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Oil and Gas Energy News Update

Thursday, June 30, 2011

Oil & Gas Post - All News Report for Thursday, June 30, 2011

Thursday, June 30, 2011


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Commodity Corner: Oil, Natural Gas Settle Higher

- Commodity Corner: Oil, Natural Gas Settle Higher

Thursday, June 30, 2011
Rigzone Staff
by Matthew V. Veazey

The price of light sweet crude oil for August delivery gained 65 cents Thursday to settle at $95.42 a barrel.

The WTI received a boost from a weaker dollar as well as a slight improvement in new jobless claims. The Dollar Index declined 0.4 percent, signifying that dollar-denominated crude oil became a better value for investors holding currencies other than the greenback. In addition, the U.S. Department of Labor reported that first-time claims for unemployment insurance declined by 1,000 to 428,000 last week.

The August WTI contract price fluctuated from $93.88 to $95.82. Brent futures settled at $112.40 a barrel. The Brent contract traded within a range from $108.10 to $112.67.

August natural gas gained 5.5 cents to settle at $4.37 per thousand cubic feet. The U.S. Energy Information Administration (EIA) reported that the country's natural gas inventories rose by 78 billion cubic feet last week. The implied build was lower than what analysts had expected. A Platts survey of analysts projected an increase of 80 to 84 Bcf.

Natural gas futures traded within a range from $4.21 to $4.42 Thursday.

July gasoline gained two cents to end the day at $3.03 a gallon—the intraday high. Gasoline bottomed out at $2.98 Thursday.

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Investors Wait For Next Asset To Drop In Conoco's Sales Plan

- Investors Wait For Next Asset To Drop In Conoco's Sales Plan

Thursday, June 30, 2011
Dow Jones Newswires
HOUSTON
by Isabel Ordonez & Ben Lefebvre

ConocoPhillips (COP) investors are hoping for the company to quickly unveil the next step of its plan to sell up to $17 billion in noncore assets by the end of 2012 and reinvest a bulk of the proceedings in share buybacks.

Conoco's stock outperformed rivals Exxon Mobil Corp. (XOM) and Chevron Corp. (CVX) last year after investors embraced a large-scale, two-year restructuring plan presented in late 2009 that included a $10-billion asset sale and was aimed at shoring up its finances. Conoco's shares surged more than 30% in 2010, helped by evidence that the plan was going full steam ahead. By the end of last year, the sale plan seemed to be moving along. Conoco had sold $7 billion in assets, including its stake in oil sands oil producer Syncrude Canada Ltd. and the majority of its 20% stake in Russia's oil giant Lukoil OAO for $5.82 billion. Conoco said the Lukoil proceedings were excluded from the original $10-billion asset-sale plan and that money would be used to buy back the company's own shares. Those sales went so well that the Houston-based company announced in March it will expand its planned program through 2012 by selling an additional $10 billion of older, higher-cost assets.

But after a strong start, the company has this year given few signs that the asset sale is on schedule, says Fadel Gheit, an analyst at Oppenheimer & Co. "The company is keenly aware that the market is looking for news on the progress they are making in their asset sale," he said.

Conoco still has another year to complete the plan, but uncertainty about the pace of the second phase of the asset sales is starting to take a toll on its stock. Year to date, Conoco's shares are up 9.7%, underperforming the stock of Exxon and Chevron, which are up 10.6% and 12.1%, respectively.

Some analysts believe ConocoPhillips would have to make a significant announcement by the end of July, when it will report second-quarter earnings, if it wants to maintain momentum with investors; worries will only increase the longer no announcement is made. "If they don't announce something in the third quarter, the concern could rise," says Allen Good, an analyst at Morningstar.

Others believe that it's good for shareholders that the company is taking its time to make concrete sales plans. "With asset sales, it is rarely a good idea to rush the process," says Pavel Molchanov, an analyst at Raymond James. "A lower, more deliberate process can allow the seller to maximize value for the asset."

Conoco spokesman John Roper said the company doesn't "discuss potential acquisitions and dispositions prior to their closings. While we expect additional announcements this year, we have none to discuss at present."

Conoco has made a few medium-sized deals this year, including an April sale of a 15% stake in the planned Australia Pacific LNG Project in Queensland for $1.5 billion and the sales of its Seaway Products Pipeline in South Texas for an undisclosded price. But the company needs to make a couple of large-scale assets sale announcements to let the market know that it isn't behind schedule, Gheit said.

Conoco could shed assets in Australia and Kazakhstan, say UBS analysts who in June met with ConocoPhillips Chief Financial Officer Jeff Sheets. Those could include new stakes in Conoco's Australian liquefied natural gas venture with Origin Energy Ltd. (ORG.AU), and its 8.4% interest in the Kashagan oilfield in Kazakhstan, UBS said. Conoco's partner in the field, Exxon Mobil, received a $5 billion bid for its identical stake in Kashagan, according to the Wall Street Journal.

Alan Hirshberg, Conoco's Senior Vice President of Planning and Strategy, said in a presentation at a May energy conference that the company is also looking at leaving countries where it has a small presence, and selling some marginal refining assets like the Wilhelmshaven refinery in Germany. Hirshberg said Conoco is also considering turning refineries into product terminals and striking joint venture agreements, exchanging refining capacity for oil and gas assets.

Conoco would most likely want to pull out of the East Coast market, where fuel imports into New York Harbor make price competition extremely difficult, UBS said. The company has two major refineries in the area, the 238,000 barrel-a-day Bayway refinery in Linden, New Jersey; and the 185,000 barrel-a-day refinery in Trainer, Penn. Valero Energy Corp. (VLO) sold two of its refineries in that region in 2010 to private equity firm PBF Energy. PBF declined to say whether it was interested in the Conoco refineries in the area.


Copyright (c) 2011 Dow Jones & Company, Inc.

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U.S. Energy Enters Second Eagle Ford Agreement

- U.S. Energy Enters Second Eagle Ford Agreement

Thursday, June 30, 2011
U.S. Energy Corp.

U.S. Energy Corp. has entered into a second participation agreement with Crimson Exploration Inc. to acquire an interest in an Eagle Ford oil prospect and associated leases located in Zavala and Dimmit Counties, Texas.

Under the terms of the agreement, USE will acquire 30% of Crimson's working interest (~23% net revenue interest) in approximately 7,186 acres (2,156 acres net to USE). All of the leases are currently held by production and produce approximately 200 gross BOE/D (46 net BOE/D) from the Austin Chalk formation. It is estimated that under current spacing there is a potential for up to 44 gross (13.5 net) drilling locations on the acreage. All drilling and leasing on this prospect will be on a heads up basis. This acquisition brings USE's total acreage in the Eagle Ford to approximately 11,861 gross acres (3,558.5 acres net to USE) with the potential for up to 70 gross and 21.3 net Eagle Ford drilling locations. The prospect also has additional Austin Chalk and Buda formation production potential. For competitive reasons, the financial terms of the transaction will not be disclosed at this time.

The prospect is in the Eagle Ford shale oil window in Zavala and Dimmit Counties, Texas. Crimson will operate and tentatively plans to spud the first horizontal well in the prospect in October 2011. The well is planned to be drilled to a total drilling depth of 12,500 feet (~6,000 ft. vertical, ~6,500 ft. horizontal), and to be completed with 15 to 20 fracture stimulation stages.

"We are pleased to announce another oil venture with Crimson Exploration. These assets complement our existing Leona River acreage and provide both U.S. Energy and Crimson with a potential multi-year drilling inventory in the Eagle Ford oil window," stated Keith Larsen, CEO of U.S. Energy Corp. "We look forward to drilling our first well on this acreage in the near future and to continue seeking additional Eagle Ford opportunities with Crimson as well," he added.

About U.S. Energy Corp.

U.S. Energy Corp. is a natural resource exploration and development company with a primary focus on the exploration and development of its oil and gas assets. The Company also owns the Mount Emmons molybdenum deposit located in west central Colorado. The Company is headquartered in Riverton, Wyoming and trades on the NASDAQ Capital Market under the symbol "USEG."

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General Motors Says Cars Will Reach Highest Percent of Chevy Sales Since 1991

- General Motors Says Cars Will Reach Highest Percent of Chevy Sales Since 1991



Jun 30, 2011

General Motors (NYSE:GM) said Chevrolet's total sales are expected to increase 15% during the first half of 2011, driven primarily by cars, which are approaching their highest level of Chevy sales in 20 years.

Chevy car sales are projected to be up 23% for the first six months of the year when June sales are reported on Friday.

Truck utilities, and crossovers are expected to be up 9% over the first half of 2010.

Chevy cars have outsold sales of trucks, crossovers, and utilities in the months of April, May, and June this year, and are expected to represent 47% of total sales for the 6 month period. That's the most since 1991, when cars were 52% of all sales.

Alan Batey, U.S. vice president, Chevrolet Sales and Service said, "Chevrolet has always been known for building great trucks. Today, we are in the middle of transforming the brand with a strong lineup of cars that match the appeal of our trucks and crossovers.

Shares of General Motors are trading up 0.2% at $30.36.

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ERHC Awarded Chad Oil Exploration Blocks

- ERHC Awarded Chad Oil Exploration Blocks

Thursday, June 30, 2011
ERHC Energy

ERHC Energy Inc. today announced that the government of the Republic of Chad has formally awarded the company three oil blocks for exploration and development. The company expects to announce a concluded production sharing contract in respect of the blocks as early as next week. ERHC's financial officer, Mr. Sylvan Odobulu, has led a team of legal, technical and financial experts in negotiating the production sharing contract on behalf of ERHC.

The specific blocks in the award are Block BDS 2008, Manga and Chari-Ouest Block 3. The award of these blocks follows several months of negotiations between ERHC and the government of Chad.

"This is another significant milestone in the remarkable history of ERHC," said ERHC CEO Peter Ntephe. "Among the independents operating in Africa, we are already one of the largest holders of exploration acreages in terms of number and size of blocks. This new award increases our holding considerably while also strategically diversifying our portfolio beyond the Gulf of Guinea."

The West African nation of Chad is one of sub-Saharan Africa's significant crude oil producers. It shares borders with Cameroun and Sudan, which both produce oil, and Nigeria which is Africa's largest oil producer. Chad has proven oil reserves of 1.5 billion barrels with studies establishing the prospect of more discoveries.

Apart from the new award, ERHC currently holds working interests in six Blocks in the Nigeria-São Tomé & Príncipe Joint Development Zone (JDZ). ERHC also holds 100% of Blocks 4 and 11 of the São Tomé & Príncipe Exclusive Economic Zone (EEZ) with an option to acquire up to 15 percent working interests in two other EEZ Blocks.

ERHC management will host a live online chat at 5:00 p.m. Central Time Wednesday, July 6, 2011. CEO Peter Ntephe will respond to questions posted live at www.erhc.com/chat. Those unable to participate live will be able to review the online interaction afterward.

About ERHC Energy

ERHC Energy Inc. is a Houston-based independent oil and gas company focused on growth through high impact exploration in Africa, including within the highly prospective Gulf of Guinea. ERHC is committed to creating and delivering significant value for its shareholders, investors and employees, and to sustainable and profitable growth through risk balanced smart exploration, cost efficient development and high margin production. For more information, visit www.erhc.com.

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3D Training Simulator Delivered for Pazflor FPSO

- 3D Training Simulator Delivered for Pazflor FPSO

Thursday, June 30, 2011
VRcontext International

VRcontext International was recently awarded a milestone contract with TOTAL E&P Angola to deliver a 3D "Immersive Training Simulator" (ITS) for the Pazflor FPSO, to be anchored on one of TOTAL's largest offshore producing assets.

Walkinside allowed the TOTAL Training Room Instructors to create customized collaborative scenarios that were later used to develop improved communication skills of the trainees and to test their execution performance.

Walkinside ITS' Scenario Editor helped TOTAL E&P Angola simulate real-life workflow situations using different training mode options, with diverse immersive scenarios specifically designed for the planning, the scheduling and the execution of Standard Operating Procedures. The implementation of these scenarios can be timed and stored for subsequent operators' assessment, improvement tracking and playback for refresher courses or novice training, making learning more effective, fun and easy!

"The objective for the Field Operators was to associate the Tags of equipment, instruments such as pressure gauges, valves, safety valves on one hand and piping lay out and the main machines such as pumps on the other hand, with their location on site for various scenarios including HSE (Health, Safety Environmental) procedures, Black Start procedures and Routine operations," said Lionel Ramat from the Field Operations group of the Pazflor project for TOTAL E&P Angola.

He added: "Even though it is still early to quantify the return on investment, the ease of the takeover by the trainees and their feedback were very positive. Also the value of the ITS, as a contextual training environment, was confirmed by experienced operational personnel."

Thanks to the Walkinside ITS, TOTAL can now rely on faithful, photo-realistic 3D representations of its new producing assets for the training of all field personnel. The 3D Virtual Reality models can be automatically created from the existing 3D Engineering CAD drawings using the smart Walkinside converter capabilities. The 3D models are subsequently enhanced to include interactive items that can be manually operated during the training sessions, such as valves, pumps, fire-extinguishers, etc. Trainees are therefore able to use these live-action items in training scenarios.

This breakthrough technology helps accelerate both safe start-up operation and time to first oil of all new important assets, significantly improving Return on Investment for major capital projects.

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Exxon Ordered to Pay $495 Million For 2006 Gas Leak

- Exxon Ordered to Pay $495 Million For 2006 Gas Leak



Jun 30, 2011

A jury in Baltimore County has ordered Exxon Mobil Corp (NYSE:XOM) to pay $495 million in compensatory damages related to a gas station leak in 2006, the Baltimore Sun reported today.

That amount doesn't include the punitive awards for 160 affected businesses and families, which could total over $2.5 billion, after a lawyer for the group asked the six-member civil jury to consider a punitive damage award of three to five times the compensatory damages.

The 2006 leak spilled about 26,000 gallons of gasoline into the groundwater in Jacksonville, Florida, which has no public water or sewer service and depends on private wells for drinking water.

Exxon's lawyers said the company has spent $46 million on cleanup.

Shares of Exxon Mobil are trading up 0.8% at $80.89.

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ABS, China Classification Society Meet on Deepwater China

- ABS, China Classification Society Meet on Deepwater China

Thursday, June 30, 2011
ABS

The growing importance of deepwater exploration and production developments offshore China led classification societies ABS and CCS (China Classification Society) to conduct a joint “Deepsea Developments in the China Offshore Industry” meeting on 17 June 2011. The meeting, which was held in Beijing, brought together leading offshore industry professionals to discuss a wide range of energy development issues.

More than 100 representatives from the Chinese government, shipbuilders, designers, research institutes, energy corporations and universities attended. Topics included a discussion of the global energy market outlook from research firm Infield Systems, the challenges and latest solutions proposed for deepwater development from offshore solutions technology leader Horton Wison and a look at risk-based operations and new approaches toward minimizing risk with deepwater exploration from global engineering, procurement and construction firm Worley Parsons.

ABS discussed the regulatory changes resulting from the Macondo incident in the Gulf of Mexico and the broader impact on regulatory schemes worldwide while CCS highlighted the impact of deepsea development on the technology standards for the region’s offshore industry.

“This industry meeting illustrates the cooperative spirit between ABS and CCS,” says ABS CEO and President Christopher J. Wiernicki. “Over the past decade, China has significantly grown in its importance to both the maritime and offshore industries. With our experience and leadership in setting standards for the offshore industry, ABS can bring valuable assistance to the region as it faces new exploration and production challenges.”

It is this experience that led to ABS’ and CCS’ joint involvement on the massive Liwan 3-1 gas field development in the South China Sea. The Liwan 3-1 development is China’s largest offshore natural gas discovery to date and will be the first deepwater development project.

It is widely known that China has begun to invest heavily in deepsea exploration as the country’s economic growth demands more energy resources. “We are helping to support our country’s efforts by providing the technical guidance necessary for safe and efficient exploration,” said Li Kejun, CCS Chairman and President. “This industry meeting shows our commitment to helping achieve deepsea technological advancements in the region.”

Also in attendance was President of the China Association of the National Shipbuilding Industry (CANSI) Guangqin Zhang. While China’s shipbuilding industry has been challenged by the global economic recession, the accomplishments of China’s shipbuilding industry are well known, as is its rapid diversification into the gas and offshore sectors. “Meetings such as these contribute to the intellectual discussion and allow for the introduction of new offshore technologies in our shipyards, new technologies that will position the region for successful deepsea exploration,” Zhang said.

Calling it a new era in deepwater development for China, Vice Chief Engineer for China National Offshore Oil Corporation (CNOOC) Hengyi Zeng concluded the meeting by saying “we appreciate both class societies and the years of support and cooperation they have provided to expand China’s offshore development.”

In November 2010, ABS and CCS strengthened their collaborative efforts, formally established in 1993, by entering into a new Cooperative Agreement with offshore as a key area of focus for the two classification societies.

As a further demonstration of ABS’ long-term commitment to the Greater China region, in May 2011, ABS established the ABS China Offshore Technology Center (COTC) in partnership with Shanghai Jiaotong University (SJTU). While the research efforts will support development activities in the Greater China region, applied research will also be conducted on a wide range of energy development issues. The COTC is ABS’ fourth offshore-focused research center, which are strategically positioned around the world to support clients’ activities.

The ABS Greater China Division has more than 500 employees operating from more than 30 offices across mainland China, Hong Kong and Taiwan.

Founded in 1862, ABS is a leading international classification society devoted to promoting the security of life, property and the marine environment through the development and verification of standards for the design, construction and operational maintenance of marine-related facilities.

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NZOG Chief Executive To Step Down

- NZOG Chief Executive To Step Down

Thursday, June 30, 2011
NZOG

NZOG (New Zealand Oil & Gas Ltd) advises that Chief Executive and Managing Director David Salisbury has given six months notice of his resignation.

David Salisbury joined NZOG in April 2007. He is resigning for personal reasons and his last day with the company will be 29 December 2011.

NZOG Chairman Tony Radford said "the Board is disappointed to be losing someone of David's calibre. David has made a tremendous contribution during a period of growth for our business that has included many significant challenges.

"David has brought great enthusiasm, rigour, discipline and insight to our business strategy. I know he is keen to conclude a number of important initiatives over the coming months."

Tony Radford said the six month notice period provides time to ensure a smooth transition and a process will commence shortly to recruit a replacement Chief Executive.

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Ford Motor Marks Completion of $500 Million South African Investment

- Ford Motor Marks Completion of $500 Million South African Investment



Jun 30, 2011

Ford Motor Co (NYSE:F) marked the completion this week of its $500 million investment in its South African operations.

The company has spent the last two years expanding its Struandale engine plant in Port Elizabeth, increasing its capacity to 75,000 diesels and 220,000 engine component kits, and its Silverton Assembly Plant in Pretoria to produce the all-new ford Ranger for export.

The Ranger will be exported from South Africa to 148 markets around the world. To meet that demand, capacity at the Silverton Plant was increased to 110,000 of the pickups annually.

Jeff Nemeth, president of Ford Motor Co. of Southern Africa, said in an interview Tuesday with the Detroit News that "somewhere down the pike, Africa will hit that growth curve as well,"

Ford currently has about 10% market share in South Africa, behind Toyota, Volkswagen, and General Motors, Nemeth said. The company employs 2,900 workers in the country and has 127 dealers.

Shares of Ford Motor are trading up 3.84% at $13.94.

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First Solar Wins $4.5 Billion in Conditional Loan Guarantees from the DoE

- First Solar Wins $4.5 Billion in Conditional Loan Guarantees from the DoE



Jun 30, 2011

First Solar Inc (NASDAQ:FSLR) is trading up big today after it was reported that the world's largest manufacturer of thin-film solar modules had won $4.5 billion in conditional loan guarantees from the Department of Energy for three California projects.

The company's Topaz and Desert Sunlight projects, which will have 550 megawatts of capacity each, and its 230-megawatt Solar Ranch project, were each offered low-cost financing needed for construction to commence, the agency said today in an e-mailed statement.

The agency must distribute all of the funds authorized for the loan guarantee program before it expires at the end of September. The agency has offered conditional loans or loan guarantees for 40 clean energy products totaling $38 billion, including $16 billion for solar energy.

First Solar said the construction projects approved today will add 1,400 jobs and that all of the 20 million plus cadmium telluride glass panels used in the projects will be manufactured at its plants in Ohio and in Arizona.

Shares of First Solar are trading up 6.3% at $137.57.

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Alaska To Offer Nearly 15 Million Acres for Oil, Gas Drilling Leases

- Alaska To Offer Nearly 15 Million Acres for Oil, Gas Drilling Leases

Thursday, June 30, 2011
Dow Jones Newswires
WASHINGTON
by Tennille Tracy

The state of Alaska plans to offer nearly 15 million acres of state-owned land and waters for oil-drilling leases, saying the areas contain billions of barrels of oil.

The lease sale will be held Oct. 26, 2011, the state said Thursday.

The sale will involve 2 million acres in the Beaufort Sea, 5.1 million acres on the North Slope and 7.6 million acres in the North Slope foothills.

Roughly 3 billion to 6 billion barrels of undiscovered oil exists in the state- and Alaska Native-owned lands between the National Petroleum Reserve and Arctic National Wildlife Refuge, the state said.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Tower Updates Namibia Prospect Potential

- Tower Updates Namibia Prospect Potential

Thursday, June 30, 2011
Tower Resources

Tower Resources plc has provided details of the outcome of a second detailed technical and economic evaluation of the 0010 Licence, located offshore Namibia. Tower has a 15% working interest in the Licence and is fully carried financially by Arcadia Expro Namibia (PTY) Ltd (“Arcadia”) through an initial exploration well and a contingent second well.

The Tower Board has now received an updated Competent Persons Report, compiled by Oilfield International Limited (OIL), over Licence 0010. The CPR update follows the interpretation of the high quality 3D seismic data acquired in 2010 over the primary drilling target "Delta". OIL conducted a detailed review of the “Delta” structure and calculated the Expected Monetary Values (EMV’s) of the prospects and leads identified. OIL also updated the EMV of two other structures, ”Alpha” and “Gamma” which were the subject of the previously reported June 2010 CPR on Licence 0010.

The main conclusions of the CPR are summarised below.

The Delta Maastrichtian prospect remains the principal target for an exploration well. Best estimate prospective resources (50% probability) have been estimated as follows:

In the event of volatile oil, gross recoverable resources amount to 2.2 billion barrels and 3.4 trillion scft of natural gas. Net figures for Tower are 317 million barrels and 484 billion scft of natural gas.

In the event of gas condensate, gross recoverable resources amount to 267 million barrels and 8.1 trillion scft of natural gas. Net figures for Tower are 38 million barrels and 1.15 trillion scft natural gas.

In the event of dry gas, gross recoverable resources amount to 20 million barrels and 8.2 trillion scft natural gas. Net figures for Tower are 3 million barrels and 1.17 trillion scft natural gas.

Gross un-risked prospective recoverable resources from the Delta Palaeocene supplementary prospect and the other Licence wide supplementary leads at the 50% probability level amounts to about 10 billion barrels and 15 trillion scft of gas for the volatile oil cases and 35 trillion scft in the case of predominantly gas.

OIL has calculated for the Licence net risked prospective resources to Tower as 150 million barrels oil and 719 billion scft natural gas (together ca 270 million barrels oil equivalent). More importantly, the corresponding numbers for the target Delta Maastrichtian prospect alone are 55 million barrels oil and 257 billion scft of natural gas (together ca 98 million barrels oil equivalent).

OIL has calculated an EMV for the prospective resources of Tower and, in just the Delta Maastrichtian prospect, an EMV of US$744 million has been calculated. The Board believe there is also a very high upside in the other Delta horizons.

OIL has determined that there are now two prospects at Delta. The Maastrichtian prospect has been confirmed and the Palaeocene lead has been upgraded to a prospect. There are now three supplementary leads within the Delta structure: the Upper Campanian; the Campanian “wedge”; and at a deeper Albian horizon. The Alpha Palaeocene and Gamma Palaeocene leads are separate structures and would be the subject of further 3-D seismic before drilling.

OIL has used the seismic data, the two Namibian wells on the block and regional data to evaluate the likelihood that the reservoirs would be predominantly light oil-bearing; gas condensate-bearing or dry gas-bearing. For Delta, OIL concludes probabilities of 50%, 40%; and 10% respectively. The Gamma and Alpha structures are rated 45%, 44% and 11% respectively.

OIL have engineered the most likely development approach and associated capital cost, operating cost and production profiles for each case together with currently traded oil and gas prices (gas into Europe), escalated to 2020 first production and beyond. They have calculated NPV 10% after-tax values on that basis for each case. Each has been valued on an independent standalone basis to avoid trying to determine economies of shared facilities.

The final step has been to estimate a geological chance of success (“GCOS”) for each structure. DeltaM has been assessed as having a 40% GCOS and DeltaP a 24% GCOS. The leads have a GCOS ranging between 10 and 20%. An economic confidence factor has then been applied to the geological COS’s to calculate the economic COS “ECOS” which is used in the determination of risked reserves and the EMV calculations. DeltaM has a 31% ECOS; DeltaP a 19% ECOS; and the leads between 8% and 12%.

The OIL review team included two geophysicists, a geologist and a petroleum engineer having a total of 125 years of experience as technical specialists in the oil and gas industry. In particular, two of them have considerable experience of South America where South Atlantic exploration is most advanced. The OIL assessment has been undertaken in compliance with the SPE Petroleum Resources Management System (SPE-PRMS). OIL has had access to all available data from the Licence and a wide variety of regional technical information. They reviewed the work undertaken by Arcadia and specialist consultants and where relevant, undertook technical analysis of their own to accommodate their own wide and relevant experience, particularly of the Brazilian basins, and any publicly available information. Interaction with Arcadia took place to understand their technical approach but the conclusions drawn are entirely those of OIL.

The first exploration well, currently anticipated at the end of Q1 2012, will test as many as five zones of interest including two prospects and three leads targeting a “best estimate” resource potential of an estimated 6-12 billion barrels of recoverable oil equivalent (gross) depending on whether the fluid is predominantly gas or oil respectively.

Peter Kingston, Chairman of Tower Resources plc, commented: “The comprehensive independent reassessment of the prospectivity of Namibia Licence 0010 has confirmed its potential as a world class group of oil and gas prospects. It is particularly encouraging that the 3-D seismic survey has substantially increased the reserve potential of the Delta structure and has led to an improvement in the chance of success with the first well. This well alone, still on schedule for the end of Q1 2012, will test a resource potential of significantly more than 5 billion barrels of oil equivalent.”

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Energy Law Firm Expands Attorney Roster

- Energy Law Firm Expands Attorney Roster

Thursday, June 30, 2011
Burleson LLP

With the addition of 25 attorneys to its offices in Houston, San Antonio, and Pittsburgh, Burleson LLP has broadened its regional and national footprint, further strengthening its ability to provide the widest range of legal services to companies and financial institutions in the oil and gas industry.

“Energy work has always been a major priority for our firm, but the surge of activity in shale plays has been critical in shaping our overall strategic direction,” said Rick Burleson, managing partner. “Our focus on growth – in terms of capabilities, attorneys, and physical office space – has extended our reach significantly, enabling us to work on some of the largest and most important transactions happening in the industry.”

The latest wave of expansion includes:

San Antonio. The firm added eight new attorneys and two partners to its San Antonio location to support litigation and oil and gas title matters for companies operating in the Eagle Ford Shale. The office, which now includes 17 lawyers, has moved to the Weston Center on the River Walk, where nearly 10,000 square feet of space has been leased on the seventh floor of the building located at 112 East Pecan St.

Pittsburgh. Eight lawyers and a partner have joined the Pittsburgh office, reinforcing the firm’s transactional and litigation practice areas for companies with interests in the Marcellus and Utica Shale. Since opening in September 2009, the location has grown from four to 26 attorneys.

Houston. Six new lawyers have been hired in Houston, where Burleson recently moved into new offices in the downtown Pennzoil Building, virtually doubling its square footage. The Houston location now occupies 20,407 square feet on the 11th floor of the building’s North Tower at 700 Milam.

With this growth, the firm’s portfolio of work in shale formations now includes clients in the Marcellus, Bakken, Barnett, Eagle Ford, Fayetteville, Haynesville, Utica, and Woodford plays, as well as those with a presence in the Permian Basin.

About Burleson LLP
Burleson LLP has earned a reputation as the energy law firm the energy industry goes to. It has grown significantly in recent years with over 85 attorneys and offices in Houston, San Antonio, and Pittsburgh, Pennsylvania. Serving clients in the upstream and midstream segments, the firm provides counsel to oil and gas producers, transportation companies, storage and processing businesses, and energy service providers. Burleson’s far-reaching experience includes mergers, acquisitions, and divestitures; finance; private equity; venture capital; securities; corporate governance and compliance; patents and intellectual property; title review; real estate; litigation; and bankruptcy/restructuring, land use, and environmental law. For further information, visit www.burlesonllp.com.

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Poll: More Domestic U.S. Gas, Oil Development Needed

- Poll: More Domestic U.S. Gas, Oil Development Needed

Thursday, June 30, 2011
Rasmussen Reports

Most voters continue to feel America needs to do more to develop domestic gas and oil resources. They also still give the edge to finding new sources of oil over reducing gas and oil consumption.

The latest Rasmussen Reports national telephone survey of Likely Voters shows that just 19% believe the United States does enough to develop its own gas and oil resources. Seventy-five percent (75%) do not think the country is doing enough in this area. These findings are virtually unchanged from late February.

Forty-nine percent (49%) of voters say, when given the choice, that increasing the supply of oil by finding new sources is a better energy policy than reducing demand by cutting gas and oil consumption. Forty-two percent (42%) believe reducing the demand for oil is the better energy policy.

The gap between the two was a bit wider in June 2008, when 39% said reducing demand was more important and 47% preferred increasing the supply. But a majority of voters for years have said finding new sources of energy is more important than reducing the amount of energy Americans consume. At the same time, most voters believe investment in renewable energy sources like solar wind is the best long-term solution the nation’s energy issue.

The survey of 1,000 Likely Voters U.S. Voters was conducted on June 26-27, 2011 by Rasmussen Reports. The margin of sampling error is +/- 3 percentage points with a 95% level of confidence. Field work for all Rasmussen Reports surveys is conducted by Pulse Opinion Research, LLC.

Republicans and voters not affiliated with either party believe more strongly than Democrats that America is not doing enough to develop its own gas and oil resources. But sizable majorities across all demographic categories share this belief.

Most Democrats (59%) favor reducing demand for oil over increasing the supply through development of new sources. Sixty-nine percent (69%) of Republicans think increasing the supply is the better policy to follow. Unaffiliated voters are evenly divided on this question. Fifty-three percent (53%) of Political Class voters say reducing the demand for oil is the better energy policy, while 52% of Mainstream prefer the opposite approach.

This past April, one year after the devastating Deepwater Horizon oil spill in the Gulf of Mexico, most voters (59%) were again supportive of deepwater drilling. Two-out-of-three voters (67%) support offshore drilling. Fifty-five percent (55%) oppose President Obama's seven-year ban on offshore oil and gas drilling in part of the Gulf of Mexico and along the East Coast.

One-in-two Americans are ready to drill for oil in the Arctic National Wildlife Refuge (ANWR) to lessen the country’s dependence on foreign oil. However, only 38% think the United States is even somewhat likely to reduce its dependence on foreign oil by the year 2025, a goal set by the president in an energy plan earlier this year.

Americans are no more enthusiastic than they were a year ago about buying a car that runs on alternative fuel.

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Kodiak Completes Williston Basin Acquisition

- Kodiak Completes Williston Basin Acquisition

Thursday, June 30, 2011
Kodiak Oil and Gas Corp.

Kodiak Oil & Gas Corp. today announces the June 30, 2011 closing of the previously announced acquisition of Williston Basin oil and gas producing properties and undeveloped leasehold.

Included in the transaction are approximately 25,000 net mineral acres and production of approximately 200 net barrels of oil equivalent per day (BOE/d). The total purchase price for the leasehold interests and associated assets is $85.5 million and is comprised of $71.5 million in cash and the issuance to the Seller of 2.5 million shares of Kodiak common stock. Kodiak funded the transaction through cash balances and borrowings under credit facilities including its reserve-based revolving line of credit.

As part of the transaction, Kodiak entered into a contract for a new build drilling rig that was previously contracted to the Seller. The new build drilling rig is scheduled for completion in September 2011.

Including today's acquisition, Kodiak's acreage position in the Williston Basin now approximates 100,000 net acres.

The shares of common stock of Kodiak issuable under the acquisition agreement with the Seller have not been registered under the U.S. Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States absent registration thereunder or an applicable exemption from such registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities.

Operations Update

Kodiak has begun completion operations on its two-well pad in the Koala project area in McKenzie County, N.D. The Company anticipates completing both wells during early July 2011 and plans to simultaneously flow back the wells and turn them to production facilities and gas pipeline infrastructure which services the area. Kodiak operates the two-well pad with a 52.5% working interest and a 42.5% net revenue interest.

Following this two well pad, completions operations will move to Dunn County, N.D. where a four-well pad is being prepared for fracture stimulation operations in late July and early August. Oil, gas and water disposal pipelines have been constructed to these wells. In addition, four gross (2 net) wells have been drilled on Kodiak's non-operated lands in Dunn County and completion operations are underway of the first of those wells. Operated and non-operated completion procedures are expected to be continuous through the third quarter.

Kodiak is currently drilling ahead on four wells with two rigs running in McKenzie County, N.D. and two rigs running in Dunn County, N.D. Each of these rigs is drilling on multi-well pads.


"We are pleased to have closed on another high-quality Williston Basin acquisition," said Kodiak's Chairman and CEO Lynn A. Peterson. "The new assets provide Kodiak and its shareholders a meaningful inventory of largely de-risked additional drillable locations for future growth. By expanding our presence in the Basin, we can further improve our field-level efficiencies as we continue to work to improve per-well economics and reduced lease operating expense.

"Vastly improved weather and much better surface conditions are returning to the Williston Basin. Our fracture stimulation operations are underway at Koala without weather or road condition impediments. Our 2011 program is largely on schedule and we expect to see significant changes in our production volumes as we complete several wells in the coming weeks. "

About Kodiak Oil & Gas Corp.

Denver-based Kodiak Oil & Gas Corp. is an independent energy exploration and development company focused on exploring for, developing and producing oil and natural gas in the Williston and Green River Basins in the U.S. Rocky Mountains. For further information, please visit www.kodiakog.com. The Company's common shares are listed for trading on the NYSE Amex exchange under the symbol: "KOG."

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Seabird to Acquire Seismic in Bonaparte Basin

- Seabird to Acquire Seismic in Bonaparte Basin

Thursday, June 30, 2011
by Rigzone Staff

Octanex N.L. subsidiary Goldsborough Energy Pty Ltd. has awarded Seabird Exploration FZ LLC a contract for the acquisition of 3D and 2D marine seismic data within the areas of WA-422-P, WA-420-P, WA-407-P and WA-421-P, which lie offshore the northwest coast of Western Australia.

Octanex reports that no less than 600 sq km of 3D seismic and approximately 1,000 kms of 2D seismic will be acquired under the contract. The Octanex Group has now substantially completed the reprocessing of more than 11,000 line kilometers of good quality 2D seismic acquired by previous operators over its suite of South Bonaparte permits.

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McDermott Names New Chief Operating Officer

- McDermott Names New Chief Operating Officer

Thursday, June 30, 2011
McDermott International

McDermott International, Inc. announced today that John T. ("Jack") McCormack has been appointed Executive Vice President, Chief Operating Officer of McDermott International, Inc. effective June 30, 2011.

"Jack has been instrumental in leading our Asia Pacific and Middle East operations to exceptional performance," said Stephen M. Johnson, McDermott's Chairman, President and Chief Executive Officer. "Jack has been with McDermott since 2003 and has extensive experience in the capture and execution of major engineering and construction projects. His performance and background make him uniquely qualified for this position."

McCormack will succeed McDermott's current Chief Operating Officer John T. Nesser who previously indicated his intention to retire from McDermott in 2011.

"John Nesser's service to McDermott's employees, customers and shareholders has been nothing less than extraordinary. In John's nearly 13 years of service he has led both the Legal & Administrative functions as well as served as our Chief Operating Officer. He has created significant value for shareholders in each. I know of few executives in our industry that have the business knowledge, intellectual capability and personal integrity that John possesses. I wish John every success in his retirement," said Johnson.

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Nova Scotia Calls For Deepwater Bids

- Nova Scotia Calls For Deepwater Bids

Thursday, June 30, 2011
CNSOPB

The Canada - Nova Scotia Offshore Petroleum Board (CNSOPB) has issued Call for Bids NS11-1. The Call consists of eight deep water parcels offshore Nova Scotia, some of which were nominated by industry. Bids must be received by Tuesday, January 10, 2012, 4:00 p.m. Atlantic Time. The Board will only accept bids from companies that have experience in the drilling of exploration wells in water depths greater than 800 meters in the past ten years.

“This Call for Bids includes deepwater parcels located in a largely unexplored area of Nova Scotia’s offshore,” says Stuart Pinks, Board CEO. “The Offshore Energy Technical Research Association’s (OETR) Play Fairway Analysis provides strong evidence that this area could have significant oil potential. The parcels are located in a geological region that contains many large undrilled structures that could trap oil or gas.”

The Board has made detailed geoscientific assessments and regulatory information associated with the parcels available on its website.

The successful bidder(s) will be awarded an Exploration Licence (EL) subject to federal and provincial Ministerial approval.

The CNSOPB is preparing a Strategic Environmental Assessment (SEA) for exploration activities in areas identified in this Call for Bids which will include two public comment periods; one on the scope of the assessment and the other public comment period on the draft SEA report. The SEA will identify any environmental issues that a successful bidder would need to address when performing a project-specific environmental assessment which is required before any activity can begin.

In addition, the public is invited to submit written comments to the Board on the lands included in this Call for Bids. Written submissions must be received by Tuesday, December 20, 2011, 4:00 p.m. Atlantic Time. Such submissions will be considered by the Board before an Exploration Licence is issued.

Written submissions from the public should be sent to:

Director, Resources & Rights, Canada - Nova Scotia Offshore Petroleum Board
1791 Barrington Street
6th Floor, TD Centre
Halifax, Nova Scotia
B3J 3K9
or via e-mail at callforbids@cnsopb.ns.ca.

Further information about the Call for Bids can be found on the Board’s web site at www.cnsopb.ns.ca.

The Canada-Nova Scotia Offshore Petroleum Board is the independent joint agency of the Governments of Canada and Nova Scotia responsible for the regulation of petroleum activities and resources offshore Nova Scotia.

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Abraxas Updates U.S., Canadian Operations

- Abraxas Updates U.S., Canadian Operations

Thursday, June 30, 2011
Abraxas Petroleum Corporation

Abraxas Petroleum Corporation today provided an operational update.

Rocky Mountain – North Dakota / Montana

In McKenzie County, North Dakota, Abraxas drilled the Stenehjem 27-34 1H to a total measured depth of 16,504 feet, including a 5,965 foot lateral in the middle Bakken formation, and completed the well with a 17-stage fracture stimulation. The well was recently placed on production, including gas (and natural gas liquids) directly into the sales line, and is currently in the early stages of cleaning up and producing at rates in excess of 800 barrels of oil equivalent per day, which is comprised of approximately 600 barrels of oil, 100 barrels of natural gas liquids and 700 Mcf of residue gas. We anticipate providing initial rates (after recovery of frac fluid) when 30-day rates are also available. Abraxas owns an approximate 79% working interest in this well.

In various counties in North Dakota and Montana, fourteen non-operated horizontal wells, targeting the Bakken or Three Forks formation, in which Abraxas owns a working interest are currently in progress or recently placed on-line. Four gross (0.15 net) wells went on production in mid-June, three gross (0.15 net) wells have been fracture stimulated and are currently cleaning up, three gross (0.50 net) wells are waiting on completion and four gross (0.07 net) wells are waiting on a drilling rig. Since January 2010, Abraxas has elected to participate in 19 gross (1.02 net) non-operated wells in the Bakken / Three Forks play.

In McKenzie County, North Dakota, two gross (0.11 net) non-operated horizontal wells targeting the Mission Canyon have been drilled and completed and are currently waiting on production facilities.

Abraxas anticipates being in a position in the near future to discuss long-term service availability to allow a multi-year continuous development plan on its Bakken / Three Forks acreage.

Rocky Mountain - Wyoming

In Campbell and Niobrara Counties, Wyoming, a two well oil development program is scheduled to begin this fall. One of these horizontal wells will target the Niobrara formation and one will target the Turner formation. Abraxas owns a 100% working interest in each of these wells.

Rocky Mountain – Alberta Basin Bakken

Abraxas has been approached by a number of companies in the industry with respect to a joint venture or similar arrangement; however, Abraxas has elected to wait for more definitive results from wells drilled to-date in the play before planning a course of action. Abraxas’ leases have a primary term of 5-10 years providing plenty of time to evaluate the results of other operators in the play.

South Texas – Eagle Ford

Abraxas currently owns a 50% equity interest in Blue Eagle, which is a joint venture between Abraxas and Rock Oil Company, LLC.

In DeWitt County, Texas, Blue Eagle’s first well, the T-Bird 1H, continues to outperform expectations and is currently producing approximately 1,100 barrels of oil equivalent per day, which is comprised of approximately 200 barrels of condensate, 340 barrels of natural gas liquids and 3.2 MMcf of residue gas. The well has produced approximately 200,000 barrels of oil equivalent during its first 150 days on production. Blue Eagle owns a 100% working interest in this well.

In DeWitt County, Texas, Blue Eagle participated in a non-operated horizontal well with its 43.9% working interest. The well, the Matejek Gas Unit 1, was drilled to a total measured depth of approximately 17,865 feet, including a 3,600 foot lateral, and recently completed with a 14-stage fracture stimulation. The well flow tested at restricted rates in excess of 780 barrels of oil equivalent per day through a choke while recovering frac fluid. The well is currently shut-in waiting on pipeline hookup.

In Atascosa County, Texas, the Grass Farms 1H should spud this week as the rig is currently rigging up. This well is located in the oil window of the play and will be drilled to a total measured depth of approximately 12,500 feet, including a 5,000 foot lateral. A fracture stimulation date has been secured for this well in August. Blue Eagle owns a 100% working interest in this well.

South Texas – Portilla

In San Patricio County, Texas, seven wells have been drilled and completed to-date in the multi-well in-fill drilling program and one additional well was recently recompleted. Three of the new wells targeted the dual objectives of the 7,400 and 8,100 foot Frio sands and four targeted the 7,400 foot Frio sand. These wells have increased production in the field by 100% and have added approximately 300 barrels of oil equivalent per day, 82% of which is oil. This drilling program has met the Company’s economic expectations and six additional locations remain to be drilled, all of which are scheduled for later this year. Abraxas owns a 100% working interest in each of these wells.

West Texas

In Nolan County, Texas, the Spires 126 2H recently reached a total measured depth of approximately 9,000 feet, including a 2,000 foot lateral. Completion operations will commence on this well in the near future. Abraxas owns a 100% working interest in this well.

In Coke County, Texas, in the NE Millican Reef field, Abraxas anticipates drilling two vertical delineation wells targeting the Canyon Sand play which is located approximately 30 miles to the southwest of Spires Ranch in the near future. The rig that drilled the Spires Ranch well will move to drill one of these two wells, after which, the rig will return to Spires Ranch for a continual horizontal development program, and assuming favorable results on the first well, the rig will return to NE Millican when convenient to drill the second well. Abraxas owns a 100% working interest in these wells.

In Reeves County, Texas, Abraxas recently acquired 640 net acres, for a total of approximately 3,000 net acres, in the emerging Wolfbone play. Two wells directly adjacent to our acreage are being currently drilled by the industry.

Canada - Pekisko

In Alberta, Canada, production from the Twining 9-11 remains relatively stable at approximately 100 barrels of oil equivalent per day. Two wells offsetting the successful Twining well will be drilled back-to-back, the first of which spudded this week. The two wells will be drilled horizontally and will target the Pekisko formation. Canadian Abraxas owns a 100% working interest in each of these wells.

Comments

“With the expected performance of the Portilla and Twining wells and the recent new production in the Bakken / Three Forks play, we have more than offset production disruptions from wells shut-in in the Williston Basin due to unprecedented high water and flooding. With all of our drilling activity, we should be in a position to continue sequential quarterly production growth for the foreseeable future,” commented Bob Watson, Abraxas’ President and CEO.

Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploration and production company with operations across the Rocky Mountain, Mid-Continent, Permian Basin and Gulf Coast regions of the United States and in the province of Alberta, Canada.

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Beach Hits Oil Pay at Parsons-5

- Beach Hits Oil Pay at Parsons-5

Thursday, June 30, 2011
Beach Energy Ltd.

Beach Energy Ltd. announced Thursday that it has successfully encountered a six-meter oil column at the Parsons-5 development well in the Cooper Basin Western Flank.

Beach had its fifth success in its PEL 92 drilling program with two wells remaining to be drilled. The Parsons-5 well, located 1.3km south of the Parsons-1 discovery well, encountered a six meter oil column.

The Parsons-5 oil column was encountered in the Namur Sandstone reservoir and was consistent with pre-drill expectations. The confirmed updip position with respect to Parsons-2 will result in an upgrade of recoverable oil reserves from the Parsons Field.

Beach will announce a firmer reserve assessment as appropriate data becomes available, but preliminary work suggests that well results from the current drilling program, plus continued strong production performance, will result in an reserve increase in excess of 800,000 barrels for the Parsons Field.

Parsons-5 is expected to be tied in during the second half of the year through the Parsons oil facility. Oil from the Parsons Field is transported from the Western Flank by flowline to Tantanna, from where it is currently trucked to Moomba, and hence not impacted by any flooding in the area.

The next well to be drilled in the PEL 92 program will be the Wheatons-1 exploration well, which is located about 10km to the north of the Parsons Field. Participants in PEL 92 are:
  • Beach (Operator) 75%
  • Cooper Energy Limited 25%

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Breitling Spuds Big Tex No. 1

- Breitling Spuds Big Tex No. 1

Thursday, June 30, 2011
Breitling Oil & Gas

Breitling Oil and Gas Corporation has spud the Breitling-Big Tex #1 on June 26, 2011 in Gaines County, Texas. The Breitling-Big Tex #1 is the first of three Big Tex prospect wells to be drilled.

The Breitling-Big Tex #1 is a 9,000-foot vertical well within the established Tex-Pac Field and is targeting Lower Clearfork Dolomite beneath 8,500 feet. Secondary objectives include the San Andres, Yates, Glorieta and Abo formations.

Breitling's 3-Well Breitling-Big Tex Prospect was developed after a 75-square-mile 3D seismic shoot was reprocessed and interpreted in 2010. The quality of the new data set after it was re-imaged using Breitling's proprietary Geo3D technology identified features that were not noticeable when the shoot first occurred. In essence the resultant seismic lines were much more detailed and refined, therefore capturing subsurface images not previously acknowledged.

Breitling Oil and Gas expects to recover reserves of 350,000-500,000 BO per well.

Management anticipates the first well will reach total depth in about 29 days. Well completion and testing should begin during the last week of July. Breitling Oil and Gas and its drilling partner Sandridge Energy plan to drill all three wells back-to-back using the same drilling rig.

Breitling Oil and Gas CEO Chris Faulkner stated, "We are excited to be working with Sandridge Energy on the Big Tex wells." Faulkner added, "We have great well control within the Tex-Pac field and great 3D seismic over the prospect."

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Woodside Strikes Over A$1 Billion Deal With Landowners Over Browse

- Woodside Strikes Over A$1 Billion Deal With Landowners Over Browse

Thursday, June 30, 2011
Dow Jones Newswires
SYDNEY
by Ross Kelly

Woodside Petroleum Ltd. (WPL.AU) said Thursday that it has signed an agreement with landowners allowing it to develop the massive Browse gas export project in Western Australia state.

Woodside said the agreement with the Goolarabooloo Jabirr Jabirr native title claim group includes initiatives worth over A$1 billion, such as education, training and employment programs, support for indigenous businesses and payments when project milestones are met.

The Browse joint venture also includes Royal Dutch Shell PLC (RDSB.LN), Chevron Corp. (CVX), BHP Billiton Ltd. (BHP.AU) and BP PLC. (BP.LN).

It's planning to give final approval to the development, estimated by analysts to cost more than $30 billion, by mid-2012.

Copyright (c) 2011 Dow Jones & Company, Inc.

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BG Doubles Santos Basin Net Potential

- BG Doubles Santos Basin Net Potential

Thursday, June 30, 2011
BG Group

BG Group on Thursday issued a material upgrade for its interests in the pre-salt Santos Basin, offshore Brazil.

Mean Total Reserves and Resources* are now estimated to amount to some 6 billion barrels of oil equivalent (boe) net to BG Group, with an upside potential of 8 billion boe net. Existing discoveries account for 96% of the mean Total Reserves and Resources.

The mean Total Reserves and Resources represents a doubling of BG Group's previous best estimate of 3 billion boe prevailing at the time of the Group's February 2010 Strategy Presentation.

The aggregate range of Total Reserves and Resources net to BG Group is from 4 billion boe (P90) to 8 billion boe (P10)**.

These new estimates result from BG Group's internal analysis based on probabilistic modelling of its Santos Basin interests. The analysis used a wealth of drilling, appraisal and other data that BG Group has gained or developed in relation to those interests, including:
  • a total of 29 wells drilled in our existing discoveries; two wells drilled on Lula since November 2010 proving particularly important in delineating the flanks of the field. Other wells have demonstrated excellent connectivity in the reservoir;
  • a total of 19 drill stem tests on current discoveries;
  • the shooting and analysis of over 14,400 square kilometers of 3D seismic;
  • full analysis of a completed extended well test (EWT) on Lula Sul and early results from the Guara EWT indicating the very large hydrocarbon volumes connected to each of these wells;
  • production from the first permanent floating production, storage and offloading vessel on Lula which commenced in October 2010;
  • development plans that include enhanced recovery processes to improve ultimate recovery factors for these giant fields; and
  • cost optimization, potential debottlenecking of facilities and greater well productivity enhancing the economic viability of later phases of development.

BG Group Chief Executive Sir Frank Chapman said: "The doubling of our estimated Santos Basin mean reserves and resources is clearly significant and demonstrates the continued rapid evolution of our understanding of these enormous discoveries. Robust economics and solid progress with the fast-track development program will see gross installed production capacity rising steadily to reach more than 2.3 million boe per day by 2017. I believe this - alongside progress with major ventures in Australia, the US and across our global portfolio - will transform the scope, scale and value of BG Group."

* Total Reserves and Resources are defined by BG Group as the aggregate of proved and probable reserves plus discovered resources and risked exploration.

** The Total Reserves and Resources upgrade announced today is based upon probabilistic modelling by BG Group of its interests in the Santos Basin, in accordance with Society of Petroleum Engineers (SPE) guidelines. The data has been analyzed, interpreted and verified by BG Group and not by the Operator or other Consortium partners.

BG Group has interests in five blocks in the Santos Basin, offshore Brazil
  • BM-S-9 (30%) containing the Guara, Carioca, Abare and Iguacu discoveries and prospects.
  • BM-S- 10 (25%) containing the Parati and Macunaima discoveries and prospects.
  • BM-S-11 (25%) containing the Lula, Cernambi and Iara discoveries and prospects.
  • BM-S-50 (20%) containing prospects including Sagittario.
  • BM-S-52 (40%) containing the Corcovado discovery.

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Wednesday, June 29, 2011

Oil & Gas Post - All News Report for Wednesday, June 29, 2011

Wednesday, June 29, 2011


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