Commodity Corner: Oil Falls on Weak Economic Data

- Commodity Corner: Oil Falls on Weak Economic Data

Thursday, May 19, 2011
Rigzone Staff
by Saaniya Bangee

Oil prices fell below the $100-mark Thursday on weak economic reports.

Front-month crude lost $1.66, settling at $98.44 a barrel Thursday. At its quarterly meeting, the International Energy Agency (IEA) urged oil producers to increase supply. The agency, which acts as a watchdog for 28 industrialized nations, claimed that the high oil prices are hindering global economic recovery. Additionally, the Conference Board reported an unexpected decline in April's index of U.S. leading economic indicators. This marks the first decline in nearly a year.

Other U.S. economic data showed a decrease in home sales for the month of April while Mid-Atlantic manufacturing activity barely grew in May.

Although the U.S. Department of Labor announced a decrease in unemployment filings for the second straight week, traders were unable to get past the bigger picture. Oil prices bottomed out at $98.16 Thursday.

June natural gas futures plummeted to their lowest in nearly six weeks. Prices for natural gas settled 10.4 cents lower at $4.09 per thousand cubic feet. The 2.5 percent-drop came after the Energy Information Administration (EIA) reported that inventories grew by 92 billion cubic feet for the week ended May 13, almost 11 percent lower than the previous year. As the seasonal maintenance for nuclear power plants nears its end this month, some analysts predict the size of gas inventory builds may increase over the next few weeks.

The intraday range for natural gas was $4.09 to $4.20 Thursday.

RBOB gasoline prices fell by 2.95 cents Thursday. Prices traded within $2.91 to $3.00, before settling at $2.93 a gallon.

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GE O&G Selected to Supply HPHT Equipment Offshore Vietnam

- GE O&G Selected to Supply HPHT Equipment Offshore Vietnam

GE O&G's drilling & production business has been selected to supply high-pressure, high-temperature (HPHT) equipment to Bien Dong Petroleum Operating Company, a subsidiary of the state-run Vietnam Oil and Gas Group (PetroVietnam), for the development of gas fields, offshore Vietnam.

Under a contract of approximately $30 million, GE will provide 16 sets of HPHT surface wellheads and subsea production trees, along with associated equipment and services, for deployment in phase one of the development campaign for blocks 05.2 and 05.3 of the Hai Thach and Moc Tinh gas fields. This marks the largest single contract for surface wellheads and subsea trees in Vietnam by any equipment manufacturer.

Sam Aquillano, vice president—drilling & production, GE Oil & Gas said, "We are honored to supply high-tech equipment to Bien Dong Petroleum Operating Company to support Vietnam's offshore drilling and production operations. This is the largest single contract for surface wellhead and subsea trees in Vietnam, and GE hopes to build on this contract award by continuing to support Vietnam's burgeoning oil and gas industry with high-tech, high-performance equipment and services from across our integrated oil and gas portfolio."

The high-tech equipment, with the capability to operate at 350°F and 15,000 psi, is a first for Vietnam and reinforces GE's position as a leading supplier of surface HPHT and ultra HPHT wellheads and subsea trees in Asia. The contract follows GE's recent agreement with Total Malaysia to supply ultra HPHT equipment (450° F and 15,000 psi).

GE Oil & Gas has a strong local presence in Vietnam for turbomachinery and drilling and production equipment and services support. Last year, GE signed a memorandum of understanding (MOU) with PetroVietnam, paving the way for the future supply of advanced oil and gas equipment, services and spare parts to optimize the total life-cycle value of key oil and gas projects in Vietnam.

This contract further affirms GE's position as a significant wellhead and subsea production tree supplier for surface HPHT and ultra HPHT equipment in Asia and follows a recent award with Total Malaysia for ultra HPHT equipment (450°F and 15,000 psi). GE Oil & Gas has a local presence in Hanoi for turbomachinery equipment and services and in Ho Chi Minh City for VetcoGray subsea equipment and services. GE Oil & Gas also provides advanced technology equipment and services to other high-profile projects in Vietnam, such as the BP Pipeline, Dung Quat Refinery, Phu My Refinery, Camau Fertilizer and Vietsovpetro. Last year, GE Oil & Gas successfully signed an MOU with PetroVietnam outlining the principles and basis of long-term collaboration regarding the supply of advanced oil and gas equipment, services and spare parts to optimize the total life-cycle value of key oil and gas projects.

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NTIC Subsidiary, Petrobras Sign Phase 2 Contract

- NTIC Subsidiary, Petrobras Sign Phase 2 Contract

Thursday, May 19, 2011
Northern Technologies International Corp.

Northern Technologies announced the signing of a Phase 2 expanded contract between Petrobras and Zerust Prevencao de Corrosao S.A. (NTIC's Brazilian subsidiary) to supply an additional $2.6 million (BRL$ 4.21 Million) in ZERUST(R) FlangeSaver(TM) products to help protect several more of Petrobras' offshore oil production rigs from corrosion damage.

Petrobras, the world's 6th largest oil producing company in terms of volume, currently owns and operates 109 offshore rigs. Prior to awarding contracts to NTIC's Brazilian subsidiary, Petrobras conducted extensive multi-year product field trials against competitive alternatives. This new contract is a result of the fulfillment of the Phase 1 contract awarded by Petrobras to NTIC's Brazilian subsidiary in July 2010 for an initial implementation of $1.4 million (BRL$ 2.5 Million) in FlangeSaver products.

"We are very pleased that our ZERUST(R) FlangeSaver(TM) corrosion protection products continue to prove their value to Petrobras by helping to reduce operating, environmental and maintenance costs by significantly extending the operational integrity and safety of certain equipment on their offshore rigs," said Patrick Lynch, President and Chief Executive Officer of NTIC. "Corrosion is a significant threat to keeping essential equipment operating properly on off-shore installations. Zerust(R) products have proven, time and again, their ability to provide the corrosion prevention necessary to protect infrastructure and thereby protect the oil workers from harm and the environment from damage," Mr. Lynch continued. "We're proud to offer the oil and gas industry innovative solutions to protect against the environmental damage that can be caused by corrosion damage to oil and gas infrastructure."

FlangeSaver technology as well as other Zerust(R) Oil & Gas corrosion solutions are based on NTIC patented and/or proprietary technologies and are intended to significantly extend the service life of oil and gas industry infrastructure beyond the capabilities of conventional alternatives. NTIC has a core R&D team dedicated to the Oil & Gas sector based in Beachwood, OH and is currently conducting joint R&D and trials with multiple major oil companies around the world. Together with its extensive joint venture network, NTIC has trained personnel in most geographic regions to support global oil & gas industry clients.

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AMEC Names New Chairman

- AMEC Names New Chairman

Thursday, May 19, 2011
AMEC plc

AMEC announced that John Connolly will succeed Jock Green-Armytage as Chairman.

John Connolly is due to retire from his current role as Chief Executive Deloitte UK and Global Chairman of Deloitte Touche Tohamatsu on May 31, 2011 and will join the AMEC board on 1 June 2011.

Jock Green-Armytage said, "I am pleased that, following a thorough process led by Tim Faithfull, Senior Independent Director, John will be joining our board as my successor. He has extensive experience in building a global business based on the skills and talents of its employees. I am certain this will be invaluable in shaping AMEC's continued success.

"It has been an honor work with the people of AMEC since 1996, firstly as a non-executive director and more recently as Chairman. I am extremely proud of what we have achieved together."

John Connolly said, "I am delighted to be joining the board of AMEC at such an exciting point in its development. I look forward to guiding the team in the successful delivery of the Vision 2015 growth strategy."

Tim Faithfull added, "I would like to welcome John to AMEC and thank Jock for his significant contribution over the last 15 years. We wish him every success in the future."

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PetroLatina Welcomes CEO

- PetroLatina Welcomes CEO

Thursday, May 19, 2011
PetroLatina Energy plc

PetroLatina announced the appointment of Mr. Luis Guillermo Acosta as Chief Operating Officer of the Company.

Luis Guillermo, aged 44, is a petroleum engineer with over 22 years experience in the oil and gas industry in Colombia and overseas, including 14 years with BP plc in the UK, Colombia and most recently, Houston. Luis Guillermo's expertise will be invaluable in the ongoing development of the Company's oil and gas assets in Colombia. Based in Bogotá, Luis Guillermo will be responsible for the day-to-day management the Company's assets and will report directly to Juan Carlos Rodriguez, CEO, and the Board of Directors.

Luis Guillermo's oil & gas industry career began when he joined Occidental Petroleum in Bogotá as a Petroleum Engineering Apprentice in 1989. He then worked for Schlumberger Canada for over 2 years before joining BP plc as a Completions Engineer in Bogotá in 1996. Over subsequent years, he assumed increasingly senior production engineering and completion engineering roles within various BP operating divisions in the UK, Colombia and most recently Houston, where he was responsible for leading a high impact subsea project that involved operational expenditure of US $1 billion and capital expenditure of some US $300 million.

A Colombian citizen, Luis Guillermo holds a Bachelor of Science degree in Petroleum Engineering from the Universidad de America in Bogotá, and a Master of Science degree in Petroleum Engineering, from the University of Alberta, Canada. He is a Professional Member (P.Eng.), of APEGGA, Alberta, Canada, and a Professional Engineer, ACIPET, Asociación Colombiana de Ingenieros de Petróleos, Bogotá, Colombia.

Commenting on the appointment, Luc Gerard, Executive Chairman of PetroLatina, said, "We are delighted to welcome Luis Guillermo to the team. He brings proven technical expertise and international project development experience, particularly in bringing complex projects into production. His experience and operational expertise will be invaluable at a time when we wish to accelerate our ongoing exploration and development program and fully develop our existing assets. Luis Guillermo will greatly complement the existing skills of PetroLatina's operational team and ensure that the Company has the required capabilities to support the longer term objective of value added production."

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Harley-Davidson expects international sales to exceed 40% by 2014

- Harley-Davidson expects international sales to exceed 40% by 2014



May 19, 2011

Harley-Davidson (NYSE:HOG) announced the official opening of its Asia Pacific headquarters. The company expects that retail sales of new Harley-Davidson motorcycles outside of the U.S. will exceed 40% of the total by 2014. In 2010, international retail sales were 35.5% of the Company's total unit volume, with the Asia Pacific region accounting for 9.4% of Harley-Davidson's retail volume.

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Eagle Ford Production Could Overtake Barnett, Haynesville

- Eagle Ford Production Could Overtake Barnett, Haynesville

Thursday, May 19, 2011
Rigzone Staff
by Karen Boman

The liquids rich Eagle Ford shale play in southwest Texas may overtake the Barnett and Haynesville shale gas plays in Texas and Louisiana in terms of production, potentially becoming the largest producing shale play in Texas and the entire U.S., according to a recent report by London-based Evaluate Energy.

The Eagle Ford is currently dwarfed by its neighbors in terms of production, with the Barnett producing 877,000 BOE/d, the Haynesville producing 708,000 BOE/d and Eagle Ford producing 66,000 BOE/d in the fourth quarter of 2010. However, a recent surge in new wells suggests this all about the change, with horizontal drilling for both oil and gas in the Eagle Ford growing rapidly.

Source : Evaluate Energy

Drilling activity in the 22 Texas counties that Eagle Ford formation encompasses has been growing dramatically for the past year, and at the end of first quarter 2011, the area had the most new wells being drilled in Texas. In comparison, the number of new horizontal wells in Barnett Shale counties has fallen to a much lower level than its mid-2008 peak. The number of new wells in Haynesville counties in Texas and Louisiana also has slipped into a slight decline following a two-year increase up to the second quarter of 2010.

Like its Texas counterparts, Eagle Ford drilling activity is now mostly development drilling, which suggests that Eagle Ford production may overtake Barnett and Haynesville production sooner rather than later, Evaluate noted.

EIA Shale Gas Estimate Jumps 134 Percent

Oil and gas producers have increasingly switched their focus from drilling shale gas plays to oil shale plays after the U.S. shale gas drilling boom significantly increased U.S. gas supply and depressed U.S. gas prices.

The supply increase has prompted the U.S. Energy Information Administration (EIA) to raise its estimate of technically recoverable shale gas resources by 134 percent. In its Annual Energy Outlook 2010, technically recoverable shale gas resources were estimated at 368 Tcf. For its Annual Energy Outlook 2011, EIA's estimate rose to 862 Tcf, bringing total U.S. recoverable gas resources to 2,629 Tcf.

EIA attributed the increase in gas resources to technological advances in horizontal drilling and hydraulic fracturing. "This is a welcome change because as little as 10 years ago, analysts and politicians said that the United States could not drill its way out of a natural gas shortage," EIA said.

U.S. shale gas produced 2.3 Tcf of natural gas in 2008, or 11 percent of the U.S. gas market share, and is expected to produce 12.3 Tcf by 2035, a 47 percent share of the gas market. U.S. shale gas resources are the second largest in the world behind China, according to a study EIA commissioned with ARI International.

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Industry Professionals Divided on Future Oil Price - GL Poll

- Industry Professionals Divided on Future Oil Price - GL Poll

Thursday, May 19, 201
GL Noble Denton

Oil and gas industry professionals are divided in opinion on whether the price of a barrel of oil will exceed $150 by the end of 2011, according to an Industry Snapshot poll conducted by GL Noble Denton at the SPE Offshore Technology Conference (OTC) 2011 in Houston. 52% of participants believed that oil will not exceed $150 per barrel by the end of 2011, while 48% thought it would.

Nearly three quarters (72%) of participants in the research also felt that the industry is not doing enough to avert an impending shortage of technical professionals, while 28% felt the industry is providing enough support to attract future technical talent.

When asked whether post-Macondo regulation is likely to have a negative impact upon their business, nearly two-thirds (61%) of participants in the poll thought that it would, while 39% felt an impending revision of industry regulation following last year's Deepwater Horizon disaster would not cause harm.

John Wishart, President of GL Noble Denton, said, "Our Industry Snapshot poll has provided the opportunity for oil and gas professionals to give their opinion on some of the most important issues facing the sector. The results show that the opinion regarding the future price of oil is split, and that the full regulatory impact of last year's Macondo incident has raised concerns over potential higher operating costs.

"The poll also sends a clear message that the oil and gas sector needs to work together more cohesively to help educate emerging young talent about the benefits of joining the industry."

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Drilling Impact Fee Won't Go To Those Who Ban It

- Drilling Impact Fee Won't Go To Those Who Ban It

Thursday, May 19, 2011
Knight Ridder/Tribune Business News
by Brad Bumsted, The Pittsburgh Tribune-Review

Local governments that want to share revenue from a proposed impact fee on natural gas drilling cannot adopt more stringent zoning regulations than a statewide "model ordinance" called for in a Senate bill.

The provision is aimed at Pittsburgh, which banned drilling, and any other municipalities that would do the same, said Andrew Crompton, chief counsel for Senate President Pro Tempore Joe Scarnati, R-Jefferson County, the bill's author.

"It's mainly to make sure the city of Pittsburgh and any others that have explicitly zoned out shale are not getting rewarded by getting a share of the (drilling) fee," Crompton said.

The way the bill is structured Pittsburgh wouldn't be eligible for the local share of the money, which goes to communities in or near drilling sites, but it would otherwise be eligible for statewide revenue the bill provides, Crompton said.

Ben Price, project director for the Community Environmental Legal Defense Fund, which drafted Pittsburgh's no-drilling ordinance, called the revenue "blood money" that requires municipalities to abrogate their authority to protect communities in order to get state revenue. He claimed the gas industry drafted the Scarnati bill, which Crompton denied.

The Public Utility Commission would develop the model zoning ordinance, which would permit drilling "by right" in all but residentially zoned areas.

Crompton said he suspects the commission would rely on a model zoning proposal used by the Pennsylvania State Association of Township Supervisors.

"We put a model ordinance out to members so they can properly plan for (drilling)," said Elam Herr, an official with the supervisors association. The group is still reviewing Scarnati's bill, Herr said, but has no problem with preventing revenue from going to municipalities that ban drilling.

Scarnati on Monday introduced the bill, which would impose a $10,000-per-well fee on deep gas sites, with potential revenue much higher depending on the price of gas and volume produced by the well.

The legislation would bring in $121.2 million in revenue by March 1, 2012. The first $7.5 million would go to conservation districts. The split after that would be 60 percent to counties and municipalities and 40 percent for statewide grants on projects such as roads, stormwater and sewer systems and protecting open space.

But the bill faces hurdles: Gov. Tom Corbett has said he would consider an impact fee, but the money must remain local and not come to Harrisburg. The Republican-controlled House has shown no appetite for a statewide fee or tax. There are six other tax or fee proposals on Marcellus shale drilling.

Copyright (c) 2011, The Pittsburgh Tribune-Review

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IEA: Urgent Need for More Oil

- IEA: Urgent Need for More Oil

Thursday, May 19, 2011
International Energy Agency

The IEA Governing Board, at its regular quarterly meeting on May 18-19, examined oil market developments and their impact on the global economy. Despite a near-10% correction since May 5, oil prices remain at elevated levels driven by market fundamentals, geopolitical uncertainty and future expectations. The IEA Governing Board expressed serious concern that there are growing signs that the rise in oil prices since September is affecting the economic recovery by widening global imbalances, reducing household and business income, and placing upward pressure on inflation and interest rates. As global demand for oil increases seasonally from May to August, there is a clear, urgent need for additional supplies on a more competitive basis to be made available to refiners to prevent a further tightening of the market.

Additional increases in prices at this stage of the economic cycle risk derailing the global economic recovery and are neither in the interest of producing nor of consuming countries. Oil importing developing countries are most likely to be seriously affected by high oil prices, undermining their economic and social well-being. In these circumstances, enhancing consumer-producer dialogue is urgently important to reach both short- and long-term solutions. The Governing Board urges action from producers that will help avoid the negative global economic consequences which a further sharp market tightening could cause, and welcomes commitments to increase supply. We stand ready to work with producers as well as non-member consumers; in this constructive spirit, we are prepared to consider using all tools that are at the disposal of IEA member countries.

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Lundin Contracts Fred Olsen Semisub for NCS Drilling

- Lundin Contracts Fred Olsen Semisub for NCS Drilling

Thursday, May 19, 2011
Fred Olsen Energy ASA

Dolphin Drilling, a subsidiary of Fred Olsen, has entered into a Letter of Award for the provision of the semi-submersible drilling rig Bredford Dolphin with Lundin Norway AS for operation on the Norwegian Continental Shelf. The contract is for a six well drilling program with an estimated duration of one year, with commencement January 2012. Lundin have the option to extend the contract period with three additional wells within November 30, 2011. The estimated contract value for the firm period is approximately USD 133 million.

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Sinopec Gets JDA Nod for Extension of Exploration Phase in Nigeria

- Sinopec Gets JDA Nod for Extension of Exploration Phase in Nigeria

Thursday, May 19, 2011
ERHC Energy Inc.

ERHC announced that the Nigeria-São Tomé & Príncipe Joint Development Authority (JDA) has approved a 12-month extension to Exploration Phase I Joint Development Zone (JDZ) Block 2. ERHC holds a 22 percent working interest in JDZ Block 2 which is operated by ERHC's technical partner, Sinopec Corp.

The JDA approval of extension is subject to final approval by the Nigeria-São Tomé & Príncipe Joint Ministerial Council.

ERHC's partner, Sinopec Corp., completed drilling of the Bomu-1 exploration well in Block 2 in October 2009. The well was drilled to a total depth of 3,580 meters, targeting 13 individual sands. Eight sands were found to contain biogenic methane gas. During the Exploration Phase I extension, the contracting parties led by the operator are expected to conduct further geological and geophysical studies on the Block. Further, they will assess exploration strategy and overall course of action regarding Exploration Phase II.

Negotiations on the exploration program in JDZ Blocks 3 and 4 continue between the JDA and the contracting parties, led by Addax Petroleum. ERHC holds 10 percent working interest in JDZ Block 3 and 19.5 percent working interest in JDZ Block 4.

In addition to its working interests in JDZ Blocks 2, 3 and 4, ERHC holds working interests in Blocks 5, 6 and 9 of the JDZ. ERHC also holds 100 percent working interests in Blocks 4 and 11 of the Sao Tome and Principe Exclusive Economic Zone (EEZ) with an option to acquire up to 15 percent working interests in two more Blocks in the EEZ.

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Solimar to Commence Flow Testing Prog. at Guijarral Hills

- Solimar to Commence Flow Testing Prog. at Guijarral Hills

Thursday, May 19, 2011
Blast Energy Services Inc.

Blast announced that a completion rig has moved on location to commence the flow testing program on the Solimar Energy 76-33 well in the Guijarral Hills Field Area located in Fresno County, California. Under the completion plan, Solimar Energy, the operator of the well, plans to perforate and flow test up to three zones within the Gatchell, Avenal and Leda intervals. A total of potential net pay of over 135 feet in six separate intervals was previously reported for the well. The three intervals that have been selected for testing are those deemed most likely to potentially produce commercial quantities of oil.

"We acquired our interest in the Guijarral Hills Project with a target of achieving five million barrels of recoverable light oil resources. We are encouraged by the shows encountered in this first well and are looking forward to the results of this testing program," stated Michael Peterson, acting President and Chief Executive Officer of Blast.

The testing program will involve perforating the selected interval followed by periods when the well will be flowing or shut-in to measure the pressure response and to evaluate fluid properties. The test sequence will involve testing the deepest interval, the Lower Gatchell, first and then working up the well, as necessary, to the shallower Avenal and Leda objectives.

The three intervals selected to be tested have all been productive in the adjacent Guijarral Hills field. Each zone had increased shows of hydrocarbons while drilling and were indicated on wireline logs. While such petro-physical analysis indicates that hydrocarbon pay is present, the flow testing program is necessary to determine whether the reservoir quality will meet commercial production rates.

The testing program for the three intervals is expected to have a gross cost of approximately $530,000, although the total cost will depend on the results and whether any of the intervals require additional procedures, such as fracture stimulation. While Blast has paid two-thirds of the cost to date, Blast is now heads up on this project and will be responsible for 50% of the costs going forward.

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Beach to Commence Shale Flow Stimulation in June

- Beach to Commence Shale Flow Stimulation in June

Thursday, May 19, 2011
Beach Energy Ltd.

Beach will commence flow stimulation of its Holdfast-1 shale well in early June, which will be followed immediately by the flow stimulation of the Encounter-1 shale well.

In preparation for flow stimulation, the Holdfast-1 well has been successfully completed with Encounter-1 completion expected to be finalized within the next week.

The flow stimulation process may take up to two weeks for each well, after which they will be flow tested in preparation for a resource booking in July/August 2011.

Both Holdfast-1 and Encounter-1 are data gathering wells and as such are not designed to flow at levels expected of a production well.
The design of pilot production wells will be based on information gathered from the flow stimulation of, and earlier core samples retrieved from, Holdfast-1 and Encounter-1. The timing of these pilot production wells will be primarily driven by equipment availability, and as such, it is anticipated that the pilot production program will now commence early in 2012.

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FOGL Secures 2 Drilling Slots Offshore Falklands

- FOGL Secures 2 Drilling Slots Offshore Falklands

Thursday, May 19, 2011
Falkland O&G Ltd.

FOGL has signed an assignment agreement and associated documents with Borders & Southern ("B&S") and Ocean Rig to contract the Leiv Eiriksson for two firm drilling slots. The rig is currently expected to arrive in the Falkland Islands in the fourth quarter of 2011. FOGL expects to access the rig for the third and fourth slots in the combined B&S and FOGL program and to commence drilling in the first quarter of 2012.

As announced on April 19, 2011 the Company is currently funded for a deep well on Loligo, a prospect within the Tertiary Channel play which has estimated Pmean reserves of 4,700 mmbbls. The well will have an estimated duration of 50 days. Based on its latest cost estimates and assumptions, the Company also has sufficient funds for a second well on either Loligo (as an appraisal well), or on one of the other high ranked prospects such as Nimrod, Vinson or Inflexible.

As an alternative, FOGL is also considering options to drill the second well on one of the deeper Mid Cretaceous prospects such as Scotia (Pmean reserves of 1,060 mmbbls). Such a well would involve additional cost due to its greater total depth and the Company continues to explore options to provide additional financial flexibility around its drilling options. In particular, the Company would look to fund this additional cost principally via a farmout and it is currently in discussion with several parties who have expressed an interest in participating in our exploration drilling program.

Further to the announcement on April 19, 2011 and, as a result of the signing of the Rig Contracts, the Placing and the RAB Arrangements have become unconditional other than in respect of admission to trading on AIM. Application has been made for admission to trading on AIM of 45,714,281 Placing Shares and 15,103,978 RAB Shares ("Admission"). Admission of the Placing Shares and the RAB Shares is expected to become effective in on around May 24, 2011, following which the Company will have 207,235,325 Ordinary Shares in issue.

Tim Bushell, Chief Executive of FOGL, commented, "We are delighted to have secured the Leiv Eiriksson which, together with the successful completion of the Placing, positions us to drill two wells commencing in 1Q 2012."

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PTTEP Discovers More Gas in Myanmar

- PTTEP Discovers More Gas in Myanmar

Thursday, May 19, 2011
PTT E&P Co. Ltd.

Recently, H.E. U Than Htay, the Minister of Energy of the Union of Myanmar (Center) and Mr. Kanok Intharawijitr, General Manager PTTEP International Ltd. a subsidiary of PTT Exploration and Production Plc. or PTTEP jointly opened the testing valve on the drilling rig of the exploration well Aung Sinkha-2 in Mataban Gulf, Union of Myanmar, to examine the natural gas and condensate flow rate of M3 Block which shown substantial gas flow. The flow tests were conducted on two zones with a natural gas maximum flow rate of approximately 25 million standard cubic feet per day (MMSCFD) with the condensate flow rate of approximately 150 barrels per day and calculated Absolute Open Flow (AOF) rate of approximately 53.5 million standard cubic feet per day. (MMSCFD)

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TAG Oil Sees Increase in Taranaki Reserves

- TAG Oil Sees Increase in Taranaki Reserves

Thursday, May 19, 2011
TAG Oil Ltd.

TAG Oil reported that an independent assessment of reserves has been completed as of March 31, 2011 on TAG Oil's 100%-owned Cheal Mining Permit (PMP 38156) and Sidewinder Exploration Permit (PEP 38748), located in the Taranaki Basin, New Zealand. Sproule International Limited, one of Canada's largest petroleum engineering consulting companies prepared the report in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (COGE Handbook) and National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities.

The reserves reported for the 2011 fiscal year relate primarily to the Cheal oil and gas field due to fiscal year-end 2011 cut-offs required under NI-51-101. Due to the timing of operations occurring after March 31, 2011, the Sidewinder reserve assessment was completed with information related only to the Sidewinder-1 well and does not include the now-completed Sidewinder-2, Sidewinder-3 and Sidewinder-4 wells.

The assessment of reserves has assigned net proved and probable reserves ("2P") remaining of 1,360,000 barrels of oil (2010 = 651,000 bbls) and 1,864 million cubic feet ("mmcf") of associated gas (2010 = 258 mmcf). This reserves report, on a 2P basis, amounts to 1,677,000 barrels of oil equivalent ("BOE") assessed within a reserves area covering just 475 acres of the 7,487-acre Cheal permit and just 107 acres of the 7,910-acre Sidewinder permit.

After considering production during the 2011 fiscal year, the 1,677,000 BOE in proved and probable reserves represents a 221% increase over the March 31, 2010 year-end independent reserve assessment. The key factors for the increase in reserves for fiscal 2011 are as follows:

• One new well drilled and completed
• Establishment of commercial production from a bypassed discovery
• Increased recovery factors
• Upward revision to projected future well performance

During the 2011 fiscal year, TAG focused primarily on optimizing the production from the producing Cheal wells. This resulted in an increase in the recovery factors being assigned to the Mt. Messenger Formation. In addition, TAG was successful in establishing the first-ever commercial production from the bypassed Urenui Formation oil discovery, using two historical wells drilled at Cheal by the previous operator. Having successfully completed these operations, Cheal now produces from both the Urenui and Mt. Messenger Formations at approximate depths of 1400m (~4600 feet) and 1800m (~5900 feet), respectively.

TAG Oil's Chief Executive Officer, Garth Johnson, commented, "We are very pleased to follow fiscal 2010's reserve increase with another large increase in fiscal 2011, even after having produced ~160,000 barrels of oil during the year. This report has established initial reserves within the Sidewinder discovery area, where the majority of our operations occurred after year-end and could not be considered for fiscal 2011 reserves. The commercialization of the Urenui oil discovery has also allowed us to book initial reserves and is another low-risk opportunity to build reserves in Taranaki from this widespread formation identified at Cheal."

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Entek Preps VR 342 Well for Casing in GOM

- Entek Preps VR 342 Well for Casing in GOM

Thursday, May 19, 2011
Entek Energy Ltd.

Entek provided an update on the VR 342 well in the Gulf of Mexico.

The well is at 5,145' (Measured Depth). Current operations involve finalization of running the 13 3/8'' casing and testing surface equipment before drilling ahead. The next casing point is planned to be around 7,500' where 9 5/8" casing will be set. The planned total depth of the well is 8,552' (Measured Depth).

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SeaBird, Spectrum Enter Frame Agreement

- SeaBird, Spectrum Enter Frame Agreement

Thursday, May 19, 2011
SeaBird Exploration plc

SeaBird announced the signing of a Frame Agreement with Spectrum for the acquisition of 2D seismic data to a minimum value of USD 23 million over a period of 36 months, and a Re-Let Agreement for the MV GGS Atlantic on a bareboat charter basis until August 2012. The effective date of these agreements is May 20, 2011.

Under the terms of the Frame Agreement, Spectrum will purchase vessel capacity from SBX under specific Call-off Orders for worldwide acquisition surveys. Spectrum is required to prioritize GGS Atlantic where geographic and technical parameters allow. Spectrum is also required to commit to 50% of the acquisition value of USD 23 million within the first 12 months of the Frame Agreement.

SBX, subject to vessel availability, commits to deliver 2D seismic acquisition services to SPU to a minimum value of USD 23 million at agreed rates over the period of 36 months. SBX has an option to extend by 6 months should vessel availability not allow completion, on same terms and conditions.

The Frame Agreement is non-exclusive beyond the above conditions and provides SBX with confirmed backlog across the 2D fleet.

Tim Isden, SeaBird's chief executive officer, commented, "We are very pleased to have signed these agreements with Spectrum for the mutual benefit of both companies. Spectrum is an aggressive MC company with good sales record and with a comprehensive library covering many geographic areas. SeaBird's fleet of 2D vessels are well positioned around the World to efficiently cover SPU's requirement for 2D services. For the GGS Atlantic, it makes sense for SBX to absorb this vessel into our current operational structure with only marginal risk, while SPU can concentrate on multi client projects and data processing. We see this as a good strategic move for both companies with a continuing involvement over the long term."

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Diamond Offshore Orders 3rd Ultra-Deepwater Drillship

- Diamond Offshore Orders 3rd Ultra-Deepwater Drillship

Thursday, May 19, 2011
Diamond Offshore Drilling Inc.

Diamond Offshore announced that a subsidiary, Diamond Offshore Drilling Limited, has exercised its option to build a third ultra-deepwater drillship with Hyundai Heavy Industries Co., Ltd. with delivery scheduled for the second quarter of 2014. Total cost, including commissioning, spares and project management, is estimated to be approximately $610 million and is anticipated to be paid out of cash flow and available funds.

Like its previously announced sister drillships, the new unit will be dynamically-positioned, have a seven ram blow-out preventer, dual activity capability, five mud pumps and a maximum hook-load capacity of 1,250 tons. The unit will be designed for operations in up to 12,000 feet of water.

Diamond Offshore President and Chief Executive Officer Larry Dickerson said, "The addition of this third new drillship is part of our ongoing effort to provide multiple ultra-deepwater options to our customers, allowing state of the art drilling with Diamond Offshore's high standards of systems integrity, safety and operational excellence. Including our acquisitions of the Ocean Courage and Ocean Valor, we have over the past two years increased our ultra-deepwater fleet by five units. Coupled with the Ocean Confidence, Ocean Endeavor and Ocean Monarch, Diamond Offshore will be able to provide eight rigs for the growing 10,000 foot and deeper market."

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Tellus Sidetrack Delivers Additional Oil Pay for Lundin

- Tellus Sidetrack Delivers Additional Oil Pay for Lundin

Thursday, May 19, 2011
Lundin Petroleum AB

Lundin Norway AS, a wholly owned subsidiary of Lundin Petroleum AB (Lundin Petroleum), operator of PL338, has completed the sidetrack well 16/1-15A on the Tellus prospect.

The objective of well 16/1-15A was to further appraise the Tellus discovery located in Block PL338. The well proved a 50 meter oil column including a thin lower Cretaceous sandstone with excellent reservoir quality overlaying fractured basement.

The initial gross contingent resource range for the Tellus discovery is estimated at between 11 to 55 million barrels of oil equivalent (MMboe) of which approximately 90 percent is oil. This contingent resource range has been independently audited by Gaffney Cline and Associates (GCA). The Tellus discovery will be included in the Luno development program.

Well 16/1-15A was drilled to a vertical depth of 1,986 meters below the sea level using the semi-submersible drilling rig Bredford Dolphin.

Lundin Petroleum is the operator of PL338 with 50 percent interest. Partners are Wintershall Norge ASA with 30 percent and RWE Dea Norge AS with 20 percent interest.

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Petro Matad: Drilling Commences at Davsan Tolgoi Well

- Petro Matad: Drilling Commences at Davsan Tolgoi Well

Thursday, May 19, 2011
Petro Matad Ltd.

Petro Matad announced that the Davsan Tolgoi-5 ("DT-5") exploration well was spudded at 13:15 Mongolian time (05:15hrs GMT) on May 19, 2011.

The DT-5 well is being drilled vertically to an estimated target depth of 2,020 meters. The well is being drilled by the Company's contractor, DQE International.

This well will test a portion of the recently identified Uvgan Gal paleovalley as well as part of the Lower Tsagaansav Formation. DT-5 is 3.1km north-northeast of DT-1 and 2.5km south of the 19-62 well on the adjacent Block XIX, operated by Daqing Oilfields.

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American Eagle Energy Spuds 1st HZ Bakken Well

- American Eagle Energy Spuds 1st HZ Bakken Well

Thursday, May 19, 2011
American Eagle Energy Inc.

American Eagle Energy has spud its first horizontal Bakken development well in the Hardy Field (Bakken Formation) of Southeast Saskatchewan. Proposed merger partner Eternal Energy Corp., as well as Passport Energy Ltd., are working interest partners in the well. The Hardy S 1A4-16-4B4-9-04-21W2 is the initial earning well for the farm-out agreement among the companies.

The new well is located approximately one-half mile west of American Eagle's current Hardy 7-9 producing well (owned equally with Eternal Energy) and has a projected total depth of 3,515 meters with a lateral section in the Bakken Formation of about 1,370 meters. A multi-stage fracture stimulation is planned for the completion of this new well.

Pursuant to the previously announced agreement among the three companies, American Eagle and Eternal Energy will each maintain a 37.5% working interest in the new well, but each will only pay 30.75% of its drilling, completing and equipping costs.

"American Eagle is pleased to be able to secure a rig early in the drilling season so that we can get this development work initiated," stated Richard Findley, the Company's Chief Executive Officer. "This well is an important component of the Company's 2011 capital program, as we continue to build cash flow and a solid reserves position and to develop our significant inventory of Bakken well locations in both the Williston and Southern Alberta Basins."

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Grenland Enters Engineering Agreement with Samsung for Valemon Platform

- Grenland Enters Engineering Agreement with Samsung for Valemon Platform

Thursday, May 19, 2011
Grenland Group ASA

Korean Samsung Heavy Industries has entered into an agreement with Grenland Group for delivery of detailed engineering and fabrication services for the topside on Statoil's wellhead platform Valemon. The project will start up immediately and will be completed in February 2014.The contract value for Grenland Group is approx. NOK 200 million and will secure a high activity level in the main offices in Sandefjord in the coming period. The fabrication of the platform's flare tower shall be executed in the Grenland Group yard in Tønsberg. The agreement contains in addition an option for the delivery of services in connection with the hookup and commissioning of the platform.

"This is the first time Statoil puts out a total EPC contract to a Korean supplier for a new field development on the Norwegian continental shelf. For Samsung, this is a significant breakthrough and recognition of their considerable expertise within the offshore sector. Furthermore, the contract confirms the position Grenland Group has as a leading supplier of design and engineering services in the offshore industry," said CEO Otto Søberg.

Several phases in several countries

The project will be executed in close cooperation with Technip in Kuala Lumpur, another subcontractor to Samsung. During the first six months of the project, the main activities will be carried out by Grenland Group in Sandefjord. This follows by a phase of nine months in Kuala Lumpur, before the project will be constructed and finally completed at the Samsung Geoje facility in Korea. Grenland Group will during this period deliver a considerable amount of engineering hours to the project. Grenland Group and Samsung Heavy Industries have over the years, starting in 1998, worked successfully together on a number of international projects. The contract on Valemon confirms the solidity in the relationship.

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