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  • Impacts of Recent E&P Deals on Unconventional Drilling

    With the latest flurry of E&P deals (Statoil-Brigham, Kinder Morgan’s impending sale of El Paso E&P)—and still more to come—what might be the impacts of M&A action would be to unconventional drilling? The Unconventional Drilling Report compared rig counts pre- and post-deals for other recent E&P deals focused primarily on unconventional plays and concluded:  Not much. ExxonMobil’s U.S. land rig count has scarcely budged since it acquired XTO, averaging 68 vs. their pre-acquisition tallies of 7 and 64, respectively. Post-acquisition Chevron has averaged 20 rigs since closing on Atlas vs. their respective pre-deal averages of 8 and 7. BHP has averaged 25 after closing on Petrohawk vs. pre-deal average tallies of 2 and 18, respectively. The biggest post-deal traction for bolstering rig counts has come not from outright acquisitions but from joint venture deals, namely Chesapeake’s, whose rig count jumped from a pre-JV 120 to an average 140 since the last JV closed (and recently peaked at 154). It will climb still further after an imminent JV closes on Chesapeake’s Utica Shale acreage. 

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  • BP Announced Drilling of Well in Mad Dog Field

    BP, PLC announced the drilling of a successful appraisal well in a previously untested northern segment of the Mad Dog field. The well, drilled by BHP Billiton on behalf of unit operator BP, is located on Green Canyon Block 738 in about 4,500 ft of water. The well encountered about 166 net ft of hydrocarbons in the objective Miocene sands and discovered an oil column of more than 300 ft. Pending confirmation, total hydrocarbons in place in the field are now estimated at 4 billion barrels of oil equivalent.

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  • Offshore Operator News

    Anadarko Petroleum Corporation has issued a letter of intent to Technip for the engineering, construction, and transport of a 23,000 ton truss spar hull for its Lucius field development in the GOM’s Keathley Canyon area. This field is located in approximately 7,100 feet of water. The letter of intent allows Technip to begin preliminary work on the project, including purchase of long-lead items for the hull in advance of the planned sanction date of December 2011.

     

    BHP Billiton, a significant player in the deepwater Gulf of Mexico, announced that all conditions have been satisfied surrounding the closing of the tender offer to acquire all outstanding shares of the common stock of leading onshore independent Petrohawk Energy Corporation for $38.75 per share.

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  • Upstream M&A Push in Full Swing

    Recent events support the view that the latest upstream M&A push is in full swing, according to The Land Rig Newsletter’s Biweekly Report. Of course, the elephant in the room here is BHP’s proposal to acquire Petrohawk for $12 billion:  a shot across the bow of the other non-U.S. international oil companies looking into U.S. unconventional plays that says, in effect:  Joint venture deals with U.S. independents won’t suffice any more vs. equity deals. The JV deals clearly have accelerated drilling in the key unconventional plays. The big carries in those deals have enabled a lot of E&D capex and drilling that would not have happened at the same pace otherwise. But it’s a good question whether the same thing will happen with outright company acquisitions. The 1990s merger boom actually reduced drilling, chasing some E&P capex out of the industry as companies struggled to service debt loads while digesting their acquisitions. It’s doubtful that will happen again, but the current M&A surge leads one to think that a repeat of the JV-induced drilling spurt isn’t a slam-dunk scenario.

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  • Three Operators Announce Recent Deepwater Discoveries

    Three major operators, Exxon Mobil Corporation, Royal Dutch Shell, plc, and BHP Billiton Petroleum, have announced recent discoveries and/or developments in the deepwater Gulf of Mexico. These projects are the result of resuming deepwater drilling following the moratorium put in place in May 2010 after BP, plc’s Deepwater Horizon incident.

     

    Exxon Mobil Corporation announced the KC 919 #3 wildcat well confirmed the presence of a second oil accumulation in Keathley Canyon 919 in 7,000 feet of water. The well encountered more than 475 feet of net oil pay and a minor amount of gas. The company estimates a recoverable resource of over 700 mmboe combined in its Keathley Canyon blocks, reporting that more than 85% of the resource is oil with additional upside potential. Other interest owners include Eni Petroleum US, LLC and Petrobras America, Inc.

     

    Royal Dutch Shell, plc announced a multi-billion dollar investment to develop its Cardamom oil and gas field in the deepwater Gulf of Mexico. The Cardamom project is expected to produce 50,000 boe/d at peak production and more than 140 MMboe over its lifetime. As a result of today’s final investment decision, Shell will move ahead with further development drilling and installing undersea ...

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  • MWCC Grows to Ten Members

    The Marine Well Containment Company (MWCC) announced that its membership has grown to 10 members at the conclusion of the company’s formation period. The MWCC member companies are now Chevron, ConocoPhillips, ExxonMobil, Shell, BP, Apache, Anadarko, BHP Billiton, Statoil and Hess. These 10 companies operated approximately 70 percent of deepwater wells drilled in the U.S. Gulf of Mexico between 2007 through 2009.

     

    McDermott International, Inc. announced that one of its subsidiary companies was awarded fabrication and installation work from Chevron U.S.A., Inc. to support the development of the Jack and St. Malo fields.

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