GULF OF MEXICO

William Furlow
Houston

Rowan Companies can draw workers from a wide area around Vicksburg, Mississippi, and is not experiencing as much manpower pressure as coastal yards. [33,156 bytes]

Manpower major question for US Gulf Coast fab yards

An acquisition, such as Friede Goldman International's purchase of the Marystown Shipyard in Newfoundland, seems to be the only sure way of acquiring the additional capacity needed to keep with a growing backlog of fabrication work. But there is another reason for the acquisition - manpower.

Unlike the US Gulf Coast, Newfoundland has a high unemployment rate and numbers of trained workers coming off fabrication of the Hibernia concrete platform.

Every fabrication facility on the US Gulf Coast has depleted the immediate supply of available workers and has both pushed up hourly pay as well as expanded the search for workers beyond the US Gulf coast. Reportedly, trained shipfitters and welders along the coast of Alabama and Mississippi are shifting employers for as little as $0.10/hour.

As the acute fabrication manpower shortage in South Louisiana and South Texas continues, it has begun to affect fabrication prices. Unifab in Louisiana has pushed up its man-hour costs on new projects to $30 an hour, from the upper $20's, and is bidding $40 and more on upcoming projects, according to analysts at Morgan Keegan.

Rowan Companies said it is not facing a tight employment market at its LeTourneau yard in Vicksburg, Mississippi. While Rowan says its benefits and high pay attract these workers, the fact that there are no other yards, or major employers for that matter, in the immediate area, also contribute to this stability.

Vicksburg, Mississippi is a veritable boom town, thanks to the renewed activity at the LeTourneau shipyard where Rowan has built what amounts to a Super Gorilla assembly line.

An ill wind that blew some good

While media and politicians are quick to blame everything from the recent stock market correction to the price of coffee on El Nino, that warm wind from the South Pacific may have given the Gulf of Mexico an early Christmas present - a very mild hurricane season. There were no hurricanes to report this year. This is unusual to the point of attracting news interest.

According to a recent report form the Weather Research Center in Houston, this has been the mildest hurricane season the Gulf of Mexico has seen in over 50 years. In fact, since 1900 there have been only 13 years when there was only one hurricane in the month of September. Of these 13 September hurricane years, eight were years when El Nino was present in the Pacific.

While this is far from causal evidence, the fact remains that the Gulf of Mexico, all its rigs, ships and platforms, once again dodged a bullet by enjoying relatively fair weather this season. The weather was actually a little too clear for at least one operator.

Oryx recently installed and began production from the Neptune Spar in Viosca Knoll 826. The operator, along with other parties, was interested in how the spar would perform in extreme weather conditions and planned to install equipment that would report on its movements during a severe storm. Unfortunately, from a research standpoint, these conditions have not yet evolved. El Nino notwithstanding, the Gulf has been unusually calm for an extended period.

RB, Falcon merger snag no big deal

Investors might have taken pause when they first heard Falcon Drilling and Reading & Bates had postponed their special stockholder meetings until late December. The two companies said the delay was necessary because they were in discussions with the US Securities and Exchange Commission regarding the proper treatment of accounting, or the "pooling of interests" method under APB Opinion No. 16, and the finalization of the necessary joint proxy statement.

The fear is that the merger, long anticipated for the fourth quarter of 1997, would be delayed until next year. Industry analyst Michael Rabalais, vice-president of Robinson-Humphrey Companies, said the delay adds up to little more than an minor accounting question and should not delay the merger. Rabalais said the SEC does not generally raise too much objection when it sees a merger as a natural fit, as in this case.

E&P Update:

Marathon Oil has confirmed a discovery at Green Canyon Block 112 in the Gulf of Mexico. An appraisal well on adjacent Green Canyon Block 113 No. 1 well was drilled to a TD of 7,300 ft. southeast of the discovery well and encountered 120 ft. of net pay. The new field is located 9 mi. east of the Shell-operated Bullwinkle platform. Marathon has 65% and 20% interests respectively, in GC Blocks 112 and 113. Shell Deepwater Development has the remaining interests.
Consolidated Natural Gas has made three natural gas discoveries in the Gulf of Mexico. The two larger discoveries, named Nautilus and Nemo, are in the Main Pass area near a dropoff into deepwater. Nautilus is in Main Pass blocks 280 and 281, in 307 ft of water. CNG's planned development program will include installation of a platform and facilities now being designed to handle 150 MMcf/d of natural gas and 15,000 b/d of oil, and the drilling of several additional wells in the field. Nemo is located at Main Pass blocks 279 and 284, in 290 ft of water. The Main Pass 284 No. 1 well encountered 64 net ft of pay in a shallow Pliocene age reservoir. One additional well currently under way, is targeting a deeper objective interval at Main Pass 279. CNG is the operator and has 100% working interest in the field.
Genoil of Calgary and partners will drill another exploratory well off Cuba in the next 12 months under an agreement with Comercil Cupet, the Cuban state oil company. Genoil said the test will be a follow-up to the Ana Maria No. 1 well drilled last summer, which flared gas and had live oil shows but was not commercial. The company also has agreements for seismic and exploratory drilling on onshore Cuban Blocks 19 and 20.
Amerada Hess and Oryx have hit deep subsalt pay on the Garden Banks 216 Block in the Gulf of Mexico. The Penn State Deep discovery well, GB 216 No. 3, cut 123 ft of net pay in four zones at about 20,500 ft, in 1,450 ft of water. The new discovery lies below the Penn State Shallow discovery made last year.