With a bone-loosening yawn, the Gulf of Mexico (GOM) is doing its best Rip Van Winkle imitation as it awakens from the post-Macondo nap.

And my how the world has changed. One year ago, the region limped along at 46.5% utilization. But utilization rose to 61.7% in January, the second month in the last three that has witnessed utilization above the 60% marker.

GOM utilization is up 10% since the most recent low in August 2011. While the return to deepwater is a factor, a second theme involves an improving jackup market. Jackup utilization is up 13% to 56% since the low in September 2011.

Furthermore, a boatload of recent transactions point to a more active shelf in 2012.  Indeed, the surprise deal to date has to be SandRidge Energy Inc.’s $1.275 billion takeout of privately held Dynamic Offshore Resources LLC. The transaction came out of left field for SandRidge, the Oklahoma City company that got its start drilling tight-formation gas wells in far West Texas.

SandRidge, fresh off a $1 billion joint venture with Spanish multi-national Repsol, has pivoted to an oil-focused onshore portfolio over the last two years with transactions in the Permian Basin’s Central Basin Platform as well as an aggressive campaign to amass acreage in the Mississippi Lime carbonate play along the Oklahoma/Kansas border.  

The Dynamic deal also surprised in part because SandRidge had been scrambling to amass the capital necessary to move forward with its ambitious onshore oil development programs.  Dynamic contributes production of 25,000 barrels of oil equivalent per day {boe/d} (50% oil) from fields it operates in water depths less than 300 feet offshore Texas, Louisiana and Alabama, and the company adds a completely different aspect to the SandRidge portfolio.

The Dynamic acquisition is expected to generate enough free cash flow to underwrite SandRidge’s onshore efforts.

The SandRidge deal follows a proposed joint venture between Saratoga Resources Inc. and McMoRan Oil and Gas LLC for ultra-deep rights over a combined 10,000 acres targeting shelf Lower Tertiary targets, including Saratoga’s Long John Silver prospect at the Vermilion 16 field in Louisiana.

Meanwhile those ultra-deep, sub-salt, shallow shelf wells face several upcoming milestones even as the concept of targeting Eocene and Paelocene objectives below the salt weld expands beyond the shallow shelf. The McMoRan-led group spudded a 29,000-foot onshore well in Cameron Parish, LA, in December.

Curious about the price tag for those ultra deep subsalt shelf tests? To date, the McMoRan posse exceeds $118 million for just three of the 30,000 plus foot ultra deep tests.

Elsewhere in the Gulf, Energy Partners Ltd. (EPL) added to its core Main Pass 296/311 complex through the $80 million purchase of Stone Energy Corp. assets last October. The deal is a bolt-on acquisition for assets EPL purchased from Anglo-Suisse Offshore Partners LLC in February 2011.

Other evidence of a percolating shelf market includes Quantum Energy Partners' $300 million investment in Houston-based Renaissance Offshore. The management team plans to acquire and redevelop legacy oil producing properties on the shelf.

Additional GOM transactions are likely. Newfield Exploration is looking at selling its Gulf assets in 2012.  

New Semisubmersible Boosts Fleet to 924

The global offshore fleet grew by one rig to 924 following the delivery of a newbuild semisubmersible. However, contracted rigs fell by three to 664 as of the Feb. 3 reporting date.

Recent offshore datapoints show rig count expanding in the Middle East and Asia-Pacific regions (up 14 rigs combined in January), though rig count was off in January for Africa, Europe, and Latin America.

The tightest offshore market remains the North Sea at 96% utilization.  Rowan Companies Inc. just inked two, new, North Sea contracts, including one with Xcite Energy for a heavy-duty, harsh-environment (HDHE) jackup to commence development on Phase 1A of the Bentley Field in the UK North Sea.

The second contract covers a 15-well, $4 billion program to develop the Luno oil field in the North Sea, accessing a potential 186 MMboe in reserves after first production begins in late 2015.

Similarly, Noble Corp. signed a $122,000, one-year contract for the Noble Byron Welliver through July 2013 in the North Sea. The new day rate marks a 34% improvement over the previous charter. Noble is reporting full utilization for its eight North Sea jackups.

In other contract news, Atwood Oceanics Inc. will relocate the Atwood Beacon jackup to offshore Israel on a 180-day contract at $151,000 per day beginning in September. The new rate marks a $36,000 per day increase with the operator paying for mobilization to Israel from its current location in Latin America.

Offshore Equipment Manufacturers: Record 2011 Volumes

Combined new order volume fell sequentially to $3.6 billion during the fourth quarter for Cameron and National Oilwell Varco. Think of it as the pause that refreshes as the offshore newbuild market muscles up.

Cameron, for example, reported a $6.0 billion backlog at year-end. For 2011, Cameron experienced a 35% increase in orders to $7.83 billion, a company record.

Across Houston, National Oilwell Varco reported $10.8 billion in capital equipment orders during 2011, outdistancing the company’s previous high of $7.3 billion.

National Oilwell Varco completed one more acquisition in an effort to build out its FPSO portfolio. NOV acquired NKT Flexibles I/S for $670 million. NKT is a Danish manufacturer of flexible pipe products and offshore production systems. It is the third NOV transaction in the FPSO space over the last 18 months.

Elsewhere Sembcorp Marine will build a $792.5 million drillship for Sete Brasil Paraticipacoes SA. The unit will be capable of operating in 10,000 feet of water and drilling to 40,000 feet. It marks the first drillship order for the new Brazilian shipyard as efforts expand in the development of pre-salt oil fields.