Deepwater expansion begins with new Pride International drillship
Houston–based Pride International Inc. has dedicated the first of its four new deepwater drillships under construction by Samsung Heavy Industries in South Korea, the Deep Ocean Ascension. The rig will be mobilized to the US Gulf of Mexico where it is expected to begin operations in the third quarter under a five–year contract with BP.
In 2007, the company committed to expanding its presence in the deepwater sector. The Deep Ocean Ascension is the first in the four–rig construction program, and leads the company into the US Gulf of Mexico deepwater region.
In a shipyard ceremony, Louis A. Raspino, president and CEO of Pride commented, "The deepwater sector is expected to offer strong prospects and long–term demand visibility and this rig provides our clients with a complete package of high–specification attributes necessary to address the challenges inherent in deepwater well construction."
Pride's four–rig construction program is a cornerstone of its expansion strategy. The company expects the addition of each drillship to contribute to the company's expanding revenue base from floating assets, which accounted for 78% of total revenues in 2009 including 52% from the deepwater segment.
The next drillship scheduled to be delivered is the Deep Ocean Clarion, with an expected August 2010 completion date, followed by the Deep Ocean Mendocino in the first quarter of 2011, and the Deep Ocean Molokai in the fourth quarter of 2011.
Petrohawk sells WEHLU interest to private company for $175M
Independent energy company Petrohawk Energy Corp. will sell its interest in the West Edmond Hunton Lime Unit (WEHLU) Field in Oklahoma County, Okla. to a private company for $155 million. The sale is the first of four asset packages expected to be sold by the Houston–based company during 2010.
As of December 31, 2009, Petrohawk had estimated proved reserves of 23 bcfe associated with its interests in WEHLU. Current production is roughly 12 MMcfe/d.
RBC Richardson Barr acted as marketing and financial advisor to Petrohawk in connection with the sale.
Additionally, the company has completed a portion of an additional 2010 divestiture package. Two transactions involving properties in the Mid–Continent region have been closed for a roughly $20 million. These include, in total, nearly 7 bcfe of estimated proved reserves and approximately 3 MMcfe/d of production.
The $175 million of assets were monetized for $11,667 per flowing Mcfe and $5.83 per Mcfe of proved reserves. Analysts with Madison Williams Equity Research say the transactions "yielded impressive results and are a step in the right direction toward the monetization of $1 billion of assets to help HK [Petrohawk] fund its 2010 capital budget."
Anadarko sets 2010 CAPEX near $5.6B, hits pay in first find offshore Mozambique
Anadarko Petroleum Corp. estimates its total 2010 capital expenditures to reach between $5.3 and $5.6 billion.
Jim Hackett, Anadarko chairman and CEO said the company's strong 2009 results—including record production, nine deepwater discoveries and cost reductions—and strong balance sheet at year–end, support "higher expectations for 2010 and future years."
"Building upon our base with the expected growth from our natural gas shale plays and oil–focused mega projects, we project that we can surpass 3 billion boe of proved reserves by year–end 2014, with an increased production CAGR (compounded annual growth rate) of 7% to 9% over the five–year period."
Near–term projects
In 2009, Anadarko allocated roughly $1.8 billion to its base and increased sales volumes by about 7% relative to 2008. This year, the company has allocated nearly $2 billion to these near–term projects and expects to increase sales volumes in 2010 by up to 5% over the 2009 total of 220 million boe.
Mega projects
Anadarko has allocated 22% of the 2010 budget to the ongoing development of its oil–weighted and sanctioned mega projects. The Jubilee Phase I development, offshore Ghana, is on track for first production in late 2010. Construction of the 120,000 b/d FPSO (floating production, storage and offloading) vessel is roughly 90% complete and is scheduled to arrive in Ghana in 2Q10. All 17 Jubilee Phase I development wells have been drilled. Installation of the subsea infrastructure is under way.
At the Caesar/Tonga complex in the deepwater Gulf of Mexico, the partnership has drilled three of the four development wells. Conversion work on the topsides at the Constitution spar is nearly complete and the project is expected to deliver first production during 2Q11. The El Merk development in Algeria is nearly 28% complete, and 62 of the 140 wells have been drilled. First production is anticipated in late 2011.
Shales
Anadarko currently holds roughly 600,000 net acres in the Marcellus, Haynesville, Eagleford and Pearsall shale plays, with an estimated 50 trillion cubic feet of natural gas equivalent (tcfe) of gross unrisked resources. For 2010, the company expects to allocate nearly 10% of its capital budget to these areas that have the potential to increase their production over a five–year period at a 60% CAGR.
Exploration
Roughly 20% of the 2010 capital program is allocated to exploration, with much of it focused on deepwater. The plan is to drill roughly 30 high–impact exploration/appraisal wells. Up to 13 exploration/appraisal wells are expected to be drilled offshore West Africa, 7 to 10 wells in the Gulf of Mexico, 4 to 6 wells in Brazil, 4 to 6 wells in Mozambique and 3 to 5 wells in southeast Asia.
Recently the Windjammer exploration well in the frontier Rovuma Basin offshore Mozambique reached an intermediate casing point and encountered more than 480 net feet of natural gas pay. To date, the Windjammer well has been drilled to a depth of roughly 14,000 feet in about 4,800 feet of water, approximately 30 miles east of the Mozambique coastline. The company anticipates drilling another 4,100 feet in this well.
Anadarko is the operator with a paying interest in the well of roughly 43%. "Given that at least 75% of the $1.1 billion allocated to exploration is directed to the drill bit, we expect to be one of the most active deepwater drillers in the world this year, testing up to 7 billion boe of gross unrisked resources," said Hackett.
Apache marks development milestones in Western Australia
A subsidiary of Apache Corp., Apache PVG Pty Ltd., has started oil production from the Pyrenees development in production license WA–42–L in the Exmouth Basin offshore Western Australia. Production from the Crosby, Ravensworth and Stickle wells processed through the floating production, storage and offloading (FPSO) vessel at Pyrenees is expected to be brought on in phases, with approximately half the field ramping up from first oil and the other half over the next six months.
First production from Apache PVG's Van Gogh Field in production license WA–35–L in the Exmouth Basin was competed recently. Apache PVG owns a 52.5% interest in the field with INPEX owning the remaining interest.
"We now have two oil fields on production in Australia that will make a significant contribution to Apache's projected growth in 2010," said Rod Eichler, co–chief operating officer and president – international. "Net production from Pyrenees and Van Gogh is projected to quadruple Apache's oil production in Australia."
The Crosby, Ravensworth and Stickle oil fields were discovered in 2003 in water depths ranging from 555 to 820 feet roughly 27 miles off the coast of Exmouth, Western Australia. BHP Billiton Petroleum operates the Pyrenees development. A subsea gathering system will bring oil from 13 horizontal wells to an FPSO with production capacity of nearly 96,000 b/d.
Apache owns a 28.57% interest in the $1.7 billion Pyrenees development in production license WA–42–L. BHP Billiton owns the remaining interest.
Apache has a 31.501% interest in the part of the Ravensworth field located in production license WA–43–L. BHP Billiton Petroleum holds 39.999% and INPEX owns 28.5%. This part of the Pyrenees project will have its own wells and gathering system with oil production from the WA–43–L part scheduled to begin later in 2010.
Gas produced at the Pyrenees development will be reinjected into the reservoir of the nearby Macedon gas field, which is in front–end engineering and design with a final investment decision expected later in 2010. Apache owns a 28.57% interest in this development, also operated by BHP Billiton.
Apache plans to invest nearly $1 billion in Australia in 2010, funding exploration and a range of development projects.
Apache's Devil Creek domestic gas processing plant, scheduled for completion in 2011, will process gas from the offshore Reindeer Field and increase Western Australia's domestic natural gas production capacity by up to 20%.
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