Anadarko Petroleum Corp. has awarded Transocean Inc. three-year contracts valued at an estimated $985 million in combined revenues for the company’s high-specification drillships Discoverer Spirit and Deepwater Millennium.
The drillship contracts are expected to commence in June 2007, immediately following the conclusion of current contract commitments with Shell and Anadarko, respectively, in the Gulf of Mexico. Revenues of an estimated $520 million could be generated over the three-year contract for the Discoverer Spirit, while revenues from the Deepwater Millennium three-year contract could total about $465 million.
The fifth-generation, dynamically positioned drillships Discoverer Spirit and Deepwater Millennium are two of 32 high-specification rigs in the Transocean fleet, 13 of which are fifth-generation deepwater floaters. Both units are capable of operating in water depths of up to 10,000 feet. The Discoverer Spirit entered service in 2000 following its construction in El Ferrol, Spain, and Corpus Christi, Texas, while the Deepwater Millennium began operations in 1999 following the rig’s construction in Ulsan, South Korea.
Transocean is an offshore drilling contractor with a fleet of 92 mobile offshore drilling units. The company’s mobile offshore drilling fleet consists of 32 high-specification floaters (semisubmersibles and drillships), 24 other floaters, 25 jackup rigs and other assets utilized in the support of offshore drilling activities worldwide. Transocean has a current equity market capitalization in excess of $19 billion.
Far East Energy completes financing transactions
Far East Energy Corp. accepted subscription agreements from certain investors for the purchase of 2,782,181 shares of common stock offered in a private placement for total gross proceeds of $2,503,963. The shares were offered pursuant to the terms of the stock subscription agreement dates Dec. 21, 2004 between the company and investors. In connection with this private placement, the company may, as a fee, pay up to 8 percent of the gross proceeds from the sale of the common stock, and issue a warrant to purchase up to 8 percent of the shares sold in the private placement at an exercise price of $0.90 per share with a term of two years.
Houston-based Far East Energy has offices in Beijing, Kunming, and Taiyuan City, China. The company is focused on the acquisition of, and exploration for, coalbed methane through its agreements with ConocoPhillips and China United Coalbed Methane Company (CUCBM).
Acquisition complete between Sonoran Energy and Baron Oil
Phoenix-based Sonoran Energy Inc. has finalized its acquisition of Baron Oil, a privately-held Norwegian company. The final terms of the acquisition were concluded following the completion of a pre-acquisition audit of the Baron Oil assets and financial statements. Baron Oil has a significant presence in the Middle East, proven oil and gas reserves in Texas, and well-established opportunities in the prolific oil province of the Caspian Region.
Baron Oil shareholders will receive 19,026,514 shares of Sonoran Energy restricted common stock in exchange for their shares in Baron Oil as consideration for the acquisition.
Sonoran Energy is an independent oil and gas company with oil and gas assets in North America, the Middle East, the Caspian Sea region, and North Africa.
Chevron developing deepwater Blind Faith field in GoM, production expected in 2008
Chevron Corp. is proceeding with the development of the Blind Faith field in the deepwater Gulf of Mexico. The field will be developed using a semisubmersible production facility, with first production expected during the first half of 2008. Chevron is the operator and holds a 62.5 percent working interest.
Blind Faith is located in about 7,000 feet of water, about 160 miles southeast of New Orleans, on Mississippi Canyon blocks 695 and 696. The discovery well was drilled in June 2001 and encountered more than 200 feet of net pay in Miocene sands at depths of 20,900 feet to 24,300 feet. A successful appraisal well was drilled in 2004. The field has an estimated gross resource potential exceeding 100 million barrels of oil-equivalent.
“The project demonstrates our strong commitment to continue to invest in the Gulf of Mexico to develop new energy supplies, as well as our ability to advance significant capital projects in areas where we are well positioned for future growth,” said George Kirkland, Chevron’s executive vice president, upstream and gas.
Added Ray Wilcox, Chevron’s North America Exploration and Production Co. president, “Blind Faith is part of our upstream strategy to grow profitability in our core areas and build new legacy positions. This project is a key asset in our deepwater portfolio and is expected to provide significant new oil and gas resources in the Gulf of Mexico.”
Total capital costs for the project will be approximately $900 million. Chevron’s partner in the Blind Faith project is Oklahoma City-based Kerr-McGee Corp., which holds a 37.5 percent interest.
Initial production is expected to be about 30,000 bo/d and 30 MMcfd of gas. The semisubmersible facility will have a production capacity of around 45,000 bo/d and 45 MMcfd. The topsides can be upgraded to a capacity of 60,000 bo/d and 150 MMcfd to accommodate production from satellite discoveries or third-party tiebacks.
Chevron is the largest overall leaseholder in the Gulf of Mexico. With more than 53,000 employees, company subsidiaries conduct business around 180 countries, producing and transporting crude oil and natural gas, and refining, marketing, and distributing fuels and other energy products. Chevron is based in San Ramon, Calif.
IntercontinentalExchange subsidiaries and business units operating under ICE name
All IntercontinentalExchange subsidiaries and business units have begun operating under the ICE name. ICE operates the leading electronic global futures and over-the-counter (OTC) marketplace for trading energy contracts. The parent company will continue to be known as IntercontinentalExchange, or ICE.
The company’s regulated futures and options business, formerly known as the International Petroleum Exchange (IPE), will operate under the name ICCE Futures. ICE acquired the London-based energy futures and options exchange in 2001 and completed the transition from open-outcry to electronic trading in April 2005. At this time, all futures and options contracts, including the benchmark Brent crude and gas oil futures contracts will retain “IPE” in their contract names and specifications.
ICE’s OTC market data services, formerly known as The 10x Group, as well as the company’s futures market data business will operate as a single business unit under the name ICE Data. ICE’s automated electronic confirmations service for OTC market participants, is known as ICE eConfirm.
These changes were made to integrate access to the company’s information and services following the recent transition of its futures markets to electronic trading.
ICE is based in Atlanta, with offices in Calgary, Chicago, Houston, London, New York, and Singapore.
Peabody, ArcLight Capital enter into MOU to develop coal gasification in Illinois
St. Louis-based Peabody Energy has entered into a memorandum of understanding (MOU) with ArcLight Capital Partners LLC to advance project development of a commercial-scale coal gasification project in Illinois that would transform coal into pipeline-quality synthetic natural gas. The initial project would be designed with ConocoPhillips E-Gas technology, featuring an oxygen-blown gasification system. ConocoPhillips and Fluor have begun preliminary engineering design work for the project.
The plant would be one of the largest coal-to-natural-gas plants in the United States and would be sited in Illinois. Peabody would develop a coal mine to fuel the plant using its Illinois basin reserves, and ArcLight, through an affiliate, would contribute its Illinois-related coal-to-natural-gas development assets.
The project would require at least 3 million tons of coal per year to fuel two gasifier trains that could produce more than 35 billion cubic feet of synthetic natural gas.
“This partnership combines the strength of industry leaders in advancing a major Btu conversion opportunity that provides an alternative to scarce US natural gas,” said Gregory H. Boyce, Peabody president and CEO-elect. “Btu conversion technologies will significantly expand the market for coal and more fully utilize America’s 200-year supply to improve energy security.”
Gasification has been used for the refining, chemical and power industries for 50 years. The E-Gas process would combine a coal-water mixture with oxygen and steam to produce a synthesis gas (syngas), which is further upgraded at the site to produce pipeline-quality natural gas.
“The agreement with Peabody represents a major step in bringing to reality the development effort initiated by ArcLight several years ago,” said Robb Turner, senior partner at ArcLight. “We look forward to a successful partnership with Peabody that will result in an environmentally-friendly coal-use project.”
Peabody is the world’s largest private-sector coal company, with 2004 sales of 227 million tons of coal and $3.6 billion in revenues. Its coal products fuel more than 10 percent of all U.S. electricity and three percent of worldwide electricity.
ArcLight is a global energy infrastructure investing firm with more than $2.5 billion under management. ArcLight invests throughout the energy industry value chain in hard assets that produce high current income and capital appreciation.
OFS Portal launches new catalog functionality based on Heiler products
OFS Portal LLC, a worldwide e-commerce consortium of upstream oil and gas suppliers, has launched new catalog functionality. The implementation of Heiler’s PCM Premium Content Manager was completed in two months.
OFS Portal is using PCM Premium Content Manager to electronically receive, validate, view, and publish catalog product information from its supplier members and deliver it to its buyers - national and international oil companies. While working with OFS Portal, Heiler implemented for the first time, and now officially supports, the Petroleum Industry Data Exchange (PIDX) catalog schema, developed by the American Petroleum Institute.
PCM Premium Content Manager is the first step in enabling both an automated catalog management process and increasing functionality when distributing catalogs from supplier’s back ends through OFS Portal to buyers.
In addition to purchasing PCM, OFS Portal has also elected to use Heiler’s hosting and managed service offering. Heiler’s service offers ongoing support including all hosting, infrastructure, basic professional services for upgrades, and access to a team trained on OFS Portal’s business processes.
“We needed a system that was both supplier- and buyer-centric,” said Randy Dutton, vice president of OFS Portal. “The Heiler PCM Premium Content Manager platform provides us with a highly scalable solution for our entire community and a very flexible partner for the future that is willing to work with us to meet the ongoing complexity of the oil and gas industry.”
The entire deployment of PCM Premium Content Manager for OFS Portal took around two months, including design, installation, implementation, data migration of existing catalogs, testing, and training.
“We are pleased to be working with a world-class organization such as OFS Portal that is driving industry standards,” said Heiler Software Corp. COO Greg Wong. “The selection by OFS Portal of our managed services offering also underpins our belief that more and more companies are looking for a turn-key solution where vendors take responsibility not only for delivering software, but for making sure it works in their environment,” added Wong.
Heiler is a provider of electronic catalog management systems and content services for e-procurement. Heiler Software offers comprehensive catalog management and content services for buyers and suppliers from a single source.
Headquartered in Houston, OFS Portal, LLC is a member-based group of global upstream oil and gas suppliers and service providers. OFS Portal works with global standards organizations to converge or develop open and non-proprietary e-commerce standards for use in the upstream oil and gas industry.
Montana governor visits Syntroleum’s Tulsa plant
In November, Montana Gov. Brian Schweitzer visited Syntroleum Corp., a Tulsa-based company with coal-to-liquids (CTL) capabilities. Schweitzer is interested in potentially developing some of Montana’s coal reserves into ultra-clean synfuels using a CTL process.
The governor toured Syntroleum’s facilities and learned about its proprietary technological developments utilizing Fischer-Tropsch (FT) technology and the potential to apply this expertise in the development of clean fuels.
“I am grateful for the opportunity to learn more about Syntroleum’s unique technology and its efforts in promoting environmentally, clean fuels,” Schweitzer said. “I believe synfuels make a lot of sense for America and Montana. Montana has the opportunity to create jobs, enhance economic development and decrease our dependency on foreign energy. Coal-to-liquids is something I am exploring as a possibility.”
Syntroleum president and CEO Jack Holmes added, “We thank the governor for his visionary efforts in the evolving industry to develop ultra-clean fuels using FT technology. Syntroleum is well positioned with its proprietary technology to meet the growing demand for clean fuels. Energy supply and demand fundamentals are making commercial application of our technologies more and more attractive.”
Macquarie Bank plans to acquire Cook Inlet Energy Supply Co.
Sydney-based Macquarie Bank Group intends to acquire 100 percent of US energy marketing and trading company, Cook Inlet Energy Supply LLC. The acquisition is subject to final agreement and is expected to close before the end of the year.
Headquartered in Los Angeles, Cook Inlet provides physical natural gas trading, transportation, and storage services to North American natural gas producers, utilities, wholesalers, and industrial end users. Cook Inlet was founded in 1991 and currently employs 59 staff consisting of energy traders and marketers as well as mid-office and black-office staff.
The head of Macquarie’s treasury and commodities group, Andrew Downe, said, “The acquisition of Cook Inlet is a significant strategic step for Macquarie’s North American energy markets business, adding a major platform of physical trading expertise to our existing financial and structured energy markets activities. Macquarie and Cook Inlet are a strong cultural fit, with complimentary skill sets and a similar emphasis on risk management and credit worthiness.”
Under Macquarie ownership, Cook Inlet will have access to additional financial resources, systems, and operational assistance to expand both the scale and range of services that it offers participants in the US natural gas market.
Cook Inlet’s founder and CEO, Gregory L. Craig, and president, Hans O. Saeby, will join the Australian bank as division directors and will remain as part of the Cook Inlet management team.
Under the terms of the acquisition, Cook Inlet will become a wholly-owned operating subsidiary of the Macquarie Bank Group. Macquarie intends to retain the Cook Inlet Energy Supply operating name through a transition period.
Overall management of Cook Inlet under Macquarie ownership will be the responsibility of Nick O’Kane, currently an executive director with Macquarie’s energy markets division based in London who will be relocating to Los Angeles.
Ron Neal, currently a division director within the energy markets division, will also join the Cook business and be responsible for origination and structuring.
Appro partners with CyrusOne to launch Compute on Demand center in Houston
Appro, a provider of high-performance enterprise computing systems has opened a Computer on Demand Center (CODC) in Houston. The service is designed to address the demand for supercomputing power in the oil and gas industry. The CODC is located in the CyrusOne data center, and is one of the few centers engineered to address the dense power and cooling requirements needed for grid computing.
Located in Houston, the oil and gas industry can access the center for additional capacity and services to meet the short-term computational requirements planned or unplanned peak workloads, new projects, and new business opportunities. The CODC offers contracts in which the customer pays for the amount of capacity reserved for the duration of the contract period, and deploys fast and scalable capacity to support customers needs with minimal financial and technical risk.
Hosting the CODC at the CyrusOne facility adds an additional layer of security and availability, but leverages the economies of scale and enables seismic data processing and interpretation for less than an internal solution.
Milpitas, Calif.-based Appro has an R&D and manufacturing center in Asia and a sales and service office in Houston. Appro enables a variety of network computing applications by developing powerful, scalable, and reliable clusters, servers, storage subsystems, and high-end workstations for the high-performance computing, Internet computing, and cluster market.
CyrusOne is provides remote monitoring, data center operations, and managed IT services.
Terax to record aeromagnetic data to aid in Barnett shale drilling location identification
Austin-based Terax Energy Inc. has executed an agreement to record, process, and interpret high-resolution, aeromagnetic data to help delineate well locations on Terax acreage in Erath County, Tex., and advance the company’s initial drilling operations in the Fort Worth basin.
To obtain the data, an airplane equipped with high-resolution instruments will survey the area. The instruments will record full-spectrum magnetic amplitudes utilizing Global Positioning System (GPS) coordinates on a 9-by-12-mile grid - roughly 69,000 acres. The grid will consist of 958 line-miles of data.
When Terax receives the aeromagnetic data, expected to be within 30 days following completion of the survey, Terax and its technical advisors will process and interpret the data to better understand the sub-surface geological structure and determine well locations.
Terax Energy is an independent, managed risk, gas exploration, development, and production company. The company is focused on exploitation and development of large, mostly contiguous acreage blocks in the Barnett shale play within the Fort Worth basin of Texas. OGFJ