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Global and Regional Markets

ExxonMobil makes final investment decision to develop West Barracouta Gas Project

ExxonMobil has stated that it has made a final investment decision to develop the West Barracouta gas field in Bass Strait to bring new gas supplies to the Australian domestic market. The project, located in the VIC/L1 block offshore Victoria, is part of the company’s continuing investment in the Gippsland Basin. The company recently completed front-end engineering design work for the project, which is part of the Esso-BHP Gippsland Basin Joint Venture, and awarded contracts to Subsea 7 and OneSubsea, a Schlumberger company. The project will be tied back to the existing Barracouta infrastructure offshore in Bass Strait, the first offshore field ever discovered in Australia. “We continue to use advanced technology, along with our extensive, decades-long understanding of the Gippsland ...

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AFGlobal and MHWirth sign distribution agreement

AFGlobal and MHWirth have entered into a distribution agreement, providing the managed pressure drilling market with a comprehensive package for deepwater rig systems. This non-exclusive agreement enables MHWirth to offer AFGlobal MPD equipment for sale within their rig equipment business. As a leader in drilling rig systems, MHWirth can now offer the industry’s most comprehensive MPD kit as part of their new build and retrofit packages. “Our shared purpose in this arrangement is to provide clients with optimal quality and efficiency in the offshore drilling environment,” Roy A. Dyrseth, Chief Commercial Officer of MHWirth, said. “We are pleased to partner with MHWirth to provide next-generation systems and market-leading manufacturing capabilities in both MPD equipment and rig systems to the offshore ...

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Mixed outlook for proppant in 2019

Going into 2019, the outlook for proppant – a key ingredient of fracking fluid in the shale completion market – is mixed if not outright depressed. Room for price improvements is hard to spot. Rystad Energy has just released a new proppant market study as a part of its Shale Intel product suite. The study reveals mixed perspectives and numerous challenges which the proppant industry will have to deal with in the near future. “The recent oil price collapse has generated a lot of uncertainty on the demand side of the equation next year. We see a range of between 109 million and 133 million tons when we vary oil price assumptions for WTI Nymex between $50 and $73 per bbl. ...

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Permian gas flaring hits all-time highs

Rystad Energy estimates that gas flaring in the Permian averaged 407 million cu ft per day in Q3 2018 – and this number is likely to climb even higher once final disposition figures are registered, given the significant level of under-reporting that still exists for September. Rystad Energy expects flaring to grow well into 2019, reaching a level of at least 600 MMcfd by mid-2019 assuming WTI Nymex oil prices recover to $60 per barrel to support existing activity levels.  In Texas, Ry observes an increased tendency whereby gas is flared on new wells for extended periods – often between four and six months – far beyond the 45-day period covered by the initial flaring permit.

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Equinor strengthens its position in the Norwegian Sea

Equinor and Faroe Petroleum have agreed a number of transactions in the Norwegian Sea and the North Sea region of the Norwegian Continental Shelf (NCS). These transactions are calibrated as a balanced swap when it comes to value with no cash consideration. “The net effect of our agreement with Faroe is to upgrade Equinor’s portfolio in line with our updated roadmap for the NCS, Siri Espedal Kindem, Equinor’s Senior Vice President for Operations North, said. “We are strengthening our operated position in the prolific Njord area, which we believe continues to have considerable upside potential. We remain operator and majority equity holder in Alve, which is produced via Norne, another important part of the Norwegian Sea for us. And we ...

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Verus moves to next phase of growth plan as production rises 12-fold through drilling and acquisitions

Verus Petroleum is moving on to a new phase of growth, having secured a 12-fold increase in its production – from 1,500 to 18,000 BPD in less than a year – through drilling and key acquisitions in the UKCS. The private equity backed independent operator has recently completed three significant acquisitions; an interest in the Babbage gas field acquired from Premier Oil on 6 December, on the back of completing transactions to acquire Cieco Exploration & Production and Equinor’s Alba field interest in November. These three deals, each with an economic date of 1 January 2018, were funded by a combination of equity, existing cash reserves and debt. Equity has been provided by HitecVision, the majority-owner of Verus. Together with the drilling of ...

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Chevron announces $20 billion capital and exploratory budget for 2019

Chevron has announced a 2019 organic capital and exploratory spending program of $20 billion. “Our 2019 budget supports a robust portfolio of upstream and downstream investments, highlighted by our world-class Permian Basin position, additional shale and tight development in other basins and our major capital project at TCO in Kazakhstan,” Michael K. Wirth, Chairman and CEO, said. “Our investments are anchored in high-return short-cycle projects, with more than two-thirds of spend projected to realize cash flow within two years.” “We expect to continue to deliver steady production growth, enabling continued free cash flow that underpins our strong dividend and share repurchase program,” Mr Wirth added. Details of the 2019 Capital and Exploratory Spending Program include: Chevron 2019 Planned Capital & Exploratory ...

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USGS identifies largest continuous oil and gas resource potential ever

The US Department of the Interior announced the Wolfcamp Shale and overlying Bone Spring Formation in the Delaware Basin portion of Texas and New Mexico’s Permian Basin province contain an estimated mean of 46.3 billion bbl, 281 trillion cu ft of natural gas, and 20 billion bbl of natural gas liquids, according to an assessment by the US Geological Survey (USGS). This estimate is for continuous (unconventional) oil, and consists of undiscovered, technically recoverable resources. “Christmas came a few weeks early this year,” Ryan Zinke, US Secretary of the Interior, said. “American strength flows from American energy, and as it turns out, we have a lot of American energy. Before this assessment came down, I was bullish on oil and gas production in the United States. Now, I ...

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Quick plugging of shut-in wells at Valhall

Through utilization of the PWC (Perforate, Wash & Cement) plug and abandonment method (P&A) on the Valhall field, HydraWell has contributed towards Aker BP executing its plugging program significantly quicker than planned.  Since May 2017, HydraWell has contributed towards plugging 10 shut-in wells on the original drilling platform (DP) at the Valhall field centre. Compared to the first P&A phase on the DP platform from 2014 to 2016, Aker BP has reduced the average time per well by 50% in the latest phase, despite a rise in the complexity of the wells towards the end of the campaign. Plugging wells on the DP platform is a key part of the work to modernize the Valhall field centre. The three original ...

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Rystad Energy: What’s at stake in Vienna

US production at $50 WTI levels would remove only 0.4 million BPD of the looming 1.5 million BPD surplus in the balances that Rystad Energy, an independent energy consulting services and business intelligence data firm, forecasts for 2019 in a status quo scenario. “We believe a cut announcement that effectively removes anything less than 1 million BPD of 2019 supply would be interpreted negatively by the market,” Bjornar Tonhaugen, Head of Oil Market Research at Rystad Energy, said. Mr Tonhaugen says the market is now at the mercy of OPEC and the 10 non-OPEC countries that have previously agreed to curb production. “To surprise the market in a bullish fashion, we believe cuts approaching 2 million BPD would have to be announced. Should OPEC+ announce a ...

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