| April 26, 2010
Rig Utilization Mobile rig utilization in the Gulf of Mexico was slightly down this week. Total fleet utilization was 62.5% with 75 of 120 mobile rigs under contract or committed for work. Marketed utilization, which excludes those cold stacked and other non-marketed rigs rose slightly to 89.2% with 75 of the 84 units under contract or committed for work. Jackup utilization dropped last week as one uncommitted rig began tow to the US Gulf from Venezuela, another unit had its contract switched to alternate rig and one previously idle rig went back to work. As a result, fleet utilization fell to 50.6% with 41 of 81 jackups under contract. Marketed utilization, however, rose slightly to 82.0% with 41 of 50 rigs contracted. ENSCO had a rig get under tow from Venezuela, Seahawk had a previously awarded contract transferred to another of its rigs, and a Pride International jackup was removed from the marketed fleet. Total and marketed utilization for the floating rig fleet remained at 100% with 26 semis and 7 drillships under contract or committed for work. The semisubmersible fleet had one addition and one loss for a net gain of zero. The newbuild, ENSCO 8502 got under tow from Singapore, but that was offset by the loss of Transocean’s Deepwater Horizon. Headline News Transocean, Ltd.’s semisubmersible rig Deepwater Horizon sank on April 22 after experiencing a fire and explosion earlier last week. The response team was not able to stem the flow of hydrocarbons prior to the rig sinking. Transocean said 11 crew members are presumed dead and search and rescue efforts have been suspended. The rig was working for BP in Mississippi Canyon 252 at the time of the incident. The Minerals Management Service (MMS) has taken the first step for leasing a wind energy project on the Outer Continental Shelf under the framework established by the Obama Administration, issuing the nation’s initial Request for Interest for renewable energy development off the coast of Delaware. Delaware officials have approved a proposal by Bluewater Wind Delaware, LLC for the construction of a new power plant to sell up to 200 megawatts of power from an offshore wind farm to the state’s largest utility, Delmarva. Bluewater Wind Delaware, LLC is still required to apply to the Minerals Management Service for an offshore lease, which may entail competing with other companies if competitive interest exists. Operator News Noble Energy, Inc. reported the Double Mountain exploration well in the deepwater Gulf of Mexico reached the targeted Lower Miocene objective and found noncommercial quantities of hydrocarbons. Drilled to TD 33,815 feet on Green Canyon 555, the well is currently being plugged and abandoned. BHP Billiton operated the well with 70% interest and Noble Energy had the remaining 30%. Callon Petroleum Company announced the following personnel appointments. Gary Newberry has been named Vice President, Production and Development; Gregory Hepguler has been named Senior Reservoir Engineer; April Coker has been named Development Geologist; John Becher has been named Senior Explorationist; John Beddo has been named Drilling and Production Superintendent; and Eric Williams has been named Manager, Financial Reporting. ATP Oil & Gas Corporation announced that subsequent to its initial startup at the Telemark Hub, it has received approval from the Minerals Management Service for the commingling of two zones at the Atwater Valley 63 #4 well. Operations will commence on the Mississippi Canyon 941 #3 well with completion estimated for later this quarter. ATP owns a 100% working interest in the Telemark Hub and is the operator. Driller News ENSCO is believed to have a Letter of Intent (LOI) for jackup ENSCO 99. While specifics are not known, it is believed to be a one-well deal that would begin around mid-June after the current and follow-up contracts with ExxonMobil and Nexen are completed. Also, jackup ENSCO 68 is now under tow back to the U.S. Gulf, with arrival expected around mid-May. While the rig has no commitment currently in place, it is rumored that the contractor is working on a deal. Details on both rigs will be reported as they become available. Diamond Offshore reports that operations taking longer than expected have pushed out end dates for two jackups. The Ocean Columbia was slated to end its initial four-well program with Chevron in the first-half of May, but work will extend until mid-June. Rumors indicate Chevron will extend the contract, but an agreement is not in place. The six-well contract for the Ocean Scepter with Arena Offshore will run to early August, about 30 days longer than original plans. Rumors indicate Arena may be want the rig for more work, but some reports say Diamond may bid the rig in Mexico. However, with the rig not available for the July 1 start date of the specific program, it is unclear whether Diamond might go after another of the five tenders or keep the rig in the Gulf. The July 1 program for Pemex runs for 1,039 days while the remaining four range from 252 to 465 days. ENSCO, plc reported net income of $190 million on revenues of $449.4 million for the three months ended March 31 compared to income of $285.1 million on revenues of $499.9 million for the year earlier period. Diamond Offshore reported net income of $290.9 million on revenues of $859.7 million compared to net income of $348.6 million on revenues of $885.7 million for the first quarter 2009. Noble Drilling reported earnings of $371 million on revenues of $809 million versus earnings of $414 million on revenues of $872 million in the first quarter 2009. Nabors Industries reported first quarter 2010 net income of $40.2 million on revenues of $905.7 million compared to net income of $184.4 million on revenues of $1.2 billion for the first quarter of 2009. Seahawk Drilling reports several new contracts and changes to its jackup fleet. First, an option well recently exercised by Castex Energy for the Seahawk 2601 will now be done by the Seahawk 2001. The rig should move to location around May 7 after the current contract with Energy XXI is completed. That swap was made after Seahawk was forced to switch the 2601 for its 100-day plus options contract with Hilcorp Energy. Drilling in South Marsh Island 77 will begin in the first-half of May after Walter O&G completes its contract with the rig. The work was originally scheduled for the Seahawk 3000, but operations were halted while the rig was jacking up on location. It will be moved later this week to South Marsh Island 1 for further repairs to the jacking system. Seahawk says work should be completed around May 18 and it is understood the contractor is close to signing an alternative contract for the rig. The company has also secured a follow-up contract for Seahawk 2007 with Breton Energy. The one-well plus two options contract in West Cameron 171 will start in mid-July, with operations scheduled to last 35 days. The rig is now in High Island A-176 on its contract with Mariner Energy. The Seahawk 2500 began today its 30-day ADTI turnkey well for Contango Operators in Ship Shoal 263. The rig will go to Main Pass 120 and 122 for a three-well, 70-day contract with Arena Offshore next. With the two jobs, the rig is tied up now to early August. The Seahawk 2600 has also moved, now on location in North Padre Island 975 for the start of a three-well plus one option contract with Peregrine O&G. The 60-day program is comprised of two wells there and one in High Island A-268. The option, if exercised, would be in the Galveston area. The firm part of the contract will take the rig to late June. Hercules Offshore has secured a 75-day contract from Apache. Jackup Hercules 200 is now under tow to Eugene Island 224 to begin the three workover plus one drill well contract. The rig recently completed an ADTI turnkey well for Hall-Houston in Eugene Island 227. The rig is next available in July. The company also reports that jackup Hercules 205 is now on location in West Cameron 431 to begin its 30-day well for Hall-Houston. The rig had been undergoing maintenance and repairs since returning from Mexico in March. Rowan has signed a contract with Energy Resource Technology (ERT) to use jackup Rowan Louisiana. The rig has just gotten onto location in Eugene Island 302 for a 30-day well. Depending on when operations are completed, the rig may move to nearby Eugene Island 304 for a 14-day P&A. The rig is then scheduled to go to Eugene Island 26 for a 180-day well with McMoRan. Meanwhile, jackup Rowan Alaska still has two-to-three weeks before it finishes up work for Devon Energy in Eugene Island 337. It is understood Rowan has a 90-day follow-up commitment for the rig, but that the location may not pass engineering criteria for hurricane season. A final determination is expected to be reached within the next week or so. Northern Offshore, Ltd. has entered into a $120 million Secured Revolving Credit Facility maturing in September 2011 with The Royal Bank of Scotland, plc, Nordea Bank Norge ASA and NIBC Bank N.V. Separately, the company announced that its subsidiary, Northern Offshore U.K., Ltd, was awarded a contract with Perenco UK, Ltd. for the jackup Energy Enhancer. Service/Supply News Deep Down, Inc. has completed the design and has begun construction of a 3,200 metric ton Carousel System, which is scheduled for completion early in the third quarter of 2010. Upon completion the Carousel System will be located in the Gulf Coast, to facilitate the handling of umbilicals from transportation vessels onto the Carousel, and with the ability to store up to three separate steel tube umbilicals for projects in the region. In addition, the company has received a Letter of Intent (LOI) for an order valued in excess of $4 million for installation equipment, surface and subsea hardware in West Africa. The majority of the work is to take place in the third quarter of 2010. Global Industries, Ltd. announced that C. Andrew Smith has been named Senior Vice President and Chief Financial Officer of the company effective April 26, 2010. In his new role, Mr. Smith will be responsible for financial reporting, accounting, tax, treasury, internal audit and investor relations and will report to John Reed, Chief Executive Officer. FMC Technologies, Inc. has signed a multi-year frame agreement with BG Norge, a subsidiary of BG Group, to provide subsea systems for offshore projects. The five-year contract includes provisions for two additional five-year extensions. Oceaneering International, Inc. announced the appointment of Knut Eriksen as Senior Vice President, Subsea Products. |