Russia Plans to Boost Investments in Iraq's Oil, Energy Sectors

Russia Plans to Boost Investments in Iraq's Oil, Energy Sectors

Tuesday, May 10, 2011
Knight Ridder/Tribune Business News
by Nehal El-Sherif, dpa, Berlin

The Russian government was working to increase its investments in Iraq, especially in the oil and energy sectors, Russian Foreign Minister Sergey Lavrov said Tuesday.

"Russia supports the Iraqi government in its efforts to restore security and develop the economy," Lavrov said at a joint press conference with his Iraqi counterpart Hoshyar Zebari in Baghdad.

"We are also working to increase cooperation and our investments here ... We are delighted that Russian companies are working in Iraq in the energy field," he said.

A consortium led by Russia's private oil company, Lukoil, secured the rights to develop an oilfield in 2009. Lukoil recently announced plans to quadruple its oil production from the massive West Qurna oilfield, to the west of Basra. It said initial production was scheduled for 2012 and full production should begin in 2017.

Iraq has held three international bidding rounds since late 2009 to attract investments in its oil and gas industry.

It relies heavily on oil exports for its revenue and aims to raise production from 2.5 million barrels to 12 million barrels per day within six years.

Lavrov said they also discussed the security situation in Iraq and cooperation in the defense sector. He also said Russia intends to open a consulate in the southern city of Basra, where some of the largest oilfields are located.

Copyright (c) 2011, dpa, Berlin. Distributed by McClatchy-Tribune Information Services.

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US Govt Asks for Legal Certainty in Indonesia's Oil Industry

US Govt Asks for Legal Certainty in Indonesia's Oil Industry

Tuesday, May 10, 2011
Knight Ridder/Tribune Business News
by Rangga D. Fadillah, The Jakarta Post, Indonesia

The US Department of Energy called on the Indonesian government to ensure the certainty of energy sector contracts and regulations to attract more investment from US companies.

Tom Cutler, the department's director for European and Asia Pacific affairs, said that following Indonesia's impressive economic growth over the past several years, the country needed more investment to develop its energy potential to cope with fast-growing domestic demand.

"The most important [thing to attract investment] is certainty. Once you have a contract with certain terms, companies want those terms to stay in place, because they make business calculations based on whatever the contract terms are," he told reporters on the sidelines of the US-Indonesia Energy Investment Roundtable in Jakarta.

Investment from US companies would help Indonesia boost its energy supply since they have been proven of being capable to provide capital and technology not only in the oil and gas sector but also in renewable energy, Cutler said.

US companies were interested in developing all of Indonesia's energy resources, including geothermal, bio-energy, hydro and wind, he added.

"We heard that Indonesia has 40 percent of the world's geothermal resources. We've some of the best companies in the world, like Chevron, which are interested in developing geothermal resources," he said.

Recently appointed US Ambassador to Indonesia Scott Marciel said US companies were interested in undiscovered oil and gas reserves offshore or in deep waters.

"According to our data, 90 percent of Indonesia's undiscovered oil and gas reserves are located in offshore and deep water areas," he said during his opening remarks.

Cutler said that to reverse the declining trend in oil production, Indonesia was in dire need of more investment to find more oil and gas reserves.

The nation's oil production is currently 916,000 barrels of oil per day (bpd), far below a government target of 970,000 bpd for 2011. Indonesia produced 954,000 bpd in 2010, below a target of 965,000 bpd.

Energy and Mineral Resources Minister Darwin Zahedy Saleh, who also attended the roundtable, said he would consider providing fiscal "incentives and more attractive production-sharing arrangements" to potential investors in the energy sector.

However, he did not elaborate in detail on the form of the incentives and more attractive production sharing arrangements.

"The government is also ready to consider fiscal incentives to encourage acceleration of resources development, as well as more attractive terms and conditions in production-sharing contracts," he said in his speech.

Darwin said he hoped that the bilateral roundtable would be soon followed by the participation of more US investors, not only in oil and gas, but also infrastructure development, new and renewable energy development and energy conservation.

Copyright (c) 2011, The Jakarta Post, Indonesia / Asia News Network. Distributed by McClatchy-Tribune Information Services.

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Texas Researchers to Study Fracking of Shale Gas

Texas Researchers to Study Fracking of Shale Gas

Tuesday, May 10, 2011
Fort Worth Star-Telegram, Texas
by Jack Z. Smith

University of Texas at Austin researchers will conduct "a comprehensive review of the science, policy and environmental issues surrounding hydraulic fracturing of shale gas," the school's Energy Institute announced Monday.

North Texas' Barnett Shale will be included in the study, which will examine the controversial process that pumps huge volumes of water and sand, plus much smaller amounts of chemicals, under extremely high pressure to create fractures in rock and release trapped oil and natural gas.

The project "will for the first time combine an independent assessment of alleged groundwater contamination and seismic events" ascribed to hydraulic fracturing, or "fracking," of shale formations "with a detailed analysis of the scope and effectiveness of laws and regulations" related to the process, the announcement said.

The project is expected "to get started straight away," Gary Rasp, communications director for the Energy Institute, told the Star-Telegram. Preliminary findings are expected by the end of October and a final report by the end of this year, he said.

The Environmental Protection Agency is conducting its own fracking study but doesn't expect to have initial findings before the end of 2012. The EPA study is also expected to include portions of the Barnett Shale.

The Energy Institute is providing the approximately $300,000 for its study, Rasp said.

"What we're trying to do is separate fact from fiction," Dr. Raymond L. Orbach, director of the Energy Institute, said in a statement. "Unlocking huge reserves of natural gas could be vital to our nation's energy security. If proven to be safe and environmentally benign, fracking could unleash a bountiful supply of domestic energy for generations, if not centuries, to come."

The research team "will investigate specific claims of groundwater contamination, seismic events, fugitive air emissions and other concerns" associated with fracking in the Barnett, Marcellus and Haynesville shales, the announcement said.

The Barnett Shale underlies more than 20 North Texas counties, including Tarrant and Johnson, the leading natural gas-producing counties in Texas. The Marcellus is in the Appalachian region of the eastern U.S, most notably in Pennsylvania and West Virginia, and the Haynesville is in northwest Louisiana and East Texas.

Copyright (c) 2011, Fort Worth Star-Telegram, Texas. Distributed by McClatchy-Tribune Information Services.

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Ky. Congressman: Make Domestic Oil Exploration Easier

Ky. Congressman: Make Domestic Oil Exploration Easier

Tuesday, May 10, 2011
The Blade, Toledo, Ohio
by Tom Troy

Boosting U.S. oil production would send gasoline prices downward and help free the United States from dependence on foreign oil, according to U.S. Rep. Bob Latta, who on Monday announced a package of bills to free up the domestic oil industry.

Mr. Latta's legislation, the "Consumer Relief of Pain at the Pump Act," contains numerous provisions that would allow for more exploration of oil and natural gas in the ocean outer continental shelf, the Gulf of Mexico, Alaska, and in the lower 48 states.

It would abolish regulations, tamp down on environmental lawsuits, and repeal a $4,000 fee on new applications for drilling permits.

"We've got to be able to produce our own energy in this country," Mr. Latta said.

The Bowling Green Republican held his news conference in front of a rusty old oil derrick at the Wood County Historical Museum near Bowling Green, the legacy of an era when producers in northwest Ohio and Indiana led the nation in oil production.

"Given America's abundance of natural resources, there is no reason why we are sitting tight and letting gas prices soar. I am excited to introduce this bill, which will curb surging gas prices and create downward pressure on the cost of oil by allowing America to take advantage of its vast domestic oil resources," Mr. Latta said.

He said the oil sources cited in the bill are capable of providing 198 billion barrels of oil, not counting shale oil.

Critics contend that America's domestic reserves won't make a big enough impact soon enough to lower the price of gasoline.

Republicans gained control of the House last November, running in part on promises to expand domestic oil projection. Mr. Latta's bill is one of several that aims to turn the GOP goal into reality.

Mr. Latta is chairman of the Energy Working Group of the Republican Study Committee, a conservative caucus within the Republican majority of the House of Representatives. He said the bill has 33 co-sponsors in the House.

The aim of the legislation is to increase the supply of North American energy by lessening "the regulatory burdens, mandates, and prohibitions that artificially increase the price of gasoline."

Mr. Latta held a similar news conference to promote domestic oil exploration on May 27, 2008, when a gallon of gasoline cost $4.09 at one Bowling Green station. Six months later, as the nation was plunged into a financial crisis and a recession, the price was less than half that much.

Monday the average price of regular gasoline in Toledo was $3.97 a gallon, about 19 cents less than one week earlier. A year ago, the average gallon of gas in Toledo cost $2.79.

Last week, U.S. Rep. Marcy Kaptur (D., Toledo) called on House Republicans to allow a vote on President Obama's proposal to end $4 billion in oil-industry tax benefits.

While acknowledging that reducing the oil and gas companies' tax deductions would be unlikely to reduce retail gasoline prices, Miss Kaptur said the additional revenue could be used to reduce the national deficit or could be paid out as a consumer refund.

Kaptur spokesman Steve Fought said the five biggest American oil companies earned a combined $27 billion in the first quarter.

"I don't think they need tax breaks from the middle class," Mr. Fought said.

President Obama has proposed using the funds for alternative-energy programs. The President has said that domestic production is at its highest point since 2003.

"The challenge is we've only got about 2 to 3 percent of the world's oil reserves and we use 25 percent of the world's oil. So we can't just drill our way out of the problem," Mr. Obama said in a recent speech.

Mr. Latta said repealing the tax benefits would be passed along to consumers in the price at the pump.

Copyright (c) 2011, The Blade, Toledo, Ohio. Distributed by McClatchy-Tribune Information Services.

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Justice Dept Claims EPA Did Not Violate Range's Due Process Rights

Justice Dept Claims EPA Did Not Violate Range's Due Process Rights

Tuesday, May 10, 2011
Fort Worth Star-Telegram, Texas
by Jack Z. Smith

The Justice Departments contends in court papers filed Monday that the Environmental Protection Agency did not violate Range Resources' constitutional right of due process when it issued a Dec. 7 emergency order against the company related to methane contamination of two residential water wells in Parker County.

Range's due-process argument is "without merit," the department said, arguing that the Fort Worth-based natural gas producer "seeks to curtail the EPA's emergency powers" under the federal Safe Drinking Water Act "in a manner that would seriously harm EPA's ability ... to address risks to underground sources of drinking water and public water systems."

The department filed a 31-page brief in a Dallas federal court where Senior Judge Royal Furgeson is considering a Justice Department complaint, filed Jan. 20, contending that Range failed to comply with three of six provisions in the EPA order. The department is asking Furgeson to deny Range's motion to dismiss the complaint.

Range has also filed an appeal with the 5th U.S. Circuit Court of Appeals in New Orleans.

The department said Range is entitled only to a hearing on whether it complied with the emergency order and "whether any civil penalties should be assessed." Fines could be $16,500 per day per violation.

In its Dec. 7 order, EPA said Range "caused or contributed" to the methane contamination of the water wells, likely from two nearby Range gas wells. Methane is the chief component of natural gas.

Range's wells were drilled more than a mile deep into the Barnett Shale, far below the water wells, which are roughly 200 feet deep.

Range spokesman Matt Pitzarella said late Monday that the company is reviewing the Justice Department's brief and that its "position remains the same": that it did not cause the water wells' contamination.

Range argues that the EPA's findings represent "sheer guesswork" based on "threadbare-thin" reasoning. It noted that EPA enforcement official John Blevins, who signed the emergency order, later backtracked somewhat, saying in a sworn deposition that Range "may" have caused or contributed to the wells' contamination.

Range argues that "there is 5,500 feet of the earth's strata separating the bottom of the private water wells from the subsurface horizontal sections" of its gas wells. The company contends that the EPA "does not even set forth a theory how gas could migrate from Range's wells to the aquifer."

The Texas Railroad Commission found March 29 that the Range gas wells did not cause the contamination. Its members said they agreed with its staff hearing examiners, as well as with Range and its consultants, that the gas in the water wells likely migrated from the shallow Strawn geological formation, into which some gas wells were drilled in the early 1980s.

Copyright (c) 2011, Fort Worth Star-Telegram, Texas. Distributed by McClatchy-Tribune Information Services.

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Okla. Treasury Gets Oil Revenue Boost

Okla. Treasury Gets Oil Revenue Boost

Tuesday, May 10, 2011
Tulsa World, Okla.
by Randy Krehbiel

State general fund revenues continued steady growth in April, boosted by increased sales and income tax collections and higher oil prices.

The Office of State Finance reported general fund revenues of $576.8 million for the month, up 13 percent from the same month a year ago but 3 percent less than expectations.

"The increase in tax revenues is good news for Oklahoma," Gov. Mary Fallin said. "Unfortunately, we still have a ways to go before we get to where we were before the recession hit.

"That means lawmakers will need to continue to find ways to make government smaller and more efficient, pursue targeted cuts at state agencies and pass reforms that help to create jobs and boost economic productivity," she said.

For the fiscal year ending June 30, general fund revenues are up $373.1 million, or 10 percent, from the same period a year ago, and $127.8 million greater than projections.

Net income taxes for the month totaled $313.6 million, which equaled projections but was 26 percent more than for the same month a year ago.

The general fund's share of state sales taxes totaled $147.1 million for the month, or 10 percent more than in 2010 and 5 percent more than the estimate.

Gross production taxes continued to lag because of depressed natural gas prices. The general fund's share on natural gas was only $4.9 million, more than 80 percent less than a year ago.

Oil gross production taxes, on the other hand, remained strong at $26.1 million, or 12 percent more than a year ago.

Motor vehicle taxes totaled $16.5 million, about the same as a year ago, and all other revenues were $68.7 million, a 15 percent increase.

Copyright (c) 2011, Tulsa World, Okla. Distributed by McClatchy-Tribune Information Services.

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RIL Tripled Investments in Group Companies in FY11

RIL Tripled Investments in Group Companies in FY11

Tuesday, May 10, 2011
Knight Ridder/Tribune Business News
by Aveek Datta, Mint, New Delhi

The Mukesh Ambani-controlled Reliance Industries Ltd (RIL) has used its strong cash flows to step up funding to new businesses such as shale gas and digital services, kicking off its next investment cycle.

RIL's 2010-11 annual report shows that the oil-to-yarn-to-retail conglomerate invested '7,593 crore in its subsidiaries and associate companies in fiscal 2011, almost three times the investment made in 2010. Net loans and advances given to these companies stood at '5,418.46 crore, against a receipt of '2820.43 crore from them in 2010.

Most of RIL's investments in subsidiaries and associate firms the last fiscal were driven by its fledgling shale gas operations in the US, a company official said. He did not want to be identified.

"We will augment our commitment to the Indian markets by investing in new petrochemical capacity, organized retailing and digital services," Ambani said in his letter to shareholders.

Overall, the company in 2011 made investments worth '37,651.54 crore, 62% higher than in 2010. This included a '5,897 crore investment in various mutual funds.

RIL put '2,207.70 crore in a wholly owned subsidiary, Reliance Exploration and Production Mauritius Ltd--the vehicle through which RIL holds its stakes in the three shale gas joint ventures in the US. "The investments comprise part payments that we were required to make upfront payments as well as guarantees for the deferred payments," the official said.

The increase in loans and advances are also mostly linked to the firm's shale gas venture as they have been used to make the equity payments.

RIL recorded an around 10-fold increase in the financial guarantees that it extended on behalf of associates and subsidiaries, at '21,637.59 crore. Apart from guaranteeing deferred payments for its shale gas partnerships, the company has also furnished guarantees against future cash calls to be made by the joint venture partners of its wholly owned subsidiary Reliance Holding USA Inc. to the tune of '9,409.55 crore, RIL's annual report said. Reliance Holding USA had issued bonds worth $1.5 billion ('6,705 crore today) in October.

In a span of five months till August, RIL acquired three shale gas assets in the US for a total consideration of around $3.44 billion.

"The JVs (joint ventures) are expected to accrue resources in excess of 10 tcfe (trillion cu. ft equivalent of gas) and make a meaningful contribution to our earnings within the next few years," Mukesh Ambani told RIL shareholders.

According to analysts, with the kind of cash flow that RIL is expected to generate, high levels of investment are likely in the coming quarters as well.

Reliance may have as much as $22 billion in cash and cash equivalents by 2012, including payments from BP Plc and an estimated cash profit of $8 billion in the next fiscal year, according to a 22 February report by HSBC Securities and Capital Markets (India) Pvt. Ltd.

RIL had said during the announcement of its January-March quarter financial results that it had already received an initial $2 billion from BP, which is being treated as a current liability pending regulatory approval to the deal.

"RIL will continue to show high investment figures as it has entered a number of new ventures," said S.P. Tulsian, a Mumbai-based independent stock market analyst. "In shale gas, RIL might reach the maximum level of investment in three to four years, while for broadband it should happen in 24 months."

Some brokerages, however, remain sceptical about RIL's ability to deploy the cash its operations have generated.

"(RIL's) management acknowledged that utilization of cash remained a key challenge," a 22 April Citigroup Global Markets Inc. report stated.

"While RIL had already decided to use a part of this (cash) for pursuing organic growth opportunities...management reiterated that a part of this would be used for inorganic opportunities as well," Citi analysts Saurabh Handa and Graham Cunningham noted.

During the last fiscal, RIL also made a major investment of '4,155.99 crore in Infotel Broadband Services Ltd, the pan-India winner of broadband wireless spectrum that it acquired in June, marking the conglomerate's re-entry into telecom.

Interestingly, RIL did not make any new equity investment in its retail ventures. RIL's investment in the equity shares of Reliance Retail Ltd as on 31 March was '5,220 crore, the same as at the end of fiscal 2010.

Tulsian said RIL's retail arms did not receive any fund infusion as either the firm was going slow on retail expansion or they may have started generating enough cash on their own and could have even achieved cash break-even, though they reported net losses for the last fiscal.

After reaping the benefits of its last value creation cycle in 2009-10 by redeeming investments in subsidiaries and associates to yield '6,482.55 crore, there was negligible sale of similar investments 2011.

Over the last fiscal, RIL's shares have underperformed the broader market. Share prices of RIL lost 2.5% in 2010-11, while the benchmark equity index of the Bombay Stock Exchange, Sensex, gained 10.94%.

On Monday, RIL's share price gained 0.31% to close at '958.35 per share, while the Sensex rose 0.05% to close at 18,528.96 points.

Copyright (c) 2011, Mint, New Delhi. Distributed by McClatchy-Tribune Information Services.

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Platts Survey: OPEC Pumps 28.84 Million Barrels of Oil Per Day in April

Platts Survey: OPEC Pumps 28.84 Million Barrels of Oil Per Day in April

Tuesday, May 10, 2011
Platts

The 12-member Organization of the Petroleum Exporting Countries' (OPEC) pumped an average 28.84 million barrels per day (b/d) of crude oil in April, down from 29.17 million b/d in March, a Platts survey of OPEC and oil industry officials and analysts showed May 9.

Excluding Iraq, which does not participate in OPEC output agreements, the 11 members bound by quotas (OPEC-11) pumped an average 26.18 million b/d during the month. This is down 340,000 b/d from the March estimate of 26.52 million b/d.

Lower volumes from Saudi Arabia, Libya and Angola accounted for almost the entire drop.

"With oil prices taking center stage, many pundits have dismissed fundamental supply and demand as a factor in the recent increases," explains Platts Global Director of News John Kingston. "One need go no further than these latest statistics to see one reason as to why the price of crude has risen so sharply. It's nice to point to an easily-understood concept like excessive speculation, but losing one million barrels per day of supply over the last two months in a market where demand has been climbing is having the result economic supply/demand theory would suggest it should have."

Some participants in the survey revisited their March estimates for Saudi Arabia after oil minister Ali Naimi said last month that the kingdom had slashed production by some 700,000 b/d to 8.29 million b/d in March because the oil market was oversupplied.

But some industry sources wondered whether the minister's figure might not have been intended as an average for the month, noting that the kingdom had submitted a figure of 8.655 million b/d to the International Energy Forum's Joint Oil Data Initiative, or JODI, for March.

In early March, Naimi said Saudi Arabia had increased production to 9 million b/d to make up for the loss of Libyan output and had even created a special blend of crude similar in quality to the lighter, lower-sulfur content Libyan grades. Refiners have shown little appetite for the new Saudi concoction, however.

The survey showed Libyan output dropping further in April, to just 200,000 b/d from 460,000 b/d in March.

In the United Arab Emirates (UAE), the 200,000-barrel-per-day drop in production from the offshore Upper Zakum field does not appear to have had an impact on overall output for the month. Industry sources said Abu Dhabi kept supply steady by amending production levels at other fields and tapping into storage to meet export commitments.

Angolan production fell 100,000 b/d to 1.6 million b/d, as maintenance and repair work continued on Greater Plutonio.

Qatari production also dipped slightly due to the production shut down at a platform of Denmark's Maersk Oil at the offshore Al-Shaheen field following a fire on April 21.

The 470,000-barrel-per-day decreases more than offset the increases of 190,000 b/d. Higher Nigerian output accounted for the bulk of the increases, but volumes also rose in Ecuador, Iraq, and Kuwait.

The latest estimates leave the OPEC-11 overproducing its official target of 24.845 million b/d by 1.385 million b/d.

There had been a suggestion earlier this month that OPEC kingpin Saudi Arabia might want to see OPEC raise its official output target at the upcoming June 8 meeting to a level closer to actual production. Subsequent soundings would appear to rule out such a move, however.

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CAVU to Boost Production from Chisholm Wells

CAVU to Boost Production from Chisholm Wells

Tuesday, May 10, 2011
CAVU Resources, Inc.

CAVU Resources, Inc. announced Tuesday that the Company is utilizing new technology and introducing computer controlled directional drilling and enhanced dewatering processes to recomplete two wells on the Chisholm lease. CAVU plans on reentering two of its existing wells, utilizing chemical stimulation and dewatering processes after drilling four horizontal legs out from each well.

The two producing wells were originally drilled in the 1950s to the Bromide formation at about 3,000 feet. The wells will be deepened to the Oil Creek formation at about 3,800 feet with the horizontal legs to be drilled in zones with oil shows out 1,000' to 1,500' in four different directions. This allows for production in multiple zones without the cost of drilling four separate wells. Based on analyses from surrounding wells is estimated that the Bromide and Oil Creek zones can produce up to 200 barrels of oil per day, (BOPD) per well.

"After reviewing our recent production and well log analyses from the Chisholm Lease, we are very confident that we should hit our targets for the seven current wells we have reentered or plan to, which would put our combined production at between 10 to 200 BOPD per well. This is part of an old Marathon Oil water flood, where over 4 million of barrels of oil were recovered. We feel this field and surrounding acreage has the great potential, using the new technology we are introducing and drilling offset wells that could provide increased reserves and long term cash flow. We currently in negotiations for targeted lease opportunities in the surrounding area. These leases have producing wells that we will introduce a similar rework program as we have on the Chisholm lease. This along with potential new development and drilling programs could quickly duplicate our projected production," said William Robinson, President of CAVU Resources, Inc.

CAVU was formed with the goal of becoming a recognized regional player in the independent oil and natural gas industry by growing the company's oil and natural gas reserves. CAVU is a natural resource company engaged in the acquisition, exploration and development of oil and natural gas properties. The Company operates in the upstream segment of the oil and gas industry with planned activities including the drilling, completion and operation of oil and gas wells in Oklahoma, Kansas, Colorado, Montana and Texas. The Company also owns two pipelines in its area of operations, which will be used for gathering its gas and oil and the gas and oil production of other producers. The Company has acquired leases and is currently exploring additional opportunities in oil and gas leases. The company has acquired significant oil and gas equipment including rigs, trucks and completion equipment.

CAVU's 100% owned subsidiaries, CAVU Energy Services, LLC provides contract drilling, fracture stimulation and directional drilling services to oil, natural gas exploration and production companies. EnviroTek Fuel Systems, Inc., provides natural gas delivery and marketing thru its own pipelines and FILO quip Resources, LLC a licensed Oil and Gas Operating Company manages the company's properties and targeted leases in Oklahoma, Colorado and Montana.

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Gustavson to Interpret, Evaluate Offshore Israel Licenses

Gustavson to Interpret, Evaluate Offshore Israel Licenses

Tuesday, May 10, 2011
Adira Energy Ltd.

Adira Energy Ltd. announced Tuesday that Gustavson Associates, LLC has been contracted to provide resource interpretation and evaluation of Adira's offshore licenses.

Adira Energy has formally contracted Gustavson of Boulder, Colorado, to provide professional, geophysical, petrophysical, geological and engineering services for resource interpretation and evaluation on each of its three offshore Israel licenses, "Gabriella", "Yitzhak" and "Samuel". Gustavson is an internationally recognized team of resource industry specialists acknowledged for their technical capacity to provide expert opinions on resource evaluation geotechnics and economics. Adira Energy, as Operator on the Gabriella and Yitzhak licenses and as Co-Operator on the Samuel license, has contracted Gustavson, to independently evaluate all three licenses. The Company has recently completed 3D geophysical programs on Gabriella and Yitzhak, and the first phase of processing (often termed "Fast Track") is now complete, and detailed processing is underway by CGG Veritas. The Samuel 3D contractor, ARIS Nefterazvedska LLC of Moscow is currently mobilizing, to complete an Ocean Bottom Cable deployed survey. Other regional data is to be obtained in order to provide initial characterization.

Colin Kinley, Adira Energy President and COO stated: "Contracting Gustavson to complete three independent reports on our licenses is a significant step forward on the Company time line. Adira's highly qualified in-house team, together with our respective partners, are continuing to evaluate the targets. Gustavson support will provide adequate assurances of the quality of our resource and the selection of our targets. We are focused on independent oil targets on each license and are encouraged by the quality of the data obtained from the geophysical program."

Yael Reznik Cramer, interim CEO of the Company confirmed: "We believe that the potential exists for significant oil in Israel. As in the gas discoveries, early indications defining the fundamentals exist. Gustavson and our team are focused on defining and proving out oil and gas targets that, in the event successful, will be meaningful both to Adira and Israel."

Kinley adds: "We anticipate completion of resource evaluation on Yitzhak, Gabriella and Samuel by the end of the third quarter. Assuming Fast Track quality is sufficient to support further quantification, the Company will engage an independent major consultancy firm to establish economic risking of the targets, and an anticipated valuation of each of the blocks. Adira is focused on establishing credible targets and valuations thereof to define their drilling schedules."

Stock Option Grant

The Company also announces the granting of incentive stock options to purchase an aggregate of 505,000 common shares of Adira Energy to an officer and a number of employee recipients. The stock option grants are all subject to regulatory approval. Terms of the options include an exercise price of $0.60 per common share, and a vesting schedule allowing for the vesting of 12.5% of the options granted every six months with the initial amount vesting on the date that is six months from the date hereof, resulting in the options being fully vested on November 2, 2015. The options expire on May 2, 2016.

Gustavson Associates is a global consulting firm consisting of geologists, geophysicists, engineers, land and contract managers as well as economists and financial experts who solve problems on all aspects of natural resource evaluations. This work ranges from the first steps of prospecting to design and assessment of production facilities. Multi-lingual capabilities include Spanish, French, German, Russian, Chinese, Farsi, and Arabic.

Adira Energy Ltd. explores for oil and gas in and offshore Israel. It has four petroleum exploration licenses; the Eitan, Gabriella, Yitzhak and Samuel Licenses. These licenses are located respectively on-shore in the Hula Valley of Northern Israel, 10 km offshore between Netanya and Ashdod, 17 km offshore between Hadera and Netanya and adjacent to the coast between Ashkelon and Bat-Yam.

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Japan to promote renewable energy

Japan to promote renewable energy



May 10, 2011

USA Today is reporting that Japan will scrap a plan to obtain half of its electricity from nuclear power. Instead Japan will look to promote renewable energy and conservation as a result of the ongoing nuclear crisis that the country is facing.

According to the report, Japan's Prime Minister Naoto Kan said Japan needs to "start from scratch" on its long-term energy policy. Nuclear plants supplied about 30 percent of Japan's electricity, and the government had planned to raise that to 50 percent by 2030. This decision to cut back on the use of nuclear energy comes after the Fukushima Dai-ichi nuclear power plant was heavily damaged by the March 11 earthquake and tsunami and began leaking radiation.

Tokyo Electric Power Co., the operator of the stricken plant, has been struggling for nearly two months to restore critical cooling systems that were knocked out by the March disaster.

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Madalena Cases Argentina Well as Potential Oil Discovery

Madalena Cases Argentina Well as Potential Oil Discovery

Tuesday, May 10, 2011
Madalena Ventures Inc.

Madalena Ventures Inc. and its wholly owned subsidiary Madalena Austral SA ("Madalena" or the "Corporation"), announced Tuesday that the Corporation's CAN X-4 exploratory well on the Coiron Amargo Block has been cased as a potential oil discovery. The well is situated on a separately defined 3D drilling anomaly located between the CAN X-1 and CAN X-2 wells.

The CAN X-4 exploration well was drilled to total depth ("TD") of 11,027 feet and has been cased to TD. Both oil and gas shows were evident during the drilling of the Vaca Muerta and Sierras Blancas formations. Based on electric logs, the Vaca Muerta formation had similar thickness and characteristics to the other four wells the Corporation has drilled on the block. In the Sierras Blancas formation, the well encountered a potential gross hydrocarbon column of 92 feet.

The Corporation now plans to return to the CAS X-1 well drilled in April 2011 in the southern portion of the block to test both the Sierras Blancas and Vaca Muerta formations encountered by the well. Part of the test is expected to include a fracture stimulation of the Vaca Muerta formation and combined test results will be reported as soon as they are available. Completion operations at the CAS X-1 well have commenced to be immediately followed by testing of the CAN X-4 well.

Madalena is a publicly traded international junior Canadian oil and gas exploration company. The Company is actively evaluating international oil and gas opportunities with a primary focus on South America.

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Genesis Energy Q1 Earnings Gain; Shares Down 1.1%

Genesis Energy Q1 Earnings Gain; Shares Down 1.1%



May 10, 2011

Genesis Energy (GEL), a limited partnership focused on the midstream segment of the oil and gas industry in the U.S. Gulf Coast region, reported Q1 net income attributable to the partnership of $7 mln versus $6.9 mln a year ago. Net income per common unit was $0.11 per unit over $0.06 per unit in Q1 2010. Revenues were also higher at $689.80 mln over last year's $466.53 mln. Analysts were looking for revenues of $526.44 mln. Shares are down 1.11% at $27.63.

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ExxonMobil Launches EOR Project in West Texas

ExxonMobil Launches EOR Project in West Texas

Tuesday, May 10, 2011
Exxon Mobil Corp.

ExxonMobil Production Co. announced Tuesday that drilling and construction have started on an enhanced oil recovery project at the Means Field in Andrews County, Texas. The first phase of the project has the potential to recover as much as five million barrels of additional oil, an amount equal to the annual energy needs of about 170,000 Texas households.

ExxonMobil has more than two decades of experience with carbon dioxide injection for enhanced oil recovery at the Means Field. The new project will apply technology to produce oil that until recently was technically and economically challenging to develop. Carbon dioxide injection is expected to begin before year end 2011. This first phase could lead to future development phases, which could significantly increase oil recovery from the field.

"ExxonMobil's investment in the field is part of an ongoing effort to find, develop and produce more domestic supplies of oil and gas to meet the country's growing energy needs," said Lyndal Trout, the company's senior field superintendent for western Texas.

ExxonMobil discovered the Means Field in the early 1930s. Since then, the company has produced more than 300 million barrels of oil from the field.

Over the past three years ExxonMobil's capital expenditures in Texas has exceeded $790 million. These investments help create jobs and contribute to economic growth across the region. They also help maintain Texas' position as the leading U.S. oil and natural gas producing state.

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Study: Tax Grab Undermines Confidence in UK Energy Sector

Study: Tax Grab Undermines Confidence in UK Energy Sector

Tuesday, May 10, 2011
Aberdeen & Grampian Chamber of Commerce

Rising confidence and increased investment in the oil and gas sector has been severely undermined by the UK Government’s sudden Budget tax grab in March, reveals the 14th Aberdeen & Grampian Chamber of Commerce Oil and Gas Survey.

The survey found that the tax changes have raised many serious concerns as to current investment plans and the potentially changed value of North Sea assets. This has arguably made the North Sea less competitive and more marginal which will lead to less investment and a reduction in drilling activity and production.

The survey, sponsored by national law firm McGrigors and conducted by the Fraser of Allander Institute, is the 14th in the survey series and draws on responses from oil and gas operators and contractors to identify current trends, investment, research and development, exploration and employment. The findings are used to identify how the performance of this sector might impact on the wider business community.

Data was being gathered when the Chancellor made his shock announcement and a number of respondents had completed and returned their questionnaires. In marked contrast those returning surveys after the announcement tended to be less optimistic about the future.

The majority of operators reported rising exploration and development activity in 2010 and expect these trends to continue through 2011 although they are now re-assessing future projects. A large number of both operators and contractors reported rising trends in employment in 2010 and anticipate increasing trends in 2011.

Robert Collier, Chief Executive of Aberdeen & Grampian Chamber of Commerce, said: “This survey has come at a critical time for the oil and gas sector in this region. Until recently there were consistent signs of recovery and optimism, together with a developing upturn in investment. The sector had more confidence about the future potential until the March Budget put this optimism in doubt by introducing the tax changes without consultation. Trust between the industry and government is now at an all-time low.

“Our findings show that current business optimism is higher in the UKCS than the last survey, but this is a lagging indicator. The forward indicator of business optimism in the UKCS over the next year shows a drop in confidence which is a clearer representation of what the industry is expecting.”

Bob Ruddiman, McGrigors’ Head of Energy, said: "This is the first empirical data I have seen to demonstrate the very tangible damage which the Westminster Government's so-called 'tax raid' has had upon investor confidence around the North Sea.

“The research clearly highlights the divergence in attitude between respondents who completed the survey before and after the changes were announced. There is a clear appetite for investment but new markets seem increasingly attractive.

“We can only hope that, although the Westminster government retains control over UK oil and gas rights, the First Minister-elect Alex Salmond will stick to his pledge to ‘batter down the door of Chancellor George Osborne’ and put this at the top of the new administration’s agenda during any negotiations with Whitehall."

“This survey does however highlight the areas in which there is considerable confidence and the industry has proved in the past that it is resilient and will survive unexpected events. The challenge for the industry is to rebuild confidence and to continue to demonstrate our world class capability on the world stage.”

The key findings from this 14th survey are:

•   This survey was being conducted when the Chancellor announced the unexpected tax increase, and a number of respondents had completed and returned their questionnaires; those returning after the announcement tended to be less optimistic and more cautious as to the year ahead. It is important to remember the timing of the survey and the Chancellor’s actions when considering the main trends.
•   At the turn of the year there was widespread evidence of rising confidence, increasing investment in both conventional and new areas (carbon capture and storage and renewables), global oil prices were remaining high and on an upward trend and demand was increasing.
•   The unexpected tax changes in the March budget raised many concerns as to current investment plans, the potentially changed value of North Sea assets to both potential sellers and buyers arguably made the UKCS less competitive and more marginal and would lead to less investment, drilling activity and production.
•   Business confidence remained on a level trend amongst operators in 2010, the adverse effects of the budget changes undercutting the optimism of our previous survey, and underpinning the expectations that net trends in business confidence will ease over the next year. Amongst contractors, confidence continued to improve, however, unlike our previous three surveys contractors are more cautious as to the business situation in the year ahead.
•   The majority of operators reported rising exploration and development activity, and level production activity in 2010, and expect these trends to continue through 2011. Although one operator noted “following the 2011 budget several areas will be closely analysed and revised before any commitment” is made. Rising trends in the value of UKCS based work in 2010 were reported by a third of contractors and a further 62% reported a level trend. Looking forward more than 50% anticipate rising trends in the value of UKCS based contract work in 2011.
•   The majority of operators and contractors reported rising trends in employment in 2010 and anticipate increasing trends in 2011.
•   Investment continues to be directed towards improving the extraction process and improving yields. Amongst contractors investment in staff and new markets were most frequently cited, and more are seeking to develop both a decommissioning and a renewables capacity.
•   The UKCS continues to be seen as competitive, especially in the areas of subsea, deep water and brown field development.
•   The main business constraints/drivers as seen by operators continue to be the commodity price, economic climate, tax relief and allowances, level of demand and lift costs. Amongst contractors the level of demand, loss of staff to other companies and oil companies’ Opex were the most highly rated factors.

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Daewoo to Build Vantage Ultra-Deepwater Drillship

Daewoo to Build Vantage Ultra-Deepwater Drillship

Tuesday, May 10, 2011
Vantage Drilling Company

Vantage Drilling Company has entered into an agreement with Daewoo Shipbuilding and Marine Engineering Co., Ltd ("DSME") to
construct an ultra-deepwater drillship further expanding the Company's ultra-deepwater drilling fleet. The Company plans to name
the drillship Tungsten Explorer.

The agreement is a fixed price turnkey contract for the construction of the drillship with a scheduled delivery date of May 31, 2013. The
cost of the Tungsten Explorer, including all project management, commissioning, spares, pre-delivery crew costs and inventory is
estimated to be approximately $580 to $590 million. The Company has also obtained a fixed price option for the purchase of an additional drillship.

Tungsten Explorer will be constructed at DSME's shipyard in Okpo, Korea, and will be capable of operating in water depths up to 12,000 feet, with a total vertical drilling depth capacity of 40,000 feet. The hull design has a variable deck load of 20,000 tons and measures 781 feet long by 137 feet wide. The drillship will be equipped with the most technically advanced features in the drilling industry including DP3 dynamic positioning system, 1250 short ton hook load drilling package, a 9000 hp drawworks, as well as offline pipe handling and trip saver system. The drillship will have accommodations for 200 personnel.

Paul Bragg, the Company's Chairman and CEO, commented, "The addition of Tungsten Explorer to our fleet is an exciting development. While this will be our second Company-owned unit to be constructed at DSME, it will be our fifth drillship project undertaken there, inclusive of our three ongoing construction oversight projects. Our strong relationship with the DSME management has allowed us to achieve exceptional project terms -- a) one of the lowest cost construction contracts of this kind, (b) one of the earliest deliveries of the recent order cycle -- just 24 months away, and (c) one of the highest specification ultra-deepwater units yet to be built.

"We are also very pleased that payment terms provide for an initial down payment of just slightly over $100 million, with the balance of
the contract price due at delivery in May 2013. We plan to debt finance the down payment in connection with our planned refinancing
of some of our existing high cost debt.

"The addition of Tungsten Explorer to our fleet will add substantial additional earnings power to Vantage by the second half of 2013."

The Company, a Cayman Islands exempted company, is an offshore drilling contractor, with an owned fleet of four Baker Marine Pacific Class 375 ultra-premium jackup drilling rigs and one ultra-deepwater drillship, the Platinum Explorer. The Company's primary business is to contract drilling units, related equipment and work crews primarily on a dayrate basis to drill oil and natural gas wells. The Company also provides construction supervision services for, and will operate and manage, drilling units owned by others. Through its fleet of seven owned and managed drilling units, the Company is a provider of offshore contract drilling services globally to major, nationaland large independent oil and natural gas companies.

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Paxton Closes on Vermilion 179 Acquisition

Paxton Closes on Vermilion 179 Acquisition

Tuesday, May 10, 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 Friday, May 6, 2011, Paxton closed on the agreement with Montecito Offshore, LLC ("Montecito") of Louisiana, whereby Paxton acquired a 70% working interest in 546.875 acres in the Vermilion 179 (VM 179) track for $1,500,000 cash, a $500,000 subordinated note and the issuance of 15 million shares of Paxton common stock.

Located in the shallow waters of the Gulf of Mexico offshore from Louisiana, VM 179 is adjacent to Exxon's VM 164 #A9 well. Based on the Montecito Independent Reserve report by James E. Hubbard, dated March 29, 2010, Proven and Probable reserves have a PV-10 value of $92,000,000 at $85 per barrel oil and $4 per mcf gas.

"The Vermilion 179 acquisition follows the company's strategy of acquiring producing properties with proved and probable reserves," said Charles F. Volk, Jr., Chairman of Paxton.

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 proved and probable reserves, develop the fields by reworking existing wells and drilling new wells. Paxton was founded in 2004 and is based in Stateline, Nevada.

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GM to announce $2 billion in update and expansion plans

GM to announce $2 billion in update and expansion plans



May 10, 2011

USA Today is reporting that GM is expected to announce today it will spend more than $2 billion on plant updates and expansion in eight states. The plan will create more than 4,000 jobs.
About half the hires will be at Detroit-Hamtramck Assembly Center, where GM builds the Chevrolet Volt and is in the expected last year of building the Buick Lucerne and Cadillac DTS sedans. It will be revamped later in the year to start building the 2013 Malibu.

The report says that CEO Dan Akerson will reveal the plans today at GM's Toledo, Ohio, transmission factory, which is where GM will spend about $250 million and add 250 jobs.

Hiring is expected to start this year and run through 2013, according to USA Today.

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Chevron, JX Nippon Sign Gorgon SPA

Chevron, JX Nippon Sign Gorgon SPA

Tuesday, May 10, 2011
Chevron Corp.

Chevron Corp. on Tuesday announced that its Australian subsidiary has signed a Sales and Purchase Agreement (SPA) with JX Nippon Oil and Energy Corporation for a portion of Chevron's offtake of liquefied natural gas (LNG) from the Gorgon Project.

Under the binding agreement, JX Nippon Oil and Energy will receive 0.3 million tons per annum (MTPA) of LNG from the Gorgon Project for 15 years.

John Gass, president, Chevron Gas and Midstream, welcomed JX Nippon Oil and Energy Corporation as a customer of the Gorgon Project. "We are pleased to have JX Nippon Oil and Energy as a customer of the Gorgon Project. Chevron has a long-standing relationship with JX Nippon Oil and Energy, and we look forward to continuing to grow our relationship."

Roy Krzywosinski, managing director, Chevron Australia, said, "The agreement is another step towards commercializing our equity natural gas in Australia, further demonstrating Chevron's leading ability to meet long-term demand growth in Asia-Pacific. Construction of the Gorgon Project is progressing well with first gas expected in 2014."

Chevron is the operator of the Gorgon Project and holds an approximate 47 percent interest.

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Enterprise Products Partners Reports Strong Q1, Revenue Up 19% YoY

Enterprise Products Partners Reports Strong Q1, Revenue Up 19% YoY



May 10, 2011

Enterprise Products Partners L.P. (NYSE:EPD) reported Q1 EPS of $0.49 today, beating the consensus estimate for $0.44 per share. Revenues for the quarter were up 19% year-over-year to $10.18 billion, easily topping the consensus estimate for $8.86 billion.

Michael A. Creel, president and CEO of Enterprise stated, "Enterprise had a record first quarter to begin 2011. Our 50,000-mile system of natural gas, NGL, refined products, crude oil and petrochemical pipelines continues to operate at record or near record volumes. We are continuing to benefit from production growth in the shale regions as well as increased demand for NGLs by the U.S. petrochemical industry and international markets. With few exceptions, the partnership's diversified mix of businesses had another strong quarter."

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Azerbaijan Parliament Ratifies Shafag-Asiman PSA

Azerbaijan Parliament Ratifies Shafag-Asiman PSA

Tuesday, May 10, 2011
BP plc

On May 6, the Parliament of the Republic of Azerbaijan ratified the new production sharing agreement (PSA) between BP and SOCAR on joint exploration and development of the Shafag-Asiman structure in the Azerbaijan sector of the Caspian Sea, BP reported Tuesday.

Rashid Javanshir, BP's Regional President, said: "We are particularly pleased that the PSA was ratified by a unanimous vote. This is a good demonstration of the country's acknowledgement of BP's track record here and trust in our long-term commitment to Azerbaijan. We look forward to working in partnership with the State Oil Company of Azerbaijan (SOCAR) to expand our mutual cooperation in exploration and development."

The ratification follows the signing of the PSA in Baku in October, 2010. Under the PSA, which is for 30 years, BP Exploration (Azerbaijan) Limited will be the operator with 50 percent interest while SOCAR will hold the remaining 50 percent equity.

The block lies some 125 kilometers (78 miles) to the SE of Baku. It covers an area of some 1,100 square kilometers and has never been explored before. It is located in a deepwater section of about 650-800 meters with reservoir depth of about 7000 meters.

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Statoil Reports North Sea Discovery

Statoil Reports North Sea Discovery

Tuesday, May 10, 2011
Statoil ASA

Oil has been proven by Statoil and its partners Det norske oljeselskap ASA and Svenska Petroleum Exploration AS on the North Sea Krafla prospect. The well is located in block 30/11 around 26 kilometers south of the Oseberg South field.

Based on preliminary calculations the size of the discovery is between 12.5 and 56.5 million barrels of recoverable oil equivalent.

"Statoil has had great exploration success in mature areas during the last years," said Gro Gunleiksrud Haatvedt, Statoil's head of exploration on the Norwegian continental shelf (NCS).

"The North Sea is a strategically important area to Statoil, and this discovery on Krafla confirms once again that the company can still find interesting volumes close to established infrastructure."

"These discoveries can quickly be put on stream and help extend the life of our installations," she said.

Drilled by the Ocean Vanguard rig the well proved a column of around 200 meters in good quality reservoir rocks.

"Previously six exploration wells have been drilled in block 30/11 without commercial success, so we are very pleased that Statoil seems to have made a fast track discovery in our first operated well in this license," said Tom Dreyer, exploration manager for the Northern North Sea.

"Although data collection is still ongoing, the results so far clearly indicate that this is an oil discovery. If this is the case then we have unlocked the exploration potential of this area and have several follow-up opportunities."

When the Krafla well is completed, the Ocean Vanguard will start drilling the planned sidetrack well on Krafla West, which is located west of the recently drilled well.

The find will probably be developed and produced by tie-back to one of the subsea installations in the Oseberg area.

The licensees in PL035/PL272 are: Statoil (operator) (50%), Det norske oljeselskap ASA (25%) and Svenska Petroleum Exploration AS (25%).

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Coastal Hits Pay Offshore Thailand

Coastal Hits Pay Offshore Thailand

Tuesday, May 10, 2011
Coastal Energy Co.

Coastal Energy Co. on Tuesday announced the successful results of the Bua Ban North B-02 exploration well.

The Bua Ban North B-02 well was drilled to 6,513 feet TVD and encountered 62 feet of net pay in the Miocene objective with 26% average porosity. The B-02 well also tested the Eocene interval and encountered 150 feet of net sand with 19% average porosity. The Eocene sand zone was wet as it was not a target in this well and was drilled off structure.

The B-02 has been cased and suspended pending the arrival of testing equipment. Conductor pipe has been set on the B-03 well, which is testing the Miocene in a separate fault block due east from the B-02 well.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented:

"The B-02 well encountered thicker sands in the Miocene than were anticipated with better than expected reservoir quality. The Eocene zone which was encountered was not a target in this well, but delivered the highest reservoir quality sands we've seen to date in the Eocene interval. The reservoir characteristics in the Eocene are better than what we have modelled at this depth. This supports our thesis of higher quality sands in the shallower Eocene and should bode well for the planned drilling of the shallower Eocene prospects to the northwest."

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Microsoft Is In Talks To Buy Skype Technologies

Microsoft Is In Talks To Buy Skype Technologies



May 10, 2011

Microsoft (NASDAQ:MSFT) is in talks to buy Skype to gain the most popular international calling service and its 663 million customers, according to a Bloomberg report, which cited two people familiar with the matter.

The deal would value Skype at $8.5 billion and may be announced as early as today. It could help CEO Steve Ballmer bring in Web users and narrow Google's (NASDAQ:GOOG) lead in Internet advertising.

Microsoft has a potential upside of 27.3% based on a current price of $25.83 and an average consensus analyst price target of $32.89.

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