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With the weather events in the third quarter impacting nearly all of Newfield Exploration Co.'s Gulf of Mexico platforms and rigs, the producer is now seeking partners to move ahead on its production plans. However, unlike past ventures when producers looked for partners to help reduce risks, Newfield is looking for partners with available rigs.
The Houston-based independent is still in recovery mode following the devastating storms, but it has about 15 "ready-to-drill" prospects on the deep shelf. Finding rig access, however, has proved difficult.
"Gaining access to rigs is our number one challenge in the deepwater," CEO David Trice said during the company's recent analyst conference. "Pre-Katrina we were on track to have one of our best years ever in the Gulf of Mexico...We can get back reasonably quickly once the pipelines and plants come on line." The "unknowns," Trice said, are rig availability and finding people.
Spokesman Steve Campbell said nearly all of Newfield's offshore plays are partnered, similar to joint ventures used by other offshore exploration and production companies. Most have contracts that typically run two to five years, he said. What makes the situation different for operators today is the lack of rigs, and because of that, producers are getting more creative.
"In the past, partnerships were usually formed to reduce risk," Campbell said. "Now, we have partners to gain access to rigs under contract." Campbell did not disclose whether Newfield has made progress in finding new rigs, but he added, "it's hard to find rigs anywhere today."
Newfield, the fifth largest producer on the shelf, was working 220 platforms and producing about 350 MMcfe/d before Hurricanes Dennis, Katrina, Rita and Tropical Storm Arlene waylaid its plans. Now the company is back up to 160-170 MMcfe/d and is ready to gain more -- once downstream infrastructure ready to go.
"We could flow 300 [MMcfe/d] today if the infrastructure, the pipes and the onshore processors were ready," said Campbell.
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