Should industry be alarmed by falling oil prices? IEA’s plan to draw down 60 million barrels of emergency oil stocks (including 30 million barrels from the U.S. SPR) pushed Nymex crude futures to their lowest level of the year. The IEA action is a response to recent OPEC disarray over whether or not to make up the Libyan shortfall.

 

The Land Rig Newsletter team, in the latest issue of the Biweekly Report, contends that ultimately the impact on U.S. liquids drilling will prove to be inconsequential in the greater scheme of things. First, Saudi Arabia has already signaled its intent to unilaterally and indefinitely offset the loss of Libyan supply despite OPEC’s lack of cohesion on the issue. In terms of overall market concerns, the move simply forestalls any Saudi urgency to ramp up supply. Second, the main driver in U.S. liquids drilling is not high oil prices but surging demand for NGLs. Thanks to growing supplies of low-cost ethane feedstock spawned by the liquids drilling boom, the U.S. is enjoying a spike in exports of petrochemicals.

Baker Hughes, Inc. announced that Adam B. Anderson will be appointed Baker Hughes Vice-President, Investor Relations, effective July 1, 2011.

 

Dril-Quip, Inc. announced that one of its subsidiaries in Singapore has been awarded a $39 million contract by Murphy Sabah Oil Company, Ltd. to supply drilling and production equipment for the Kikeh dry tree spar platform located offshore Malaysia.

ABS surveys and repairs on jackup Hercules 120 are now scheduled to be completed in mid-July, but the rig may not return to its contract with Chevron Corporation until early September or October. Chevron picked up the Hercules 201 as a substitute rig, and that contract will not be completed until early September if an outstanding 30-day option on the rig is not exercised. Hercules Offshore, Inc. says it will market the Hercules 120 to other operators during the gap should Chevron opt to not resume the contract in mid-July. The firm portion of the Hercules 120 contract does not end until December 31, but Chevron also has two, six-month priced options available should it choose to exercise them. Meanwhile, Rooster Petroleum, LLC will pick up jackup Hercules 150 for a 25-day well in Eugene Island Block 28 in mid-August. The rig will finish its current contract with Hilcorp Energy Company in late July, after which it has a 14-day shipyard stay scheduled. The new work now keeps the rig employed into the first week of September. Apache Corporation also has exercised an option to keep jackup Hercules 200 for an additional 60 days, with wells in West Cameron Block ...

ATP Oil & Gas Corporation has priced a public offering of 1,500,000 shares of Series B 8.00% convertible perpetual preferred stock. The company has also granted a 30-day option to the underwriters to purchase about 225,000 additional shares of convertible perpetual preferred stock to cover any over-allotments. ATP is using a portion of the net proceeds of this offering to buy a capped call transaction.

 

Endeavour Energy UK, Ltd. awarded Technip an engineering, procurement, and construction contract worth about $100 million for the East Rochelle oil field development in the U.K. North Sea.

Joy Global, Inc. has completed the acquisition of LeTourneau Technologies, Inc. from Rowan Companies, Inc. for $1.1 billion in cash. LeTourneau is a leader in the manufacture of jackup rigs and ancillary equipment for the oil and gas drilling industries, among other lines of business.

Total mobile rig utilization in the Gulf of Mexico dipped below 50% this week. Currently, 60 of 125 rigs are under contract or committed for work, for utilization of 48%. Marketed utilization, which excludes cold stacked and other non-marketed U.S. Gulf of Mexico rigs, also declined—to 81.1%, with 60 of 74 rigs under contract.

 

Within the jackup fleet, overall, two previously contracted units were released while one idle rig received a contract. As a result, fleet utilization now stands at 39.3%, with 33 of 84 rigs under contract or committed for work. Marketed utilization dropped to 75%, with 33 of 44 units contracted.

 

Floating rig utilization saw no changes again this week. Overall, 28 of 34 rigs are under contract, for utilization of 82.3%, while marketed utilization is 93.3%, with 28 of 30 rigs under contract.

 

Total Platform rig fleet utilization did not change for the week. Currently, 23 of 52 units are under contract, for utilization of 44.2%. Marketed utilization rose slightly, as one rig was removed from marketed status. Currently, 23 of 35 units are contracted, for utilization of 65.7%.

 

Inland barge utilization is unchanged this week. Total fleet utilization remains at 42.4%, with ...