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Oil and Gas Energy News Update

Thursday, May 5, 2011

Fortune Magazine releases the Fortune 500 list with Wal-Mart Taking the Top Spot

Fortune Magazine releases the Fortune 500 list with Wal-Mart Taking the Top Spot



May 5, 2011

This morning, the year's Fortune 500 list was released by Fortune magazine. The list is compiled by the publication based on revenues of the previous year.

On top was Wal-Mart again for the second year in a row, with revenues over $421 million dollars. The retail giant has topped the list eight times in the last decade, and has stayed in the top ten since 1995. It beat out Exxon Mobil, the oil giant that held the top spot two years prior.

Coming in at number 3 and 4 are energy companies Chevron and ConocoPhillips, respectively. Both had a great year in profitability, with both companies making over 80% more than in 2009.

Fannie Mae came in at number 5, up from number 81 the previous year, mostly due to the new accounting rules the company put in place. Right behind it is General Electric even after the reactor problems the company had during the nuclear crisis in Japan. Their spot is due to the possibility of a $53 billion dollar plan for a high-speed rail project awaiting the approval of Congress.

And rounding out the top ten were Berkshire Hathaway, General Motors, Bank of America Corp., and Ford Motor.

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Sterling Drills First Side-track in Cladhan Campaign

Sterling Drills First Side-track in Cladhan Campaign

Thursday, May 05, 2011
Sterling Resources Ltd.

Sterling Resources Ltd. on Thursday announced the completion of drilling of the 210/30a-4Z well on Block 210/30a in the United Kingdom North Sea. This is the second well (first side-track) drilled in the current four well campaign to appraise further the extent of the Cladhan reservoir.

The 210/30a-4Z well was drilled at a location 1.6 kilometers east and a further 1240 feet downdip of the most recent 210/30a-4 well, utilizing the Transocean Prospect rig from a centrally positioned location. The objectives of the 210/30a-4Z sidetrack well were to appraise the field further east of previous well control and prove sand and oil presence in a fan system considerably deeper than previous wells which have been drilled into channel systems on a terrace structure.

The 210/30a-4Z well was drilled to a total measured depth (MD) of 15,900 feet having encountered two separate Upper Jurassic reservoir zones of 12 and 169 feet (vertical thickness) with oil shows through both intervals. No oil-water contact was encountered. Petrophysical analysis of the open-hole logs showed porosities up to 13.5% but with a high degree of dolomitic cement. Pressure measurements were attempted but not obtained.

"We have been able to prove-up a large depositional feature as prognosed from our seismic interpretation and with hydrocarbons quite deep in the structure," remarked John Rapach, Sterling's Chief Operating Officer. "Our challenge will be to understand the variation in reservoir quality in the eastern area of the field. We are only half way through our current campaign of drilling; the next well will target the central channel and the final well will be drilled to the southern portion of northern channel. These wells are planned into areas with similar seismic characteristics that have already encountered movable hydrocarbons. Success with these wells will build on our resource base inventory and provide further information for our ongoing development planning," added Mr. Rapach.

"While we would have preferred to see better quality sands in what appears to be a large package of oil filled reservoir, this is the first well into a deeper portion of the field and we have to remember that we are still exploring in an area with little well control," stated Mike Azancot, Sterling's President and CEO. "As is usually the case in the early phase of field appraisal, a number of wells are required to delineate the field. The partnership is planning reprocessing of current seismic data along with possible further seismic acquisition, which should improve understanding of reservoir quality variation. We still see much promise in this eastern fan area and we will be updating the geological model potentially to unlock significant prospectivity. Given that the first two wells of the current campaign have still not encountered an oil-water contact, the uncertainty of the prospective oil in place at least in the terrace area has been significantly reduced and should be further refined by the next two wells," added Mr. Azancot.

On completion of this appraisal campaign and following analysis of all data obtained, the partnership intends to commission an updated independent resource evaluation.

Sterling holds a 39.9% interest in license P1064 which contains Cladhan, and is the operator. The partners are Wintershall (UK North Sea) Ltd 33.5 percent, Encore Petroleum Ltd 16.6 percent and Dyas UK Ltd 10.0 percent.

Sterling Resources Ltd. is a Canadian-listed international oil and gas company headquartered in Calgary, Alberta with assets in the United Kingdom, Romania, France and the Netherlands.

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Natural Gas Producers, Distributors to Promote NGVs, Infrastructure

Natural Gas Producers, Distributors to Promote NGVs, Infrastructure

Thursday, May 05, 2011
America's Natural Gas Alliance; American Gas Assoc

America's Natural Gas Alliance (ANGA) and the American Gas Association (AGA) are working collaboratively to advance the development and utilization of natural gas vehicles and fueling infrastructure in the North American marketplace.

More than 50 producers and distributors of natural gas will work together to enhance domestic energy security and advance clean air by promoting the development of natural gas vehicles and infrastructure.

"Advancing our country's energy independence is vital and we are pleased to work directly with AGA to develop and promote policies that will make an American natural gas transportation network a reality," said ANGA President and CEO Regina Hopper. "This will make it easier for businesses and consumers to embrace this clean, affordable and domestic transportation choice."

The ANGA-AGA joint initiative will encourage stakeholder dialogue to advance greater use of North American natural gas for transportation. Specifically, the collective effort will focus on infrastructure development, greater fleet usage, vehicle production, and marketing and education for natural gas transportation.

"Natural gas producers and distributors recognize that the private sector must play a leading role," said Kathryn Clay, Executive Director of the joint effort. "This joint work will continue important efforts to help manufacturers meet demands for vehicles that run on natural gas, and ensure that the infrastructure is in place to fill them up. Our message is simple from well to fuel dispenser, we will work to expand the use of these vehicles."

"Kathryn's deep roots in the automotive industry will be a great asset to the natural gas industry as it seeks to expand the role natural gas will play in our nation's transportation sector," said AGA President and CEO Dave McCurdy. "As an engineer and scientist, she understands the important role natural gas will play in enhancing national and energy security, improving air quality, and providing North America with a more affordable and secure transportation fuel."

America's Natural Gas Alliance (ANGA) represents 30 of the nation's leading independent natural gas exploration and production companies.

The American Gas Association, founded in 1918, represents 199 local energy companies that deliver clean natural gas throughout the United States. There are more than 70 million residential, commercial and industrial natural gas customers in the U.S., of which 91 percent — more than 64 million customers —receive their gas from AGA members. Today, natural gas meets almost one-fourth of the United States' energy needs.

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Lufkin Names Cestero VP, General Counsel

Lufkin Names Cestero VP, General Counsel

Thursday, May 05, 2011
Lufkin Industries, Inc.

Lufkin Industries, Inc. on Thursday announced that Alejandro "Alex" Cestero has been named Vice President and General Counsel for the Company, effective May 9, 2011. The Company's current General Counsel, Paul Perez, will stay on as Lufkin's Corporate Secretary until his planned retirement later this year.

"I'm very pleased to welcome Alex to the Lufkin management team," said John F. "Jay" Glick, President and Chief Executive Officer. "In addition to his professional background as a General Counsel, Alex also has extensive international finance and operations experience within the oil and gas industry.

"Paul Perez has been a valuable member of the Lufkin team for nearly two decades. I am grateful for his contributions to the Company, and his assistance during the transition will ensure a smooth handover of responsibilities."

Mr. Cestero most recently served as Senior Vice President, General Counsel, Chief Compliance Officer and Secretary for Seahawk Drilling, Inc., a publicly traded offshore oil and gas drilling company. Seahawk Drilling was spun off from Pride International in 2009, where Cestero served in various positions within the general counsel's office since 2002. Prior to Pride International, he was an attorney with Bracewell & Giuliani, L.L.P. and Vinson & Elkins, L.L.P. Cestero has a J.D. from Stanford University and an M.B.A. and B.A. from Rice University.

Lufkin Industries, Inc. sells and services oilfield pumping units, foundry castings and power transmission products throughout the world. The Company has vertically integrated all vital technologies required to design, manufacture and market its products.

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EnerJex Issues Ops Update

EnerJex Issues Ops Update

Thursday, May 05, 2011
EnerJex Resources, Inc.

EnerJex Resources, Inc. on Thursday provided the following update on its operations year to date.

Operations Update

Eastern Kansas:

EnerJex has drilled 32 development wells with a 100% success rate and 3 wildcat exploration wells with a 33% success rate. A handful of these wells are already online and the remainder should be operational within 30 days. In addition, the Company has re-established production from more than 50 idle wells that required maintenance work.

A number of the development wells were drilled deeper than those of EnerJex's adjacent producers, and encountered additional oil pay zones which will be tested. EnerJex's successful exploration well encountered two oil pay zones, one of which presently appears to have exceptional potential. The higher-potential zone will be tested in the coming weeks and the Company may drill additional wells to evaluate the size and scope of this potential discovery. Current production in Eastern Kansas is approximately 215 barrels of oil per day net to the Company's working interest.

South Texas:

EnerJex recently worked over a well in its El Toro Project and the Company plans to work over two additional oil-producing wells. The recent workover increased production by approximately 18 barrels of oil per day. The Company's current production in South Texas is approximately 40 barrels of oil per day from five wells in which EnerJex owns a 40% working interest.

Management Comments

EnerJex's CEO, Robert Watson, Jr., commented, "We have been hard at work in Eastern Kansas during the past four months and expect these efforts to result in measurable near-term production growth. The Company currently has two rigs drilling new wells in Eastern Kansas and expects to contract an additional rig by June to drill multiple new development wells at our El Toro Project in South Texas."

EnerJex is a domestic onshore oil company with assets located in Eastern Kansas and South Texas. The Company's primary business is to explore, develop, produce and acquire oil properties onshore in the United States.

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Commodity Corner: Oil Settles Below $100

Commodity Corner: Oil Settles Below $100

Thursday, May 05, 2011
Rigzone Staff

Crude oil for June delivery plummeted more than eight percent Thursday and settled below $100 for the first time since March 16.

The commodity settled at $99.80 a barrel, a $9.44 decline from Wednesday. The sharp drop stems from a stronger U.S. dollar and concerns about economic growth on both sides of the Atlantic.

In the U.S., the federal Department of Labor announced that first-time claims for jobless benefits increased last week by just under 10 percent to 474,000. Meanwhile, Germany's Ministry of Economics and Technology announced that the country's factory orders fell by four percent in March—a dramatic shift from a two-month growth trend. Crude oil traded within a range from $98.25 to $109.38 Thursday.

The price of June natural gas also followed a downward slope Thursday, losing nearly 32 cents to settle at $4.26 per thousand cubic feet. Driving the decline was the U.S. Energy Information Administration's weekly report on natural gas inventories.

According to the EIA, working gas in underground storage rose to 1,757 billion cubic feet as of last Friday. The 72-Bcf week-on-week increase was higher than expected; analysts surveyed by Platts, for instance, had predicted a more modest build of 64 to 68 Bcf for the period.

Front-month natural gas peaked at $4.57 and bottomed out at $4.25 Thursday.

Gasoline also ended the day lower, falling 23 cents to settle at $3.095. June gasoline fluctuated from $3.335 to $3.06.

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USGS Cuts Recoverability Assessment of NPRA Oil

USGS Cuts Recoverability Assessment of NPRA Oil

Thursday, May 05, 2011
U.S. Geological Survey

The U.S. Geological Survey assessment on the economic recoverability of undiscovered, conventional oil and gas resources within the National Petroleum Reserve in Alaska (NPRA) and adjacent state waters is now available online.

This economic analysis is based on a 2010 USGS resource assessment that determined how much undiscovered, conventional oil and gas in the NPRA is technically recoverable. These reports provide updates from the USGS 2003 economic analysis and 2002 resource assessment of the NPRA.

"The USGS conducts assessment updates to re-evaluate petroleum potential as new data and information become available," said USGS Energy Resources Program Coordinator Brenda Pierce. "Understanding how much undiscovered, technically recoverable resource might be present serves as a basis for calculating how much might be economically developed."

Technically recoverable resources are those that could be potentially produced using current technology and industry practices. Economically recoverable resources are those that can be sold at a price that covers the costs of discovery, development, production and transportation to the market.

The new economic analysis estimates that approximately 273 million barrels of undiscovered oil are economically recoverable at an oil price of $72 per barrel (comparable to $8 per thousand cubic feet of gas). About 500 million barrels of undiscovered oil are economically recoverable at $90 per barrel (comparable to $10 per thousand cubic feet of gas). These estimates do not include the discovered oil accumulations in northeastern NPRA that have not yet been developed.

The economically recoverable oil estimates above are dependent upon gas exploration in the NPRA, meaning that it is assumed the oil would be found in the process of looking primarily for gas.

The USGS assessment also found that about 18 trillion cubic feet of undiscovered gas are economically recoverable when the market price is $8 or more per thousand cubic feet, and 32 trillion cubic feet of undiscovered gas would be economic when the market price is $10 or more per thousand cubic feet.

There currently is no pipeline in place to transport gas from the North Slope of Alaska, so this assessment assumes that there is a 10- or 20-year delay between discovery and production in the NPRA. This analysis shows that if a pipeline is constructed, there is a significant amount of gas that is economically recoverable from the NPRA when prices are above $8 per thousand cubic feet of gas.

The different market prices quoted above for the same resource are because some resource accumulations are relatively easy to find and produce while others are not and therefore cost more.

"USGS estimates are based on 2010 costs and technology, and these results could change over time as they are dependent on multiple factors," said USGS scientist Emil Attanasi, who was the lead author for this assessment. "For example, USGS economic recoverability estimates could vary in the future depending on the timeframe and costs to construct a gas pipeline to the NPRA, technological advances that make resource extraction and development easier and less expensive, and fluctuating market prices for oil and gas."

The amount of oil that could be economically developed is significantly less than what the 2003 analysis concluded. One reason for the reduction is reduced volumes of technically recoverable oil based on recent NPRA exploration drilling which found gas rather than oil.

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CEA Applauds House Vote to Develop Offshore Energy Resources

CEA Applauds House Vote to Develop Offshore Energy Resources

Thursday, May 05, 2011
Consumer Energy Alliance

New access to abundant energy resources offshore could soon be granted to American energy consumers thanks to historic legislation passed Thursday in the U.S. House of Representatives.

The bill, H.R. 1230, orders the Interior Department to conduct lease sales on four separate energy-rich tracts along our nation's Outer Continental Shelf (OCS) — two in the central Gulf of Mexico, one in the western Gulf, and one more than 50 miles off the coast of Virginia.

Following the vote, Consumer Energy Alliance (CEA) executive vice president Michael Whatley issued the following statement:

"Today's vote in the House essentially asks the administration to do what it should have done a long time ago. It compels the Interior Department to put in place a plan to get fair value for the taxpayer on the massive reserves of energy currently being held captive offshore — resources that are owned by all Americans and which our country needs access to now more than ever before.

"It's now incumbent on the Senate to follow suit, not only in view of the new jobs and additional revenues that such an action would create, but also with an eye on bringing more American energy online for consumers, lowering prices and reducing imports in the process."

Earlier this month, CEA launched a campaign designed to empower everyday Americans with the tools they need to ensure their voices are heard in Washington. The campaign, coined More Energy Now, also includes an online feature capturing the up-to-date status of America's growing reliance on foreign energy — along with a rolling counter of how much Americans are currently sending overseas to acquire the energy they need.

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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How to Make Money Off Drilling Becomes Issue in Pa. County Race

How to Make Money Off Drilling Becomes Issue in Pa. County Race

Thursday, May 05, 2011
Knight Ridder/Tribune Business News
by Timothy Puko, The Pittsburgh Tribune-Review

All four candidates for Allegheny County Executive want to drill for gas on county-owned land, but how to do it has become a matter of debate in the weeks before the May 17 primary.

Two candidates agree. Democrat Rich Fitzgerald of Squirrel Hill and Republican D. Raja of Mt. Lebanon want a traditional deal: The county should lease land to a gas driller for an up-front fee and a share of the gas royalties.

"Like anyone else, the county should seek the best deal possible as market prices allow," Raja spokesman Mark Harris said in an e-mail.

But taxpayers fall short in that kind of deal, said Mark Patrick Flaherty of Mt. Lebanon. Flaherty, a Democrat and county controller, advocates a joint venture with a drilling company on 9,200 acres at Pittsburgh International Airport and the county airport in West Mifflin. The county would have to borrow to help pay for the drilling, but would get a larger profit in the end, he said.

Both Fitzgerald and Republican candidate Chuck McCullough of Upper St. Clair opposed Flaherty's idea on Wednesday. The Fitzgerald campaign released a commercial on YouTube calling it a risky scheme that would be a big loss if the wells turn up dry.

McCullough called Flaherty's plan illegal. He contends state law prohibits municipalities from doing "any proprietary or private business."

Flaherty denied that.

"All you would do is be negotiating different terms of the lease," he said. "Instead of most of the lease proceeds going to the gas company, the residents would be getting more of a deal."

McCullough wants to sell and privatize the airports. The county should be able to get a larger sale price if the mineral rights are part of the deal, he said. It's safer, he added. "You're not supposed to be putting taxpayers' dollars at risk in business investments, and you're not supposed to be competing with them either," he said.

But selling an asset can be risky, too, Fitzgerald said. Leasing is the safest thing to do; that could bring up-front payments of $3,000 to $5,000 per acre and another 15 percent to 20 percent in royalties as the gas is extracted over several decades, he said. The county wouldn't face the liability that comes from explosions and blowouts at well sites, he added.

"I just don't think we should risk taxpayers' dollars," Fitzgerald said.

Copyright (c) 2011, The Pittsburgh Tribune-Review. Distributed by McClatchy-Tribune Information Services.

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BP Migas Extends Contracts of Four PSC Holders

BP Migas Extends Contracts of Four PSC Holders

Thursday, May 05, 2011
Asia Pulse Pte Ltd

Indonesian upstream oil and gas regulator BP Migas announced Wednesday that the government had extended contracts with four production sharing contract (PSC) holders in 2011.

The four PSC holders were Camar Resources Canada for the Bawean block in East Java, PT Medco E&P Malaka for Block A in Aceh, Husky Oil (Madura) Limited for the Madura strait block and PT Medco E&P Indonesia for the South Sumatra Central Sumatra Area block.

The government has extended contracts with those PSC holders, said BPMigas spokesperson Elan Biantoro over the phone.

In addition to the four blocks, the government will also extend the contract of the West Madura offshore block, currently operated by Korea-based Kodeco Energy. The contract will expire on May 6.

BPMigas has recommended that the government grant the right to operate the block to state oil and gas firm PT Pertamina, the Jakarta Post newspaper said.

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Consol Pitches Gas Role to Industry

Consol Pitches Gas Role to Industry

Thursday, May 05, 2011
Knight Ridder/Tribune Business News
by Kim Leonard, The Pittsburgh Tribune-Review

Consol Energy Inc.'s big move into natural gas production last year puts it in line to sell gas to chemical companies that could locate in the Pittsburgh region, as well as utilities and other industries that need the fuel, CEO J. Brett Harvey said on Wednesday.

"We think the utilities will build out the next round of generating (plants) for gas," Harvey told shareholders at the company's annual meeting at the Hyatt Regency hotel in Findlay. "We also believe chemical companies will come and build plants here because the fuel and water are here."

Regional leaders have approached five chemical makers about building gas "cracking" plants in Southwest Pennsylvania or northern West Virginia, said Dennis Yablonsky, CEO of the Allegheny Conference on Community Development.

A plant with cracking furnaces that turn ethane into ethylene typically costs $1 billion, and employs about 250 people, Yablonsky said.

The Energy Alliance of Greater Pittsburgh, which the conference and business investment group Innovation Works formed two years ago, is pushing the idea that the "wet" gas -- rich in ethane, butane and propane -- that comes from Marcellus shale and other wells is ideal for making ethylene. The compound is used in coatings, adhesives and other products.

Harvey is one of 16 energy company CEOs advising the alliance as it tries to entice new businesses to the region.

Yablonsky wouldn't say which chemical companies have been contacted but, "The response has been pretty good," he said.

Cecil-based Consol focused on coal for most of its 150-year history, but now views natural gas as a "perfect hedge," Harvey said, considering environmental policies that discourage coal use.

"And if you push against coal," he said, "the fuel that comes back to mind in terms of acceptance is natural gas."

Consol last year bought the 16.7 percent of CNX Gas Corp. that it didn't already own, and it paid $3.5 billion for Dominion Resources Inc.'s Appalachian Basin natural gas exploration-production business. The company controlled 3.7 trillion cubic feet of gas reserves as of Dec. 31.

Record revenue last year resulted in a $347 million profit, Harvey said, but Consol's stock performance was disappointing. "The acquisition of the gas piece confused the marketplace," he said.

Consol stock traded at around $56 in January 2010 and dipped to around $32 in midsummer before rebounding. Shares closed at $51.03 yesterday, down $1.23.

Shareholders approved Ernst & Young as Consol's independent auditor, and shareholders also approved advisory votes on executive pay. One shareholder, who declined to be named, criticized Harvey's 16 percent pay boost and other executives' raises in 2010, while stock returns dipped.

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India, RIL in Proxy Fight Over KG-D6 Output Decline - Bernstein

India, RIL in Proxy Fight Over KG-D6 Output Decline - Bernstein

Thursday, May 05, 2011
Asia Pulse Pte Ltd

India's Reliance Industries wants a hike in the price of natural gas to resume drilling in the KG-D6 fields, which have seen a sharp drop in output due to drilling of less wells than committed, investment research group Sanford C Bernstein & Co said.

"We believe that RIL doesn't believe it is worth its while to invest additional capital in drilling wells when the price at the beach remains at US$4.20" per million British thermal units, Neil Beveridge, a Hong Kong-based analyst for Bernstein, said in a report on Thursday.

Gas output from the Dhirubhai-1 and 3 fields in the KG-D6 block had steadily risen to 53 million standard cubic meters per day in March last year, but have dropped to below 42 mmscmd now instead of rising to the projected level of 61 mmscmd.

Another 8 mmscmd is produced from the MA field in the same block, taking the total output from KG-D6 to about 50 mmscmd.

The fall in output due to drilling of less wells had earned RIL the ire of the government and the regulator DGH.

While the DGH is pressing RIL to drill more wells outside the main channel that is currently producing, the government is pressuring RIL by directing it to supply gas to priority sectors like fertilizer and power and cut off sales to refineries and petrochemical plants, including its own.

"We believe that this is a proxy fight between the government and RIL," Bernstein Research said.

"Lower production output is primarily a function of the hiatus in development drilling," it said. "While it seems likely that the reservoir is more complex than originally anticipated, performance on a per well basis has not been too dissimilar to the original field development plan.

"Instead, the lower number of development wells drilled (18 versus 22 planned) is primarily the reason for the under-performance," it said.

Bernstein said completion of Phase - I drilling plus initiation of Phase-II drilling, when the total number of wells could reach up to 50, would restore output growth.

"We believe that the natural rate of the decline in production for the KG-D6 wells is around 20 percent annually, or around 5 percent per quarter, not substantially different from similar fields around the world," it said.

"In case RIL doesn't take any more action on the drilling of wells and connecting those to the reservoir and continues operating with 18 wells, we expect the production to reach a level of around 37-38 mmscmd by FY'2013," Bernstein said.

The government has asked the company to drill 11 wells by the fiscal-end to take the total number to 31 as had been planned when RIL won approval for investing $8.8 billion, S.K. Srivastava, the director general of the country's oil regulator, had said earlier this week.

RIL will submit a drilling plan in two weeks, he had said on May 2.

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Envoy: S. Sudan to Respect India's Oil Deals After Independence

Envoy: S. Sudan to Respect India's Oil Deals After Independence

Thursday, May 05, 2011
Knight Ridder/Tribune Business News
by Julius N. Uma, Sudan Tribune

All contracts for Indian stakes in south Sudan's oil wells and their entities within the semi-autonomous region will be honored after the latter's independence, a special envoy revealed last week.

Priscilla Joseph Kuch, according Indo-Asia News Service (IANS), made these assurances during a meeting she held with S.M Krishna, the Indian external affairs minister in the capital, Delhi.

South Sudan is due to become independent in July after its population overwhelmingly voted for separation during the January self-determination referendum. The plebiscite was a key part of Sudan's 2005 Comprehensive Peace Agreement (CPA), which ended over two decades of war between north and south of the country.

Also discussed, according to Vishnu Prakash, the ministry spokesperson, was India's hydrocarbon interests in the oil-rich South Sudan which, he added, was reportedly "consolidating" and taking stock of agreements in the sector. "Our understanding is that the agreements pertaining to India will be honored," Prakash reportedly told reporters.

Currently, according to IANS, India's ONGC Videsh Limited is said to have stakes in several wells in Sudan, with production reportedly standing at 160,000 barrels per day. Out of this, 100,000 barrels per day of production is reportedly from oil wells in South Sudan.

"OVL has already offered training and to go beyond the current level of engagement," Rajiv Shahare, the Indian external affairs ministry secretary reportedly revealed.

OVL is a company began operating in Sudan in 2003. It built the pipeline from Khartoum to Port Sudan. It has a 25% stake in Sudan's Greater Nile Oil Project, which produces 280,000 barrels of oil per day. It is looking to expand its reach in South Sudan.

Regarded as being among the biggest players in Sudan's oil sector, along with China and Malaysia, India reportedly made an initial investment of US$1 billion in the sector, which is said to have increased to US$2.5 billion.

Over the years India has reportedly extended a US$566 million line of credit, which includes building a 500 megawatt power plant. Bilateral trade between India and Sudan was about $1 billion in 2010.

In March this year, the Energy and Mining ministry in the Government of South Sudan and Petroliam Nasional Berhad (PETRONAS), a Malaysian-owned oil and gas company signed a two-year memorandum of understanding aimed at boosting mutual cooperation between the two parties.

The document, signed in South Sudan's capital, Juba, outlines the overall principles of cooperation in the oil and gas sector between the government and the Malaysian oil giants, creating an avenue exploiting existing business opportunities in the two regions.

Founded on August 14, 1974, PETRONAS is owned by the Malaysian government. Since its incorporation, the company has reportedly grown to be an integrated international oil and gas company with business interests in 35 countries.

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Both Williams Firms Tap Strong Q1 Returns

Both Williams Firms Tap Strong Q1 Returns

Thursday, May 05, 2011
Tulsa World, Okla.
by Rod Walton

Williams Cos. Inc. and Williams Partners LP both exceeded $300 million in profits for 2011's first quarter, the Tulsa natural gas, oil and natural gas liquids firms reported Wednesday.

Higher NGL margins sparked the strong returns for the three months ending March 31. Parent Williams tapped $321 million, or 54 cents per share, in net income while Williams Partners totaled $307 million, or 81 cents per unit, in profit.

"We're off to a good start this year, and we're expecting an even stronger performance for the remainder of 2011 and 2012," Alan Armstrong, president and chief executive officer, said in a statement. "We've increased our earnings guidance 11 percent for both years, as we expect strong NGL and olefin margins in our midstream businesses."

Williams Cos. net income was a dramatic increase over 2010's first quarter, when the company announced a $195 million net loss. Williams Partners' total was down slightly from the $322 million same time last year, but 33 percent higher on a per-unit basis, according to the release.

The traditionally natural gas-rich Tulsa company has upped its stake in oil and NGL plays in the past year due to higher prices and increased demand for ethane for use in petrochemical production. Williams has $4.8 billion in growth capital projects planned through 2012.

"We continue to invest in and bring more value-adding natural gas and NGL infrastructure projects online," Armstrong added. "With abundant supplies in the new shale plays and growing demand from natural gas-fired electrical generation, the need for natural gas infrastructure will continue to grow."

Williams Cos. is focused on infrastructure, exploration and production although a new subsidiary, WPX Energy Inc., will spin off the E&P segment in the near future. Williams Partners handles natural gas and NGL gathering, transport and processing assets.

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Sony Ericsson Announces Two New Experia Phones

Fortune Magazine releases the Fortune 500 list with Wal-Mart Taking the Top Spot



May 5, 2011

Mobile phone maker Sony Ericsson announced Thursday the launch of two additions to its Xperia smartphone product portfolio, the Xperia mini and the Xperia mini pro.

Sony Ericsson is a joint venture formed in 2001 between Sweden's LM Ericsson Telephone Company (NASDAQ:ERIC) and Japan's Sony Corporation (NYSE:SNE).

The London-headquartered company said the new handsets are "building on the success of the original mini series" and will utilize Google Inc.'s (NASDAQ:GOOG) new Android operating system, Gingerbread 2.3.

A one-gigahertz Qualcomm (NASDAQ:QCOM) Snapdragon processor powers both phones, which use SONY display technology. The Xperia mini pro has a keyboard that slides out while the company claims the Xperia mini is the world's smallest Android running smartphone that also has HD-video recording capabilities.

The phones will go on sale in the third quarter.

Shares of Ericsson are trading down 1.46% at $14.84.

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Legacy Adds Permian Assets

Legacy Adds Permian Assets

Thursday, May 05, 2011
Legacy Reserves LP

Legacy Reserves LP has closed the previously announced acquisition of Permian Basin natural gas properties for $66.1 million in cash, excluding revenue suspense and subject to customary post-closing adjustments.

The properties include 126 wells, 100 of which are operated, that are located in Eddy and Chaves Counties, New Mexico. In addition, the acquisition encompasses a natural gas gathering system and related compression facilities gathering gas from the acquired wells and some third party wells. Legacy estimates net daily sales of 7.6 MMcf of natural gas, 397 Bbls of NGLs, and 4 Bbls of oil, as well as proved reserves of 40.7 Bcfe.

All of the evaluated reserves from this pending acquisition are considered proved developed producing ("PDP"). There are also multiple locations included in this acquisition that will be evaluated for future drilling.

Legacy Reserves LP is an independent oil and natural gas limited partnership headquartered in Midland, Texas, focused on the acquisition and development of oil and natural gas properties primarily located in the Permian Basin, Mid-Continent and Rocky Mountain regions of the United States.

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Hawk Announces Sask. Farm-in Deal

Hawk Announces Sask. Farm-in Deal

Thursday, May 05, 2011
Hawk Exploration Ltd.

Hawk Exploration Ltd. (the "Corporation") along with its 50 percent operating partner have entered into a strategic farm-in agreement (the "Agreement") with a public oil and gas company (the "Farmor") in its core area of Seagram Lake in western Saskatchewan. The Agreement allows Hawk to earn an interest in up to twelve gross (6 - net) sections of land prospective for Duperow (Leduc equivalent) heavy oil immediately adjacent to Hawk's existing crown acreage in the area. With this Agreement, Hawk currently owns or has access to 24 (12 - net) sections of land at Seagram Lake.

Under the terms of the Agreement, Hawk plans to drill one (0.5 net) vertical test well on the farm-in lands prior to June 30, 2011 to evaluate the Duperow formation for potential horizontal development. Based on the results of the vertical test well and at the election of Hawk and its partner, a horizontal or dual-leg horizontal test well could be kicked off from the vertical test well. Hawk and its partner can earn two (1 -net) sections for drilling a vertical test well, four (2 - net) sections for a single leg horizontal test well and eleven (5.5 net) sections of land for a dual-leg horizontal test well in exchange for 7.5% non-convertible gross overriding royalty to the Farmor. All of the farm-in lands were acquired at crown land sales and are eligible for existing Saskatchewan crown royalty incentive programs.

The Corporation has also commenced drilling operations at its first dual-leg horizontal (0.5 - net) well at Seagram Lake adjacent to Hawk's existing producing Duperow well.

Hawk is an emerging exploration company engaged in the exploration, development and production of conventional crude oil and natural gas in western Canada and is based in Calgary, Alberta.

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Natural Gas Glut Begins to Shrink

Natural Gas Glut Begins to Shrink

Thursday, May 05, 2011
Houston Chronicle
by Tom Fowler

A global natural gas glut is disappearing sooner than expected, thanks to rebounding economies and troubles in Japan and the Middle East, panelists said at the Offshore Technology Conference on Wednesday.

The global recession, combined with a surge in natural gas production from prolific shale formations in the United States, sent supplies of the blue-burning fuel soaring and prices plummeting beginning in late 2008.

Some of that supply-demand imbalance had reversed as economies started to recover, but the pace has picked up, said Rafael McDonald, an associate director with research firm IHS-CERA.

The economies in China, India and Brazil were lightly touched by the global recession and are still growing quickly, McDonald said.

And some economies hit hard, such as South Korea's, have rebounded stronger than before, while back-to-back cold winters in Europe improved demand there, he said.

While Libya's oil and natural gas production is modest, the ongoing war there has cut into its marginal supply to Europe.

And Japan's demand for liquefied natural gas to fuel power plants soared after the March earthquake and tsunami knocked out nuclear power plants.

The gas outlook, which IHS-CERA has adjusted even since its annual CERAWeek conference in Houston in February, isn't changing Houston-based Cheniere Energy's plans to start exporting liquefied natural gas from a terminal it now uses to import it.

David Thames, president of Cheniere's marketing arm, said during the panel discussion that his company hopes to get final regulatory approval in 2012 for facilities to turn U.S. natural gas into LNG for export through the import terminal it opened at Sabine Pass in 2008. Exports could begin by 2015.

The Cheniere export facility won't actually sell natural gas, Thames said, but rather the capacity to convert it to LNG. He said that reduces the risk of the project and makes it more competitive with other LNG projects around the globe.

Exporting of domestic natural gas could face political opposition, given the nation's dependence on overseas oil, Thames said. But as a member of the World Trade Organization and a signatory on many regional free trade agreements, the federal government can't prohibit such trade, he said.

Richard Davis, an executive with Bechtel Oil, Gas & Chemicals, the engineering and construction firm set to build the new Cheniere facilities, noted that an export terminal in Kenai, Alaska, has been sending LNG to Japan since 1969.

He said that building a facility from the ground up would cost twice as much as adding capacity for liquefying gas to an existing import facility, like Cheniere's, that already converts it back to gas from LNG delivered by tanker.

The U.S. chemical industry may see a renaissance in the coming years as shale gas production creates more supply and a cheap feedstock for chemical plants, the panel noted.

And U.S. power plants using natural gas are expected to increase the demand for the fuel in the coming years as more coal-fired plants are retired due to tougher air quality rules.

But that doesn't mean the U.S. will see natural gas shortages any time soon, said Emma Cochrane, vice president of Exxon Mobil Corp.'s Asia Pacific, Africa and Power business.

By 2025 U.S. natural gas production capacity is expected to grow beyond what the country will consume by then, even with a strong economic rebound.

"The U.S. will be almost completely self sufficient for natural gas in 2030," Cochrane said.

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Disaster Inspires Brilliant Answers

Disaster Inspires Brilliant Answers

Thursday, May 05, 2011
Houston Chronicle
by Tom Fowler

A possible tool for preventing oil spills like last year's Gulf disaster arrived on the floor of Houston's Reliant Center this week, courtesy of an auto industry refugee and a jackknife can opener.

T-3 Energy Service unveiled a new kind of pipe-cutting device at the Offshore Technology Conference, running through Thursday at Reliant Park. The design came from some late-night thinking by Doug Jahnke, a company engineer who came to Houston after the automotive industry took a dive several years ago.

The design is just one of many products unveiled this week at the annual Offshore Technology Conference that were developed in response to last year's deadly blowout of BP's Macondo well.

Most blowout preventers, including the one that failed to keep Macondo under control, use a pair of V-shaped blades to crimp and cut drill pipe in an emergency. But the blades may not do the job if the pipe has been knocked off-center in the wellhole, as investigators believe occurred at Macondo.

"I didn't have a lot of set ideas about how things should work in the energy industry," Jahnke said. "So I thought 'Why can't we try a curved blade?' like the curved hook on a Swiss Army Knife can opener."

Since January, T-3 has been testing Jahnke's design, slicing through just about every size of drill pipe and casing used in the Gulf.

From improvements in blowout preventers to improved systems for skimming oil if it does get out of a deep-water well, the offshore industry has spent the past year trying to avoid a repeat of the accident that killed 11 men and triggered the nation's largest offshore oil spill.

National Oilwell Varco is showing customers its new shear rams -- a pair of trident-like blades that puncture a drill pipe before cutting it to shreds. The ShearMax Low Force Casing Shear Rams are aimed at cutting through tool joints -- the thickest section of a drill pipe where it screws into another section of pipe.

GE Oil & Gas' Hydril line of blowout preventers include a hardware and software system that allows an operator to know exactly how far shear rams close within the blowout preventer.

Another new Hydril product captures the natural pressure thousands of feet underwater to help activate a shear ram.

Weatherford International has touted its new "closed-loop" drilling system, which allows for better monitoring for gas as mud comes back from a well during drilling.

Investigations suggest the crew on the Deepwater Horizon drilling rig, which was working on the Macondo well, missed early signs of gas coming back to the rig through the drilling mud.

The sales staff at Houston-based Titan Specialties says OTC attendees are showing strong interest in its cement bond logging equipment -- used to test the integrity of a well's cement job. A government report on the Macondo accident says a failed cement job was a factor.

"Some states are mandating cement bond logs now, so it's a big item in the past year," Titan's Tim Johnson said.

Today, German equipment maker Bornemann Pumps is formally rolling out plans for a variation of the "top hat," a giant steel cone that BP lowered onto the Macondo leak early on after last year's spill in a futile attempt to funnel oil up to a surface ship.

That effort was doomed by the formation of natural gas hydrates -- a sort of icy slush that clogged the top hat's piping.

Bornemann's version includes pumps within the cone capable of handling up to 300,000 barrels per day of oil and gas flow -- five times the flow government officials believe was coming out of the Macondo.

The high pumping velocity and heat from the unit's electric motor prevent hydrates from forming, the company says.

"This system can buy companies time as they work on the final solution to stop a leaking deep-water well," said Axel J äschke, head of Bornemann's subsea division.

Some of the ideas in the technology on display have been in the works for many years.

For example, parts of Weatherford's system were recognized with OTC technical awards a few years ago when they were first unveiled by another company, but Weatherford has since acquired that firm and bundled the technology with some other systems it had developed.

Other devices resulted from brainstorming in response to new developments.

"Engineering is a strange profession," said Gary Schaeper, vice president of engineering for T-3. "Some days you come to work and you're just pushing papers around like a clerk, others you're working on an idea that you know is something new. You just can't schedule when you're going to have a breakthrough."

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Ivanhoe Upgrades Pungarayacu Crude to Pipeline Quality

Ivanhoe Upgrades Pungarayacu Crude to Pipeline Quality

Thursday, May 05, 2011
Ivanhoe Energy Inc.

David Dyck, President and Chief Operating Officer of Ivanhoe Energy Inc. and Michael Silverman, Executive Vice President and Chief Technology Officer on Thursday announced that heavy crude oil extracted from Ivanhoe's IP-5B well in the Pungarayacu field in Block 20 in Ecuador has been successfully upgraded to local pipeline specifications using Ivanhoe Energy's proprietary HTL upgrading process.

The successful tests demonstrate the flexibility and robustness of the HTL upgrading process to convert diverse heavy crude feedstocks into more valuable and marketable, pipeline-ready synthetic crude oil. In addition, these tests help position Ivanhoe Energy for full-scale heavy oil operations in Ecuador and in other countries having similar heavy oil characteristics.

Ivanhoe Energy drilled its first two appraisal wells in the Pungarayacu field in 2010. This followed a 26-well appraisal drilling program in the 1980's carried out by Petroecuador, which provided valuable preliminary data on the field but did not include thermal recovery and hence did not produce any oil for characterization and testing.

Ivanhoe Energy's goals for the initial wells in Pungarayacu were to add to its preliminary understanding of the reservoir, to carry out thermal recovery tests, and to extract heavy oil for characterization and upgrading tests using its proprietary HTL upgrading process. Ivanhoe Energy drilled its second well, IP-5B, at the southern end of the Pungarayacu oil field in Block 20. Following thermal operations, heavy crude was extracted and test volumes were sent to Ivanhoe Energy's HTL Feedstock Test Facility (FTF) in San Antonio, Texas. These heavy crude volumes were successfully processed and converted to a product that would meet pipeline specifications in Ecuador and would have a higher value and greater marketability than the raw heavy crude.

"This successful processing test confirms the capabilities and flexibility of our HTL upgrading technology", said David Dyck. "We believe our HTL process provides Ivanhoe Energy with a unique capability to help the Government of Ecuador, and other governments and heavy oil owners around the world, develop this important resource in a cost-effective and environmentally-responsible manner."

Ivanhoe Energy's technical team is pleased with this result given the specific characteristics of the crude samples that were obtained from IP-5B. The crude gravity is similar to Athabasca bitumen, at approximately 8° API, however other characteristics are quite different and present specific upgrading challenges. This included higher residual oil (heaviest fraction of the crude), metals, viscosity, solids, and water. In order to deal with these challenges, the FTF was calibrated and customized to suit the feed, and the processing was successful.

The input heavy crude, with a gravity of approximately 8° API, was upgraded to approximately 17° API, while the viscosity of the feed was virtually eliminated and the metals significantly reduced. All of this was accomplished with an overall liquid yield of 88%. These results were from Ivanhoe's first well of recovered volumes and as such represents an early test result. Ivanhoe anticipates that improvements in technical attributes, including API, will continue to advance as progress is made on the overall Ecuador project. This would be consistent with improvements achieved in the Tamarack Project also operated by Ivanhoe.

"In recent years, we have dramatically improved the overall performance and capabilities of the HTL process from its early stage design," said Silverman. "Over the last twelve months we have focused deliberately on making the process as flexible as possible so we can handle different and more challenging crudes. This preparation served us well when processing the heavy crude from well IP-5B."

An independent review by Gaffney, Cline & Associates estimated that within the 250 square-mile delineated portion of Block 20, and within the Hollin formation, there are between 4 and 12 billion barrels of oil originally-in-place. Canadian reporting standards and, in particular, the Canadian Oil and Gas Evaluation Handbook, stipulate that, until it can be established that oil will flow to the surface, original-oil-in-place must be reported as "undiscovered resources."

Ivanhoe has also commenced a 190 kilometer 2-D seismic program on the southern part of the Pungarayacu Block. Ivanhoe anticipates that this initial phase of shooting and processing of 2-D seismic will be completed in early July. The seismic data will be used to better identify sub-surface structures, assist in the selection of future drilling locations and possibly determine deeper geologic trapping systems which may contain lighter quality crude products.

HTL represents a unique competitive advantage as Ivanhoe executes its heavy oil business plan around the world. HTL has demonstrated the ability to upgrade a wide range of heavy oil feedstocks with significant variability in characteristics into a more valuable and marketable synthetic crude oil meeting pipeline specifications. HTL eliminates the need for diluent and blend agents for transport, and eliminates, or virtually eliminates, the need for natural gas for steam generation for thermal recovery. These HTL advantages all come to bear in Pungarayacu in Block 20, as well as in many other heavy oil fields in Ecuador, where access to natural gas and blend agents is restricted, and heavy oil is abundant.

Ivanhoe Energy Inc. is an independent, international oil and gas company with a focus on heavy oil development and production using advanced technologies, including its proprietary, patented heavy to light upgrading process (HTL). Core operations are in Canada, Ecuador, China and Mongolia, with business development opportunities worldwide.

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Saipem Wins $1B-plus in E&C Contracts

Saipem Wins $1B-plus in E&C Contracts

Thursday, May 05, 2011
Saipem

Saipem has been awarded new E&C Offshore contracts worth in excess of $1 billion in China and Brazil.

The offshore activities for both the contracts will be performed mainly by the newly built and highly specialized Saipem FDS 2 vessel, in different periods between 2012 and 2013.

In China, Husky Oil China Ltd awarded Saipem the contract for the Liwan 3-1 Field Deepwater EPCI. The scope of work includes the engineering, procurement, construction and installation of two 22 inch diameter 79-kilometers-long pipelines, umbilicals, along with the transport and installation of a subsea production system linking the wellheads to a processing platform.

The Liwan 3-1 gas field, is located in the Block 29/26 in the South China Sea in 1500 meters water depth and approximately 300 kilometers south of Hong Kong. It represents the first offshore field developed in deep water in the South China Sea.

In Brazil, the Brazilian oil company Petrobras has awarded Saipem an EPIC contract for the Guara & Lula-Northeast gas export pipelines, in the Santos Basin, approximately 260 kilometers off the coasts of the Rio de Janeiro and Sao Paulo States, in water depths of between 2,100 and 2,200 meters.

The contract encompasses the transportation, installation and pre-commissioning of two export sealines, as well as the engineering, procurement and construction of related subsea equipment: the first line, 18 inch in diameter and 54-kilometers-long, will connect the Guara FPSO vessel (Floating Production Storage and Offloading) to a subsea gathering manifold in the Lula field; the second line, 18 inch in diameter and 22-kilometers-long, will connect the Lula-Northeast FPSO to the same manifold in the Lula field.

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Aminex Recompletes Sunny Ernst-2

Aminex Recompletes Sunny Ernst-2

Thursday, May 05, 2011
Aminex PLC

Aminex PLC announced Thursday that the Sunny Ernst-2 well at its Alta Loma property, Galveston County, Texas, has now been successfully recompleted in the "S" Sands.

The Upper Andrau Sands, placed on production after a successful discovery in summer 2008, are now substantially depleted and have been plugged off. A new completion has been made higher up the well bore in the "S" Sands formation, where a 60 foot hydrocarbon-bearing interval was logged during the original exploration drilling. This interval has now been successfully tested and is on limited production of 3.5 million cubic feet gas and 260 barrels condensate per day, pending the installation of upgraded production equipment which is due to be operational this month. The flowing tubing pressure is constant at 8,700 pounds per square inch on a 5/64" choke.

With full production facilities in place, production is likely to increase materially from the current restricted level in the near future and the increased production levels will be announced when available.

Aminex USA, Inc., a wholly owned subsidiary of the Company, has a 37.5% interest in Sunny Ernst-2 which is operated by El Paso E&P, LP.

Aminex chairman Brian Hall commented: "The recompletion of Sunny Ernst-2 will provide a substantial boost to production with immediate revenue benefits and at a low capital cost when compared to new drilling. Unlocking value from the 'S' Sands, potentially more prolific than the Upper Andrau formation, has been an objective of the Company for some time, but commingling the 'S' Sands with the Upper Andrau Sands was not a technically viable option and so recompletion was delayed until the Upper Andrau was approaching the end of its economic life."

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Ahlstrom to Lead Strategic Development at Noble

Ahlstrom to Lead Strategic Development at Noble

Thursday, May 05, 2011
Noble Corp.

Noble Corp. on Thursday announced that Lee M. Ahlstrom has been named to the position of Senior Vice President, Strategic Development.

Ahlstrom will be responsible for evaluating and developing strategic alternatives and initiatives to guide the Company's path toward increasing shareholder value into the future and he will report to David W. Williams, Chairman, President and Chief Executive Officer. Ahlstrom joined the Company in May 2006 and has served as Vice President of Investor Relations and Planning since that time.

"Lee's appointment recognizes not only his outstanding professional qualifications and extensive knowledge of the global offshore drilling industry, but also the importance we place on a strategic focus on growth and increasing shareholder value," said David W. Williams, Chairman, President and Chief Executive Officer. "Lee's broad understanding of the competitive landscape, world markets and finance coupled with his engineering background not only make him uniquely qualified, but will also provide an added dimension to our management team as we continue to develop our plans for the future."

Ahlstrom holds a master of mechanical engineering degree and a bachelor of mechanical engineering degree from the University of Delaware. He has 20 years of energy industry experience and previously served as Director, Investor Relations at Burlington Resources and held various management positions at UNOCAL Corporation, including Manager, Planning & Strategy, Deepwater, USA, Manager, Investor Relations and Executive Assistant to the President and Chief Operating Officer. Prior to UNOCAL, Ahlstrom held the position of Engagement Manager with McKinsey & Company and held various engineering positions with Exxon Company, U.S.A.

Additionally, Simon Johnson, who held the position of General Manager, Marketing and Contracts, has been named Vice President, Marketing and Development. In this position, Johnson will be directly responsible for the Company's marketing and contracting efforts in West Africa, the Mediterranean, Middle East and South East Asia/Australia. Johnson graduated from Curtin University, Perth, Australia and has worked in the drilling industry for the past 15 years with several companies and in various operations and marketing roles in Australia, Aberdeen and most recently in Singapore where he was responsible for Seadrill's marketing function in the Middle East and SEA.

"We are delighted to have Simon as part of our management team and believe his energy, knowledge and experience make him an ideal addition to our worldwide marketing effort," said Williams.

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Ante5 Bolsters N.D. Position

Ante5 Bolsters N.D. Position

Ante5, Inc.

Ante5, Inc. announced Wednesday that it has entered into agreements to purchase certain oil & gas leases covering approximately 8,023 net acres in the counties of Dunn, Billings and Stark, North Dakota. With the addition of these new leaseholds, Ante5 will control approximately 13,800 net acres in the growing North Dakota Bakken and Three Forks trend.

"These acquisitions materially increase our exposure to the North Dakota Bakken and Three Forks play," said Bradley Berman, Chief Executive Officer of Ante5. "Leading exploration companies continue to have significant Bakken and Three Forks success south of Mountrail. Ante5's newly acquired acreage appears to be in the fairway of that success."

"Our focus on strategic acreage acquisition continues to provide opportunities for Ante5 to expand our leasehold interest," stated Mr. Berman. "We plan to continue to acquire prospective acreage in the expanding Bakken and Three Forks trend and develop our leasehold interest with our drilling partners in the region. The speed of development continues to accelerate in North Dakota and we expect to increase our production significantly throughout 2011."

Ante5, Inc. is an oil and gas exploration and production company based in Minnetonka, Minnesota. Ante5's focus is the Williston Basin Bakken and Three Forks trend in North Dakota and Montana. Ante5 controls, or has under contract, approximately 13,800 net mineral acres in North Dakota.

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Transocean Reports Q1 Financials

Transocean Reports Q1 Financials


Transocean Ltd.

Transocean Ltd. on Wednesday reported net income attributable to controlling interest of $310 million, or $0.96 per diluted share, for the three months ended March 31, 2011. The results compare to net income attributable to controlling interest of $677 million, or $2.09 per diluted share for the three months ended March 31, 2010.

First quarter 2011 results included the following items, after tax, that resulted in a net positive impact of approximately $139 million, or $0.43 per diluted share:

-- $176 million of income from discontinued operations, nearly all of
which is from the gain on the sale of the Trident 20,
-- $9 million from the gain on the sale of the Transocean Mercury,
-- $8 million of net charges related to litigation matters not associated with the Macondo well incident, and
-- $38 million of net charges primarily related to discrete tax items.


First quarter 2011 results also included expenses associated with the Macondo well incident of $23 million, $19 million after tax, or $0.06 per diluted share. These expenses were primarily related to increased insurance premiums and legal costs.

Operations Quarterly Review

Revenues for the three months ended March 31, 2011 were $2.144 billion, compared to revenues of $2.127 billion during the three months ended December 31, 2010. First quarter contract drilling revenues were impacted by lower utilization and revenue efficiency. Our Deepwater and Midwater Floater fleets experienced lower utilization due to the stacking of rigs, as well as increased shipyard time related to contract preparation, special periodic surveys and major maintenance projects. Compliance with new well control equipment certification requirements, higher standards for equipment condition and capacity constraints on our vendors contributed to reduced revenue efficiency among our Ultra-Deepwater and Deepwater Floaters. Partially offsetting lower contract drilling revenue was additional revenue from two newbuild rigs commencing operations. Other revenues increased primarily from additional drilling management services activity.

Operating and maintenance expenses totaled $1.359 billion for the first quarter 2011, up slightly from $1.339 billion for the prior quarter. The change was due to increased drilling management services activity, which was partially offset by reduced rig-related maintenance costs.

Depreciation and amortization expense was $354 million in the first quarter 2011 compared to $381 million in the prior quarter. The $27 million decrease was primarily due to the reduced carrying amounts of our Standard Jackups resulting from the approximately $1 billion asset impairment recognized on that asset group during the fourth quarter 2010.

Liquidity and Interest Expense

Interest expense, net of amounts capitalized for the first quarter 2011, was $145 million, compared to $152 million in the fourth quarter 2010.

Cash flow from operating activities decreased to $390 million for the first quarter 2011 compared to $796 million for the fourth quarter 2010. The decline in cash flow from operations resulted primarily from an increase in working capital.

Effective Tax Rate

Transocean's Annual Effective Tax Rate(1) for the first quarter 2011, which excludes various discrete items, was 19.3 percent. The Effective Tax Rate(2) for the first quarter was 33.1 percent, primarily reflecting the impact of discrete items resulting from changes in estimates.

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S&P Launches Oil Hedged Index

S&P Launches Oil Hedged Index

Standard & Poor's

S&P Indices announced Wednesday the launch of the S&P 500 Oil Hedged Index, calculated as a combination of a long S&P 500 position overlaid with long positions in NYMEX Oil futures and ICE Brent Crude Oil futures.

The S&P 500 Oil Hedged Index seeks to reduce the effects of a rise in inflation, as reflected in higher oil prices, or against declines in the value of the U.S. Dollar by simulating the returns of an investment strategy that is long the S&P 500 and hedged against changes in the U.S. Dollar, as measured by oil prices. By holding long oil futures contracts, investors may benefit from an increase in oil prices or potentially sustain losses when the opposite occurs.

The Index uses NYMEX Crude Oil and ICE Brent Crude Oil futures as a hedge. The hedge position has 50% in NYMEX Crude Oil and 50% in ICE Brent Crude Oil at the close of each rebalancing day. The hedge only protects against adverse movements in the relative value of the U.S. Dollar, as expressed in the dollar price of oil. Stock market risk is not hedged in any way.

"Investors are increasingly looking for alternative methods to hedge against inflationary risk during this period of global economic uncertainty," says Alka Banerjee, Vice President at S&P Indices. "We would expect funds that replicate returns on the S&P 500 Oil Hedged Index to provide investors with a means to mitigate the potential negative impact on an investor's portfolio resulting from a rise in inflation or decline in the U.S. Dollar."

The S&P 500 Oil Hedged Index belongs to the S&P U.S. Index family. Other closely related S&P indices include British Pound, Canadian Dollar, Euro, Yen, and Gold hedged S&P 500 indices.

S&P Indices, a world leading index provider, maintains a wide variety of investable and benchmark indices to meet an array of investor needs. Over $1.25 trillion is directly indexed to Standard & Poor's family of indices, which includes the S&P 500, the world's most followed stock market index, the S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, the S&P Global BMI, an index with approximately 11,000 constituents, the S&P GSCI, the industry's most closely watched commodities index, and the S&P National AMT-Free Municipal Bond Index, the premier investable index for U.S. municipal bonds.

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BME UK Announces West Africa Contract Win

BME UK Announces West Africa Contract Win

BME UK

BME UK on Wednesday announced a contract worth GBP500,000 for the provision of its Specialised Machinery And Reduced flow Technology (SMART) in West Africa.

The company which designs and manufactures engineering equipment for the construction, marine and oil and gas industries will deploy seven of its personnel from Aberdeen, to carry out the work in the Bonga Field in Nigeria. This landmark deal follows the award of two further contracts with Hunting Energy Services International Ltd and BIS Salamis, both of which will be delivered by BME's operations in Aberdeen.

Scot Borland, director of BME UK comments, "The contract win in West Africa has been achieved in conjunction with local our partner, GCA. The work on the Bonga Field will utilise our revolutionary SMART system, to undertake deep tank and vessel cleaning. We have specially designed this technology to deliver outstanding results while reducing the waste, which deep tank and vessel cleaning produces; in some cases the level of waste is reduced by as much as 80%.

"Seven people from Aberdeen will travel to Nigeria to install and operate the SMART equipment. Training provision also forms part of the contract scope and six West African nationals will receive on-site training."

Aberdeen based Hunting Energy Services International Ltd will also be using BME UK's SMART system. Scot continues, "We have been awarded a contract by energy services provider Hunting Energy Services (Well Intervention) Ltd. This will be fulfilled from our offices in Aberdeen and is for the provision of a containerised ultra high pressure jetting unit and associated training."
Additionally the company has been contracted to undertake activity for leading international industrial services firm, BIS Salamis with the award of an order for the provision of six vertical air receiver frames.

Scot continues, "The technologies we supply are designed to provide results of the highest quality whilst having the added benefit of producing lower amounts of waste. This is therefore better for the environment and helps companies to comply with waste minimisation program requirements. Customers using our SMART system also benefit from lower costs because the amount of contaminated waste products which need to be treated or disposed of is reduced.

"We have recently invested GBP750,000 in the launch of our Specialist Cleaning Services; these initial contract wins validate our decision to make this level of investment and mean that we are well on the way to achieving our target of doubling our turnover to GBP3.4 million."

BME UK designs and manufactures a range of equipment for the construction, marine, oil and gas and decommissioning sectors. This includes decontamination modules for the treatment and disposal of NORM, high pressure fluid pumps for on and offshore use, munchers, handling systems, pipe cleaning systems phosphate systems, heat exchanger and bundle cleaning equipment, as well as traditional spoolers, powerpacks, workshops.

From its headquarters in Aberdeen, BME UK also offers a 24/7 maintenance back up services for clients who own or operate their own water/fluid pumps/pipe handling and cleaning systems. BME's skilled engineers have a wealth of knowledge on a range of pumps and work in global locations. Specialised Cleaning Services, a division of BME UK, provides full bundle cleaning services including surface preparation, internal and external pipe cleaning, drain cleaning, vessel cleaning and shutdown, waste removal and decommissioning services for global operators.

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