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Oil and Gas Energy News Update

Friday, March 25, 2011

BP, Rosneft Look to Salvage Alliance after Setback

BP, Rosneft Look to Salvage Alliance after Setback

Friday, March 25, 2011

Mulva Reveals 3 Keys to ConocoPhillips' Success

Mulva Reveals 3 Keys to ConocoPhillips' Success

Friday, March 25, 2011
Rigzone Staff

James Mulva, president and CEO of ConocoPhillips, believes that saving money, cutting capital spending, and maintaining a level of transparency in his business decisions is the key to the company's success. In 1999, when Mulva became CEO, ConocoPhillips' combined assets were about $75 billion. By the end of Q1 2004, he had secured an income of $1.9 billion for the company and brought its debt down to 32% of its capital. More recently, ConocoPhillips reported Q4 2010 earnings of $2.0 billion, compared with Q4 2009 earnings of $1.3 billion.
Mulva, whose total compensation in 2010 was $11.26 million, never dreamed of working in the oil and gas industry while growing up in central Wisconsin. He attended the University of Texas and earned his BBA in finance in 1968 and an MBA in business administration in 1969. After graduation he entered the US Navy and was stationed on Bahrain Island. That's where he learned about the oil and gas industry. "The production side of the business as well as the financial aspect intrigued me," Mulva said. When he completed his tour of duty in 1973, he searched for a financial job in the oil and gas industry.

Mulva joined Phillips Petroleum Co. in the treasury department later that year. He was soon promoted to assistant treasurer and manager of foreign exchange and investment. In 1980, Mulva was then promoted to vice president and treasurer of Europe/Africa - a position he held for four years. With a strong financial background, Mulva analyzed investments and new technologies with an eye on the bottom line. His assessments allowed him to predict the long-term financial impact of each proposal. His understanding of the global market also helped him to build up the company's long-term security and assets. This strategy paid off for Mulva as well as Phillips as he helped the company meet and exceed corporate goals through his many positions with the company.

Going Green

Mulva was known to be a hard worker and had a knack for finding profitable solutions for Phillips. While CEO at Phillips, Mulva took a hit to his reputation when a K-resin chemical tank exploded in March 2000 at a Phillips Petroleum plant in Pasadena, TX. The blast killed Rodney Gott, a 45-year-old supervisor, as well as seriously burning four employees and injuring 65 others. The fire produced a huge plume of black smoke that spread over the Houston Ship Channel as well as neighboring residential areas. The tank was out of service for cleaning at the time of the explosion, and had no pressure or temperature gauges to alert the workers to the danger. This blast was the third in 11 years at that particular plant.

Another Expert Says Haynesville Not Bigger than Shale

Another Expert Says Haynesville Not Bigger than Shale

Friday, March 25, 2011

S. Korea Seeks Role in African Energy Development

S. Korea Seeks Role in African Energy Development

Friday, March 25, 2011
Asia Pulse Pte. Ltd

South Korea is seeking to take part in various energy development projects in Africa in an effort to boost mutual economic growth and make better use of natural resources, the government said Friday.

The Ministry of Knowledge Economy said a delegation led by Deputy Minister Kim Jung-gwan visited Angola and Ghana earlier in the month and discussed ways to expand cooperative tie-ups in liquefied natural gas (LNG), oil field development and oil refinery construction.

"Officials from both countries expressed a wish to forge a win-win partnership involving energy development, sharing of economic growth knowhow and fueling business investments," the ministry said.

The ministry added that Angola and Ghana have untapped natural resources and have considerable growth potential. Angola is the third-largest oil producing country in Africa, while Ghana started oil production last year and aims to build up its industrial infrastructure.

A memorandum of understanding on energy cooperation was signed with Ghana with views being exchanged on allowing South Korea companies to take part in a new oil refinery and gas pipeline building projects being pursued by the West African nation, it said.

SK Energy Co. and state-run Korea Gas Corp. have expressed interest in the two projects.

In Angola, the delegation discussed the possible purchase of LNG from a refinery that is expected to go on-line in 2012. Resource-poor South Korea is one of the largest importers of the fossil fuel resource in the world and has sought to diversify its imports to better insulate it from sudden price fluctuations.

The southwest African nation also said that it will welcome South Korean companies taking part in oil exploration efforts off its coast.

Westmoreland County Joins Shale Consortium

Westmoreland County Joins Shale Consortium

Friday, March 25, 2011
by  Rich Cholodofsky, Tribune-Review, Greensburg, Pa
Knight Ridder/Tribune Business News

Westmoreland County commissioners on Thursday voted to join a consortium of landowners as part of a move that could lead to the first Marcellus shale deep gas well on county property on an historic site dating back to 1773.

The unanimous vote did not directly authorize a lease for any company drill at the more than 140-acre property on which the Historic Hanna's Town tourist attraction sits. The town, established as the first county seat west of the Allegheny Mountains, is operated by the Westmoreland County Historical Society.

"We're looking at all properties so we can explore the natural resources on behalf of taxpayers of Westmoreland County," said Commissioner Charles Anderson.

The commissioners said no deal to lease the land was imminent, but attorney John Ward will handle negotiations for the county and nearly two dozen surrounding private property owners.

Those owners and the county will negotiate as a group with oil and gas companies that wish to lease land to install deep well drilling platforms to harvest natural gas from the lucrative Marcellus shale formation.

"I don't think Pennsylvania or this county can write off a valuable reserve such as a pool of natural gas," said Commissioner Tom Balya.

Before the vote, East Huntingdon resident Jan Kiefer asked county officials to consider advocating against Marcellus shale drilling, saying it was unsafe and could potentially damage the environment.

"People are polluting our air and water and it's affecting our health," Kiefer said.

Commissioners said they can't restrict local governments from authorizing Marcellus drilling, and then voted to join the consortium.

"We have to do it smart and we have to stay on top of it," Anderson said.

Commissioner Ted Kopas said revenues generated from leasing drilling rights and gas royalties would be used to provide a dedicated source of revenue to build a new visitors center at Historic Hanna's Town.

The county and the historical society plan to build a $4.2 million center at the site. The county has given the project a $1 million grant, while about half of the overall project cost has been raised.

MOL Subsidiary Spuds Well at Akri-Bijeel Block

MOL Subsidiary Spuds Well at Akri-Bijeel Block

Friday, March 25, 2011
Gulf Keystone Petroleum Ltd.

Gulf Keystone announced that the Bekhme-1 Exploration Well has spudded on the Akri-Bijeel block in the Kurdistan Region of Iraq on March 21, 2011.

Bekhme-1 is the second exploration well to be drilled on the Akri-Bijeel block, 20 km to the north-east from the Bijell-1 discovery well (Operator's P50 estimate of 2.4 billion barrels of oil in place). Bekhme-1 will target prospective intervals in the Jurassic and the Triassic with a planned depth of approximately 3000 meters.

The Company has a 20 percent working interest in the Akri-Bijeel block operated by Kalegran Ltd., a 100% subsidiary of MOL Hungarian Oil and Gas Plc., which holds 80 percent working interest in the block.

John Gerstenlauer, Gulf Keystone's Chief Operating Officer commented, "Bekhme-1 is the first well to be drilled on the large surface feature that dominates the north of the Akri-Bijeel block, which is adjacent to the Shaikan block with proven oil and gas reservoirs. The discoveries at Bijell-1 and Shaikan have considerably de-risked this new drilling target making Bekhme an attractive prospect."

Northern Signs Agreement with Azimuth for Southern Adriatic Permits

Northern Signs Agreement with Azimuth for Southern Adriatic Permits

Friday, March 25, 2011
Northern Petroleum plc

Northern has signed an agreement involving Italian permits F.R39.NP and F.R40.NP which contain the Rovesti and Giove oil discoveries and ten mapped prospects. The objective of the agreement is to work with Azimuth Limited ("Azimuth") a specialist global E&P business, to define and delineate suitable appraisal and exploration drilling targets. Azimuth will become a 15% interest partner in both permits by funding a promoted share of future work programs prior to the drilling phase.

The future assignment of permit interests to Azimuth, and implementation of aspects of the agreement, are subject to receiving approvals from the Italian authorities.

The Giove and Rovesti oil fields have been independently assessed by Blackwatch Petroleum Services ("Blackwatch") to have 53.2 million barrels of probable oil reserves. In addition, as a result of work undertaken, Northern recognizes the potential both for oil prospects with a mean of over 3 billion barrels of oil in place and gas prospects with a mean of over 2 Tcf of gas in place, which is over 1 billion barrels oil equivalent of prospective resource in the two permits, split approximately equally between oil and gas prospects.

Matt Haartsen, commenting on behalf of Azimuth, said, "Azimuth is excited by the opportunity to work with Northern Petroleum and looks forward to unlocking commercial reserves across the permits."
Derek Musgrove, Managing Director of Northern Petroleum, commented, "This deal brings additional resources and skills to assist Northern to progress the future development of reserves and drilling of exploration prospects in the permits in one of our key areas in the Italian offshore.
"The Rovesti field was discovered in 1978 by Eni and the nearby Giove field was discovered in 1998 by Enterprise Oil Plc. Blackwatch have assigned P2 oil reserves of 33.6 million barrels to Rovesti and 19.6 million barrels to Giove and support the view that there is high potential within the two permits. We have surmised that the decisions by previous companies not to move these two discoveries towards development could be attributed to the depth of water of Rovesti in the context of the then prevailing oil industry capabilities and costs, and that Giove was found to be smaller than originally mapped and at the time low oil prices prevailed."

Ithaca Briefs Impact of UK's Fiscal Changes

Ithaca Briefs Impact of UK's Fiscal Changes

Friday, March 25, 2011
Ithaca Energy Inc.

Ithaca clarifies the impact on the Company's near to medium term financial position further to the recent announcement made by the UK government regarding changes to fiscal regulations.

On March 23, 2011, the UK government announced that it would be increasing the rate of supplementary charge from 20% to 32% from 24 March 2011, resulting in a 62% marginal tax rate. The following important factors should be taken into account when considering the specific impact of the tax increase on the Company:
  • The Company's tax losses pool at the start of 2011 was approximately US $215 million. This pool, combined with the Company's predicted future capital expenditure program, indicates no taxes are likely to be payable for at least the next five years.
  • The Company's revenues from future field developments with approximately less than 25 million barrels of oil equivalent, such as the Athena field, will continue to benefit from the Small Field Allowance sheltering up to US $120 million of field profits from the 32% supplementary charge.
  • The Company has limited decommissioning liabilities, which minimizes its exposure to the announced differential tax treatment of decommissioning costs.
The Company is continuing with its development of the Athena field and the core Stella hub. A review of the Company's portfolio of existing appraisal and development opportunities will be conducted as details of the draft tax change legislation emerge.

Roc Increases Stake in Zhao Dong Block

Roc Increases Stake in Zhao Dong Block

Roc Oil (Bohai) Company, a wholly owned subsidiary of ROC, advises that the existing Petroleum Contract covering the Zhao Dong Block in the Bohai Bay, offshore China, has been modified with the aim of commercializing previous near field discoveries in the area and encouraging further exploration activity. The key elements of the modifications are:
  • The existing Zhao Dong Block Contract will include two additional blocks; and
  • The term of the Zhao Dong Contract and Production Period will be extended when and as necessary to accommodate any new production from the additional blocks.
The existing Zhao Dong Block contract area (28km2) will be increased to include the adjoining Zhanghai (16km2) and Chenghai (26km2) blocks. Participating interests in the newly added blocks are separate from the existing block; ROC 80% and New XCL (Sinochem) 20%, with PetroChina having an option to back-in for 51% on any future commercial development.

It is anticipated that any potential commercial development in the expanded block would utilize existing Zhao Dong facilities and replicate the cost sharing and tariff arrangements previously implemented for the C4 Unitized Field (ROC: 11.575%). ROC will retain operatorship of the expanded Zhao Dong Block.

The initial work program for the additional areas includes the drilling of two appraisal wells from an existing Zhao Dong platform over the next two years, with one anticipated in 3Q 2011. Drilling of the appraisal well in 3Q 2011 will initially add 2P Reserves of 0.6 MMBBL to the expanded Zhao Dong block (ROC working interest 0.2 MMBBL following PetroChina back-in for 51%). It is anticipated that these reserves would be brought into production immediately following the successful completion of the well.

Commenting on the Zhao Dong Block modifications, ROC's Chief Executive Officer, Alan Linn, stated, "One element of ROC's strategy is to generate future growth through appraisal and pre-development opportunities and to commercialize near field opportunities through our existing infrastructure. Extension of the Zhao Dong Block provides the potential to commercialize and incrementally develop a number of small discoveries through Zhao Dong facilities in parallel with ongoing activities. Exploration opportunities within this acreage could also impact the future profitability and recovery life of the existing assets.

This is a positive outcome for all joint venture partners in the Zhao Dong Block. It represents a vote of confidence for ROC's abilities as an offshore operator in China and highlights the continual strengthening of ROC's relationships with PetroChina and Sinochem."

Beach, JV Partner Commence Seismic Survey Offshore Albania

Beach, JV Partner Commence Seismic Survey Offshore Albania

Friday, March 25, 2011

Sterling to Drill Ahead at Sangaw North Block

Sterling to Drill Ahead at Sangaw North Block

Friday, March 25, 2011
Sterling Energy plc
Sterling provideed the following update for the Sterling operated Sangaw North block in Kurdistan (53.33% working interest).

Sangaw North #1 Well

The side-tracked wellbore of Sangaw North #1 well has been drilled to a depth of 3,360 metres, into the top of the Jurassic formations and at a depth above where the influx of gas was recorded in the previous wellbore.

A liner has been run and cemented across the open hole interval with the liner shoe at approximately 3,340 meters.

The Company now plans to drill ahead and evaluate the Jurassic formations to a well depth of 3,660 meters and estimates this will take approximately one month. During this section, the well is expected to encounter the formations from which gas containing hydrocarbons and hydrogen sulphide entered the well in the previous wellbore. Operations are being conducted using drill pipe resistant to the effects of hydrogen sulphide.

The joint venture partners in the Sangaw North Production Sharing Contract ("PSC") may elect, in the event of encouraging results, to drill further to evaluate deeper Jurassic and Triassic formations.

Petrophysical logs have been acquired across open-hole Cretaceous intervals below 2,400 meters, the base of the intervals logged and flow tested in the previous wellbore. Preliminary evaluation of the logs acquired in the current wellbore, together with hydrocarbon shows and other information acquired while drilling, indicate the presence of hydrocarbons within these deeper Cretaceous intervals. A detailed analysis of all the data acquired is being undertaken to identify whether flow testing of certain intervals may be warranted. Flow testing of Cretaceous intervals, if undertaken, will follow any flow testing that may be undertaken in the Jurassic and Triassic intervals after they have been drilled.

Extension of Exploration Period

Sterling has received confirmation from the Ministry of Natural Resources of the Kurdistan Regional Government that the first sub-period of the exploration phase of the PSC has been extended by one year to allow for the completion of drilling operations in the Sangaw North #1 well and the evaluation of the results of this well. The first sub-period, including the one year extension, will now continue until November 2011.

Angus MacAskill, Sterling's Chief Executive said, "Operations since the gas influx and parted drill pipe in the previous wellbore have been challenging, and we are very pleased to have successfully re-drilled and cased the well to this important point in the upper Jurassic section. From here, we look forward to exploring the potential of the deeper horizons."

Breitling Spuds Oklahoma Well

Breitling Spuds Oklahoma Well

Friday, March 25, 2011
Breitling O&G Corp.

Breitling has spud the Breitling-Magnolia #2, the second of two wells in its Breitling-Magnolia prospect in Pottawatomie County, Oklahoma. The first well, the Magnolia #1, encountered multiple potential pay zones on its way down to its 4,500 feet. The primary objectives of the Magnolia #2 are the Wilcox Sand at 4500', the Simpson Sands at 4400' and the Hunton at 4175'. A secondary objective includes the Earlsboro Sand at 3625'.

The proposed Magnolia #2 well is located within a 240-acre closure mapped at the Simpson and Wilcox Sands and the Hunton Sand at above an estimated total vertical depth of 4,500 feet.

"If this Magnolia #2 trends like the Magnolia #1 we will have another great well here," said Joe Simo, Chief Geologist for Breitling Oil and Gas.

Management anticipates the well will reach total depth in about 7 days. Well completion and testing on the Magnolia #2 well should begin during the first week of April 2011.

Breitling Oil and Gas CEO Chris Faulkner stated, "Most of the geology on Magnolia #2 mimics what we anticipated and now have confirmed after drilling and logging the Magnolia #1." Faulkner added, "Based on the very positive logs on the Magnolia #1 we expect Magnolia #2 to be a producer as well."
Breitling has current oil and gas exploration projects all over the United States.

American Petro-Hunter Acquires Acreage in Ok.

American Petro-Hunter Acquires Acreage in Ok.

Friday, March 25, 2011
American Petro-Hunter Inc.

American Petro-Hunter has acquired a majority working interest in an additional 2,000 acres of lands located in Payne County, Oklahoma. The acreage augments the Company's holdings at the North Oklahoma Project to 3,400 total gross acres.

With this recent acquisition, the Company has designated the new lands as the "Ripley Prospect" and the original lands as the "Yale Prospect," with both areas held as regional components of the North Oklahoma Project. The newly acquired Ripley acreage is located in a key area of an emerging horizontal drilling play where over 100 foot thick sections of Mississippi Formation are currently being aggressively exploited by regional players deploying laterally drilled, horizontal wells.

Surrounding the Ripley Prospect, numerous lease holdings are under development by Tulsa-based Calyx Energy, a private company. To date, Calyx has drilled 3 horizontal wells on leases within a mile and a quarter (1¼ mile) south of the Ripley block and, of major significance to the Company, the nearby C&N 25-1H well has been speculated to have had initial production rates (I.P.) of 1,000 barrels per day (BPD). Calyx also has plans for further wells immediately north of our Ripley Prospect holdings and is currently exploiting prospects on over 40,000 acres in central and eastern Oklahoma.

The 2,000 acre Ripley Prospect block is now part of the central focus of the Company's 2011 development plan. A location for our first Mississippi horizontal has been engineered and proposed. The 1,500 to 4,000 foot lateral will drill down and along the Mississippi which sits directly over the Woodford Shale. The lease block would allow, if successful, for the drilling of 5 horizontals on 320 acre parcels. Further information will be released regarding potential spud dates and particulars on the play.

Company President Robert McIntosh stated, "We are very pleased to have added this encouraging and very interesting horizontal Mississippi play to the North Oklahoma Project. With the new drilling combined with our existing lands encompassing both Woodford and Mississippi prospects, we have secured sufficient acreage to drill many horizontal and vertical wells in 2011. If we are successful, we will rapidly move the Company forward to our stated production goals and targets."

Given the added expense of horizontal drilling, American Petro-Hunter has developed a prudent "watch & learn" approach based on the experiences of the well-funded major operators at the Yale Prospect area. As the drill programs currently under development by the major players adjacent to our Yale Prospect are not yet underway, the opportunity to quickly move into a proven and highly productive area less than 10 miles away at Ripley presented itself as a desirable near term opportunity.

The Company will continue to explore and develop vertical wells in the Yale area and plans to immediately follow up the NOS227 well dependent on completion results.

FAR Confirms Kora Drilling Agreement with Ophir

FAR Confirms Kora Drilling Agreement with Ophir

Friday, March 25, 2011

FAR announced that Detailed Agreements have now been finalized with Ophir confirming the terms of an earlier Heads of Agreement to participate in the drilling of the Kora Prospect via the acquisition of a 10 percent paying interest (8.8% beneficial interest) in the AGC Profond PSC, offshore Senegal and Guinea Bissau. Regulatory approval has been granted by the AGC Joint Authority. The agreements also allow Ophir the right to acquire a 22.5% beneficial interest in FAR's Senegal licences.

The Kora well is targeting a prospect having mean prospective oil resources of 448 million barrels (100% basis, Rocksource estimate). The well will be operated by Ophir using the semi-submersible rig Maersk Deliverer and is expected to spud around 11 April 2011 and take in the order of 24 days. The expected spud date may vary depending upon the timing of release by an existing contractor in Ghana from where the rig will mobilize to the AGC area.

The well location is 285km south west of the port of Dakar in a water depth of 2651m. The planned minimum Total Depth for the Kora well is 4,251mSS (approx. 1,600m below the mudline) although consideration will be given to drilling deeper based on the geology encountered.

Morumbi Closes Rockwell Acquisition

Morumbi Closes Rockwell Acquisition

Friday, March 25, 2011
Morumbi O&G Inc.

Morumbi has acquired all of the issued and outstanding share capital of Rockwell Exploration. In connection with the acquisition of Rockwell, Morumbi has paid cash consideration of US $582,000 in settlement of certain debts of Rockwell and has also issued an aggregate of 4,000,000 common shares of Morumbi to Rockwell's ten shareholders. Rockwell's business to date has been focused on sourcing and developing exploration opportunities in Papua New Guinea ("PNG") with a focus on oil and gas exploration opportunities.

As a part of the acquisition, Morumbi has also entered into a consulting agreement with Mr. Lindsay Semple providing for Mr. Semple's services on an exclusive basis to build an exploration platform for Morumbi in PNG in order to take advantage of the opportunities management believes to be present there. Morumbi has also entered into a consulting agreement with Mr. Philip Rali a PNG national and an expert in Melanesian customs, who has worked as a team with Mr. Semple for the past 13 years focusing on the acquisition and development of oil and gas properties. Of the 4,000,000 Morumbi common shares issued in connection with the acquisition, 1,800,000 are being held in escrow and will be released in three equal tranches over a period of 18 months.

Tom Loch the President of Morumbi, "We view this as an opportunity to participate in one of the most attractive under explored resource areas in the world today. PNG is the home to some of the world's great mines including Porgera, OK Tedi, and Lihir and the recently announced 35 million ounce equivalent gold/copper/silver resource at Wafi-Golpu by Harmony Gold Mining Limited. Further, Exxon Mobil's $15 billion liquefied natural gas project currently under construction in the highlands is set to commercialize extensive stranded natural gas reserves. PNG is a stable Commonwealth country with attractive fiscal resource policies."

Barclays Anticipates $185 Oil in 2020

Barclays Anticipates $185 Oil in 2020

Friday, March 25, 2011
Fort Worth Star-Telegram, Texas
by  Jack Z. Smith

If you believe oil prices are going to soar in coming years, you're very much in sync with the thinking of the brain trust at Barclays Capital, a prominent international investment banking firm based in London.

Barclays, in its Oil Market Update released Thursday, forecasts that a barrel of West Texas Intermediate (WTI) crude oil, the benchmark U.S. grade, will sell for an average price of $185 in 2020. That's $38 higher than the current all-time record high reached in the summer of 2008, when oil topped $147 a barrel.

Meanwhile, Barclays is dramatically revising its 2011 oil price forecast upward in light of tensions in the Middle East, curtailed production in Libya, rising global oil demand and a shrinkage in spare production capacity.

Barclays is now forecasting an average price of $106 a barrel for WTI this year, a $15 jump from its prior estimate of $91. And it is predicting that even pricier North Sea Brent crude will average $112 rather than the $91 it previously forecast for that grade also.

WTI crude for May delivery settled at $105.60 Thursday, down 15 cents, in futures contracts for May delivery on the New York Mercantile Exchange. But the price went as high as $106.69 in intraday trading.

Brent crude gained 17 cents to settle at $115.72 a barrel on the London-based ICE Futures Europe exchange.

Shell Gets Irish License to Complete Offshore Gas Pipe -Reuters

Shell Gets Irish License to Complete Offshore Gas Pipe -Reuters

Friday, March 25, 2011
Dow Jones Newswires

Ireland on Friday granted Shell a license to complete the controversial Corrib pipeline project, which the company says could provide up to 60% of Irish demand for natural gas, Reuters reported.

The pipeline will link Ireland's northwest coast to the Corrib field offshore, which is estimated to contain 1 trillion cubic feet of gas.

The Department of the Environment, Heritage and Local Government said in a statement that it had granted a pipeline foreshore license, the last government permission needed for work to begin on the project, which has been beset by protests and delays since its discovery in 1996.

But a legal action to overturn the pipeline's planning permission being heard in the country's High Court could still cause delays.

The action is being brought by residents who fear onshore processing would bring the pipeline too close to their homes and pollute the water supply. Protests against the pipeline in the past have led to several arrests and a hunger strike.

Shell said in a statement Friday that it welcomed the government's decision. It said it has developed five wells at the field, built the offshore pipeline and is close to completing the onshore terminal.

Aurelian Begins Stabilized Flow-Test at Polish Well

Aurelian Begins Stabilized Flow-Test at Polish Well

Friday, March 25, 2011
Aurelian O&G plc

- First Siekierki Multi Fracced Horizontal Well ("MFHW") Trzek-2 begins stabilized flow rate test
  • Stabilized flow rate test delayed by two weeks due to mechanical problems during well clean up. Gas inflow in six of the ten well bore sleeves currently restricted. Likely cause is either clean up debris lodged in sleeve ports or sleeve ports being temporarily closed.
  • Reservoir quality good, with tracers confirming that gas was recovered from all ten fracced zones during initial production test. Down hole logs also confirm good quality reservoir throughout horizontal wellbore.
  • If these well bore sleeve mechanical problems persist after the end of the stabilized flow test, appropriate remedial work will be undertaken.
  • Stabilized rate at the end of the 14-21 day test is likely to be less than the 8mmscf/d that the Company had originally expected. However, good reservoir quality indicators and expected lower production decline rates means that Aurelian should still recover 16-28 bcf from this well and 346 bcf (net) from 20 wells across the full project.
- Second Siekierki MFHW, Trzek-3, drilling ahead of schedule
  • Casing set at 3,699 meters after 57 days, compared to 90 days in Trzek-2
  • Improved drilling performance due to implementation of Trzek-2 learning
  • Update on size of gas column and reservoir quality to be provided in April
  • Stabilized flow test results expected by late June or early July
- First Bieszczady well targeting prospective resources of up to 100 million barrels (gross) encounters active oil and gas system in zone above primary targets
  • Excellent oil and gas shows and flow of oil and gas obtained in two short term drill stem tests indicates existence of an active oil and gas system above primary targets
  • Currently drilling at 3700 meters, still to reach three primary oil targets located between 4,000 and 4,800 meters
  • Acquisition of additional 300 km of 2D seismic has been completed and will be interpreted later this year, block coverage now 40%
  • Second well in program expected to spud late 2011/early 2012
- Confirmation that there will be no restrictions on the development of Polish unconventional gas
  •  Henryk Jesierski the Chief Geologist at the Polish Ministry of Environment confirmed at a conference held at the British Embassy in Warsaw on the 16th of March 2011 that Poland will not be blocking unconventional and shale gas development.
Rowen Bainbridge, Chief Executive commented, "While the mechanical performance of the down hole and completion equipment on Trzek-2 has been disappointing, we believe that this can be corrected, will not recur in the future and will not impact the potential of our Siekierki Tight Gas Project. The Trzek-3 well is performing better than we had hoped and we will have stabilized flow rates from both MFHWs by the end of June/beginning of July which will help us optimize the development of this key project.

The Bieszczady well update is encouraging and the existence of an active oil and gas system above our primary targets provides us with further options as to how we may commercialize this well in the future.

Aurelian is moving forward with our operations and our plan to create value in both of our Core Areas. As 2011 progresses, I look forward to bringing you further updates, particularly on our planned activity for the second half of the year when we expect to spud the Krzesinki-1 conventional gas well in the Greater Siekierki Area and potentially two further high impact exploration wells in the Slovakian and Polish Carpathians."

ConocoPhillips Awards Prosafe Contract

ConocoPhillips Awards Prosafe Contract

Friday, March 25, 2011
Prosafe SE

ConocoPhillips has awarded Prosafe a two-month contract for use of the Safe Scandinavia for accommodation support at the Eldfisk Platform in the Norwegian sector of the North Sea. On site operations are planned to commence in May 2012.

Furthermore, reference is made to press release dated January 12, 2011 where Prosafe announced the award of a Letter of Intent by an undisclosed client for the provision of the Safe Scandinavia accommodation and service rig at a project in the UK sector of the North Sea for a four-month period, with an additional one-month option.

Prosafe now advises that the contract has been signed, and that the Safe Scandinavia will offer accommodation support for ConocoPhillips at the Jasmine Development Project. The contract will start in direct continuation of the contract at Eldfisk. In addition to the existing one-month option, Prosafe has granted ConocoPhillips an additional one-month option.

The revised total value of the contract for this two-month firm period plus existing four-month firm period is about USD 53.3 million.

Aker Solutions Delivers 100th Subsea Tree to Statoil's Troll

Aker Solutions Delivers 100th Subsea Tree to Statoil's Troll

Friday, March 25, 2011
Aker Solutions

Aker Solutions has reached a major milestone in delivering the 100th subsea tree to the world's largest subsea field development - Statoil's Troll.

A subsea tree is a key technology enabling oil and gas production directly from a subsea well to a processing facility. The tree is essentially an advanced set of valves and is used together with associated technologies to control the well flow. The subsea tree is an integral part of a subsea production system.

The Troll field is located in the northern part of the North Sea, approximately 65 kilometers west of Kollsnes, near Bergen in Norway. The field contains 40 per cent of the total gas reserves on the Norwegian continental shelf and is also one of the largest oil fields on the continental shelf.

"Aker Solutions has a proud history of subsea design, manufacturing and installation of subsea production systems and the delivery of Troll subsea tree number 100 is a testimony to our capabilities," said Mads Andersen, Executive Vice President of Aker Solutions and head of the subsea business.

The vision of embarking on a large subsea project began in 1991 when Kvaerner Energy, now known as Aker Solutions, started developing a subsea tree. In July 1996, they were awarded a major contract for the delivery of 65 subsea trees for the Troll project which opened up for the opportunity to be a major player in the subsea production system market. The delivery to Norsk Hydro, now Statoil, started in the spring of 1997.

The contract award and deliveries for the Troll project have helped to shape and develop Aker Solutions' subsea business. Today, the company is one of the major suppliers of subsea production systems in the world and the Tranby technology and manufacturing center outside Oslo, which is the main production site for subsea trees in Norway, has grown to employ over 500 people. In total, the subsea business in Aker Solutions employs more than 4300 people globally.

Aker Solutions continues to develop their technology to solve the challenges of deeper water, higher pressures and temperatures, longer step-outs and increased oil recovery demands.

"Aker Solutions is constantly breaking new technology frontiers to find solutions for more demanding fields. At the same time, we are developing smarter, more robust and adaptable technologies to standardize our existing portfolio of subsea production systems," said Andersen.

Shell was initially the operator of Troll when the first block was awarded in 1979. A large gas field with underlying oil was discovered in the same year and the field was then declared commercial in 1983. During the same year, the three neighboring blocks were awarded to Statoil, Norsk Hydro and Saga Petroleum.
Shell's block contained 32% of the Troll field's reserves while the remaining 68% were discovered in the other three blocks. In 1985, the two licenses were merged and Troll was developed as a field. Statoil became the operator for Troll Gas in 1996, while Norsk Hydro began production from Troll Oil in the autumn of 1995.

Of the 100 trees delivered to Statoil, 99 of them are oil producing
trees and one of them is a water injection tree. Thirty-two of the subsea trees are connected to the Troll B platform and the rest are connected to the Troll C platform.

Samson O&G to Sell Wyoming Assets

Samson O&G to Sell Wyoming Assets

Friday, March 25, 2011
Samson O&G Ltd.

Samson O&G has agreed to sell its gas assets in the Jonah and Lookout Wash Fields in the greater Green River Basin, Wyoming for $6.3 million to a group of private buyers. The transaction is currently expected to close on or before March 30th, 2011. When closed, the sale will have an effective date of January 1, 2011.

The sale of these gas properties will cause the Company to recognize a tax loss that will offset some of the income tax liability it previously incurred by the sale of acreage in Goshen County, Wyoming completed in November 2010. The tax benefit is presently expected to be approximately $8 million, though the final amount will not be determined until the tax return for the year ended June 30, 2011 is completed and filed.

The sale of these gas assets is consistent with the business strategy Samson announced in October 2010, allowing Samson to focus on developing its two oil plays, the Bakken Formation in North Dakota and the Niobrara Formation in Wyoming. That strategy also calls for the Company to become debt-free in May 2011 when its debt facility with Macquarie Bank, bearing a current balance of $9.7 million, matures.

Rosneft Ready to Defend its BP Deal

Rosneft Ready to Defend its BP Deal

Friday, March 25, 2011
by  William Mauldin
Dow Jones Newswires
Rosneft Chairman Igor Sechin said the company is ready to defend its $16 billion tie-up with BP, after an arbitration tribunal extended a ban on the deal following complaints from BP's existing Russian partners, Russian newswires reported Friday.

State-controlled Rosneft is already suffering losses because the panel extended an injunction blocking the deal at the behest of BP's partner in TNK-BP, Sechin said, according to an Interfax report.

Sechin, who is also Russia's powerful deputy prime minister overseeing energy, said the final arbitration ruling will come out of Stockholm only on April 7. Rosneft is "not in negotiations" with AAR, BP's partner in TNK-BP, nor has it received proposal from AAR, Sechin said, according to the reports.

BP said late Thursday that the arbitration tribunal ruled that a temporary court injunction against BP's deal with Rosneft "should continue." In a statement, BP said it was "disappointed" that the agreements "cannot for now go ahead in the form intended."

Besides BP and Rosneft, the panel's ruling is seen as a setback for Sechin, who has sought to attract billions of dollars of foreign investment into Russia's oil sector.

Shares of Rosneft sank 1.2% to RUB266.10 on the Micex Stock Exchange at 1220 GMT, compared with only a slight decline for the broader index.

Top Ten Ways Govt is Preventing Federal Onshore U.S. Production

Top Ten Ways Govt is Preventing Federal Onshore U.S. Production

Friday, March 25, 2011
by  Karen Boman
Rigzone Staff
Western Energy Alliance, formerly IPAMS, reported that at least half of the non-producing onshore U.S. acreage is the direct result of bureaucratic delays imposed by the Obama administration, not oil and gas companies are refusing to develop lands currently under lease.

The organization has published a top ten list to show how bureaucratic delays are not only preventing more production of domestic oil and natural gas today, but putting at risk tomorrow's production as well, said Kathleen Sgamma, the organization's director of government and public affairs.

While companies are in the long process of satisfying all the requirements necessary to begin production, new federal policies and deliberate bureaucratic delays are preventing American production in the West. Western Energy Alliance estimates that about one-third of leased acreage will not be developed by the current leaseholder with today's technology because exploratory work determines there are insufficient resources and other factors.

Sgamma said that the Obama administration continues to deflect blame for leases that are not producing onto the industry, yet their rhetoric displays a misrepresentation of how oil and natural gas development on federal lands works.

"The truth is that companies are doing all they can to develop federal energy resources, but a lease is not a green light to produce—it's the first step in a long, expensive process that is fraught with bureaucratic red tape and lawsuits by environmental groups determined to stop domestic energy development," noted Sgamma.

"Since development on federal lands takes close to ten years, we know that production today is the result of policies and actions from several years ago," said Sgamma. "Symbolic, punitive measures will do nothing to increase domestic energy supply. What's needed is legislation that provides certainty, clears obstacles, and encourages production."

The top ten ways that the government is preventing production on federal onshore leases includes:

Project Approvals: Whether a small project under fifty wells or a large one with thousands, the Department of the Interior (DOI) is simply not approving oil and natural gas projects. Environmental analysis and project approval must occur before companies can even apply for drilling permits. Normally, this process can take over seven years, but companies are currently experiencing indefinite delays.

EPA Overreach: Recent EPA [Environmental Protection Agency] expansion imposes excessive, redundant regulatory burdens on oil and natural gas production and introduces high levels of uncertainty. EPA has directly prevented project approvals in the West. EPA overreach is having a chilling effect on energy production, diverting precious time and resources away from energy development and into non-productive regulatory activities.

Permitting: Companies are not getting permits to drill in a timely fashion. The Bureau of Land Management (BLM) conservatively estimates a 206 day average processing time for permits. Depending on the field office, permits can take over 500 days. Companies cannot start to produce without a permit.

Reduced Leasing: Often producers conduct exploratory work on leases and determine that nearby areas have the right geology for energy production. DOI frequently defers and delays these offset leases needed to develop the existing leasehold. New policies in 2010 added three additional layers of analysis and regulation, on top of the existing five. These bureaucratic delays have led to anemic lease sales, canceled sales, and indefinite deferrals. Delays in obtaining offset leases prevent production on existing leaseholds.

Unissued Leases: DOI continues to hold millions of dollars in unissued leases, despite statutory requirements to issue leases within sixty days of receipt of payment from successful bidders. Unissued leases can hold up production on adjacent existing leasehold.

Stipulations: DOI has cleared much of the backlog of unissued leases in Wyoming, but in many cases has added more restrictions that were not specified at the time of sale. These new restrictions, such as even preventing development from the surface, reduce the value of leases and may render them uneconomic to develop.

Withdrawal of Leases: One of the first things Secretary Salazar did after taking office was to withdraw 77 leases in Utah. That has been followed by the intent to cancel existing leases in the Wyoming Range, after the government had already completed the leasing contracts. Existing, adjacent leases are affected.

Wild Lands: New policies for wild lands mean that DOI can unilaterally determine that an area is suitable for wilderness protection, and delay for years any development while they reinventory the lands and update land use plans. In the meantime, DOI treats these areas as de facto wilderness, despite lacking legal authority, which prevents production on many existing leases.

Climate Change Challenge: Environmental lawsuits have caused DOI to delay leases in Montana while additional environmental analysis and climate change study is done. Rather than settling these lawsuits as in the past, DOI should stand by its analysis that showed no significant impact to climate change from leasing in Montana.

Ad Hoc Requirements: BLM field offices are arbitrarily adding new requirements to permits, and requiring producers to conduct new and redundant analysis without a basis in law. These arbitrary delays in the field are another means of “death by a thousand cuts” that prevent energy production, job creation, and economic development.