Hess Bids High to Extend Utica Footprint

- Hess Bids High to Extend Utica Footprint

Wednesday, September 07, 2011
Hess Corp.

Hess has entered into an agreement with CONSOL Energy Inc. to acquire a 50 percent interest in CONSOL's nearly 200,000 acres in the Utica Shale in eastern Ohio for aggregate payments of $593 million.

"We are delighted with our entry into the Utica Shale, which enables us to build a strategic acreage position in an emerging unconventional play in the United States," said John Hess, Chairman and CEO of Hess Corporation. "We believe that this acquisition offers significant potential for future growth in reserves and production with most of the land either owned in fee or held by production with high net revenue interests. We are honored to partner with CONSOL, which has a long history and an excellent safety and operating record in the Appalachian basin. We believe that together our companies will build a profitable business and deliver important economic benefits for the residents of eastern Ohio."

Hess will pay CONSOL $59 million at closing, which is expected in October, and $534 million in the form of a 50 percent drilling carry of certain CONSOL working interest obligations over a five year period. The joint exploration and development plan calls for Hess to operate approximately 80,000 acres in Jefferson, Harrison, Guernsey and Belmont counties while CONSOL will operate approximately 120,000 acres elsewhere in eastern Ohio, including Portage, Tuscarawas, Mahoning and Noble counties. Appraisal drilling is expected to commence in the fourth quarter.

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Keppel Secures 3rd Transocean High Specification Jackup

- Keppel Secures 3rd Transocean High Specification Jackup

Friday, August 05, 2011
Keppel Corp. Ltd.

Keppel FELS Limited (Keppel FELS) has secured a repeat order from Transocean Offshore Deepwater Holdings Ltd, a subsidiary of Transocean Ltd. (Transocean) for US $195 million.

Following its order of two jackup rigs from Keppel FELS on February 17, 2011, Transocean is exercising its option to build another high specification jackup rig based on the KFELS Super B Class Bigfoot design for delivery in 3Q 2013.

Mr. Wong Kok Seng, Managing Director of Keppel FELS said, "We are pleased that Transocean has chosen to exercise their option in building another jackup rig to our proprietary design. We have developed a winning collaboration with Transocean over the years through numerous projects. In working with forward thinking customers, we are able to customize innovative products well suited to meet the needs of the market."

Tailored to suit Transocean's requirements, the KFELS Super B Class Bigfoot is designed with larger spud cans, expanding its operational coverage to more places, especially areas where soft soil is predominant. Having larger spud cans enables the unit to operate efficiently while minimizing potential leg penetration problems in soft soil conditions.

With a 1.5 million pound drilling system and a maximum combined cantilever load of 3,200 kips, the Super B Class Bigfoot features immense horsepower during drilling operations. In addition, the rig will be installed with offline stand building features in its drilling system package which allows drilling and the preparation of drill pipes to take place at the same time. The rig is capable of drilling at a 75 feet outreach, allowing for coverage of a larger well pattern.

Keppel FELS and Transocean have shared a long-standing partnership spanning several significant projects. In 2009, Keppel delivered Transocean's Development Driller III, an ultra-deepwater drilling semisubmersible rig built to Keppel's proprietary DSSTM 51 semisubmersible design. Other projects include upgrades and conversions of the Sedco 700-series semis to enable dynamic positioning, and the repair of various Transocean rigs.

The above contract is not expected to have material impact on the net tangible assets or earnings per share of Keppel Corporation Limited for the current financial year.

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Hess' Second-Quarter Net Surges 62% On High Oil Prices

- Hess' Second-Quarter Net Surges 62% On High Oil Prices

Wednesday, July 27, 2011
Dow Jones Newswires
by Tess Stynes & Ryan Dezember

Hess' second-quarter earnings soared 62% thanks to sharply higher oil prices and despite a wider loss for its marketing and refining operations.

Hess' performance in recent quarters has been boosted by high oil prices, as well as improved demand for gasoline and diesel products. However, its marketing and refining business has continued to lag.

Hess reported a profit of $607 million, or $1.78 a share, up from $375 million, or $1.15 a share, a year earlier. Revenue climbed 27% to $9.81 billion.

Analysts polled by Thomson Reuters most recently forecast earnings of $1.94 a share on revenue of $10.08 billion.

Pearce Hammond, an analyst with Houston investment bank Simmons & Co., said that Hess' trading losses as well as those from its refining joint venture with Venezuela's state oil company were "major disappointments." Overall, the results "will likely weigh on the stock today," Hammond wrote in a note to clients.

Shares recently traded 3.13% lower at $70.80.

Earnings at the exploration-and-production segment, which accounts for most of Hess' profit, surged 53% despite lower production. Average prices, excluding hedging impacts, jumped 46% for oil and 6.5% for natural gas.

In the marketing and refining business, losses widened in the refining-and-trading segments, while marketing income strengthened by 65%.

Copyright (c) 2011 Dow Jones & Company, Inc.

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BHP Billiton Bids High to Extend US Shale Footprint

- BHP Billiton Bids High to Extend US Shale Footprint

Friday, July 15, 2011
BHP Billiton plc

BHP Billiton and Petrohawk have entered into a definitive agreement for BHP Billiton to acquire Petrohawk for US $38.75 per share by means of an all-cash tender offer for all of the issued and outstanding shares of Petrohawk, representing a total equity value of approximately US $12.1 billion and a total enterprise value of approximately US $15.1 billion, including the assumption of net debt. The Petrohawk board of directors has unanimously recommended to Petrohawk shareholders that they accept the offer.

The transaction would provide BHP Billiton with operated positions in the three world class resource plays of the Eagle Ford and Haynesville shales, and the Permian Basin. Petrohawk's assets cover approximately 1,000,000 net acres in Texas and Louisiana, with estimated 2011 net production of approximately 950 million cubic feet equivalent per day (MMcfe/d), or 158 thousand barrels of oil equivalent per day (Mboe/d). At year-end 2010, Petrohawk reported proved reserves of 3.4 trillion cubic feet of natural gas equivalent (Tcfe). The company has a current non-proved resources base of 32 Tcfe for a total risked resource base of 35 Tcfe. Petrohawk reported gross assets of US $8.2 billion as at 31 March 2011 and US $390 million of profit before tax for the year ended 31 December 2010.

BHP Billiton CEO, Marius Kloppers, said the acquisition was a natural fit with BHP Billiton's strategy.

"The proposed acquisition of Petrohawk is consistent with our well defined, upstream, Tier 1 strategy and provides us with even greater exposure to the world's largest energy market, while also broadening our geographic and customer spread. Importantly, our offer and the associated substantial premium represent a unique opportunity for Petrohawk shareholders and recognize the growth opportunities embedded in its portfolio immediately.”

BHP Billiton Petroleum Chief Executive, J. Michael Yeager, said the Petrohawk acquisition would add high quality growth to the company.

"Petrohawk has a focused portfolio of three world class onshore natural gas and liquids rich shale assets. With over a decade of significant investment and volume growth ahead, this transaction would build on our recent acquisition of the Fayetteville shale in Arkansas and provides the potential to more than double our existing resource base. Following completion of the Petrohawk transaction, BHP Billiton Petroleum will be on track to deliver a compound annual production growth rate of more than 10 per cent for the remainder of the decade as we accelerate our shale development program and leverage our strategic capability in the deep water.

"Importantly, BHP Billiton would retain Petrohawk's sizable U.S. based workforce, which has been at the forefront of the technological innovation that brought about the economic viability of U.S. shales. We look forward to extending our dedication to safeguarding the environment and the communities where we operate and continuing our commitment to safe and responsible operating practices across all of our shale gas plays, including the world-class assets that Petrohawk would bring to our portfolio."

Petrohawk CEO, Floyd Wilson, stated, "We believe these premium oil and natural gas assets would benefit significantly by residing within a larger entity that can employ more capital intensity to accelerate their realized value. We are excited to see this transaction completed and to be part of the BHP Billiton organization."

The tender offer is expected to commence by July 25, 2011. The acquisition is subject to the terms and conditions set forth in the merger agreement, including a condition that at least a majority of the outstanding Petrohawk shares are tendered, that the waiting period under the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, has expired or been terminated and that clearance is obtained from the Committee on Foreign Investment in the United States, and other customary conditions. If the tender offer is completed, un-tendered shares of Petrohawk will be converted into the right to receive the same US $38.75 per share price paid in the tender offer. The transaction is to be financed from existing cash resources and a new credit facility and is not subject to any financing contingency. The transaction is expected to close in the third quarter of 2011.

BHP Billiton has engaged Barclays Capital and Scotia Waterous as financial advisors in connection with this Offer. Its legal advisors are Sullivan & Cromwell LLP and Morgan, Lewis & Bockius LLP in the United States. Barclays Capital will act as Dealer Manager for the offer. Petrohawk has engaged Goldman Sachs as its financial advisor in connection to this Offer. Its legal advisor is Simpson Thacher & Bartlett LLP.

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Chevron Bids High to Extend Footprint in Norwegian Sea

Chevron Bids High to Extend Footprint in Norwegian Sea

Tuesday, April 19, 2011
Chevron Corp.
by SubseaIQ

Chevron Upstream Europe has successfully bid for the exploration rights in four blocks awarded in the Norwegian 21st Licensing Round.

The blocks are located in the Outer Vøring Basin in the Norwegian Sea, approximately 335 miles (540 kilometers) west of the coast of Bodø, in 6824 feet (2080 meters) of water. Chevron Norge AS has been appointed as the operator with a 40 percent equity in Production License PL598 comprising the blocks 6601/6 and 9 and 6602/4 and 7. The other participants in the blocks are ExxonMobil Exploration & Production Norway AS with 30 percent equity interest, Idemitsu Petroleum Norge AS with 10 percent equity interest and Petoro AS with 20 percent equity interest.

"Chevron is committed to building a focused portfolio of key exploration prospects worldwide," said Guy Hollingsworth, President of Chevron Europe, Eurasia and Middle East. "We view the deep waters of the Norwegian Sea as an area of significant resource potential and this acquisition advances our strategy of pursuing attractive and high-impact growth opportunities." Hollingsworth added, "This is Chevron's second award in the deep water of the Norwegian Sea and as operator, we look forward to working with our partners and bringing our technical expertise and capabilities to this high-potential area."

"Rick Cohagan, Managing Director of Chevron Upstream Europe said, "We are very pleased with the partnership which will complement the strengths of the four companies – Chevron's exploration experience from the West of Shetland and ExxonMobil, Petoro and Idemitsu's significant regional knowledge and long-term operational experience in the Norwegian Sea. We appreciate the strengthened license criteria imposed by the Ministry of Petroleum and Energy in Norway deep water operations and we will continue to apply Chevron's safety standards in all aspects of our operations."

Petrobras Confirms High Productivity in Guara

Petrobras Confirms High Productivity in Guara

Tuesday, April 12, 2011
Petrobras

Petrobras has completed the formation test in the first extension well of Guará confirming the accumulation's high productivity estimates, located in ultra deep waters, in the Santos Basin pre-salt.

During the test in well 3-SPS-69 (3-BRSA-788), located in block BM-S-9, flow rates of approximately 6 thousand barrels per day of good quality oil (30º API) were confirmed, limited to the capacity of the equipment used. Initial production potential is approximately 50 thousand barrels of oil per day.

Also referred to as Guará Norte, the well is located at a water depth of 2,118 meters, about 305 kilometers off the coast of the State of São Paulo, 15 kilometers northeast of 1-SPS-55 (Guará discovery well).

The formation test of discovery well 1-SPS-55, executed earlier, had already showed similar numbers to the results of Guará Norte well, demonstrating excellent quality of the reservoirs.

At the moment the second extension well, Guará Sul (3-SPS-82A), about 7 kilometers south of the Guará discovery well is being drilled.

The consortium, formed by Petrobras (45% - operator), BG Group (30%) and Repsol Sinopec Brasil (25%), will give continuity to the activities and investments necessary to assess the deposits discovered in this area, as per the Evaluation Plan approved by the National Petroleum, Natural Gas and Biofuels Agency (ANP).

Commodity Corner: Oil Hits Another High

Commodity Corner: Oil Hits Another High

Friday, April 08, 2011
Rigzone Staff

by  Matthew V. Veazey

Front-month crude oil settled at its highest point in nearly 32 months Friday, ending the day at $112.79 a barrel.

Oil futures surged 2.3 percent amid fears that the global oil supply will tighten, thanks in part to pessimism about any near-term resolution to the Libyan conflict. Moreover, investors are wary about fighting in other major oil-producing countries in Africa and the Middle East.

Also pressuring oil upward was a weaker dollar, which fell 0.9 percent against the euro Friday. Oil and other commodities priced in dollars become a better value for those holding other currencies when the euro strengthens against the dollar.

On Thursday the European Central Bank decided to raise interest rates by 0.25% in an effort to curb inflation. The dollar has grown weaker recently given the improbability that the Federal Reserve will enact similar measures to tighten U.S. monetary policy.

Crude oil fluctuated from $110.11 to $112.75 during Friday's trading. Since last Friday, oil has gained 4.5 percent.

A milder, more springlike weather forecast for much of the Upper Midwest and Northeast once again contributed to a decrease in natural gas futures Friday. May natural gas settled two cents lower to end the day at $4.04 per thousand cubic feet.

Natural gas traded within a range from $4.01 to $4.08. For the week, it is down 7.3 percent.
May gasoline gained seven cents to settle at $3.26 a gallon. During Friday's session, gasoline peaked at $3.25 and bottomed out at $3.18. Front-month gasoline is up 3.5 percent for the week.

Noble Adds High Specification Jackups to Fleet

Noble Adds High Specification Jackups to Fleet

Monday, March 28, 2011
Noble Corp.

Noble has exercised two of its four options with Sembcorp Marine's subsidiary Jurong Shipyard for the construction of additional high-specification heavy duty, harsh environment JU3000N jackup drilling rigs. This order will bring to four the total number of new jackup rigs the Company will have under construction.

Total delivered costs are estimated at approximately $235 million per rig, including project management, spares, and start-up costs, but excluding capitalized interest. Payment terms are consistent with the order of the two rigs placed in December 2010: 20 percent of the construction price due at contract signing, 20 percent due at steel cutting, and the remainder due at rig delivery. Unit deliveries from the shipyard are expected in the third quarter of 2013 and first quarter of 2014. The Company still has options for up to two additional units which must be exercised by January 1, 2012. As previously disclosed, the option units are priced based on the original unit price, plus a potential escalation factor, with future deliveries scheduled in six-month increments beginning in late 2014.

The Friede & Goldman JU3000N design is an enhanced evolution of the JU2000E design and represents the latest generation of high specification jackup drilling rig with greater capacities and capabilities than most existing units. The rigs, which are approximately 231 feet in length and 270 feet in breadth, will have the capability to operate in water depths up to 400 feet and drill to depths of 30,000 feet. The rigs will each have a seventy-five foot cantilever, 2.5 million pounds of hook load capacity, a high capacity mud circulating system, and a 15,000 psi blow out preventer system. The units are capable of off-line pipe handling and offer accommodations for up to 150 people.

"Noble's fleet evolution is well underway as we focus on adding rigs with superior technology, equipment, and capabilities," said David W. Williams, Chairman, President and Chief Executive Officer, Noble Corporation. "With the addition of two more JU3000N units, Noble will have four out of the eleven jackups in existence or under construction with hoisting capacities of 2.5 million pounds. We expect ultra-premium units such as these to be in high demand and look forward to serving our future customers' growing needs in this key market segment."