Qatarenergy Announces The Award Of $6 Billion EPC Contracts To Increase Oil Production By About 100,000 Bpd From Al-Shaheen Oil Field

QatarEnergy has announced the award of the four main Engineering, Procurement, Construction, and Installation (EPCI) contract packages related to the next development phase of the offshore Al-Shaheen field (Qatar’s largest oil field) to increase production by about 100,000 barrels of oil per day (BPD).
The award is part of Project Ru’ya (vision in Arabic), which is the third phase of Al-Shaheen’s development since North Oil Company, a joint venture between QatarEnergy (70%) and TotalEnergies (30%), took over the field’s operation in July 2017.
Project Ru’ya, which will develop more than 550 million barrels of oil, will be executed over a period of 5 years with first oil expected in 2027. The project includes the drilling of more than 200 wells and the installation of a new centralized process complex, nine remote wellhead platforms, and associated pipelines.
The four EPC packages, with varying scopes of work, valued in total at more than six billion dollars, comprise of:

•  the EPC package for 9 wellhead platforms valued at about $2.1 billion and awarded to a consortium of McDermott Middle East Inc. and Qingdao McDermott Wuchuan Offshore Engineering Co.;
• the EPC package for a Central Processing Platform valued at about $1.9 billion and awarded to a consortium of McDermott Middle East Inc. and Hyundai Heavy Industries;
• the EPC package for a riser platform valued at about $1.3 billion and awarded to Larsen & Toubro Limited; and
• the EPC package for subsea pipelines and cables valued at about $900 million and awarded to China Offshore Oil Engineering Co (COOEC).

His Excellency Mr. Saad Sherida Al-Kaabi, the Minister of State for Energy Affairs, the President and CEO of QatarEnergy, welcomed the award of the contract packages as an important milestone in the development of the State of Qatar’s largest oil field. His Excellency said: “By awarding these contracts, we are taking an important step towards realizing the full potential of Al-Shaheen filed, which produces around half of Qatar’s crude oil today.”

His Excellency Minister Al-Kaabi added: “I would like to thank North Oil Company and our longtime strategic partner TotalEnergies for their great efforts towards unlocking the true potential of Qatar’s hydrocarbon resources and maximizing value from Al-Shaheen field through the implementation of world-class development and operational excellence programs.”

Al-Shaheen field is located 80 kilometres offshore Qatar and is among the world’s largest in terms of “oil in place”. The field commenced commercial production in 1994 and underwent significant development to reach an oil production rate of 300,000 bpd in 2007.

McDermott and Baker Hughes Safely Complete Subsea Infrastructure in Northern Australia

McDermott, a premier engineering and construction company, and Baker Hughes, an energy technology company, today announced the safe completion of the installation of subsea infrastructure at the Ichthys field in northern Australia.

Awarded to the McDermott and Baker Hughes consortium in 2019 by INPEX Operations Australia P/L (INPEX), the subsea infrastructure development project included engineering, procurement, construction and installation (EPCI) of umbilicals, risers and flowlines (URF), a subsea production system comprised of a new 7-inch (approximately 18 centimeters) vertical Christmas tree (VXT) system, all forming a subsea well gathering system (GS4) tied back to the existing Ichthys Explorer central processing facility. The consortium’s scope of work also included an in-fill URF EPCI involving the development of new subsea wells tied in to the existing gathering systems.

“The McDermott and Baker Hughes partnership has been marked by resilience and adaptability, guided by our firm commitment to deliver for the INPEX-operated Ichthys LNG and Australia,” said Mahesh Swaminathan, McDermott’s Senior Vice President, Subsea and Floating Facilities. “Together, leveraging McDermott’s unique end-to-end EPCI capabilities and Baker Hughes’ subsea development solutions, we navigated project complexities and overcame the unique challenges posed by the pandemic. Our hard work paid off, and I would like to thank our teams in Perth, Batam, and beyond, whose collective efforts enabled the safe completion of this important work scope.”

“This milestone has been achieved through the successful partnership between Baker Hughes and McDermott to execute for INPEX,” said Romain Chambault, Baker Hughes Senior Vice President, Subsea Projects and Services. “The amount of collaboration shown between the consortium has been truly unique and serves as an industry benchmark for the successful execution of large, complex EPCI subsea projects. Manufacturing the highly complex 7-inch VXT from our dedicated SP&S facility in Batam has expanded the global capability for Baker Hughes in the Asia Pacific region where we are well-positioned to support customers with a strong regional capability, complemented by a strong McDermott presence in Batam and the region as a whole.”

Técnicas Reunidas and Sinopec awarded two contracts by Saudi Aramco for more than 3,3 billion USD

Saudi Aramco, one of the world’s largest energy companies, has awarded a joint venture formed by the Spanish company Técnicas Reunidas and the Chinese Sinopec Engineering Group the development of new Natural Gas Liquids (NGL) fractionation facilities in Saudi Arabia. The works will be developed on the basis of two EPC (engineering, procurement and construction) contracts for the execution of Riyas NGL Fractionation Trains (Package 1) and Riyas NGL Common Facilities (Package 2), which includes utilities, storage and export facilities. Total investment arising from these two contracts amounts to more than 3.3 billion USD. Since the joint venture is 65% owned by Técnicas Reunidas and 35% by Sinopec Engineering Group, the Spanish company is entitled to more than 2.15 billion USD of this total amount.


Function of the new facilities

The primary objective of the project is to enable the fractionation of NGLs, thus producing ethane, propane, butane and pentane.

Scope of the contracts

The new facilities to be developed by Técnicas Reunidas and Sinopec Engineering Group will fractionate 510 thousand barrels per day (MBD) of NGLs. The two trains of the Package 1 will process 255 MBD each, and will include fractionation, treatment, dehydration and refrigeration units. The common facilities of Package 2 will provide feed and product surge storage, chemicals storage and utilities including, although not limited to, steam and condensate recovery systems, utility water, plant, instrument air and nitrogen systems, machinery cooling water, drainage and flare systems. The expected duration of the project is about 46 months for Package 1 and about 41 months for Package 2, with a total maximum level of 575 engineers, of which more than 70% will be from Técnicas Reunidas.

Discovery near the Munin field in the North Sea

Equinor Energy AS has discovered oil in exploration well 30/12-3 S in the North Sea. The well also included a sidetrack, 30/12-3 A, which was dry.

The wells were drilled about 40 kilometres south of Oseberg and 150 kilometres west of Bergen. The drilling was conducted by the Deepsea Stavanger drilling rig.

Equinor drilled the well on behalf of Aker BP, which is the operator of production licence 272 B. This is the first well in the production licence.

Aker BP and Equinor each have ownership interests of 50 per cent in the production licence, which was awarded in APA 2018. The production licence is part of the Munin field, which was discovered in 2011. The authorities approved the plan for development and operation (PDO) for Munin in June 2023.

Between 0.15 and 0.55 million standard cubic metres (Sm3) of recoverable oil equivalent (o.e.) was proven in well 30/12-3 S.

Preliminary calculations show that the discovery is not profitable with current price assumptions.
Geological information

The objective of wildcat wells 30/12-3 S and 30/12-3 A was to prove petroleum in Middle Jurassic reservoir rocks in the Tarbert Formation.

Well 30/12-3 S encountered a 3.5-metre oil column in the Tarbert Formation, in a sandstone reservoir with moderate reservoir quality. The Tarbert Formation was about 195 metres thick, 97 metres of which was sandstone rocks with moderate-good reservoir quality. The oil/water contact was encountered 3110 meters below sea level.

The Ness Formation was about 163 metres thick in total, 19 metres of which was a sandstone reservoir with moderate reservoir quality.

Well 30/12-3 A encountered the Tarbert Formation with a thickness of about 216 meters, 19 meters of which was sandstone rocks with poor reservoir quality. The Ness Formation was about 50 metres thick in total, 11 metres of which was a sandstone reservoir with moderate reservoir quality. The well was dry.

The wells were not formation-tested, but data acquisition was undertaken.

Well 30/12-3 S was drilled to measured and vertical depths of 3663 metres and 3465 metres below sea level, respectively, and was terminated in the Drake Formation. Well 30/12-3 A was drilled to measured and vertical depths of 4520 and 3718 metres below sea level, respectively, and was terminated in the Ness Formation. Water depth in the area is 106 metres. The well has now been permanently plugged and abandoned.

Talos Energy Announces Strategic Acquisition of QuarterNorth Energy

Talos Energy Inc. ("Talos" or the "Company") (NYSE: TALO) today announced the execution of definitive agreements to acquire QuarterNorth Energy Inc. ("QuarterNorth") for $1.29 billion (the "Transaction"). QuarterNorth is a privately-held U.S. Gulf of Mexico exploration and production company with ownership in several prolific offshore fields. QuarterNorth's assets will provide additional scale from high quality deepwater assets with a favorable base decline profile along with attractive future development opportunities. The Transaction is immediately accretive to Talos shareholders on key metrics and is expected to accelerate de-leveraging of Talos's balance sheet.

Consideration for the Transaction consists of 24.8 million shares of Talos's common stock and approximately $965 million in cash. The board of directors of both Talos and QuarterNorth have unanimously approved the Transaction. The Transaction is expected to close by the end of the first quarter of 2024, subject to certain customary closing conditions and regulatory approvals.

Key Transaction Highlights:

• Adds production of approximately 30 thousand barrels of oil equivalent per day ("MBoe/d") expected for the full year 2024, averaging about 75% oil from approximately 95% operated assets.
• Adds proved reserves1 of approximately 69 million barrels of oil equivalent ("MMBoe") with a PV-10 of $1.7 billion.
• High margin, low decline production, with low reinvestment rate requirements to sustain production and no meaningful near-term asset retirement obligations ("ARO") conducive to long-term high free cash flow generation.
• Accretive to key financial metrics, including Cash Flow Per Share, Free Cash Flow Per Share, and Net Asset Value Per Share.
• Annual run-rate synergies of approximately $50 million are expected to be achieved by year-end 2024.
• Improves balance sheet strength with expected year-end 2024 leverage ratio2 of 1.0x or less.

Talos President and Chief Executive Officer Timothy S. Duncan commented: "Today's announcement marks one of Talos's most significant milestones as we build a large-scale offshore exploration and production company. The addition of QuarterNorth's overlapping deepwater portfolio with valuable operated infrastructure will increase Talos's operational breadth and production profile while enhancing our margins and cash flow. This Transaction aligns with Talos's overall strategy of leveraging existing infrastructure and complementary acreage to accelerate shareholder value creation. The pro forma footprint in the U.S. Gulf of Mexico should allow us to capture meaningful operating synergies. The expected financing structure of the Transaction accelerates de-leveraging, immediately improves our credit profile, is accretive on key metrics, and positions us to consider additional capital return initiatives following deleveraging in the near term. We look forward to completing this Transaction in the next few months and continuing our strategy of building a large-scale, diverse energy company."

STRATEGIC AND FINANCIAL DETAILS

Immediately Accretive to Key Metrics
The Transaction is accretive to key financial metrics based on management's 2024 and 2025 estimates3. This approach is consistent with Talos's disciplined acquisition strategy to execute transactions that create shareholder value. This Transaction is accretive on the following metrics at current strip pricing4:>65% accretive on 2024E and 2025E Free Cash Flow Per Share3,5.
>15% accretive on 2024E and 2025E Cash Flow Per Share.
Accretive on Net Asset Value Per Share.
Accretive on Proved Reserves Per Share.
Accretive on 2024E and 2025E Production Per Share.

High Quality Asset Base with Low Production Decline
Talos estimates QuarterNorth average daily production for the full year 2024 of approximately 30 MBoe/d (75% oil), inclusive of planned downtime. QuarterNorth's producing assets include six major fields and are approximately 95% operated and 95% in deepwater. The Transaction is expected to improve Talos's base decline rate by approximately 20%, providing increased production stability and lower reinvestment rates.

QuarterNorth's assets bring significant reserves upside beyond current production from both producing probable zones and near-term development opportunities in 2024 and 2025. The Transaction also brings a high-quality inventory of drilling opportunities that will high-grade Talos's already robust inventory and will immediately compete for capital.

QuarterNorth operates and holds a 50% working interest in the Katmai discovery in the Green Canyon region, producing an estimated combined 27 MBoe/d gross from two early-life wells. Talos expects the Katmai field to produce over 34 MBoe/d gross on average with minimal decline over the next several years based on a successful field development plan including two future well locations and a facilities upgrade project in early 2025. QuarterNorth's interest in the Big Bend, Galapagos, Genovesa, and Gunflint fields represent attractive assets, each with strong production histories with nominal declines, and future development potential.

Material and Tangible Synergies
Talos expects to realize annual run-rate synergies of approximately $50 million, consisting of both operational and general and administrative cost reductions. Talos expects to realize approximately half of the synergies throughout 2024 and expects full run-rate savings can be achieved by year-end 2024.

Additional asset management and drilling & completions optimizations are also expected to create meaningful synergies in the combined business, which will be incremental to the expected $50 million annual synergies.

Reduction of Asset Retirement Obligations per Barrel
QuarterNorth's assets have no meaningful near-term ARO obligations. On a pro forma basis, future ARO obligations will represent a reduction of Talos's average ARO per barrel of oil equivalent ("Boe") of reserves and ARO per Boe of production, representing another "accretive" metric for Talos's shareholders.

Fully Committed Financing
Talos has secured $650 million in bridge financing from a syndicate of banks representing most of the Company's reserves-based loan ("RBL") lender group. All required RBL approvals and waivers have been received. Talos also expects to fund a portion of the cash consideration with availability under the RBL, and opportunistically to the extent market conditions warrant, debt or equity financings. Talos thereafter expects to repay the majority of the RBL funding for the Transaction in the next 12 months. The initial bridge financing structure provides flexibility to Talos with respect to the timing and structure of permanent financing of the Transaction.

GOVERNANCE, TIMING AND APPROVALS

Leadership, Governance, and Equity Holders
The Talos senior management team will remain unchanged. Talos's Board of Directors will be expanded to include one additional independent director.

QuarterNorth's top equity holders, representing approximately 68% of the total ownership group of QuarterNorth, have entered into a support agreement pursuant to which they will vote in favor of the Transaction and exercise a drag-along right in connection therewith. These holders will also be subject to a customary lock-up arrangement, subject to certain exceptions, for a 60-day period following closing, implying a lock-up into mid-2024 based on Talos's estimated closing timing. Following the closing, Talos expects that no single QuarterNorth shareholder will hold 5% or more of Talos's outstanding shares of common stock.

Timing And Approvals
The Transaction, which is expected to close by the end of the first quarter of 2024, is subject to customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Both the Talos and QuarterNorth boards of directors have unanimously approved the Transaction.

Reabold Resources plc - Notification of final tranche of payment from Shell

Reabold Resources plc, the oil & gas investing company with a diversified portfolio of exploration, appraisal and development projects, announces that, further to its announcement on 5 December 2023, it has been informed that the final tranche of the payment from Shell U.K. Limited ("Shell") for the sale of the entire issued share capital of Corallian Energy Limited ("Corallian"), as announced on 1 November 2022, will be distributed to former Corallian shareholders over the coming days, following receipt of Development and Production Consent for the Victory gas field from the North Sea Transition Authority on 17 January 2024.

Reabold will receive £4.4 million for the final tranche, which follows the £8.3 million already received by the Company. Reabold intends to use the proceeds received to advance the development of assets across its portfolio, as well as distributing excess cash to shareholders.

Reabold aims to replicate its success with the Victory project across the other key assets in its portfolio, most notably, West Newton and Colle Santo. Both assets are significant gas resources, which, like Victory, can make a meaningful contribution to improve energy security in Western Europe.

Stephen Williams, Co-CEO of Reabold, said:

"We are pleased to see development approval granted for the Victory gas field, which triggers the final tranche of the payment from Shell to Corallian's shareholders. This represents a significant moment in the delivery of the Reabold strategy to identify, fund and monetise underappreciated, but strategically important assets. We remain focused on progressing other key projects in the Reabold portfolio in 2024 and realising further value to reward shareholders for their ongoing support of the Company."

TechnipFMC Awarded Significant Subsea Contract by BP in the Gulf of Mexico

TechnipFMC (NYSE: FTI) has been awarded a significant contract by bp (LON: BP) for its Argos Southwest Extension project in the Mad Dog field.

TechnipFMC will install pipe and an umbilical, tying back three new wells to the Argos platform in the Gulf of Mexico.

Jonathan Landes, President, Subsea at TechnipFMC, commented: “We have a long-standing relationship with bp, underpinned by close collaboration. This partnership, combined with our robust installation and execution capabilities, enables us to meet bp’s schedule to extend the production in the Mad Dog field.”

Under the contract, TechnipFMC will also manufacture and install pipeline end terminations.