News Article | April 25, 2017
Strong Start to 2017 with Increased Guidance due to Increased Profitability and Cash Flow Strategic MOU with Saudi Aramco Supports Leadership Position in the Middle East Implementation Underway of First-of-its-Kind Software Platform to Deliver Best Industry Solutions for Project Lifecycle Acquisition and Sale Leaseback of Deepwater Pipelay and Construction Vessel Amazon Continued Focus on Company Taking the Lead Safety Culture led to 1-year LTI Free Company Wide Company to Host Conference Call and Webcast Today at 7:30 a.m. Central Time HOUSTON, April 25, 2017 (GLOBE NEWSWIRE) -- McDermott International, Inc. (NYSE:MDR) (“McDermott,” the “Company,” “we” or “us”) today announced financial and operational results for the first quarter ended March 31, 2017. “McDermott saw a profitable and strategic start to 2017 and I am extremely pleased with our first quarter performance. Excellent project execution and customer alignment led to cost savings, better than anticipated closeouts and customer driven change orders, driving McDermott’s profitability. Over the past few years, we have worked to stabilize and optimize the business and are now taking long-term strategic steps to transform McDermott for sustainability and growth,” said David Dickson, President and Chief Executive Officer of McDermott. “During the first quarter, we signed a strategic Memorandum of Understanding (“MOU”) with Saudi Aramco for a land lease at the new maritime facility at Ras Al Khair in Saudi Arabia, which we believe strengthens our leadership position in the Middle East. We announced the strategic acquisition and sale leaseback of the Amazon vessel to build our ultradeepwater capabilities when upgraded as planned; and we also began implementation of a first-of-its-kind project lifecycle management software platform that will leverage data and analytics to improve efficiency and productivity and create a digital twin to mirror the as-built physical state with a living, up-to-date 3D model. This new technology will position McDermott as a valued partner for our customers from concept to decommissioning. Additionally, with continued focus on our Taking the Lead quality and safety culture, we achieved an outstanding full year LTI-free as a company. While there were limited material contracts awarded in our market during the quarter, we still see a solid revenue pipeline, and these strategic investments help position McDermott for continued success as the market recovers.” First quarter 2017 earnings attributable to McDermott stockholders, computed in accordance with U.S. generally accepted accounting principles (“GAAP”), were $21.9 million, or $0.08 per fully diluted share, compared to a net loss of $2.2 million, or $0.01 per fully diluted share, for the prior-year first quarter. We generated first quarter 2017 net income of $21.9 million, or $0.08 per fully diluted share, for which there were no adjustments from GAAP, compared to an adjusted net income of $36.3 million, or $0.13 per adjusted fully diluted share, excluding restructuring charges of $6.4 million and impairment charges of $32.3 million, in the prior-year first quarter. The Company reported first quarter 2017 revenues of $519.4 million, a decrease of $209.6 million, compared to revenues of $729.0 million for the prior-year first quarter. The key projects driving revenue for the first quarter of 2017 were the ONGC Vashishta, Saudi Aramco Long Term Agreement II (“LTA II”), KJO Hout and INPEX Ichthys projects. The decrease from the prior-year first quarter is primarily due to reduced activity on Ichthys as the project progresses through the installation phase. Our operating income for the first quarter of 2017 was $56.0 million, or an operating margin of 10.8%, compared to $36.0 million, or an operating margin of 4.9%, for the first quarter of 2016. Our operating income for the first quarter of 2017 was $56.0 million, or an operating margin of 10.8%, for which there were no adjustments from GAAP, compared to $74.7 million, or an adjusted operating margin of 10.2%, for the first quarter of 2016, excluding the restructuring charges and impairment mentioned above. Operating income for the first quarter of 2017 was primarily driven by fabrication and marine activity under the Saudi Aramco LTA II, marine activity on Karan-45 and progress on the Marjan power system replacement, fabrication activity on Yamal and fabrication on Abkatun-A2. These activities were partially offset by a decrease in activity on Ichthys and a decrease in active projects in AEA compared to the same quarter last year. Cash provided by operating activities in the first quarter of 2017 was $48.5 million, a decrease compared to the $59.3 million of cash provided in the first quarter of 2016. The decrease was primarily driven by higher receivable collections from Pemex in the first quarter of 2016 compared to the first quarter of 2017. We report financial results under three reportable segments consisting of (1) the Americas, Europe and Africa (“AEA”), (2) the Middle East (“MEA”) and (3) Asia (“ASA”). We also report certain corporate and other non-operating activities under the heading “Corporate and Other”. Corporate and Other primarily reflects costs that are not allocated to our reportable segments. In the first quarter of 2017, we implemented changes to our financial reporting structure to better align with how we operate the business. Corporate expenses, certain centrally managed initiatives (such as restructuring charges), impairments, year-end mark-to-market (“MTM”) pension actuarial gains and losses, costs not attributable to a particular reportable segment, and unallocated direct operating expenses associated with the underutilization of vessels, fabrication facilities and engineering resources, are no longer apportioned to our reportable segments. Those expenses are now reported under “Corporate and Other”. As of March 31, 2017, the Company’s backlog was $3.9 billion, compared to $4.3 billion at December 31, 2016. Of the March 31, 2017 backlog, approximately 85% was related to offshore operations and approximately 15% was related to subsea operations. Order intake in the first quarter of 2017 totaled $96 million, resulting in a book-to-bill ratio of 0.2x. At March 31, 2017, the Company had bids outstanding and target projects of approximately $3.1 billion and $12.6 billion, respectively, in its pipeline that it expects will be awarded in the market through June 30, 2018. In total, the Company’s potential revenue pipeline, including backlog, was $19.6 billion as of March 31, 2017. In the Americas, Europe and Africa (“AEA”) Area, during the first quarter of 2017, detail design and fabrication of the compression platform for the Abkatun-A2 project progressed with the project continuing to advance on schedule. Front-end engineering and design (“FEED”) and early detailed engineering for a Caribbean gas development continued throughout the quarter and is progressing ahead of plan. During the quarter, we were awarded the Hess Penn State subsea scope, which includes installation of a rigid pipeline that is scheduled to be fabricated in our Gulfport Spoolbase and reeled onto the NO 105 for installation offshore. The project scope also includes installation of a 4,500 foot umbilical and four electrical flying leads, fabrication and installation of two pipeline end terminations (“PLETS”) and pipeline pre-commissioning and system start-up support. In our Altamira fabrication yard, upgrades to increase skidway and loadout capabilities are substantially complete, and the blast and paint facility foundations and framing have been installed. These upgrades are on track for completion early in the second quarter of 2017. In the Middle East (“MEA”) Area, fabrication activity increased steadily through the first quarter, with the Jebel Ali and Dammam facilities operating at high levels of utilization. Regional marine assets continued to operate in Qatar, Saudi Arabia and the Khafji Neutral Zone. Qatar marine activity was focused on the RasGas Flow Assurance and Looping project, with the umbilical installation scope completed ahead of schedule. Additionally, the DLV 2000 has now relocated to the Middle East, where she is expected to remain busy on existing contracts for most of 2017. Installation of the KJO Hout structures was completed during the quarter, with pipeline activity and platform hook up and commissioning still remaining. Project completion is still expected in the second quarter of 2017. Engineering and procurement on the Saudi Aramco Lump Sum LTA II project are in the final stages, with focus now transitioning to fabrication. Progress on the three Saudi Aramco projects awarded in the second quarter of 2016 remains on target. The Safaniya Phase 5 and 4 Jackets and 3 Observation Platforms projects are in the engineering and procurement phases, with both slightly ahead of the overall planned progress. The Area’s exceptional QHSES performance was maintained through the quarter, now reaching 54 million man hours lost time incident (“LTI”) free. In the Asia (“ASA”) Area, during the first quarter of 2017, the LV 108 carried out subsea construction and pre-commissioning works to prepare for the arrival of the floating facilities on the INPEX Ichthys project. Also on Ichthys, we continued working collaboratively with INPEX and the supplier to rectify the subsea connector component issue identified in January 2017. Engineering, procurement and fabrication of the pre-lay structures, in-line tees (“ILTs”) and PLETs for the Woodside Greater Western Flank Phase 2 pipeline project commenced in February, and the project is progressing on schedule. In India, the ONGC Vashishta project continues to achieve significant progress with the completion of the shallow water section of pipelines and umbilical installation by the DB 30. The fabrication of pipe stalks for the deepwater pipelay was completed utilizing McDermott’s mobile spoolbase in our consortium partner Larsen & Toubro’s fabrication yard in Kattupalli, along with the first and second loadouts onboard the NO 105. The NO 105 also completed the installation of the first two deepwater pipeline sections and continues to install the remaining two. The DB 30 is scheduled to mobilize at the end of April 2017 for the Brunei Shell Petroleum offshore pipelines installation. In our Batam fabrication yard, fabrication of the modules for the Yamal LNG project is reaching the final completion stage with sailaway scheduled in April 2017. Also in Batam, the fabrication of 14 jackets for Saudi Aramco is progressing well, with 3 of the 14 jackets complete and sailed on a fast transport vessel to Ras Tanura, Saudi Arabia. In the first quarter of 2017 for Corporate and Other, costs were mainly attributable to selling, general, and administrative costs of $12.9 million and unallocated direct operating expenses of $27.3 million. Unallocated direct operating expenses were primarily driven by the underutilization of marine assets which incurred less than standard activity during the first quarter. These expenses were offset by a gain of $3.4 million on the sale of certain thrusters. The increase in 2017 guidance is mainly attributable to increased profitability and cash flow due to closeouts from excellent project execution in the first quarter of 2017, as well as customer driven change orders awarded this quarter. While we expect change orders, close-outs and settlements to continue as part of our normal business activities, the period in which they are recognized is largely driven by the finalization of agreements with customers and suppliers and, as a result, is difficult to predict. We previously reported it was reasonably possible costs on the INPEX Ichthys project could increase by an additional $10 million due to a failure identified in a supplier-provided subsea-pipe connector component, which had previously been installed. However, we have continued to mitigate the $10 million risk and now believe the range of reasonably possible additional costs has decreased to $5 million. Costs forecasted under Corporate and Other include $115 million of unallocated direct operating expenses resulting from the expected underutilization of our marine assets during 2017. Weighted average common shares outstanding on a fully diluted basis were approximately 282.3 million and 239.1 million for the quarters ended March 31, 2017 and 2016, respectively. Additional shares of 38.0 million related to the Tangible Equity Units (“TEUs”), as well as other potentially dilutive shares, were included in the quarterly dilution calculation for the quarter ended March 31, 2017. Subsequent to quarter end, on or about April 3, 2017, we delivered 40.8 million shares of our common stock related to the settlement of the TEUs. McDermott has scheduled a conference call and webcast related to its first quarter 2017 results today at 7:30 a.m. U.S. Central Time. Interested parties may listen over the Internet through a link posted in the Investor Relations section of McDermott’s website. A replay of the webcast will be available for seven days after the call and may be accessed by dialing (855) 859-2056, Passcode 2104294. In addition, a presentation will be available on the Investor Relations section of McDermott’s website that contains supplemental information on McDermott’s financials, operations and 2017 Guidance. McDermott is a leading provider of integrated engineering, procurement, construction and installation (“EPCI”), front-end engineering and design (“FEED”) and module fabrication services for upstream field developments worldwide. McDermott delivers fixed and floating production facilities, pipelines, installations and subsea systems from concept to commissioning for complex Offshore and Subsea oil and gas projects to help oil companies safely produce and transport hydrocarbons. Our customers include national and major energy companies. Operating in approximately 20 countries across the world, our locally focused and globally integrated resources include approximately 13,500 employees, a diversified fleet of specialty marine construction vessels, fabrication facilities and engineering offices. We are renowned for our extensive knowledge and experience, technological advancements, performance records, superior safety and commitment to deliver. McDermott has served the energy industry since 1923, and shares of its common stock are listed on the New York Stock Exchange. To learn more, please visit our website at www.mcdermott.com This press release includes several “non-GAAP” financial measures as defined under Regulation G of the U.S. Securities Exchange Act of 1934, as amended. We report our financial results in accordance with U.S. generally accepted accounting principles (“GAAP”), but believe that certain non-GAAP financial measures provide useful supplemental information to investors regarding the underlying business trends and performance of our ongoing operations and are useful for period-over-period comparisons of those operations. Non-GAAP measures are comprised of the total and diluted per share amounts of adjusted net income (loss) attributable to the Company and adjusted operating income and operating income margin for the Company, in each case excluding the impact of certain identified items. The excluded items represent items that our management does not consider to be representative of our normal operations. We believe that total and diluted per share adjusted net income (loss) and adjusted operating income and operating margin are useful measures for investors to review because they provide a consistent measure of the underlying financial results of our ongoing business and, in our management’s view, allows for a supplemental comparison against historical results and expectations for future performance. Furthermore, our management uses adjusted net income (loss) and adjusted operating income as a measure of the performance of our operations for budgeting and forecasting, as well as employee incentive compensation. However, Non-GAAP measures should not be considered as substitutes for operating income, net income or other data prepared and reported in accordance with GAAP and should be viewed in addition to the Company’s reported results prepared in accordance with GAAP. The Forecast non-GAAP measures we have presented in this press release include forecast free cash flow, adjusted free cash flow and EBITDA, in each case excluding the impact of certain identified items. We believe these forward-looking financial measures are within reasonable measure. We define “free cash flow” as cash flows from operations less capital expenditures. We believe investors consider free cash flow as an important measure, because it generally represents funds available to pursue opportunities that may enhance shareholder value, such as making acquisitions or other investments. Our management uses free cash flow for that reason. Additionally, adjusted free cash flow represents free cash flow plus cash expected as a result of the sale leaseback arrangement for the acquisition of the Amazon vessel. We define EBITDA as net income plus depreciation and amortization, interest expense, net, and provision for income taxes. We have included EBITDA disclosures in this press release because EBITDA is widely used by investors for valuation and comparing our financial performance with the performance of other companies in our industry. Our management also uses EBITDA to monitor and compare the financial performance of our operations. EBITDA does not give effect to the cash that we must use to service our debt or pay our income taxes, and thus does reflect the funds actually available for capital expenditures, dividends or various other purposes. In addition, our presentation of EBITDA may not be comparable to similarly titled measures in other companies’ reports. You should not consider EBITDA in isolation from, or as a substitute for, net income or cash flow measures prepared in accordance with U.S. GAAP. Reconciliations of these non-GAAP financial measures and forecast non-GAAP financial measures to the most comparable GAAP measures are provided in the tables set forth at the end of this press release. In accordance with the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995, McDermott cautions that statements in this press release which are forward-looking, and provide other than historical information, involve risks, contingencies and uncertainties that may impact McDermott's actual results of operations. These forward-looking statements include, among other things, statements about backlog, bids and change orders outstanding, target projects and revenue pipeline, to the extent these may be viewed as indicators of future revenues or profitability, our beliefs with respect to the expected benefits to be derived from recent strategic activities, including the MOU signed with Saudi Aramco, the planned upgrades to the Amazon and the implementation of the project lifecycle management software platform, the expected scope, execution and timing associated with the projects discussed, the expected timing of upgrades to our Altamira fabrication yard, the expected utilization of the DLV 2000, McDermott’s earnings and other guidance for 2017 and expectations related to the guidance, expectations with respect to change orders, close-outs and settlements, our expectations with respect to the range of additional costs on the Ichthys project related to the subsea-pipe connector component issue identified in January 2017 and the expected underutilization of our marine assets in 2017. Although we believe that the expectations reflected in those forward-looking statements are reasonable, we can give no assurance that those expectations will prove to have been correct. Those statements are made by using various underlying assumptions and are subject to numerous risks, contingencies and uncertainties, including, among others: adverse changes in the markets in which we operate or credit markets, our inability to successfully execute on contracts in backlog, changes in project design or schedules, the availability of qualified personnel, changes in the terms, scope or timing of contracts, contract cancellations, change orders and other modifications and actions by our customers and other business counterparties, changes in industry norms and adverse outcomes in legal or other dispute resolution proceedings. If one or more of these risks materialize, or if underlying assumptions prove incorrect, actual results may vary materially from those expected. You should not place undue reliance on forward looking statements. For a more complete discussion of these and other risk factors, please see McDermott's annual and quarterly filings with the Securities and Exchange Commission, including its annual report on Form 10-K for the year ended December 31, 2016 and subsequent quarterly reports on Form 10-Q. This press release reflects management's views as of the date hereof. Except to the extent required by applicable law, McDermott undertakes no obligation to update or revise any forward-looking statement.
King R.C.,University of Adelaide |
Hillis R.R.,University of Adelaide |
Tingay M.R.P.,University of Adelaide |
Tingay M.R.P.,Brunei Shell Petroleum Co. |
And 2 more authors.
Basin Research | Year: 2010
The Baram Delta System, Brunei, NW Borneo, is a Tertiary delta system located on an active continental margin. Delta top regions in many Tertiary delta systems (e.g. Niger Delta) are thought to exhibit a normal-fault stress regime and margin-parallel maximum horizontal stress orientations. However, unlike in passive margin Tertiary delta systems, two present-day stress provinces have been previously identified across the Baram Delta System: an inner shelf inverted province with a margin-normal (NW-SE) maximum horizontal stress orientation and an outer shelf extension province with a margin-parallel (NE-SW) maximum horizontal stress orientation. Before this study, there were few data constraining the inverted province other than in the vicinity of the Champion Fields. New data from 12 petroleum wells in the western inner shelf and onshore west Brunei presented herein confirm the margin-normal maximum horizontal stress orientations of the inverted province. A total of 117 borehole breakouts, all documented in shale units, and one drilling-induced tensile fracture (in a sandstone interval) reveal a mean maximum horizontal stress orientation of 117 with a standard deviation of 19°. This orientation is consistent with contemporary margin-normal maximum horizontal stress orientations of the inverted province described previously in the vicinity of the Champion Fields that have been linked to basement tectonics of the Crocker-Rajang accretionary complex and associated active margin. However, stress magnitudes calculated using data from these 12 petroleum wells indicate a borderline strike-slip fault to normal fault stress regime for the present day; combined with the absence of seismicity, this suggests that the studied part of the NW Borneo continental margin is currently tectonically quiescent. © 2009 The Authors. Journal Compilation © Blackwell Publishing Ltd, European Association of Geoscientists & Engineers and International Association of Sedimentologists.
Alger W.D.,Brunei Shell Petroleum Co. |
Van Den Heuvel E.,Brunei Shell Petroleum Co.
EAGE/FESM Joint Regional Conference Petrophysics Meets Geoscience: From Nano Pores to Mega Structures | Year: 2014
Saturation evaluation from petrophysical logs is problematic in Brunei reservoirs due to the clay rich formations. Laminated and disseminated clays are common throughout reservoir units resulting in a suppression of resistivity log responses. Saturation height models based on capillary pressure data are often not possible as core recovery and the vintage of much of the core results in limited special core analysis measurements. Through careful quality control of capillary pressure curves a combined database covering all major Brunei reservoirs has been compiled. Saturation trends from capillary pressure curves based on reservoir permeability have been developed and shown to be consistent across the combined field's data. This larger data set enables development of robust saturation modelling trends for fields with a very limited capillary curve database.
Pinillos C.,Brunei Shell Petroleum Co. |
Rong Y.C.,Brunei Shell Petroleum Co.
Society of Petroleum Engineers - SPE/IATMI Asia Pacific Oil and Gas Conference and Exhibition, APOGCE 2015 | Year: 2015
Development of computer processing capability has helped nowadays to develop tools that are not only able to interpret a single Build-up or Drawdown but instead the whole pressure history acquired during welltest or the whole life of the well (when Permanent Down-Hole Gauges, PDHG, are available) by using either analytical solutions or numerical simulation techniques. The use of recorded bottom-hole pressure during welltests to conduct Pressure Transient Analysis (PTA) should not be limited to classical approach of determining permeability and skin parameters. Moreover, when PTA is used in combination with classic Reservoir Engineering tools such as Material Balance and Rate Transient Analysis (RTA), then it can be very useful in Reservoir Characterization, Reconciliation of Initial in Place Volume obtained from different techniques and Identification of main Drive Reservoir Mechanism. This paper describes the successful implementation of the aforementioned Pressure Transient Analysis applications in a Gas Field where the main uncertainties identified during the Field Development Plan (FDP) stage were: 1) Initial in Place Volumes, mainly as result of uncertainty of the Gas Water Contact (GWC) depth in the deeper reservoirs, 2) Connectivity between blocks, due to a fault presence and 3) Aquifer pressure support. A deviation of historical pressure behavior from the Field Development Plan estimates was observed, which resulted in: a) Revisit of the assumptions made in the FDP and b) Re-evaluation of the Gas Initial In-Place Volumes (GIIP). The Integration of PTA, Material Balance and RTA together with the incorporation of 3-4 years of production and pressure history has proved to be a good practice to understand and characterize the reservoir allowing different methods (Volumetric, Material Balance, Rate Transient Analysis) to converge to a similar GIIP estimates. Copyright 2015, Society of Petroleum Engineers.
Turner R.,Brunei Shell Petroleum Co.
Society of Petroleum Engineers - International Petroleum Technology Conference 2012, IPTC 2012 | Year: 2012
In 1999 Brunei Shell Petroleum (BSP) completed its first Smart Well, leading to over 100 Smart Wells being installed over the subsequent decade. BSP defines Smart as having remotely operated control devices in the completion string; a well only containing a downhole pressure gauge is not considered Smart. Typical wells in Brunei intersect multi-layered reservoirs containing oil, water and/or gas, many of them oil rims. The relatively low hydrocarbon volume per reservoir requires each well to develop numerous reservoirs in order to be economic. Smart completions allow flow to be controlled on a per zone basis, enabling different dynamic reservoir responses to be managed over the field life (e.g. by controlling drawdown or optimising gas development). This ability, particularly for oil rims, has enabled BSP to develop fields that would not have been sanctioned otherwise. Obtaining optimum value from Smart Wells is demanding. Additional resources are required as more data needs to be reviewed and more frequently, in order to perform the many zonal optimisations necessary for optimum reservoir management. Workflows become more complex, additional interfaces with other disciplines are required and new work competencies need to be acquired. The challenge for operators contemplating the use of Smart Technology is that Smart Capabilities are required in all major company departments. Subsurface teams need to justify Smart requirements in Field Development Plans, Well Engineering want to standardise Smart completions, Production Departments require processes to efficiently maximise lifecycle production, whilst IT personnel have to provide reliable two way communications between the wells and head office. Smart completions lend themselves to being able to prove to stakeholders that fields are being optimally managed, particularly with regards to reserves recovery. In the future having Smart Field capability may become a requirement as opposed to an option, possibly turning it into a licence to operate. Copyright 2011, International Petroleum Technology Conference.
Talib N.,Brunei Shell Petroleum Co. |
Omar A.S.,Brunei Shell Petroleum Co.
Society of Petroleum Engineers - International Petroleum Technology Conference 2012, IPTC 2012 | Year: 2012
The West Asset of Brunei Shell Petroleum (BSP) is an offshore-based oil & gas production asset with substantial volumes of non-associated gas from deep, low permeability reservoirs. The typical depths of these reservoirs are from ca. 9000 ft to 11000 ft tvdss having a permeability range of 0.1 - 10 mD and porosity range of 9% - 13%. In the past, the completion type for the deep, tight gas reservoirs has been primarily cased-hole and perforated. The production rates has not been sustainable and was observed to decline faster than expected and ceased production, at reservoir pressures significantly higher than expected abandonment pressure. Investigation showed that these wells quit prematurely due to high skin, although the actual damage mechanism i.e. from fines migration, condensate banking, water banking or clay swelling, is still unknown. Production remediation via acid stimulation and through-tubing re-perforation did not achieve the desired results. Consequently, there is a demand for the West Asset to pursue different completion strategies primarily dedicated to develop deep, tight gas reservoirs. Hydraulic fracturing is one of the completion concepts proposed to test the reservoir producibility performance. Other than a failed "Skin-Frac" campaign attempt in the past, hydraulic fracturing technology has not been widely applied in BSP. With a lack of geomechanics data and fracturing experience, a number of challenges were confronted during well planning and completion design phase as well as during planning and execution of the hydraulic fracturing campaign. In the past two years, two wells have been hydraulically fractured by bull heading through 4-1/2'' monobore completion via frac boat. Therefore, this case study documents the evolvement of completion and hydraulic fracturing strategies, emphasizing the importance of perforation selection, fluid selection and hydraulic fracture designs to the overall outcome of well performance. This paper also captures the operational challenges and learnings experienced throughout the campaign. This campaign has gathered valuable information on fracturing data and provided better understanding on future completion and fracturing approaches for new tight gas wells in the West Asset and similar assets in Brunei. Copyright 2011, International Petroleum Technology Conference.
Yong I.,Brunei Shell Petroleum Co.
Society of Petroleum Engineers - SPE Intelligent Energy International 2012 | Year: 2012
Brunei Shell Petroleum (BSP) first started completing Smart Wells in 1999, trialing standalone technologies such as permanent downhole gauges and inflow control valves in individual wells. Once these were seen as successful, the technology was used extensively on a single platform. This was later extended to application in a whole field, taking advantage of refinements such as variable downhole control valves and multiphase flow metering. Learning from the successes of other oil producing fields such as Champion West and Bugan, Seria North Flank was planned and designed as a fully Smart field. Seria North Flank would be the first field to fully integrate Smart technology with Smart field processes, improving the efficiency of Well and Reservoir Management activities and accelerating reservoir understanding in order to reduce uncertainties for future development. This resulted in the development of over 120 million barrels of oil, with improved Unit Technical Costs compared to an offshore development. Copyright 2012, Society of Petroleum Engineers.
Hustedt B.,Brunei Shell Petroleum Co. |
Snippe J.R.,Royal Dutch Shell |
Snippe J.R.,Leiden University
SPE Reservoir Evaluation and Engineering | Year: 2010
The performance of many waterfloods [and enhanced-oil-recovery (EOR) schemes] is characterized by fluid injection under fracturing conditions. Especially when the geology is complex and the mobility of the reservoir is low, induced fractures can be of the same order as the well spacing, which has a significant (in general undesired) impact on both areal sweep and vertical conformance. Therefore, fluid injection needs to be actively managed and surveyed in order to design an appropriate injection strategy over time. We have analyzed historical injection/production-test, injection step-rate-test, and falloff (FO) test (FOT) data of an existing complex waterflood in the Pierce field, North Sea. The mental subsurface model that emerged from this data analysis was developed further through a series of dynamic fracture-propagation simulations. While the data analysis was a relatively standard procedure, the fracture-modeling part was far from trivial and included simulations using a standalone fracture modeling tool and a more sophisticated coupled dynamic fracture-propagation reservoir simulator, both being in-house software tools. The combined analysis was used to develop a better understanding of the waterflood performance. The main improvement compared to previous work was the integration of the data analysis and the dynamic modeling work rather than looking at each data source individually. In combination, a consistent explanation of the observed reservoir behavior was achieved. This has resulted in changes in the day-to-day water injection management and is expected to play a key role in longer-term development strategies. Copyright © 2010 Society of Petroleum Engineers.
Langhi L.,CSIRO |
Zhang Y.,CSIRO |
Gartrell A.,CSIRO |
Gartrell A.,Brunei Shell Petroleum Co. |
And 2 more authors.
AAPG Bulletin | Year: 2010
Three-dimensional (3-D) coupled deformation and fluid-flow numerical modeling are used to simulate the response of a relatively complex set of trap-bounding faults to extensional reactivation and to investigate hydrocarbon preservation risk for structural traps in the offshore Bonaparte Basin (Laminaria High, the Timor Sea, Australian North West Shelf). The model results show that the distributions of shear strain and dilation as well as fluid flux are heterogeneous along fault planes inferring lateral variability of fault seal effectiveness. The distribution of high shear strain is seen as the main control on structural permeability and is primarily influenced by the structural architecture. Prereactivation fault size and distribution within the modeled fault population as well as fault corrugations driven by growth processes represent key elements driving the partitioning of strain and up-fault fluid flow. These factors are critical in determining oil preservation during the late reactivation phase on the Laminaria High. Testing of the model against leakage indicators defined on 3-D seismic data correlates with the numerical prediction of fault seal effectiveness and explains the complex distribution of paleo- and preserved oil columns in the study area. Copyright © 2010. The American Association of Petroleum Geologists. All rights reserved.
ten Kroode F.,Royal Dutch Shell |
Bergler S.,Brunei Shell Petroleum Co. |
Corsten C.,Royal Dutch Shell |
de Maag J.W.,Royal Dutch Shell |
And 2 more authors.
Geophysics | Year: 2013
We considered the importance of low frequencies in seismic reflection data for enhanced resolution, better penetration, and waveform and impedance inversion. We reviewed various theoretical arguments underlining why adding low frequencies may be beneficial and provided experimental evidence for the improvements by several case studies with recently acquired broadband data. We discussed where research and development efforts in the industry with respect to low frequencies should be focusing. © 2013 Society of Exploration Geophysicists.