Noble Corporation gets continued listing warning from NYSE

Offshore rig owner Noble Corporation has received a continued listing standard notice from the New York Stock Exchange (NYSE). 

Noble Houston Colbert
Noble Houston Colbert; Source: Noble Corp.

Noble on February 19, 2020, received formal notice of non-compliance with the NYSE share price continued listing standards, which require a listed common stock to maintain a minimum average closing price of $1.00 per share for 30 consecutive trading days.

The company said on Thursday it intends to regain compliance with the NYSE’s listing standards, and as required by the NYSE, the company intends to respond to the NYSE within ten business days with respect to its intent to cure the deficiency.

Under the NYSE’s rules, Noble has a period of six months from the date of the NYSE Notice to regain compliance with the minimum share price criteria by bringing its share price and thirty trading-day average share price above $1.00. Noble can regain compliance at any time during the six-month cure period if its ordinary shares have a closing price of at least $1.00 per ordinary share on the last trading day of any calendar month during the cure period and an average closing price of at least $1.00 per ordinary share over the 30-trading day period ending on the last trading day of that month.

Under the NYSE rules, Noble’s ordinary shares will continue to be listed and traded on the NYSE during the cure period, subject to the company’s compliance with other continued listing requirements.

The company said it is considering all available options to regain compliance with the NYSE’s continued listing standards, which may include a reverse stock split, subject to approval of the company’s shareholders.

Failure to satisfy the conditions of the cure period or to maintain other listing requirements could lead to a delisting.

Earlier this week, Noble reported a net loss attributable to the company for the three months ended December 31, 2019 of $33 million on total revenues of $454 million. In the same period of 2018, Noble recorded a net loss of $33 million on revenues of $310 million.

Noble also said on Wednesday that, at the close of the company’s next annual general meeting of shareholders, Julie J. Robertson would resign as President and Chief Executive Officer, and would take on the newly created role of an executive chairman of the company’s board of directors.


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Ex-consultant connected to Sembcorp Marine convicted of corruption in Brazil

A former consultant connected to Singapore’s offshore rig builder Sembcorp Marine has been convicted of corruption and money laundering in a case related to a drilling rig construction contract with Brazil’s drilling contractor Sete Brasil.

Estaleiro Jurong Aracruz yard; Source: Sembcorp Marine

The Brazilian Federal Prosecutors (MPF) arrested Guilherme Esteves de Jesus (GDJ) in 2015 and in 2017 brought criminal charges against him.

Companies connected to GDJ were engaged by Sembcorp Marine’s subsidiaries as consultants in Brazil.

Those charges alleged, among other things, that GDJ made certain payments in connection with contracts entered into in Brazil by certain subsidiaries of the company. GDJ is connected to the consultant engaged by the company’s subsidiaries in connection with the drilling unit construction contracts for subsidiaries of Sete Brasil. GDJ defended the charges throughout the criminal proceedings against him.

The company has learnt on February 20, 2020, that GDJ has been convicted by the Federal Courts of Curitiba of the crimes of corruption, money laundering and participation in a criminal organization. GDJ was sentenced to 19 years and 4 months in prison and was also fined.

SembMarine earlier in February informed that the MPF had filed further charges against GDJ for money laundering. This proceeding is still ongoing.

As previously reported, the MPF has also filed charges against Sembcorp Marine’s ex-employee Martin Cheah Kok Choon for money laundering and corruption in connection with certain drilling rig construction contracts entered into by subsidiaries of the company with Sete Brasil in 2012.

Other than Martin Cheah, the former President of Estaleiro Jurong Aracruz (EJA), the company’s Brazilian subsidiary, the company said it was not aware of any other employee past or present of the company that is a subject of the ongoing investigations by the Brazilian authorities related to Operation Car Wash.


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Sembcorp Marine sinks to the red amid low activity levels

Singapore’s offshore rig builder Sembcorp Marine posted a bigger loss for 2019 when compared to 2018. Quarterly, the company went from black to the red as its revenues dropped by 32% amid low activity levels. 

Source: Sembcorp Marine

Sembcorp Marine on Thursday posted a net loss of S$137 million for the 12 months ended December 31, 2019, compared with the net loss of S$74 million for FY 2018.

This was due mainly to the accelerated depreciation for the Tanjong Kling Yard of S$48 million and continued low overall business volume, the company explained. It was partly offset by profits from the repairs and upgrades business, which rose on improved margins and better product mix.

Group revenue for FY 2019 totaled S$2.88 billion, compared with S$4.89 billion booked in FY 2018.

For the fourth quarter 2019 SembMarine recorded a net loss of S$78 million compared to a profit of S$6 million in 4Q 2018.

The company’s revenues in 4Q 2019 were S$624 million, a 32% decrease compared to revenues of S$913 million in 4Q 2018.

The higher revenue in 4Q 2018 had been due to revenue recognition on delivery of a jack-up rig as well as revenue recognition of the Heerema semi-submersible crane project which was delivered in July 2019.

According to the company, business activity levels remain low for all segments except for repairs and upgrades, which continues to improve, underpinned by IMO regulations that require installation of ballast water treatment systems and gas scrubbers.

Challenges remain, in particular supply chain disruptions due to the COVID-19 virus outbreak, which could affect execution of projects. Competition remains intense for all segments of business and the company expects the trend of losses to continue into 2020, SembMarine concluded.

Offshore Energy Today Staff


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Masirah flows first Yumna oil into tanker

Exploration and production company Masirah Oil has completed the Yumna 1 well and flowed first oil into an Aframax tanker. The well is located in Block 50, 30km offshore east Oman. 

Bull Papua tanker; Source: PT. Buana Lintas Lautan, Tbk

Masirah awarded a contract to Foresight Offshore Drilling to use the Foresight Driller IX drilling rig for the appraisal well on Block 50 in early November 2019.

Later that month, Masirah also awarded a contract to Wings Offshore for the floating storage and offloading (FSO) vessel, Mt Bull Papua, to be used on the Yumna field. The Mt Bull Papua is an Aframax tanker with a storage capacity of 750,000 barrels.

The well was spud on December 26, 2019.

In an update released earlier this week, Masirah said that the well came in as expected and confirmed the updated reservoir model.

The Yumna 1 well has tested at a production rate of 11,843 stock tank barrels of oil per day through a 1-inch choke, with a crude oil gravity of 42 degrees API. The Yumna field is being further appraised with an extended early production test.

The company also stated that further data evaluation and testing would be done and its findings would be released when completed.

Masirah is an 86.37 percent owned subsidiary of Singapore’s Rex International.

Commenting on Masirah’s update, Dan Broström, Executive Chairman of Rex International, said: “We are very happy with the successful results from the Yumna 1 well and are pleased to play a part in opening up a new frontier offshore, east of Oman. We expect the high level of activity to continue as we move forward in the block. We thank the Ministry of Oil & Gas in Oman for their support and help in this endeavor.”

Offshore Energy Today Staff


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Green light to Lundin for Barents Sea wildcat

The Norwegian Petroleum Directorate has granted Lundin Norway a drilling permit for a well in the Barents Sea offshore Norway. 

West Bollsta drilling rig / Image source: Northern Drilling

The well 7221/4-1 will be drilled from Northern Drilling’s West Bollsta semi-submersible drilling rig.

The drilling program for well 7221/4-1 relates to the drilling of a wildcat well in production license 609.

Lundin Norway is the operator with an ownership interest of 40 percent. Other licensees are Idemitsu Petroleum Norge with 30 percent and Wintershall Dea Norge with 30 percent interest.

The area in this license consists of parts of blocks 7220/11, 7220/12, 7220/9, 7221/4 and 7220/6. The well will be drilled 12 kilometers east of the 7220/6-2 discovery.

Production license 609 was awarded on May 13, 2011, in the 21st licensing round on the Norwegian shelf. This is the 13th well to be drilled in the license.

It is worth reminding that Lundin  in February 2019 awarded a ten-well contract to the West Bollsta rig.


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Australia picks operator to keep Northern Endeavour FPSO in ‘lighthouse mode’

Australian government has hired  Upstream Production Solutions (Upstream PS) to operate the Northern Endeavour FPSO following an unprecedented event in the offshore oil and gas industry in Australia where an oil and gas company has been placed into liquidation.

Northern Endeavour FPSO; Source: NOGA

Northern Oil and Gas Australia (NOGA), the operator of the Northern Endeavour FPSO, has recently been placed into liquidation, leaving the Australian government with a task to secure a solution for the continued safety and security of the Northern Endeavour FPSO.

Australia’s Minister for Resources, Water and Northern Australia Keith Pitt said this was an unprecedented event in the offshore oil and gas industry in Australia.

The Northern Endeavour FPSO is permanently moored between the Laminaria and Corallina oil fields in the Timor Sea.

As the FPSO is currently not in production, the risks associated with safety and the environment are low, according to the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).

Following NOGA’s liquidation, the Australian government in early February established a taskforce to consider options to deliver a long-term solution for the Northern Endeavour and the Laminaria-Corallina fields, and limit any costs to Australian taxpayers as a result of the NOGA liquidation.

It also announced the establishment of the Northern Endeavour Temporary Operations Program to provide funding to support the operation and maintenance of the Northern Endeavour.

On Monday, February 17, the Australian government said it had signed a new agreement with Upstream PS to operate and maintain the FPSO vessel in lighthouse mode, which is the minimum required for safe operations, with no production and a small crew until a longer-term solution is determined.

Upstream PS is a wholly owned subsidiary of GR Engineering Services.

Minister for Resources, Water and Northern Australia, Keith Pitt, said: “It was essential that we re-crewed the Northern Endeavour quickly, to maintain the safety of the vessel and the surrounding Timor Sea environment, and that has been done.

“Lighthouse mode operations will support the vessel and the associated subsea infrastructure and critical maintenance will be undertaken as required. No petroleum production can occur in lighthouse mode.

“The Australian Government will now start consultations with industry experts to consider a longer-term resolution to the situation,” Minister Pitt said.

GR Engineering’s Managing Director, Geoff Jones, said: “Upstream PS’ involvement in operating and maintaining the Northern Endeavour for over three and a half years and at all times prior to NOGA’s entry into liquidation has facilitated Upstream PS’ quick response and safe re-mobilization to the facility.”

Offshore Energy Today Staff


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Westwood: More offshore EPC spending in 2020, prices remain a focus

Significant cost reductions have improved E&P cashflows and should drive increased offshore tendering activity in 2020 with pricing expected to remain competitive, according to market research provider Westwood Global Energy Group.

For illustration only. Author: SP Mac

Westwood said on Thursday that contractors would need to remain focussed on profitability and avoid being locked into low-margin purgatory.

The company identified that oil markets were off to a rocky start in 2020 over several unrelated circumstances, namely, heightened tensions in the Middle East, Australian bushfires, and the rise of the COVID-19 (Corona) virus in China.

For the offshore oil & gas sector, however, 2020 should be the second year of growth for an industry still reeling from the most severe downturn in its history.

Westwood Global expects $63 billion of contract awards for new offshore oil and gas production infrastructure in 2020 – a 49 percent increase over 2019 and the highest in seven years.

Floating production systems (FPS) spend is projected to reach $20 billion in 2020 after hitting $13.5 billion last year.

Latin America will dominate activity with major awards such as Mero 3, Itapu, and Sergipe underpinning $7 billion of spend. Africa will also feature with Woodside’s focus FPSO already awarded to MODEC in January and BP’s PAJ, and Shell’s much anticipated Bonga SW projects currently expected to be awarded late in the year. Other major awards anticipated are Western Gas’ Equus in Australia and LLOG’s Shenandoah in the USA.

Subsea tree contract awards underwhelmed in 2019 with only 212 tree orders – significantly lower than the 263 in 2018.


Offshore EPC spending 2013-20 by contract award; Source: Westwood

Much of this can be attributed to delay in award of certain key contracts such as Payara, Mamba, and Sangomar. With these major projects now expected this year – Sangomar was awarded to Subsea Integration Alliance in early January – 2020 looks like a bumper year with 321 of projected tree awards and $10 billion of subsea equipment order value for contractors.

Increasing orders are a welcome reprieve for a beleaguered offshore EPC supply chain still reeling from the worst downturn in its history. The recovery remains fragile, according to Westwood.

With most E&Ps budgets based on $60-$65/bbl, there is very little room for pricing growth, meaning contractors must continue to look within themselves to improve margins and profitability of their operations.

“If oil prices do continue to stick to their current $55-$65/bbl groove, contractors will more than ever need to clearly understand future tender activity and contracting dynamics. This will enable them to prioritize internal resources and stay right-sized and relevant. Overall, 2020 is expected to see a jump in offshore E&P infrastructure tenders, as E&Ps rush to lock in low costs,” the company stated.


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Israel limits natural gas production at Leviathan due to pipeline fault

The Government of Israel has limited the natural gas production from its largest natural gas field – Leviathan – to about 60 percent of its production capacity due to a pipeline fault.

Leviathan platform; Image source: Noble Energy

The operator of the Leviathan field, Noble Energy, was told that full production from the wells would not be possible until an investigation and necessary tests were completed.

Leviathan, located in the Mediterranean Sea, has four wells with a daily production capacity of about 300 million cubic feet each.

According to the Ministry, a fault was discovered in pipeline segments located close to one of the wells.

The fault is described as a vibration detected by an underwater robot. In order to minimize vibration, natural gas production from the wells has been reduced.

The ministry also stated that the fault did not cause any pollution of seawater, nor damage to the rig and engineering facilities.

The field, which started flowing natural gas in December 2019, was discovered in 2010 and contains about 500 billion cubic meters of natural gas.

It is worth reminding that Noble Energy started exporting gas from the Leviathan field to Egypt last month.


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i3 opens data room to entice farm-in partners for UK offshore assets

UK independent i3 Energy has opened its data room to potential partner companies looking to farm into its UK North Sea assets ahead of an upcoming appraisal drilling program.

Borgland Dolphin, rig which drilled the Liberator and Serenity prospects; Source: Dolphin Drilling CEO Bjørnar Iversen

i3 Energy said on Thursday that the farm-out would fund a 2020 appraisal drilling program on its assets in 13/23c Block in the UK North Sea.

According to the company, the data room is now open and companies are actively evaluating the opportunity.

i3’s 13/23c Block holds the Serenity and Liberator oil finds drilled during the 2019 drilling campaign.

The company successfully completed the drilling of the Serenity 13/23c-10 well in late October 2019. Preliminary well results were consistent with i3 Energy’s pre-drill estimate of 197 mmbbls STOIIP for the entire Serenity closure within the company’s license area.

After plugging and abandonment of the Serenity well, the Borgland Dolphin semi-submersible rig mobilized to the Liberator field to drill the final well in the 2019 drilling program. i3 Energy hit oil on the Liberator 13/23c-11 well in late November of the same year.

The company also said on Thursday it was planning to list its shares on a secondary exchange.

i3 added that it was doing it for administrative reasons related to the company’s Loan Notes issued May 31, 2019, and explained that this was not being done in preparation for imminent equity placing as indicated by market rumors.

Offshore Energy Today Staff


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