| September 13, 2010
Rig Utilization Mobile rig utilization in the Gulf of Mexico dropped slightly this week. Total fleet utilization stands at 51.7% with 62 of 120 mobile rigs under contract or committed for work. Marketed utilization, which excludes cold stacked and other non-marketed rigs, dropped to 76.5%, with 62 of 81 rigs under contract. Jackup fleet utilization also dropped slightly from the prior week. Total utilization stands at 40.2% with 33 of 82 rigs under contract or committed for work. Marketed utilization decreased to 67.4% with 33 of 49 units contracted. Floating rig fleet utilization was unchanged this week. Currently, 28 of 32 rigs are under contract for utilization of 87.5%. Marketed utilization also remains the same at 90.3% with 28 of 31 units under contract. Platform rig fleet utilization is 29.4% with 15 of 51 units under contract, while marketed utilization stands at 42.9% with 15 of 35 rigs contracted. Inland barge utilization improved this week, however. Inland barge fleet utilization stands at 53.5% with 31 of 58 units under contract, while marketed utilization is 75.6% with 31 of 41 units under contract. Headline News Marathon Oil Corp. has ramped up production from its Droshky field to about 45,000 net boepd since the development first came online in July in 3,000-foot waters in Green Canyon Block 244. This production rate consists of about 39,000 bpd of liquid hydrocarbons and 39 MMcfd of natural gas. Three producing wells are tied back to Shell’s Bullwinkle platform, and a fourth is undergoing repairs. Marathon owns a 100% working interest in the development. Operator News BP started relief well drilling operations again from the Development Driller III, following the successful installation of a lockdown sleeve to secure the Macondo 252 (MC252) well’s casing hanger. The rig is drilling toward the MC252 well intercept point, currently about 50 feet below. Relief well operations will consist of drilling and ranging runs that will guide the rig’s drill bit to intercept the original well’s annulus. Following the intercept, heavy drilling mud and cement will be pumped into the annular space to complete the isolation of the MC252 well. Contango Oil & Gas reported that its current net production rate is 105 MMcfed. The company’s FY 2011 capital expenditure budget has been set at $60 million to drill up to four wildcat exploration wells in the Gulf of Mexico, pending permit approvals by the Bureau of Ocean Energy Management, Regulation, and Enforcement. Chevron Corp. has been granted approval by the Liberian government to acquire a 70% interest and operatorship in three deepwater blocks offshore Liberia. The blocks, LB-11, LB-12, and LB-14, cover a combined area of 3,700 square miles. Under the agreement, Chevron’s Liberian subsidiary will conduct a three-year exploratory program that is expected to begin in the fourth quarter of 2010. Saratoga Resources, Inc., through its wholly owned subsidiary, Lobo Operating, Inc., acquired S.L. 20433, 20435, and 20436 at Louisiana’s State Lease Sale held September 8 in Baton Rouge. The leases are located in Breton Sound Blocks 18, 19, 50, and 51. Driller News Long-standing rumors have been confirmed regarding Transocean, Ltd.’s drillship Deepwater Americas. It is understood the rig will depart the U.S. Gulf of Mexico for Egypt in about a week. The rig, which is under contract with Statoil AS to October 2013, recently completed a test of its riser system and is now back in Grand Isle Block 71 to complete load-out. It is unclear at this time what the program off Egypt will entail, but details will be reported as they become available. The departure will mark the fourth floating rig to leave the gulf since the deepwater drilling moratorium was instituted in May. Jackup Rowan Gorilla II completed its 14-day workover with Energy Resource Technology GOM in Vermilion Block 348 and was released over the weekend; the rig is now at Rowan’s facility in Sabine Pass. However, it is understood the company is in discussions with multiple operators regarding potential work, and expectations are for a contract to be in place shortly. Jackup ENSCO 99 has begun its option well in West Delta Block 30/45 for Nexen Petroleum U.S.A., Inc., with operations expected to be completed in about two weeks. ENSCO then will take the rig to Stone Energy Corp. for a one-well contract, likely in Ship Shoal Block 93. Operations there are expected to last about 30 days to late October. Stone had an alternative 80-day well for the rig in South Pelto Block 5, but it now appears the Ship Shoal location will get the rig. As a result of the existing deepwater drilling moratorium in the U.S. Gulf of Mexico, Pride International, Inc. and BP, Plc have agreed to temporarily amend the day rate for newbuild drillship Deep Ocean Ascension. The rig will receive a standby rate of $360,000, effective from August 23, 2010, to April 1, 2011, or until the date the rig begins mobilization to its first drilling location, which can be in or out of the U.S. Gulf of Mexico. At that time, Pride will begin the five-year term at about $531,000 per day. The rig is currently undergoing acceptance testing in the gulf, but BP is looking at other areas of the world to find a suitable drilling location. Blake International USA Rigs, LLC has received 60-day extensions from Apache Corporation for two workover platform rigs. First, the Blake 14 term was extended from mid-September to mid-November. An additional 60-day option exists but must be exercised by mid-October. The rig has been working continuously for Apache since January 2009. Meanwhile, the extension for the 650 hp Blake 210, which has been with Apache since February 2010, will run from September 27 to November 30. Hercules Offshore, Inc. has built backlog for jackup Hercules 150 for the remainder of 2010. The rig will complete its current contract with Hilcorp Energy Company in about 10 days. It then goes to LLOG Exploration Company, LLC for a 21-day well in West Cameron Block 31, followed by a one-well, 20-day contract with Apache in East Cameron Block 2. Upon completion of this work in early November, the rig will return to Hilcorp for another program, the details of which are not yet clear. Meanwhile, jackup Hercules 205 is now moving to location in Mustang Island Block 726 to begin a new two-well contract with MCX Gulf of Mexico, LLC. Operations should begin this week and keep the rig working through October. The jackup had been working for Hall-Houston Exploration, LLP in High Island Block 88 Hilcorp Energy has picked up two previously idle inland workover barges. First, Basic Marine, Inc. Rig 10 is headed out for a multi-well project off Venice, LA, while the Nabors Offshore Corporation BR-10 is moving to location in the Caillou Island area for a one-well contract. Inland barge Parker 12B has just now moved onto location in Lafourche Parish for its final well with Maritech Resources, Inc. Operations are expected to keep the rig busy between 17 and 28 days, after which, it is understood, follow-up work has been secured. Details of that work will be reported when they become available. Meanwhile, the previously idle Parker 15B, is now on location in Lafourche Parish for a seven-day workover with Petrogulf Corporation, with work due to be completed late this week. It is also believed that follow-up work for the rig is in place. The rig had been idle since late July. Finally, Gulfport Energy Corporation released the Parker 21B on September 13, and the rig will next go to Alta Mesa Resources, Inc. for a recently awarded 14-28 day sidetrack in the Weeks Island area. Seahawk Drilling Inc. has received a new one-well contract from PetroQuest Energy, Inc. for jackup Seahawk 2001. The workover in Ship Shoal Block 63 will begin around the first of October and take about 15 days. The rig will complete its current contract for Medco Energi US, LLC in Main Pass Block 64 late this month. The company also reports that jackup Seahawk 2601 will complete the first of two completions for Tarpon Oil & Gas Company later this week. The rig then heads from West Cameron Block 487 to East Cameron Block 240 where it will be until late October. Meanwhile, jackup Seahawk 2004 will complete work in Vermilion Block 196 later this week. It is believed the operator is trying to get another permit approved, but should that not occur, Seahawk will move the rig to West Cameron Block 38. Apex O&G completed its well in East Cameron Block 24 with jackup Spartan 303, and the rig was released. It is now hot stacked in West Cameron Block 38. Service/Supply News National Oilwell Varco, Inc. has signed an agreement to acquire Advanced Production and Loading PLC (APL), a subsidiary of BW Offshore, Ltd., for $500 million in cash. APL designs and manufactures turret mooring systems and other products for floating production, storage, and offloading vessels. Halliburton anticipates closing the acquisition of Boots & Coots on September 17, assuming that Boots & Coots stockholders approve the transaction at a special meeting scheduled for September 15. |