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Global and Regional Markets

Concho Resources to acquire RSP Permian in $9.5 billion transaction

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Concho Resources and RSP Permian announced they have entered into a definitive agreement under which Concho will acquire RSP in an all-stock transaction valued at approximately $9.5 billion, inclusive of RSP’s net debt. The consideration will consist of 0.320 shares of Concho common stock for each share of RSP common stock. The transaction was unanimously approved by the board of directors of each company...

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Reliance announces sale of select assets in the Eagle Ford shale play

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Reliance Eagleford Upstream Holding, a subsidiary of both Reliance Holding USA and Reliance Industries, announced the signing of a purchase and sale agreement with Sundance Energy to divest its interest in certain acreage, producing wells and related assets in the western portion of its Eagle Ford shale position for approximate consideration of $100 million, subject to certain customary adjustments and closing terms and conditions. This transaction is in conjunction with sales made by Pioneer Natural Resources and Newpek, the other working interest owners in the joint development with Reliance...

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Liam Mallon, ExxonMobil: Lower-for-longer environment has transformed industry’s mindset on innovation, collaboration

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The lower-for-longer price environment has forced oil and gas companies to change their mindsets, resulting in innovation, collaboration and standardization that have cut cycle times in half. The result is that new frontier projects, like ExxonMobil’s Liza development offshore Guyana, have become economic once again. While no one knows when, if ever, oil prices will return to pre-downturn levels, what’s certain is that the industry cannot afford to revert to old ways of doing business even if prices do improve in the future, Liam Mallon, President of ExxonMobil Development Co, said in a keynote session on 6 March at the 2018 IADC/SPE Drilling Conference in Fort Worth, Texas...

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Asia Pacific: Utilization on the rise but dayrates still refuse to budge

UMW’s NAGA 8, like the company’s other six jackups, is working in Malaysia. Over the past year, the company has reactivated five of its seven rigs, demonstrating an increase in rig demand. Compared with the approximately 20% utilization UMW saw in 2016, utilization in 2017 topped 90% and is expected to remain relatively unchanged this year.

In the Asia Pacific drilling market, rig dayrates are still down near OPEX levels. Demand for rigs, while improving, can’t exactly be described as high either. And yet, looking to the next couple of years, there is a growing sense of optimism among drilling contractors here. “I believe 2018 is going to be a very busy year,” said Izwan Megat, Head of Operations at Malaysia-based UMW Oil & Gas, which owns and operates seven jackups. “2017 was about ‘can you survive this?’ and in 2018 it’s more about, ‘we survived, and we’re going out to work, but how can we make healthy returns for the company?’”...

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PV Drilling jackups likely to stay busy through 2018 as demand rises in Vietnam, Southeast Asia

The PV DRILLING II has been drilling for Vietsopetro since June 2017, with the work expected to last through this year. It is the only PV Drilling rig that was working in Vietnam as of early February – a big change from previous years. Before this downturn, PV Drilling had never seen the need to seek work for its jackups outside its home country of Vietnam.

The number of E&P wells drilled in Vietnam has fallen drastically since 2014. Particularly in 2016 and 2017, almost 60% of E&P activities in Vietnam were trimmed off. Not surprisingly, this reduction in activity also drastically curtailed the amount of work available to PetroVietnam Drilling & Well Service Corp (PV Drilling), which has a fleet of four jackups, one semisubmersible tender-assist and one land rig...

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