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Oil Patch Insider
Anadarko undecided about hot ice drilling This past winter Anadarko Petroleum in conjunction with Maurer Technology and the U.S. Department of Energy drilled the first dedicated hydrate research well in Alaska, 20 miles south of the Kuparuk River oil field. The well was part of a three-well program to evaluate the North Slope’s subsurface hydrate potential and to test Anadarko’s Arctic drilling platform, designed to protect the tundra while solving some of the problems associated with tundra access in the region’s short winter drilling season.
The company’s spokesman in Alaska, Mark Hanley, told Petroleum News June 6 that “The cost to drill was higher than originally expected, so we’re evaluating whether or not to drill the other two wells. … but at this point it doesn’t look likely.”
Hanley said the company is also “in the planning stages right now” as to what it’s going to do next with the Arctic platform.
It expects to make a decision on both within three weeks, he said. Holland heads to Houston John Holland, Era Aviation’s marketing manager, is taking flight Houston-way where he’ll apply his marketing skills to offshore Gulf Coast activities. Holland's Alaska assignment with Era lasted six years; his new position is effective August 1. Houston is headquarters for Rowan Companies, which owns Era.
Kaye Benner and Senior Vice President Bryan Blixhavn will assume marketing responsibilities for Alaska operations for the time being. Benner is executive assistant to Blixhavn and Executive Vice President Lash Larew. It was just a ‘cut and paste’ mistake A simple clerical error will cost Calgary-based TransAlta US$24 million in second-quarter, pre-tax earnings and left flustered executives at the company groveling.
“On a personal basis, as CEO, a director and a shareholder of TransAlta, I am clearly disappointed over this event,” Steve Snyder, chief executive officer of Canada’s biggest investor-owned power generator, told analysts June 3.
“It was literally a cut-and-paste error in an Excel spreadsheet that we did not detect,” he confessed.
TransAlta’s blunder became part of a sealed bid to New York Independent System Operator for May contracts in the New York market that hedges the cost of transmission.
As a result, TransAlta said it won contracts it did not want at prices it had not intended to pay. And New York ISO rules do not allow a reversal of bids for any reason.
TransAlta said the error was made by an employee in Annapolis, Md., who misplaced a number on the spreadsheet, boosting its bid to 15 times the amount of transmission it required.
“In all our years of trading, we have never seen one like this,” said Snyder.
He said the employee is one of TransAlta’s “most diligent people” and will not be fired.
However, TransAlta has suspended all bidding on transmission contracts until it conducts an “extensive review of all processes, procedures and controls.”
TransAlta has C$9 billion of coal-fired, natural gas-fired, hydro and renewable power generation assets in Canada, the United States, Mexico and Australia and 10,000 megawatts of capacity either operating or under construction. ConocoPhillips Alaska names new vice president ConocoPhillips Alaska President Kevin Meyers said June 4 that Darren Jones has been named vice president, Kuparuk and Cook Inlet, replacing Joe Leone, who recently transferred to ConocoPhillips corporate headquarters in Houston.
Jones’ most recent position was general manager of upstream strategy and portfolio management with ConocoPhillips in Houston. He began his career as an engineer with ARCO International Oil and Gas in 1982 in Los Angeles and has worked in Alaska on two previous occasions with ARCO. Sumitomo gets five-year pipe contract with BP BP Exploration (Alaska) has awarded Sumitomo a five-year contract for pipe services, a BP spokesman told Petroleum News in mid-June.
The contract is “not for the supply of the pipe itself,” he said, as BP “has existing supply sources in the Lower 48 (carbon pipe) and Japan (chrome pipe) which are unaffected by this change of contractor.”
Services involve the “placement of orders on pipe mills on our behalf, and managing the supply chain between the mills and the North Slope,” he added.
Sumitomo has established an Anchorage-based company called Tubular Services Alaska LLC.
The former pipe services contractor for BP in Alaska was NI-Energy. McWhorter joins Lynx Enterprises Lynx Enterprises, an Anchorage-based consulting firm specializing in Alaska permitting and environmental work, recently hired Rob McWhorter as senior project manager.
A recent retiree from the Joint Pipeline Office, McWhorter has extensive experience in environmental planning and external relations with the U.S. Bureau of Land Management. Running the Gauntlet Nobody knows the troubles Canadian junior Gauntlet Energy has seen in the last few months.
They all culminated June 17 with an order from the Alberta Court of Queen’s Bench preventing creditors of the besieged E&P company from “taking any legal actions against Gauntlet or its assets” while Gauntlet tries to bail out of its financial woes.
The order is the rough Canadian equivalent of Chapter 11 in the United States.
Here’s what pushed Gauntlet into the ranks of penny stocks after it started trading on the Toronto Stock Exchange and quickly became a hot buy among oil patch investors, propelling its share value to an all-time high of C$10.92 in May last year:
• Its natural gas production from a high-risk play in northern Alberta started to tumble towards the end of last year and averaged 12 million cubic feet per day in the first quarter — barely half its average volume in 2002.
• Its gas reserves were slashed in 2002 to 29.8 billion cubic feet from 83 bcf.
• Winter drilling, instead of turning its fortunes around, compounded the troubles by encountering water, making future output uncertain and increasing net debt to C$82 million from C$71 million.
• Toronto-based investment banker Griffiths McBurney & Partners was hired to examine strategic alternatives — including seeking out a buyer — and deal with liquidity concerns. It resigned as advisor and Gauntlet President and Chief Executive Officer Laurie Sibbald was ushered out.
• A C$13.9 million lawsuit was filed last week by retail and institutional investors against the company, its directors and engineers, claiming damages from a flow-through share offering that raised C$25 million at C$7.80 a share.
•Gauntlet shares have crashed to 13 cents and the Toronto Stock Exchange is conducting an “expedited review” of Gauntlet for possible delisting.
In the midst of all this, Gauntlet officials have gone underground. Alyeska renews Air Logistics contract Air Logistics of Alaska recently signed a multi-year renewal contract with Alyeska Pipeline Service Co. The helicopter transportation contract covers maintenance and security support to trans-Alaska pipeline operations using aircraft based at multiple locations along the TAPS corridor.
Air Logistics main office is in Fairbanks; the company has branches in Deadhorse, Valdez and Anchorage. It’s all in a name Judy Brady, executive director of the Alaska Oil and Gas Association, said June 16 at the AOGA-Anchorage Chamber of Commerce luncheon that “this is always a fun luncheon. … You get to see who’s still around and what the name of their company is…”
When she introduced Kevin Meyers, president and chief executive officer of ConocoPhillips Alaska, and the president of AOGA, she mentioned that his company affiliation has changed a number of times.
Meyers, outgoing AOGA president (Steve Marshall, president of BP Exploration (Alaska), is the new president), said he thought concluding his AOGA term of office is “a major accomplishment. Generally when I’m president of something it either gets bought, sold or merged. Of course, I have a few more weeks, Judy, so don’t count your chickens yet,” he said, referring to his consecutive tenures as president of ARCO Alaska, Phillips Alaska and ConocoPhillips Alaska.
When Brady introduced Jack Bergeron, Total’s Alaska manager, she said: “Jack is going to fit in just fine here, because when he started he was with Fina and then since he’s been there, first it was TotalFina, then TotalFinaElf, now it’s gone back to Total.”
Gary Carlson, senior vice president of Forest Oil, noted that Forest is an order of magnitude smaller than the companies represented by the other speakers — ConocoPhillips, Total, ExxonMobil and BP — but, he said, “They’ve all gone through major mergers and have multiple names. Forest Oil is a $1.9 billion company, 1.5 tcf of reserves, but it is an 87-year old upstream independent oil and gas company with the same name it started with.”
Oil Patch Insider is compiled by Paula Easley and Kay Cashman. If you have a news tip or press release for Oil Patch Insider, please email [email protected], phone (907) 522-9469, or fax (907) 522-9583.
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