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6 Oil & Gas Journal
Dec. 4, 2017
GENERAL INTEREST QUICK TAKES
Shell adds product use to carbon dioxide goals
Royal Dutch Shell PLC plans to cut by half the emissions of carbon dioxide from its own work and from the use of its products.
In a strategy update, Chief Executive Officer Ben van Beurden said the company would target a 20% cut in emissions by
2035 and the full 50% cut by 2050.
Until now, it has disclosed the “net carbon footprint” from
its operations and energy use. Accounting also for emissions
associated with use of its products is new.
Shell measures emissions as grams of CO2 per megajoule
consumed and takes account of any emissions offset.
“It is critical that our ambition covers the full energy lifecycle from production to consumption,” Van Beurden said.
Jones Energy adjusts credit, mulls options
Jones Energy Inc., Austin, is “exploring strategic alternatives”
with financial advisers after gaining flexibility from lenders on
its revolving credit during regularly scheduled redetermination
of its borrowing base.
Alternatives under consideration include formation of drilling joint ventures to continue development of properties in the
western Anadarko basin of Oklahoma and Texas.
The company last year acquired 18,000 net acres in the
Merge area of the STACK and SCOOP plays of Oklahoma from
Scoop Energy Co. LLC for $136.5 million, increasing its existing leasehold in Oklahoma and the Texas Panhandle (OGJ
Online, Sept. 28, 2016).
Jones Energy’s third-quarter earnings report warned of a
possible breach at yearend of financial ratios in revolving-credit
covenants. The company reported a third-quarter net loss of
$66.772 million, compared with a net loss of $10.618 million
in the same quarter a year earlier.
Adjustment of the lending agreements, said Johnny Jones,
the company’s founder, chairman, and chief executive officer,
“gives us the flexibility to increase our Merge activity in 2018
In a separate press statement Jones said, “We believe it is
prudent to explore additional opportunities to strengthen our
balance sheet, secure additional capital, and improve the com-
pany’s financial flexibility.”
The statement said Jones Energy is working with Credit Su-
isse “to evaluate strategic and financial alternatives and to assist
the company in determining the most appropriate course to de-
liver shareholder value.” Tudor Pickering, Holt & Co. is helping
the company evaluate potential drilling joint ventures.
BSEE okays first Arctic OCS drilling permit in 2 years
The US Bureau of Safety and Environmental Enforcement has
approved Eni US Operating Co.’s application to drill in the
Beaufort Sea off Alaska’s North Slope. The project represents
the first fresh exploration on the US Arctic Outer Continental
Shelf in more than 2 years, BSEE said.
Eni US submitted the application to drill from a manmade
island in state waters in August, BSEE said. It said its action will
allow the Eni SPA unit to start as early as December. Activity
will not commence until personnel in BSEE’s Alaska regional
office in Anchorage thoroughly review the project to make certain it meets appropriate technical adequacy, safety, and environmental sustainability standards.
BSEE said Eni US noted that new exploratory well drilling
will add 100-110 jobs. Any potential development plan will
depend on the results of Eni US’s proposed exploration wells.
At a minimum, new development could lead to the creation of
100-150 jobs in the region and new production of 20,000 b/d of
crude oil, the agency said.
Eni US’s exploratory drilling will take place on Spy Island,
a manmade artificial island 3 miles offshore Oliktok Point in
Alaskan state waters. Both the island and Oliktok Point are already home to Eni production facilities comprised of 18 producing wells, 13 injector wells, and 1 disposal well. Eni US now
proposes to use extended-reach drilling techniques to drill into
federal submerged lands, BSEE said.
The extended-reach drilling will target a formation in the
newly formed Harrison Bay Block 6423 unit, a 13-lease unit on
the OCS which BSEE approved in December 2016. Eni US will
explore the Harrison Bay Block 6423 Unit in partnership with
Shell and plans to drill 2 explorations wells plus 2 potential
sidetracks over the next 2 years, BSEE said.
US House members pose energy policy reform bill
US House Majority Whip Steve Scalise (R-La.) introduced legislation early last month that would reform federal onshore and