E&P Notes (October 2018)

Abstract

E&P Notes Equinor To Employ Permanent Reservoir Monitoring at Arctic, North Sea Fields Matt Zborowski, Technology Writer Equinor will use permanent reservoir monitoring (PRM) to help improve recovery in two of the operator’s more important offshore projects of the next few years. The Norwegian state-owned operator has exercised an option in an existing framework agreement with Alcatel Submarine Networks (ASN) to implement the technology at its Johan Castberg field in the Barents Sea. That framework agreement was reached in January for PRM deployment at the Johan Sverdrup field in the North Sea. The technology involves the permanent installation of seismic sensors on the seabed, enabling the operator to continually monitor reservoir changes—with better images—throughout the lifespan of a field. Equinor said the information generated from PRM will aid its overall efforts in visualization, modeling, and, eventually, predictive analyses. Directional Drilling Services Market Grows in 2017, Near-Term Upward Trend Expected Stephen Whitfield, Senior Staff Writer A new report from Spears & Associates paints a positive picture for the global directional drilling services market as it recovers from the oil-price down-turn. After falling from $16.5 billion in 2014 to $7.1 billion in 2016, market growth is projected to accelerate in the near term. The directional drilling services market grew 16% in 2017 as increased horizontal drilling activity in the US and longer per-well lateral length offset a faster penetration rate. Richard Spears, vice president of Spears & Associates, said that lateral length has created an enormous demand for directional drilling services even though rig counts are still not high. “It doesn’t even matter that much what the drilling rig count is,” Spears said. “The question is how many feet are being drilled in the horizontal section? That’s the only metric that matters. If I’m drilling 10,000-ft laterals and 12,000-ft laterals and 20,000-ft laterals, that just means there’s a greater intensity of use for directional drilling services every day, every quarter.” Bids, Dollars Rise in Third Regionwide US Gulf of Mexico Lease Sale Matt Zborowski, Technology Writer The third regionwide US Gulf of Mexico lease sale drew more bids and more money than the first two, providing, for now, another reason for optimism in an offshore industry hungry for a resurgence. Lease Sale 251 drew 171 bids on 141 blocks with high bids totaling $178.1 million, up 43% from the last regionwide auction in March, the US Bureau of Ocean Energy Management (BOEM) announced from New Orleans on 15 August. Twenty-nine companies submitted bids, including the usual group of participants consisting of majors and big independents from past lease sales. Offshore operators showed “their continued confidence in the region,” said William Turner, senior research analyst at Wood Mackenzie, in comments following the event. The improved results came in spite of less acreage being made available compared with the March auction—the largest ever—and the government’s unwillingness to budge on recommended cuts to offshore royalties. Diamondback Energy Spending $10.5 Billion in Permian Acreage Expansion Matt Zborowski, Technology Writer Diamondback Energy Inc. is amassing billions of dollars’ worth of Permian basin acreage in a pair of deals that rivals recent acquisitions by BP and Concho Resources. In the biggest, reported 14 August, Diamondback agreed to acquire Energen Corp. in an all-stock deal valued at $9.2 billion, including Energen’s net debt of $830 million. A week earlier, Diamondback said it agreed to buy Ajax Resources for $1.25 billion. The deals will give Diamondback 390,000 net acres across the Midland and Delaware Basins, up 85% from 211,000 net acres as of 30 June. This includes 266,000 net “tier one” acres and 7,000 estimated total net horizontal locations, the company said in a statement.