September 14, 2012 • Volume 02, No. 11 OILFIELDSERVICES Serving the marketplace with news, analysis and business opportunities Transocean sells all standard jackups in $1.1 billion deal Baker & Schlumberger win Transocean announced contracts to sell 37 jackups and a swamp barge to Shelf $847 million in Statoil work Drilling International Holdings for ~$1.05 billion. Shelf will pay $855 million in cash Statoil has awarded $847 million and $195 million in preferred shares issued by Shelf’s parent. The shallow water jackups in major integrated drilling and wireline were built between 1974 and 1992 and have an operating depth range from service contracts to Big 4 companies in 250-400 feet of water. Transocean will also provide various transition support recent weeks. The big winner services to Shelf subsequent to was Baker Hughes, which Rigs were sold at an average of $28MM; closure, which is expected in Q4. all based outside United States. was awarded a $504.5 million, The sale represents a full 30% of two-year integrated drilling Transocean’s 128-unit fleet as of its prior fleet which included 32 standard jack-ups services contract with and a swamp barge classified as discontinued and another 12 jackups classified as held- Statoil for 25 fields on the Norwegian for-sale. The sold units included 31 operating, five cold-stacked and two in process of Continental Shelf (NCS). Statoil said reactivation. The sale spells formal discontinuance of Transocean’s standard jackup the deal would cover directional drilling, and swamp barge operations. The company is also seeking a buyer for its remaining seven cold-stacked standard jackups. Continues On Pg 6 Baker won a $505MM drilling contract; Schlumberger a $342MM wireline deal. Seadrill backlog grows 60% to record $20 billion MWD, logging-while-drilling, mud Seadrill reported $7.6 billion in new backlog since Q1, led by a previously logging, 24-hour-a-day onshore support announced possible ~$4.0 billion, three-rig 19-year deal with an unidentified customer. and drilling engineering services. The Total backlog has increased 60% since Q1 to a company record $20.3 billion. Seadrill deal focus on integrated operations will expects backlog levels to be sustainable going forward with average floater contract include multidisciplinary work processes terms of 3.2 years and a $1.1 billion/quarter burn rate. and collaborative technologies and real- Major new wins included UDW drillship commitments for the time data transfer. Continues On Pg 9 West Polaris (five years at $642,000/ New UDW wins added $2.79 billion to day or $1.17 billion new backlog, 4.0% current backlog; tenders added $564MM. above previous rate), West Gemini (four FEATURED DEALS years off Angola at $640,000/day or $934 million new backlog, 43% above previous rate), and West Capella (three years off Nigeria at $627,500/day or $687 million new SOUTHEAST TEXAS PROPERTY backlog, 15% above previous rate). 12-Horiz. Wells. 1-PDNP. 11-PUDs. Seadrill’s tender segment also contributed significantly to recent deals. The FAYETTE,BURLESON,GRIMES. Austin Chalk, Georgetown & Buda. company announced tender rig T11 took a four-year contract with Chevron at Plus Woodbine Potential. PP $127,500/day (or $186.2 million in backlog) offshore Thailand. Continues On Pg 4 ~9,000 Net Acres - > 50% HBP Up to 100% OPERATED WI ; ~80% NRI Heckmann gains Bakken exposure in $531 million merger Net Prod: ~30 BOPD &1,000 MCFD -- Net Cashflow ~$100,000/Mn GIDDINGS Heckmann Corporation announced it would merge with Bakken-focused Liquids Rich Reserves: +40% Liquids environmental services player Power Fuels in a $531 million cash, stock and assumed Avg Well Cost: $1,900,000 debt deal. For the privately held Power Fuels—the largest environmental services Von Gonten Reserve Report Available firm in the Bakken focusing on waste management, treatment, CALL PLS FOR INTRO TO SELLER PP 9976 disposal and environmental solutions—Heckmann will pay $125 million in cash, 95 million shares of Heckmann (valued at $2.69/share the day prior WISE CO., TX PROPERTY to the news, or $255.55 million total) and take on $150 million in assumed Power Fuels 3-Active Wells. 3-Permitted. debt. Power Fuels may get more than BARNETT SHALE PLAY. NEWARK EAST FIELD it bargained for however, as Heckmann Heckmann on path to be industry's Active Area - Rigs Running largest water treatment firm. shares spiked ~49% on the news and 25% NonOperated WI; ~82% Lease NRI PP Gross Production ~26 BOPD & 2.6 MMCFD appear to have settled in at ~$4/share (for $380 million in stock compensation). If High Liquids Production - HIGH BTU maintained to closure, this would push total deal value closer to $655 million. Current Net Cash Flow: ~$100,000/Mn Power Fuels operates nearly 500 water trucks, 19 disposal wells and a large fleet of Close Proximity to Gas Plant BARNETT water-related rental equipment in the Bakken. The combined companies’ fleet will consist Surface Equipment Ready For New Wells Operated By Large Public Company of ~1,300 heavy-duty trucks, 3,800 frac tanks, 2,000 fluid handling or solid-waste tanks CONTACT PLS FOR MORE INFO and other pieces of equipment, 200 rail cars, 45+ disposal wells and 300 miles of piping PP 9635DV with 70 locations in 26 states serving over 20,000 customers. Continues On Pg 7 All Standard Disclaimers & Seller Rights Apply. OILFIELDSERVICES 2 September 14, 2012 US rig count down 8% from peak on latest weekly decline Oilfield Services Briefs The US rig count saw its largest decline in years the week of September 7 according • Buccaneer Energy said Kenai to Baker Hughes, dropping by 30 rigs to 1,864. Now down 8% from the November Offshore Ventures completed delivery 2011 high of 2,026, this week represented a fourth consecutive week of declines. The of Buccaneer’s Endeavor jack-up rig to gas count dropped by a hefty 21 rigs (4.4%) sequentially to 452, while oil took a 10-rig the Homer port of Cook Inlet, Alaska on hit to 1,409—the oil count’s third decline Cosco’s Kang Sheng Kou heavy-lift vessel. Wyoming saw 2012 records for both in the past four weeks. The rig is undergoing final preparations well starts and permits in August. Overall, the Permian saw the biggest before towing out to its first drilling sequential overall decline (at nine), with 12 rigs ceasing vertical oil drilling in the location ~1.5 miles north of the play. Meanwhile, the Granite Wash lost four and the Marcellus lost three net rigs. historic Shell 1 well that was tested The miscellaneous “other” category accounted for 12 of the net 30 lost rigs, largely in the 1950s but undeveloped. driven by horizontal oil and both unconventional and conventional gas declines. Endeavor is anticipated to move its Intraplay, several rigs shifted from gas to oil drilling. drilling operations to the Cosmopolitan August onshore starts were down 4.5% sequentially at 3,300, according to RigData, project in the southern Cook Inlet in early November upon completion of its a fairly mid-range amount both in terms of 2012 (beating three months YTD) and 2011 northern Cook Inlet 2012 drilling season. (beating seven months). Sequential declines were driven by California (down 57 to • Deep Down, Inc. has consolidated 220) and Pennsylvania (down 42 to 124), both at 2012 lows, and Texas District 8 operations of its ROV and related services (Permian) (down 46 to 490). Conversely, Wyoming and Texas District 4 (Eagle Ford) groups. The company says the cost rose to 2012 highs of 155 (up 32) and 77 (up 25), respectively. containment efforts benefit shareholders Meanwhile, August permits rose 20% sequentially to 5,814, effectively tying through increased visibility of services February for the fourth-highest month of 2012 but beating eight months in 2011. and operational synergies. CEO Ron Sequential increases were spread fairly uniformly among states. Wyoming was again Smith said, “We were a standout, jumping 139 permits to a 2012 record 250 as operators apparently expand able to reduce workforce Niobrara operations to the north. Other significant sequential gainers included Kansas by 10% and expect to recognize (at 631 vs. 557), Oklahoma (at 383 vs. 296) and North Dakota (at a 2012 record 265 vs. additional cost savings during the second 174). Texas permits jumped 22% to 1,983 with big gains in most districts. half of 2012 and beyond.” Operations and assets previously based in Morgan North American Rotary Rig Count As Of September 7 Source: Baker Hughes City, Louisiana are now at the firm’s consolidated Houston, Texas facility. Current Week Ago Month Ago Year Ago % Chg. • Miller Energy Resources said Location 9/7/12 8/31/12 8/10/12 9/9/11 YOY it received final state approvals for its United States 1864 1,894 1,935 1,958 -3.3% Rig-35 to operate on its Alaskan Osprey Canada 345 316 328 515 -38.6% platform after a rig inspection and BOP US Breakout Information test. The rig, a National 1320, 2000-hp rig with maximum drilling depth of Oil 1864 1,894 1,935 1,958 -3.3% 24,000 ft both on- and offshore, Gas 345 316 328 515 -38.6% is undergoing repairs to restore Miscellaneous 0 0 0 0 0 production at the RU-1 through RU-5 Major Field Variances wells. Miller believes bringing the RU-1 and -2 wells online will double its 2012 Barnett 41 41 44 68 -39.7% Alaska production, and that production D-J (Niobrara) 45 46 44 43 7.0% rates will meet or exceed historic flow Eagle Ford 238 238 247 222 7.2% rates via advanced drill techniques and Fayetteville 15 14 14 28 -50.0% wellbore optimization.