Offshore News

Reading & Bates Development Co. (DEVCO), a wholly owned subsidiary of R&B Falcon Corporation, announced its Boomvang Project in deepwater offshore Texas is proceeding rapidly. DEVCO concurs with previously announced reserve estimates of 70-100 million boe in several oil reservoirs extending across portions of East Breaks Blocks 642, 643, 688 and 732. Platform, production facilities and pipeline contracts are being evaluated, and development drilling is scheduled to begin in the second quarter of this year. The partners anticipate first production in the first quarter of 2002. DEVCO owns a 50 percent working interest in the Boomvang Project. Kerr-McGee Oil & Gas Corp., a wholly owned subsidiary of Kerr-McGee Corp. is operator and owns a 30 percent working interest. Ocean Energy Inc. owns the remaining 20 percent.

Halliburton Establishes Deepwater Team

Halliburton Energy Services, a global leader in deepwater solutions, has created a team of established experts to speed the development, application and delivery of deepwater solutions.

This marks an unparalleled commitment to the industry for the future of exploration and development of deepwater assets. Halliburton Energy Services is a business unit of Halliburton Company.

The team of Halliburton experts will help capture and transfer best practices for solutions development, business alignment, technology applications and delivery processes. This will drive global research and development of deepwater technologies within, across and outside of the company's broad product service lines.

In addition, the team will leverage the breadth of Halliburton's business units to maximize services and solutions to meet the industry's deepwater needs, particularly focusing on real time reservoir solutions for deepwater development.

The team will include experts from each of HES' product service lines, deepwater reservoir understanding and characterization expertise, deepwater business development and commercialization expertise and integrated project delivery expertise. The team will be based in Houston, as the city has recently become the headquarters of a large number of global deepwater oil and gas operators in development areas such as Gulf of Mexico, West Africa and Brazil.

$749,000 Paid in OCS Civil Penalties

The U.S. Department of the Interior's Minerals Management Service (MMS) has published a summary of civil penalties totaling $749,000, paid from January 1, 1999-December 31, 1999. The assessed penalties were for violations occurring in the Outer Continental Shelf (OCS). The summary highlights the identity of the party, the regulation violated, and the amount paid. For this period, penalties ranged from a low of $3,000, for a company's failure to test gas-detection systems, to a high of $165,000 assessed to a company for not equipping a drilling unit with a proper safety device.

The civil penalty process is designed to encourage companies to comply with the statutes and regulations by pursuing, assessing, and collecting penalties. The penalties summary provides information to the public on violations of special concern in OCS operations and provides an additional incentive for safe and environmentally sound operations.

OPA 90 expanded MMS' authority to impose penalties for violating its regulations. Section 8201 of OPA 90 authorizes the Secretary of the Interior to assess a civil penalty without providing notice and time for corrective action where a failure to comply with applicable regulations results in a threat of serious, irreparable, or immediate harm or damage to human life or the environment.

Between August 18, 1990, and December 31, 1999, MMS has initiated 297 civil penalty reviews, which resulted in 297 civil penalty cases; assessed 186 civil penalties; and collected more than $3.5 million in fines.

Transocean Sedco Forex Inc. Receives Contract

Transocean Sedco Forex Inc. announced one of its operating subsidiaries has entered into a contract with BP Amoco for semisubmersible Transocean Rather. The agreement covers one well, with a minimum duration of 120 days, plus an option to drill two additional wells in direct continuation.

The drilling program is expected to commence in the U.S. Gulf of Mexico on or around April 1, 2000 and will generate an estimated $9.6 million in revenues.

Also, the company said its semisubmersible Transocean Richardson has completed a drilling program in the U.S. Gulf of Mexico with Kerr-McGee Corp. and is now under contract to Anadarko Petroleum to drill two wells over an estimated 60-day duration. Following completion of the Anadarko work assignment, the rig will return to Kerr-McGee to drill one well for a period of up to 60 days. Revenues to be generated by Transocean Richardson during the two drilling programs are estimated at $7.5 million.

Transocean Rather and Transocean Richardson are high-specification semisubmersibles capable of drilling in water depths of up to 4,500 ft. and 5,000 ft., respectively. The rigs represent two of 43 semisubmersibles currently active in the Transocean Sedco Forex fleet, 12 of which are high specification semisubmersibles, possessing advanced drilling features allowing for operations in ultra-deepwater and harsh environment locations around the world.

R&B Falcon Announces Drilling Contract for Peregrine III

R&B Falcon Corporation announced R&B Falcon Drilling (International & Deepwater) Inc. has been awarded a drilling contract by Petroleo Brasileiro S/A-PETROBRAS for a three-year contract for DP drillship Peregrine III for operations in Brazil in up to 3,937 ft. of water. Total contract value for the three-year term is estimated at approximately $108 million.

The drillship is currently located in Galveston, Texas, where an upgrade project consisting of installation of a new blowout preventer stack and control system is underway. The unit will mobilize from Galveston for commencement of operations upon arrival in Brazil.

FirstWave Settles Environmental Investigation

FirstWave Marine, Inc. announced the Texas Environmental Enforcement Task Force has concluded an investigation of FirstWave's subsidiary, Newpark Shipbuilding, Brady Island, Inc. In settling the investigation, Newpark agreed to:

· plead guilty in federal court to a negligence charge, a misdemeanor under the Clean Water Act, alleging failure to take samples that were representative of the volume and nature of discharges from its wastewater treatment plant, and pay a corresponding $25,000 fine

· plead nolo contendere in state court to two misdemeanor charges, alleging knowing and intentional violations of a Newpark environmental permit issued by the TNRCC, and pay a corresponding $100,000 fine for each charge.

In addition, Newpark has separately agreed to contribute a total of $975,000 over the next 18 months to the Galveston Bay Foundation and the Coastal Conservation Association of Texas. Each of these non-governmental organizations is dedicated to the preservation and enhancement of the environment and habitats of Galveston Bay and the Texas Gulf Coast waterways.

The costs associated with the conclusion of this investigation have been accounted for by the company in its fourth quarter 1999 results of operations.

Grady Walker, President of FirstWave said, "From its inception, FirstWave and its subsidiaries have been leaders in the Texas shipyard industry on environmental initiatives. The company looks forward to working with the Galveston Bay Foundation and the Coastal Conservation Association in continuing to support initiatives and projects that benefit the local environment.''