Page 14 - NorthAmOil Week 35

NorthAmOil PROJECTS & COMPANIES NorthAmOil

PetroChina, Ovintiv terminate

Duvernay joint venture

ALBERTA STATE-RUN PetroChina and independent production from the field was condensate.
Ovintiv have terminated their eight-year old Neither side will incur penalties or fees from
joint venture that operates assets in the liq- the split.
uid-rich Duvernay shale gas play in the Cana- “Full ownership and operatorship of the
dian province of Alberta. Duvernay asset is a significant step in the evolu-
The two companies said on September 1 that tion of PCC’s business,” said PCC president and
the acreage would be split in line with their pre- CEO Jilin Fu in a statement. “It is also a major
vious holdings, with Ovintiv previously owning development in our upstream capabilities, which
50.1% of the licence and PetroChina Canada include increasing production at our MacKay
(PCC) holding the remainder. River commercial project in northern Alberta,
The transaction results in both sides tak- and continuing progress with our Ground-
ing sole ownership of around 13,000 barrels of birch tight gas asset in British Columbia, which
oil equivalent per day (boepd) of production, will provide equity gas for our interest in LNG
though PCC has said it will subcontract opera- Canada.”
torship on its lands to Ovintiv until it can staff up Encana rebranded itself at the start of the year
its own operating team. as part of a wider corporate reorganisation that
Ovintiv – which was formerly known as saw the independent re-domicile in the US.
Encana – said it would have a consolidated inter- Ovintiv CEO Doug Suttles said at the time
est in around 250,000 net acres (1,012 square km) that the move would allow his company to tap
of the play. The independent added that around into larger pools of investment in US index funds
43% of its 13,000 boepd of second-quarter net and passively managed accounts.™

Schlumberger offloading fracking business

NORTH AMERICA OILFIELD services giant Schlumberger has company will have 2.5mn HHP available for ser-
agreed to offload its North American hydraulic vice, another 1.25mn HHP available for mainte-
fracturing business to Liberty Oilfield Services. nance support and intellectual property that will
The business, known as OneStim, had been support [Liberty’s] position as one of the thought
underperforming even prior to the latest indus- leaders in pressure pumping.”
try downturn, which hit North American shale Chapman estimated Schlumberger’s 37%
particularly hard. stake in the combined company to be worth
Under the transaction, Schlumberger will $450mn.
hand over OneStim – which includes pressure The move comes less than three years after
pumping, pumpdown perforating and Permian Schlumberger sought to expand its frack-
frack sand businesses – to Liberty in exchange ing footprint through a $430mn purchase of
for a 37% equity stake in the combined company. Weatherford International’s fracking fleet. The
Both US and Canadian businesses are included company has also acquired frack sand mines
in the transaction. and artificial-lift technology in recent years.
Commenting on the deal, Enverus’ vice-pres- However, these bets have proved ill-timed, as
ident of intelligence, Mark Chapman, noted that the shale industry went from aggressive growth
it would create the largest completions-focused to showing restraint in the face of shareholder
service company in North America. Meanwhile, pressure over returns and capital discipline. This
Citigroup estimated that the combination would was severely exacerbated by this year’s collapse
create the second-largest fracking company in in oil prices and demand, which resulted in shale
the US overall. drillers dramatically scaling back spending and
“Since at least 2019, the North American activity.
pressure pumping market has been challenged Schlumberger is not the only one to step
due to an oversupply in horsepower (HHP) and back from fracking, with Baker Hughes and
lower activity levels,” Chapman said in a note. Weatherford exiting the industry in recent
“The move to divest OneStim falls in line with years. Halliburton remains by far the leader in
[Schlumberger’s] plan to scale-to-fit its North fracking services, but has also said recently that
American land business, shifting focus inter- it is turning more to its overseas businesses to
nationally and into technology. The combined drive growth.™

P14 www. NEWSBASE .com Week 35 03•September•2020