Repsol makes US$8.3bn offer for Talisman Energy

Repsol makes US$8.3bn offer for Talisman Energy @ US$8/share86% premium to 12 December closing price...but not that big in the context of the recent share price f...

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Sub-Saharan Africa - newsflow update

Gabon Deepwater - Leopard discovery Leopard-1 was drilled on licence BCD10 Shell 75%*, CNOOC 25% Encountered substantial gas column with 200m net gas pay Further appraisal required FLNG? 3-4 tcf may be required, although economics of sales into Europe are marginal Government is also keen to grow domestic gas market Congo Offshore - Eni/NewAge - follow up discovery in Marine XII Minsala Marine discovery Estimated 1bnboe in place, of which...

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Brent falls - impact on E&A

Brent (above) has now fallen >25% since June...what are the E&Ps going to do... Onshore flexibility, but not in the offshore Longer lead times, offshore spend tends to be committed vs. onshore Likely see cut back in E&A instead Delayed payments Kurdistan, DNO and Genel are still to be paid for pipeline exports Egypt, TransGlobe has built up USD185m of receivables Nigeria, Seplat has built up USD215m receivables as government...

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Obama Administration to bypass Congress on deal with Iran?

Obama Administration reported plan to bypass Congress on a deal with Iran Administration’s plan to suspend economic sanctions against Iran without a vote in Congress …Administration says Congress will have final say in whether to permanently lift sanctions Permanent sanctions would only be lifted if Tehran demonstrates compliance with restrictions on its nuclear programme …and Iran must make sufficient progress in conceding its...

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Sangomar Deep - Senegal's first offshore discovery

On 7 October 2014, Cairn Energy and its partners announced that a significant oil discovery had been made in the FAN-1 exploration well in the Sangomar Deep block, Senegal's first offshore discovery 29m net pay Gross oil interval of >500m No OWC encountered Distinct oil types recovered 28-41 API This was followed by a second discovery in the SNE-1 well, announced on 10 November 2014 36m net pay Gross oil interval of 95m with gas...

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Gunvor to expand into spot LNG trading as supply increases

Bloomberg Gunvor Group, the world’s fourth-biggest oil trader, plans to expand into short-term buying and selling of liquefied natural gas (LNG) as global supply rises, two people with direct knowledge of the matter said. The Cyprus-based trading house will charter vessels for spot agreements and sell cargoes in Asia and the Atlantic basin, tapping into supply from Nigeria, Australia and Southeast Asia, the people said, asking not to be identified because the plan is confidential. Seth Pietras, a spokesman for Gunvor in Geneva, declined to comment...

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Waha resumes production - a brief history of the Waha fields

Comprises a number of concessions located in the Sirte Basin in eastern Libya Four main fields are: Waha, Gialo, Dahra and Defa Originally issued to Oasis Oil Company (consortium of Conoco, MRO and Amerada Hess) In 1986, US sanctions required all US companies to withdraw Concessions were held in escrow NOC established 100% subsidiary, the Waha Oil Company, to operate the fields until 2005 when the US companies re-entered In 2009, list of 24 fields...

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Notes on Yemen - Summary

Summary Oil production dominated by 2 blocks: Masila (Bloack 14) Licence expired in 2011 Operations taken over by newly formed government op co May impact production levels and future development Marib-Jawf (Block 18) Production peaked in 2002 at 160mbopd Absent further discoveries, reserves will be depleted over next decade A number of licences are due to expire in coming years, if not renewed, could exacerbate declining reserves problem Small...

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Yemen - Key Companies and Licensing

Key companiesTotal is largest resource holder due to interest in Yemen LNGPartners are: Hunt Oil and SK EnergyOccidental is most significant IOC not in Yemen LNGAcreage, reserves and production reduced following expiry of Masila block in 2011Its East Shabwa (Block 10) is due to expire in 2015 - extension unlikely to be grantedNexen was also a key player in Yemen until expiry of Masila block (Block 14)Low capex in 2013 reflects maturity as an oil...

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Apache divesting international assets? A hard one!

On 31 July 2014, Apache announced its Q2 2014 resultsApache said it was looking to exit its Canadian LNG positions and was considering options around its international assetsThis comes amidst Jana Partners, a hedge fund which recently picked up c.USD1bn of shares in Apache, wrote to investors arguing that Apache should focus its efforts on the North American onshoreReasoning behind this is that over the last few years, a number of North American...

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Notes on Oman

Executive summaryAfter years of declining production, crude output has increased y-o-y since 2008 due to:Oman's EOR project at the Mukhaizna field; andStabilisation of production at PDO's Block 6 (Oman's main producing area)PDO has also implemented a number of EOR initiatives to maintain its own production of c.550mbopd over the next 5 to 8 yearsThe success of these EOR projects will largely dictate the level to which Oman can maintain liquids production over the medium termIncreasing focus on gas production in response to projected shortfallsEncourage...

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Tullow exits Liberia and Sierra Leone

On 30 July, Tullow published in H1 2014 results. Within the results, Tullow stated: "After evaluating potential options in Liberia and Sierra Leone, Tullow made the decision not to renew its licence interests and will exit its position. Tullow’s interest in LB-15 in Liberia expired in June 2014 and its interest in SL-07B-11 in Sierra Leone will expire in August 2014, following which Tullow will have no licence interests in either country" Acreage...

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Afren - CEO and COO suspended re unauthorised payments

On 31 July 2014, Afren has temporarily suspended its CEO, Osman Shahenshah and the COO, Shahid Ullah During an independent review by Willkie Farr & Gallagher, evidence had been uncovered showing the CEO and COO were in receipt of unauthorised payments These payments were not made by Afren The investigation continues, no conclusive findings to date No evidence found that any other directors involved Egbert Imomoh...

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Sebuku PSC

Overview Contains 2 discoveries: Ruby gas field and the small Pangkat oil deposit Plan of development for Ruby approved in July 2008 incorporates two bridge-linked platforms and initially four development wells 312km pipeline to transport gas to new onshore receiving terminal for processing Gas sold to the local Kaltim fertiliser plants Ruby currently contracted to supply 85mmcfpd Production capacity of 115mmcfpd, so scope to provide more gas Participation Mubadala (70%*), INPEX (15%), Total (15%) Exploration 11 wells drilled to...

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ISIS: Sectarian furies unleashed again

The recent events in Iraq is a continuation of a rift between Sunni and Shias that began over a thousand years ago Shias believed Ali, the son-in-law of the Prophet Muhammad should take over the leadership upon his death Sunnis believed the Muslim community should determine the new leadership by consensus Ali became the new leader, but upon his assassination in 661, war broke out between the two groups Islamic terrorism once seemed to wear...

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Ivar Aasen crib sheet

Contains 4 fields: Ivar Aasen, West Cable, Hanz, Asha PDO approved in March 2013 Development costs relatively high Discovery of Asha in December 2012, and inclusion of Asha in development improves economics Edvard Greig and Johan Sverdrup could push cost of services market higher Ivar Aasen expected to receive transitional terms , whereas other fields will be taxed under new terms Participation Ivar Aasen Area contains...

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Eagle Ford Shale

Intro and historyPlay in South Texas stretching into Louisiana; contributes c.10% towards US productionThree “windows” to the play – oil, gas-condensate, dry gas; focus has been on development of the liquids sectionEagle Ford formation not singled out until 2008 although routinely tested before thenInitial production was gas/condensates by Petrohawk with Apache testing oil around the same timeBig change in 2010: EOG acquired acreage in oil window, changing Eagle Ford into a liquids focused playWell economicsProduction and reservoir...

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Bakken

Intro and historySpans western North Dakota, eastern Montana in US and parts of Saskatchewan and Manitoba in CanadaNamed after Montana farmland owner Henry BakkenRecoverable estimates continue to increase as more about the play is understoodFirst production in 1951, after which, formation began to be mappedIn mid-90s, Elm Coulee field discovered with significant oil accumulation in the middle Bakken memberIn mid-2000s, EOG drilled the Nelson Farms 1-24H well; demonstrated H-wells with fracture stimulation could produce high IPsIn...

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The state of the UK North Sea

Tax incentives have encouraged capex spend...but this has led to an overheated OFS marketand rising costs have caused some marginal projects to be postponed or even cancelled (Bressay (Statoil) and Rosebank (Chevron) being well known examples)Production decline continued in 2013...Increase in planned and unplanned shutdownsAgeing infrastructure...compounded by few large field start-ups and poor exploration successWM estimates UKNS average discovery size in 2013 to be c.11.3mmbbl, which struggle to meet commercial thresholds in current high cost...

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Thoughts around using a high discount rate

Higher discount rates may be used to reflect the greater risk averseness adopted by a company/project manager. This may also be used as a screening tool, with lower NPV projects rejected. In O&G, and other fields, higher discount rates should be used in conjunction with other tools to evaluate projects.At the planning level, the use of higher discount rates has its own limitations due to conflicting interests between the project team (e.g. staying in the job) and management.Encourages projects with near term and/or higher levels of early production Implication:...

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Global upstream review - 2014

Transaction activity declined sharply in 2013Record M&A in 2010-12, companies switched focus to developing acquired acreageCorporate activity weak – NOCs faced hurdles in NAM, public companies weary of overreaching with strict capital discipline and own paper cheapIn NAM, prime acreage now leased up; valuations mixed as drilling results and understanding of plays have progressedAsian NOCs bidding aggressively on global assets as large corporate opportunities limited or more difficult to transact – have seen spending from this group of buyers...

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Repsol hit with further delays offshore Namibia: Welwitschia

Welwitschia prospect being drilled on PEL0010: Repsol (44%*), Tower (30%), Arcardia (26%)Welwitschia-1 spud last monthDue to issues with wellhead housing, well was plugged and abandonedDecision made to drill Welwitschia-1A 50m away, which was spud 1 May 2014Welwitschia-1A now at 1,879m but problems with blowout preventer system has halted drillingProspect estimated to have multi-billion bbl potential and is being drilled to test the Maastrichtian and Aptian-Albian reservoir sequen...

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Libya update: co-ordinated militia attacks against Islamists

On 16 May, forces loyal to Colonel Haftar attacked the bases of two Islamist militias in the eastern Libyan city of Benghazi: Ansar al-Sharia and 17 February Martyrs BrigadeHaftar commands the "national army"Aim of attack to remove Islamist militias from BenghaziAnsar al-Sharia aims to impose Sharia law in LibyaAllied with 17 February Martyrs, who report to the GovernmentIn Western city of Tripoli, militias allied with the Zintan Brigade also moved in support of Haftar's actions and attached the General National Congress ("GNC")Colonel Obaidi,...

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Lekoil acquires 40% WI in Otakikpo Marginal Field

20 May 2014: Lekoil announced acquisition of 40% participating and economic interest in Otakikpo, a Nigerian onshore Marginal Field; located within OML11Vendor: Green EnergyConsideration: USD7m upfront, plus USD4m contingent on production and ministerial approvalLekoil will also fund work programme for re-entry of existing wells and all costs up to production (estimated c.USD67m); this is recoverable from enhanced share (88%) of production cash flowLekoil expects to bring Otakikpo into production within 12-18 monthsAcquisition and work...

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Oryx: Appraisal drilling update for Demir Dagh, Kurdistan

Oryx holds 65% WI in Hawler licence (Operator), KNOC (15%), KRG (20%)On 19 May 2014, announced test results for Demir Dagh-3 ("DD-3") and Demir Dagh-5 ("DD-5") wellsDD-3: all four tests flowed successfully; crude quality similar to that at DD-2 and -4Spudded in November 2013, 3km south-east of DD-2Will now be completed as producer with DD-2 and -4DD-5: Logging data and drilling fluid losses during drilling, only small amount of hydrocarbons recovered to surfaceFirst production from Demir Dagh Area expected Q2 2014DD-6 plus a further 4 appraisal/development...

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Petroceltic successfully completes USD100m placing

Joint book-runners are Davy, HSBC and MirabaudProceeds will be used to "provide financial flexibility to pursue growth opportunities across Petroceltic's existing portfolio and also through new ventures"Dovenby Capital will be a new strategic shareholder, subscribing to USD50m of the placingDovenby Captial is an investment company led by Dato' Ahmad Fuad, a Malaysian oil and gas industry specialistUpdate on assetsAlgeriaAin Tsila / Isarene PSC - tender for FEED at end 2013, farm-out to Sonatrach (pre-empted) - post farm-out Petroceltic...

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