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Oil and Gas Energy News Update

Monday, April 4, 2011

Emirates wins UN carbon credits for reducing emissions

Emirates wins UN carbon credits for reducing emissions

Apr 5, 2011
April Yee

The UAE has become the first nation in the GCC to earn credits from the UN for reducing carbon emissions.
The power-production efficiency project developed by Masdar, Abu Dhabi's clean-energy company, is expected each year to generate more than €1.5 million (Dh7.8m) of carbon credits at current market prices.

"It's a good start," said Shibu Davies, the regional general manager for TUV, the German company that audited the project for Masdar. "This will be a lead model for most organisations to follow."


ABU DHABI - 16JAN2011 - The Masdar Institute building at Masdar City in Abu Dhabi. Ravindranath K / The National 
ABU DHABI - 16JAN2011 - The Masdar Institute building at Masdar City in Abu Dhabi. Ravindranath K / The National

The UAE has become the first nation in the GCC to earn credits from the UN for reducing carbon emissions.

The power-production efficiency project developed by Masdar, Abu Dhabi's clean-energy company, is expected each year to generate more than €1.5 million (Dh7.8m) of carbon credits at current market prices.

"It's a good start," said Shibu Davies, the regional general manager for TUV, the German company that audited the project for Masdar. "This will be a lead model for most organisations to follow."

The project, based 80km from the capital at a gas-burning power plant in Taweelah, uses waste heat to produce extra power and desalinated water, increasing the plant's production for every tonne of carbon dioxide that it releases.

Vitol, one of the world's largest energy trading companies, has entered into a contract to buy those credits to use in Switzerland and is awaiting the approval of the Swiss government.
Earning carbon credits is key to Abu Dhabi's aim to become a centre of clean energy and to diversify its economy away from oil.

Masdar has a pipeline of other such projects awaiting approval from the UN, which awards the credits to developing economies for confirmed reductions in emissions of greenhouse gases.
The developing countries can sell those credits to a set of developed nations - Japan, Canada, New Zealand and the EU countries - which can use the credits to offset emissions from their own industrial processes.

Masdar developed the project over several years and at an estimated cost of more than US$300,000 (Dh1.1 million) to file the paperwork and to verify the carbon emissions reductions, a burden difficult for smaller companies to bear.


"The whole process is too bureaucratic," said Shezan Amiji, the managing director of Ecoventures, a consultancy in Dubai that was involved in applying for such credits. "You have to make it more time-efficient, as well as from a cost perspective."

The credits are issued under a UN framework known as the Clean Development Mechanism (CDM), the future of which is uncertain after the expiration next year of the Kyoto Protocol on climate change. Government officials and environmentalists from around the world are meeting this week in Bangkok to work on the details of a replacement agreement.
The lack of certainty about the CDM's future has slowed Masdar's ambitions of developing other carbon-reduction projects.

"It's great to see the pipeline actually realised now, but I don't think it's going to kick-start investment in the region at all," Mr Amiji said. "You don't know what's going to happen post-2012, so how are you going to make that investment today?"

Saudi Arabia steady amid the turbulence

Saudi Arabia steady amid the turbulence

Apr 5, 2011

The King Abdullah Financial District takes shape in the centre of Riyadh. Waseem Obaidi / Bloomberg News
The King Abdullah Financial District takes shape in the centre of Riyadh. Waseem Obaidi / Bloomberg News

Recent events in the Middle East have caused concern in some quarters about increased risks to Saudi Arabia's economic outlook.

While apprehensions in the region may dampen confidence in the next few months, Credit Suisse forecasts that Saudi Arabia will enjoy robust real GDP growth in the next two years.
Fuelled by surging oil prices, higher crude output and increases in government and consumer spending, Credit Suisse expects Saudi Arabia's real GDP to grow 5.7 per cent this year and 4.9 per cent next year.

After the impact of the Libyan turmoil on oil markets, crude prices surged towards US$120 a barrel, prompting Saudi Arabia to offer reassurances that it would step in to replace the loss of Libyan exports.

The rise in global oil prices and increased crude output will clearly benefit the Saudi economy. We see Saudi oil output posting large gains this year, with production rising 10.4 per cent to 9 million barrels per day (bpd).

Consequently, the oil sector will make a greater contribution to the kingdom's overall economic growth. According to our forecast, Saudi Arabia's oil GDP will grow 7.1 per cent this year and 4.6 per cent next year.

We also expect public sector spending to grow more strongly this year as authorities further boost social payments. The government's $36 billion (Dh132.22bn) social support package, announced in February, includes the first unemployment benefits, as well as investment in housing and extensions of salary increases for public sector workers.


Last month, King Abdullah announced another package of social spending, worth $133.32bn.

These packages complement the kingdom's ninth five-year development plan, a $385bn investment that targets key industrial and infrastructure projects such as the economic and industrial cities.

Moreover, development projects are aimed at drawing in private investment to fuel the expansion of non-crude activities to try to diversify away from oil, while also creating jobs to meet the needs of the kingdom's fast-growing young population.

This huge spending push by the Saudi Arabian government will further bolster activity in the non-oil sector of the economy. In our view, non-crude GDP growth will accelerate to 5.3 per cent this year and hold at nearly 5 per cent next year.

The kingdom's fiscal balance will be given a lift from surging crude prices. Based on an average Brent oil price assumption of $110 a barrel, our baseline forecast, we see government revenues leaping 47.9 per cent this year to 1.15 trillion riyals (Dh1.12tn), 53.2 per cent of GDP.

Based on our projection of an average crude output of 9 million bpd, we expect oil revenues to climb 51.5 per cent this year to 1.05tn riyals. We also expect non-oil revenues to increase by 17.7 per cent, given the pick-up in economic activity in the kingdom.

Robust revenue collections, particularly from oil, will help Saudi Arabia to offset the added burden of increased government spending from the social support packages and the continuation of the kingdom's five-year development plan.

According to our projection, government expenditure will grow 25.2 per cent this year to 811.1bn riyals (37.5 per cent of GDP).

Saudi Arabia is likely to tap its huge foreign-asset holdings to cover part of the near-term spending increases this year. Based on this, we forecast the fiscal surplus to increase to 339bn riyals. If oil prices average a higher $120 a barrel, this will result in a fiscal surplus of 410.8bn riyals.

We see Saudi Arabia's fiscal balance posting another large surplus next year of 276.8bn riyals, provided oil prices remain at $110 a barrel on average.

We see headline inflation edging up to an average annual rate of 6 per cent this year. Although annualised consumer price index inflation edged down for the third straight month in January, to 5.3 per cent, price pressures will continue, fuelled by higher prices for food and housing as well as a pickup in domestic demand.

The government's social support package is likely to add to inflation by bolstering demand. However, Saudi Arabian authorities are likely to implement subsidies and other price control measures if inflation begins to climb significantly higher.

In our view, monetary policy will remain accommodative to help the recovery gain further momentum and boost lending, with the Saudi Arabian Monetary Authority awaiting a cue from the US Federal Reserve before raising rates.

Berna Bayazitoglu is the head of macroeconomic research for emerging markets in eastern Europe, the Middle East and Africa at Credit Suisse, and Sergei Voloboev the director within the bank's emerging market economics research group

Toyota Announces Temporary Shutdown of All North American Factories "Inevitable" (TM)

Toyota Announces Temporary Shutdown of All North American Factories "Inevitable" (TM)




Toyota Motor Co (NYSE:TM) announced earlier today that they will have to close down all of their North American factories by the end of this month due to a parts shortage caused by the damage from the Japanese earthquake and tsunami.

The temporary shutdown of the company's 13 factories in North America is inevitable, the company said. How long the production stoppage will last is unknown. 25,000 workers will be affected, but no layoffs are expected.

The factories have been using parts from their inventories and those that were shipped before the disaster, but those supplies are running out.

Spokesman Mike Goss said, "We're going to get to a point this month where that gap in the pipeline starts to show up. So we'll have to suspend production for a while,"

Toyota gets about 15% of the parts for cars and trucks built in North America from Japan, "but still you have to have them all to build the vehicles," Goss said.

Shares of Toyota Motor are trading down 1.29% at $79.47.

Cook Inlet Energy to Restart Production at Osprey Platform

Cook Inlet Energy to Restart Production at Osprey Platform

Monday, April 04, 2011
Alaska Journal of Commerce

Rockhopper Updates Ops at Sea Lion Appraisal

Rockhopper Updates Ops at Sea Lion Appraisal

Monday, April 04, 2011
Rockhopper Exploration plc
 
Rockhopper provided the following technical update on its Sea Lion Discovery after further interpretation of the results of well 14/10-4:
  • Porosity in 14/10-4 in the range 15%-27%, average 20%
  • Net to gross within the pay zone of 88%
  • Dual packer modular formation dynamic tester (MDT) results indicated well had the potential to flow at 2,700 bbls per day, compared to c.2,000 bbls per day seen in 14/10-2
  • Management interprets new low case area of 22km2 with stock tank oil initially in place (STOIIP) of 516 mmbbls giving 155 mmbbls recoverable at 30% recovery factor
  • New seismic depth conversion confirms upper fan full to spill, oil water contact within the upper fan package at 2,477m true vertical depth subsea (TVDSS)
  • Analysis of MDT results and logging indicates 14/10-2 and 14/10-4 are in communication.

Africa Oil Inks Agreement for Lion Shares

Africa Oil Inks Agreement for Lion Shares

Monday, April 04, 2011
Africa Oil Corp.

Endeavour Redeems 6% of Senior Notes

Endeavour Redeems 6% of Senior Notes

Monday, April 04, 2011
Endeavour International Corp.
 
Endeavour announced that it is redeeming all of its outstanding $81.25 million of 6% Senior Notes due 2012 (the "Notes") with a portion of the proceeds from its recently completed offering of common stock. The redemption will be made in accordance with the terms of the indenture governing the Notes.

Endeavour expects to redeem the Notes on or about April 20, 2011 (the "Redemption Date") at a redemption price of 100% of their principal amount, plus accrued and unpaid interest to the Redemption Date.

ProSep Concludes Revolving Loan

ProSep Concludes Revolving Loan

Monday, April 04, 2011
ProSep Inc.
 
ProSep has concluded a $2.5 million unsecured revolving loan agreement with Fondaction. This facility will provide the Company with additional liquidity to fund working capital requirements due to an increased level of activity and growing backlog and to support investments in strategic initiatives.

The facility bears interest at a monthly fixed rate of 1%, has an initial twelve month term and, subject to annual review, can be renewed for up to a total of three years. It will rank after any existing secured indebtedness of the Company.

Penspen Appoints New O&G Field Engineering Director

Penspen Appoints New O&G Field Engineering Director

Monday, April 04, 2011
The Penspen Group
 
The Penspen Group has announced the appointment of Mike Simm as its new Director of Oil and Gas Field Engineering. Mike joins Penspen from Foster Wheeler where he worked in a number of Senior Management Roles including Divisional Director, Engineering Operations, Divisional Director, Process Engineering, and Programme Manager of their Strategic Alignment Initiative.

As Director of Oil and Gas Field Engineering, Mike will work across a broad range of technical disciplines to develop Penspen's field development expertise across the full project lifecycle into one of the company's principal business streams. Penspen has regularly provided engineering and project management services into Field Development work and the majority of its Operations and Maintenance activities are in oil and gas producing fields. Mike's role will be to strategically address building a comprehensive engineering and project management service for these clients.

Penspen's Chief Executive David Stanley, said, "I am delighted to welcome Mike to the Penspen Group and very much look forward to working with him to build on Penspen's field development expertise. Penspen is frequently requested to provide such services and with Mike heading this business for us, we will be able to respond positively and comprehensively."

Mike Simm said, "Penspen is a company driven by excellence and values and I am very excited to be joining them. David and the team I am joining have a clear vision to continue to deliver excellence to existing clients, as well as to grow in a structured and sustainable way into other areas we have until now addressed on a more opportunistic basis. I know that my strong background in the engineering of international projects with multi-disciplined, multi located teams is a great fit with Penspen. I welcome the opportunity to become part of this very successful and well established business."

Red Spider Launches New Products at Key Industry Events

Red Spider Launches New Products at Key Industry Events

Monday, April 04, 2011
Red Spider

Red Spider is launching two game-changing products to new international markets for the company at key industry events.

The UK-headquartered company recently expanded into the North American market, opening a base in Houston. The company has invested nearly £1.6million in the last quarter in increasing its fleet of products to ensure it can respond to growing customer demand.

eRED, Red Spider's first tool to use its patented remote open close technology for pressure testing applications, has been used in 12 fields. The technology is on its way to becoming the industry standard solution for various downhole applications.

The valve has allowed North Sea operators to save up to £600,000 during a single subsea completion operation, typically reducing slickline runs from 8 to 1. In subsea workover operations savings of up to 41 hours and £500,000 have also been recorded in a single job.
It quickly became apparent from the eRED's continuing success that there were other potential applications for Remote Open Close Technology in the completion of wells. Further customer requests led to around £1.9million of investment and over two years of extensive research and development work which has resulted in the two new products - PowerBall® and the eRED-FB (a completion placement valve).

Red Spider CEO Steve Nicol, who is attending the South African event, said, "There is enormous potential for our products in the US, South America and Africa - a high level of interest has been expressed in all of these regions. Both conferences are excellent forums for us to show our new completions technology to highly-relevant audiences."

Traco Joins Quality Companies

Traco Joins Quality Companies

Monday, April 04, 2011
Quality Companies LLC

Quality Companies welcomed Traco to its family of companies. Effective April 1, 2011, Traco will join the Quality Companies taking its place alongside Quality Construction & Production, (QCP) and Quality Production Management, (QPM). The addition of Traco further diversifies the Quality Companies portfolio and strengthens its position as the premier oil and gas service provider.

Kendall Allen, Traco's Vice President of Production, sees many new opportunities by joining the Quality Companies, adding "This move with Quality Companies gives us all more diversification in the oil and gas industry making us much stronger….We are all very proud to be joining such a fantastic organization."

Quality Companies co-founder, Nathan Granger, commented that the similar management philosophies and business models of Quality and Traco should facilitate a seamless integration of services. Granger expects the Traco addition will immediately enhance the growth potential of all of the Quality Companies and anticipates the organization will eclipse the 100 Million Dollar revenue mark within 3 to 5 years. Granger said, "There's no doubt the Traco addition provides further opportunities for QCP and QPM and vice versa. Although I am not a huge fan of the term, Quality Companies will truly be a 'one stop shop' for many of our clients. We're now fully capable of servicing the complete production services needs of our clients from fabrication to installation, maintenance, and operation…"

Troy Collins, Quality Companies President and cofounder, is also enthusiastic about the Traco addition adding that, "it was nice to finally get the deal wrapped up today so that we can get to work building our new facility. There's not a doubt in my mind that this deal enhances the ability of all of our companies to meet the diversified needs of our clients. As someone with firsthand knowledge of being shortchanged in a buyout, I am completely committed to Traco and ensuring that all parties involved in this acquisition achieve maximum return."

Quality Companies will consolidate operations at Traco's existing 14 acre facility on Griffen Road in Youngsville, LA where it plans to build state of the art fabrication and paint facilities, as well as a 12,000 square foot corporate headquarters. Construction is slated to begin in late April with completion projected before January 1, 2012.

BPD Zenith Expands Business

BPD Zenith Expands Business

Monday, April 04, 2011
BPD Zenith

BPD Zenith is expanding its business with the launch of new premises in Aberdeen.
The company specializes in the provision and support of IBM's Maximo Enterprise Asset Management (EAM) software, which is used by many North Sea operators to manage their maintenance and engineering operations. The new office is at Original House on Craigshaw Road where seven new and existing staff will be based.

BPD Zenith is headquartered in Carlisle and has driven its Aberdeen expansion plans forward on the back of a successful financial year, which saw the firm record a turnover of £2.5million – almost 40% more than figures recorded for the previous year.

George Lightfoot, managing director of BPD Zenith, said, "We are delighted to expand our presence in Aberdeen. Over the past few years we have been developing and growing our client base in the North east and we felt the time was right to open an office.

"We recognize the significant opportunities that the Aberdeen oil and gas sector presents as more North Sea assets are acquired by lower cost operators, many of whom are already our clients. To date, we have provided Maximo software implementation and customization services to support 25 successful asset transitions in the North Sea.

"We pride ourselves on providing a high level of expertise in the maintenance sector, which has enabled us to develop software solutions that can be tailored to suit the needs of individual clients.
"We are particularly looking forward to working with companies operating in the energy sector and intend to use our unique positioning as a company that specializes in EAM with a presence in Aberdeen to offer clients on site, local expertise, training and support with their asset management systems."

Onshore Oil Helps Fill Gap from Gulf

Onshore Oil Helps Fill Gap from Gulf

Monday, April 04, 2011
Houston Chronicle
by  Brett Clanton

A spill-related slowdown in the Gulf of Mexico could cut into oil production from the offshore basin for several years. But a number of emerging oil fields onshore, once thought out of reach, are helping the U.S. fill in the gap in the meantime.

Oil and gas companies, using techniques mastered in recent years to produce natural gas from shales and other dense rocks, are now having success extracting big quantities of oil from tight rock formations stretching from Texas to North Dakota.

Amid steadily high oil prices and a U.S. market saturated with low-price shale gas, they've had ample incentive to try.

In 2010, when an offshore disaster dominated the news, rising output from such fields -- including North Dakota's Bakken Shale and the Eagle Ford Shale play in South Texas -- quietly helped domestic crude oil production rise for the second year in a row, after years of declines.

Production also rose in the Gulf, where several new pro-jects ramped up output. (A federal moratorium on deep-water drilling, which lasted for five months after the Deepwater Horizon accident, did not apply to producing platforms.)

Bigger contributions from U.S. onshore fields arrive at a good time. Due largely to moratorium-related delays, oil production in the Gulf will fall by 240,000 barrels per day this year and another 200,000 barrels per day in 2012, the U.S. Energy Information Administration forecast last month. Higher production from onshore fields will help offset the declines.

"That's sort of the silver lining," said Bob Fryklund, vice president of research at IHS-Cambridge Energy Research Associates.

How long that disruption in the Gulf will last remains an open question. Though the deep-water moratorium was lifted in October, regulators so far have approved just nine permits for deep-water drilling activities that were covered by the ban. As a result, projects representing 400,000 barrels per day of production over the next five years are being pushed back from their original start dates, Fryklund said.

Rising output from onshore fields, however, could help keep total U.S. oil output flat or possibly higher in 2011 and over the next several years, he said.

Complex rock

Onshore fields, both old and new, are yielding more oil with the help of technology advances in drilling and production methods that have made complex rock formations more accessible and lowered development costs.

"Geologists have known that oil was there for years," said David Kirsch, industry analyst with PFC Energy. "It was just a question of how to get it out. It's a combination of project economics and technology coming together to make it viable."

The Bakken shale, for instance, could hold more than 4 billion barrels of undiscovered, technically recoverable oil -- a 25-fold increase over what could be recovered in 1995, according to the U.S. Geological Survey. Other emerging U.S. oil fields include the Granite Wash, from North Texas into Oklahoma .

In addition, advanced drilling and extraction methods are boosting production in mature fields such as the Permian Basin in West Texas.

Greg Garland, ConocoPhillips' senior vice president of exploration and production for the Americas, recently said the company's Permian properties increased output last year -- by 5,000 barrels per day -- for the first time since 1972. "Horizontal drilling, these advanced fracturing techniques, are literally breathing new life into some of these old fields," he said.

In 2009, domestic oil production rose for the first time since 1991 as increases from deep-water fields in the Gulf and tight oil plays onshore like the Bakken overshadowed declines elsewhere.

Output hit 5.36 million barrels a day, up from 4.95 million barrels a day the year before, according to Energy Department figures. Last year, the trend continued, with production climbing to 5.51 million barrels per day.

Reduced imports

The gains have helped reduce U.S. oil imports, though the nation remains a long way from energy independence as Americans consume more than 18 million barrels of petroleum products a day.

The Obama administration has cited the production gains in answer to oil companies' complaints over the past year that the drilling ban and permitting delays in the Gulf have brought the U.S. oil and gas industry to its knees.

But critics say the administration is unfairly taking credit for rising production and falling imports when offshore projects coming onstream now were launched before President Barack Obama took office. And onshore gains are chiefly due to tight rock oil plays located on private and state lands, not federal.

UK Oil Firms to Brief Lawmakers Next Month on Tax Hike Impact

UK Oil Firms to Brief Lawmakers Next Month on Tax Hike Impact

Monday, April 04, 2011
Dow Jones Newswires
by  Alexis Flynn

U.K. lawmakers will hear submissions next month from the country's major oil and gas producers as to how a large tax increase is affecting the industry, the Energy and Climate Change Committee said Monday.

In a one-off evidence session scheduled for May 4, members of the parliamentary committee will hear oral submissions from Oil & Gas UK and the Oil and Gas Independents' Association.
The meeting comes as several large companies said they were reconsidering billions of pounds of investments in oil and gas production after a shock tax increase in Chancellor of the Exchequer George Osborne's budget two weeks ago.

In a statement confirming it will participate in the session, Oil & Gas UK said it was consulting its members to quantify the full impact of the budget move on investment and will publish the findings by the end of April.

Oil Cos Tell Legislature Investments Lost Due to Taxes

Oil Cos Tell Legislature Investments Lost Due to Taxes

Monday, April 04, 2011
Alaska Journal of Commerce

Constellation Energy Reached Deal To Manage Toyota's Natural Gas Needs (CEG,TM)

Constellation Energy Reached Deal To Manage Toyota's Natural Gas Needs (CEG,TM)



Constellation Energy (NYSE:CEG) said it reached a deal with Toyota Motor Corp.'s (NYSE:TM) North American engineering and manufacturing operations to manage its natural gas needs.

The company will handle natural gas supply, risk management, hedging, budget analysis, energy market monitoring and other services for Toyota manufacturing facilities in the U.S., Canada and Mexico. It will also provide risk management services to 14 facilities and will supply natural gas to nine Toyota sites in North America.

Kuwait Oil Spends $5.41B A Year on Capex

Kuwait Oil Spends $5.41B A Year on Capex

Monday, April 04, 2011
Dow Jones Newswires

Lukoil Declares Force Majeure Offshore Cote d'Ivoire

Lukoil Declares Force Majeure Offshore Cote d'Ivoire

Monday, April 04, 2011
OAO Lukoil
LUKOIL released an official force majeure notification under the PSA terms with regards to the CI-205 offshore geological prospecting project to the Government of Cote d'Ivoire, relevant ministries and Oranto Petroleum and PETROCI Holding partner companies.

LUKOIL Overseas will resume active operations under the CI-205 project as soon as the situation in Cote d'Ivoire subsides.

Aztec Drills 2nd Liberty County Well

Aztec Drills 2nd Liberty County Well

Monday, April 04, 2011
Aztec O&G Inc.
Aztec announced the successful completion of its first well in Liberty County, the Dyco Blanding #1. Aztec now announces the successful drilling of its second well in Liberty County. The Blackstone 80 #1 well was recently completed in the Cockfield Channel sand that is a known prolific producer in the area. Initial production rates averaged approximately 50 to 60 barrels of oil per day.

"Based on the results of these two wells, we believe we have several additional potential locations for future development in this county," stated Waylan Johnson, President of Aztec Oil & Gas, Inc. Mr. Johnson further stated, "As a result of the foregoing, we anticipate that Aztec will participate in at least 3-5 wells in this field and surrounding areas in 2011."

General Electric to Offer Gas Turbines to Tokyo Electric Power

General Electric to Offer Gas Turbines to Tokyo Electric Power



General Electric (GE) will offer gas turbines to Tokyo Electric Power Co. to ease energy shortages in the Japanese capital and surrounding area, Chief Executive Office Jeffrey Immelt told reporters in Tokyo after meeting with Japanese Trade Minister Banri Kaieda, Bloomberg reports.

PetroNeft Looks Ahead to 2011 Exploration

PetroNeft Looks Ahead to 2011 Exploration

Monday, April 04, 2011
PetroNeft Resources plc
PetroNeft, owner and operator of Licenses 61 and 67, Tomsk Oblast, Russian Federation, is pleased to provide an update on its operations.

Highlights:
  • Hydraulic fracturing program completed successfully
  • Target production now estimated to be between 7,000 and 8,000 bopd at end of Q1 2012
  • First and second production wells in 2011 development program successfully drilled - first well encounters thickest net pay interval to date
  • Five well exploration drilling program targeting 120 mmbbls to commence in April
License 61 Hydraulic fracturing program
  The hydraulic fracturing of nine wells at Pad 1 at the Lineynoye oil field was completed successfully in February 2011. All of the fracture stimulated wells have been returned to production and cleaned-up. Current production from the nine wells is approximately 3,000 bopd; this does not include the Lineynoye No. 1 or No. 6 wells which are currently offline for operational reasons.

In the Lineynoye No.1 well, which was drilled in 1972, the diameter of the well casing is too small to accommodate an Electrical Submersible Pump (ESP) and a special order screw pump was purchased for the well. This pump is currently being installed.

The well produced around 275 bopd on natural flow during pilot production in 2009, but production from the well has been minimal this past year because it could not flow naturally against the back pressure of the process system caused by the ESPs in the other wells. The screw pump should remedy this issue.

Repair of a casing hole in Lineynoye No.6 well has just been completed and an ESP is currently being re-installed. This well had previously produced around 200 bopd.

Both Lineynoye No. 1 and No. 6 are anticipated to be back on line within the month.
We are satisfied with the results of the fracture stimulation program and the performance of the fracture stimulated wells to date and remain highly confident with regard to our understanding of both geology and reservoir quality in License 61. The results of this program will enable us to refine our plans for future activities, especially with regard to the size of the frac and the time required to return wells to production following the fracture stimulation. Current plans are to fracture stimulate up to 8 of the 17 new development wells being drilled in 2011 this summer using a heli-frac crew. To this end we have purchased the necessary proppant and frac tubing and already moved these items to the field by winter road. In addition, we have also recently purchased a new workover rig, which will be staffed with our own crew, and speed up workovers and their quality in the future.

Given our recent experience, we have felt it prudent to take a more conservative view regarding the future production profile taking into account of the attendant variables for the timing of bringing wells online and the timing of the hydraulic fracturing of new wells. Therefore the Company is now targeting a range of between 7,000 and 8,000 bopd by the end of Q1 2012 when all of the 17 new wells being drilled in the 2011 campaign, together with the 11 existing wells, will have been fracture stimulated and returned to production.

2011 License 61 Development program - Lineynoye oil field

Production drilling at Pad 2 has commenced and the 201 and 202 wells successfully drilled and cased. Preliminary log and survey data indicate that well 201 encountered the thickest net pay interval to date in the drilling program.

The rig for Pad 3 and all materials have been mobilized to site and rig-up is about 25% complete. The first well should spud in late April.

Works to tie-in Pads 2 and 3 to the existing central processing facility are ongoing and it is expected that this work will be completed in May 2011 thereby allowing new wells to be brought swiftly into production. All of the major equipment and materials necessary to expand the central processing facility from 7,400 bpd to 14,800 bpd have been delivered to site and this work is proceeding to schedule and is expected to be completed by July 2011.

2011 License 61 Exploration program

PetroNeft's high impact 2011 exploration program, which has the potential to more than double our reserves this year, will target over 60 million barrels across three prospects in License 61. The first of these, Kondrashevskoye No. 2 well, should spud in late April; site preparation is complete, the rig has been mobilized to location and rig-up is underway.

The second well in the schedule at Sibkrayevskaya No. 372 will target the largest prospect in the program at over 40 million barrels. At present, site preparation and mobilization of the rig and materials is complete and rig-up operations are planned to start in late April for a June spud. The site for the North Varyakhskaya No. 1 well has also been prepared and the rig and materials are being moved to the site. This well will be the last exploration well drilled at License 61 in 2011 with a planned spud in July.

2011 License 67 Exploration program

The drilling tender for the two exploration wells to be drilled in 2011 in License 67 is currently underway. This program will also target over 60 million barrels. The two wells, Cheremshanskaya No. 3 and Ledovoye No. 2a, are located close to existing all weather roads and will be drilled in the second half of the year following the License 61 exploration wells.

Mobilization of equipment for the construction of the Cheremshanskaya site has commenced.
Dennis Francis, Chief Executive Officer of PetroNeft, commented, "We are pleased with the results of our nine well fracture stimulation program but we have learned from the program and feel we can improve on both the design and efficiency in our future drilling and frac programs.

Based on these results we have taken a more conservative approach to our production profile and are targeting a range from 7,000 to 8,000 bopd by the end of Q1 2012. The Company has a very significant reserve base which we are only just starting to develop and the key for sustained production growth in the coming years will be to continue to build the stock of producing wells, in the most cost efficient manner.

Part of the process is implementing our Lessons Learned and continuous review of the development sequence based on new discoveries. Provided we do these tasks well the future of the Company looks very good and we will build significant production and cash flow profiles over the next 5 years."

Beach Boasts Results for Western Flank Campaign

Beach Boasts Results for Western Flank Campaign

Monday, April 04, 2011
Beach Energy Ltd.
Beach has obtained excellent results from the first two wells drilled of its 16 well operated program in the Western Flank area.

In late February, the Parsons-3 oil development well encountered a 9 meter oil column. This result has now been immediately followed by a second success at Parsons-4, where a 5.5 meter column of oil was encountered in line with pre-drill prognosis. Both wells intersected excellent quality Namur sandstone reservoirs and have been completed for production and early tie-in to the Parsons facility. Following completion and perforation, Parsons-3 flowed over 5000 barrels of oil per day during clean up. No water was produced. This well is expected to be on-line around mid April with Parsons-4 shortly thereafter.

The success at Parsons will increase daily gross production from the PEL 92 area to around 6000 barrels of oil per day (gross). Beach expects to book additional reserves for the Parsons field following these results, the quantity of which is currently being assessed.

Oil from the Parsons field is transported from the Western Flank by flowline to Moomba via Tantanna and thus is not at risk from flooding in the area.

The Ensign #30 rig will now move to the Butlers-2 location. The well to be drilled will appraise the northerly extent of the Butlers oilfield and facilitate development planning and production optimization. A successful result at Butlers-2 has the potential to add up to 2 million barrels of oil (gross).

The Ensign #18 rig is currently moving across the Cooper Creek via the Kudnarri Bridge into PEL 91. The rig is expected to be 100% on location at Hanson-1 by the middle of this week and will commence drilling after a short maintenance and repair period of one to two weeks.

Hanson-1 is the first of a five well exploration campaign for the PEL 91 joint venture.

A further flood pulse is expected in the PEL 91 and PEL 92 areas in mid April, however Beach has established a remote operations base at Gunyah on the western side of the Cooper Creek to enable drilling operations to continue unaffected.

Ophir Drills Third Gas Discovery Offshore Tanzania

Ophir Drills Third Gas Discovery Offshore Tanzania

Monday, April 04, 2011
BG Group plc

BG Group announced its third Tanzanian gas discovery with the Chaza-1 well, located in Block 1 approximately 18 kilometers offshore southern Tanzania in a water depth of around 950 meters. The discovery is some 200 kilometers south of BG Group's Pweza and Chewa discoveries, previously announced.

The three successful wells so far drilled by the joint venture of BG Group (60%) and Ophir Energy plc (40% operator) form part of an initial work program planned for Blocks 1, 3 and 4 offshore Tanzania. The initial work program also includes the acquisition of a minimum of 4,000 square kilometers of 3D seismic data. BG Group has the option to assume operatorship of all three blocks upon completion of the initial work program.

To date in 2011, a 3 200 square kilometer 3D seismic survey has been acquired in Blocks 3 and 4, and a second 3D survey of 1 800 square kilometers is nearing completion in Block 1. It is intended that a second drilling campaign will commence in late 2011.

Apache Hits Gas Pay at Zola

Apache Hits Gas Pay at Zola

Monday, April 04, 2011
Santos Ltd.
Santos announced that the Zola-1 exploration well in WA-290-P, located in the Carnarvon Basin offshore Western Australia, has intersected over 100 meters of net gas pay sands over a 400 meter gross interval in the primary target, the Mungaroo formation.

Wireline logging and pressure testing completed over the weekend has confirmed the net gas pay and the high quality of the reservoir sands.

The Zola-1 well is located 27 kilometers southwest of Gorgon-1, with a water depth at location of 280 meters. The discovery is on trend with the Gorgon gas field and is situated near existing and developing gas infrastructure.

Santos Vice President Exploration and Subsurface, Trevor Brown said Santos will be working with partners to quickly appraise this discovery.

"Zola is in a terrific location and is a significant gas discovery for Santos and Western Australia," Mr. Brown said.

Santos Vice President WA & NT, John Anderson added the company would commence discussions with partners on development options for this resource.

"The Zola discovery adds to the company's strong asset base in Western Australia. This is the first well in an exciting drilling program this year for Santos in Western Australia," Mr. Anderson said.

Following completion of operations at Zola, the Stena Clyde drilling rig will move to Finucane South, Santos' next exploration well in the Carnarvon Basin.

Santos holds 24.75% of WA-290-P. Apache (operator) holds 30.25%, OMV Australia 20%, Nippon Oil Exploration 15% and Tap Oil 10%.

Valiant to Take Stake in Orchid Prospect

Valiant to Take Stake in Orchid Prospect

Monday, April 04, 2011
Valiant Petroleum plc
Valiant's wholly owned subsidiary, Valiant Exploration Limited, has reached an agreement to acquire a 30% stake in Block 29/1c containing the Orchid prospect from Summit Petroleum Limited ("Summit") in return for carrying a share of the cost of the initial exploration well.

The Orchid prospect is a four-way dip closure in the Tertiary and Chalk horizons and is a located in the Central North Sea surrounded by the producing Banff, Kyle, Bittern and Gannet group of fields. The Orchid prospect is located adjacent to acreage Valiant recently agreed to acquire from Sterling Resources (U.K.) Ltd, which contains a similar prospect and two smaller appraisal opportunities.

Summit, the operator, is currently seeking a semi-submersible rig to drill the prospect in the second half of the year.

Peter Buchanan, CEO, commented, "We are pleased to join Summit in the Central North Sea which is a growing area of exploration focus for Valiant. Orchid will be the third exploration well planned for 2011 following the recent announcement regarding the farm-out of Cladhan South in the Northern North Sea and the Don Southwest Area E discovery made in the first quarter."

Maersk Oil Strengthens North Sea Portfolio with Norway Acquisition

Maersk Oil Strengthens North Sea Portfolio with Norway Acquisition

Monday, April 04, 2011
Maersk Oil
Maersk Oil has acquired shares in three production licenses in Norway from Marathon Petroleum Norge A/S, a wholly-owned subsidiary of Marathon Oil, in exchange for Maersk Oil's financial contribution to the Earb South exploration well.

Marathon Petroleum Norge A/S is currently drilling the well on the Earb South Prospect in the South Viking Graben. Drilling is expected to be completed in May.

As a result of the deal, Maersk Oil will have a 15 percent share in Production Licenses PL505 and PL505BS, where Marathon Petroleum Norge A/S remains the operator (35%) with Lundin Petroleum (30%) and VNG (20%) as partners.

Maersk Oil will also have a 10% share in Production Licence PL570, operated by VNG (40%) with Marathon Petroleum Norge A/S (20%) and Lundin Petroleum (30%).

"This is quality acreage which helps our goal of building a strong portfolio in this part of the North Sea," said Maersk Oil Managing Director in Norway, Morten Jeppesen.

"We believe Maersk Oil's experience in similar plays in both Norway and across the border in the UK could be extremely useful in appraising this acreage, which we believe has a significant potential," Jeppesen said.

The transaction is subject to the necessary authority approvals.

Maersk Oil will now have a total of ten production licenses, three operated, in Norway.

Statoil Gets Green Light to Drill in Norwegian Sea

Statoil Gets Green Light to Drill in Norwegian Sea
Monday, April 04, 2011
Petroleum Safety Authority Norway
Statoil has received consent to carry out exploration drilling of well 6407/3-1S in the Norwegian Sea with the Transocean Leader mobile facility.

The well will be drilled in production license 312, approx. 100 nautical miles west of Namsos.

The well has the coordinates N 64° 46' 32.5", E 7° 42' 14.2". The water depth at the site is 232 meters.

Drilling is scheduled to start in March 2011.

The operation has an estimated duration of 46 days. There is a sidetrack option, with an estimated duration of 26 days.

Ithaca Acquires North Sea Assets from Hess

Ithaca Acquires North Sea Assets from Hess

Monday, April 04, 2011
Ithaca Energy Inc.
Ithaca has entered into an agreement to acquire a 28.46% non-operated interest in the Cook oil field and a 7.41% non-operated interest in the Maclure oil field ("Maclure") from Hess Limited ("Hess") for a consideration of US $74.5 million and the transfer from Ithaca to Hess of a 10% interest in each of exploration Blocks 42/25b, 43/16a and 43/21c ("the SNS blocks") in the Southern North Sea (the "Acquisition").

Cook, operated by Shell, lies in Block 21/20a in the Central North Sea. Gross average production from the field for 2010 was 7,940 barrels of oil equivalent per day ("boepd") of mainly oil (2,260 boepd net to Hess interest).

Maclure, operated by BP, is located in Block 9/19 in the Northern North Sea. The field produces mainly oil; gross average production from the field for 2010 was 5,857 boepd (434 boepd net to Hess interest).

Maclure production is temporarily suspended. Production is routed through the third party owned Gryphon Floating Production Storage and Offloading vessel (the "FPSO"), which broke some of its moorings in February 2011. The operator of the FPSO is taking measures to investigate and repair the mooring system.

The acquisition of Maclure is subject to preemption within 30 days of notification of the transaction by other parties in the Maclure field.

The Company has commissioned Sproule International Ltd ("Sproule") to provide a Reserves Audit Opinion on Cook and Maclure. The opinion from Sproule is anticipated in approximately 40 days from this announcement and, on receipt, the Company expects to make a further, more detailed announcement including information on reserves and other potential upsides associated with the Acquisition together with details, if any, of preemption by any Maclure parties. Following completion of the transaction, Ithaca plans to engage Sproule to undertake a further comprehensive evaluation of the new assets in accordance with the Canadian Oil and Gas Evaluation

Handbook ("COGEH") reserves definitions and evaluation practices and procedures as specified by National Instrument 51-101 ("NI 51-101").

Terms of the Acquisition

The Acquisition will be effected through a sale and purchase agreement ("SPA") between Ithaca Energy (UK) Limited, as the purchaser, and Hess Limited, as the seller. The SPA contains customary provisions for a transaction of this nature in the oil and gas sector and is subject to DECC and co-venturer approvals.

The Acquisition is expected to complete in Q3 2011 with an effective date of January 1, 2011.

Financing of the Acquisition

The Acquisition will be funded from existing cash. Evaluation of the Acquisition with Lloyds Bank Corporate Markets (previously referred to as 'HBOS') indicates that the Acquisition should support an increase in Ithaca's debt capacity of approximately US $45 million. In line with previous announcements on the Company's debt facilities, the overall size of the Company's debt facility is reasonably anticipated to increase from US $140 million to US $185 million. The Company has not drawn from this facility.

Iain McKendrick, CEO, commented, "This acquisition strengthens the Company's portfolio of producing oil assets and diversifies Ithaca's existing UK North Sea production base, whilst keeping decommissioning liabilities to a minimum. Significant non-operated interests, particularly in the Cook field, are highly strategic for the Company. It permits the Company to focus on extracting value from its existing operated portfolio, whilst being underpinned by additional non-operated production and cash flow being generated though the acquisition. Final negotiations to crystallize the transaction were conducted after the recent changes to the UK Fiscal system. Once again this demonstrates our capability to be opportunistic, execute accretive deals and build value for our shareholders".

Premier to Steer North Sea Fyne Block

Premier to Steer North Sea Fyne Block

Monday, April 04, 2011
Antrim Energy Inc.
Antrim announced that Premier has provided notice that it has elected to drill the East Fyne well under the Joint Venture and Earn-In Agreement with Antrim, previously announced October 6, 2010.

The East Fyne well is an appraisal well designed to de-risk the eastern extent of the Fyne Field in Block 21/28a UK Central North Sea, and is expected to be drilled before the end of 2011. Under the conditions of the previously announced transaction, the well will be drilled at no cost to Antrim and the cost of drilling, completion and/or abandonment deducted from Premier's carried contribution of up to $50 million assigned to offset all or a portion of Antrim's development expenses to bring the Fyne Field to production.

This election by Premier results in the transfer of a 39.9% working interest and operatorship of the Fyne Block 21/28a from Antrim to Premier. Antrim retains a 35.1% working interest in the block, with First Oil Expro Limited holding the remaining 25% working interest. The license assignment and transfer of operatorship under the Agreement is subject to partner approval and to the usual UK government approvals.

The Fyne Block 21/28a was assigned gross proved plus probable reserves of 23.3 million barrels of oil by independent engineering consultants McDaniel & Associates Consultants Ltd. as at Dec. 31, 2010. The Fyne Field is situated immediately west-southwest of the Guillemot group of oil fields, which have produced in excess of 70 million barrels of oil to date. Fyne is also located approximately 35 kilometres north of the recently announced Catcher and Burgman oil discoveries in Block 21/9, both of which have reservoirs of comparable age with those in the Fyne Field.

Drilling of the East Fyne well will be in addition to Antrim's recently announced drilling plans for two exploration wells in the Greater Fyne Area, the West Teal and Carra wells (Antrim 100%). Premier retains a right to participate up to 50% in the Greater Fyne Area exploration program, which is due to commence mid-year 2011.

Seadrill Finalizes $4.1B Deal with North Atlantic Drilling

Seadrill Finalizes $4.1B Deal with North Atlantic Drilling

Monday, April 04, 2011
Seadrill Ltd.

Seadrill announced that North Atlantic Drilling's acquisition of our harsh-environment drilling activities was successfully completed on March 31, 2011. Closing of the transaction took place in line with the initial agreement after North Atlantic Drilling successfully completed a private placement of 250,000,000 new shares in February and secured a US $2.0 billion loan facility.

The US $4.1 billion purchase price to Seadrill was settled by North Atlantic assuming approximately US $2.0 billion in existing debt and payment obligations. This will be refinanced by drawing down the loan facility mid April.

The loan facility will have a six-year tenor with a balloon installment of US $1.0 billion at maturity. The loan will have a cost of Libor plus 2.0% margin, which is lower than anticipated in the original presentation.

Furthermore, North Atlantic Drilling has issued a US $500 million seven-year bond loan with a coupon of 7.75%, subscribed for in full by Seadrill as part of the settlement. Seadrill intends to resell the bond in the market.

The remaining part of the purchase price has been paid in cash and shares.
As a consequence of the closing, the right for North Atlantic Drilling's shareholders to put their North Atlantic Drilling shares to Seadrill at the original issue price of US $1.70 per share will expire at close of business Oslo time on April 14, 2011, i.e. 10 working days after closing of the Acquisition Agreement.

All 1,050 employees involved in the operations of the five existing operating units have accepted to be transferred from Seadrill to North Atlantic Drilling.

North Atlantic Drilling will, effective from April 1, have five drilling units in operation. North Atlantic Drilling's sixth rig, the West Elara, is expected to be delivered from the Jurong Shipyard during the second quarter 2011 and will then commence drilling operations under a contract with Statoil in the North Sea. Seadrill has furthermore decided to offer the recently ordered harsh environment jack-up drilling rig West Linus, which will be delivered in 2013, to North Atlantic Drilling at its cost. The unit has a five year drilling contract in place for operations in Norway for ConocoPhillips. It is anticipated that the acquisition of West Linus including the contract coverage can be completed without raising additional equity.

North Atlantic Drilling has issued 750 million new shares to Seadrill at a subscription price of US $1.70. North Atlantic Drilling has after the transaction 1.0 billion shares issued of which Seadrill holds 75%. The company has currently 1,190 shareholders. Of which 391 are employees in North Atlantic Drilling.

The Board of North Atlantic Drilling has subsequent to the successful completion of the acquisition agreement decided to proceed with a listing of the company's shares on the Oslo Stock Exchange. The aim is to complete the listing in the third quarter 2011.

Alf C Thorkildsen, CEO in Seadrill Management AS, said, "We are pleased to have secured the necessary financing for North Atlantic Drilling and completed the acquisition agreement in line with an ambitious schedule. This marks an important starting point for North Atlantic Drilling which will now commence operations with its rigs. We look forward to develop North Atlantic Drilling further and believe the company is well positioned to take active leadership in a further consolidation of the fast growing market for harsh-environment drilling units."