Karoon Lines Up Semisub Transocean Legend

- Karoon Lines Up Semisub Transocean Legend

Thursday, September 08, 2011
Karoon Gas Australia Ltd.

A drilling contract has been signed with Sedco Forex on Sept. 8 securing the Transocean Legend semi-submersible drilling rig to complete the planned Phase-2 Browse Basin exploration drilling program in the WA-314-P, WA-315-P and WA-398-P permits jointly held by ConocoPhillips and Karoon Gas. The contract comprises five firm wells (fulfilling permit commitments) with options for three additional wells (5-8 wells). Drilling is expected to commence in the fourth quarter of 2011 and is estimated to run for eighteen months to two years ConnocoPhillips is the operator of the jointly held WA-314-P, WA-315-P and WA-398-P Browse Basin permits containing the previously announced Poseidon and Kronos gas discoveries.

The five to eight well drilling program will target the Poseidon trend as well as surrounding prospects, including one prospect in WA-314-P late in the program.

The first well will be be Boreas-1, a crestal well in WA-315-P on a large tilted fault block east of the Poseidon-1 fault block. The results of the drilling campaign will allow the size and quality of the hydrocarbon accumulations within the exploration permits to be determined in preparation for a development decision. Karoon believes that the additional new prospects identified are of sufficient size that, if successful, would result in a meaningful increase in the capacity and economics of an eventual LNG project.

Pursuant to the 2006 Farm-in Agreement between Karoon and ConocoPhillips (Browse Basin) Pty Ltd, ConocoPhillips will be funding 80% of the drilling and testing costs for the initial $125 million of expenditure within WA-315-P.

Based on current forecasted costs Karoon will have sufficient capital at its disposal to complete all drilling activities for the planned program. Karoon is currently well advanced in the process of completing the farmout of its Santos Basin and Peruvian assets, and expects to have reduced financial exposure to both drilling campaigns. A list of potential farm-in partners will be shortlisted in the near future and negotiations are continuing.

Oil & Gas Post

Promote Your Page Too
LINK

Buccaneer to Acquire Transocean Jackup

- Buccaneer to Acquire Transocean Jackup

Thursday, September 01, 2011
Buccaneer Energy Ltd.

Buccaneer advised that its subsidiary Kenai Offshore Ventures, LLC ("KOV") has executed a binding Purchase Agreement with Transocean to acquire the GSF Adriatic XI offshore jackup rig ("Rig"). The total purchase price is US $68.5 million.

Settlement of the purchase is scheduled to take place between 30 September 2011 and 25 October 2011. Upon settlement, the Rig will immediately be transported to an Asian based shipyard to undergo modifications to enable operations in the Cook Inlet, Alaska. KOV is in the process of finalizing modification and mobilization budgets.

It is anticipated that the Rig will arrive in the Cook Inlet for the 2012 drilling season in April / May 2012.

Buccaneer anticipates contracting day to day operation of the Rig out to an established rig operator, additionally senior members of Buccaneer’s existing management team have direct jackup rig operating experience.

GSF Adriatic XI Jackup Rig

The GSF Adriatic XI jackup rig is a Marathon LeTourneau 116-C jackup rig. It was first constructed in 1982. The Rig was upgraded in 2004.

The Rig has been "cold-stacked" in Malaysia since September 2009 due to a lack of drilling commitments. KOV and its advisors have already completed two inspections of the Rig whilst cold stacked and consider the Rig to be in good condition.

Shipyard work to be undertaken in the second half of 2011 and early 2012 to the Rig include:

• Bringing the Rig back into operation after being cold-stacked;
• Improvements to the accommodation quarters; and
• Modifications to "winterize" the Rig for Alaskan conditions.

The work will not include any significant structural work.

The Company will give weekly drilling updates commencing Wednesday 7 September.

GSF Adriatic XI Capabilities

The GSF Adriatic XI jackup rig was selected through a global search process. Its existing capabilities make it suitable for most water depths that exist in the Cook Inlet and northern Alaskan waters.

These capabilities include:

• Operate in water depths up to 300 feet;
• Constructed of -10o Celsius rated steel allowing it to work safely in the wide environmental envelope that exists in the Arctic including the Chukchi and Beaufort Sea which are located offshore the North Slope;
• Two (2) sets of blow out protectors ("BOPs"), both 10,000 and 15,000 PSI, giving it capacity to drill high pressure horizons that exist in the Cook Inlet;
• Cantilever beam extensions that enhance its ability to work over existing platforms in the Cook Inlet to undertake drilling and repair operations; and
• Four (4) cranes and a high variable deck load rating of 8,300 KLBS which enable it to operate with extra equipment and materials onboard should support services be limited.

Initial Work Program

Buccaneer will have the first right of refusal with KOV to utilize the Rig until 31 December 2014 and Buccaneer will commit to drill a minimum of 4 wells in the Cook Inlet using the Rig.

The first well to be drilled by the Adriatic XI will be located on Buccaneer's 100% owned Southern Cross project where Netherland, Sewell & Associates have estimated Proven & Probable (2P) Reserve of 12.7 MMBOE and additional P50 Resource of 14.7 MMBOE.

The Southern Cross project is in approximately 50 feet of water with no unusual technical hurdles to drill and develop. Southern Cross is within 5 miles of four significant oil and gas fields with a combined production of 1.1 Billion BO and over 550 BCF of gas.

Buccaneer's initial test will offset several wells on its leasehold that tested oil and gas but were never produced. Buccaneer's first well is approximately 300 feet from the Pan Am 17595 # 3 (circa 1960's) which tested 230 feet oil and 1080 feet of mud cut oil from the Lower Tyonek and 165 feet of oil from the Hemlock.

It will also be structurally high to the Pan Am 17595 # 2 (circa 1960's) which tested the Lower Hemlock and recovered gas to the surface followed by fluid from which 990 feet of clean oil was recovered. Other wells on the lease tested gas from the Upper Tyonek. Buccaneer's well will be within the demonstrated hydrocarbon column for this area.

Financing

KOV anticipates that the total budget to acquire, modify and mobilize the Rig to the Cook Inlet will be approximately US $86.5 million.
KOV expects the funding to be sourced from:

• Kenai Offshore Ventures, LLC ("KOV") $6.85 MM
• Alaska Industrial Development and Export Authority (“AIDEA”) $24.0 - $30.0 MM
• Senior Debt Facility $50.0 - $56.0 MM

Buccaneer Energy owns a 50% direct interest in KOV with its 50% joint venture partner being Singaporean based Ezion Holdings Limited ("Ezion") with each funding an equal 50% of the required US $6.85 million deposit.

The Joint Ownership Agreement ("JOA") with AIDEA was executed with AIDEA on the 2 June 2011. Under the JOA, AIDEA will invest US $24.0 - US $30.0 million in the form of Preferred Interest in KOV subject to a series of conditions precedents ("CPs") being met.

In addition, KOV has separately received a credit approved term sheet from an Asian based international bank to provide a Senior Debt Facility of between US $50 – US $56 million. Final loan documentation is now in the process of being finalized.

KOV anticipates satisfaction of all CP's for both the Senior Debt Facility and AIDEA by late September 2011. The total amount of finance being sourced under the Senior Debt facility and AIDEA will not exceed in aggregate US $80.0 million. Further details of the financing terms will be announced upon the completion of the acquisition.

Commentary

Director of Buccaneer Energy, Dean Gallegos said, "This is another major milestone for Buccaneer.

"In order to drill the first well at its 100% owned Southern Cross Project in April/May 2012 a jackup rig was required. Since no suitable rig was available forming KOV and sourcing the funding has been a priority for the Company. Netherland, Sewell & Associates has estimated 73.3 MMBOE in combined 2P Reserves and P50 Resources to the Company's two offshore Cook Inlet projects.

"The acquisition of the Adriatic XI jackup rig begins the process of unlocking the substantial value in the Company’s offshore Alaskan projects.”

Oil & Gas Post

Promote Your Page Too
LINK

Transocean Bid Gets Green Light from Aker Investors

- Transocean Bid Gets Green Light from Aker Investors

Friday, August 26, 2011
Transocean Ltd.

Transocean Services, a wholly owned subsidiary of Transocean, after receiving clearance by the Oslo Stock Exchange, launched its all cash voluntary offer (the "Offer") for 100 percent of the shares of Aker Drilling ASA ("Aker Drilling") for NOK 26.50 per share. The Offer has been made on the same terms as the previously announced voluntary offer, except that it has been made on an unconditional basis and with settlement guaranteed by a financial institution.

The Offer period begins August 26, 2011 and ends on September 23, 2011 at 11:30 a.m. (EDT), 5:30 p.m. (CEST). To date, Transocean and its affiliates have acquired 13.7% of the shares and votes in Aker Drilling, and shareholders representing 59.5% of the total share capital of Aker Drilling have given their unconditional and irrevocable pre-acceptances to the Offer.

The Offer document has been reviewed and approved by the Oslo Stock Exchange in accordance with Section 6-14 of the Norwegian Securities Trading Act. The document will also be sent to the shareholders of Aker Drilling, subject to restrictions under applicable securities laws.

The Offer and the distribution of this announcement and other information in connection with the Offer may be restricted by law in certain jurisdictions. Transocean assumes no responsibility in the event there is a violation by any person of such restrictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

Oil & Gas Post

Promote Your Page Too
LINK

Transocean Launches All Cash Voluntary Offer For Aker Drilling

- Transocean Launches All Cash Voluntary Offer For Aker Drilling



Aug 26, 2011

Transocean (NYSE:RIG) announced after receiving clearance by the Oslo Stock Exchange, that it launched its all cash voluntary offer for 100% of the shares of Aker Drilling for 26.50 Kroner per share. The offer has been made on an unconditional basis and with settlement guaranteed by a financial institution.

Transocean has a potential upside of 51.7% based on a current price of $51.47 and an average consensus analyst price target of $78.07.

Transocean is currently below its 50-day moving average (MA) of $59.22 and below its 200-day MA of $70.28.

Oil & Gas Post

Promote Your Page Too
LINK

Transocean Strengthens Management with New Appointments

- Transocean Strengthens Management with New Appointments

Monday, August 22, 2011
Transocean Ltd.

Terry B. Bonno has been promoted to Senior Vice President, Marketing, for Transocean Ltd. She previously served as Vice President, Marketing.

Ms. Bonno has approximately 30 years of industry experience, including 17 years with Global Marine Inc. and Applied Drilling Technology Inc., two subsidiaries of GlobalSantaFe Corporation assumed in a 2007 merger. Her prior service also includes management positions in marketing, accounting and corporate planning functions.

A Certified Public Accountant, Ms. Bonno earned a Bachelor's degree in Business Administration, Accounting, from Stephen F. Austin State University.

In addition, Mark Monroe has been promoted to Vice President, Account Management, for Transocean. Based in Houston, he is responsible for overseeing our relationships with the key U.S. based customers.

Before being named to his new position, Mr. Monroeserved since 2010 as Managing Director, Marketing, responsible for customer relationships with major Customers such as BP, Exxon and Chevron as well as overseeing the development of the company's Customer Focus workshops. He joined a predecessor company Global Marine in 1983 as Manager, London Sales and Contracts and held numerous Marketing positions with Global Marine and GlobalSantaFe. In 2000, he was promoted to Vice President, Sales and Contracts with responsibility for the sales, contracts and marketing of the GlobalSantaFe fleet in North and South America, Southeast Asia and West Africa.

Mr. Monroe serves on the Board of Directors of the Offshore Energy Center, the Advisory Board of Spindletop International and is a member of the IADC (International Association of Drilling Contractors) and SPE (Society of Petroleum Engineers). He earned a Bachelor of Arts, Business Administration, degree from Texas Christian University in Fort Worth in 1976.

Oil & Gas Post

Promote Your Page Too
LINK

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.

Oil & Gas Post

Promote Your Page Too
LINK

Transocean Reports $2.33B in 2Q Revenue

- Transocean Reports $2.33B in 2Q Revenue

Thursday, August 04, 2011
Transocean Ltd.

Transocean reported net income attributable to controlling interest of $155 million, or $0.48 per diluted share, for the three months ended June 30, 2011. The results compare to net income attributable to controlling interest of $715 million, or $2.22 per diluted share, for the three months ended June 30, 2010.

• Revenues increased nine percent to $2.334 billion compared to $2.144 billion in the first quarter 2011
• Second quarter 2011 net income attributable to controlling interest was $155 million, which included $36 million of certain net unfavorable items, compared to $310 million in the first quarter 2011, which included $139 million of certain net favorable items noted in our first quarter earnings release
• Revenue efficiency improved to 92.1 percent, up from 90.0 percent in the first quarter 2011
• Fleet utilization was 55 percent, unchanged from the first quarter 2011
• Operating and maintenance expenses were $1.492 billion, up from $1.359 billion in the first quarter 2011
• The Annual Effective Tax Rate (4) for 2011 has increased to 22.6 percent from 19.3 percent in the first quarter 2011
• New contracts totaling $1.5 billion were secured in the Fleet Status Report period April 14, 2011 through July 13, 2011
• Non-core assets George H. Galloway and GSF Labrador were classified as assets held for sale, in addition to the previously announced GSF Britannia
• The first quarterly installment of the dividend was paid on June 15, 2011

Second quarter 2011 results included the following items, after tax, that resulted in a net unfavorable impact of approximately $36 million, or $0.11 per diluted share:

$25 million loss on impairment relating to the three Standard Jackups, George H. Galloway, GSF Labrador and GSF Britannia, classified as assets held for sale at June 30, 2011, and
$11 million of net charges related to discrete tax items and the effect of discontinued operations.

Second quarter 2011 results also included expenses associated with the Macondo well incident of approximately $26 million, $19 million after tax, or $0.06 per diluted share. These expenses were primarily related to legal costs and professional service fees.

Operations Quarterly Review

Revenues for the three months ended June 30, 2011 were $2.334 billion, compared to revenues of $2.144 billion during the three months ended March 31, 2011. Second quarter contract drilling revenues, which increased to $2.086 billion from $1.95 billion in the first quarter, were positively impacted by improved activity in the Gulf of Mexico, the commencement of operations of the newbuild Ultra-Deepwater Floater Deepwater Champion, the reactivation of previously idled rigs, and higher revenue efficiency for our Ultra-Deepwater and Deepwater Floaters, partially offset by the stacking of additional Deepwater and Midwater Floaters. Overall utilization was flat during the period compared to the first quarter.

Other revenues increased $54 million to $238 million, primarily due to additional drilling management services activity.

The company reported improved revenue efficiency for our Ultra-Deepwater and Deepwater Floaters compared to the first quarter, as our program to improve efficiency yielded results. Similar to the first quarter, compliance with new well control equipment certification requirements, higher standards for equipment condition and capacity constraints on our vendors continued to adversely impact revenue efficiency and out-of-service time compared to the prior year.

Operating and maintenance expenses totaled $1.492 billion for the second quarter 2011, up from $1.359 billion for the prior quarter. The increase was primarily due to higher maintenance expenses along with increased levels of contract drilling and drilling management services activity.

Net Interest Expense, Capital Expenditures and Cash Flow

Net Interest Expense was $142 million in the period compared to $130 million in the first quarter. The increase is due primarily to interest income associated with a tax refund recognized in the first quarter.

Capital expenditures increased to $293 million for the second quarter compared to $240 million in the first quarter 2011. The higher expenditures were primarily due to our newbuild construction program.

Cash flows from operating activities decreased to $340 million for the second quarter 2011 compared to $390 million for the first quarter 2011. The decrease in cash flows from operations resulted primarily from an increase in working capital.

Oil & Gas Post

Promote Your Page Too
LINK

Transocean: Rig Off Ghana Remains Stable after Taking On Water

- Transocean: Rig Off Ghana Remains Stable after Taking On Water

Friday, July 08, 2011
Dow Jones Newswires
HOUSTON
by Ryan Dezember

Transocean said Thursday that the deep-water drilling rig off Ghana that was evacuated Wednesday after it took on water remains stable.

The company is working on unmooring the Transocean Marianas, which is anchored some 46 miles offshore, and plans to tow it to sheltered water to inspect damage, spokesman Guy Cantwell said.

It will likely be at least a week before a full damage assessment can be made, Cantwell said.

There have been no injuries and a skeleton crew remain aboard the vessel, Cantwell said. And because the rig was not drilling when it began taking on water, there is no risk of an oil spill.

Transocean owned the Deepwater Horizon, which exploded last year while drilling a well for BP in the Gulf of Mexico, killing 11 and touching off the worst offshore oil spill in U.S. history. Since then Transocean has faced scrutiny over its safety procedures and maintenance of the world's largest offshore drilling fleet.

More than 100 workers were evacuated from the Marianas on Wednesday when it was discovered to have taken on water. A semisubmersible rig, the Marianas floats on large ballast tanks, or pontoons, which are filled with water for stability during drilling and emptied to ease transport. It was built in 1976 and upgraded to drill in depths up to 7,000 feet in 1998.

The rig had been drilling for ENI and was in the process of being moved to drill an exploration well for Kosmos Energy and partners that include Anadarko, Tullow Oil and Ghana's national oil company.

The Marianas was expected to arrive on site next week and Kosmos on Thursday asked Ghana for more time to begin drilling the prospect while it searches for a new rig.

The loss of income from the Marianas, which earned $450,000 a day on its contract with ENI, will likely trim Transocean's earnings by 15 cents per share this year, analysts with Tudor, Pickering, Holt & Co. said in a client note.

"As of now we are assuming rig does not work for rest of 2011," the Houston-based analysts said.

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

Oil & Gas Post

Promote Your Page Too
LINK

Kosmos Seeks Force Majeure on Transocean Semisub

- Kosmos Seeks Force Majeure on Transocean Semisub

Thursday, July 07, 2011
Kosmos Energy Ltd.

Kosmos Energy provided an update on the company's drilling of the Cedrela-1 exploration well offshore the Republic of Ghana. The Transocean Marianas semisubmersible drilling rig, under contract to another operator in Ghana, was expected to arrive at the Cedrela-1 well location on the West Cape Three Points Block on or about July 10 to commence drilling Kosmos' Cedrela-1 well near the block's southern boundary. The rig was rendered temporarily inoperable following a reported anchor-handling incident on the Offshore Cape Three Points Block, which is east of the Kosmos-operated West Cape Three Points Block. The incident occurred while preparations were being made to move the rig from the other operator's block to the Cedrela-1 well location.

Kosmos has delivered a force majeure notice to the government of Ghana and the Ghana National Petroleum Corporation due to the delay in the rig's scheduled arrival at the Cedrela-1 well location. As a result, Kosmos has begun a search for a substitute drilling rig and intends to drill the Cedrela-1 well when either the Transocean Marianas or an alternative rig becomes available. The company has the necessary approvals to drill the Cedrela-1 well and anticipates that a rig will be available soon.

Kosmos is the operator of the West Cape Three Points Block in which the company holds a 30.875% interest. An affiliate of Anadarko Petroleum Corporation has a 30.875% interest; an affiliate of Tullow Oil plc has a 22.896% interest; E.O. Group Limited has a 3.5% interest; Sabre Oil & Gas Holdings Limited has a 1.854% interest; and the Ghana National Petroleum Corporation has a 10% carried interest.

Oil & Gas Post

Promote Your Page Too
LINK

Transocean Board Member Resigns

- Transocean Board Member Resigns

Wednesday, June 29, 2011
Transocean Ltd.

Transocean announced that W. Richard Anderson has resigned from its Board of Directors, effective immediately, due to the demands of his duties as Chief Financial Officer of Eurasia Drilling Company Limited.

Transocean Ltd. President and Chief Executive Officer Steven L. Newman said, "We greatly appreciate the many contributions that Rich Anderson has made to our Board of Directors and our company, in particular his financial insights. We will miss Rich and wish him all the best."

Oil & Gas Post

Promote Your Page Too

Transocean Briefs Investigation Report on Causes of Macondo Incident

- Transocean Briefs Investigation Report on Causes of Macondo Incident

Wednesday, June 22, 2011
Transocean Ltd.

Transocean announced the release of an internal investigation report on the causes of the April 20, 2010, Macondo well incident in the Gulf of Mexico.

Following the incident, Transocean commissioned an internal investigation team comprised of experts from relevant technical fields and specialists in accident investigation to gather, review, and analyze the facts and information surrounding the incident to determine its causes.

The report concludes that the Macondo incident was the result of a succession of interrelated well design, construction, and temporary abandonment decisions that compromised the integrity of the well and compounded the likelihood of its failure. The decisions, many made by the operator, BP, in the two weeks leading up to the incident, were driven by BP's knowledge that the geological window for safe drilling was becoming increasingly narrow. Specifically, BP was concerned that downhole pressure -- whether exerted by heavy drilling mud used to maintain well control or by pumping cement to seal the well -- would exceed the fracture gradient and result in fluid losses to the formation, thus costing money and jeopardizing future production of oil.

The Transocean investigation team traced the causes of the Macondo incident to four overarching issues:

• Risk Management and Communication: Evidence indicates that BP failed to properly assess, manage and communicate risk to its contractors. For example, it did not properly communicate to the drill crew the absence of adequate testing on the cement or the uncertainty surrounding critical tests and procedures used to confirm the integrity of the barriers intended to inhibit the flow of hydrocarbons into the well. It is the view of the investigation team that the actions of the drill crew on April 20, 2010, reflected the crew's understanding that the well had been properly cemented and successfully tested.
• Well Design and Construction: The precipitating cause of the Macondo incident was the failure of the downhole cement to isolate the reservoir, which allowed hydrocarbons to enter the wellbore. Without the failure of the cement barrier, hydrocarbons would not have entered the well or reached the rig. While drilling the Macondo well, BP experienced both lost circulation events and kicks and stopped short of the well's planned total depth because of an increasingly narrow window for safe drilling, specifically a limited margin between the pore pressure and fracture gradients. In the context of these delicate conditions, cementing a long-string casing would increase the risk of exceeding the margin for safe drilling. But rather than adjusting the production casing design to avoid this risk, BP adopted a technically complex nitrogen foam cement program that allowed it to retain its original casing design. The resulting cement program was of minimal quantity, left little margin for error, and was not tested adequately before or after the cementing operation. Further, the integrity of the cement may have been compromised by contamination, instability and an inadequate number of devices used to center the casing in the wellbore.
• Risk Assessment and Process Safety: Based on the evidence, the investigation team determined that BP failed to properly require or confirm critical cement tests or conduct adequate risk assessments during various operations at Macondo. Halliburton and BP did not adequately test the cement slurry program, despite the inherent complexity, difficulties and risks associated with the design and implementation of the program and some test data showing that the cement would not be stable. BP also failed to assess the risk of the temporary abandonment procedure used at Macondo, generating at least five different temporary abandonment plans for the Macondo well between April 12, 2010 and April 20, 2010. After this series of last-minute alterations, BP proceeded with a temporary abandonment plan that created unnecessary risk and did not have the required approval by the MMS. Most significantly, the final plan called for underbalancing the well before conducting a negative pressure test to verify the integrity of the downhole cement or setting a cement plug to act as an additional barrier to flow. It does not appear that BP used risk assessment procedures or prepared Management of Change documents for these decisions or otherwise addressed these risks and the potential adverse effects on personnel and process safety.

Operations

• Negative Pressure Test: The results of the critical negative pressure test were misinterpreted. Post-incident investigation determined that the negative test was inadequately set up because of displacement calculation errors, a lack of adequate fluid volume monitoring, and a lack of management of change discipline when the well monitoring arrangements were switched during the test. It is now apparent that the negative pressure test results should not have been approved, but no one involved in the negative pressure test recognized the errors. BP approved the negative pressure test results and decided to move forward with temporary abandonment. The well became underbalanced during the final displacement, and hydrocarbons began entering the wellbore through the faulty cement barrier and a float collar that likely failed to convert. None of the individuals monitoring the well, including the Transocean drill crew, initially detected the influx.
• Well Control: With the benefit of hindsight and a thorough analysis of the data available to the investigation team, several indications of an influx during final displacement operations can be identified. Given the death of the members of the drill crew and the loss of the rig and its monitoring systems, it is not known which information the drill crew was monitoring or why the drill crew did not detect a pressure anomaly until approximately 9:30 p.m. on April 20, 2010. At 9:30 p.m., the drill crew acted to evaluate an anomaly. Upon detecting an influx of hydrocarbon by use of the trip tank, the drill crew undertook well-control activities that were consistent with their training including the activation of various components of the BOP. By the time actions were taken, hydrocarbons had risen above the blowout preventer and into the riser, resulting in a massive release of gas and other fluids that overwhelmed the mud gas separator system and released high volumes of gas onto the aft deck of the rig. The resulting ignition of this gas cloud was inevitable.
• Blowout Preventer (BOP): Forensic evidence from independent post-incident testing by Det Norske Veritas (DNV) and evaluation by the Transocean investigation team confirm that the Deepwater Horizon BOP was properly maintained and operated. However, it was overcome by the extreme dynamic flow, the force of which pushed the drill pipe upward, washed or eroded the drill pipe and other rubber and metal elements, and forced the drill pipe to bow within the BOP. This prevented the BOP from completely shearing the drill pipe and sealing the well.
• Alarms, Muster, and Evacuation: In the explosions and fire, the general alarm was activated, and appropriate emergency actions were taken by the Deepwater Horizon marine crew. The 115 personnel who survived the initial blast mustered and evacuated the rig to the offshore supply vessel Damon B. Bankston.

The Transocean internal investigation team began its work in the days immediately following the incident. Through an extensive investigation, the team interviewed witnesses, reviewed available information regarding well design and execution, examined well monitoring data that had been transmitted real-time from the rig to BP, consulted industry and technical experts, and evaluated available physical evidence and third-party testing reports.

The loss of evidence with the rig and the unavailability of certain witnesses limited the investigation and analysis in some areas. The team used its cumulative years of experience but did not speculate in the absence of evidence. The report of the team does not represent the legal position of Transocean, nor does it attempt to assign legal responsibility or fault.

LINK 
The Gulf of Mexico Oil Spill
Latest Deepwater Horizon Headlines

Oil & Gas Post

Promote Your Page Too

Semco Maritime Contracts 2nd Transocean Rig in North Sea

- Semco Maritime Contracts 2nd Transocean Rig in North Sea

Friday, June 17, 2011
Semco Maritime A/S

Two contracts for the world's largest rig company, Transocean, will be carried out in Tromsø and Bergen. This strengthens Semco Maritime's strategy to service clients in the entire North Sea area.

Semco Maritime A/S has won their second order this spring for upgrade of a floating rig, semi-submersible; a project to be carried out in a Norwegian harbor. This latest contract for upgrade of Transocean Winner, strengthens Semco Maritime's strategy to carry out rig projects in any harbor in the North Sea area.

Transocean Winner is a large rig which can operate in water depths up to 1500 meters; it will arrive at a yard and service area in Askøy north of Bergen in August and in the following 45-50 days, Semco Maritime will carry out an extensive upgrade, repair and piping installations to optimize the rig for new projects in the Norwegian sector of the North Sea. The work will be carried out as a close cooperation between the Danish and Norwegian divisions of Semco Maritime and with local sub suppliers. Senior Vice President for rig repair, Hans-Peter Jørgensen, expects around 150 employees from Esbjerg and Stavanger to be working on Transocean Winner during its stay in Askøy.

"We have entered an agreement with Bergen Group, who will provide for yard facilities, personnel, logistics, anchoring and catering. We will carry out this contract employing staff from this partnership," said Hans-Peter Jørgensen.

The contract with the world's largest rig operator, including SPS and upgrade of Transocean Winner worth approximately DKK 100 million, also comprises two options for similar projects.

The project succeeds a smaller Transocean contract for a semi-submersible-rig Polar Pioneer which is being upgraded and repaired in Tromsø at the moment. The rig is scheduled to leave Tromsø again June 19.

"These two contracts are our first rig projects in Norway for a number of years and they are an important step in the right direction to fulfill our strategy of serving Norwegian, British and Danish clients in the entire North Sea area. This is the first time we have the main contract for semi-submersibles, It is an interesting market, as upgrades of this type of rigs is more complex and extensive than upgrade of jack-up rigs," said Hans-Peter Jørgensen.

The main contracts for the two Transocean rigs represent a value of about DKK 200 million and thus contribute to a good start of 2011 in one of Semco Maritime’s main markets.

Oil & Gas Post

Promote Your Page Too

Transocean Reports Q1 Financials

Transocean Reports Q1 Financials


Transocean Ltd.

Transocean Ltd. on Wednesday reported net income attributable to controlling interest of $310 million, or $0.96 per diluted share, for the three months ended March 31, 2011. The results compare to net income attributable to controlling interest of $677 million, or $2.09 per diluted share for the three months ended March 31, 2010.

First quarter 2011 results included the following items, after tax, that resulted in a net positive impact of approximately $139 million, or $0.43 per diluted share:

-- $176 million of income from discontinued operations, nearly all of
which is from the gain on the sale of the Trident 20,
-- $9 million from the gain on the sale of the Transocean Mercury,
-- $8 million of net charges related to litigation matters not associated with the Macondo well incident, and
-- $38 million of net charges primarily related to discrete tax items.


First quarter 2011 results also included expenses associated with the Macondo well incident of $23 million, $19 million after tax, or $0.06 per diluted share. These expenses were primarily related to increased insurance premiums and legal costs.

Operations Quarterly Review

Revenues for the three months ended March 31, 2011 were $2.144 billion, compared to revenues of $2.127 billion during the three months ended December 31, 2010. First quarter contract drilling revenues were impacted by lower utilization and revenue efficiency. Our Deepwater and Midwater Floater fleets experienced lower utilization due to the stacking of rigs, as well as increased shipyard time related to contract preparation, special periodic surveys and major maintenance projects. Compliance with new well control equipment certification requirements, higher standards for equipment condition and capacity constraints on our vendors contributed to reduced revenue efficiency among our Ultra-Deepwater and Deepwater Floaters. Partially offsetting lower contract drilling revenue was additional revenue from two newbuild rigs commencing operations. Other revenues increased primarily from additional drilling management services activity.

Operating and maintenance expenses totaled $1.359 billion for the first quarter 2011, up slightly from $1.339 billion for the prior quarter. The change was due to increased drilling management services activity, which was partially offset by reduced rig-related maintenance costs.

Depreciation and amortization expense was $354 million in the first quarter 2011 compared to $381 million in the prior quarter. The $27 million decrease was primarily due to the reduced carrying amounts of our Standard Jackups resulting from the approximately $1 billion asset impairment recognized on that asset group during the fourth quarter 2010.

Liquidity and Interest Expense

Interest expense, net of amounts capitalized for the first quarter 2011, was $145 million, compared to $152 million in the fourth quarter 2010.

Cash flow from operating activities decreased to $390 million for the first quarter 2011 compared to $796 million for the fourth quarter 2010. The decline in cash flow from operations resulted primarily from an increase in working capital.

Effective Tax Rate

Transocean's Annual Effective Tax Rate(1) for the first quarter 2011, which excludes various discrete items, was 19.3 percent. The Effective Tax Rate(2) for the first quarter was 33.1 percent, primarily reflecting the impact of discrete items resulting from changes in estimates.

Oil & Gas Post

Promote Your Page Too

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%.

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.

Transocean Execs Donating Portion of Bonuses To Victims (RIG)

Transocean Execs Donating Portion of Bonuses To Victims (RIG)

Transocean's (NYSE:RIG) senior management team said last night they would donate the portion of their bonuses they earned from getting good marks on internal safety metrics to the families of the 11 men killed in last years Deepwater Horizon tragedy.

The donation will be made to the Deepwater Horizon Memorial Fund, established last year in the wake of the disaster, for donations by coworkers and friends to help the families of the 11 men lost in the accident.

The non-deductible sum will exceed $250,000. More than $1.6 million has already been distributed to the families to date.

"Nothing is more important to Transocean than our people, and it was never our intent to diminish the effect the Macondo tragedy has had on those who lost loved ones," said Steven Newman, chief executive, announcing the bonus donations, in a news release on Tuesday. "The executive team made this decision because we believe it is the right thing to do."