[PeakOiler]

cbsnews article

$this->bbcode_second_pass_quote('', 'S')hell Alaska says a drifting drill ship that broke loose from tow vessels during a severe storm has run aground on the southeast side of Sitkalidak Island.

Shell's unified command center says the Kulluk grounded around 9 p.m. Monday. It says the crew of a tug boat had been ordered to separate from it earlier in the night for the safety of its crew members.

The Kulluk is one of two Shell drill ships that operated in U.S. Arctic waters in 2012. It had been under tow by a tug and a 360-foot anchor handler before it broke loose earlier Monday night.

The vessel first separated from a towing vessel Thursday night south of Kodiak Island. Repeated attempts to control it in the rough North Pacific have been unsuccessful.

All 18 crew members on the Kulluk were safely evacuated Saturday from the drill ship, which has no propulsion system of its own.

[Plantagenet]

$this->bbcode_second_pass_quote('PeakOiler', 'S')hell Alaska says a drifting drill ship that broke loose from tow vessels during a severe storm has run aground on the southeast side of Sitkalidak Island...... first test of oil spill response efforts in the arctic waters...

[PeakOiler]

I stand corrected. I knew of course of the Valdez oil spill, so stating that it might be the first opportunity for oil cleanup was just wrong.

And I just assumed that a drilling rig that is/was to be used in the arctic waters was still in arctic waters when this mishap occurred. I just didn't take the time to look up where Sitkalidak Island actually was.

I did not intend to misinform. I wonder if I have time to edit the post...

[rockdoc123]

A bit of historical background. The Kulluk was part of the drilling fleet that Bowdrill (a subsidiary of Gulf Canada) built back in the early eighties at the hay days of Canadian government research incentives. It was conical towed drillship built specifically for shallower water and meant to have the ability to sit in ice bound conditions for a long period of time. There were a number of floating vessels as well as several casisson designs for very shallow water, some very large such as the Mulikpaq. During the late seventies and eighties there was something in the order of eighty wells drilled in the Canadian Arctic and to my knowledge no serious incident occurred (I know of a shallow gas blowout with the Mulikpaq but it resulted in no environmental issues). It seems clear to me that the current issue happened because Shell ignored weather forecasts and someone (lot's of finger pointing and musical chairs being played at Shell right now I suppose) made a decision to see if they could sneak through the bad weather window. This is a particularly bad idea as it would apply to the Kulluk given it is nothing more than a floating cork in high seas. As with most of the bad incidents that have happened they are due to human error which is, of course, unacceptable but should be avoidable.

[dinopello]

$this->bbcode_second_pass_quote('rockdoc123', 'A')s with most of the bad incidents that have happened they are due to human error which is, of course, unacceptable but should be avoidable.

[rockdoc123]

IN this particular case it was completely avoidable....head to shore when the seas get rough or don't be out there in the first place. The vessel is not meant for these conditions.

[Graeme]

crap

[PeakOiler]

I thought it interesting that, according to the report linked by Graeme, media were restricted from reporting on this incident. No fly and no ship zones were established, apparently for safety reasons.

However, CNN had this update today:

$this->bbcode_second_pass_quote('', 'S')hell: Grounded drilling rig sound and fit to be towed

[Graeme]

Grounded Alaska Oil Rig Ship Kulluk Refloated

$this->bbcode_second_pass_quote('', 'A') Shell oil-drilling ship that ran aground near a remote Alaska island has been refloated.

Royal Dutch Shell's Kulluk was lifted from rocks late on Sunday night and teams are assessing its condition, US Coast Guards said on Monday.

Once salvage experts are satisfied that the vessel is seaworthy, it will be towed 30 miles to shelter in Kodiak Island’s Kiliuda Bay.

[Graeme]

Shell agrees to sell Eagle Ford acreage to Sanchez Energy

$this->bbcode_second_pass_quote('', 'R')oyal Dutch Shell plc (Shell) has agreed to sell its 100 percent working interest in approximately 106,000 net acres in Dimmit, LaSalle, and Webb Counties, Texas to Houston-based Sanchez Energy Corporation for approximately $639 million, subject to closing.

The sale includes approximately 176 operated producing wells and associated field facilities and infrastructure. Net production in Q1 2014 was approximately 24,000 barrels of oil equivalent per day, with approximately 60 percent crude and natural gas liquids.

Following the acquisition, Sanchez Energy will have control of 226,000 acres in Texas' Eagle Ford. The company estimates the deal will allow the firm to have up to 3,000 potential drilling sites and could produce about 42,800 barrels of oil equivalent per day.

Of the drilling sites to be acquired, Sanchez Energy said about 200 locations are considered low risk and high rate of return areas.

[Plantagenet]

$this->bbcode_second_pass_quote('', '[')b]Shell agrees to sell Eagle Ford acreage to Sanchez Energy

Royal Dutch Shell plc (Shell) has agreed to sell its 100 percent working interest in approximately 106,000 net acres in Dimmit, LaSalle, and Webb Counties, Texas to Houston-based Sanchez Energy Corporation for approximately $639 million, subject to closing....
Following the acquisition, Sanchez Energy will have control of 226,000 acres in Texas' Eagle Ford. The company estimates the deal will allow the firm to have up to 3,000 potential drilling sites and could produce about 42,800 barrels of oil equivalent per day.

[ROCKMAN]

AThe word on the street is that She'll paid ll$1 billion just for the lease. And from the TRRC records the drilled at least 185 wells in this portion of the EFS play. Of those wells that had their initial rates reported the avg. was 79 bopd. That's the avg INITIAL RATE...not after the decline begins. Given the initial rates of the big iwells in those press of 500 -- 1,000 bopd you can imagine the sh*t storm haat Shell. But all that is sunk cost now and doesn't play in the go forward economics

[ROCKMAN]

And Tony Sanchez is one of those guys that can squeeze blood out of a turnip...even someone else's turnip

[rockdoc123]

I believe this speaks to something I've said a number of times about the Eagle Ford and shale gas/oil in general. The big guys are useless, they actually haven't a clue. Their modus operandi is to throw money at problems. That works sometimes for big expensive projects that have extremely high yield (eg. a very expensive deepwater well could pay out in one day the kind of mistakes and overspending they would normally encounter) but it doesn't work for shale plays which are marginal business. That requires a mindset where you cut costs and you figure out ways to streamline your operations. Exxon bought XTO for their shale expertise and after about a year all the XTO people left no doubt partly because it was clear Exxon couldn't understand the model for success. This is why there will only be a few players out of this business who survive eventually.

[ROCKMAN]

Pstarr - happens with every boom: foolish enthusiasm rewarded with failure for both Big and Little oil. I couldn't guess many operations went under during the 70's boom long before oil prices cratered. I worked for one that spent $500 million to find $100 million in reserves. Over 4500 rigs drilling and no significant increase in production.

[Pops]

$this->bbcode_second_pass_quote('rockdoc123', 'I') believe this speaks to something I've said a number of times about the Eagle Ford and shale gas/oil in general. The big guys are useless, they actually haven't a clue. Their modus operandi is to throw money at problems. That works sometimes for big expensive projects that have extremely high yield (eg. a very expensive deepwater well could pay out in one day the kind of mistakes and overspending they would normally encounter) but it doesn't work for shale plays which are marginal business. That requires a mindset where you cut costs and you figure out ways to streamline your operations. Exxon bought XTO for their shale expertise and after about a year all the XTO people left no doubt partly because it was clear Exxon couldn't understand the model for success. This is why there will only be a few players out of this business who survive eventually.

[ROCKMAN]

Pstarr - F*ck sensitivity training. And yes I was forced twice to go to PC class. LOL.

[rockdoc123]

$this->bbcode_second_pass_quote('', 'D')oesn't sound like the NOCs have much of a chance with LTO then, even if the infrastructure problems are overcome - and "the rocks are down there."