Commodity Corner: Oil Declines on bin Laden News

Commodity Corner: Oil Declines on bin Laden News

Monday, May 02, 2011
Rigzone Staff
by Matthew V. Veazey

News that Osama bin Laden was killed in a U.S. covert operation in Pakistan contributed to a temporary dip in oil futures Monday, with oil bottoming out at $110.82 a barrel.

June crude oil would ultimately settle at $113.52, though. Despite reports that bin Laden's remains are now somewhere in the ocean as well as assurances by President Obama that the world is "safer" without the 9/11 mastermind, Al-Qaeda and other terrorist organizations remain a serious threat to the world's oil supply. This latter realization, along with unconfirmed reports by Iranian state media that Israeli military jets were preparing airstrikes against Iran, caused the oil price to regain territory lost earlier in the day.

Crude oil peaked at $114.83 Monday.

Natural gas for June delivery also ended the day higher, settling at $4.69 per thousand cubic feet. The National Oceanic and Atmospheric Administration's Climate Prediction Center recently forecast below-normal temperatures for May throughout the northern tier of the Lower 48 states. This outlook has been bullish for natural gas given the boost in heating demand that could occur should it come to fruition.

Front-month natural gas traded within a range from $4.64 to $4.73 Monday. June gasoline slipped to $3.35 a gallon after fluctuating from $3.31 to $3.42.

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Coastal Governors Form OCS Coalition

Coastal Governors Form OCS Coalition

Monday, May 02, 2011
Consumer Energy Alliance

Governors from four key coastal U.S. states announced Monday the formation of the Outer Continental Shelf (OCS) Governors Coalition, a group whose goal will be to promote a constructive dialogue between the federal government and states when it comes to the responsible development of energy resources offshore.

The coalition's mission was described in an open letter of invitation to governors from other coastal states sent today by Louisiana governor Bobby Jindal, Texas governor Rick Perry, Mississippi governor Haley Barbour and Alaska governor Sean Parnell. The engagement was officially announced by Governor Barbour during a panel discussion organized by Consumer Energy Alliance at the Offshore Technology Conference in Houston. Governor Barbour was joined by U.S. state officials from each of the participating states.

The letter explains the critical role that offshore oil and gas development has played in creating thousands of high-paying American jobs, and laments how federal decisions affecting the industry have been made with little consultation of state officials. The governors say the coalition will serve "as a mechanism to foster an appropriate dialogue between the coastal states and the Administration and ensure that future actions are done with adequate state input."

Consumer Energy Alliance president David Holt moderated the panel during which the announcement was made, and issued the following statement:

"Consumer Energy Alliance, representing both producers and consumers of energy, supports and applauds the collaboration of these four governors in promoting an open discussion about the benefits of producing American energy offshore, not only for their individual states, but for the entire nation and our economy. In a post-Macondo environment, these governors have seen the federal government significantly limit their ability to access critical domestic natural resources along the Outer Continental Shelf, subsequently denying their citizens and the entire nation reasonable energy prices and high-paying jobs in an unstable economy.

"By simply communicating effectively and more often, federal and state regulators can gain a better understanding of the benefits of safe offshore oil and gas exploration and production, and come to a consensus on how to make the most of American energy resources that will help improve domestic energy security, U.S. competitiveness and our economic well-being..Successful domestic oil and gas development will not only provide us with a more secure supply of energy, but it will also provide more opportunity for industries across all sectors of our economy."

Consumer Energy Alliance (CEA) is a nonprofit, nonpartisan organization, comprised of more than 160 affiliate members, including energy consumers and producers, and tens of thousands of consumer advocates, that supports the thoughtful utilization of energy resources to help ensure improved domestic and global energy security, stable prices for consumers and balanced energy policy for America.

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Oregon Utility to Invest $250M in Jonah Field Development

Oregon Utility to Invest $250M in Jonah Field Development

Monday, May 02, 2011
Encana Corp.

Encana Oil & Gas (USA) Inc., a subsidiary of Encana Corp., has completed a benchmark upstream joint-venture development agreement with Northwest Natural Gas Co., a Portland, Oregon-based natural gas distributor.

The Public Utility Commission of Oregon recently approved the agreement that will see Northwest Natural invest about US$250 million over the next five years to earn a working interest in certain sections of Encana's Jonah field in Wyoming. The arrangement provides NW Natural with secure, reliable and economic supplies of natural gas for a portion of the needs of its 674,000 customers.

"This is a landmark agreement and regulatory step that we believe will open the door for future upstream investment by utilities seeking price stability for their customers transactions that are backed by utility ratepayers and supported by regulators as prudent investments. As a leading producer, Encana has heard end-users' requests for structures that provide long-term price security, and under this agreement, we are able to achieve both our customer's goal and efficiently advance the development of a portion of the Jonah field," said Renee Zemljak, Encana's Executive Vice-President, Midstream, Marketing & Fundamentals.

An innovative supply model for a utility

Traditionally, utilities have purchased natural gas on short-term contracts from wholesale markets, with customers subject to fluctuating prices. Under this transaction, in order to reduce price uncertainty for consumers, NW Natural will invest approximately $45 million to $55 million per year for the next five years earning a working interest in certain sections of Jonah natural gas field. This direct producer-utility deal helps secure long-term natural gas supply for NW Natural at the cost of production rather than at future market prices.

"This agreement and the commission's order represent a lot of hard work by a lot of parties over a short period of time, and we are pleased the commission approved the transaction," said NW Natural President and Chief Executive Officer Gregg Kantor. "This is a terrific outcome for both customers and shareholders."

"This transaction is another of Encana's many joint-venture arrangements that provide attractive investment opportunities and reliable, economic supplies of natural gas to a variety of counterparties. These transactions help serve our customers' needs and accelerate the value recognition of Encana's enormous resource potential," Zemljak said.

Joint ventures attract more than $840 million to Encana lands in 2011; other joint ventures available

In the past few years, Encana has established numerous joint ventures in Canada and the U.S., many that involve other natural gas producers, as well as industrial firms and national oil companies. In 2011, joint ventures are expected to result in about $840 million of additional capital investment on Encana lands. Encana recently announced plans to attract new joint venture partners on selected assets in the Horn River basin and its Greater Sierra lands.

Encana is also offering an acquisition opportunity for a portion of its producing Greater Sierra resource play. This new joint venture initiative builds on previous announcements of a farm-out agreement with Kogas Canada Ltd., a subsidiary of Korea Gas Corporation, in the Horn River and Montney formations and a planned joint venture and acquisition by PetroChina International Investment Company Limited of a 50 percent interest in Encana's Cutbank Ridge business assets. RBC Capital Markets and Jefferies & Company, Inc. have been retained by Encana to conduct the potential joint venture and divestiture processes on the Horn River and Greater Sierra assets.

Encana is a leading North American natural gas producer that is focused on growing its strong portfolio of natural gas resource plays in key basins from northeast British Columbia to Texas and Louisiana. By partnering with employees, community organizations and other businesses, Encana contributes to the strength and sustainability of the communities where it operates. Encana common shares trade on the Toronto and New York stock exchanges under the symbol ECA.

NW Natural is headquartered in Portland, Ore., and provides safe, reliable, cost-effective natural gas service to about 674,000 residential, commercial, and industrial customers through 15,000 miles of mains and service lines in western Oregon and southwestern Washington. It is the largest independent natural gas utility in the Pacific Northwest. The company has approximately $2.6 billion in total assets. The company operates and owns 16 Bcf of underground storage capacity in Mist, Ore., and also operates the designed 20 Bcf Gill Ranch underground storage facility in California, in which it owns a 75 percent undivided interest. Together, NW Natural and its subsidiaries currently own and operate underground gas storage facilities with designed storage capacity of approximately 31 Bcf in Oregon and California.

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Paxton to Acquire Virgin Oil

Paxton to Acquire Virgin Oil

Monday, May 02, 2011
Paxton Energy, Inc.

Paxton Energy, Inc., an energy turnaround company engaged in the acquisition, exploration, development and drilling of oil and natural gas properties, announced that on April 29, 2011, it entered into an agreement to acquire Virgin Oil Company, Inc. of Louisiana.

Virgin was incorporated in March of 1996 for the purpose of oil and gas exploration, development and production. Since that time, Virgin has successfully acquired interest in and developed multiple oil and gas producing properties with significant proven and probable reserves.

Under the terms of the Agreement, the shareholders of Virgin will receive an aggregate of 70,000,000 shares of Paxton common stock in exchange for all of the issued and outstanding shares of Virgin common stock. The closing of the Agreement is subject to the satisfaction of a number of conditions precedent, including but not limited to the completion of an audit of Virgin, in accordance with PCAOB standards and SEC guidelines; receipt of an updated third party engineering of Virgin, completion of a financing by Paxton, and approval of the Virgin bankruptcy judge, as Virgin is currently a debtor in possession under a Chapter 11 proceeding. Upon closing, Virgin will be a wholly owned subsidiary of Paxton and Paxton anticipates changing its name to Virgin Oil Company, Inc.

The most recent third-party reserve report prepared for Virgin, dated May 13, 2010, by James F. Hubbard (whose work for Virgin goes back to the 1990s under S.A. Holditch & Associates, which became Schlumberger Technology Services), calculates Virgin's net proven reserves at 6.4 MM boe (million barrels of oil equivalent) in addition to net probable reserves at 1.8 MM boe.

Virgin currently owns interests in multiple active leases in the Gulf of Mexico, covering approximately 50,000 acres. All are less than 100 miles from the Louisiana shoreline in water depths of between 40 and 200 feet. Virgin also owns an interest in one active on-shore lease located in the Empire Field in Plaquemines Parish, Louisiana.

In September 2008, Hurricane Ike caused significant damage to Virgin's existing operations. While past hurricanes resulted in only a few days of shut-down time on the offshore properties, Ike's damage to these pipelines took several months to repair and in Virgin's case production was not re-established on its properties until June 2009. This ten month down-time resulted in Virgin's creditors filing an involuntary bankruptcy petition against Virgin under Chapter 7 of the Bankruptcy Code, which was subsequently converted into a Chapter 11 proceeding.

"We consider the merger with Virgin to be a great opportunity for Paxton's shareholders," said Charles F. Volk, Jr., Chairman and CEO of Paxton. R. Fulton (Tony) Smith, Jr., Director, President and CEO of Virgin stated, "This merger will allow Virgin to ramp up oil production from existing wells and move forward on plans for new well drilling while growing revenues and achieving profitability."

Paxton engages in the acquisition, exploration, development and drilling of oil and natural gas properties. Paxton is an energy turnaround company whose strategy is to acquire cash flow producing properties with proven reserves, develop the fields by reworking existing wells and drilling new wells. Paxton was founded in 2004 and is based in Stateline, Nevada.

Virgin is a Louisiana-based independent exploration and production company engaged in the acquisition of exploratory leases and producing properties, secondary enhanced oil recovery projects, exploratory drilling, and production of oil and natural gas in the United States.

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Eagleford Reaches Target Depth in Matthews/Dyami Well

Eagleford Reaches Target Depth in Matthews/Dyami Well

Monday, May 02, 2011
Eagleford Energy Inc.

Eagleford Energy Inc. announced Monday that the Matthews/Dyami #3 well has reached its projected target depth to the San Miguel formation and testing is currently underway.

The Company's Matthews Lease comprises 2,629 acres of land in Zavala County, Texas and is situated adjacent to the Redhawk land block under development by Petrohawk Energy Corp. Zavala County, Texas is part of the Maverick Basin of Southwest Texas and downdip from the United States Geological Studies north boundary of the Smackover-Austin-Eagle Ford total petroleum system. This area is often referred to as the oil window of the present Eagle Ford shale play

Eagleford Energy Inc. is a growth orientated oil and gas company with a focus on growing hydrocarbon reserves, cash flow, and net asset value per share through exploration and production of mineral properties in South Texas. There are approximately 33 million shares issued and outstanding in the capital of the Company.

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FirstEnergy Reported Q1 EPS Results; Issued 2011 EPS Guidanc

FirstEnergy Reported Q1 EPS Results; Issued 2011 EPS Guidanc



May 2, 2011

FirstEnergy (NYSE:FE) reported Q1 EPS of $0.69, ex-items, missing consensus estimates of $0.74 per share.

The company sees 2011 EPS of $3.20 to $3.50, vs. consensus estimates of $3.20 per share.

FirstEnergy President and Chief Executive Officer Anthony J. Alexander said, "With the February closing of our merger with Allegheny Energy behind us, we are already making significant progress in realizing its benefits, and we now expect the merger to be accretive to earnings in 2011. Our first quarter results are in line with our expectations for the year."

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BG Norge Drills Duster

BG Norge Drills Duster

Monday, May 02, 2011
Norwegian Petroleum Directorate

BG Norge AS, operator of production license 522, is in the process of completing the drilling of wildcat well 6604/2-1.

The well has been drilled about 45 kilometers southwest of the discovery 6705/10-1 Asterix and 60 kilometers north of the discovery 6603/12-1 Gro.

The purpose of the well was to prove petroleum in reservoir rocks from the Upper Cretaceous (the Springar formation). It encountered the Springar formation with reservoir rocks and reservoir quality as expected, but the well is dry. Data acquisition and sampling were carried out.

This is the first exploration well in production license 522. The production license was awarded in the 20th licensing round in 2009.

The well was drilled to a vertical depth of 3511 meters below the surface of the sea and was terminated in the Springar formation. The water depth is 1262 meters. The well will now be permanently plugged and abandoned.

Well 6604/2-1 was drilled by the Aker Barents drilling facility, which is moving to production license 377S west of the Vega field in the North Sea to drill wildcat well 35/7-1 S, where Idemitsu Petroleum Norge AS is the operator.

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Anadarko Petroleum Reported Q1 Results, Top Line Up 3.5% YoY

Anadarko Petroleum Reported Q1 Results, Top Line Up 3.5% YoY



May 2, 2011

Anadarko (NYSE:APC) reported Q1 EPS of $0.43 and adjusted net income of $0.72 per share. Analysts, on average, estimated EPS of $0.58 per share. Revenues for the quarter rose 3.5% year-over-year to $3.25 billion, ahead of consensus estimates of $3.09 billion.

Anadarko Chairman and CEO Jim Hackett said, "Anadarko delivered record sales volumes in the first quarter, including a 15-percent quarter-over-quarter increase in daily liquids volumes, strong cash flow and improved margins. This record performance was highlighted by the rapid growth of our shale plays and our first lifting from the Jubilee field offshore Ghana. Our deepwater exploration program also achieved excellent results in the quarter with three discoveries and three successful offshore appraisal wells. Early in the second quarter, we closed the previously announced $1.6 billion joint venture with KNOC (Korea National Oil Corporation) in the Eagleford Shale, validating the tremendous embedded value of this resource."

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Chesapeake Energy Topped Q1 EPS Estimates

Chesapeake Energy Topped Q1 EPS Estimates



May 2, 2011

Chesapeake Energy (NYSE:CHK) reported Q1 EPS of $0.75, ex-items, ahead of consensus estimates of $0.70 per share. Revenues for the quarter fell to $1.61 billion. Analyst expected revenues of $2.68 billion, which may not be comparable.

Chesapeake Energy has a potential upside of 19.4% based on a current price of $33.23 and an average consensus analyst price target of $39.67.

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ABS Offers Guidance for Latest OSVs

ABS Offers Guidance for Latest OSVs

Monday, May 02, 2011
American Bureau of Shipping

Increased sophistication within the offshore support vessel (OSV) market has prompted leading classification society ABS to develop standalone guidance for these more specialized yet multi-functional vessels. Newly developed criteria and relevant existing Rule requirements have been consolidated into the ABS Guide for Building and Classing Offshore Support Vessels.

ABS classes approximately one-third of the worldwide OSV fleet and in the past had reviewed these specialized vessels by following the ABS Rules for Building and Classing Steel Vessels Under 90 Meters (295 Feet) in Length. The new OSV Guide will be applicable to OSVs of all sizes and it includes specific guidance for the various segments of the global support vessel market.

"Today's support vessels are a far cry from previous designs sharing the same name," says Mike Sano who leads the society's OSV Market Sector Group. "As the search for oil and gas moves into deeper waters, along with increased activity in the renewable offshore energy market, more specialized and technically advanced types of OSVs are needed for various support roles."

ABS engineers are reviewing plans for some of the most technically advanced OSVs being proposed. The recent specialized multipurpose designed vessels carry out maintenance and repairs on platforms, facilities and subsea piping, equipment and systems. The new requirements from ABS are tailored for these new generation vessels.

"The Guide takes a comprehensive approach toward OSV design," says Wei Huang, ABS Manager, Offshore Technology and principal author of the Guide. "New categories of offshore service types such as well intervention and oil spill recovery vessels are included along with updates for advances in specialized equipment."

The OSV Guide consists of four major sections: scope and conditions of classification; hull construction and equipment; machinery and systems; and offshore support services. Material and welding, strengthening for navigation in ice, and survey during and after construction are referenced from the ABS Rules for Building and Classing Steel Vessels. The intent is to evolve the ABS Guide for Building and Classing Offshore Support Vessels into Rules during the society's next Rule making cycle.

Included in the OSV Guide are explanations of notations reflecting specialized capabilities such as transportation of supplies and equipment, towing and anchoring of offshore structures, fire fighting, diving, oil spill recovery, safety standby rescue, pipe laying, handling heavy surface and subsea loads, well intervention, well stimulation, well test and wind farm support.

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

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UGI Reports Lower Q2 Earnings, Falls Below EPS Expectation; Shares Down 0.5%

UGI Reports Lower Q2 Earnings, Falls Below EPS Expectation; Shares Down 0.5%



May 2, 2011

UGI (UGI), a holding company that distributes and markets energy products and related services through its subsidiaries, today posted its Q2 earnings, with net income attributable to UGI of $149.4 mln, or $1.32 per diluted share, lower than the prior-year's $157.1 mln, or $1.43 per diluted share. This compares to Thomson Reuters estimate for a $1.48 Q2 EPS.

This includes the impact of an after-tax loss of $3.3 mln, or $0.03 per share concerning stoppage of hedge accounting for interest rate protection agreements at AmeriGas.

Shares are lower by 0.57% at $33.11.

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Maersk Selects Lloyd's Register for FPSO Contract

Maersk Selects Lloyd's Register for FPSO Contract

Monday, May 02, 2011
Lloyd's Register

Lloyd's Register EMEA has been awarded the global contract to provide Maersk FPSOs with a comprehensive suite of technical services to assure the reliable operation of its fleet of floating oil and gas production units which serves some of the world's biggest offshore fields.

The multi-year agreement will require the combined expertise of the energy and marine teams at Lloyd's Register to deliver a suite of technical services -- including integrity and inspection management, classification, verification and engineering support -- to help ensure safe and sustainable operations. There is an option to extend beyond the original contract period.

"This is a very important contract for Lloyd's Register, not least because it offers further evidence of our ability to deliver a wide portfolio of technical services to elite companies in the offshore industry," said Iain Light, Group Energy Director, Lloyd's Register. "We are among very few organizations supporting the offshore industry that has the required global reach and depth of knowledge to deliver such a comprehensive and consistent range of technical support across the world."

Lloyd's Register has an unrivalled marine heritage which it has merged with the offshore expertise of its energy division and bolstered with specialist expertise acquired through recent acquisitions to offer a unique technical-assurance package that covers people, plant and process, Light says.

"Maersk FPSOs are pleased to continue our relationship with Lloyd's Register for classification, verification and integrity management services," said David McLean, Maersk FPSOs' Chief Operating Officer. "Following a competitive tender, the decision to award the contract was made on financial, technical and strategic grounds with LR ideally suited to align themselves geographically to our requirements."

Lloyd's Register has committed more than GBP150 million in the past five fiscal years to acquire companies displaying technical leadership in their specialist fields, including: Scandpower AS, a leader in independent risk-management; ModuSpec BV, the leading provider of technical services to the offshore drilling sector; and Human Engineering Ltd, one of the world's top human factors consultancies.

The new agreement will require Lloyd's Register to assist and advise Maersk FPSOs on meeting the regulatory, health, safety and environmental commitments of its asset integrity-management program.

It also requires Lloyd's Register to proactively manage activities relating to the retention of class notations for Maersk FPSOs' fleet, to supply the surveyors to carry out Flag State surveys and to carry out in-service and design verification and examination activities as required by local legislation and/or Maersk in markets as distant as Australia, Brazil, Norway and the UK.

To ensure a seamless delivery of the complex long-term program, the core integrity team at Lloyd's Register will reside with Maersk FPSOs' operations team in Aberdeen.

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Britten to Lead Tubular Unit at U.S. Steel

Britten to Lead Tubular Unit at U.S. Steel

Monday, May 02, 2011
United States Steel Corp.

United States Steel Corp. announced Friday that David L. Britten will join U. S. Steel effective May 3, 2011, to serve in the newly created position of vice president — tubular technology & business development.

Britten, 50, will oversee energy services and tubular technology development efforts, including premium connections, as well as other business development activities. He will report to Senior Vice President — Tubular Operations Douglas R. Matthews, and as an executive officer of the corporation will be based at U. S. Steel's corporate headquarters in Pittsburgh.

"The energy market continues to represent an important growth opportunity for our company, particularly with the advancement of unconventional drilling and completion technologies being used to develop shale oil and gas resources across North America," said U. S. Steel Chairman and Chief Executive Officer John P. Surma. "The expansion of the U. S. Steel executive team to include David Britten in this newly created role reinforces our commitment to becoming the energy industry's supplier of choice for high-quality, value-added tubular products and services."

"David is widely recognized in our industry as an innovative thinker and his more than 20 years in the tubular steel business further deepens the expertise of our company's talented management team," noted Matthews. "David has a demonstrated record of driving results and building strategic relationships, and we are confident that his contributions will be immediate and significant as we continue to develop the products and services that our customers need both now and in the future."

Most recently, Britten served as executive vice president of Sweden-based steelmaker SSAB and president of SSAB's Americas division. He began his career in the steel industry in 1985 when he joined the former IPSCO as a product development engineer and began his tubular experience as a sales representative in Calgary, Alberta. At IPSCO, he served in a variety of increasingly responsible management roles in several disciplines, including quality assurance, tubular manufacturing, and business and corporate development. From 1999 until 2006, Britten served as vice president and general manager for IPSCO's Tubular Division. After SSAB acquired IPSCO in 2007, he was named senior vice president — steel for the company's IPSCO division.

A native of Sydney, Nova Scotia, Canada, Britten earned a Bachelor of Science degree in mechanical engineering from the Technical University of Nova Scotia (now known as Dalhousie University) in Halifax in 1983. He obtained a Master of Science degree in mechanical engineering from Queen's University in Kingston, Ontario in 1985. During his career, Britten has been active in several prominent industry trade associations, including serving on the boards of the American Iron and Steel Institute, the Steel Manufacturers Association and the Metals Service Center Institute.

Britten and his wife, April, and their children will relocate to the Pittsburgh area.

U. S. Steel Tubular Products, Inc., a subsidiary of United States Steel Corporation, is the largest tubular products manufacturer in North America, with total annual production capability of 2.8 million net tons. Energy industry customers utilize U. S. Steel Tubular Products' casing, tubing, line pipe and couplings to help them locate, retrieve, transport and refine the oil and natural gas products that fuel the world.

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ABS Sets Up China Offshore Tech Center

ABS Sets Up China Offshore Tech Center

Monday, May 02, 201
American Bureau of Shipping

ABS, the leading provider of classification services to the global offshore industry, on Monday announced the establishment of the ABS China Offshore Technology Center (COTC) in partnership with Shanghai's Jiaotong University (SJTU).

The focus of the center will be on new technology research for offshore facilities. While the research efforts will support development activities in the Greater China region, applied research will also be conducted on a wide range of oil and gas development issues.

Heading up the COTC will be George Wang, ABS Manager, Advanced Analysis Department, Shanghai. Wang and his team will be located within the ABS Shanghai office and plans are already underway for expansion of the COTC.

"This partnership builds upon our existing relationship with the University and its well-respected naval architecture program," says ABS Chief Technology Officer Todd Grove. "The complexity and demands of offshore exploration and production mean we must continue to be proactive in assisting industry develop economical, safe and environmentally sensitive ways to address field development challenges. Research centers like this are an effective way to partner with academia and industry on a regional basis to conduct leading edge research which becomes the foundation for technical guidance and Rules."

The COTC will be ABS' fourth offshore focused research center strategically positioned around the world to support clients' activities. The other facilities are: the ABS Harsh Environment Technology Center (HETC) on the campus of Memorial University in St. John's Newfoundland; the ABS Brazil Offshore Technology Center (BOTC) in Rio de Janeiro; and the ABS Singapore Offshore Technology Center (SOTC). The SOTC, now in its fifth year, has become a key research and development facility in Southeast Asia supporting the latest offshore developments.

ABS has established these research centers as an extension of the society's Corporate Technology Research & Development Group. This network of offshore research centers compliments work carried out within ABS and its close association with leading universities around the world.

"COTC will further enhance ABS' presence in China as it has rapidly diversified into the gas and offshore sectors for both domestic and international markets," says Grove. "The activity level within China that supports the development of a wide range of offshore exploration and production projects is increasing at a rapid pace. The COTC will serve as a premiere R&D center in the Greater China region in terms of new approaches and technology solutions as the industry continues its expansion into more challenging offshore environments."

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

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Statoil Submits Katla Fast-Track Development Plan

Statoil Submits Katla Fast-Track Development Plan

Monday, May 02, 2011
Statoil

Statoil has submitted a plan for development and operation (PDO) for the Katla discovery in the North Sea to the Norwegian Ministry of Petroleum and Energy. Total investments are estimated at NOK 5.4 billion in current NOK.

The Katla discovery was proven in March 2009, and is situated 13 kilometers south-west of the Oseberg South platform.

The discovery has been included in Statoil's portfolio of fast-track developments, with production start-up planned in the first quarter of 2013.

This is the third fast-track development plan Statoil has submitted to the Norwegian Ministry of Petroleum and Energy this year.

Previous fast-track PDOs have been submitted for Visund South and Vigdis North-East.

"This shows that we are able to realize profitable development of smaller discoveries, and this portfolio of developments gives us important production contributions in a short timeframe," says Ivar Aasheim, Statoil's vice president for field development on the Norwegian shelf.

Oil and gas to Oseberg

The estimated recoverable reserves on Katla amount to 45 million barrels of oil equivalents. The plan is to develop the discovery with a seabed template and four wells.

Two of the wells will produce oil and gas, while the two other wells will inject water into the reservoir for pressure support.

The oil from Katla will be sent to the Oseberg South platform. The gas will be used as pressure support on Oseberg Omega North, and thus help maintain production from this reservoir.

"Katla reinforces the Oseberg South area by bringing new volumes into a well-maintained process facility," says Knut Henrik Dalland, Statoil's head of production for the Oseberg area.

Partners: Statoil 49.3% (operator), the Norwegian state's direct financial interest (SDFI) 33.6%, Total 10%, ExxonMobil 4.7% and ConocoPhillips 2.4%.

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Public Offering in Limbo for Turkey's NOC

Public Offering in Limbo for Turkey's NOC

Monday, May 02, 2011
Asia Pulse Pte Ltd

Prospects of public offering of Turkey's national oil company went uncertain after a Turkish court ruled to reestablish stakes of a former shareholder.

Turkey's Social Security Institution (SGK) has won a lawsuit and re-claimed its 6 percent share in the Turkish Petroleum Company (TPAO) -- nationalized back in 1983 by a government decree, which the court said unlawfully seized stakes of several shareholders.

"There can be no public offering in a company in which the partnership structure is unknown," a TPAO official told the Anadolu Agency on the condition of anonymity because the official was not authorized to speak publicly on the issue.

More such court rulings were likely to follow as Turkey's Is Bankasi has also filed a similar lawsuit to take back its three per cent share and the dividends it failed to receive since 1983.

Around 20 individual shareholders also own shares in the TPAO, which is one of the biggest and the most profitable companies in Turkey.

"We do not know if those individual shareholders are still alive or who their lawful heirs are. We do not know where they live," the official said.

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Petrobras Predicts $73B in Plansal Spending

Petrobras Predicts $73B in Plansal Spending

Monday, May 02, 201
Petrobras

Petrobras on Monday presented the annual review of the Integrated Development Master Plan for the Santos Basin Pre-Salt Area (Plansal) to the Board of Directors. The Master Plan is reviewed annually, incorporating information from newly drilled wells and from the implementation of different commercial strategies.

Plansal's current review strengthens the trend of reducing the investments necessary to develop the area, today estimated at 45% with regard to the original Master Plan of 2008 and around 32% with regard to last year's Master Plan, which is the result of the optimization achieved in the conception of the production projects, mainly due to higher well productivity (average increase of around 20%) and better understanding of the areas with production potential. Additionally, the expectation of the recoverable volume potential for the Lula and Cernambi areas was extended beyond 8 billion barrels. There was also a significant increase considering the 5 billion barrels of recoverable oil equivalent (broe) recently acquired in the Transfer of Rights, which will enable Petrobras to take advantage of great synergies with projects which are under development.

The current vision allows Petrobras to predict that the total investments to develop the projects present in the Santos Basin Pre-salt Area, through 2015, will reach 73 billion dollars, of which 74% will be carried out directly by Petrobras. These investments will lead to significant pre-salt production increases and will create the basis for the production increase in the post-2015 period. As a result of this great company effort, the company expects the contribution of the areas, operated by Petrobras, in terms of total production, to reach 613 thousand barrels of oil per day in 2015, an increase of 108 thousand barrels per day with regard to the previous plan. Of this total, around 60% belongs to Petrobras and the remaining 40% belongs to non-partners. In 2017, the previously disclosed production target of 1 million barrels of oil per day will be surpassed.

Another highlight of Plansal was Petrobras's high performance capacity. Many of the initiatives established in the first Master Plan, in 2008, have already become reality in 2011, with highlight to the start of operations of:

• two FPSOs (BW Sao Vicente and Dynamic Producer) to perform Long-Duration Tests (LDTs) programd for the area;
• a higher number of drilling rigs (8 are currently in operation and another 5 will begin activities in the next 3 months);
• the first definitive production system, installed in Lula field (FPSO Cidade Angra dos Reis);
• the gas pipeline between Lula Pilot and the Mexilhao platform (200 km of submarine pipelines in ultra-deep waters);
• the gas pipeline between Caraguatatuba and Taubate (Gastau).

Besides the events above, also representative are the start of construction of eight FPSOs at the Rio Grande Shipyard, the contracting for the construction of up to 28 drilling rigs in Brazil, the first batch of seven rigs of which has already been defined and the development of studies for a Gas FSO, designed to provide a new alternative for the flow through its liquefaction in the open sea. With regard to the development of the Transfer of Rights areas, the Inhama Shipyard is already being fitted out for the construction of the first four units, to be installed by 2016.

The need to implement alternative routes for the flow of oil and gas of the Santos Basin Pre-salt Area, based on the forecast of the huge production volumes, was identified. These alternatives, which are in an advanced stage of maturation, will allow an adequate logistics network to take on the future forecast of the area's production.

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Dart Forms CBM Venture in Belgium

Dart Forms CBM Venture in Belgium

Monday, May 02, 2011
Dart Energy Limited

Dart Energy Limited has entered into a coal bed methane (CBM) joint venture with NV Mijnen (NVM) in Belgium.

NVM is a wholly owned subsidiary of Limburgse Reconversie Maatschappij (LRM), a Flanders Authority owned enterprise, with a charter focused on promoting economic development and overall employment in the province of Limburg, Belgium. NVM owns approximately 80% of all coalfield concessions in the Flanders region of Belgium.

The joint venture will seek to explore, appraise and develop CBM resources on NVM's existing coal mining concession area in the Campine Basin, Flanders, Belgium. The joint venture will also seek to secure further CBM and unconventional gas concessions in the same region.

The joint venture will operate under the name NV Limburg Gas, and will be owned 80% by Dart Energy and 20% by NVM. Dart Energy will be operator and manager of the joint venture.

Initially, the joint venture will focus on, and have the exclusive rights to explore for CBM in a 350km2 area of the Campine Basin over which NVM currently holds a coal mining concession. Dart and NVM will fund the cost of exploration and share the economic benefits in proportion to their respective equity interests in the joint venture.

Dart and NVM have agreed an initial appraisal program of a minimum of 1 core well to be drilled during 2012. Depending on successful outcomes, the program might be expanded to include additional core wells in 2012, and pilot wells in 2013.

In addition, Dart and NVM have agreed to exclusively work together under an Area of Mutual Interest Agreement (AMI). The AMI is for 3 years and covers the joint pursuit of further licensing opportunities in the Campine Basin. The Campine Basin is currently generally unlicensed for CBM / gas exploitation, although a Belgian government decree opening the region for licensing is expected in mid-2011. In order to secure licenses in this region once available, a license applicant will be required to have both technical capabilities and some level of local Flemish ownership. Dart and NVM therefore believe the combined attributes of both parties via the joint venture being created will maximize the prospect of securing further licenses. Under the AMI, the joint venture will initially be targeting open acreage areas of approximately 700km2.

Announcing the Joint Venture, Dart Chief Executive Officer and Managing Director, Simon Potter said:

"Dart acquired Composite Energy Limited to provide a low cost CBM platform in Europe with a maturing funnel of business opportunities, including the opportunity in Belgium which Composite has been working on securing for over 12 months. The initial entry cost into the joint venture is modest, but over time the potential exists to work through this joint venture and develop a material CBM resource in the Campine Basin which although prospective is currently unexplored. This transaction is therefore consistent with Dart's stated strategy of gaining low-cost access to high-graded opportunities proximate to high demand gas markets and high prices, and furthers our desire to selectively expand our acreage across Europe."

"The transaction also marks the beginning of a relationship with NVM and its parent company, LRM, as our Belgian partner. We are delighted that Composite / Dart has been selected as NVM's partner of choice, and we look forward to working closely with our new Belgian partner as we seek to better understand and then unlock the CBM resource potential in the Flanders region."

LRM is a Flemish Authority-owned profit-oriented investment company which acts as an investor to promote economic development and general employment in the province of Limburg, Belgium. Whilst LRM is a generalist investor, core areas of focus for LRM include ICT, Life Sciences and Cleantech & Energy. LRM focuses on all sectors and enterprises, and owns approximately 80% of all existing coalfield concessions in Flanders, Belgium via its 100% subsidiary NV Mijnen.

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CGGVeritas Marks Ops Step-Change with Eldesvik JV

CGGVeritas Marks Ops Step-Change with Eldesvik JV

Monday, May 02, 2011
CGGVeritas

CGGVeritas announced Monday a new joint venture with the Norwegian ship-owner Eidesvik Offshore to manage ten high-capacity 3D vessels in the CGGVeritas fleet, including the two new X-BOW vessels, Oceanic Vega and Oceanic Sirius. The joint venture, CGGVeritas Eidesvik Ship Management AS, will be based in Bergen and is 51 % owned by Eidesvik and 49 % owned by CGGVeritas.

The joint venture marks a step-change in the way CGGVeritas operates its high-end seismic vessels. It creates an integrated team of highly skilled professionals dedicated to ship management to fully support and develop the performance of the fleet. CGGVeritas and Eidesvik are both contributing resources and support to the joint venture.

Jean-Georges Malcor, CEO of CGGVeritas, said: "This new joint venture is a key step in our performance action plan. It builds a strong partnership that is focused on shared objectives around the operational excellence of our marine fleet and supports our plans to streamline the number of our maritime partners. I look forward to working closer with our long-term partner Eidesvik to further strengthen our business in the future."

CGGVeritas is a leading international pure-play geophysical company delivering a wide range of technologies, services and equipment through Sercel, to its broad base of customers mainly throughout the global oil and gas industry.

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Falcon Announces Beetaloo Deal with Hess

Falcon Announces Beetaloo Deal with Hess

Monday, May 02, 2011
Falcon Oil & Gas Ltd.

Falcon Oil & Gas Ltd. ( "Falcon"), an international oil and gas exploration and production company, announced Monday that Falcon Oil & Gas Australia Ltd ("Falcon Australia"), Falcon's 73 percent owned subsidiary, has signed a Participation Agreement with Hess Australia (Beetaloo) Pty Ltd ("Hess"), an affiliate of Hess Corporation, for the acquisition of an interest in onshore Exploration Permits 76, 98 and 117 in the Beetaloo Basin, Northern Territory, Australia (the "Agreement Area").

The terms of the agreement remain as outlined in the Letter of Intent between the two companies announced on February 22, 2011. In brief, and subject to certain regulatory approvals and standard conditions, Hess will earn a 62.5 percent working interest in approximately 25,200 square kilometers (6,227,500 acres) by making a payment to Falcon Australia, acquiring warrants in Falcon Oil & Gas Ltd., conducting an extensive seismic program, and drilling five wells to explore and appraise the Agreement Area. Hess has the right to withdraw from the project following the seismic evaluation and again following the drilling phase, in which event the entire interest would transfer back to Falcon Australia. In addition to its 37.5 percent working interest in the joint acreage, Falcon Australia will retain 100 percent ownership in the entirety of EP99 and 405 square kilometers (100,000 acres) in EP98.

The seismic survey is anticipated to commence once necessary government and land users' approvals are obtained. Falcon Australia will also carry out its work planned for the Shenandoah-1 well, commencing with re-opening and casing the existing wellbore planned for the third quarter 2011, followed by a comprehensive testing program.

Falcon Oil & Gas Ltd. is an international oil and gas exploration and production company, headquartered in Denver, Colorado, incorporated in British Columbia, Canada, and trading on the TSX Venture Exchange under the symbol "FO." The company specializes in the business of unconventional and conventional oil and gas exploration and production and holds interests in prospective properties in Australia, Hungary, and South Africa. The company is focused on discovering, acquiring, and maturing a globally diversified portfolio of drilling opportunities with a goal of maximizing shareholder value through strategic relationships.

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Fugro to Acquire JDR Cable Systems

Fugro to Acquire JDR Cable Systems

Monday, May 02, 2011
Fugro N.V.

Fugro has reached agreement with JDR Cable Systems (Netherlands) Ltd to acquire JDR Cable Systems Holdings Netherlands BV and its marine cable subsidiary JDR Cable Systems BV, together comprising JDR's Marine Cables division.

JDR Marine Cables designs and produces special marine cables for oil and gas (subsea lead-in cables, array cables, control cables), geophysical (airgun umbilicals, lead-ins) and defense (towed arrays) market segments. The facility is based close to Rotterdam in the Netherlands, and the division has around 110 employees. The division will operate as an independent unit and aims to further develop its current range of products and services and to continue the supply to all its clients.

Current annual revenues of the company are in the order of Euro 25 million. The division will be renamed to De Regt Marine Cables.

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