,159/MonthAGENT WANTS OFFERS FEB 22, 2017PP 2365DV
WEST COASTVENTURA CO., CA PROPERTYProducing Wells. PPSESPE/ BARDSDALE OILFIELDSOPERATED WI AVAILABLE 100Current Production: 100 BOPD BOPDCONTACT SELLER FOR MORE INFOPP 2947
MULTISTATE & CROSS REGIONWEST & SOUTH TEXAS PROPERTIES11-Total Wells. 1-SWD. ~867-Net Acres.HIDALGO & REAGAN COUNTIESPERMIAN BASIN - WOLFCAMP PPEllenburger, Wolfberry & Wolfcamp2-HZ Wolfcamp Wells Waiting On Comp.14 Additional HZ Wolfcamp Wells In 2017 NONOP12.5-25% NonOperated WI; 9-18.5% NRIForecasted Jan 2017 Net Prod: 0.39 BOPD,0.75 MCFD & 0.07 BNGLDAGENT WANTS OFFERS FEB 21, 2017PP 2641DV
ILLINOIS & INDIANA SALE PACKAGE9-Producing Wells. 1-SWD. 990-Net Acres.ILLINOIS BASIN PP20% Of Acreage Held By Production.100% OPERATED WI; 77.5% NRI UPSIDE6-Mn Gross Prod: 96 BOPD4-Mn Avg Cash Flow: $85,657/MonthCONTACT AGENT FOR UPDATEPP 2425DV
ROCKIESDJ BASIN ASSETS FOR SALE428-Total Wells. 67,496-Net Acres.LARAMIE CO., WY & WELD CO., CO PPNiobrara, Codell, D & J Sands Production96% Of Leases Are Held By Production.>2,000 Gross Undeveloped Locations. 1,200Avg 74% Working Interest; Avg 80% NRI BOEDCurrent Net Prod: 1,200 BOED (48% Oil)ORIGINALLY Q4 2016 SALECONTACT AGENT FOR UPDATEPP 2702DV
WILLISTON BASIN PROPERTY37-Total Wells.MONTANA & NORTH DAKOTA17-Operated Wells. 20-NonOp Wells. PPBakken, Dakota, Madison, Mission Canyon,NISKU, Ratcliffe, Red River & TylerOperated & NonOperated WI Available BAKKENGross Production: 478 BOPD & 160 MCFD3-Mn Avg Net Cash Flow: $105,263/MnORIGINALLY Q4 2016 SALECONTACT AGENT FOR UPDATEPP 1593
RIO BLANCO CO., CO ASSETS123-Active Wells. ~25,000-Net Acres.WHITE RIVER DOME PPRights Are Mostly Surface To Mesa VerdeAcreage Is 98% Held By Production.41-High Graded 40-Acre Drilling Locations MESAAvg 99% OPERATED WI; 83% NRI VERDECurrent Production: 60 BOPD, 5 MMCFD& 180 BNGLDProjected 2017 Cash Flow: $71,250/MnCONTACT SELLER FOR MORE INFOPP 2614DV
MIDCONTINENTOKLAHOMA NONOP & MINERAL SALE71-Wells. ~5,413-Net Acres. 1,259-NMA.BLAINE, CANADIAN, DEWEY,-- AND KINGFISHER COUNTIES PPCORE STACK PLAYMeramec, Osage, Volatile, Woodford Upside ~2,07555+ OCC Work-In-Process Units BOEDNonOperated WI For SaleCurrent Net Production: ~2,075 BOEDAGENT WANTS OFFERS FEB 17, 2017PP 2815M
OKLAHOMA PROPERTY FOR SALE89-Total Wells. ~2,366-Net Acres (HBP).ANADARKO BASIN - STACK & SCOOPChester, Hunton, Mississippian & Red PP-- Fork Production0.603 ORRI Included In Property NONOPAvg 11.33% NonOperated WI; 9.7% NRIJan 2017 Bet Prod: 45 BOPD, 453 MCFD& 6.7 BNGLDJan 2017 Net Cash Flow: $91,951/MnCONTACT AGENT FOR UPDATEPP 2740RR
TEXAS CO., OK PROPERTY159-Producing Wells. 129,000-Net Acres.ANADARKO BASIN PPAcreage 100% Held By Production.Council Grove, Morrow & CherokeeLansing, Marmaton, Keyes, Topeka & ANADARKOToronto. Target Depth <7,000 Ft.Net Prod: 58 BOPD, 2,380 MCFD 57 NGLsProjected Cash Flow: $140,000 MnCONTACT AGENT FOR UPDATEPP 2126DV
EASTERN & APPALACHIA BASINAPPALACHIA BASIN PROPERTIES7,900-Active Wells. 494,229-Net Acres.MULTIPLE EASTERN STATESMarcellus & Utica Deep Rights Include PPDeep Rights To New Albany & ChattanoogaAvg 825 OPERATED WI; 88% NRI 45Net Production: 45 MMCFED (95% Gas) MMCFEDEst Operating Cash Flow: $3,083,333/MnPDP PV10: $209,000,000AGENT WANTS OFFERS MAR 1, 2017PP 2445DV
PENNSYLVANIA & NEW YORK ASSETS~1,500-Active Wells. ~189,000-Net Acres.UPPER DEVONIAN FIELDS PPFee Surface, Mineral & Royalty Acres.Bradford Formation ProductionShallow Rights Only, Majority From ~400-- Surface To Base Of Elk Formation. BOEDOPERATED WI AVAILABLENet Production: ~400 BOED (~60% Oil)AGENT WANTS OFFERS FEB 16, 2017PP 2175G
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