Offshore Drilling Update — 1.19.16
Offshore injury lawyers continue to follow business trends and developments in the U.S. offshore industry. This article will provide a snapshot of recent news.
If you or a loved one has been injured offshore or on the high seas, please call our maritime injury lawyers at 1-800-489-2216 for a free and confidential consultation.
Freeport-McMoRan to sell oil and assets in Gulf of Mexico and Louisiana
Freeport-McMoRan announced in late December 2015 that the mining company intends to sell its oil and gas business unit, Freeport-McMoran Oil & Gas, estimated to be worth more than $3 billion.
Who Is Freeport McMoran?
Known largely for its mining interests, Freeport-McMoran is a large, publicly traded company that also owns assets in Louisiana and the Gulf of Mexico, including offshore oil and gas interests.
The oil and gas business unit, Freeport-McMoRan Oil & Gas, is currently located at 717 Texas Avenue in Houston, Texas.
The company states describes its oil and gas business as follows:
“Oil and gas are naturally occurring hydrocarbons consisting of a complex mixture of organic material of various molecular weights and other liquid organic compounds. Generally referred to as petroleum, they are found in geologic formations beneath the Earth’s surface. The name petroleum covers both naturally occurring unprocessed crude oils and petroleum products that are made up of refined crude oil. A fossil fuel, it is formed when large quantities of dead organisms, usually zooplankton and algae, are buried underneath sedimentary rock and undergo intense heat and pressure. Petroleum is used in the manufacture of a wide variety of products.
Natural gas is primarily a mixture of four naturally occurring gases that have different molecular structures. Natural gas consists mostly of methane and contains less than 20% of ethane, butane and propane. Natural gas is used for electricity generation, heating, manufacturing and transportation. Chemical constituents – known as natural gas liquids, or NGLs – are extracted from natural gas to provide chemical building blocks for the manufacture of consumer products.”
Freeport’s “portfolio of oil and gas assets  includes oil production facilities and growth potential in the Deepwater Gulf of Mexico (GOM), established oil production facilities onshore and offshore California, large onshore natural gas resources in the Haynesville shale in Louisiana, natural gas production from the Madden area in central Wyoming and a position in the Inboard Lower Tertiary/Cretaceous natural gas trend located onshore in South Louisiana.”
U.S. Offshore Drilling Rig Count Falls
Houston-based oilfield services giant Baker Hughes announced in January 2016 that, facing continuing headwinds from falling oil prices, the U.S. rig count continues to decline. The overall count, including land rigs and offshore rigs, is down from its 2008 high of 2,031 rigs to only 650 for the week ending January 15, 2016.
The number of U.S. offshore drilling units declined from 27 to 26 between January 1, 2016 and January 15, 2016.
Noble Energy Stock Underwater
Noble Energy, Inc., a Houston-based independent energy exploration and production company that explores and operates wells in the Rocky Mountains, Mid-continent, deep-water Gulf of Mexico, and offshore Israel, the North Sea and West Africa, is under pressure as its stock continues to fall.
Experts speculate that Noble’s stock has been hit particularly hard because its asset portfolio includes too many gas interests (as opposed to liquids). Upstream companies with more liquid interests tend to have better operating margins.