Renewable Revolution

Published July 20, 2016
 
UK-based Ensco  announced it has sold various drilling rigs for scrap value, including semi-submersible rigs, drill ships and jack-up rigs.

According to the offshore drilling contractor’s latest fleet status report, two semi-submersible drilling rigs built in 2004    – Ensco 6003 and 6004 – have been sold for scrap value with the sale price in line with net book value of the rig. 

As well as this, the company’s two drill ships Ensco DS-1 and Ensco DS-2, with a DP Gusto 10,000 design and built in 1999, have also been sold for scrap value.



Ensco Sells Drilling Rigs for Scrap

Ensco also sold two jack-up drilling rigs – Ensco 91 ad Ensco 58. While the first is of a DP Gusto 10,000 design and was built in 1989, the second is of an F&G L-780 Mod II design and was built in 1981.

Additionally, two DP3 Samsung drillships – Ensco DS-4 and Ensco DS-5 –, built in 2010 and 2011     , have been cold stacked in Spain.


Ensco Gets New Contracts in Gulf of Mexico

The company has been reportedly awarded short-term contracts in the Gulf of Mexico.

The contracts awarded include one for jack-up Ensco 75 with Talos Energy, as well as the lease of Ensco 8506 semi-submersible rig to Deep Gulf Energy.

Castex also awarded a contract for jack-up rig Ensco 87 with a duration of one month, while the contract for the semi-submersible rig Ensco 5006 has been extended by 15 months.

As well as this, Ensco has allegedly received the termination of a longer contract by Marubeni, for the semi-submersible rig Ensco 8605 with effect from August 16.

The original contract was expected to last from December 2015 to January 2018 and no reason has been disclosed for the terminal, Ensco reported.

http://www.offshorepost.com/ensco-sells-drilling-rigs-for-scrap/

Back to where we were at the start of the year, outlook negative:

About three months ago, Palloy "concluded" that the price of oil would go up. I told him he was wrong. I predicted that the price would NOT go up, but go DOWN because of demand destruction and efficiency improvements.

I was right. But don't expect Palloy to admit he was wrong OR that I was right. He is not into admitting his flawed conclusions, especially about fossil fuels and their price.

But it is nice to see Palloy face reality for a change. 

Fri Jul 29, 2016 3:05pm EDT  Related:  Global Energy News 

Oil rout erodes second-quarter profits for U.S. majors Exxon, Chevron
HOUSTON  |  By Ernest Scheyder

http://www.marketbeat.com/stories.aspx?story=http%3a%2f%2ffeeds.reuters.com%2f%7er%2freuters%2fbusinessNews%2f%7e3%2fPSEkMg3xd0Y%2fus-oil-results-idUSKCN1091QU

Published at 03:20PM - 28/07/16
 
Swiber Holdings Limited, an offshore services company based in Singapore, has made an application to wind up the company following demands from credits.

The company also filed an application to place it in provisional liquidation, media sources reported.

“While business sentiment in the oil and gas industry remains depressed, the Group believes that the impact on shallow water field development and production activities, where Swiber is an established provider, will be lower,” the company’s Group President, Darren Yeo, had said in its first quarter results report.

Offshore Services Firm Goes Bankrupt

The company announced it made the application to Singapore’s High Court on Wednesday and the hearing is set for August 19, 2016.

The High Court of Singapore has appointed Cameron Lindsay Duncan and Muk Siew Peng, care of KordaMentha Pte, as the joint and several provisional liquidators of the company.

Following the application, the company’s Executive Director and Vice Chairman Francis Wong, Executive Director and Group Chief Financial Officer (CFO) Leonard Tay and its Executive Director Nitish Guptal, all resigned.

In the first quarter of the year, the company reported a net loss of US$200,000, while the Group revenue rose by 16% compared to the first quarter of 2015, mainly due to new contracts secured in the last 12 months despite depressed market conditions.

2,700 Oil Workers Left Jobless

Swiber is a global provider of engineering, procurement, installation and construction (EPIC) services to the offshore industry.

According to Swiber’s 2015 annual report, the company has nearly 2,700 employees worldwide and some 10,250 shareholders, a total of US$1.43 billion in liabilities and total assets of US$1.99 billion.

The company owns 51 vessels, but it is not certain whether it will be able to convert these into cash given the current downfall in oil prices.

Across the industry, the pace of bankruptcies is picking up, especially in the US, where 11 oil and gas firms had filed for bankruptcy this year, until May.

According to analysts, more bankruptcy filings are expected to take place throughout the year, with approximately a third of global oil and gas firms at risk of insolvency.

http://www.offshorepost.com/offshore-services-firm-files-goes-bankrupt/

Transocean Profits Dwindle as Customers Cut Offshore Drilling
August 3, 2016 by Bloomberg

 
By David Wethe

(Bloomberg) — Transocean Ltd.’s profit dwindled in the second quarter as the world’s largest offshore driller struggles to win contracts and keep rigs busy during an oil industry downturn.

Net income fell to $77 million, or 21 cents a share, from $342 million, or 93 cents, a year earlier, the company based in Vernier, Switzterland, said Wednesday in a statement. Excluding one-time items, the 17-cent per-share profit was better than the average 2-cent loss estimated by 33 analysts surveyed by Bloomberg.

Offshore rig contractors have been among the hardest hit in the industry, with customers slashing spending while new drilling vessels continue to enter an oversupplied market. Transocean announced on Monday it agreed to buy out the public stakes in Transocean Partners LLC for $249 million in an effort to cut costs and boost liquidity.

“Utilization is still declining at almost 5 percent per quarter, and contracting is essentially next to zero,” Marc Edwards, chief executive officer at Diamond Offshore Drilling Inc., told analysts and investors Monday on a conference call. “Before we can declare a bottom, we at least need to see a level of fixture awards that matches a number of contracts that are reaching the end of their term. And for our industry sector, this has yet to happen.”

Brent crude, the global benchmark, is still down by more than half since the downturn began in the middle of 2014. Roughly around the same time that oil prices began falling, Transocean announced plans to create Transocean Partners, selling stakes in three deepwater rigs for the tax-free partnership.

“Transocean Partners was formed so that Transocean would be able to monetize drilling contracts by selling the ownership interests,” Andrew Cosgrove, analyst at Bloomberg Intelligence, said in an interview. “Under the current conditions, it’s not economic to use Transocean Partners for the reason it was created.”

The earnings were released after the close of regular trading in New York.

(Transocean is scheduled to hold an earnings conference call Thursday at 9 a.m. New York time, accessible at EVTS.)

© 2016 Bloomberg L.P

https://gcaptain.com/transocean-profits-dwindle-as-customers-cut-offshore-drilling/

Oil Prices Cut AGAIN by Saudis
Published at 09:19AM - 01/08/16

Saudi Aramco just announced it has lowered the price of its Arab Light crude by the most since October 2015, showing it does not intend to change its plans amid Iran’s strong revival.

Over this year, Iran has seen its production go up by 25% in an attempt to get back to pre-sanction levels, while Brent crude prices have shown a 17% rise mostly due to supply disruptions.

“We expect slightly higher oil prices for the second half of 2016 as oil market oversupply diminishes. However, inventories remain very large and will take some time to be drawn down,” World Bank’s Commodities Markets Outlook report lead author, John Baffes, said.

Oil Prices Cut by Saudi Despite Oversupply

Iran is trying to reach a daily output of 4 million barrels by the end of 2016, after a heavy drop caused by the international sanctions.

Just last month, Saudi Aramco CEO Amin Nasser told media sources the company was not worried   about rival producers like Iraq, Iran and Russia gaining ground on Asia, its main export market.

However  , the recent move could be showing otherwise. In 2014, Saudi Arabia led OPEC’s decision to maintain production levels.

In the meantime, despite this year’s climb in Brent crude oil prices, these are still 20% lower than in 2015.

The rise follows a downfall in crude production in Nigeria, as militants resume pipeline attacks in the Niger Delta, as well as the Canadian wildfire that led the oil-sands industry to shut down more than 1 million barrels a day of production.


This oversupply and the continued drop in crude prices has severely affected the industry, which was left clear in the latest second quarter results announced over the past week.

In fact, ExxonMobil and Shell reported their lowest profits since 1999 and 2005, while Chevron reported its deepest fall in 27 years.       

“Energy exporting emerging and developing economies have struggled to adjust to persistently low prices. (…) Both energy and agricultural commodity exporting countries need to step up economic diversification efforts to bolster resilience to commodity price fluctuations,” Director of the World Bank’s Development Prospects Group, Ayhan Kose, said.

http://www.offshorepost.com/oil-prices-cut-by-saudi-despite-oversupply/

Agelbert NOTE: The BABYING of Oil & Gas Corporations by the BANKS  in our fossil fuel corrupted economy is FINALLY starting to end.  :emthup:

If these TORRENTS of losses was being experienced by ANY of the Renewable Energy corporations, Wall Street would have destroyed them over a YEAR ago. But the oil and gas welfare queens have been BABIED for over TWO YEARS. 

So the next time some brain dead, biosphere math challenged defender of fossil fuels whines about Tesla cars or some "wasted" government/bank loans to a solar panel manufacturer that went bankrupt, REMIND them Renewable Energy Corporations were (and are) NOT given the TIME or the RESTRUCTURING babying in Chapter 11 fun and gaming bankruptcy that the fossil fuel irresponsible polluting welfare queens ARE given TO THIS DAY.

Fossil fuel corporations have no business being in business, PERIOD.


David Carey
Laura J Keller
Vamburkar meenal_v
August 11, 2016 — 5:00 AM EDT Updated on August 11, 2016 — 9:10 AM EDT

Buyout firms target soured loans with eye on taking ownership

Drillers    unload assets to stay afloat as cash crunch deepens

The long wait may finally be over.

Since the great crash of oil in mid-2014, more than $100 billion has been raised by buyout firms and distressed-debt funds eager to scoop up energy assets on the cheap. But as the months rolled by, few opportunities cropped up as cash-starved drillers limped along with the help of their bankers. 

Not any more.   What started out as a trickle has now turned into something much more, with Blackstone Group LP, Apollo Global Management LLC and WL Ross & Co. all jumping in this year to buy a grab bag of assets at discounted prices. Precise numbers are hard to come by, but in conversations with investors, bankers and analysts across the industry, there’s little doubt that private equity firms are ramping up their investments in everything from undrilled and developed oil and gas acreage to troubled loans.
 
“We’ve gone very aggressively into the market” after holding back for most of last year, said Shaia Hosseinzadeh, who oversees energy-focused distressed-debt investing at WL Ross, the namesake firm of billionaire dealmaker Wilbur Ross. “You’ll see more deals in the second half.”

Deals are picking up for a few key reasons. Oil prices are no longer in a free fall, but at $40 a barrel, they’re still well below the $60 to $80 levels many drillers need to break even. 

Wall Street has started to turn away the weakest borrowers after extending more than $2 trillion in loans and commitments during the boom.


And with the cash crunch causing a surge in bankruptcies this year, many firms are looking to unload assets to stay afloat.

Much of the action is unfolding in distressed debt, where buyers have targeted loans and bonds with an eye on seizing ownership in bankruptcy or restructuring.
 
Billionaire Leon Black’s Apollo, WL Ross and EIG Global Energy Partners have snapped up more than half of the $1.6 billion in unsecured debt of Permian Resources, an oil and gas producer started in 2014 by the late Aubrey McClendon, people familiar with the matter have said.

McClendon set up Permian Resources with backing from Houston-based private equity shop Energy & Minerals Group. The explorer has leaseholds to 85,000 net acres in the Permian Basin of west Texas, one of the most prolific oil and gas fields in the country. While the company has top-flight assets and bought itself time by selling some, its debt load is unsustainable and is on track to default within a year   
:, said Carin Dehne-Kiley, an analyst at S&P Global Ratings. 

Representatives for all the firms declined to comment.   

Banks, for their part, are finally getting serious about cutting off the energy industry’s weakest borrowers and selling loans -- after more than two years of foot-dragging  .   In the first half of 2016, the eight biggest U.S. banks reduced loans and loan commitments by 6.3 percent after stepping up the percentage they lopped off their books last quarter, according to data compiled by Bloomberg from the lenders’ filings and other disclosures.

As of June 30, they had lent or committed to lend $2.19 trillion, including some derivatives positions, compared to $2.34 trillion at the end of 2015, filings show. Bank of America Corp. reduced its exposure last quarter by a record 7 percent to $40.5 billion. Morgan Stanley has slashed its lending to the energy industry by 22 percent -- the most among the group -- since it ballooned to a peak in the third quarter of 2015.
 
Much of what’s left is souring . At Wells Fargo & Co., energy loans that are considered “non-accruals,”    or those that aren’t expected to be fully repaid, have soared to $2.55 billion from just $35 million less than two years ago.

Representatives at the banks declined to comment.  

Many troubled firms are tapped out anyway. At least a dozen oil and gas producers had used more than 90 percent of their credit lines at the end of the first quarter, according to Bloomberg Intelligence. Half of those are effectively overdrawn after their bank credit lines were cut.

While executives at Wells Fargo and other banks have met with buyout firms to unload their energy loans in recent months, according to people familiar with the matter, some private equity players are also snapping up assets directly from operators that are short on cash.

In July, Blackstone paid about $500 million for acreage in the Permian. This month, it expects to wrap a deal to buy a partly developed oil field in the North Sea. The firm, which didn’t make a single investment for 15 months after it raised a $4.5 billion fund in early 2015 for energy assets, has spent $1.8 billion between the fund and its main buyout pool on oil and gas plays this year.

“One thing we’re focused on is to provide capital to complete large, oil-field development projects,” said David Foley, the head of energy investing at Blackstone, which manages $356 billion. “In many cases, it is possible to buy in at a significant discount to replacement cost.” He didn’t identify the sellers.

Some buyout firms like EIG are helping financially sound companies bankroll purchases of ailing rivals. In February, the firm agreed to invest as much as $500 million by buying preferred shares from a unit of Rice Energy Inc., a natural gas explorer in the Appalachian Basin, to back Rice’s acquisition program and expansion.
“We want to finance the big guys with preferred so they have liquidity to go on the attack,” EIG President Bill Sonneborn said at a conference in May.

That suggests dealmaking may accelerate. This year, $36 billion of acquisitions involving U.S. oil and gas companies have been announced -- ahead of last year’s pace but behind 2014. And while some producers have sold equity, Anadarko Petroleum Corp., Devon Energy Corp. and others are also boosting efforts to unload assets and raise cash. Devon, which sold off less than $200 million of assets in 2015, announced $3.2 billion in sales this year.

On Wednesday, Chesapeake Energy Corp., which has suffered more than $17 billion in losses over the past six quarters, announced it will give away its Barnett Shale holdings to an operator backed by First Reserve Corp., an energy-focused private equity firm.

“The thawing is underway,” said James Row , the chief executive officer of The Oil & Gas Asset Clearinghouse , which brokers oil and gas deals.

Even as the market heats up, there are still plenty of risks -- a lesson that was driven home painfully last year.
After oil prices briefly rebounded in the first half of 2015 and flirted with $60 levels, Blackstone’s GSO credit unit , KKR & Co. and Oaktree Capital , as well as mutual-fund manager Franklin Resources Inc. , among others, spent billions of dollars on cash-strapped explorers betting the industry would recover.



It proved to be too early. Many of the investments soured as oil descended into the mid-$20s. At least 90 producers, including SandRidge Energy Inc., Linn Energy LLC and Breitburn Energy Partners LP, filed for bankruptcy since the start of 2015, according to law firm Haynes and Boone LLP.

And while oil is up more than 60 percent from its low in February, prices have once again retreated and sunk back into a bear market this month. This year, bankruptcies are being filed at double the pace in 2015.

“There’s a long list of companies that are going to disappear,” said EIG’s Sonneborn. “You’ve got to be very, very careful investing in this space.”

The recent flurry of dealmaking has left fewer bargains as well. Outside the Permian, where operators can profit from $40-a-barrel oil, the supply of top-grade acreage is spotty. And traders see oil prices stuck below $60 -- a key level many producers need to boost drilling and profits -- until at least 2020.

“I don’t think you’ll see a tidal wave of deals, not good deals anyway,” said Blackstone’s Foley. “Firms raised too much money. They may get it invested over six years, but not in the next few.”

Agelbert NOTE: SEVERAL eye opening charts and graphics  included in this story at link.

http://www.bloomberg.com/news/articles/2016-08-11/oil-busts-leery-bankers-and-100-billion-for-distressed-deals

Climate| Aug 26, 2016


By Carl Pope

SNIPPET:

"This was retail politics and oil lost,"

was how Adrienne Alvord of Union of Concerned Scientists summed up the stunning environmental victory Tuesday in the California legislature, a victory which cemented the state's commitment to a 40 percent reduction in climate pollution by 2030.''

http://www.ecowatch.com/california-climate-policy-1988157045.html