Commodity Corner: Oil Rallies As Dollar Slides
Thursday, April 21, 2011
Rigzone Staff
by Matthew Veazey
The U.S. Dollar continued to lose ground against other currencies and oil continued to rally Thursday.
Crude oil for June delivery settled at $112.29 a barrel, gaining 84 cents from the previous day. Oil has rallied this week as the greenback has weakened against other major currencies. A key contributor to the dollar's recent fall was Standard & Poor's announcement Monday that it was revising its long-term U.S. debt outlook from stable to negative.
Since Monday, the euro has strengthened more than two percent against the dollar. In such a case where the dollar weakens against other currencies, oil and other commodities tend to rally because they become a better value for investors holding these other currencies.
Crude oil traded within a range from $111.00 to $112.48 Thursday.
Natural gas also ended the day higher after the U.S. Department of Energy announced a smaller-than-expected increase in the country's natural gas inventories. The federal agency's Energy Information Administration reported that natural gas stocks rose by 47 billion cubic feet last week; analysts had expected a higher increase. A Platts survey of analysts, for instance, had anticipated a build of 49 to 53 Bcf week-on-week.
Given the EIA data, May natural gas increased by a dime to settle at $4.41 per thousand cubic feet Thursday. Gas peaked at $4.42 and bottomed out at $4.27.
May gasoline gained three cents to end the day at $3.31 a gallon. It fluctuated from $3.26 to $3.32 during Thursday's session.
Thursday, April 21, 2011
Transocean Counter Sues BP, Among Others, Over Oil Spill Liabilities
Transocean Counter Sues BP, Among Others, Over Oil Spill Liabilities
Apr 21, 2011
As the legal battle over the offshore drilling disaster in the Gulf of Mexico continues to expand, Transocean said today it has filed cross claims against BP and other entities involved in last year's spill.
Yesterday BP filed suit against Transocean, which owned and operated the Deepwater Horizon offshore drilling rig, and Cameron International, which manufactured a critical safety device intended to shut down the well in an emergency.
BP also filed suit against Halliburton, accusing that company of concealing information about its cement slurry that could have prevented the disaster The claims were filed in federal court in New Orleans.
The BP suit said that Transocean is responsible for the failures of safety devices and control procedures and is seeking at least $40 billion in damages. Transocean said in its suit that BP agreed to assume full responsibility for any "loss, expense, claim, fine, penalty or liability" for pollution or contamination in the drilling contract the two companies signed.
Shares of Transocean are trading down 1.39%.
Apr 21, 2011
As the legal battle over the offshore drilling disaster in the Gulf of Mexico continues to expand, Transocean said today it has filed cross claims against BP and other entities involved in last year's spill.
Yesterday BP filed suit against Transocean, which owned and operated the Deepwater Horizon offshore drilling rig, and Cameron International, which manufactured a critical safety device intended to shut down the well in an emergency.
BP also filed suit against Halliburton, accusing that company of concealing information about its cement slurry that could have prevented the disaster The claims were filed in federal court in New Orleans.
The BP suit said that Transocean is responsible for the failures of safety devices and control procedures and is seeking at least $40 billion in damages. Transocean said in its suit that BP agreed to assume full responsibility for any "loss, expense, claim, fine, penalty or liability" for pollution or contamination in the drilling contract the two companies signed.
Shares of Transocean are trading down 1.39%.
Nissan Leaf wins World Car of the Year
Nissan Leaf wins World Car of the Year
Apr 21, 2011
The World Car Awards has a new winner. The Nissan Leaf takes home the top honor as the 2011 World Car of the Year at the The New York auto show. The electric car beat out it's two top competitors: the Audi A8 and BMW 5-series and was also runner up for the World Green Award. That top honor however was given to the Chevy Volt. Those judging the World Car Awards said that the Nissan Leaf is the gateway to a brave new electric world with it's zero emissions and car-like performance for just under $35,000.
Apr 21, 2011
The World Car Awards has a new winner. The Nissan Leaf takes home the top honor as the 2011 World Car of the Year at the The New York auto show. The electric car beat out it's two top competitors: the Audi A8 and BMW 5-series and was also runner up for the World Green Award. That top honor however was given to the Chevy Volt. Those judging the World Car Awards said that the Nissan Leaf is the gateway to a brave new electric world with it's zero emissions and car-like performance for just under $35,000.
Southwest Reports Q1 Earnings In-Line With Estimates
Southwest Reports Q1 Earnings In-Line With Estimates
Apr 21, 2011
Southwest Airlines (NYSE:LUV) reported Q1 EPS of $0.03 today, in-line with the consensus estimate. Revenues for the quarter increased 18% year-over-year to $3.10 billion, edging the consensus estimate for $3.09 billion.
Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated, "While escalating jet fuel prices and inclement weather challenged our first quarter profitability, our People prevailed. We are very pleased to report first quarter 2011 operating income of $110 million and net income of $20 million (each excluding special items). Record monthly load factors, combined with solid passenger revenue yields, resulted in a 17.8 percent year-over-year increase in passenger revenues."
Apr 21, 2011
Southwest Airlines (NYSE:LUV) reported Q1 EPS of $0.03 today, in-line with the consensus estimate. Revenues for the quarter increased 18% year-over-year to $3.10 billion, edging the consensus estimate for $3.09 billion.
Gary C. Kelly, Chairman of the Board, President, and Chief Executive Officer, stated, "While escalating jet fuel prices and inclement weather challenged our first quarter profitability, our People prevailed. We are very pleased to report first quarter 2011 operating income of $110 million and net income of $20 million (each excluding special items). Record monthly load factors, combined with solid passenger revenue yields, resulted in a 17.8 percent year-over-year increase in passenger revenues."
Goodrich Tops Q1 Earnings Estimates, Raises 2011 Guidance
Goodrich Tops Q1 Earnings Estimates, Raises 2011 Guidance
Apr 21, 2011
Goodrich Corporation (NYSE:GR) reported Q1 EPS of $1.52 today, beating the consensus estimate for $1.25 per share. Revenue for the quarter was up 12% year-over-year to $1.90 billion, just above the consensus estimate for $1.87 billion.
The company raised its 2011 EPS outlook to $5.40 - $5.55 from $5.30 - $5.45, compared to the consensus estimate for a $5.49 per share profit.
Commenting on the company's performance and its outlook, Marshall Larsen, Chairman, President and Chief Executive Officer said, "We were very pleased with our first quarter results. We saw excellent growth in all of our major market channels, which we expect will continue through the balance of 2011. Our commercial aftermarket sales growth of 12 percent was significantly greater than the growth in airline capacity and slightly higher than our expectations, and helped solidify our view that 2011 will be a strong growth year for this market channel, despite high oil prices and the tragic events in Japan."
Apr 21, 2011
Goodrich Corporation (NYSE:GR) reported Q1 EPS of $1.52 today, beating the consensus estimate for $1.25 per share. Revenue for the quarter was up 12% year-over-year to $1.90 billion, just above the consensus estimate for $1.87 billion.
The company raised its 2011 EPS outlook to $5.40 - $5.55 from $5.30 - $5.45, compared to the consensus estimate for a $5.49 per share profit.
Commenting on the company's performance and its outlook, Marshall Larsen, Chairman, President and Chief Executive Officer said, "We were very pleased with our first quarter results. We saw excellent growth in all of our major market channels, which we expect will continue through the balance of 2011. Our commercial aftermarket sales growth of 12 percent was significantly greater than the growth in airline capacity and slightly higher than our expectations, and helped solidify our view that 2011 will be a strong growth year for this market channel, despite high oil prices and the tragic events in Japan."
Schlumberger Reports Mixed Q1, Misses EPS, But Revs Beat On 55.7% YoY Increase
Schlumberger Reports Mixed Q1, Misses EPS, But Revs Beat On 55.7% YoY Increase
Apr 21, 2011
Schlumberger Limited (NYSE:SLB) announced Q1 EPS of $0.71 ex-items, missing the consensus estimate for $0.76 per share. Revenues for the quarter were up 55.7% year-over-year to $9.07 billion, beating the consensus estimate for $8.82 billion.
Schlumberger Chairman and CEO Andrew Gould commented, "First-quarter results compounded the normal sequential drop in product, software and multiclient sales with exceptional weather conditions in the US and Australia and multiple activity disruptions from political unrest. Reservoir Characterization saw this decline in sales of multiclient seismic and software. Wireline was adversely affected by weather in Australia and political unrest in North Africa and the Middle East but the underlying trends were positive and absent exceptional items, Wireline growth was encouraging--particularly for higher technology services."
Apr 21, 2011
Schlumberger Limited (NYSE:SLB) announced Q1 EPS of $0.71 ex-items, missing the consensus estimate for $0.76 per share. Revenues for the quarter were up 55.7% year-over-year to $9.07 billion, beating the consensus estimate for $8.82 billion.
Schlumberger Chairman and CEO Andrew Gould commented, "First-quarter results compounded the normal sequential drop in product, software and multiclient sales with exceptional weather conditions in the US and Australia and multiple activity disruptions from political unrest. Reservoir Characterization saw this decline in sales of multiclient seismic and software. Wireline was adversely affected by weather in Australia and political unrest in North Africa and the Middle East but the underlying trends were positive and absent exceptional items, Wireline growth was encouraging--particularly for higher technology services."
BP Signs Agreement to Restore GOM Projects
BP Signs Agreement to Restore GOM Projects
Thursday, April 21, 2011
BP plc
BP has signed a ground breaking agreement with federal and state agencies that will accelerate work starting this year to restore areas of the Gulf of Mexico that were affected by the Deepwater Horizon accident.
The agreement commits up to $1 billion to projects that will restore injured natural resources in the Gulf at the earliest opportunity. It allows projects important to the Gulf's recovery to begin now, as early restoration projects, rather than waiting for the Trustees to complete all of the Natural Resource Damage Assessment (NRDA) studies that are underway. The projects will undergo public review before they are funded, and priority will be assigned to projects aimed at improving areas that offer the greatest benefits to wildlife, habitat, and recreational use.
"BP believes early restoration will result in identified improvements to wildlife, habitat and related recreational uses in the Gulf, and our voluntary commitment to that process is the best way to get restoration projects moving as soon as possible," said Lamar McKay, chairman and president, BP America Inc. "Our voluntary agreement to accelerate restoration projects builds upon the cooperative approach BP has taken toward working with Gulf communities and regulators since the accident, and in assessing the potential injury to natural resources. We hope to work in partnership with the Trustee Council to address injured resources in the Gulf as soon as possible. We believe the early restoration projects to be funded through this agreement represent the best way forward in restoring the Gulf."
BP's commitment to early restoration is not required by the Oil Pollution Act (OPA) at this stage of the NRD process, and will have the effect of speeding up restoration work that otherwise likely would be deferred for several years, while the NRD assessment continues.
OPA directs the federal and state Trustees to study potential injuries, complete a report that identifies the injuries resulting from the incident, and develop restoration plans to address the identified injuries. The process typically takes years to complete. Shortly after the incident, BP began working with federal and state agencies to collect data needed to assess damages to natural resources, through the NRDA process. Over 100 cooperative studies are underway to evaluate the potential for injury to all types of wildlife and habitat in the Gulf of Mexico.
Under the expedited restoration framework made possible by this agreement, and to allow restoration to begin as quickly as possible, the Trustees will use the study data they have collected to date to identify injuries that are evident now and propose plans to restore those resources at the earliest opportunity, focusing on projects that can start in 2011 and 2012. According to the agreement, "the Parties intend to work cooperatively to seek to achieve significant, meaningful restoration of natural resources in the Gulf of Mexico."
LINK
The Gulf of Mexico Oil Spill
Latest Deepwater Horizon Headlines
Thursday, April 21, 2011
BP plc
BP has signed a ground breaking agreement with federal and state agencies that will accelerate work starting this year to restore areas of the Gulf of Mexico that were affected by the Deepwater Horizon accident.
The agreement commits up to $1 billion to projects that will restore injured natural resources in the Gulf at the earliest opportunity. It allows projects important to the Gulf's recovery to begin now, as early restoration projects, rather than waiting for the Trustees to complete all of the Natural Resource Damage Assessment (NRDA) studies that are underway. The projects will undergo public review before they are funded, and priority will be assigned to projects aimed at improving areas that offer the greatest benefits to wildlife, habitat, and recreational use.
"BP believes early restoration will result in identified improvements to wildlife, habitat and related recreational uses in the Gulf, and our voluntary commitment to that process is the best way to get restoration projects moving as soon as possible," said Lamar McKay, chairman and president, BP America Inc. "Our voluntary agreement to accelerate restoration projects builds upon the cooperative approach BP has taken toward working with Gulf communities and regulators since the accident, and in assessing the potential injury to natural resources. We hope to work in partnership with the Trustee Council to address injured resources in the Gulf as soon as possible. We believe the early restoration projects to be funded through this agreement represent the best way forward in restoring the Gulf."
BP's commitment to early restoration is not required by the Oil Pollution Act (OPA) at this stage of the NRD process, and will have the effect of speeding up restoration work that otherwise likely would be deferred for several years, while the NRD assessment continues.
OPA directs the federal and state Trustees to study potential injuries, complete a report that identifies the injuries resulting from the incident, and develop restoration plans to address the identified injuries. The process typically takes years to complete. Shortly after the incident, BP began working with federal and state agencies to collect data needed to assess damages to natural resources, through the NRDA process. Over 100 cooperative studies are underway to evaluate the potential for injury to all types of wildlife and habitat in the Gulf of Mexico.
Under the expedited restoration framework made possible by this agreement, and to allow restoration to begin as quickly as possible, the Trustees will use the study data they have collected to date to identify injuries that are evident now and propose plans to restore those resources at the earliest opportunity, focusing on projects that can start in 2011 and 2012. According to the agreement, "the Parties intend to work cooperatively to seek to achieve significant, meaningful restoration of natural resources in the Gulf of Mexico."
LINK
The Gulf of Mexico Oil Spill
Latest Deepwater Horizon Headlines
Rosneft, Lukoil Agree to Joint Offshore-Exploration Deal
Rosneft, Lukoil Agree to Joint Offshore-Exploration Deal
Thursday, April 21, 2011
Dow Jones Newswires
Rosneft and the country's biggest private oil producer, Lukoil, on Thursday signed a long-term cooperation deal that includes offshore exploration in Russian Arctic waters.
The two companies agreed to work together on "geological exploration in the license areas of Rosneft on Russia's shelf and development of fields already discovered," Lukoil and Rosneft said in a joint statement.
Thursday, April 21, 2011
Dow Jones Newswires
Rosneft and the country's biggest private oil producer, Lukoil, on Thursday signed a long-term cooperation deal that includes offshore exploration in Russian Arctic waters.
The two companies agreed to work together on "geological exploration in the license areas of Rosneft on Russia's shelf and development of fields already discovered," Lukoil and Rosneft said in a joint statement.
Drilling Commenced at Neon's San Ardo Field
Drilling Commenced at Neon's San Ardo Field
Thursday, April 21, 2011
Neon Energy Ltd.
Neon Energy is pleased to announce commencement of a two well development drilling program on it's 100% owned North San Ardo oil field, onshore California.
The Lombardi 20-27H and Lombardi 21-27H horizontal production wells will be drilled back to back, targeting the southern lobe of the field. These wells are anticipated to significantly increase production at a time of strong oil prices.
The two well program is budgeted at US $1.6 million, and the wells are each expected to take two weeks to drill, complete and commence production. The Company will provide further information as and when initial production rates become available
Thursday, April 21, 2011
Neon Energy Ltd.
Neon Energy is pleased to announce commencement of a two well development drilling program on it's 100% owned North San Ardo oil field, onshore California.
The Lombardi 20-27H and Lombardi 21-27H horizontal production wells will be drilled back to back, targeting the southern lobe of the field. These wells are anticipated to significantly increase production at a time of strong oil prices.
The two well program is budgeted at US $1.6 million, and the wells are each expected to take two weeks to drill, complete and commence production. The Company will provide further information as and when initial production rates become available
MicroSeismic Bags 2nd Contract in Marcellus Play
MicroSeismic Bags 2nd Contract in Marcellus Play
Thursday, April 21, 2011
MicroSeismic Inc.
MicroSeismic has been awarded a second BuriedArray™ contract in the Marcellus Shale play in northern West Virginia by Gastar Exploration.
"We are excited about our continued work in the Marcellus," said Peter Duncan, CEO and Founder of MicroSeismic, Inc. "This second award demonstrates the work we are doing in the Marcellus and other plays is creating value for our customers."
Gastar's Vice President and Exploration Manager, Keith Blair, commented, "Gastar has used MSI's FracStar in East Texas and because of the knowledge gained we have decided to implement their BuriedArray in our Marcellus Shale Play. We look forward to optimizing our completion techniques and in turn maximizing our production and minimizing our capital investment from the microseismic data gathered."
Thursday, April 21, 2011
MicroSeismic Inc.
MicroSeismic has been awarded a second BuriedArray™ contract in the Marcellus Shale play in northern West Virginia by Gastar Exploration.
"We are excited about our continued work in the Marcellus," said Peter Duncan, CEO and Founder of MicroSeismic, Inc. "This second award demonstrates the work we are doing in the Marcellus and other plays is creating value for our customers."
Gastar's Vice President and Exploration Manager, Keith Blair, commented, "Gastar has used MSI's FracStar in East Texas and because of the knowledge gained we have decided to implement their BuriedArray in our Marcellus Shale Play. We look forward to optimizing our completion techniques and in turn maximizing our production and minimizing our capital investment from the microseismic data gathered."
Diamond Offshore Declares Quarterly Dividend
Diamond Offshore Declares Quarterly Dividend
Thursday, April 21, 2011
Diamond Offshore Inc.
Diamond Offshore has declared a special quarterly cash dividend of $0.75 per share of common stock and a regular quarterly cash dividend of $0.125 per share of common stock. Both dividends are payable on June 1, 2011 to shareholders of record on May 2, 2011.
The Board reiterated its stated policy of considering paying special cash dividends, in amounts to be determined, on a quarterly basis. Any determination to declare a special dividend, as well as the amount of any special dividend that may be declared, will be based on the Company's financial position, earnings, earnings outlook, capital spending plans, and other relevant factors at that time.
Thursday, April 21, 2011
Diamond Offshore Inc.
Diamond Offshore has declared a special quarterly cash dividend of $0.75 per share of common stock and a regular quarterly cash dividend of $0.125 per share of common stock. Both dividends are payable on June 1, 2011 to shareholders of record on May 2, 2011.
The Board reiterated its stated policy of considering paying special cash dividends, in amounts to be determined, on a quarterly basis. Any determination to declare a special dividend, as well as the amount of any special dividend that may be declared, will be based on the Company's financial position, earnings, earnings outlook, capital spending plans, and other relevant factors at that time.
Transocean Files Cross-Claims against BP
Transocean Files Cross-Claims against BP
Thursday, April 21, 2011
Transocean Ltd.
Transocean announced that an affiliate of BP on April 20, 2011 filed a cross-claim against Transocean entities in the existing Multi-District Litigation proceeding in the U.S. District Court, Eastern District of Louisiana for contribution pursuant to the Oil Pollution Act of 1990. Pursuant to an order of the court, co-defendants in a consolidated proceeding related to the Macondo well incident were required to file claims by April 20, 2011.
To protect its rights, Transocean also filed cross-claims against BP entities and other parties involved in the Macondo well incident to enforce its indemnification rights.
Under the drilling contract for Deepwater Horizon, BP has agreed, among other things, to assume full responsibility for and defend, release and indemnify Transocean from any loss, expense, claim, fine, penalty or liability for pollution or contamination, including control and removal thereof, arising out of or connected with operations under the contract. Transocean expects BP to honor its contractual indemnification obligations under the contract. The Deepwater Horizon drilling contract with BP can be found in the company's August 4, 2010 10Q filing with the SEC.
Thursday, April 21, 2011
Transocean Ltd.
Transocean announced that an affiliate of BP on April 20, 2011 filed a cross-claim against Transocean entities in the existing Multi-District Litigation proceeding in the U.S. District Court, Eastern District of Louisiana for contribution pursuant to the Oil Pollution Act of 1990. Pursuant to an order of the court, co-defendants in a consolidated proceeding related to the Macondo well incident were required to file claims by April 20, 2011.
To protect its rights, Transocean also filed cross-claims against BP entities and other parties involved in the Macondo well incident to enforce its indemnification rights.
Under the drilling contract for Deepwater Horizon, BP has agreed, among other things, to assume full responsibility for and defend, release and indemnify Transocean from any loss, expense, claim, fine, penalty or liability for pollution or contamination, including control and removal thereof, arising out of or connected with operations under the contract. Transocean expects BP to honor its contractual indemnification obligations under the contract. The Deepwater Horizon drilling contract with BP can be found in the company's August 4, 2010 10Q filing with the SEC.
Key Agency to Miss Next Round of Tests
Key Agency to Miss Next Round of Tests
Thursday, April 21, 2011
Houston Chronicle
by Jennifer A. Dlouhy
Testing is set to resume next week on the blowout preventer that failed to stop gushing oil at BP's Macondo well, but an independent federal agency that has been probing the disaster will not be permitted to participate.
Under a federal judge's ruling, the only witnesses allowed during the examination at a NASA facility in New Orleans will be representatives of the Justice Department, oil spill victims in a broad class-action lawsuit and three companies linked to the disaster.
That shuts the door to the Chemical Safety Board, the latest setback for the U.S. agency that has been trying to get a foothold in investigating the spill since lawmakers requested the board's involvement last year.
A four-month probe of the blowout preventer concluded that after surging oil and gas pushed drill pipe askew, the device's powerful shear rams were unable to completely sever the drill pipe and seal the well.
On March 25, U.S. District Judge Carl Barbier granted BP's request for additional tests, which will be conducted by the same forensic analysis firm that examined the blowout preventer at the Michoud NASA facility from November through February.
Although the CSB was part of a "technical working group" that guided that testing, Barbier's ruling last week excluded the board -- along with anyone else not party to oil spill litigation -- from the additional analysis.
The ruling was not released, but it was described by several people with know-ledge of the case and connections to the oil spill litigation that Barbier is overseeing.
The CSB has limited recourses to gain access now, since it does not have independent litigating authority like other federal agencies.
The CSB has limited recourses to gain access now, since it does not have independent litigating authority like other federal agencies.
Justice Department
Instead, it is up to the Justice Department whether to enforce CSB subpoenas or fight for its access in court. Lawyers at the Justice Department concluded months ago that it would not assert CSB's jurisdiction in court, amid uncertainty about whether the agency was authorized to probe the accident.
Although the CSB has investigated more than 50 industrial accidents in its two-decade history -- including the lethal 2005 explosion at BP's Texas City refinery -- federal officials and companies linked to the Macondo well have questioned the board's jurisdiction to probe the Deepwater Horizon blast.
A stationary object?
The federal law that created the CSB says it is not authorized to investigate marine oil spills. The CSB has argued that applies to investigations of transportation-related spills and not its probe focusing on what happened on the rig itself.
The rig was tethered to the well in the seabed, effectively making it a stationary installation, CSB officials have said.
"The CSB continues to face significant challenges in its fact-gathering process, including companies and witnesses evading subpoenas for testimony and records," said CSB Chairman Rafael Moure-Eraso said in a statement.
Moure-Eraso said the agency is focusing on whether the evolving federal oversight of offshore drilling "can adequately prevent another major accident and protect offshore workers."
On Wednesday, the CSB asked the Obama administration to hand over potentially hundreds of thousands of documents amassed during a presidential commission's six-month probe of the spill.
Don Holmstrom, the CSB's investigations supervisor, said the commission's documents "would provide us the ability to have the fullest possible picture of what occurred."
Request to Chu
Moure-Eraso made the request in a letter to Energy Secretary Steven Chu, saying that the commission had seemed likely to approve an earlier request for the material, but that the document transfer could not be worked out before the presidential panel was disbanded last month.
The Energy Department is reviewing the letter and will consult with the Justice Department on the response.
Bob Graham, the co-chairman of the presidential commission, said in written responses to questions from the Senate in March that the CSB's earlier request for the commission documents involved "legal issues" that the Justice Department had to resolve.
LINK
The Gulf of Mexico Oil Spill
Latest Deepwater Horizon Headlines
Thursday, April 21, 2011
Houston Chronicle
by Jennifer A. Dlouhy
Testing is set to resume next week on the blowout preventer that failed to stop gushing oil at BP's Macondo well, but an independent federal agency that has been probing the disaster will not be permitted to participate.
Under a federal judge's ruling, the only witnesses allowed during the examination at a NASA facility in New Orleans will be representatives of the Justice Department, oil spill victims in a broad class-action lawsuit and three companies linked to the disaster.
That shuts the door to the Chemical Safety Board, the latest setback for the U.S. agency that has been trying to get a foothold in investigating the spill since lawmakers requested the board's involvement last year.
A four-month probe of the blowout preventer concluded that after surging oil and gas pushed drill pipe askew, the device's powerful shear rams were unable to completely sever the drill pipe and seal the well.
On March 25, U.S. District Judge Carl Barbier granted BP's request for additional tests, which will be conducted by the same forensic analysis firm that examined the blowout preventer at the Michoud NASA facility from November through February.
Although the CSB was part of a "technical working group" that guided that testing, Barbier's ruling last week excluded the board -- along with anyone else not party to oil spill litigation -- from the additional analysis.
The ruling was not released, but it was described by several people with know-ledge of the case and connections to the oil spill litigation that Barbier is overseeing.
The CSB has limited recourses to gain access now, since it does not have independent litigating authority like other federal agencies.
The CSB has limited recourses to gain access now, since it does not have independent litigating authority like other federal agencies.
Justice Department
Instead, it is up to the Justice Department whether to enforce CSB subpoenas or fight for its access in court. Lawyers at the Justice Department concluded months ago that it would not assert CSB's jurisdiction in court, amid uncertainty about whether the agency was authorized to probe the accident.
Although the CSB has investigated more than 50 industrial accidents in its two-decade history -- including the lethal 2005 explosion at BP's Texas City refinery -- federal officials and companies linked to the Macondo well have questioned the board's jurisdiction to probe the Deepwater Horizon blast.
A stationary object?
The federal law that created the CSB says it is not authorized to investigate marine oil spills. The CSB has argued that applies to investigations of transportation-related spills and not its probe focusing on what happened on the rig itself.
The rig was tethered to the well in the seabed, effectively making it a stationary installation, CSB officials have said.
"The CSB continues to face significant challenges in its fact-gathering process, including companies and witnesses evading subpoenas for testimony and records," said CSB Chairman Rafael Moure-Eraso said in a statement.
Moure-Eraso said the agency is focusing on whether the evolving federal oversight of offshore drilling "can adequately prevent another major accident and protect offshore workers."
On Wednesday, the CSB asked the Obama administration to hand over potentially hundreds of thousands of documents amassed during a presidential commission's six-month probe of the spill.
Don Holmstrom, the CSB's investigations supervisor, said the commission's documents "would provide us the ability to have the fullest possible picture of what occurred."
Request to Chu
Moure-Eraso made the request in a letter to Energy Secretary Steven Chu, saying that the commission had seemed likely to approve an earlier request for the material, but that the document transfer could not be worked out before the presidential panel was disbanded last month.
The Energy Department is reviewing the letter and will consult with the Justice Department on the response.
Bob Graham, the co-chairman of the presidential commission, said in written responses to questions from the Senate in March that the CSB's earlier request for the commission documents involved "legal issues" that the Justice Department had to resolve.
LINK
The Gulf of Mexico Oil Spill
Latest Deepwater Horizon Headlines
United Continental Posts Narrow Q1 Loss Than Expected
United Continental Posts Narrow Q1 Loss Than Expected
Apr 21, 2011
United Continental Holdings (NYSE:UAL) reported a Q1 per share loss of $0.41 today, a narrower loss than the consensus estimate for $0.48 per share. Revenue for the quarter was up 10.8% year-over-year to $8.20 billion, just edging the consensus estimate for $8.19 billion.
Jeff Smisek, UAL's president and chief executive officer said, "My co-workers did a great job running an on-time and efficient operation this past quarter, and I especially want to thank my co-workers who conducted our Japan operations, overcoming tremendous personal hardship to help our customers and keep our operation safe and reliable after the tragic earthquake and tsunami. With our people, and the power of our network, product and fleet, United and Continental are much better positioned to manage through the current high-cost fuel environment as a combined carrier than either would have been as stand-alone carriers."
Apr 21, 2011
United Continental Holdings (NYSE:UAL) reported a Q1 per share loss of $0.41 today, a narrower loss than the consensus estimate for $0.48 per share. Revenue for the quarter was up 10.8% year-over-year to $8.20 billion, just edging the consensus estimate for $8.19 billion.
Jeff Smisek, UAL's president and chief executive officer said, "My co-workers did a great job running an on-time and efficient operation this past quarter, and I especially want to thank my co-workers who conducted our Japan operations, overcoming tremendous personal hardship to help our customers and keep our operation safe and reliable after the tragic earthquake and tsunami. With our people, and the power of our network, product and fleet, United and Continental are much better positioned to manage through the current high-cost fuel environment as a combined carrier than either would have been as stand-alone carriers."
Ensco Sees Decrease in 1Q11 Profits
Ensco Sees Decrease in 1Q11 Profits
Thursday, April 21, 2011
Ensco plc
Ensco reported diluted earnings per share from continuing operations of $0.45 for first quarter 2011, compared to $1.12 per share in first quarter 2010. There were no discontinued operations in first quarter 2011. Earnings from discontinued operations in first quarter 2010 were $0.21 per share that included a $34 million pre-tax gain from the sale of two jackup rigs. Diluted earnings per share were $0.45 in first quarter 2011, compared to $1.33 per share in first quarter 2010.
Chairman, President and Chief Executive Officer Dan Rabun stated, "Our planned acquisition of Pride International is on track and we look forward to realizing the benefits of the combination for customers, employees and shareholders. We successfully completed our debt offering to fund the cash portion of the acquisition and have commenced integration planning to ensure a smooth transition."
Mr. Rabun added, "During the quarter we were honored to be ranked first among offshore drilling contractors in total customer satisfaction by EnergyPoint Research, an independent research firm that measures customer satisfaction in the global oilfield. We earned top scores in eleven separate categories. This recognition validates the commitment of our employees who serve our customers around the world each and every day."
Chief Operating Officer Bill Chadwick commented, "Ensco has a long-established strategy of high-grading our fleet by investing in new equipment. During the first quarter, we ordered two ultra-premium harsh environment jackups and secured options for two additional rigs of the same design with similar terms. The new jackup rigs will be capable of operating in water depths up to 400' and their unique design will significantly increase the area of operability in the Central North Sea and other harsh environment regions."
Mr. Chadwick added, "ENSCO 8503 successfully commenced drilling operations in French Guiana with Tullow under a sublet agreement and we contracted ENSCO 7500 with Petrobras in Brazil. Our rig crews in the U.S. Gulf of Mexico are performing extremely well and ENSCO 8501 has commenced operations under the first post-moratoria new deepwater well permit approved by regulators."
Revenues in first quarter 2011 were $362 million, compared to $449 million a year ago. Jackup segment revenues decreased $55 million and deepwater segment revenues declined $32 million.
Total operating expenses in first quarter 2011 increased 10% to $281 million, from $255 million last year. Contract drilling expense grew 5%. Depreciation expense rose by 15% driven by growth in the deepwater segment. General and administrative expense was $30 million, compared to $21 million in first quarter 2010, primarily due to increases in professional fees related to the Pride International acquisition.
Segment Highlights
Deepwater
Deepwater segment revenues were $98 million in first quarter 2011, down from $130 million a year ago. Revenue for ENSCO 7500 declined year to year since the rig was in a shipyard during first quarter 2011, but operated during first quarter 2010. This revenue decline was partially offset by the addition of new ultra-deepwater rigs to the fleet. In first quarter 2011, the average day rate was $304,000 and utilization was 77%, down from $411,000 and 99%, respectively, a year ago.
Contract drilling expense was $41 million in first quarter 2011, down from $45 million in first quarter 2010. The decrease was primarily due to lower expenses for ENSCO 7500 while in the shipyard, offset in part by the addition of ENSCO 8502 and ENSCO 8503 to the fleet.
Total Jackup Segments
Revenues from the jackup fleet totaled $263 million in first quarter 2011, down from $318 million a year ago. The decline was primarily due to a seven percentage point decrease in utilization to 72% and a $15,000 decline in the average day rate to $97,000. Contract drilling expense increased 10% year to year, mostly due to the acquisition of ENSCO 109 in July 2010.
Thursday, April 21, 2011
Ensco plc
Ensco reported diluted earnings per share from continuing operations of $0.45 for first quarter 2011, compared to $1.12 per share in first quarter 2010. There were no discontinued operations in first quarter 2011. Earnings from discontinued operations in first quarter 2010 were $0.21 per share that included a $34 million pre-tax gain from the sale of two jackup rigs. Diluted earnings per share were $0.45 in first quarter 2011, compared to $1.33 per share in first quarter 2010.
Chairman, President and Chief Executive Officer Dan Rabun stated, "Our planned acquisition of Pride International is on track and we look forward to realizing the benefits of the combination for customers, employees and shareholders. We successfully completed our debt offering to fund the cash portion of the acquisition and have commenced integration planning to ensure a smooth transition."
Mr. Rabun added, "During the quarter we were honored to be ranked first among offshore drilling contractors in total customer satisfaction by EnergyPoint Research, an independent research firm that measures customer satisfaction in the global oilfield. We earned top scores in eleven separate categories. This recognition validates the commitment of our employees who serve our customers around the world each and every day."
Chief Operating Officer Bill Chadwick commented, "Ensco has a long-established strategy of high-grading our fleet by investing in new equipment. During the first quarter, we ordered two ultra-premium harsh environment jackups and secured options for two additional rigs of the same design with similar terms. The new jackup rigs will be capable of operating in water depths up to 400' and their unique design will significantly increase the area of operability in the Central North Sea and other harsh environment regions."
Mr. Chadwick added, "ENSCO 8503 successfully commenced drilling operations in French Guiana with Tullow under a sublet agreement and we contracted ENSCO 7500 with Petrobras in Brazil. Our rig crews in the U.S. Gulf of Mexico are performing extremely well and ENSCO 8501 has commenced operations under the first post-moratoria new deepwater well permit approved by regulators."
Revenues in first quarter 2011 were $362 million, compared to $449 million a year ago. Jackup segment revenues decreased $55 million and deepwater segment revenues declined $32 million.
Total operating expenses in first quarter 2011 increased 10% to $281 million, from $255 million last year. Contract drilling expense grew 5%. Depreciation expense rose by 15% driven by growth in the deepwater segment. General and administrative expense was $30 million, compared to $21 million in first quarter 2010, primarily due to increases in professional fees related to the Pride International acquisition.
Segment Highlights
Deepwater
Deepwater segment revenues were $98 million in first quarter 2011, down from $130 million a year ago. Revenue for ENSCO 7500 declined year to year since the rig was in a shipyard during first quarter 2011, but operated during first quarter 2010. This revenue decline was partially offset by the addition of new ultra-deepwater rigs to the fleet. In first quarter 2011, the average day rate was $304,000 and utilization was 77%, down from $411,000 and 99%, respectively, a year ago.
Contract drilling expense was $41 million in first quarter 2011, down from $45 million in first quarter 2010. The decrease was primarily due to lower expenses for ENSCO 7500 while in the shipyard, offset in part by the addition of ENSCO 8502 and ENSCO 8503 to the fleet.
Total Jackup Segments
Revenues from the jackup fleet totaled $263 million in first quarter 2011, down from $318 million a year ago. The decline was primarily due to a seven percentage point decrease in utilization to 72% and a $15,000 decline in the average day rate to $97,000. Contract drilling expense increased 10% year to year, mostly due to the acquisition of ENSCO 109 in July 2010.
Diamond Offshore Briefs Net Income for 1Q 2011
Diamond Offshore Briefs Net Income for 1Q 2011
Thursday, April 21, 2011
Diamond Offshore Inc.
Diamond Offshore reported net income for the first quarter of 2011 of $250.6 million, or $1.80 per share on a diluted basis, compared with net income of $290.9 million, or $2.09 per share on a diluted basis, in the same period a year earlier. Revenues in the first quarter of 2011 were $806.4 million, compared with revenues of $859.7 million for the first quarter of 2010.
Thursday, April 21, 2011
Diamond Offshore Inc.
Diamond Offshore reported net income for the first quarter of 2011 of $250.6 million, or $1.80 per share on a diluted basis, compared with net income of $290.9 million, or $2.09 per share on a diluted basis, in the same period a year earlier. Revenues in the first quarter of 2011 were $806.4 million, compared with revenues of $859.7 million for the first quarter of 2010.
GL Noble Denton Selected to Develop Ireland's New PSF
GL Noble Denton Selected to Develop Ireland's New PSF
Thursday, April 21, 2011
GL Noble Denton
GL Noble Denton has been appointed by the Irish Commission for Energy Regulation (CER) to assist in developing Ireland's new Petroleum Safety Framework (PSF).
Once complete, the Petroleum Safety Framework will create a system that allows the CER to assess and monitor the safety of Ireland's petroleum industry. The half-million Euro project will outline how safety will be regulated for each stage of the life-cycle of Ireland's petroleum assets, from design, construction and operation to maintenance, modification and decommissioning of the full range of assets for which the regulations are deemed to apply.
During the development of the Framework, GL Noble Denton's consultants will form an extension of the CER team, working with the Irish public, oil and gas operators, statutory bodies and other interested parties to research and develop a world-class set of regulations.
GL Noble Denton will work with the CER in developing a range of discussion, consultation and decision papers for the new PSF over 2011 and 2012, using experienced technical advisers based on-site at the Commission's headquarters in Dublin and at GL Noble Denton offices. The GL Noble Denton project team will work with the CER to undertake a period of extensive consultation with key stakeholders in the lead up to finalizing the Petroleum Safety Framework.
GL Noble Denton has developed a track record in assisting authorities and operators in developing, influencing and interpreting regulatory policies, with particular expertise in the UK, Norway, USA, Australia and Singapore. The experience gained in working with safety regulations in these countries will help form the CER's approach to developing Ireland's Petroleum Safety Framework.
GL Noble Denton's Head of Consulting and Compliance, Dr John Morgan, said, "We're delighted that the Commission for Energy Regulation has recognized GL Noble Denton's expertise and experience in developing world-class regulations for the oil and gas industry by appointing our team to assist with this crucial piece of work.
"It is important that Ireland develops a Petroleum Safety Framework that suits the purpose of all stakeholders, and we hope that this project may help in setting the benchmark for the development of future industry regulations in other regions."
Thursday, April 21, 2011
GL Noble Denton
GL Noble Denton has been appointed by the Irish Commission for Energy Regulation (CER) to assist in developing Ireland's new Petroleum Safety Framework (PSF).
Once complete, the Petroleum Safety Framework will create a system that allows the CER to assess and monitor the safety of Ireland's petroleum industry. The half-million Euro project will outline how safety will be regulated for each stage of the life-cycle of Ireland's petroleum assets, from design, construction and operation to maintenance, modification and decommissioning of the full range of assets for which the regulations are deemed to apply.
During the development of the Framework, GL Noble Denton's consultants will form an extension of the CER team, working with the Irish public, oil and gas operators, statutory bodies and other interested parties to research and develop a world-class set of regulations.
GL Noble Denton will work with the CER in developing a range of discussion, consultation and decision papers for the new PSF over 2011 and 2012, using experienced technical advisers based on-site at the Commission's headquarters in Dublin and at GL Noble Denton offices. The GL Noble Denton project team will work with the CER to undertake a period of extensive consultation with key stakeholders in the lead up to finalizing the Petroleum Safety Framework.
GL Noble Denton has developed a track record in assisting authorities and operators in developing, influencing and interpreting regulatory policies, with particular expertise in the UK, Norway, USA, Australia and Singapore. The experience gained in working with safety regulations in these countries will help form the CER's approach to developing Ireland's Petroleum Safety Framework.
GL Noble Denton's Head of Consulting and Compliance, Dr John Morgan, said, "We're delighted that the Commission for Energy Regulation has recognized GL Noble Denton's expertise and experience in developing world-class regulations for the oil and gas industry by appointing our team to assist with this crucial piece of work.
"It is important that Ireland develops a Petroleum Safety Framework that suits the purpose of all stakeholders, and we hope that this project may help in setting the benchmark for the development of future industry regulations in other regions."
Reliance Makes First Gas Find in Cauvery Basin
Reliance Makes First Gas Find in Cauvery Basin
Thursday, April 21, 2011
Reliance Industries Ltd.
by SubseaIQ
Reliance announced a rich gas and condensate discovery in the very first well drilled in the block CY-PR-DWN-2001/3(CYPR-D6) located in deepwater Cauvery-Palar basin. The Block with an area of about 8600 sq km was awarded to RIL under the bidding round of NELP-III. RIL currently holds 100% participating interest in this block. This is one of the 23 exploration blocks where BP Exploration (Alpha) Limited would have a 30% participating interest subject to the Government approval.
The discovery well CYPR-D6-SA1 is located in a water depth of 1194m and was drilled to a target depth of 3815m and terminated in crystalline basement. The well encountered multiple hydrocarbon bearing clastic reservoirs in Late Cretaceous section. The presence of rich Gas and condensate has been confirmed by several tests including Modular Dynamic Testing (MDT) and Drill Stem Testing (DST). During DST the well produced 37 million standard cubic feet of gas and 1100 barrels of condensate per day through a 56/64" choke size from the main zone that has a gross thickness of about 70m (230 ft). Another zone at a shallower level was established through MDT sampling where gas and condensate sample was collected. This discovery namely Dhirubhai-53 has been notified to Government of India and Directorate General of Hydrocarbons.
Further appraisal activity is being planned to assess the extent of these reservoirs along this play trend.
Thursday, April 21, 2011
Reliance Industries Ltd.
by SubseaIQ
Reliance announced a rich gas and condensate discovery in the very first well drilled in the block CY-PR-DWN-2001/3(CYPR-D6) located in deepwater Cauvery-Palar basin. The Block with an area of about 8600 sq km was awarded to RIL under the bidding round of NELP-III. RIL currently holds 100% participating interest in this block. This is one of the 23 exploration blocks where BP Exploration (Alpha) Limited would have a 30% participating interest subject to the Government approval.
The discovery well CYPR-D6-SA1 is located in a water depth of 1194m and was drilled to a target depth of 3815m and terminated in crystalline basement. The well encountered multiple hydrocarbon bearing clastic reservoirs in Late Cretaceous section. The presence of rich Gas and condensate has been confirmed by several tests including Modular Dynamic Testing (MDT) and Drill Stem Testing (DST). During DST the well produced 37 million standard cubic feet of gas and 1100 barrels of condensate per day through a 56/64" choke size from the main zone that has a gross thickness of about 70m (230 ft). Another zone at a shallower level was established through MDT sampling where gas and condensate sample was collected. This discovery namely Dhirubhai-53 has been notified to Government of India and Directorate General of Hydrocarbons.
Further appraisal activity is being planned to assess the extent of these reservoirs along this play trend.
Total Secures Ensco Semisub for Drilling Offshore Brunei
Total Secures Ensco Semisub for Drilling Offshore Brunei
Thursday, April 21, 2011
Ensco plc
Ensco has entered into a drilling contract for ENSCO 8504 with TOTAL E&P Deep Offshore Borneo B.V. Delivery from the shipyard in Singapore is planned for the end of July 2011 and the contract commencement will follow sea trials and mobilization to Brunei.
Chairman, President and Chief Executive Officer Dan Rabun commented, "We are very pleased that TOTAL has chosen ENSCO 8504 for its drilling program. Our ENSCO 108 jackup drilling rig currently is working for TOTAL in Brunei and we appreciate the opportunity to expand our relationship with our latest 8500 Series rig. Brunei is an emerging deepwater basin and we look forward to entering this market with one of our deepwater rigs for the first time."
The initial contract term is for drilling three exploration wells for a minimum of 180 days with a base day rate of $423,500. TOTAL may extend the term by exercising up to four options. The first two options may be exercised to complete up to three additional wells at the same day rate. The third and fourth options may be exercised to complete up to six additional wells at an escalated day rate. The fee for rig mobilization from Singapore to Brunei is $3.5 million.
When ENSCO 8504 commences operations later this year, it will become the sixth ultra-deepwater rig in the active fleet. Ensco's other deepwater rigs are contracted in Brazil, the U.S. Gulf of Mexico and French Guiana. Two additional ENSCO 8500 Series® rigs are under construction with deliveries scheduled in the first and second half of next year.
Thursday, April 21, 2011
Ensco plc
Ensco has entered into a drilling contract for ENSCO 8504 with TOTAL E&P Deep Offshore Borneo B.V. Delivery from the shipyard in Singapore is planned for the end of July 2011 and the contract commencement will follow sea trials and mobilization to Brunei.
Chairman, President and Chief Executive Officer Dan Rabun commented, "We are very pleased that TOTAL has chosen ENSCO 8504 for its drilling program. Our ENSCO 108 jackup drilling rig currently is working for TOTAL in Brunei and we appreciate the opportunity to expand our relationship with our latest 8500 Series rig. Brunei is an emerging deepwater basin and we look forward to entering this market with one of our deepwater rigs for the first time."
The initial contract term is for drilling three exploration wells for a minimum of 180 days with a base day rate of $423,500. TOTAL may extend the term by exercising up to four options. The first two options may be exercised to complete up to three additional wells at the same day rate. The third and fourth options may be exercised to complete up to six additional wells at an escalated day rate. The fee for rig mobilization from Singapore to Brunei is $3.5 million.
When ENSCO 8504 commences operations later this year, it will become the sixth ultra-deepwater rig in the active fleet. Ensco's other deepwater rigs are contracted in Brazil, the U.S. Gulf of Mexico and French Guiana. Two additional ENSCO 8500 Series® rigs are under construction with deliveries scheduled in the first and second half of next year.
Aurelian Makes Headway in Europe
Aurelian Makes Headway in Europe
Thursday, April 21, 2011
Aurelian O&G plc
Aurelian provided the following operational update.
Highlights
Rowen Bainbridge, Chief Executive commented, "We are making progress to understand the Siekierki reservoir and to develop production and cash-flow by the second half of 2012. Our Trzek-2 well has shown that horizontal wells can produce from tight sands such as Siekierki, and we now need to optimize the completion, frac design and execution to crystallize the potential of this project. In the Greater Siekierki area we are looking forward to the spudding of our Krzesinki, vertical well in H2 2011.
The first well in the Bieszczady concession in our Carpathian drilling program continues to look encouraging and we look forward to providing further updates on this in the coming months.
We are also pleased to have been awarded a 100% interest and operatorship in the Poreba concession, which together with our existing West Karpaty operated concession, enables us to launch our Carpathian conventional gas business targeting first gas and cash flow in H2 2012. The MOU's/alliances that we have signed with PGNiG and FX Energy are also an important step in helping us further grow our tight gas business outside of Siekierki."
Thursday, April 21, 2011
Aurelian O&G plc
Aurelian provided the following operational update.
Highlights
- Previously announced mechanical issues at Trzek-2, Siekierki Multi Fracced Horizontal Well ("MFHW"), restricts production to 3mmscf/d in 15 day stabilized flow rate test
- Result as expected after mechanical issues restrict flow in six of the ten well bore sleeves.
- Trzek-2 to be sidetracked and fracced in Q4 2011 at a cost of €6 million to achieve target stabilized flow rate of 8 mmscf/d and accelerate recovery of 16-28 bcf.
- A change in the completion methodology, to cemented liner and frac for the Trzek-2 sidetrack, removes the risk of similar mechanical issues recurring.
- Sidetrack already funded and potential of project unchanged at 346 bcf (net to Aurelian) recoverable.
- Second MFHW, Trzek-3, encounters 140 meter gas column in Rotliegendes reservoir
- Top reservoir encountered. Logs confirming good gas readings.
- Core taken from estimated 140 metre gas column representing a 40% increase compared with Trzek-2.
- Gas Processing Facility progressing well, first gas targeted H2 2012
- Contract to allow tie-in to national gas transmission system signed.
- Environmental and Planning approvals received.
- Construction approval expected H2 2011 with first gas targeted H2 2012.
- Krzesinki conventional exploration well to spud in Greater Siekierki Area Q3 2011
- Constructing site for well targeting 45-465 bcf (gross) prospective resources.
- Vertical well costing up to €10 million (gross) spudding Q3 2011.
- First Bieszczady well produces gas and condensate from potentially commercial zone above primary targets
- Short term drill stem test of 42 meter zone, flows indicates potentially commercial rates of condensate and gas. Flow from third test confirms zone's prospectivity.
- Current depth circa 3,850 meters. Primary targets between 4,000 and 4,800 meters.
- Processing and interpretation of second 300 km 2D seismic survey underway to support second well early 2012.
- Significant growth initiatives launched in both Carpathian and Tight Gas Core Areas
- Award of 100% of Poreba concession, resulting in the launch of a new 2,562 km2 operated, low cost Carpathian conventional gas business targeting 500-750 bcf (gross) of gas.
- Program commences with work over well in H2 2011 targeting resources of up to 20 bcf (gross). Up to 2mmscf/d initial production and cash flow targeted H2 2012.
- 2012 exploration well targeting prospect with resources of between 40-60 bcf .
- Tight Gas joint commercialization MOU signed with PGNiG targeting new tight gas blocks providing further growth opportunities outside of Siekierki.
- MOU signed with PGNiG and FX Energy to work together sharing data to enhance understanding of Rotliegendes tight gas blocks in Central Poland.
Rowen Bainbridge, Chief Executive commented, "We are making progress to understand the Siekierki reservoir and to develop production and cash-flow by the second half of 2012. Our Trzek-2 well has shown that horizontal wells can produce from tight sands such as Siekierki, and we now need to optimize the completion, frac design and execution to crystallize the potential of this project. In the Greater Siekierki area we are looking forward to the spudding of our Krzesinki, vertical well in H2 2011.
The first well in the Bieszczady concession in our Carpathian drilling program continues to look encouraging and we look forward to providing further updates on this in the coming months.
We are also pleased to have been awarded a 100% interest and operatorship in the Poreba concession, which together with our existing West Karpaty operated concession, enables us to launch our Carpathian conventional gas business targeting first gas and cash flow in H2 2012. The MOU's/alliances that we have signed with PGNiG and FX Energy are also an important step in helping us further grow our tight gas business outside of Siekierki."
Chevron Awards MyCelx Contract for Jack/St. Malo Facility
Chevron Awards MyCelx Contract for Jack/St. Malo Facility
Thursday, April 21, 2011
MyCelx
MyCelx has signed a contract with Chevron U.S.A. Inc. to design and deliver a produced water treatment system for the Jack/St. Malo floating production facility in deepwater Gulf of Mexico that will remove oil and water soluble organics (WSO) to below 10 parts per million (ppm).
The design requirements for the Jack/St. Malo floating production facility calls for an overboard discharge limit that Is lower than the current EPA limit of 29 ppm, and MyCelx is one of the few companies providing the technology that can guarantee low levels of oil and grease discharge levels in a consistent manner through an economically viable process. The WSOs contained in offshore produced water have proved difficult for conventional technologies to reliably meet the overboard discharge specifications set by the EPA.
"MyCelx system guarantees oil-free water and no sheen discharge into the environment," said Andy Narayanan, Manager of Operations and Technical Services at MyCelx. "The Jack/St Malo will be implementing MyCelx produced water treatment system specifically designed to handle the difficult WSO's from deep water drilling operations. We are currently in the process of design discussion with Chevron and Mustang. Current schedule is to deliver the system to Mustang Engineering by May 2011."
The Jack and St. Malo fields are being developed in the Lower Tertiary trend in deepwater Gulf of Mexico. The fields are estimated to contain total recoverable resources equivalent to more than 500 million barrels of oil. MyCelx produced water treatment system will treat up to 70,000 barrels per day.
Thursday, April 21, 2011
MyCelx
MyCelx has signed a contract with Chevron U.S.A. Inc. to design and deliver a produced water treatment system for the Jack/St. Malo floating production facility in deepwater Gulf of Mexico that will remove oil and water soluble organics (WSO) to below 10 parts per million (ppm).
The design requirements for the Jack/St. Malo floating production facility calls for an overboard discharge limit that Is lower than the current EPA limit of 29 ppm, and MyCelx is one of the few companies providing the technology that can guarantee low levels of oil and grease discharge levels in a consistent manner through an economically viable process. The WSOs contained in offshore produced water have proved difficult for conventional technologies to reliably meet the overboard discharge specifications set by the EPA.
"MyCelx system guarantees oil-free water and no sheen discharge into the environment," said Andy Narayanan, Manager of Operations and Technical Services at MyCelx. "The Jack/St Malo will be implementing MyCelx produced water treatment system specifically designed to handle the difficult WSO's from deep water drilling operations. We are currently in the process of design discussion with Chevron and Mustang. Current schedule is to deliver the system to Mustang Engineering by May 2011."
The Jack and St. Malo fields are being developed in the Lower Tertiary trend in deepwater Gulf of Mexico. The fields are estimated to contain total recoverable resources equivalent to more than 500 million barrels of oil. MyCelx produced water treatment system will treat up to 70,000 barrels per day.
Small Oil Cos Survive GOM's Deep Waters
Small Oil Cos Survive GOM's Deep Waters
Thursday, April 21, 2011
Dow Jones Newswires
by Ryan Dezember
When the staggering costs of BP's deep-water Gulf of Mexico oil spill became clear, investors feared that small, independent oil and natural-gas producers would have to leave the area.
These companies, relatively small by energy-industry standards, didn't have pockets as deep as those of the big oil companies--a necessity in the event of another spill.
But, surprisingly, few companies have abandoned their offshore positions a year after the deadly Deepwater Horizon blast, which killed 11 and unleashed the largest marine oil spill in U.S. history.
Not only will they remain, some small producers vow, but they intend to double down on their bets on deep-water drilling in the U.S. Gulf.
"We're staying," said Al Reese Jr., chief financial officer of ATP Oil & Gas, in an interview.
The Houston-based company, which has a market capitalization of less than $1 billion, last year saw its shares plummet due to its presence in the Gulf's deep water.
But on March 18, when the government announced it had approved a deep-water drilling permit for ATP, shares jumped, ending the day 4.6% higher.
Fellow oil company W&T Offshore bought deep-water properties from Shell and Total after the spill. Plains Exploration & Production Co. (PXP) recently decided to keep its deep-water assets, which it had sought to sell after the spill.
"The Gulf is going to get stronger," W&T Chief Executive Tracy Krohn said in a recent meeting with investors.
Throughout the history of the U.S. Gulf of Mexico's energy industry, small companies have played a big role in making the basin one of the world's most productive oil and natural-gas basins. In the 1990s, as production declined in the Gulf's heavily explored shallow waters, scrappy independent companies were among the first to venture out to the outer continental shelf and prove that there were big reserves in depths greater than 1,000 feet.
But the Deepwater Horizon disaster, for which BP expects to pay about $40 billion, raised what were already high stakes.
Only giants with global empires such as BP, ExxonMobil and Chevron could absorb such a hit. Indeed, many independent companies couldn't afford spill bills such as the ones for billions of dollars that BP has tried to make its partners Anadarko and Mitsui Oil Exploration pay for the Deepwater Horizon clean-up. According to Deloitte, only 10 of the roughly 300 companies operating in the Gulf have a market capitalization of more than $30 billion and about 40% are worth less than $5 billion.
Tudor Pickering Holt & Co. analyst David Pursell said that, while there has been no broad exodus of independent producers, their future in the Gulf's deep waters remains unclear. "The questions are kind of still unanswered," Pursell said. "Can these guys get access to [spill] containment equipment? Can they get access to enough insurance?"
Producers said it has been challenging, but they have found affordable insurance, mainly because BP was self-insured and didn't roil the market with massive claims. And the industry has developed a pair of spill-containment cooperatives that have allowed producers to show regulators they can control a runaway well.
One lingering fear: lawmakers setting prohibitively high liability limits. After the Deepwater Horizon disaster, there was talk in Congress about raising oil companies' liability cap under the Oil Pollution Act from $75 million to billions of dollars. That change never happened--but it doesn't mean it never could.
"It's possible to write legislation that effectively keeps all the little independents out of the Gulf," said Bob Zahradnik, director of the Southern Ute tribe's Growth Fund, which owns oil and gas explorer Red Willow Production Co.
Red Willow, formed by the tribe in 1992 to buy back natural-gas leases on its Colorado reservation, dove into the Gulf's deep water in 2006. It now has interests in 21 deep-water leases.
Typically Red Willow, which joins with Houston Energy to locate offshore prospects, bids on production blocks at government auctions and then brings in larger partners to help it to develop the reservoirs.
"There's a niche for people like us," said Zahradnik, formerly of Exxon Mobil, adding that the company looks for 50-million to 100-million barrel oilfields, which Big Oil considers small fry but which are big game for independents. "I mean, 50 million barrels is $5 billion."
In late February, U.S. regulators approved the first deep-water drilling permit since BP's spill, allowing independent oil company Noble Energy to drill what began as a Red Willow prospect in about 6,500 feet of water.
Though its interest has been reduced to 20.25% after selling larger stakes to Noble and BP, Red Willow expects the well, on which work began last week, to produce a "flash of cash" that it can reinvest in longer-lasting, less-risky onshore ventures, said Rob Voorhees, Red Willow's president and chief operating officer.
"You spend a lot of money and get a little in return onshore," Voorhees said. In deep water, however, "we have one well that's going to swing the nature of our business."
Thursday, April 21, 2011
Dow Jones Newswires
by Ryan Dezember
When the staggering costs of BP's deep-water Gulf of Mexico oil spill became clear, investors feared that small, independent oil and natural-gas producers would have to leave the area.
These companies, relatively small by energy-industry standards, didn't have pockets as deep as those of the big oil companies--a necessity in the event of another spill.
But, surprisingly, few companies have abandoned their offshore positions a year after the deadly Deepwater Horizon blast, which killed 11 and unleashed the largest marine oil spill in U.S. history.
Not only will they remain, some small producers vow, but they intend to double down on their bets on deep-water drilling in the U.S. Gulf.
"We're staying," said Al Reese Jr., chief financial officer of ATP Oil & Gas, in an interview.
The Houston-based company, which has a market capitalization of less than $1 billion, last year saw its shares plummet due to its presence in the Gulf's deep water.
But on March 18, when the government announced it had approved a deep-water drilling permit for ATP, shares jumped, ending the day 4.6% higher.
Fellow oil company W&T Offshore bought deep-water properties from Shell and Total after the spill. Plains Exploration & Production Co. (PXP) recently decided to keep its deep-water assets, which it had sought to sell after the spill.
"The Gulf is going to get stronger," W&T Chief Executive Tracy Krohn said in a recent meeting with investors.
Throughout the history of the U.S. Gulf of Mexico's energy industry, small companies have played a big role in making the basin one of the world's most productive oil and natural-gas basins. In the 1990s, as production declined in the Gulf's heavily explored shallow waters, scrappy independent companies were among the first to venture out to the outer continental shelf and prove that there were big reserves in depths greater than 1,000 feet.
But the Deepwater Horizon disaster, for which BP expects to pay about $40 billion, raised what were already high stakes.
Only giants with global empires such as BP, ExxonMobil and Chevron could absorb such a hit. Indeed, many independent companies couldn't afford spill bills such as the ones for billions of dollars that BP has tried to make its partners Anadarko and Mitsui Oil Exploration pay for the Deepwater Horizon clean-up. According to Deloitte, only 10 of the roughly 300 companies operating in the Gulf have a market capitalization of more than $30 billion and about 40% are worth less than $5 billion.
Tudor Pickering Holt & Co. analyst David Pursell said that, while there has been no broad exodus of independent producers, their future in the Gulf's deep waters remains unclear. "The questions are kind of still unanswered," Pursell said. "Can these guys get access to [spill] containment equipment? Can they get access to enough insurance?"
Producers said it has been challenging, but they have found affordable insurance, mainly because BP was self-insured and didn't roil the market with massive claims. And the industry has developed a pair of spill-containment cooperatives that have allowed producers to show regulators they can control a runaway well.
One lingering fear: lawmakers setting prohibitively high liability limits. After the Deepwater Horizon disaster, there was talk in Congress about raising oil companies' liability cap under the Oil Pollution Act from $75 million to billions of dollars. That change never happened--but it doesn't mean it never could.
"It's possible to write legislation that effectively keeps all the little independents out of the Gulf," said Bob Zahradnik, director of the Southern Ute tribe's Growth Fund, which owns oil and gas explorer Red Willow Production Co.
Red Willow, formed by the tribe in 1992 to buy back natural-gas leases on its Colorado reservation, dove into the Gulf's deep water in 2006. It now has interests in 21 deep-water leases.
Typically Red Willow, which joins with Houston Energy to locate offshore prospects, bids on production blocks at government auctions and then brings in larger partners to help it to develop the reservoirs.
"There's a niche for people like us," said Zahradnik, formerly of Exxon Mobil, adding that the company looks for 50-million to 100-million barrel oilfields, which Big Oil considers small fry but which are big game for independents. "I mean, 50 million barrels is $5 billion."
In late February, U.S. regulators approved the first deep-water drilling permit since BP's spill, allowing independent oil company Noble Energy to drill what began as a Red Willow prospect in about 6,500 feet of water.
Though its interest has been reduced to 20.25% after selling larger stakes to Noble and BP, Red Willow expects the well, on which work began last week, to produce a "flash of cash" that it can reinvest in longer-lasting, less-risky onshore ventures, said Rob Voorhees, Red Willow's president and chief operating officer.
"You spend a lot of money and get a little in return onshore," Voorhees said. In deep water, however, "we have one well that's going to swing the nature of our business."
Providence Pumps Oil at Singleton Well
Providence Pumps Oil at Singleton Well
Thursday, April 21, 2011
Providence Resources plc
Providence confirmed that its Singleton X11 development well has commenced production. This new well, together the recently completed X8v lateral development well, formed part of the company's 2010 drilling program at the Singleton field, onshore UK. The Singleton field is located in the Weald Basin in the south of England and is operated by Providence (99.125%) with partner Noble Energy (0.8725%).
The X11 horizontal development well was recently brought on-stream at an initial rate of c. 200 BOEPD (c. 150 BOPD & c. 300 MSCFGD), which is in-line with pre-drill expectations. The X11 well design has been optimized for stimulation and plans are currently being progressed to carry out an acid fracture operation during Q2/3 2011 to increase production rates further. The X8v dual lateral well is currently being prepared for stimulation. The previously producing X8x section of the well has already been stimulated and it is planned to bring the well back into production in early May.
An updated Singleton third party reserve audit has been carried out by Collarini & Associates, incorporating the results of the 2010 multi-well program. The updated audit reports 7.7 MMBO of 2P net oil reserves at Singleton as of 1st March 2011. This is an increase of 44% in 2P oil reserves when compared to the previous report from 1st January 2010. A copy of the letter from Collarini & Associates summarizing the reserve report will be posted on Providence's website.
Providence will continue the re-development of the Singleton oilfield with further drilling planned in 2011. The company is currently in discussion with rig operators in advance of plans to spud a development well on Singleton later this year.
Thursday, April 21, 2011
Providence Resources plc
Providence confirmed that its Singleton X11 development well has commenced production. This new well, together the recently completed X8v lateral development well, formed part of the company's 2010 drilling program at the Singleton field, onshore UK. The Singleton field is located in the Weald Basin in the south of England and is operated by Providence (99.125%) with partner Noble Energy (0.8725%).
The X11 horizontal development well was recently brought on-stream at an initial rate of c. 200 BOEPD (c. 150 BOPD & c. 300 MSCFGD), which is in-line with pre-drill expectations. The X11 well design has been optimized for stimulation and plans are currently being progressed to carry out an acid fracture operation during Q2/3 2011 to increase production rates further. The X8v dual lateral well is currently being prepared for stimulation. The previously producing X8x section of the well has already been stimulated and it is planned to bring the well back into production in early May.
An updated Singleton third party reserve audit has been carried out by Collarini & Associates, incorporating the results of the 2010 multi-well program. The updated audit reports 7.7 MMBO of 2P net oil reserves at Singleton as of 1st March 2011. This is an increase of 44% in 2P oil reserves when compared to the previous report from 1st January 2010. A copy of the letter from Collarini & Associates summarizing the reserve report will be posted on Providence's website.
Providence will continue the re-development of the Singleton oilfield with further drilling planned in 2011. The company is currently in discussion with rig operators in advance of plans to spud a development well on Singleton later this year.
Fire Extinguished at Maersk's Platform Offshore Qatar
Fire Extinguished at Maersk's Platform Offshore Qatar
Thursday, April 21, 2011
Maersk Oil
At 02:46 on April 21, a fire broke out on the Maersk Oil Qatar operated AD accommodation platform in the Al Shaheen field, 80 km north of Qatar.
The fire which took place in the emergency generator room has been extinguished and the situation is under control. All employees are safe and accounted for with no serious injuries. Our primary concern remains the safety and well-being of our personnel and those affected by the situation. All non-essential personnel have been evacuated from the platform and crisis counseling made available.
The cause of the fire is unknown and an investigation is underway to establish the root cause. However, three days prior to the incident production at A-Location had been shut-down for planned maintenance work. As a result no hydrocarbons were present at the time. There has been no environmental impact as a result of the incident.
Maersk Oil Qatar operates the Al Shaheen field on behalf of Qatar Petroleum. Currently there are 1561 personnel working offshore with 242 working at A-Location.
Thursday, April 21, 2011
Maersk Oil
At 02:46 on April 21, a fire broke out on the Maersk Oil Qatar operated AD accommodation platform in the Al Shaheen field, 80 km north of Qatar.
The fire which took place in the emergency generator room has been extinguished and the situation is under control. All employees are safe and accounted for with no serious injuries. Our primary concern remains the safety and well-being of our personnel and those affected by the situation. All non-essential personnel have been evacuated from the platform and crisis counseling made available.
The cause of the fire is unknown and an investigation is underway to establish the root cause. However, three days prior to the incident production at A-Location had been shut-down for planned maintenance work. As a result no hydrocarbons were present at the time. There has been no environmental impact as a result of the incident.
Maersk Oil Qatar operates the Al Shaheen field on behalf of Qatar Petroleum. Currently there are 1561 personnel working offshore with 242 working at A-Location.
BP Files Suit Against Halliburton
BP Files Suit Against Halliburton
Thursday, April 21, 2011
The Wall Street Journal
by Guy Chazan
BP said it had filed a lawsuit against Halliburton, claiming its "misconduct" contributed to last year's Deepwater Horizon disaster that led to the worst offshore oil spill in U.S. history.
The lawsuit was filed Wednesday, the first anniversary of the blowout on BP's Macondo well in the Gulf of Mexico that destroyed the Deepwater Horizon rig and killed 11 men. It came shortly after BP filed suit against two other contractors, Transocean, the Deepwater Horizon's owner and operator, and Cameron, which manufactured a critical safety device called a blowout preventer.
Wednesday saw the expiration of a court-issued deadline to make filings preserving the right to sue companies involved in the spill.
Aside from BP, the main owner of the Macondo well, no company has faced more criticism over the disaster than Halliburton. It designed the failed cement seal that experts think allowed explosive gas to flow into the well and reach the Deepwater Horizon. Halliburton doesn't deny the seal failed but argues BP should have run tests that would have revealed the problem.
In the filing, BP said its action was to hold Halliburton accountable for "improper conduct, errors and omissions, including fraud and concealment." In a statement, it said the President Commission that investigated the Gulf disaster concluded that the cement slurry designed, mixed and pumped by Halliburton failed, that the company didn't provide BP with the results of failed cement tests and that its technicians "missed critical signals that hydrocarbons were flowing into the wellbore." "The record is clear that Halliburton's misconduct contributed to the accident and spill," it said.
Halliburton said it would "vigorously deny these claims."
A BP spokesman said the company wasn't suing Halliburton for a particular sum, but would ask for damages of up to the total cost of the spill. Last year, BP set aside $40.9 billion for spill-related costs.
Earlier, BP filed claims against Transocean and Cameron, maker of the blowout preventer, a huge set of valves designed to shut down a well in an emergency. BP contended that if the blowout preventer had functioned properly, the spill could have been largely avoided.
The BP complaint said Transocean was responsible for multiple failures of safety devices and well control procedures. It said BP was seeking at least $40 billion in damages. BP also seeks to force Cameron to contribute all or part of the damages that could be levied against the oil giant by the federal government.
Cameron said in a statement that it was "not surprising" that the companies are filing to protect their indemnity rights, adding that in order to protect itself it had filed counterclaims against other parties to the litigation. A Transocean spokesman called the BP lawsuit "specious and unconscionable." It said its contract with BP indemnified it against all claims related to pollution and environmental damage.
LINK
The Gulf of Mexico Oil Spill
Latest Deepwater Horizon Headlines
Thursday, April 21, 2011
The Wall Street Journal
by Guy Chazan
BP said it had filed a lawsuit against Halliburton, claiming its "misconduct" contributed to last year's Deepwater Horizon disaster that led to the worst offshore oil spill in U.S. history.
The lawsuit was filed Wednesday, the first anniversary of the blowout on BP's Macondo well in the Gulf of Mexico that destroyed the Deepwater Horizon rig and killed 11 men. It came shortly after BP filed suit against two other contractors, Transocean, the Deepwater Horizon's owner and operator, and Cameron, which manufactured a critical safety device called a blowout preventer.
Wednesday saw the expiration of a court-issued deadline to make filings preserving the right to sue companies involved in the spill.
Aside from BP, the main owner of the Macondo well, no company has faced more criticism over the disaster than Halliburton. It designed the failed cement seal that experts think allowed explosive gas to flow into the well and reach the Deepwater Horizon. Halliburton doesn't deny the seal failed but argues BP should have run tests that would have revealed the problem.
In the filing, BP said its action was to hold Halliburton accountable for "improper conduct, errors and omissions, including fraud and concealment." In a statement, it said the President Commission that investigated the Gulf disaster concluded that the cement slurry designed, mixed and pumped by Halliburton failed, that the company didn't provide BP with the results of failed cement tests and that its technicians "missed critical signals that hydrocarbons were flowing into the wellbore." "The record is clear that Halliburton's misconduct contributed to the accident and spill," it said.
Halliburton said it would "vigorously deny these claims."
A BP spokesman said the company wasn't suing Halliburton for a particular sum, but would ask for damages of up to the total cost of the spill. Last year, BP set aside $40.9 billion for spill-related costs.
Earlier, BP filed claims against Transocean and Cameron, maker of the blowout preventer, a huge set of valves designed to shut down a well in an emergency. BP contended that if the blowout preventer had functioned properly, the spill could have been largely avoided.
The BP complaint said Transocean was responsible for multiple failures of safety devices and well control procedures. It said BP was seeking at least $40 billion in damages. BP also seeks to force Cameron to contribute all or part of the damages that could be levied against the oil giant by the federal government.
Cameron said in a statement that it was "not surprising" that the companies are filing to protect their indemnity rights, adding that in order to protect itself it had filed counterclaims against other parties to the litigation. A Transocean spokesman called the BP lawsuit "specious and unconscionable." It said its contract with BP indemnified it against all claims related to pollution and environmental damage.
LINK
The Gulf of Mexico Oil Spill
Latest Deepwater Horizon Headlines
Weatherford Swings to Profit in 1Q11
Weatherford Swings to Profit in 1Q11
Thursday, April 21, 2011
Weatherford International Ltd.
Weatherford reported first quarter 2011 income of $78 million, or $0.10 per diluted share, excluding an after-tax loss of $18 million. On a GAAP basis, our net income for the first quarter of 2011 was $59 million, or $0.08 per diluted share. The excluded after-tax loss is comprised of the following items:
First quarter diluted earnings per share reflect an increase of $0.07 over the first quarter of 2010 diluted earnings per share of $0.03, before charges. Sequentially, the company's first quarter diluted earnings per share, before charges, were $0.06 lower than the fourth quarter of 2010.
First quarter revenues were $2,856 million, or 23 percent higher than the same period last year, and down two percent sequentially. North America revenues increased 53 percent compared to the first quarter of 2010 while international revenues were up four percent over the same period.
Segment operating income of $353 million improved 38 percent year-over-year but was down 17 percent sequentially. Margin performance was held back primarily due to political turmoil in the Middle East and North Africa, unfavorable weather conditions and an equity tax enacted in Colombia.
The company expects earnings per share before excluded items of approximately $0.15 to $0.17 in the second quarter of 2011.
North America
Revenue increased eight percent sequentially and 53 percent compared to the first quarter of 2010. Canadian activity was strong while colder winter temperatures subdued progress in the United States. Operating income of $284 million improved $22 million sequentially, and margins increased 20 basis points to 20.9 percent.
Middle East/North Africa/Asia
Revenue decreased $109 million sequentially, or 16 percent, as political disruptions in the Middle East and North Africa and challenging weather events in Australia and China took a heavy toll, accounting for approximately two-thirds of the drop. Operating income declined $38 million sequentially, on decrementals of 35 percent.
Europe/West Africa/FSU
Revenue declined $18 million, or three percent, sequentially but was up 12 percent compared to the first quarter of 2010. The winter effect in the North Sea, Russia and Caspian were primarily responsible for the decline. Operating income declined $27 million sequentially. Contributing to the severe decrementals were increased employee-related costs, as well as higher fuel and transportation costs in Russia.
Latin America
Revenue decreased eight percent, or $36 million, on a sequential basis and declined four percent, or $17 million, compared to the first quarter of 2010. Mexico and Venezuela led the declines. Operating income fell $32 million sequentially. Approximately $16 million of the decline was due to the charge for the Colombia equity tax. Adjusting for this effect, decrementals were approximately 44 percent.
Net Debt
Net debt for the quarter increased $547 million primarily as a result of an increase in working capital of $365 million. The increase in working capital was largely driven by North America and Latin America.
Thursday, April 21, 2011
Weatherford International Ltd.
Weatherford reported first quarter 2011 income of $78 million, or $0.10 per diluted share, excluding an after-tax loss of $18 million. On a GAAP basis, our net income for the first quarter of 2011 was $59 million, or $0.08 per diluted share. The excluded after-tax loss is comprised of the following items:
- $9 million after-tax charge incurred in connection with the termination of a corporate consulting contract;
- $8 million in after-tax severance; and
- $1 million for investigation costs.
First quarter diluted earnings per share reflect an increase of $0.07 over the first quarter of 2010 diluted earnings per share of $0.03, before charges. Sequentially, the company's first quarter diluted earnings per share, before charges, were $0.06 lower than the fourth quarter of 2010.
First quarter revenues were $2,856 million, or 23 percent higher than the same period last year, and down two percent sequentially. North America revenues increased 53 percent compared to the first quarter of 2010 while international revenues were up four percent over the same period.
Segment operating income of $353 million improved 38 percent year-over-year but was down 17 percent sequentially. Margin performance was held back primarily due to political turmoil in the Middle East and North Africa, unfavorable weather conditions and an equity tax enacted in Colombia.
The company expects earnings per share before excluded items of approximately $0.15 to $0.17 in the second quarter of 2011.
North America
Revenue increased eight percent sequentially and 53 percent compared to the first quarter of 2010. Canadian activity was strong while colder winter temperatures subdued progress in the United States. Operating income of $284 million improved $22 million sequentially, and margins increased 20 basis points to 20.9 percent.
Middle East/North Africa/Asia
Revenue decreased $109 million sequentially, or 16 percent, as political disruptions in the Middle East and North Africa and challenging weather events in Australia and China took a heavy toll, accounting for approximately two-thirds of the drop. Operating income declined $38 million sequentially, on decrementals of 35 percent.
Europe/West Africa/FSU
Revenue declined $18 million, or three percent, sequentially but was up 12 percent compared to the first quarter of 2010. The winter effect in the North Sea, Russia and Caspian were primarily responsible for the decline. Operating income declined $27 million sequentially. Contributing to the severe decrementals were increased employee-related costs, as well as higher fuel and transportation costs in Russia.
Latin America
Revenue decreased eight percent, or $36 million, on a sequential basis and declined four percent, or $17 million, compared to the first quarter of 2010. Mexico and Venezuela led the declines. Operating income fell $32 million sequentially. Approximately $16 million of the decline was due to the charge for the Colombia equity tax. Adjusting for this effect, decrementals were approximately 44 percent.
Net Debt
Net debt for the quarter increased $547 million primarily as a result of an increase in working capital of $365 million. The increase in working capital was largely driven by North America and Latin America.
Noble 1Q Profit Dives on Drilling Restrictions
Noble 1Q Profit Dives on Drilling Restrictions
Thursday, April 21, 2011
Noble Corp.
Noble reported first quarter 2011 earnings of $54 million, or $0.21 per diluted share, versus $99 million, or $0.39 per diluted share, for the fourth quarter of 2010. First quarter 2011 results include a one-time after-tax net gain of $0.06 per diluted share related to the previously announced substitution of the drillship Noble Phoenix for the drillship Noble Muravlenko in Brazil. Contract drilling services revenues for the first quarter of 2011 were $543 million versus $614 million for the fourth quarter of 2010. Contract drilling margin for the first quarter of 2011 was approximately 44 percent, versus 46 percent in the prior quarter. Noble invested $614 million in capital projects during the quarter.
"Noble's first quarter results reflect the continuing impact of drilling restrictions in the U.S. Gulf of Mexico," said David W. Williams, Chairman, President and Chief Executive Officer. "However, improving utilization in the rest of the world coupled with our extensive contract backlog afforded us the financial flexibility to expand and extend our newbuild program, adding both high-spec ultra-deepwater and jackup units to the fleet. With several new contracts commencing this quarter and the possibility of increased permitting in the U.S. Gulf of Mexico, we expect contract drilling revenues to improve across the balance of the year."
In February 2011, Noble issued $1.1 billion aggregate principal amount of senior notes in three separate tranches with a weighted average coupon of 4.71 percent. A portion of the proceeds was used to repay our half of the $693 million of joint venture debt associated with the Noble Bully I and Noble BullyII drillships. Our joint venture partner, Shell, contributed the remaining half to retire the full balance of the debt. Debt as a percentage of total capitalization was 29 percent at March 31, 2011.
Operations Highlights
At the end of the first quarter of 2011, approximately 64 percent of the Company's available rig operating days were committed for the remainder of 2011 and approximately 33 percent were committed for 2012. The Company's total backlog at March 31, 2011 was approximately $13.1 billion.
In the first quarter, Noble continued its strategy of upgrading its fleet by adding rigs with the latest technology and capabilities. Noble announced a total of five newbuilds, including three ultra-deepwater drillships and two heavy duty, harsh environment (HDHE) jackups which are in addition to the two HDHE jackups announced in December 2010. Deliveries are expected to commence in the fourth quarter of 2012 when the first jackup is scheduled to be completed. Additionally, the first of the three drillships has been awarded a Letter of Intent for five and a half years with an expected commencement date in the second half of 2013 at a dayrate of $410,000. The unit is eligible for up to a 15 percent performance bonus. In the past five months, Noble has committed more than $2.7 billion to its fleet upgrade strategy. The Company has one remaining drillship option that expires August 31, 2011 and two remaining jackup options that expire January 1, 2012.
In the U.S. Gulf of Mexico, the Noble Jim Thompson returned to earning its full dayrate of $359,000-$361,000 at the beginning of April after being on standby for approximately nine months. The unit resumed drilling operations for our customer Shell after they received approval for an exploration permit. Noble has three other rigs on standby with Shell in the Gulf, the Noble Danny Adkins and Noble Jim Day, both at dayrates of $155,000-$157,000, and the Noble Driller at a dayrate of $84,000-$86,000. As previously announced during the quarter, Noble secured a one-year commitment on the Noble Jim Day which includes a period of standby between mid-February and July 31, 2011 and an agreement that the rig will receive a dayrate of $484,000-$486,000 from August 1, 2011 through January 31, 2012 regardless of whether or not the unit is drilling. When operating, the unit will be eligible for a performance bonus of up to 15 percent of the dayrate.
In Mexico, Noble was awarded contracts on seven jackups at dayrates ranging from the mid-$50,000's to approximately $100,000 for durations between 139 days and 624 days. The Company also secured extensions on two units, the Noble Carl Norberg and Noble Roy Butler.
In January, Noble announced a substitution of the Noble Phoenix for the Noble Muravlenko to operate in Brazil. In conjunction with the rig swap, Noble canceled a planned reliability upgrade on the Noble Muravlenko. Also in Brazil, the Noble Clyde Boudreaux commenced a one-year contract at a dayrate of $289,000-$291,000 in early April. The rig is eligible for up to a 15 percent performance bonus.
The Noble Homer Ferrington commenced a farmout in mid-March earning a full dayrate of $504,000-$506,000 while operating in Morocco.
Finally, the Noble Roger Lewis commenced its three-year contract in Saudi Arabia in early March at a dayrate of $131,000-$133,000. The Noble Scott Marks, scheduled to begin a three-year contract in Saudi Arabia in July, arrived in the Middle East to begin necessary upgrades.
"A number of anticipated catalysts have come to fruition and created value for our shareholders during the quarter, including a return to work of rigs in the U.S. Gulf, in Mexico, the Middle East, and the Mediterranean," said Williams. "With what is now eleven newbuilds, we have committed to a significant fleet upgrade program and are beginning to evaluate our existing assets to determine their ultimate future within our fleet. In the meantime, we continue to believe that there is additional upside to the Noble story, including the delivery of three ultra-deepwater drillships during 2011 and a return to normal drilling activity in the U.S. Gulf."
Thursday, April 21, 2011
Noble Corp.
Noble reported first quarter 2011 earnings of $54 million, or $0.21 per diluted share, versus $99 million, or $0.39 per diluted share, for the fourth quarter of 2010. First quarter 2011 results include a one-time after-tax net gain of $0.06 per diluted share related to the previously announced substitution of the drillship Noble Phoenix for the drillship Noble Muravlenko in Brazil. Contract drilling services revenues for the first quarter of 2011 were $543 million versus $614 million for the fourth quarter of 2010. Contract drilling margin for the first quarter of 2011 was approximately 44 percent, versus 46 percent in the prior quarter. Noble invested $614 million in capital projects during the quarter.
"Noble's first quarter results reflect the continuing impact of drilling restrictions in the U.S. Gulf of Mexico," said David W. Williams, Chairman, President and Chief Executive Officer. "However, improving utilization in the rest of the world coupled with our extensive contract backlog afforded us the financial flexibility to expand and extend our newbuild program, adding both high-spec ultra-deepwater and jackup units to the fleet. With several new contracts commencing this quarter and the possibility of increased permitting in the U.S. Gulf of Mexico, we expect contract drilling revenues to improve across the balance of the year."
In February 2011, Noble issued $1.1 billion aggregate principal amount of senior notes in three separate tranches with a weighted average coupon of 4.71 percent. A portion of the proceeds was used to repay our half of the $693 million of joint venture debt associated with the Noble Bully I and Noble BullyII drillships. Our joint venture partner, Shell, contributed the remaining half to retire the full balance of the debt. Debt as a percentage of total capitalization was 29 percent at March 31, 2011.
Operations Highlights
At the end of the first quarter of 2011, approximately 64 percent of the Company's available rig operating days were committed for the remainder of 2011 and approximately 33 percent were committed for 2012. The Company's total backlog at March 31, 2011 was approximately $13.1 billion.
In the first quarter, Noble continued its strategy of upgrading its fleet by adding rigs with the latest technology and capabilities. Noble announced a total of five newbuilds, including three ultra-deepwater drillships and two heavy duty, harsh environment (HDHE) jackups which are in addition to the two HDHE jackups announced in December 2010. Deliveries are expected to commence in the fourth quarter of 2012 when the first jackup is scheduled to be completed. Additionally, the first of the three drillships has been awarded a Letter of Intent for five and a half years with an expected commencement date in the second half of 2013 at a dayrate of $410,000. The unit is eligible for up to a 15 percent performance bonus. In the past five months, Noble has committed more than $2.7 billion to its fleet upgrade strategy. The Company has one remaining drillship option that expires August 31, 2011 and two remaining jackup options that expire January 1, 2012.
In the U.S. Gulf of Mexico, the Noble Jim Thompson returned to earning its full dayrate of $359,000-$361,000 at the beginning of April after being on standby for approximately nine months. The unit resumed drilling operations for our customer Shell after they received approval for an exploration permit. Noble has three other rigs on standby with Shell in the Gulf, the Noble Danny Adkins and Noble Jim Day, both at dayrates of $155,000-$157,000, and the Noble Driller at a dayrate of $84,000-$86,000. As previously announced during the quarter, Noble secured a one-year commitment on the Noble Jim Day which includes a period of standby between mid-February and July 31, 2011 and an agreement that the rig will receive a dayrate of $484,000-$486,000 from August 1, 2011 through January 31, 2012 regardless of whether or not the unit is drilling. When operating, the unit will be eligible for a performance bonus of up to 15 percent of the dayrate.
In Mexico, Noble was awarded contracts on seven jackups at dayrates ranging from the mid-$50,000's to approximately $100,000 for durations between 139 days and 624 days. The Company also secured extensions on two units, the Noble Carl Norberg and Noble Roy Butler.
In January, Noble announced a substitution of the Noble Phoenix for the Noble Muravlenko to operate in Brazil. In conjunction with the rig swap, Noble canceled a planned reliability upgrade on the Noble Muravlenko. Also in Brazil, the Noble Clyde Boudreaux commenced a one-year contract at a dayrate of $289,000-$291,000 in early April. The rig is eligible for up to a 15 percent performance bonus.
The Noble Homer Ferrington commenced a farmout in mid-March earning a full dayrate of $504,000-$506,000 while operating in Morocco.
Finally, the Noble Roger Lewis commenced its three-year contract in Saudi Arabia in early March at a dayrate of $131,000-$133,000. The Noble Scott Marks, scheduled to begin a three-year contract in Saudi Arabia in July, arrived in the Middle East to begin necessary upgrades.
"A number of anticipated catalysts have come to fruition and created value for our shareholders during the quarter, including a return to work of rigs in the U.S. Gulf, in Mexico, the Middle East, and the Mediterranean," said Williams. "With what is now eleven newbuilds, we have committed to a significant fleet upgrade program and are beginning to evaluate our existing assets to determine their ultimate future within our fleet. In the meantime, we continue to believe that there is additional upside to the Noble story, including the delivery of three ultra-deepwater drillships during 2011 and a return to normal drilling activity in the U.S. Gulf."
General Electric Topped Q1 Estimates, Top Line Up 6%, Lifted Dividend
General Electric Topped Q1 Estimates, Top Line Up 6%, Lifted Dividend
Apr 21, 2011
General Electric (NYSE:GE) reported Q1 EPS of $0.31, ahead of consensus of $0.28 per share. Revenues rose 6% year-over-year to $38.4 billion, topping consensus estimates of $3.6 billion.
The company raised its quarterly dividend by $0.01 to $0.15, effective in Q3.
GE Chairman and CEO Jeff Immelt said, "As today's results show, GE has emerged from the recession a stronger, more competitive company. GE Healthcare, Transportation and Aviation delivered strong results. Strategic investments in high-growth segments have strengthened the company's Energy portfolio and position that business to return to growth in the second half of this year. We ended the quarter with a record high backlog of $177 billion."
Apr 21, 2011
General Electric (NYSE:GE) reported Q1 EPS of $0.31, ahead of consensus of $0.28 per share. Revenues rose 6% year-over-year to $38.4 billion, topping consensus estimates of $3.6 billion.
The company raised its quarterly dividend by $0.01 to $0.15, effective in Q3.
GE Chairman and CEO Jeff Immelt said, "As today's results show, GE has emerged from the recession a stronger, more competitive company. GE Healthcare, Transportation and Aviation delivered strong results. Strategic investments in high-growth segments have strengthened the company's Energy portfolio and position that business to return to growth in the second half of this year. We ended the quarter with a record high backlog of $177 billion."
Schlumberger 1Q Earnings Increase 40% in 2011
Schlumberger 1Q Earnings Increase 40% in 2011
Thursday, April 21, 2011
Schlumberger Ltd.
Schlumberger reported first-quarter 2011 revenue of $8.72 billion versus $9.07 billion in the fourth quarter of 2010 and $5.60 billion in the first quarter of 2010.
Net income attributable to Schlumberger, excluding charges, was $972 million—a decrease of 16% sequentially but an increase of 30% year-on-year. Diluted earnings-per-share, excluding charges, was $0.71 versus $0.85 in the previous quarter, and $0.62 in the first quarter of 2010.
Schlumberger recorded charges of $0.02 per share in the first quarter of 2011, $0.09 in the fourth quarter of 2010, and $0.06 in the first quarter of 2010.
Oilfield Services revenue of $8.12 billion decreased 4% sequentially but increased 45% year-on-year. Pretax segment operating income of $1.46 billion was down 14% sequentially but increased 40% year-on-year.
Distribution revenue of $601 million increased 4% sequentially. Pretax segment operating income of $22 million improved 7% sequentially.
Schlumberger Chairman and CEO Andrew Gould commented, "First-quarter results compounded the normal sequential drop in product, software and multiclient sales with exceptional weather conditions in the US and Australia and multiple activity disruptions from political unrest.
"Reservoir Characterization saw this decline in sales of multiclient seismic and software. Wireline was adversely affected by weather in Australia and political unrest in North Africa and the Middle East but the underlying trends were positive and absent exceptional items, Wireline growth was encouraging—particularly for higher technology services.
"The recent completion of various licensing rounds around the world will ensure sustained marine seismic activity for the rest of the year. The anticipated increases in exploration budgets and the advent of additional development activity, especially in the Middle East and North America, will rapidly improve business conditions for Wireline and Testing Services. The continued success of new Petrel releases, particularly for exploration, will ensure further strong performance from SIS.
"Despite the seasonal drop in Russia and at M-I SWACO, Drilling Group revenue increased through excellent performance at IPM Well Construction, particularly in Iraq. In addition, growth in revenue synergies with Smith and Geoservices products and services was very strong. For Drilling & Measurements, service pricing remains extremely competitive internationally but excellent service quality and advanced technology allows this effect to be offset to some degree. Activity increases later in the year should lead to considerable tightening of capacity in this market with consequent effects on price.
"Reservoir Production continued to make strong gains in North America in both activity and pricing, which more than compensated for the absence of the gain share project that was recognized in the fourth quarter. The first quarter also saw continued strong sales of new technology with HiWAY stimulation and ACTive coiled-tubing services being in particular demand. There was also significant success in international unconventional gas activity.
"The absence of oil production from Libya, combined with continued recovery in demand, has reduced the world's spare capacity significantly. The call on both fuel oil and natural gas will increase as Japan recovers. The exploration and production industry has begun to respond and, absent a further leg to the recession, will have to substantially increase investment to maintain a comfortable supply cushion in an era of political uncertainty. We anticipate that high oil prices will continue to support additional drilling in the liquid-rich plays in North America. The upturn in deepwater activity more generally is becoming increasingly visible, and the rate of permitting in the US Gulf of Mexico is accelerating. Middle East activity is increasing substantially, led by Saudi Arabia and Iraq.
"These activities will progressively mobilize over the next six months and the projected increases will reach levels where resources will become constrained. Schlumberger is ready for this scenario with new technology, equipment and people. Our Excellence in Execution initiative, which started in 2007, is already paying dividends, and will continue to do so."
Other Events:
First-quarter revenue of $8.12 billion decreased 4% sequentially but increased 45% year-on-year. The impacts of extraordinary geopolitical events in North Africa and the Middle East as well as severe weather in the US and Australia during the quarter affected all three Product Groups and accounted for approximately half of the sequential decrease in total Oilfield Services revenue.
Excluding the impact of these geopolitical and weather events, sequential revenue performance varied by Group. Reservoir Characterization revenue decreased primarily on lower WesternGeco multiclient and Schlumberger Information Solutions (SIS) software sales following their fourth-quarter 2010 seasonal highs as well as on lower Testing Services activity, but these effects were partially offset by higher Wireline activity, particularly in North America. Drilling revenue increased on higher IPM Well Construction activity in the Middle East & Asia, Latin America and Europe/CIS/Africa Areas, which was partially offset by a decrease in M-I SWACO revenue following the high product sales of the fourth quarter, and by lower Drilling & Measurements revenue through a less favorable activity mix and lower pricing in Europe/CIS/Africa. Reservoir Production revenue increased sequentially on higher pricing and activity in North America, although this was partially offset by the absence of the Integrated Project Management (IPM) gain share payout in North America and the absence of the Artificial Lift and Completions Systems equipment sales seen in the fourth quarter.
On a geographical basis, Europe/CIS/Africa revenue decreased sequentially primarily due to disruptions resulting from the political unrest in North Africa, a less favorable revenue mix coupled with lower software sales in the North Sea GeoMarket, and seasonally lower activity in Russia. Middle East & Asia revenue was lower as increasing IPM activity in Iraq and shale gas activity in India were insufficient to offset the impact of geopolitical events in the Middle East, seasonally lower software and equipment sales, and weather-related slowdowns in Australia. In North America, higher pricing for Well Services technologies, stronger winter season activity in Canada, and increased demand for M-I SWACO services fully offset lower WesternGeco multiclient sales, the non-recurrence of the IPM gain share payout, and the impact of weather-related slowdowns on land in the US. In Latin America, increased WesternGeco and M-I SWACO activity in the Brazil GeoMarket balanced lower offshore activity and reduced software sales in the Mexico/Central America GeoMarket.
First-quarter pretax operating income of $1.46 billion decreased 14% sequentially but increased 40% year-on-year. Pretax operating margin decreased 206 basis points (bps) sequentially to 17.9% primarily due to the reduced software and equipment sales as well as the lower WesternGeco multiclient sales; the non-recurrence of the IPM gain share payout; the impact of the geopolitical events in North Africa and the Middle East; and the weather-related slowdowns in the US and Australia.
The quarter's technical highlights were led by rapid growth in the deployment of Well Services HiWAY flow-channel hydraulic fracturing technology. Total job count is now approaching 1,000 with 528 stages completed in the first quarter of 2011 compared to 102 in the fourth quarter of 2010. The first horizontal openhole well in the Bakken shale with 19 stages has been successfully completed while the first job has been conducted in the Middle East. A significant number of opportunities for future jobs are now under evaluation and new fields for HiWAY technology deployment are under discussion in the US, Canada, Argentina, India, Oman, Saudi Arabia, Egypt, Algeria, Congo and Angola.
Integration between Groups and Technologies was evidenced by a number of other technical highlights during the quarter.
A number of contract awards that illustrate the Schlumberger geographical footprint were recorded.
BP Iraq N.V. awarded Schlumberger a two-year contract for bundled services to complete the drilling of 46 re-entry wells and 25 new wells that will require a total of 4 rigs. The contract covers technologies from Wireline, Drilling & Measurements, Geoservices, M-I SWACO and Well Services.
In Ghana, Hess Ghana Exploration Limited awarded Schlumberger a contract for wireline logging services on their upcoming exploration campaign. The award was based on Schlumberger presence and infrastructure in the region, together with the availability of technology for deployment on deepwater frontier projects in the Gulf of Guinea.
WesternGeco also secured significant contract awards during the quarter. In the North Sea, BP awarded two contracts for 4D monitor programs, one each in Norway and the UK using Q-Marine Solid streamer technology. Offshore South Africa PetroSA awarded WesternGeco two Q-Marine surveys covering a total of approximately 3,000 km2. The first of these will use the DISCover deep interpolated streamer coverage acquisition technique that delivers broadband seismic data. BP Indonesia awarded WesternGeco a three-year contract for the processing of seismic data from offshore Indonesia and other areas in South East Asia. The processing will be carried out in the WesternGeco GeoSolutions center in Jakarta using advanced imaging workflows.
Reservoir Characterization Group
First-quarter revenue of $2.19 billion was 12% lower sequentially and decreased 2% year-on-year. Pretax operating income of $460 million was 32% lower sequentially and decreased 19% year-on-year.
Sequentially, Group revenue was severely impacted by disruptions from the geopolitical events in North Africa and the Middle East. WesternGeco revenue decreased following the fourth-quarter surge in multiclient sales in the US Gulf of Mexico and through lower Land activity as a consequence of the geopolitical events while Marine revenue increased due to a more favorable revenue mix. SIS revenue fell sharply from seasonally lower software sales across all geographic Areas. Testing revenue decreased on reduced equipment sales and activity, especially in Latin America; on completion of projects in the Australia/Papua New Guinea and East Asia GeoMarkets; on the winter seasonal slowdown in Russia; and on the geopolitical events. Wireline revenue was flat sequentially as strong winter activity in Canada was offset by the impact of the geopolitical events and weather slowdowns in Australia.
Pretax operating margin decreased 606 bps sequentially to 21% primarily due to the seasonally lower multiclient and software sales, the impact of the geopolitical events, the poor weather conditions in Australia, and the lower Testing activity in Latin America and Asia.
Reservoir Characterization Group activities saw a number of new or significant technology deployments in the quarter.
Drilling Group
First-quarter revenue of $3.20 billion was 1% lower sequentially but 120% higher year-on-year. Pretax operating income of $467 million was flat sequentially but increased 71% year-on-year.
Sequentially, the decrease in Group revenue was primarily due to disruptions resulting from geopolitical events in North Africa and the Middle East. Excluding the impact of these disruptions, Group revenue increased sequentially but varied by Technology. IPM Well Construction revenue increased on strong activity growth in Iraq, Mexico and Russia. Drilling & Measurements revenue declined from lower activity and pricing in Europe and Africa and the completion of offshore exploration projects in Australia/Papua New Guinea—although these effects were mitigated by the return of some deepwater work in the US Gulf of Mexico and by an increase in activity in Latin America and Russia. Following strong product sales in the fourth quarter of 2010 and despite continued strong activity in North America, M-I SWACO revenue decreased as a result of the weather-related slowdowns in Australia as well as a result of delayed projects in the Europe/CIS/Africa Area.
Sequentially, pretax operating margin was essentially flat at 14.6% as the contribution from the increased IPM Well Construction activity was offset by the impact of activity declines for M-I SWACO and reduced pricing for Drilling & Measurements services.
Drilling Group Technologies helped customers improve performance in a number of key areas.
Reservoir Production Group
First-quarter revenue of $2.72 billion decreased 2% sequentially but increased 44% year-on-year. Pretax operating income of $528 million was 9% lower sequentially but more than tripled year-on-year.
Sequentially, the decrease in Group revenue was largely due to the impact of geopolitical events in North Africa and the Middle East as well as to the severe weather in the US and Australia. Excluding these impacts, Group revenue increased as higher pricing and strong demand for Well Services technologies in North America more than offset the non-recurring prior quarter's IPM gain share payout in North America and the seasonally lower Artificial Lift and Completions Systems equipment sales.
First-quarter pretax operating margin decreased 145 bps to 19.4%, primarily due to the non-repetition of the IPM gain share payout, the lower Artificial Lift and Completion Systems equipment sales, and the impact of geopolitical events and weather.
Reservoir Production Group highlights included technology deployments in a number of key areas.
Thursday, April 21, 2011
Schlumberger Ltd.
Schlumberger reported first-quarter 2011 revenue of $8.72 billion versus $9.07 billion in the fourth quarter of 2010 and $5.60 billion in the first quarter of 2010.
Net income attributable to Schlumberger, excluding charges, was $972 million—a decrease of 16% sequentially but an increase of 30% year-on-year. Diluted earnings-per-share, excluding charges, was $0.71 versus $0.85 in the previous quarter, and $0.62 in the first quarter of 2010.
Schlumberger recorded charges of $0.02 per share in the first quarter of 2011, $0.09 in the fourth quarter of 2010, and $0.06 in the first quarter of 2010.
Oilfield Services revenue of $8.12 billion decreased 4% sequentially but increased 45% year-on-year. Pretax segment operating income of $1.46 billion was down 14% sequentially but increased 40% year-on-year.
Distribution revenue of $601 million increased 4% sequentially. Pretax segment operating income of $22 million improved 7% sequentially.
Schlumberger Chairman and CEO Andrew Gould commented, "First-quarter results compounded the normal sequential drop in product, software and multiclient sales with exceptional weather conditions in the US and Australia and multiple activity disruptions from political unrest.
"Reservoir Characterization saw this decline in sales of multiclient seismic and software. Wireline was adversely affected by weather in Australia and political unrest in North Africa and the Middle East but the underlying trends were positive and absent exceptional items, Wireline growth was encouraging—particularly for higher technology services.
"The recent completion of various licensing rounds around the world will ensure sustained marine seismic activity for the rest of the year. The anticipated increases in exploration budgets and the advent of additional development activity, especially in the Middle East and North America, will rapidly improve business conditions for Wireline and Testing Services. The continued success of new Petrel releases, particularly for exploration, will ensure further strong performance from SIS.
"Despite the seasonal drop in Russia and at M-I SWACO, Drilling Group revenue increased through excellent performance at IPM Well Construction, particularly in Iraq. In addition, growth in revenue synergies with Smith and Geoservices products and services was very strong. For Drilling & Measurements, service pricing remains extremely competitive internationally but excellent service quality and advanced technology allows this effect to be offset to some degree. Activity increases later in the year should lead to considerable tightening of capacity in this market with consequent effects on price.
"Reservoir Production continued to make strong gains in North America in both activity and pricing, which more than compensated for the absence of the gain share project that was recognized in the fourth quarter. The first quarter also saw continued strong sales of new technology with HiWAY stimulation and ACTive coiled-tubing services being in particular demand. There was also significant success in international unconventional gas activity.
"The absence of oil production from Libya, combined with continued recovery in demand, has reduced the world's spare capacity significantly. The call on both fuel oil and natural gas will increase as Japan recovers. The exploration and production industry has begun to respond and, absent a further leg to the recession, will have to substantially increase investment to maintain a comfortable supply cushion in an era of political uncertainty. We anticipate that high oil prices will continue to support additional drilling in the liquid-rich plays in North America. The upturn in deepwater activity more generally is becoming increasingly visible, and the rate of permitting in the US Gulf of Mexico is accelerating. Middle East activity is increasing substantially, led by Saudi Arabia and Iraq.
"These activities will progressively mobilize over the next six months and the projected increases will reach levels where resources will become constrained. Schlumberger is ready for this scenario with new technology, equipment and people. Our Excellence in Execution initiative, which started in 2007, is already paying dividends, and will continue to do so."
Other Events:
- During the quarter, Schlumberger repurchased 9.7 million shares of its common stock at an average price of $87.18 for a total purchase price of $844 million under the stock repurchase program approved by the Schlumberger Board of Directors on April 17, 2008.
- During the quarter, Schlumberger repurchased the remaining outstanding long-term fixed rate debt assumed in the merger with Smith International, Inc. for $1.3 billion.
- On April 5, 2011, Schlumberger completed the divestiture of its Global Connectivity Services business for $397.5 million in cash.
First-quarter revenue of $8.12 billion decreased 4% sequentially but increased 45% year-on-year. The impacts of extraordinary geopolitical events in North Africa and the Middle East as well as severe weather in the US and Australia during the quarter affected all three Product Groups and accounted for approximately half of the sequential decrease in total Oilfield Services revenue.
Excluding the impact of these geopolitical and weather events, sequential revenue performance varied by Group. Reservoir Characterization revenue decreased primarily on lower WesternGeco multiclient and Schlumberger Information Solutions (SIS) software sales following their fourth-quarter 2010 seasonal highs as well as on lower Testing Services activity, but these effects were partially offset by higher Wireline activity, particularly in North America. Drilling revenue increased on higher IPM Well Construction activity in the Middle East & Asia, Latin America and Europe/CIS/Africa Areas, which was partially offset by a decrease in M-I SWACO revenue following the high product sales of the fourth quarter, and by lower Drilling & Measurements revenue through a less favorable activity mix and lower pricing in Europe/CIS/Africa. Reservoir Production revenue increased sequentially on higher pricing and activity in North America, although this was partially offset by the absence of the Integrated Project Management (IPM) gain share payout in North America and the absence of the Artificial Lift and Completions Systems equipment sales seen in the fourth quarter.
On a geographical basis, Europe/CIS/Africa revenue decreased sequentially primarily due to disruptions resulting from the political unrest in North Africa, a less favorable revenue mix coupled with lower software sales in the North Sea GeoMarket, and seasonally lower activity in Russia. Middle East & Asia revenue was lower as increasing IPM activity in Iraq and shale gas activity in India were insufficient to offset the impact of geopolitical events in the Middle East, seasonally lower software and equipment sales, and weather-related slowdowns in Australia. In North America, higher pricing for Well Services technologies, stronger winter season activity in Canada, and increased demand for M-I SWACO services fully offset lower WesternGeco multiclient sales, the non-recurrence of the IPM gain share payout, and the impact of weather-related slowdowns on land in the US. In Latin America, increased WesternGeco and M-I SWACO activity in the Brazil GeoMarket balanced lower offshore activity and reduced software sales in the Mexico/Central America GeoMarket.
First-quarter pretax operating income of $1.46 billion decreased 14% sequentially but increased 40% year-on-year. Pretax operating margin decreased 206 basis points (bps) sequentially to 17.9% primarily due to the reduced software and equipment sales as well as the lower WesternGeco multiclient sales; the non-recurrence of the IPM gain share payout; the impact of the geopolitical events in North Africa and the Middle East; and the weather-related slowdowns in the US and Australia.
The quarter's technical highlights were led by rapid growth in the deployment of Well Services HiWAY flow-channel hydraulic fracturing technology. Total job count is now approaching 1,000 with 528 stages completed in the first quarter of 2011 compared to 102 in the fourth quarter of 2010. The first horizontal openhole well in the Bakken shale with 19 stages has been successfully completed while the first job has been conducted in the Middle East. A significant number of opportunities for future jobs are now under evaluation and new fields for HiWAY technology deployment are under discussion in the US, Canada, Argentina, India, Oman, Saudi Arabia, Egypt, Algeria, Congo and Angola.
Integration between Groups and Technologies was evidenced by a number of other technical highlights during the quarter.
A number of contract awards that illustrate the Schlumberger geographical footprint were recorded.
BP Iraq N.V. awarded Schlumberger a two-year contract for bundled services to complete the drilling of 46 re-entry wells and 25 new wells that will require a total of 4 rigs. The contract covers technologies from Wireline, Drilling & Measurements, Geoservices, M-I SWACO and Well Services.
In Ghana, Hess Ghana Exploration Limited awarded Schlumberger a contract for wireline logging services on their upcoming exploration campaign. The award was based on Schlumberger presence and infrastructure in the region, together with the availability of technology for deployment on deepwater frontier projects in the Gulf of Guinea.
WesternGeco also secured significant contract awards during the quarter. In the North Sea, BP awarded two contracts for 4D monitor programs, one each in Norway and the UK using Q-Marine Solid streamer technology. Offshore South Africa PetroSA awarded WesternGeco two Q-Marine surveys covering a total of approximately 3,000 km2. The first of these will use the DISCover deep interpolated streamer coverage acquisition technique that delivers broadband seismic data. BP Indonesia awarded WesternGeco a three-year contract for the processing of seismic data from offshore Indonesia and other areas in South East Asia. The processing will be carried out in the WesternGeco GeoSolutions center in Jakarta using advanced imaging workflows.
Reservoir Characterization Group
First-quarter revenue of $2.19 billion was 12% lower sequentially and decreased 2% year-on-year. Pretax operating income of $460 million was 32% lower sequentially and decreased 19% year-on-year.
Sequentially, Group revenue was severely impacted by disruptions from the geopolitical events in North Africa and the Middle East. WesternGeco revenue decreased following the fourth-quarter surge in multiclient sales in the US Gulf of Mexico and through lower Land activity as a consequence of the geopolitical events while Marine revenue increased due to a more favorable revenue mix. SIS revenue fell sharply from seasonally lower software sales across all geographic Areas. Testing revenue decreased on reduced equipment sales and activity, especially in Latin America; on completion of projects in the Australia/Papua New Guinea and East Asia GeoMarkets; on the winter seasonal slowdown in Russia; and on the geopolitical events. Wireline revenue was flat sequentially as strong winter activity in Canada was offset by the impact of the geopolitical events and weather slowdowns in Australia.
Pretax operating margin decreased 606 bps sequentially to 21% primarily due to the seasonally lower multiclient and software sales, the impact of the geopolitical events, the poor weather conditions in Australia, and the lower Testing activity in Latin America and Asia.
Reservoir Characterization Group activities saw a number of new or significant technology deployments in the quarter.
Drilling Group
First-quarter revenue of $3.20 billion was 1% lower sequentially but 120% higher year-on-year. Pretax operating income of $467 million was flat sequentially but increased 71% year-on-year.
Sequentially, the decrease in Group revenue was primarily due to disruptions resulting from geopolitical events in North Africa and the Middle East. Excluding the impact of these disruptions, Group revenue increased sequentially but varied by Technology. IPM Well Construction revenue increased on strong activity growth in Iraq, Mexico and Russia. Drilling & Measurements revenue declined from lower activity and pricing in Europe and Africa and the completion of offshore exploration projects in Australia/Papua New Guinea—although these effects were mitigated by the return of some deepwater work in the US Gulf of Mexico and by an increase in activity in Latin America and Russia. Following strong product sales in the fourth quarter of 2010 and despite continued strong activity in North America, M-I SWACO revenue decreased as a result of the weather-related slowdowns in Australia as well as a result of delayed projects in the Europe/CIS/Africa Area.
Sequentially, pretax operating margin was essentially flat at 14.6% as the contribution from the increased IPM Well Construction activity was offset by the impact of activity declines for M-I SWACO and reduced pricing for Drilling & Measurements services.
Drilling Group Technologies helped customers improve performance in a number of key areas.
Reservoir Production Group
First-quarter revenue of $2.72 billion decreased 2% sequentially but increased 44% year-on-year. Pretax operating income of $528 million was 9% lower sequentially but more than tripled year-on-year.
Sequentially, the decrease in Group revenue was largely due to the impact of geopolitical events in North Africa and the Middle East as well as to the severe weather in the US and Australia. Excluding these impacts, Group revenue increased as higher pricing and strong demand for Well Services technologies in North America more than offset the non-recurring prior quarter's IPM gain share payout in North America and the seasonally lower Artificial Lift and Completions Systems equipment sales.
First-quarter pretax operating margin decreased 145 bps to 19.4%, primarily due to the non-repetition of the IPM gain share payout, the lower Artificial Lift and Completion Systems equipment sales, and the impact of geopolitical events and weather.
Reservoir Production Group highlights included technology deployments in a number of key areas.
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