Finance News

petrobras-logoAt a meeting held on August 16 , Petrobras' Board of Directors approved the following asset sale transactions totaling US$ 2.1 billion:

1. Sale of a 100% interest in Petroquímica Innova S.A. (Innova) to Videolar S.A. and its majority shareholder for R$ 870 million (approximately US$ 372 million1), the buyer to take on debt of approximately R$ 23 million.

The transaction will be put to a vote at an Extraordinary Shareholders' Meeting to be convened in due course and, based on the opinion of the Brazilian Securities Commission, will not involve any preemptive rights for the acquisition of Innova shares by Petrobras shareholders.

Innova is a second-generation petrochemical company sited in the Petrochemical Zone of Triunfo, in the state of Rio Grande do Sul. It produces ethylbenzene, styrene and polystyrene, used in the manufacture of home appliances, disposables, elastomers, packaging, paints and fiberglass.

Completion of the transaction is subject to certain standard pre-conditions, including approval by the Brazilian Antitrust Authority (Cade).

2. Sale of the 35% stake held by Petrobras in block BC-10, known as Parque das Conchas, to the Sinochem Group for US$ 1.54 billion.

Block BC-10 is located in the Campos Basin, some 100 km off the south coast of the state of Espírito Santo, and partners include Shell, the operator with a 50% stake, and ONGC with 15%. These partners have preemptive rights which can be exercised within 30 days after notification.

Completion of the transaction is subject to the certain standard pre-conditions, including approval by the Brazilian Antitrust Authority (Cade), Brazil's National Petroleum, Natural Gasand Biofuels Agency (ANP) and China's National Development and Reform Commission (NDRC).

3. Signing of farm-out contracts amounting to US$ 185 million related to 100% of the Petrobras stake in blocks MC 613 (Coulomb), GB 244 (Cottonwood) and EW 910, all in production and located in the US Gulf of Mexico.

Petrobras has a 33% stake in the Coulomb field; the remaining 67% is held by Shell, which is the operator. The field is located in Mississippi Canyon Block 613 (MC 613), some 130 km off the coast of Louisiana.

Petrobras has a 100% stake in the Cottonwood field located in the Garden Banks Block 244 (GB 244), some 220 km off the coast of Texas.

Petrobras has a 60% stake in the EW910 asset; the remaining 40% is held by W&T Offshore, which is the operator.

The transaction is subject to third party preemptive rights and approval by the Bureau of Ocean Energy Management (BOEM).


- Net Income Improves 60% to $1.0 million

 - Modified EBITDA Increases 22% to $1.7 million

 - Revenues Increase 16% to $9.2 million

ddi-logoDeep Down, Inc. (OTCQX: DPDW) ("Deep Down")(the "Company"), an oilfield services company specializing in complex deepwater and ultra-deepwater oil production distribution system support services, has reported net income of$1.0 million, or $0.10 per diluted share, for the second quarter of 2013, an improvement of $0.4 million from the second quarter of 2012.   


Revenues increased by $1.3 million in the second quarter of 2013 compared to the prior-year quarter. The increase of 16 percent in revenues occurred primarily due to increased demand by our customers for our technologically innovative solutions as a result of our consistently successful project execution.

Gross profit increased by $0.6 million to $3.5 million, or 38 percent of revenues, in the second quarter of 2013 compared to the prior-year quarter. Gross profit of 38 percent of revenues is consistent with our expectations for the second quarter of 2013.

Operating expenses increased by $0.2 million in the second quarter of 2013 compared to the prior-year quarter. The slight increase was due primarily to increased lease costs associated with our new facility.

The Company's management evaluates its financial performance based on a non-GAAP measure, Modified EBITDA, which consists of earnings (net income or loss) available to common shareholders before net interest expense, income taxes, depreciation and amortization, and other non-cash and non-recurring charges. 

Modified EBITDA increased by $0.3 million to $1.7 million in the second quarter of 2013 compared to the prior-year quarter. The increase in Modified EBITDA is due primarily to increased gross profit before depreciation expense of $0.7 million, partially offset by increased selling, general and administrative expenses before amortization of share-based compensation of $0.4 million.


At June 30, 2013, we had working capital of $7.5 million. Additionally, in the first quarter of 2013, we entered into the fifth amendment of our bank credit agreement, which among other things, increased the committed amount under our revolving credit facility to $5 million from $2 million. Because of these factors, and because of cash we expect to generate from operations, we believe that we will have adequate liquidity to meet our future operating requirements.


Ronald E. Smith, Chief Executive Officer, stated, "We are pleased with our results for the second quarter of 2013. Our backlog has reached $26 million and our business is increasing.  To accommodate this increase, we entered into a long-term facility lease in June 2013, which enables us to expand our capacity and take on much larger jobs."    


petrobras-logoPetrobras announces that the oil output (oil plus natural gas liquids - NGL) of all of Petrobras' fields in Brazil was 1,979 thousand barrels per day (bpd), volume 4.6% higher than May (1,892 thousand bpd). Including the share operated by the company for its partners, oil output in Brazil reached 2,043 thousand bpd, indicating a 5.2% rise compared to May.

In June, Petrobras' total output (oil and natural gas) in Brazil averaged 2,378 thousand barrels of oil equivalent per day (boed), 4.8% higher than May. Including the share operated by Petrobras for partner companies, total production in June was 2,489 thousand boed, 5.5% higher than the previous month.

The increase in production was due to the startup of new wells connected to platforms FPSO Cidade de Itajaí, in Baúna field, Santos Basin, and FPSO Brasil, in Roncador field, Campos Basin, in addition to the startup of FPSO Cidade de Paraty, in the Lula NE Pilot Project, in the Santos Basin pre-salt. The production increase was also aided by the return into operation of platforms P-25 and P-31, in Albacora field, Campos Basin; and of FPSO Cidade de Angra dos Reis, which operates in the Lula field pilot project, in the Santos Basin pre-salt. These production units were undergoing planned shutdowns in May. According to the schedule, in June, platforms P-20 and Pampo-1 (PPM-1), both in Campos Basin, were stoped for maintenance.

Moreover, it is important to highlight the pre-salt's rising contribution to total volume. In June, a new record was set with the daily average of 310.2 thousand bpd, including the share operated by the company for its partners.

Total oil and natural gas production in June, including the company's production abroad, averaged 2,612 thousand boed, 4.2% higher than May.

Natural Gas Production

In June, Petrobras' non-liquefied natural gas output in Brazil was 63,430 thousand cubic meters per day, 6.2% higher than May. Total gas production in Brazil, including the share operated by the company for its partners, was 70,834 thousand cubic meters per day, a 6.8% rise compared to the previous month.

International Production

In June, total oil and natural gas production abroad was 234,885 boed, which corresponds to a 0.7% rise against May. Of this total, 144,131 bpd of oil were produced, stable when compared to the previous month. International natural gas output was 15,419 thousand cubic meters per day, 1.9% higher than the volume produced in May.

The rise in international output was primarily due to higher demand for Bolivian gas by the Brazilian market.

Information to the Brazilian National Agency for Oil, Natural Gas and Biofuels (ANP)

Total output reported to Brazil's National Petroleum, Natural Gas and Biofuels Agency (ANP) in June 2013 was 9,191,902.60 m³ of oil and 2,234,271.65 thousand m³ of gas.

This output corresponds to the total output from concessions where Petrobras is the operator. It does not include shale, NGL volumes and partners' output where Petrobras is not the operator.


WoodMackenzielogoDrilling activity and spend will significantly increase in global deepwater markets over the next decade according to new analysis by Wood Mackenzie. The Future of Global Deepwater Markets study indicates well spend is expected to grow from US$43 billion in 2012 to US$114 billion in 2022 challenging the industry to keep up with this unprecedented growth.  

Considering the deepwater sector has eclipsed that of onshore and shallow water in the last decade with respect to both discovered volumes (41 percent) and value created ($351 billion), this increase is not as surprising as previously thought. In addition, Wood Mackenzie saw a 39 percent growth in deepwater and Arctic net acreage licensed by the 20 leading deepwater players in 2012. 

"Deepwater has accounted for most of the discovered volumes during this time, but this has not been without increasing technical and commercial challenges," said Malcolm Forbes-Cable, Senior Management Consultant at Wood Mackenzie and author of the study. 

The study indicates global drilling activity returned to pre-Macondo highs in 2012 and forecasts bullish growth in deepwater, maintaining an overall compound annual growth rate of nine percent over the next decade.  Arctic drilling will also start to pick up by the end of the decade however it will only represent three percent of the wells drilled out to 2022. 

Wood Mackenzie believes the number of exploration, appraisal and development wells will increase by 150 percent – rising from 500 to 1,250 wells per year. 

"To meet the forecasted well demand the fleet will require 95 additional deepwater rigs to be constructed between 2016 and 2022, representing US$65 billion of investment," explained Forbes–Cable. "This will require the longest period of deepwater rig construction to date, representing a change for the deepwater sector from cyclical to sustained growth." 

Existing rig orders and new-builds required to meet demand suggest that the rig contractors will need an additional 37,000 workers over the next decade to operate the fleet. According to Wood Mackenzie, this simply cannot be met with existing personnel and the historical rate of recruitment.

This tightness in the deepwater rig market has been driven by an accelerated shift to newbuild rigs by operators in the wake of Macondo, which has set in motion increased regulation and heightened the focus on risk mitigation by the operators. 

Corporate Landscape 


Apache logoApache Corporation (NYSE, Nasdaq: APA) has announced it has agreed to sell oil and gas producing properties in the Nevis, North Grant Lands and South Grant Lands areas of western Alberta, Canada, to Ember Resources Inc., a private Canadian company, for US$214 million (CAN$220 million).

"Going forward, Apache is focused on growing our liquids production from a deep inventory of crude oil- and liquids-rich opportunities that generate attractive rates of return on our extensive remaining acreage in Canada's Western Sedimentary Basin," said Rodney J. Eichler, president and chief operating officer. "We also remain focused on advancing the Kitimat LNG project to monetize large unconventional resources in the Liard and Horn River basins in northern British Columbia.

"This transaction is one element of a comprehensive review of Apache's portfolio to determine which assets make the most sense for Apache to own given our growth and return objectives and which assets are better owned by others," Eichler said. "The Nevis, North Grant Lands and South Grant Lands assets fit in the latter category."

Apache's Nevis, North Grant Lands and South Grant Lands assets

The assets comprise 621,000 gross acres (530,000 net acres) and more than 2,700 wells that had average net production of 67 million cubic feet of gas and 237 barrels of liquid hydrocarbons per day from late Cretaceous sands and coal seams during the second quarter of 2013. Apache will retain 100 percent working interest in horizons below the Cretaceous, such as potential Duvernay and Nisku, in Nevis and North Grant Lands.

The effective date of the transaction is April 1, 2013, and it is expected to be completed during the third quarter, subject to customary regulatory approvals and other closing conditions.

"I commend the employees who have worked these assets for many years of safe and environmentally responsible operations," Eichler said.

Portfolio Rebalancing

Apache previously announced plans to divest $4 billion in assets by year-end 2013. The company intends to use proceeds from the asset divestitures to reduce debt and enhance financial flexibility and to repurchase Apache common shares under a 30- million-share repurchase program authorized by the Board of Directors earlier this year.

In July, Apache announced an agreement to sell its Gulf of Mexico Shelf operations and properties to Fieldwood Energy LLC (Fieldwood), an affiliate of Riverstone Holdings, for cash proceeds of $3.75 billion. In addition, Fieldwood will assume all asset retirement obligations for these properties, which, as of June 30, 2013, Apache estimated at a discounted value of approximately $1.5 billion.


liveThe Ferguson Group, global specialists in the provision of offshore DNV 2.7-1/EN12079 containers and accommodation solutions, has posted its 2012 results, which show continuing growth, with worldwide sales increasing by over 10% to £57.6m and pre tax profits up to £16.2m from £15.6m in 2011.

Commenting on the results, Richard Smith, Group Finance Director, said: “2012 was another successful year for the Ferguson Group, which saw the company increase profits during a year of continuing investment in our global infrastructure and asset base. The last two years have seen a substantial investment in infrastructure, strengthening our management team and continuing to build the rental fleet. We expect to see the benefits of this investment reflected in the result for 2013 and are ahead of plan at the half year.

The majority of our sales come from outside the UK and increasing our global presence is a key part of our business plan. The Middle East has been a region of accelerated growth for us, particularly following the launch of two new bases in Dubai and Abu Dhabi.  We also moved to larger facilities in Singapore at the beginning of 2013 to enable us to develop our business further in the Asia Pacific region and we are very optimistic about future prospects for the Group in all regions.

Our focused growth strategy continues to incorporate customer feedback, where operational safety and asset availability are key themes. We aim to put resources into those regions where our customers are at their busiest. Global expansion will continue to be a top priority for the Group over the next 12 months, as we move into other regions where clients require access to our extensive fleet of DNV 2.7-1/EN 12079 certified containers, tanks, baskets, accommodation and workspace modules.

During 2012 we began rebranding the group’s companies under a single “Ferguson Group”, starting with our businesses in Australia and Singapore, which were renamed Ferguson Group Australia Pty Ltd and Ferguson Group Singapore Pte. Ltd respectively. The rebranding exercise continues throughout 2013.”


oceaneeringlogoOceaneering International, Inc. (NYSE: OII) has reported record quarterly earnings for the second quarter ended June 30, 2013. On revenue of $820.4 million, Oceaneering generated net income of $98.8 million, or $0.91 per share.  During the corresponding period in 2012, Oceaneering reported revenue of $672.5 million and net income of $72.6 million, or $0.67 per share.

Summary of Results

(in thousands, except per share amounts)


Three Months Ended


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Diluted Earnings Per Share (EPS)








  Year over year and sequentially, quarterly EPS increased as all business segments achieved higher operating income, led by Subsea Products and Subsea Projects. 

M. Kevin McEvoy, President and Chief Executive Officer, stated, "Our quarterly EPS was above our guidance range, and was up 32% over the first quarter of this year and up 36% compared to the second quarter of 2012.  Our above-guidance performance was attributable to sales of subsea hardware, demand for asset integrity services offshore Norway, and early completion of a theme park project.  We achieved record quarterly operating income from Remotely Operated Vehicles (ROV), Subsea Products, Asset Integrity, and Advanced Technologies.

"Our outlook for the second half of this year remains very positive and essentially unchanged from last quarter.  Given this outlook and our year-to-date performance, we are raising our 2013 EPS guidance range to $3.20 to $3.35 from $3.10 to $3.30.  Compared to 2012, we continue to forecast income growth for all of our operating segments in 2013.  Relative to the first half of 2013, we expect to generate higher operating income during the second half led by ROV and Subsea Projects. 

"Compared to the first quarter, Subsea Products operating income rose on the strength of increased revenue and profitability from tooling and subsea hardware.  Subsea Products backlog at quarter end was $902 million, up from our March backlog of $776 million and $621 million one year ago.  The sequential and year-over-year increases in backlog were predominantly attributable to umbilical awards.  During the quarter we announced two large umbilical contracts, one for offshore Egypt and one for the U.S. Gulf of Mexico (GOM).

"Subsea Projects operating income increased due to a seasonal uptick in GOM demand for deepwater intervention and an escalation of work under our field support vessel services contract offshore Angola.  The work offshore Angola included the provision of another chartered vessel, the Maersk Attender, for half of the quarter.  The charter term on the Maersk Attender runs through September 2013, followed by two 45-day renewal options, subject to our customer's work program.



Headline revenue increased by 18.5% to $1.2bn (2012: $1.01bn)

Headline EBITDA* up 44.7% to $290.8m (2012: $201.0m)

Operating free cash flow of $123.2m (2012: outflow of $44.0m)

Sale of non-core Connectors and Measurements (C&M) business generated net proceeds after transaction costs of $591.5m

Net proceeds of C&M used to repay senior debt of $408.5m, with the balance earmarked for investment in the business

Restructuring of $4.1bn of shareholder loans eliminating reserves deficit

Pro forma leverage fell from 7.9x to 6.2x in the year

Liquidity improved from $173.4m to $201.0m

Photo: Connecting lubricator valve to BOP (blow out preventer)



Operating and financial review

International oilfield services company, Expro, has announced strong annual results for the year ending March 2013, which highlights an increase in revenue of 18.5% to $1.2bn on the previous year, or 20.6% on a constant currency basis.

These results were driven by a growth in activity across the company’s eight business units, combined with a shift in the business mix towards higher value subsea safety systems and production systems. This delivered a higher operating margin of 24.2% and Headline EBITDA growth of 44.7%, to $290.8m.

Strong performance continued in Expro’s largest business unit, Europe CIS, with revenue growing by 13.6% This was driven by increased well testing business in the UK and subsea and drill stem testing activity in Norway.

 Sub-Saharan Africa revenue closed 15.4% higher than the previous year, which was bolstered by enhanced subsea activity in Angola and well testing demand across the region.

Asia’s increased revenue was driven by the Australian market, as well as subsea activity in China, resulting in a very positive year, ending 29.5% higher than 2012.

Middle East North Africa finished 5.2% higher due to a strong performance in Saudi Arabia, particularly well testing.

In North American Land, revenue declined by 7.2% as a result of lower gas prices and reduced rig activity/numbers in gas basins.  However the North America Offshore business exhibited steady growth and finished the year with revenue up 16.7%. This was primarily driven by strong levels of well test, subsea and perforation activity in the Gulf of Mexico.

Latin America had an excellent year, with revenue growth of 52.9% thanks to buoyant wireline activity, combined with increased activity in well testing, fluids and subsea work in Brazil.

Expro PTI, the company’s production solutions business, also demonstrated extremely strong results and high growth, with an increase in revenue of 67.9% in comparison to the previous year.

Finally, Equipment Sales continued to deliver notable growth, improving revenue by 31.8% on the previous year.

Cashflow and balance sheet

The increase in Headline EBITDA, combined with effective management in Expro’s asset utilisation, capital expenditure and a focus on working capital, resulted in increased operating free cashflow of $123.2m (2012: outflow of $44.0m).

The sale of Expro’s non-core C&M business generated net proceeds (after transaction costs) of $591.5m, of which $408.5m was used to repay senior debt, with the remainder earmarked for investment in the business.  This de-leveraging resulted in lower cash interest costs of $198.9m from $212.5m, with a further reduction expected on the full year effect in the cost of financing in the year to 31 March 2014.

$4.1bn of shareholder loans were capitalised as equity, reducing the Group’s ongoing non-cash interest costs by $498.7m, resulting in a $482.8m equity position from a $3.24bn cumulative deficit at the end of last year. Net debt improved by $385.8m to close at $1.81bn.

These strong financial results mark Expro’s 40th anniversary in 2013, including the re-launch of the company’s six core areas of capability: exploration and appraisal testing, subsea safety systems, drilling and completion, flowback and clean-up, production and well integrity and intervention.  The company has continued to invest in its workforce over the past year, hiring over 1,000 people globally, developing a range of employee development and retention programmes to meet the business’ operational demands.

Commenting on Expro’s overall performance, CEO, Charles Woodburn, said:

“Expro has performed well during the year, delivering excellent growth across the business. We believe that our continued focus on efficient delivery in our core competencies of well testing and well intervention, together with our investment in subsea safety systems and production systems, competitively positions us within the market place.  This has enabled us to generate robust financial returns through effective investment of our resources.

“Our strong EBITDA performance, coupled with the bolstering of our balance sheet through the sale of our non-core Connectors and Measurements business, has enhanced Expro’s capital structure and ability to generate cash to reinvest into the core business.

As we look forward to the year ahead, Expro will continue to invest in improving its asset base, while expanding and developing our work force.

With a strong order book and continued commitment to safe and effective service delivery, we feel confident in delivering further growth in 2014.”

All comparative percentages in this section are in constant currency.

For complete details on Expro's financial results for 2013 click here


conocophillipsConocoPhillips (NYSE: COP) has announced that it has closed a transaction with the National Gas Company of Trinidad and Tobago Limited (NGC) for the sale of its wholly owned subsidiary, Trinidad and Tobago Holdings LLC, for a total consideration of $600 million plus customary adjustments.

Trinidad and Tobago Holdings LLC holds a 39 percent interest in Phoenix Park Gas Processors Limited (PPGPL). PPGPL operates a gas processing and natural gas liquids fractionation facility located at Point Lisas, Trinidad.

“The sale of this noncore, midstream asset represents further progress in strengthening and focusing the ConocoPhillips portfolio, and advances the strategic interests of both NGC and ConocoPhillips,” said Don Wallette, executive vice president, Commercial, Business Development and Corporate Planning. “We appreciate the long and productive relationship we have had with NGC.”

ConocoPhillips expects to recognize an after-tax gain of approximately $290 million for the sale.

Including this transaction, ConocoPhillips has announced expected proceeds of approximately $14.1 billion from the sale of nonstrategic assets as part of its 2012-13 asset disposition program. Through June 30, 2013, the company has received $3.8 billion in proceeds from completed sales, with the remainder expected by year-end 2013. These proceeds will be available for general corporate purposes and allow the company to advance existing growth programs.


caldiveCal Dive International, Inc. (NYSE: DVR) reported a second quarter 2013 loss of $1.7 million, or $0.02 per diluted share, on revenues of $121.0 million. Included in the loss is a $4.0 million after-tax gain related to the final marked-to-market adjustment of the derivative liability on the Company’s convertible debt. This compares to a loss of $5.7 million, or $0.06 per diluted share, on revenues of $120.3 million for the second quarter 2012. For the second quarter 2013, the Company reported EBITDA of $10.2 million compared to $10.7 million for the second quarter 2012.

Cal Dive also announced that it was awarded a contract on August 6, 2013, from Pemex Exploración y Producción that is expected to generate revenue of approximately $40 million. This award is in addition to the three Pemex awards already announced in 2013 for approximately $250 million. This most recent award brings the total expected revenue from contracts awarded by Pemex to Cal Dive this year to approximately $290 million. This latest contract is for the procurement, installation and commissioning of 3.5 kilometers of 20 inch subsea pipeline and associated tie-ins to an existing platform. The offshore construction is expected to commence toward the end of the fourth quarter 2013 with the remainder of the work expected to be performed during the first quarter 2014.

Commenting on the results and the contract award, Cal Dive’s Chairman, President and Chief Executive Officer, Quinn Hébert, stated, “The second quarter saw increased revenue and profitability from all of our international regions. For the quarter our international revenues increased by over 60% when compared to the second quarter 2012 and accounted for 65% of our total consolidated revenues. We continue to focus on our strategy of expanding our international operations, and expect that approximately 70% of our total 2013 annual consolidated revenues will come from international locations, led by work in Mexico.

“The U.S. Gulf of Mexico shallow water market overall continued to be sluggish during the second quarter and the work season had a late start due to weather during April and into May. Furthermore, we experienced a decline in the profitability of our two derrick barges year-over-year. The Pacific was in drydock much of the quarter but was fully utilized during second quarter last year on a large decommissioning project, and the Atlantic had low utilization in the quarter due to permitting delays for salvage and decommissioning projects and inclement weather at the very end of June. However, the outlook for the salvage and decommissioning market remains steady and these two assets are expected to have good utilization during the third quarter.”

Mr. Hébert continued, “We are very pleased to have just been awarded our fourth contract from Pemex this year. Looking ahead to the second half of the year, we will commence offshore operations in Mexico later in the third quarter. Our offshore schedule is always subject to change, but currently we expect to complete more work in Mexico during the fourth quarter than the third quarter. Therefore we expect the fourth quarter financial results to be comparable with the third quarter as the Mexico activity will offset the start of the typical winter season in the Gulf of Mexico. The remainder of the Mexico work will be completed during the first half of 2014 giving us better than usual utilization during the typically slow winter season. We will continue to actively bid more projects in Mexico over the remainder of 2013 for work in 2014.”


petrobras-logoOn 07/16 in Rio de Janeiro, Petrobras  signed two financing programs with the Japan Bank for International Cooperation - JBIC for the offer of two lines of credit amounting to US$ 1.5 billion. Mizuho Bank, Ltd. is the agent bank for these programs and the lines of credit will be 60% financed by JBIC and 40% by private Japanese financial institutions, which are insured by Nippon Export and Investment Insurance (NEXI).

The lines of credit are for Petrobras to purchase equipment and services from Japanese companies in Brazil and abroad, based on the memorandum of understanding signed in October 2012, when a strategic partnership between JBIC and Petrobras was established.

Petrobras and Japan Bank for International Cooperation has built up a close cooperative relationship over many years, with a number of joint operations already implemented. The two financing programs taken out represent vast funding possibilities for these entities, offering new ways of financing, and will further strengthen the relationship between the parties.


seadrill_logo_13The company refers to the press releases dated November 5, 2012, and February 11, 2013, which announced the transaction to integrate Seadrill Limited's ("Seadrill") tender rig division into SapuraKencana Petroleum Berhad ("SapuraKencana") and the signing of the conditional Sale and Purchase Agreement ("SPA") between the parties.

Seadrill and SapuraKencana have now completed the previously announced transaction pursuant to the conditional SPA.

The agreed upon acquisition price is for an enterprise value of US$2.9 billion, which includes cash, SapuraKencana shares, all debt in the tender rig business, and Seadrill's future capital commitments for newbuilds.

The incremental 400.8 million shares received by Seadrill today bring Seadrill's equity holding to approximately 12 percent of the outstanding shares of SapuraKencana. At today's closing share price of RMB3.18, Seadrill's total shareholding will have a gross value of approximately US$753 million.

In addition, John Fredriksen, Chairman of Seadrill Limited, is a nominee to the Board of Directors of SapuraKencana.

John Fredriksen, Chairman, President and Director of Seadrill says in a comment, "We are pleased to have completed this important transaction with our long-term partner, SapuraKencana. We look forward to support the integration of the tender rig fleet in order to facilitate a smooth and orderly transition for the customers. This transaction will free up significant financial flexibility for Seadrill, and the proceeds will as previously stated be used over time to continue to aggressively grow our modern ultra-deepwater and jack-up exposure."

This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.


Pomerantz Grossman Hufford Dahlstrom & Gross LLP has filed a class action lawsuit against McDermott International, Inc.  ("McDermott" or the "Company") (NYSE: MDR) and certain of its officers.  The class action, filed in United States District Court, Southern District of Texas, and docketed under 13-cv-2442, is on behalf of a class consisting of all persons or entities who purchased or otherwise acquired securities of McDermott between November 6, 2012 and August 5, 2013 both dates inclusive (the "Class Period"). This class action seeks to recover damages against the Company and certain of its officers and directors as a result of alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

McDermott is an engineering, procurement, construction and installation ("EPCI") company focused on executing complex offshore oil and gas projects worldwide.  The Company provides integrated EPCI services for upstream field developments including, fixed and floating production facilities, pipelines and subsea systems from concepts to commissioning.  McDermott operates in approximately 20 countries across the Atlantic, Middle East and Asia Pacific area.  

The Complaint alleges that throughout the Class Period, Defendants made false and misleading statements and/or failed to disclose that: (a) the Company was experiencing weakness in its project bidding and execution; (b) the Company was engaging in poor risk evaluation; (c) the Company had been experiencing poor project management; (d) the Company was experiencing material losses in its Middle East, Asia Pacific and Atlantic segments; and (e) based upon the above, the Defendants lacked a reasonable basis for their positive statements about the Company during the Class Period.

On August 5, 2013 the Company issued a press release, reporting the Company's second quarter financial and operating results for the quarter ending June 30, 2013, stating a substantial decrease in the Company's year-over-year financial results which the Company attributed to poor performance of several significant projects in the Middle East and Asia Pacific segment along with underutilization of assets in the Company's Atlantic segment.  The Company additionally disclosed that it was taking immediate action to correct "weaknesses" in its "project bidding and execution" and that management was putting in place four initiatives in order to create a "more disciplined culture within the Company" to deliver adequate return on the Company's investors' capital.  On this news, McDermott shares declined $1.80 per share or over 19%, to close at $6.93 per share on August 6, 2013.


piraAs part of its recent initiative to provide the data behind its widely followed market analysis and price forecasts, PIRA Energy Group has launched the World Oil Supply Data Portal, (WOS) Available only via PIRA’s client site, WOS reflects the 30-plus years of PIRA forecast modeling of country-by-country and, at times, field-by-field supply data.  The results of this bottom-up analysis, when combined with PIRA’s similarly detailed work for by-country and by-sector demand, provides the foundation for PIRA’s oil balances and price forecasts that are relied on by more the 500 client companies worldwide.

With the world now in the midst of a major evolution in oil supply, the timing of the WOS’s launch is particularly important. Markets in North America will increasingly be supplied by new local sources, and oil previously destined for North America from abroad will be seeking new markets in Asia and elsewhere. For instance, U.S. liquids production has grown from 9.5 MMB/D in the second quarter of 2010 to 12 MMB/D currently, with 1.8 MMB/D of that increase coming from relatively light, sweet shale crude production and the remainder primarily from shale NGLs. This higher production has led to a reduction in imports of 2 MMB/D, with largest portion of the reduction to date in African grades. PIRA anticipates that the growth in U.S. crude production will continue, albeit at a slowing rate, changing the global crude mix to one that is both lighter on average and less dependent on OPEC.  Understanding the specifics of how this will evolve makes a resource like WOS critical to commercial success in refining, crude transport and maximizing the value of crude sales.

The Portal’s customized interface allows users to quickly access PIRA's latest world liquids supply forecast (annually to 2030 and monthly to end 2014), including assumptions on disruptions, maintenance, and spare capacity.  The data can be viewed and organized for any geographical split, from world or regional totals all the way to U.S. states and Canadian provinces, and even to specific plays where available.

“What makes the Portal truly special is that it goes beyond understanding and displaying volumes,” notes Gary Ross, PIRA’s CEO. “Its critical advantage is how it allows users to delve quickly into specific components of liquids supply — conventional, nonconventional; onshore or offshore; shale or non-shale. WOS enables the user to drill down, so to speak, to specific types of liquids, not just crude or condensates. Details on NGLs, biodiesel and ethanol, GTLs and CTLs, syncrude and so on are all just a click or two away.”

Another unique aspect of the Portal is the ability to view crude and condensate production forecasts by quality (light sweet, medium sweet, heavy sweet, light sour, medium sour, heavy sour).  Users are further empowered to customize their output by establishing specific value ranges for API, sulfur, TAN, and 650+ content in order to generate a report that contains only the specific grade of crude they need. This could be particularly valuable to a refiner seeking the best source of supply or a producer assessing its most direct competition.

Dr. Ross adds, “As a reflection of PIRA itself, where all of its information services come with high degree of value-added analysis, WOS is more than a collection of data presented in an easy-to-access interface. It comes with our team of seasoned analysts who understand the limitations of source data and work to normalize the various streams. Anticipating and quantifying disruptions is another key element of accurately forecasting supply.  WOS inputs take into account all types of disruptions in production, including weather, technical problems, sabotage, sanctions, and other politically driven outages.”

Field start-ups are equally important to gauging future production. WOS’s “Production by Vintage” reports reveal which projects are scheduled to begin production in a particular year (or range of years) and show the behavior of those fields over time in PIRA’s forecast.

PIRA Energy Group, founded in 1976, is a preeminent energy information provider specializing in global energy markets research, analysis, and intelligence. PIRA offers primarily Retainer Client Services, but also can perform customized consulting, on a broad range of subjects in the international crude oil (and NGLs), refined products, natural gas (and LNG), electricity, coal, biofuels, shipping and emissions markets. Currently, more than 500 entities spread across some 60 countries — including international and national integrated oil and gas companies, independent producers, refiners, marketers, oil and gas pipelines, electric and gas utilities, industrials, trading companies, financial institutions and government agencies — use PIRA’s research and price forecasting services.


MillbanklogoMilbank has advised the lenders and hedge counterparties on a further US$500 million term loan financing for Isramco Negev 2 LP (Isramco) in support of its share of the development of the Tamargas field located of the coast of Israel.  The Loan proceeds partially refinance the US$750 million bridge and term loans extended to Isramco in 2011 and also support future development and expansion of the field which became operational in March 2013.

The Tamar gas field is located off the coast of Israel and commenced operations in March 2013 after a 3 year development.  Isramco is the largest local partner in the Project and owns a 28.5% stake in the Tamar gas field.  The other investors are Noble Energy, Delek Drilling, Avner Oil and Gas and Alon Gas Exploration.  The gross resource estimate of Tamar gas field is ten trillion cubic feet (Tcf).

This financing was arranged by Deutsche Bank, who also led the 2011 financings, and Natixis and was successfully syndicated to a large number of onshore and offshore financial institutions.  Deutsche Bank has now arranged US$1.25 billion in debt financing for Isramco's share of the development of the Tamar offshore gas field since 2011.  John Dewar, a partner in Milbank's London project finance team, said, "The successful syndication of this prestigious and high-profile financing demonstrates the high level of investor confidence in the future prospects of the geopolitically important Tamar gas field."

The team was led by John Dewar and included Oliver Irwin, Vicky Cox, Matthew Mortimer, John Goldfinch and Claire Hall in Milbank’s London Project Finance, Tax and Alternative Investment practices.

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