GENERAL INTEREST Quick Takes
Paloma Partners to acquire Goodrich Petroleum
Paloma Partners VI Holdings LLC, an affiliate of EnCap Energy Capital Fund XI LP, agreed to acquire Goodrich Petroleum Corp. for about $480 million.
Upon completion, Goodrich will become a privately held company.
Goodrich ended third-quarter 2021 with a net loss of $48.0 million and adjusted net income of $16.9 million. Production totaled about 15.3 bcfe in the quarter (99% natural gas).
The company is focused primarily on the Haynesville shale in North Louisiana and East Texas, the Tuscaloosa Marine shale in Eastern Louisiana and Southwestern Mississippi, and the Eagle Ford shale in South Texas.
The tender offer is subject to customary conditions, including the tender of a majority of the outstanding Goodrich shares pursuant to the offer, and is expected to close in December. The transaction is not subject to a financing condition. Paloma has secured from EnCap equity financing commitments for the entire acquisition, including assumption of debt.
Canadian Natural Resources to acquire Storm Resources
Canadian Natural Resources Ltd., Calgary, has agreed to acquire Storm Resources Ltd., Calgary, for a cash consideration of $6.28 (Can.) per share. Canadian Natural Resources will also assume Storm’s total debt, working capital deficit, and other monetary obligations of about $186 million (Can.).
The purchase price implies an enterprise value for Storm of about $960 million (Can.) including transaction related expenses and decommissioning obligations, Storm said.
Current production, before royalties, to be acquired by Canadian Natural is about 136 MMcfd of natural gas and 5,600 b/d of NGLs. The assets include properties in the high quality, liquids rich Montney area of Northeast British Columbia.
The agreement contains customary representations and warranties of each party and interim operational covenants by Storm. It also provides for, among other things, customary support and non-solicitation covenants by Storm, subject to a “fiduciary out” for unsolicited “superior proposals” in favor of Storm and a provision for the right to match any superior proposals in favor of the purchaser.
The deal provides for a non-completion fee of $43.5 million (Can.), payable if the transaction is not completed or is terminated in certain circumstances, including if Storm enters into an agreement with respect to a superior proposal or if the board withdraws or modifies its recommendation with respect to the transaction.
The deal is expected to close in December.
Canadian Natural is an oil and natural gas production company with operations in core areas in Western Canada, the UK sector of the North Sea, and offshore Africa.
Exploration & Development Quick Takes
ADNOC lets $1.46 billion EPC contracts for Dalma gas development project
Abu Dhabi National Oil Co. (ADNOC) awarded two engineering, procurement, and construction (EPC) contracts totaling $1.46 billion for the Dalma gas development project.
Dalma field lies about 190 km northwest of the Emirate of Abu Dhabi and is part of the Ghasha concession—the world’s largest offshore sour gas development.
Package A of the two Dalma EPC contracts was awarded to National Petroleum Construction Co. and is valued at $514 million. It covers the EPC of four offshore wellhead towers, pipelines, and umbilicals in Hair Dalma, Satah, and Bu Haseer fields.
Package B, awarded to a joint venture between Técnicas Reunidas and Target Engineering, is valued at $950 million and covers the EPC of gas conditioning infrastructure for gas dehydration, compression, and associated utilities on Arzanah Island about 80 km from Abu Dhabi.
Both contracts are expected to be completed in 2025 and will enable Dalma field to produce around 340 MMscfd of natural gas. ADNOC has advanced orders for long lead items and has completed seven development wells at Dalma.
Production from the Ghasha concession area, encompassing Hail, Ghasha, and Dalma sour gas fields, is expected to begin around 2025, ramping up to produce more than 1.5 bscfd before the end of the decade.
ADNOC and its Ghasha partners—ENI (25%), Wintershall Dea (10%), OMV (5%), and LUKOIL (5%)—have let a contract to Technip Energies to update the front-end engineering and design (FEED) for the concession.
TotalEnergies flow tests wells for Suriname development
TotalEnergies SE flow tested two wells in Block 58, offshore Suriname. The results extend the proven petroleum system to the northern boundary of Block 58, confirming the presence of high-quality reservoir sands and the generation and migration of black oil.
Bonboni-1, the first exploration well in the northern portion of Block 58, was drilled in water depths of nearly 2,000 m about 45 km from APA’s discoveries in the Maka-Kwaskwasi-Sapakara-Keskesi trend. In the primary Maastrichtian and Campanian objectives, the well encountered high quality water bearing reservoirs. In a Maastrichtian objective, the well penetrated 16 m (52 ft) net pay in a single zone, consisting of low-GOR, 25-degree API black oil. The aerial extent of this pay zone is not sufficient to support a commercial development, and the well will be plugged and abandoned.
At Sapakara South-1 (SPS-1), an appraisal well drilled earlier this year, flow and subsequent pressure build-up tests were recently completed. The well is on the eastern edge of Sapakara nearly 4 km from the discovery well. As disclosed earlier this year, SPS-1 encountered about 30 m (98 ft) of net black oil pay in a single zone of high-quality Campano-Maastrichtian reservoir.
A restricted flow test averaged 4,800 b/d for 48 hours. Without flow restrictions, a development well would produce at a significantly higher sustained rate. Preliminary analysis of the data indicates that a single reservoir in SPS-1 proved connected to resources of 325-375 million bbl of oil in place, exceptional reservoir quality with permeability in the range of 1.4 Darcies, and black oil with a 34-degree API and flowing gas-to-oil ratio of about 1,100 scf/bbl. Seismic imaging of this Sapakara reservoir supports substantially more potential resource, which could be proven through additional appraisal drilling.
Following completion of operations at Bonboni, the Maersk Valiant will drill the Krabdagu exploration prospect, 18 km east of SPS-1. Krabdagu has a similar seismic signature to the two successful wells at Sapakara and the discovery well at nearby Keskesi.
The Maersk Developer is nearing contract completion and TTE will release the rig once operations are finished at SPS-1. APA will mobilize the Noble Gerry de Souza to Block 53 early in 2022, where it has one committed well and options for two additional wells.
TotalEnergies is operator in a 50-50 partnership with APA Corp.
Aker BP drills non-commercial discovery west of Ula
Aker BP ASA plugged a non-commercial discovery in southern North Sea production license (PL) 906.
Wildcat well 7/11-14 S was drilled by the Maersk Integrator drilling rig to a vertical and measured depth of 4,090 m and 4,122 m, respectively, below sea level, about 11 km west of Ula field and 275 km southwest of Stavanger in 72 m of water. It was terminated in the Bryne formation in the Middle Jurassic.
The objective of the well, the first exploration in the license, was to prove petroleum in upper Jurassic reservoir rocks in the Ula formation (Vestland group).
The well encountered a total oil column of 7 m in the Ula formation in a 9-m thick sandstone layer of moderate reservoir quality. The oil-water contact was proven at a depth of 3,999 m below sea level.
Preliminary estimates put the discovery at 0.7-1.5 million std cu m of recoverable oil equivalent. The well was not formation-tested, but data acquisition was undertaken. The well has been permanently plugged.
The Maersk Integrator is now headed for Åmøyfjorden.
Aker BP is operator at PL 906 (60%) with partners DNO Norge AS (20%) and Longboat Energy Norge AS (20%).
Drilling & Production Quick Takes
Norway production increased in October, NPD says
Norway’s liquids production averaged 2.062 million b/d in October, the Norwegian Petroleum Directorate reported Nov. 19.
Norway’s liquids production averaged 2.022 million b/d in September.
Oil production in October is 2.8% higher than the NPD’s forecast, and 1.0% higher than the forecast so far this year.
The average daily liquids production in October consists of 1.815 million b/o, 237,000 bbl of NGL, and 10,000 bbl of condensate.
The total petroleum production so far in 2021 is about 191.1 million standard cu m oil equivalents.
The total volume is 2.4 higher than the 2020-figures.
Pharos Energy finishes TGT infill drilling in Cuu Long basin
Pharos Energy PLC drilled four wells to finish the first phase of the 2021 Te Giac Trang (TGT) infill development drilling program on Block 16-1 in Cuu Long basin, offshore Vietnam (OGJ Online July 21, 2021).
Initial flow of the four development wells was 8,800 b/d and exceeded the predicted combined initial oil rate of 5,650 b/d. The drilling program was completed about $20 million below the JV gross budget, in line with capex guidance.
Well interventions and a gas lift optimization program earlier in the year resulted in an initial production gain of 3,200 b/d. Six wells with additional perforations gained 1,800 b/d, four wells with water shut off gained 900 b/d, and eight wells where demulsifier injection was applied gained 500 b/d.
TGT field gross production on Nov. 17 was 14,800 boe/d, but would have been about 19,800 boe/d without the impact of a compressor fault. The GTC-A compressor, one of the two compressors on the FPSO, was stopped on Nov. 15 to prevent potential damage due to excessive temperature and vibration. The exact cause of the problem is under investigation but will require the compressor to be airfreighted to the manufacturer in the US for inspection and repairs. It is currently anticipated back in service by end January 2022.
Two additional TGT wells and 13 well interventions (10 firm additional perforations and three water shut-offs) are approved for 2022. Two wells are planned to be drilled from cashflow in third-quarter 2022.
Pharos has 30.5% working interest in Block 16-1 which contains 97% of TGT and is operated by the Hoang Long Joint Operating Co. Pharos’ unitized interest in TGT is 29.7%.
SDX Energy starts second drilling phase in Morocco
SDX Energy PLC spudded the KSR-19 well to start the second phase of its 2021 drilling campaign in Gharb basin, Morocco. KSR-19 will be followed by SAK-1 which, if successful, will open a new exploration area for SDX in the company’s Lalla Mimouna Sud concession, the company said. The campaign is expected to complete in December.
KSR-19 spudded on Nov. 18 targeting the Main Hoot reservoir at a depth of about 1,780 m TVDSS. SAK-1 will target the Guebbas reservoir at a depth of about 1,300 m TVDSS. Both wells are looking to encounter shallow, biogenic gas accumulations.
KSR-19 is near to the company’s existing infrastructure, thus enabling tie-in to be completed quickly and at low cost, the company said. SAK-1 lies a little farther, but would still be relatively quick to tie-in, it continued. SDX is using the drilling rig that was previously stacked in its yard in Morocco.
PROCESSING Quick Takes
Neste undertakes decarbonization project for Porvoo refinery
Neste Corp. will receive funding from the EU Innovation Fund to implement a renewable hydrogen and CO2 capture and storage (CCS) project at its 206,000-b/d refinery in the Kilpilahti industrial area of Porvoo, Finland.
Neste will use the €88 million in funding to introduce CCS and electrolysis technology solutions that will enable the refinery to decarbonize production processes to reduce GHG emissions quickly and efficiently at the site, laying the groundwork for Porvoo’s transformation into a European hub for renewable hydrogen and CO2 utilization, the operator said.
One of seven projects to be granted funding by the EU Innovation Fund’s more than €1.1 billion investment in low-carbon technologies, the grant award also strongly supports Neste’s goal of making Porvoo Europe’s most sustainable refinery by 2030, said Peter Vanacker, Neste’s president and chief executive officer.
With grant agreements scheduled to be completed during first-quarter 2022, Neste said it plans to gather a network of European technology suppliers as well as research and development institutes to participate in the project, which is currently in the feasibility phase.
Aligned with Neste’s target to achieve carbon neutral production at its operations by 2035 alongside and
supporting both Finland’s and the EU’s climate targets in step with the European energy transition, the proposed Porvoo CCS and renewable hydrogen project will be able to reduce CO2 emissions at the site by more than 4 million tonnes during the first 10 years of operation, according to the company.
Further details of the project, including a timeline for its anticipated completion, have yet to be disclosed.
Confirmation of the project follows Neste’s late-2020 announcement that it will proceed with restructuring of its Finnish refining operations under a program that will involve permanently shuttering processing and production at its 58,000-b/d Naantali refinery and transforming it into a terminal, as well as upgrading the Porvoo refinery to co-processing renewable and circular raw materials.
Neste—which ceased refining operations at Naantali refining earlier this year—executed unidentified preparatory works to enable processing of renewable and recycled materials at Porvoo during a major turnaround completed in June.
Triangle Energy begins FEED for Perth basin mini refinery
Triangle Energy Ltd., Perth, has begun a front-end engineering and design (FEED) study for a proposed 5,000 b/d modular, flexible feed renewable fuel refinery (RFR) in the North Perth basin south of Dongara in Western Australia.
The company plans to establish the mini refinery by leveraging its existing infrastructure in the basin. The plant will be suitable to process bio-crude fuel stocks as well as crude oil and condensate from offshore Cliff Head field along with feedstock from other onshore and offshore operations in Western Australia.
The refinery also will be a potential future consumer of hydrogen (up to 1,500 kilograms/day) used in fuel processing.
The project is designed to respond to decarbonization targets and increased demand for local future fuel supply and will provide future flexibility following the planned closure of bp’s Kwinana refinery south of Perth and its conversion into a fuel import terminal.
Triangle has selected American renewable diesel refining group Plant Process Group LLC as preferred contractor to undertake the FEED study.
The site will be adjacent to Triangle’s onshore Arrowsmith separation plant that stabilizes crude piped in from Cliff Head field.
The RFR will produce both renewable diesel and renewable marine fuel for the domestic Western Australian market, responding to the growing demand from the mining and heavy transport sectors for renewable fuel, Triangle said.
FEED is expected to be complete by first-quarter 2022. The plant is expected on stream in first-quarter 2024.
ADNOC, Borealis advance Bourouge 4 petrochemicals expansion
Abu Dhabi Polymers Co. Ltd. (Borouge), a joint venture of Abu Dhabi National Oil Co. (ADNOC) and Borealis AG, has taken final investment decision (FID) to move forward with the partnership’s previously proposed fourth expansion of Borouge’s integrated polyolefins complex in Ruwais, about 250 km west of Abu Dhabi City, UAE (OGJ Online, Jan. 17, 2020; July 18, 2017).
Signed in mid-November, the $6.2-billion FID agreement enables construction of the Borouge 4 polyolefin manufacturing complex—including a new 1.5 million tonnes ethane cracker, two polyethylene plants based on Borealis’ proprietary Borstar technology, and a cross-linked polyethylene plant—that will produce 1.4 million tpy of polyethylene to help meet increased demand for polyolefins by manufacturers across the Middle East, Africa, and the Asia-Pacific, ADNOC said.
Following startup, ADNOC said the Borouge 4 plant also will enable the next phase of growth of Ruwais’ broader industrial complex by allowing the Borouge partnership to supply feedstock to the TA’ZIZ Industrial Chemicals Zone, one of three special industrial ecosystems under development by ADNOC and UAE’s ADQ that specifically aims to anchor a host of petrochemical projects by both domestic and outside investors.
Scheduled to become operational by yearend 2025, the Borouge 4 complex will boost the operator’s Ruwais sitewide production capacity of polyolefins—including polyethylene and polypropylene—to 6.4 million tpy from its current 4.5-million tpy capacity to make it largest single-site polyolefins complex in the world, according to ADNOC.
With construction activities already under way and major contracts for the project awarded, startup of the Borouge 4 complex will follow the pending commissioning by yearend 2021 of the Borouge partnership’s fifth polypropylene plant (PP5) at Ruwais that, once online, will have a maximum production capacity of 480,000 tpy.
Alongside confirming FID for Borouge 4, ADNOC also said the partnership is considering implementation of a carbon capture and storage (CCS) project at Ruwais.
Still awaiting an in-depth study, the proposed CCS project—which could be operational in time for Borouge 4’s commissioning—would involve installation of a unit equipped to reduce carbon dioxide emissions at the site by 80%, according to ADNOC.
TRANSPORTATION Quick Takes
Genesis Energy sells minority equity interest in CHOPS
Genesis Energy LP, Houston, closed the sale of a 36% minority equity interest in its 374-mile Cameron Highway Oil Pipeline System (CHOPS) to an undisclosed financial party for gross proceeds to Genesis of $418 million.
CHOPS delivers crude from Holstein, Mad Dog, Atlantis, K2, Constitution, and Ticonderoga fields—all in the deepwater Green Canyon area offshore Louisiana—to refineries in