Gulf of Mexico

Aug. 1, 2009

David Paganie • Houston

Thunder Hawk onstream

Production has begun from the Murphy-operated Thunder Hawk field in Mississippi Canyon block 734. Three subsea wells in more than 1,700 m (5,577) ft water depth will be connected to the field's semisubmersible production unit. The platform is anchored in 6,050 ft (1,800 m) of water with a polyester rope-chain spread mooring system connected to 12 piles by Ballgrab mooring connectors. The SBM Offshore-designed unit can process 45,000 b/d of oil and 70 MMcf/d of natural gas (approximately 0.7 bcm per year). Murphy and partners Eni, StatoilHydro, and Marubeni lease the platform from owner SBM under a firm, five-year initial term. Thunder Hawk was discovered in 2004 and sanctioned in 2006.

Devon to sell interest in Lower Tertiary assets

Devon Energy is looking to sell up to 50% interest in 25 prospects in the Gulf of Mexico Lower Tertiary trend including stakes in its four discoveries and future exploration, according to Pritchard Capital Partners. Devon tells the analyst that it would accept cash up front or a carry for activities in order to reduce capital needed for long-term projects. Cascade is an example. The company wants to sell part of its 50% working interest to share part of the capital burden. The company also intends to redeploy capital from the deepwater play into onshore gas projects.

The data room was scheduled to open in July. The company has had interest from Asia, Europe, and other major operators, the analyst says.

Meanwhile, Devon is drilling an appraisal well on the BP-operated Kaskida discovery. Results are expected by early in the fourth quarter of this year.

MMS accepts $690 million in high bids

MMS has accepted high bids totaling $690,163,194 and awarded 328 leases to the successful high bidders who participated in Central Gulf of Mexico Oil and Gas Lease Sale 208. The leases were awarded following the completion of a two-phase bid evaluation process.

Seventy companies submitted 476 bids on 348 tracts in the March 18 sale. The total for high bids submitted on all tracts was $703,048,523. The highest bid accepted on a tract was $65,611,235 submitted by Shell Gulf of Mexico for Mississippi Canyon block 721.

Using the bid evaluation process, MMS rejected high bids totaling $12,673,983 on 19 tracts as insufficient for fair market value. In addition, a successful high bidder forfeited the lease and the 1/5th bonus that it submitted with the bid.

Companies have 11 business days from the date they are notified by MMS that a bid is officially accepted to make full payment of the bonus. MMS holds the 1/5th bonus paid in advance if full payment is not made or if a company declines the lease.

The next lease sale, Western GoM Lease Sale 210, is scheduled for Aug. 19.

Rowan re-starts construction

Rowan is re-starting construction of its third 240 C class jackup rig,JoeDouglas, at its Vicksburg, Mississippi, shipyard, with delivery expected in 3Q 2011. The company halted construction earlier this year due to the downturn in jackup drilling markets. Meanwhile, the company's first three EXL jackup rigs remain on schedule and budget, with deliveries scheduled for the second, third, and fourth quarters of next year. The fourth EXL rig remains on hold pending the company's decision to resume construction which is expected in the third quarter of this year.

"Based on improvements in the credit markets and our confidence in our liquidity outlook through 2010, we have elected to resume construction," says Matt Ralls, Rowan's president and CEO. "We believe that this very capable, high specification rig will generate an attractive return on capital based on its expected go forward cost of $150 million and will be met with widespread customer acceptance when it is delivered in 2011."

Rowan recently scored a two-year contract at $180,000/day for the 400-ft (122-m) rated ICRalph Coffman. The newbuild rig will work for McMoRan Exploration in the GoM following delivery from the yard in 1Q 2010.

Jackup slide continues

The US Gulf of Mexico jackup fleet utilization continues its slide, falling to just below 30% in early July, according to ODS-Petrodata. Meanwhile, the working jackup count in the region dropped to 17. This is the lowest level since the early 1970s, ODS-Petrodata says. Low natural gas prices, tight credit, tight budgets, and a widening surplus of jackups continue to plague the region. However, one analyst predicts the GoM jackup market to bottom in the fourth quarter and improve heading into 2010. At print, the total GoM fleet utilization was about 46%, with 52 of the region's 114 MODUs under contract.

Signal adds deck barges to product line

Signal International LLC is adding deck barges to its product line in Orange, Texas. The company is building a 300-ft (91-m) x 100-ft (30-m) ocean deck barge for Signet Maritime Corp. at its shipyard in Orange, with delivery scheduled for 1Q 2010.

Signal's yard in Orange has undergone a major transformation to elevate its marine and heavy manufacturing capability. Significant capital investment and process changes have been implemented over the past two years. The primary focus has been on improving the workflow within the nearly 500,000-sq ft (46,000-sq m) covered manufacturing area, and increasing automation, the company says.

"Signal's expansion into the large deck barge market is a natural for our operations in Orange," says Dick Marler, Signal's CEO and president. "The Orange yard has built barges in the past and we still have experienced production and management personnel who were part of that effort. We have challenged our workforce to develop new methods and tools to be successful in a competitive market. With low steel prices and our vastly improved productivity now is the time for companies to look at expanding their fleets ."

DTI ram tensioners, loaded out from Houma, Louisiana, hang inside the utility module for ATP's floating production unit,ATP Titan. Once the deck is lifted and installed onto the Bennett & Associates-designed hull, the production riser tensioners will lower themselves into position for final installation. This is the first time the approach has ever been attempted, DTI says. The tensioners maintain load ranges up to 2,000 kips, strokes from 6 to 40 ft (2 to 12 m), and pressures up to 3,500 psi (24.1 MPa). Photo courtesy of DTI.

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