Technip, Global Industries Agree to Merge

- Technip, Global Industries Agree to Merge

Monday, September 12, 2011
Technip

Technip announced Monday an agreement to acquire the entire share capital of Global Industries and reinforce its leadership in the fast-growing subsea segment of oil services. The two companies have entered into a definitive merger agreement whereby Technip will pay US$8.00 per Global Industries share. The transaction values Global Industries at US$1,073 million (EUR768 million at current exchange rates), including approximately US$136 million of net debt. The Board of Directors of Global Industries has unanimously approved the transaction.

The transaction price represents a 55% premium to Global Industries' share closing price on September 9, 2011, the last day prior to announcement of the transaction. The transaction is to be funded using existing cash balances and credit facilities.

Global Industries brings to Technip its complementary subsea know-how, assets and experience, comprising 2,300 employees operating 14 vessels, including notably two newly-built leading edge S-Lay vessels, as well as strong positions in the Gulf of Mexico (US and Mexican waters), Asia-Pacific and the Middle East.

Technip's global presence, world-class technologies, assets and services and strong project management track record will realize the full value and potential of Global Industries' know-how, assets and experience, and broaden opportunities for Global Industries' employees.

The acquisition of Global Industries reinforces Technip's leadership in the fast-growing subsea market. Strong revenue synergies are expected as the acquisition will substantially increase Technip's current capabilities and expand its addressable market by around 30% in deep-to-shore subsea infrastructure. Cost synergies are estimated to be at least US$30 million.

Given the anticipated synergies, the transaction is expected to be accretive to Technip's earnings per share by around 5 to 7% in 2013.

The transaction is expected to close early in 2012. The management teams of Global Industries and Technip will work closely together to define the integration plan. Thierry Pilenko, Chairman and Chief Executive Officer of Technip, said:

"The acquisition of Global Industries reinforces Technip's leadership in Subsea, one of our three market segments alongside Onshore and Offshore. The subsea market looks likely in 2011 to show a record amount of orders for our industry and our own backlog at end-June 2011 is above its previous peak. We see that our customers continue to firm up a substantial number of large offshore developments with Brazil, the Gulf of Mexico, West Africa and Asia Pacific leading the way to drive future growth. Our investment in Global Industries substantially expands our addressable market in subsea. Global Industries' capabilities, know-how and experience, notably in S-Lay and Heavy Lift, add to our already unique vertically integrated range of products and services, enabling us to offer our clients greater value in the execution of complex projects from deep-to-shore. We expect that the application of Technip's own skills in offshore and subsea developments, its commercial footprint and its project management experience will drive a rapid deployment of the Global Industries teams and assets on customer projects. The transaction is expected to meet our hurdle rate, create value for Technip's shareholders, and raise earnings per share starting by around 5 to 7% in 2013."

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Reliance Industries Confident of Unlocking Field Potential with BP

- Reliance Industries Confident of Unlocking Field Potential with BP

Friday, September 09, 2011
Dow Jones Newswires
NEW DELHI
by Rakesh Sharma & Saurabh Chaturvedi

Reliance Industries Ltd. (500325.BY) Friday said it was confident of unlocking the full potential of its prolific east coast gas field and other blocks with the help of its partner BP Plc (BP).

The country's largest private explorer is fighting a decline in gas output at its D-6 Block in Krishna Godavri Basin. Reliance on Aug. 30 closed a deal with U.K.-based BP Plc to sell a 30% stake in its 21 oil and gas exploration blocks in India.

Last month, India's junior oil minister R.P.N. Singh said that gas production from Reliance's KG-D6 block during the April-June quarter was 31% below plan. Reliance's average gas production during April-June from the block was 48.60 million standard cubic meters per day.

Based on the approved field development plan, the output should have been 70.39 mmscmd, the minister said.

India's federal auditor Thursday said Reliance Industries had violated the KG D6 production-sharing contract with the government.

The Comptroller and Auditor General said Reliance initially estimated its capital expenditure for the D-1 and D-3 gas discoveries in the block at $2.4 billion, but revised it to $8.8 billion. The company also started implementing the revised plans before the government approved them.

The Mukesh Ambani-controlled company said it had engaged global consultants Ernst & Young, IPA Inc. and Daniel Johnston & Co., who didn't find any irregularity in its capex and management of the block.

Reliance said it commenced gas production from KG-D6 in six-and-a-half years from discovery, in comparison to the global average of nine to 10 years for similar deep-water production facilities.

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

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Lufkin Industries Announced It Signed Agreement To Acquire All Assets Of Quinn's Oilfield Supply Ltd

- Lufkin Industries Announced It Signed Agreement To Acquire All Assets Of Quinn's Oilfield Supply Ltd



Sep 6, 2011

Lufkin Industries (NASDAQ:LUFK) announced it has signed an Asset Purchase Agreement to acquire substantially all of the assets of Quinn's Oilfield Supply Ltd., including certain affiliates, for about $303 million in cash subject to certain adjustments.

John F. Glick, President and Chief Executive Officer of Lufkin, stated, "The acquisition of Quinn's continues our strategy of expanding our product portfolio in artificial lift systems, while at the same time extending our sales and service network in the increasingly active oil provinces of the United States and Western Canada. The integration of Lufkin's surface beam pump unit with Quinn's downhole rod pump will enhance Lufkin's ability to package complementary products and allow us to better optimize the rod lift system to the benefit of our customers. Quinn's is well positioned to benefit from the large increase in unconventional oil plays as oil shale wells generally transition to artificial lift approximately 18 to 24 months after completion. Quinn's downhole rod pumps and PCPs are also a clear fit with our Automation strategy of integrating downhole devices and instrumentation to monitor and control production."

Lufkin Industries has a potential upside of 62.3% based on a current price of $58.83 and an average consensus analyst price target of $95.5.

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India OKs Reliance Industries' $7.2B Asset Sale to BP

- India OKs Reliance Industries' $7.2B Asset Sale to BP

Friday, July 22, 2011
Dow Jones Newswires
NEW DELHI
by Rakesh Sharma

India approved Reliance's proposed $7.2 billion asset sale to BP, paving the way for the U.K. oil giant's largest venture in the South Asian nation.

The companies have been waiting for approval from the federal government since February when Reliance, controlled by billionaire Mukesh Ambani, agreed to sell a 30% stake to BP in 23 oil and gas blocks for $7.2 billion plus another $1.8 billion linked to exploration success. The deal includes the D6 block in the Krishna-Godavari basin, India's richest gas find so far, and Reliance has already received $2 billion from BP.

Oil Minister Jaipal Reddy said his ministry recommended the Cabinet Committee on Economic Affairs to approve the deal for 21 blocks as there were some technical issues over two non-producing blocks. The ministry may in future grant or refuse consent on the two blocks, he added.

"This is one of the major foreign investments in the history of India," Reddy said. "This transaction will not only mean investment of $7.2 billion by a foreign company in India, it will also mean induction of vast technical expertise to India's hydrocarbon sector."

Under the February agreement, BP and Reliance will also establish an equally owned joint venture for the sourcing and marketing of natural gas in India. That venture doesn't require government approval.

BP's chief executive, Robert Dudley, said the energy giant hopes to complete the deal in a matter of weeks.

Reliance didn't immediately comment on the announcement.

Future investments to develop Indian assets could bring its total payments to $20 billion, BP had said previously.

The deal gives BP access to new hydrocarbon resources and markets, in line with its strategy of continuing to increase exploration and access new exploration acreage, especially as it is yet to resume drilling operations in the Gulf of Mexico following last year's oil spill there.

Reliance is expected to gain from BP's deepwater drilling expertise to increase gas production. The company's D6 block is expected to boost India's gas supply, but several technical and geological issues have resulted in output from the field off the eastern coast falling below 50 million metric standard cubic meter per day from 60 MMSCMD last year.

Reliance's market valuation has taken a hit due to issued including the decline in gas production. Its shares closed 1.5% up at INR873.60 ahead of the announcement on the Bombay Stock Exchange, where the benchmark index closed up 1.6%.

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

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Petrobras Contracts Deepsea Metro II

Petrobras Contracts Deepsea Metro II

Monday, May 09, 2011
Odfjell Offshore Ltd.

Deep Sea Metro Ltd. has secured a contract with Petrobras for its second drillship; the Deepsea Metro II.

The contract with Petrobras has a firm duration of 3 years and the value, including part of potential bonus and mobilization fee, is approximately USD 531 million.

Deepsea Metro II will be operating in ultra deep waters offshore Brazil from the end of Q4 2011.

Deepsea Metro II is the second of two ultra deepwater drillships under construction by Deep Sea Metro Ltd., and is scheduled for delivery from Hyundai Heavy Industries (HHI) ultimo November 2011. The Deepsea Metro I has recently secured a deepwater drilling contract with the BG Group and is expected to be delivered from HHI on 31 May 2011.

The Metrostar Group retains 60 percent ownership in Deepsea Metro I & II and Odfjell Drilling Ltd has a 40 percent ownership, which is in the process of being transferred from Odfjell Drilling Ltd to Odfjell Offshore Ltd.

Odfjell Drilling Ltd is responsible for the construction follow-up, management and operation of the vessels.

Chairman of the Board in Odfjell Offshore Ltd., Simen Lieungh, says:

"To enter the deepwater market offshore Brazil has always been part of our long term strategy with Deep Sea Metro Ltd., and with the award of this contract to Deepsea Metro II, we have achieved it. We have now secured contracts for all our deepwater newbuild units and we look forward to the operations ahead."

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Pride Extends Option for Construction with Samsung Heavy

Pride Extends Option for Construction with Samsung Heavy

Friday, April 01, 2011

Pride International Inc.

Pride has reached agreement with Samsung Heavy Industries, Ltd. to extend Pride's option for the construction of a sixth ultra-deepwater drillship by 30 days. The extension of the option period does not impact the estimated unit construction cost or delivery schedule determined in December 2010, upon the order by Pride of a fifth ultra-deepwater drillship. The option may be exercised by the company on or before April 30, 2011, unless further extended on mutually agreed terms.