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Oil and Gas Energy News Update

Friday, May 20, 2011

Commodity Corner: Oil Settles Higher After Sharp Drop

- Commodity Corner: Oil Settles Higher After Sharp Drop

Friday, May 20, 2011
Rigzone Staff
by Matthew V. Veazey

Crude oil for June delivery gained $1.05 to end a volatile trading day at $99.49 a barrel.

The front-month contract plunged to an intraday low of $95.99 as the U.S. dollar gained 0.75 percent against the euro. Oil becomes a better value for investors holding non-U.S. currencies when the dollar grows weaker because crude is priced in dollars.

Given the relative value of the expiring June oil contract relative to the higher July contract price, however, oil rebounded later Friday as investors sensed a buying opportunity. Crude topped out at $99.49 for the day and is down less than 0.2 percent for the week.

A day after falling 2.6 percent following a U.S. Energy Information Administration report showing a higher-than-expected build in inventories, June natural gas gained 14 cents to settle at $4.23 per thousand cubic feet. Buoying Friday's rally were forecast models predicting above-normal temperatures throughout the eastern U.S. for the remainder of the month. Warmer conditions in the region would likely boost demand for electricity to power air conditioners.

June natural gas traded within a range from $4.08 to $4.26 Friday. It is down 0.5 percent for the week.

The June gasoline contract gained a penny to end the day at $2.94 a gallon. It fluctuated from $2.86 to $2.96. June gasoline has fallen 4.2 percent since last Friday.

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Schilling Seeks to Reach New Depths in ROV Technology

- Schilling Seeks to Reach New Depths in ROV Technology

Friday, May 20, 2011
Rigzone Staff
by Karen Boman

Demand for remotely operated vehicles (ROVs) in the offshore oil and gas industry, which uses ROVs for well drilling and development, production facility construction and inspection, repair and maintenance, will continue to grow as strong oil prices and the global economy recovery spur worldwide exploration and development efforts.

Since its establishment in 1985, Schilling Robotics has primarily focused on ROV development for the oil and gas industry. The company's slogan, "So Deep, No One Comes Remotely Close," sums up the company's aim of expanding the technical capabilities of ROVs.

The evolution of subsea systems from mostly static to more dynamic and complex mean that ROVs must be capable of performing complex tasks, said Tyler Schilling, CEO and founder and Schilling Robotics. This evolution has occurred as exploration and production efforts move further in the world's deepwater regions.


Last year, the company launched its Heady Duty (HD) ROV system that can accommodate specific needs of the inspection, maintenance and repair, drill support and medium-duty construction markets. Schilling won the Offshore Technology Conference (OTC) Spotlight on Technology award for its HD ROV, which is rated for 13,123 feet (4,000 m) to allow for more effective remote deepwater intervention.

Development of this ROV was driven by Schilling's goal of wanting an ROV that could conduct service and repair activities in less than an hour. "Changing out a pump on a conventional hydraulic power unit can take three to six hours to do properly, and is expensive, with the most expensive as much as $9 a second to operate," Schilling said. "Being able to eliminate a three to five hour repair operation is a huge savings for our customers." Schilling said efforts are underway to map these technologies for fast service and repair for Schilling's UHD ROV model.


The Davis, California-based company has been collaborating with FMC Technologies to improve remote intervention of subsea equipment. Schilling accepted an investment from FMC in the company last year because "the direction we believe remote intervention needs should go in are related," said Schilling. While Schilling conducted all the development work on its HD ROV, input from FMC helped Schilling better understand the requirements that oil and gas companies have for ROV technology.

As part of this collaboration, Schilling has been working to developing an ROV system in which the camera and other equipment will target visual aids that FMC has installed on its subsea equipment panels. This allows the ROV system to do automatic work on the panels. Developing ROVs and subsea equipment together makes for more efficient and effective subsea intervention operations, Schilling said. "We believe further extensions of this technology will have ROVs capable of reading codes from those symbols and knowing what the characteristics of those underwater devices. This means that operators will not need to keep track of quite as much specification information. Information will be automatically retrieved, not unlike bar coding at the store that tells the cash register what item you're scanning."


This joint development is a new practice within the energy industry, but if we can cut the time it takes to do a single activity, it would really help customers, Schilling said. "It's not uncommon to have a circumstance in which an ROV can't actually perform the activity intended by the sea floor equipment designer, so operators have to improvise offshore to get a task done," Schilling said. "We're trying to bring about circumstances in which the ROV and the subsea floor equipment are designed together."

Since the Macondo oil spill in the Gulf of Mexico last year, which brought ROV and other offshore work in the region to a halt, Schilling has seen its customers wanting accessories for ROVs that allow them to deliver fluids, and that can override a blowout preventer at a much higher rate. While the BOP is typically actuated from the drilling rig, an ROV can be used as a backup if remotely closing it fails. The ROV will fly over the BOP with a hot stab, plug the hot stab into a panel, causing it to close.


One general trend Schilling sees for ROVs is greater degree of automation, or intent interface, for ROVs. "Rather than an operator pushing all the little buttons to make this complicated machine work, they tell the machine what they intend to do, and the machine takes care of the rest," Schilling said.

This trend has led Schilling to focus on making machines easy to use as their use in offshore oil and gas grows. The company has developed a method to simplify hot stabs, which are used to power hydraulic tools, transfer fluid, perform chemical injections, and to monitor pressure, in which a robot arm on the ROV places a hot stab in a receptacle on a subsea tree.


Schilling also has developed a stationkeeping system for its UHD and HD ROVs to automatically position an ROV; before that, ROVs had to be controlled manually, meaning an ROV pilot would have to monitor the ROV's position in relation to a Christmas tree and issue corrective commands through a joystick. Now, a computer monitors the ROVs' position, allowing the pilot to focus on the job he or she is getting paid for, which is getting quality video, Schilling said..


Additionally, the company has developed a wrist-mounted camera to allow ROV pilots to perform closer inspection tasks. This product is available to any customer who buys a manipulator from Schilling.

Breakthroughs in silicon and software technology enabled the evolution of cars, and Schilling believes the adaptation of more silicon and software in subsea equipment and ROVs will help the oil and gas industry take advantage of the efficiencies of productivity. However, the cost of packaging electronics for use in the ocean is huge, and many times more expensive than in other industries. Serviceability of parts, which is expensive, is another hurdle.

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Pride, Ensco Enter MOU in Merger Lawsuit

- Pride, Ensco Enter MOU in Merger Lawsuit

Friday, May 20, 2011
Pride International Inc

Pride announced it and the other named defendants in the previously disclosed stockholder class action lawsuits filed in the Delaware Court of Chancery related to the proposed merger with Ensco entered into a memorandum of understanding with the plaintiffs to settle the litigation. As part of the memorandum of understanding and subject to the approval of the Ensco board of directors, Pride and Ensco agreed to, among other things, enter into an amendment to the merger agreement.

The amendment would reduce the fee payable by Pride in connection with certain terminations of the merger agreement to $195 million from $260 million. The amendment also would shorten the "tail period" for certain transactions that could trigger a termination fee from 12 months to nine months after termination. Under the amendment, the $195 million fee would be payable by Pride if the agreement is terminated under specified circumstances, including (1) the decision by the Pride board of directors to accept a superior proposal, (2) an adverse change in the recommendation of the Pride board of directors or (3) a failure to obtain approval by Pride stockholders after public disclosure of an alternative business combination proposal before the stockholder meeting and either the Pride board of directors determines such proposal to be a superior proposal or, within nine months after termination of the merger agreement, Pride enters into a definitive agreement or consummates an alternative business combination proposal.

The amendment also would eliminate the "force the vote" provision applicable to Pride such that Pride would not be required to submit the adoption of the merger agreement to its stockholders if the Pride board of directors made an adverse recommendation change.

Pursuant to the memorandum of understanding, Pride has also agreed to make certain additional disclosures related to the proposed merger in an SEC filing.

The memorandum of understanding also provides, among other things, that the parties will seek to enter into a stipulation of settlement which provides for the release of certain claims held by such class. The stipulation of the settlement will be subject to customary conditions, including court approval. There can be no assurance that the parties will ultimately enter into a stipulation of settlement that receives court approval. The memorandum of understanding is also subject to the approval of the Ensco board of directors.

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Delek, Noble Energy Reconsider Developing Noa

- Delek, Noble Energy Reconsider Developing Noa

Friday, May 20, 2011
Knight Ridder/Tribune Business News
by Amiram Barkat, Globes, Tel Aviv, Israel

Sources inform "Globes" that Delek and Noble Energy are about to decide to develop the offshore Noa natural gas field near Yam Tethys and the Gaza Strip. Development of the field could ease the expected natural gas shortage if the gas flow from Egypt does not resume in full.

Until recently, Delek and Noble Energy said that there was no economic justification to spend $200 million to develop the two billion cubic meters Noa gas field. Development would take a year.

However, the prevailing high prices for natural gas have changed the picture. The price the two companies obtained in their gas supply contract with Hadera Paper -- $8.50 per million British Thermal Units, 50 percent above 2009 prices -- translates into $300 million per billion cubic meters.

Delek says prices are set according to the same formula used to set the price in the company's 2009 contract with Israel Electric Corporation (IEC), and it attributes the entire rise in the price in the Hadera Paper deal to the higher price of oil, to which natural gas prices are linked.

The financial report for the first quarter of Delek unit Delek Drilling indicates that the suspension in natural gas deliveries from Egypt did not greatly affect the company's revenue, partly because of the increased gas deliveries were sold at the same price as regular deliveries.

Delek and Nobel Energy reportedly supplied 100 million cubic meters of gas from Yam Tethys because of the suspension of Egyptian deliveries during the first quarter. Yam Tethys supplied 800 million cubic meters of gas during the first quarter.

The financial report also indicates that, despite the crisis in Egyptian gas deliveries, Israeli demand for natural gas slightly exceeded government projections. Demand reportedly increased because of increased use of natural gas by IEC, which for the first time preferred natural gas instead of coal for the generation of electricity, due to the sharp rise in the price of coal in recent months.

The price of coal has reached $120-130 per ton, comparable to $5.50 per million BTU for natural gas. When the excise on fuel and externalities are factored in the cost of coal equals the cost of natural gas, except that coal is more polluting and harmful to the health.

Copyright (c) 2011, Globes, Tel Aviv, Israel

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Vantage Proposes Senior Notes Offer

- Vantage Proposes Senior Notes Offer

Friday, May 20, 2011
Vantage Drilling Co.

Vantage announced that its wholly-owned subsidiary Offshore Group Investment Limited (the "Issuer") intends to offer, subject to market and other conditions, $225.0 million in aggregate principal amount of 11 ½% Senior Secured First Lien Notes due 2015. The Notes will be offered as additional notes, commonly referred to as a "tack-on bond," under the indenture pursuant to which the Issuer previously issued $1.0 billion of 11 ½% Senior Secured First Lien Notes due 2015 in July 2010. The Notes will be guaranteed by Vantage and each of Issuer's existing and future subsidiaries and by certain of Vantage's other subsidiaries, and will be senior secured obligations of the Issuer and the guarantors.

The Issuer expects to use the net proceeds from this offering, if completed, to purchase from Vantage the wholly-owned subsidiaries of Vantage which own the Aquamarine Driller and related drilling contracts (the "Acquisition"), as well as for general corporate purposes. Vantage expects to use the proceeds from the Acquisition to (i) repay and terminate its outstanding term loan secured by the Aquamarine Driller, (ii) make the initial payment to Daewoo Shipbuilding and Marine Engineering Co., Ltd under Vantage's recently announced construction contract for an ultra-deepwater drillship, to be named the Tungsten Explorer and (iii) for general corporate purposes.

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CGGVeritas Inks Agreement with Elnusa

- CGGVeritas Inks Agreement with Elnusa

CGGVeritas has signed an agreement with Elnusa to create a marine joint venture company. The newly established company, PT Elnusa-CGGVeritas Seismic, is 51% owned by Elnusa and 49% owned by CGGVeritas and will deliver 2D and 3D marine seismic acquisition services to oil and gas company clients mainly operating in Indonesia and the Region.

PT Elnusa-CGGVeritas Seismic will operate the first Indonesian-owned and flagged seismic vessel, the Elnusa Finder. The Elnusa Finder was purpose-built in Singapore and is equipped with four Sercel solid streamers. She is scheduled to conduct her first commercial survey in Indonesia starting in May, 2011, near Madura Island in East Java, on behalf of Husky Oil.

Jean-Georges Malcor, CEO of CGGVeritas, said, "The Indonesian and regional oil and gas E&P industry has significant potential for growth. Our new joint venture will enable our long-term partner, Elnusa, to expand its capability in marine seismic services by building on local expertise and offering the benefits of the latest CGGVeritas seismic technology to regionally established clients."

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BP Gains 2.1% After Settlement Payment From MOEX

- BP Gains 2.1% After Settlement Payment From MOEX



May 20, 2011

BP (NYSE:BP) is higher after the oil major reached a settlement with MOEX Offshore 2007 LLC -- which had a 10% stake in the Macondo oil well -- over claims related to the Deepwater Horizon accident.

BP said MOEX will pay $1.065 billion, which BP will immediately apply to the $20 billion trust it established in the wake of the disaster.

BP said MOEX "has joined BP in recognizing and acknowledging the findings by the Presidential Commission that the accident was the result of a number of separate risk factors, oversights and outright mistakes by multiple parties."

In return for the payment, BP will indemnify MOEX for compensatory claims arising from the accident. MOEX is majority owned by Japan's Mitsui & Co. BP said the agreement is not an admission of liability by any party.

BP shares are up 2.1%, or $0.93, to $44.81.

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Wartsila Opens New Workshop in Poland

- Wartsila Opens New Workshop in Poland

Friday, May 20, 2011
Wartsila Corp.

Wärtsilä Corporation opens a new workshop in Gdansk, Poland on May 20, 2011. Located close to Polish shipyards and ports, the workshop further strengthens Wärtsilä's presence in the Baltic area and its position as the leading services provider for shipping customers visiting Poland. The new facilities enable advanced servicing and repairs of engine components, as well as enhanced re-machining capabilities. Included among the new activities that will be undertaken are the overhaul of fuel pumps, fuel valves and air coolers, and overhauls of bow thruster units.

"Our customers will benefit from the increased range of services we now can provide," said Wojtek Wlodarczak, President and Service Manager, Wärtsilä Polska. "One of the advantages is that we now can handle very large engine assemblies. The new facilities also enable us to carry out engine repairs and overhauls using the very latest technologies, and to further expand into areas such as the supply of propulsion equipment and electrical and automation services."

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ABS Extends Global Reach with New Norway Office

- ABS Extends Global Reach with New Norway Office

Friday, May 20, 2011
ABS

ABS announced the opening of an office in Stavanger, Norway to further extend its global reach and provide dedicated support to its growing Norwegian client base.

Known for its leadership in offshore classification and technology, the society's Stavanger office will be staffed with a professional team of offshore engineers and surveyors focused on delivering premium class service to the region.

"The opening of this office is part of ABS' ongoing commitment to deliver uncompromising service to our clients," said Christopher J. Wiernicki, ABS Chief Executive Officer and President. "Given the dynamic operating environment, our clients want us more integrated into their operational and safety program and to do that effectively, we need this local presence. For ABS it is an opportunity to better serve the industry and build upon our strong ties with the Norwegian Maritime Directorate (NMD)."

In 2009, the NMD extended its authorization to ABS to include mobile offshore drilling units (MODUs) in its scope as a Recognized Organization (RO).

Country Manager for Norway Egil Legland says he and his team look forward to building and expanding the relationships ABS has in Norway. "It's not just the office – ABS just released several new services and programs that clients have been requesting including the Offshore Asset Integrity Management (OAIM) program, says Legland. The OAIM program better leverages classification services and addresses other client needs by planning, tracking and servicing the structure and equipment throughout the life of the offshore unit.

"We recognize that today's high specification rigs require the highest operational standards," said Legland. "Owners are looking to ABS because of our experience, commitment and the service and programs we can offer to support an asset during the operational phase, not just during design and construction."

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RBG Enhances Fabric Maintenance Delivery

- RBG Enhances Fabric Maintenance Delivery

Friday, May 20, 2011
RBG

RBG has worked with a number of suppliers to improve the safety and effectiveness of a range of fabric maintenance technology.

RBG worked with MONTI and its UK distributor, Belzona Polymerics Ltd to enhance the Hand-Arm Vibration (HAV) daily usage limit of MONTI's MBX® Bristle Blaster®. The lightweight, handheld power tool is used widely across the industry to remove corrosion from oil and gas platforms. A new body and handle were designed to increase the HAVs usage limit from two hours to more than 12 hours, in line with the workscope requirements of many fabric maintenance projects.

The development of the Hodge Vac Blasting Recovery System, in conjunction with Hodge Clemco, was driven by RBG's commitment to providing a safe working environment for its employees. Abrasive blasting is used to remove paint from oil and gas installations; structures coated with lead-based paint create debris and dust can cause serious health issues for the operative during this process. The new system recovers the harmful material, negating the exposure to lead in a safe, easy and efficient manner.

RBG and Hodge Clemco collaborated again to develop a Wet, Dry Offshore (WDOS) abrasive blasting unit that can change function easily. Previously two separate systems were required, which could create logistical issues if the technology was being used by rope access technicians. Integrating both functions into a single unit allows the operator to work more effectively and chose the appropriate method for the job without disruption.

RBG personnel will also benefit from using new working procedures that were developed for the sampling of coating which may contain lead and lead chromate, new hearing protection and an advanced liner for the Apollo 600 blast helmet to ensure they are receiving the best protection at all times.

Fraser Coull, RBG operations support director, said, "We are very pleased to be working with suppliers to enhance these tools which are fundamental to wide range of complex fabric maintenance services we offer. We are always looking for ways to make our operations safer for our employee community and more efficient and cost-effective for our clients and these innovations deliver on both fronts."

Robert Grainger, RBG technical manager, said, "The modifications and procedures were developed in direct response to feedback received over the last 12 months from our personnel and customers. Our technical team has worked extremely hard to realize these improvements which will bring significant economical and environmental benefits, while delivering the same high quality results."

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Repsol to Begin Offshore Cuba Drilling Later This Year

- Repsol to Begin Offshore Cuba Drilling Later This Year

Friday, May 20, 2011
Rigzone Staff
by Karen Boman

Saipem-owned semisubmersible Scarabeo 9 is set to leave Keppel Shipyard in Singapore next month or July and arrive offshore Cuba sometime in September to drill the Jaguey prospect for Repsol in 5,300 feet of water, a little bit deeper than the Macondo well, said Jorge Pinon, a visiting fellow with the Florida International University Latin America and Caribbean Center's Cuban Research Institute.

The Jaguey well will be drilled to more than 20,000 feet approximately 55 to 60 miles south of Key West, Florida and 22 miles north of Havana, said Pinon, who is a former president of Amoco Oil Latin America; he retired in 2005 from BP, which acquired Amoco. According to RigLogix, Scarabeo 9 will earn a day rate in the low-$470,000s.

While Cuba opened its offshore Gulf of Mexico zone for drilling five years ago, Repsol and other operators who hold interests in Cuban blocks, including Malaysia's Petronas and Russia's Gazprom, encountered difficulty starting their drilling programs as the U.S. embargo on Cuba meant that rigs used to drill in Cuban waters must be outfitted with no more than 10 percent of U.S components.

Operators then ordered the Scarabeo 9, which has been outfitted to meet U.S. embargo requirements. The rig is expected to be used for drilling five to seven exploratory wells. Repsol will use the Scarabeo 9 to drill two exploratory wells for Repsol, Petronas is expected to use the rig to drill two wells. Venezuelan state energy company PDVSA and Angola state energy company Sonangol might pick up the rig for drilling offshore Cuba as well.

Last year's Macondo oil spill has raised concerns about what would happen if an oil spill occurred offshore Cuba. A spill here would threaten Key West and the U.S. East Coast; The embargo means that, if an emergency arises or if a piece of equipment is needed, international oil companies operating offshore Cuba could not turn to U.S. based companies in these situations. The U.S. also does not have a spill agreement with Cuba as it does with Mexico, with drill exercises conducted twice a year. Pinon noted that companies with interests offshore Cuba would ask for a general license to allow them access to U.S. Gulf Coast companies and assets in both situations.

The embargo means that Repsol and other companies have to bring in workers for planned exploratory programs offshore Cuba are being brought in from Norway, the UK and Canada. "Utilizing workers from the U.S Gulf Coast would be the most economic and closest, but the embargo doesn't allow that," Pinon said.

Pinon said that the Cuban government has adapted into their regulations many of the regulations that came out of Bureau of Ocean Energy Management, Regulation and Enforcement since the Macondo oil spill and will use many of the lessons BP learned from Macondo for exploratory drilling offshore Cuba. Cuban officials discussed drilling and safety plans at a conference in Trinidad and Tobago two weeks ago.

Cuba is seeking to explore for and develop its oil resources in order to reduce its dependency on oil imports from Venezuela, Pinon said. According to a U.S. Geological Survey in 2004, a mean of 4.6 billion barrels of undiscovered oil and a mean of 9.8 Tcf of undiscovered gas lie in the North Cuba Basin of northwestern Cuba.

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Iran Constitutional Watchdog Says President Cannot Run Oil Ministry

- Iran Constitutional Watchdog Says President Cannot Run Oil Ministry

Friday, May 20, 2011
Deutsche Presse-Agentur (dpa)

Iran's constitutional watchdog, the Guardian Council, has said that President Mahmoud Ahmadinejad cannot run the Oil Ministry as caretaker, the Fars news agency reported Friday.

Ahmadinejad last week dismissed his oil minister Massoud Mirkazemi and took over the ministry himself, which would have also made him rotating chairman at June's OPEC meeting in Vienna.

The president argued that he planned to trim the cabinet and one of his decisions was to abolish the Oil Ministry and merge it with the Energy Ministry.

The decision caused widespread criticism in Iran and eventually the Guardian Council, which overseas the compliance of governmental and parliamentary decisions with the constitution, rejected the plan as illegal.

Ahmadinejad is involved in a row with the country's clergy and conservative factions over his reform plans, which include reducing the cabinet from 21 ministries to 17.

But the main reason for the disputes is the president's s chief of staff, Esfandiar Rahim-Mashaei, whose daughter is married to Ahmadinejad's son.

Mashaei is said to oppose the clergy-dominated framework of the Islamic republic's establishment and favors of a more nationalist approach to running the country.

Ahmadinejad has also been criticized for having so far supported Mashaei and effectively joined him in undermining the Islamic system.

The president denied the accusation in a televised interview but observers believe that the crisis would continue as long as Mashaei acts as the president's close adviser.

Since the 1979 Islamic revolution, Iran has been ruled under the Vali Faqih system, in which one senior cleric at ayatollah level has, according to the constitution, the final say on all state affairs and can even veto decisions by the president.

The supreme leadership has been in the hands of Ayatollah Ali Khamenei since 1989. Ahmadinejad has been criticized by several some clergy for allegedly having disobeyed Khamenei's order over reinstating the country's intelligence chief who was fired by the president.


Copyright 2011 dpa Deutsche Presse-Agentur GmbH

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EDITORIAL: Indonesia's Geological Prospects Not Enough

- EDITORIAL: Indonesia's Geological Prospects Not Enough

Friday, May 20, 2011
Knight Ridder/Tribune Business News

Most oil executives and hydrocarbon analysts agree Indonesia still has basins with large reserves and its geological prospect is quite attractive with the success ratio of oil prospecting among the highest in the world.

But that seems far from sufficient to woo new investors, as the steady fall in the country's oil and gas production and its decline from a major exporter into a net oil importer have proven. The upstream oil and gas regulatory body (BP Migas) itself acknowledged last week the average daily oil output during the first quarter was less than 900,000 barrels, far below the target of 970,000 bbl.

Last year, Indonesia also failed to achieve its output target of 965,00 bbl, lifting only 954,000 bbl.

Another piece of discouraging news, as purveyed by BP Migas executive Iwan Ratman, is that the implementation of 10 percent of exploration and production development projects this year fell behind schedule due to overlapping concession areas, arduous licensing procedures within regional administrations and land acquisition problems.

Even state oil company Pertamina suffered many delays in exploration works: It planned to drill 147 new wells this year but managed to complete only 25 wells in the first quarter. Worse still many producing fields suffered from unscheduled shutdowns, power-supply disruptions and damages to pipelines.

The three-day 35th annual oil and gas industry convention and exhibition of the Indonesian Petroleum Association which opened on Wednesday should be a great opportunity for the government and oil executives to thrash out the most pressing problems that stand between investors and the geological prospect.

The theme of the convention "Indonesia energy, growth, security and sustainability" fits well with the current situation Indonesia is facing within the hydrocarbon industry.

President Susilo Bambang Yudhoyono pledged at the opening of the 33rd IPA convention in 2009 to resolve regulatory, bureaucratic problems and lack of legal uncertainty that had affected the petroleum industry.

But there remained big concerns about uncertainty over cost-recovery regulations, corruption, interference by government agencies, the sanctity of contracts and the general regulatory structure of the upstream and downstream oil and gas industry. Legal and regulatory uncertainty and inefficient bureaucracy are especially inimical to investors in the upstream segment of the industry as this business involves high risks and requires big capital.

The hydrocarbon industry requires an even better investment climate now because most of the undiscovered, prospective basins are located in frontier, eastern areas.

The eastern regions have potentially big reserves that are not proven yet, but their prospecting requires sophisticated technology and huge investment, estimated at 10 times as large as those in Java and Sumatra, thereby involving bigger risks. Only by increasing proven oil and gas reserves will Indonesia be able to make its production sustainable and sufficient to meet its steadily rising consumption along with the constant expansion of its economy.

But the only way to enlarge its proven hydrocarbon reserves is to increase investment in exploration.

Copyright (c) 2011, The Jakarta Post, Indonesia / Asia News Network

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Riverdale O&G Boosts Asset, Revenue Base

- Riverdale O&G Boosts Asset, Revenue Base

Friday, May 20, 2011
Riverdale O&G Corp.

Riverdale O&G is steadily increasing its assets and revenues through acquisition of oil and gas interests that are non-operating and without the costs for drilling and completion. The latest acquisition is a 160 acre, 2.5% carried working interest (CWI) on 3 new producing wells and 1 well scheduled for drilling to 5,500', in the next few weeks, situated in Frio Co., Texas.

Recently, RVDO acquired a 1.667% CWI in 60 acres in Lavaca Co., Texas, which is scheduled to be drilled to 6,000', within a month and has an estimated reserve of two billion cubic feet (2 BCF) of gas and 12,000 barrels of condensate.

RVDO is currently in the process of commencing a 3D seismic acquisition over its 631.82 acre Foster Lease, located in Jim Wells Co., Texas. Funding is being completed and a 8,500' well is estimated to be drilled during the 4th quarter, 2011, that could penetrate 16 potential oil and gas reservoirs, that have been identified from the offset producing wells. There are an additional 8 to 10 development wells that could be drilled on the Lease. RVDO will retain a 6.25% CWI.

Each project mentioned above, has or will have the utilization of 3D seismic, and the application of a proprietary Neural Network interpretation process. The Neural Network has demonstrated the ability to define oil and gas accumulations, with much greater accuracy, than the use of 3D seismic alone.

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Explosion Rocks Foxconn iPad 2 Manufacturing Facility (NASDAQ:AAPL)

- Explosion Rocks Foxconn iPad 2 Manufacturing Facility (NASDAQ:AAPL)



May 20, 2011

Reports out of China confirm that a serious explosion has occurred at Foxconn's Chengdu manufacturing facility, one of the main producers of Apple's (NASDAQ:AAPL) iPad 2 in China. The strength of the explosion is said to have caused debris to fly from the building and a second explosion is feared. Citizens are being told to evacuate the area. There are reports of at least 7 injuries to workers, and at least 10 fire engines on scene. It is unclear at this time the extent of the damage done and how this will affect production of Apple's tablet. Stay tuned for further updates on this developing story.

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Arbitration Tribunal Orders Siemens To Pay Areva $927 Million

- Arbitration Tribunal Orders Siemens To Pay Areva $927 Million



May 20, 2011

Siemens AG (NYSE:SI) has been ordered by an arbitration tribunal to pay $927 million to French state-controlled company Areva SA, finding the Munich, Germany based company failed to meet contractual obligations in a nuclear joint venture it exited earlier this year.

The payment, plus interest, will be recorded in Siemens' fiscal Q3 ending in June. Siemens sold its stake in the joint venture to Areva in March for a pretax gain of $2.17 billion.

The French joint venture, previously called Framatome, was the world's biggest maker of nuclear reactors and when it was created a decade ago when Areva and Siemens merged their nuclear reactor businesses in France, Germany and the U.S.

Shares of Siemens are trading down 2.94% at $130.76.

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Indonesian Govt to Hunt for More Oil in The East

- Indonesian Govt to Hunt for More Oil in The East

Friday, May 20, 2011
Knight Ridder/Tribune Business News
by Rangga D. Fadillah, The Jakarta Post, Indonesia

Unexplored oil and gas reserves in eastern Indonesia will play a vital role in securing the country's energy needs in the future, therefore more investment is necessary to develop the area, a minister said.

"As many oil and gas fields are maturing -- continuing their natural decline -- we're optimistic that frontier and deep water areas, which are mostly located in the eastern part of Indonesia, will contribute significantly to future production," Energy and Mineral Resources Minister Darwin Zahedy Saleh said in a speech at the opening ceremony of "The 35th Indonesian Petroleum Association (IPA) Annual Convention and Exhibition" at the Jakarta Convention Center.

The government has launched several initiatives to encourage investment in the area, such as increasing the number of offered working acreages for oil, gas, coal bed methane (CBM) and geothermal sources, he said.

"We are upbeat seeing the positive responses to new blocks offered in deep water and frontier areas such as Semai, Halmahera, West Aru, Southwest Timor and South Java," Darwin said.

Vice President Boediono, who officially opened the event, reaffirmed the government's commitment to promoting natural gas as the main energy source to fuel Indonesia's robust economic growth following the country's failure to boost oil production.

"Last year, I mentioned that gas was our future. That remains our basic policy. The government obviously has a strong interest in keeping them on track and will continue to closely monitor their progress," Boediono said.

He said the government would continue to facilitate "gradual moves toward economic pricing for domestic gas use" and direct negotiations between gas producers and consumers to tackle pricing problems.

"However, we know that the key issue is greater than this. The critical step is how to accelerate the development of gas infrastructure," Boediono said.

He promised that the government would speed up the completion of gas pipelines in Java and the construction of floating storage and re-gasification units in Sumatra and Java.

"One unit in the Jakarta area is expected to be ready as early as 2012," he said.

Commenting on declining oil production in the country, Boediono expressed his disappointment, saying that it was bad for the country's energy security and state revenues.

He personally requested upstream oil and gas regulator BPMigas and the Energy and Mineral Resources Ministry to work harder to solve the problems of unplanned shutdowns and to encourage oil companies to conduct enhanced oil recovery measures to increase production.

"I will be asking BPMigas and the Energy and Mineral Resources Ministry to pay more serious attention to these issues," he said.

IPA president Ron Aston, who is also the general manager of Australia-based oil and gas firm Talisman, supported the government's vision to prioritize natural gas as the main energy source in the future.

But, he said boosting gas production might be very challenging, particularly when sources were found in remote areas like the eastern part of the country.

"Industries fully support this idea, but it can only be achieved with the installation of much needed domestic infrastructure like transmission pipelines, liquefaction plants and receiving terminals," he said.

Aston also urged oil and gas companies operating in Indonesia to explore the country's extensive unconventional gas resources like CBM and shale gas.

"Around the world we see the growing importance of CBM and shale gas and they can play a vital role for Indonesia. But, the effort needs to be supported by appropriate regulations, incentives and partnerships to ensure that the necessary investment is forthcoming," he said.

Copyright (c) 2011, The Jakarta Post, Indonesia / Asia News Network

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Salamander Lines Up Vantage Rig Offshore Vietnam

- Salamander Lines Up Vantage Rig Offshore Vietnam

Friday, May 20, 2011
Salamander Energy plc

Salamander issued the following Interim Management Statement for the period from January 1, 2011 to May 18, 2011.

Highlights

  • 2011 average production forecast maintained at 22-23,000 boepd
  • Active E&A campaign during the period as part of a 13 well 2011 program
    • Drilling on the Dao Raung structure found significant gas column, follow-up drilling is underway
    • Technical analysis of Angklung-1 ongoing in advance of follow-up well in 4Q
    • 2D and 3D Seismic surveys completed on SE Sangatta confirming continuation of Angklung trend, in advance of well in 4Q
  • Producing assets performance in line with expectations, development drilling underway at Bualuang oil field
  • Reserves upgrade at Bualuang field: Ultimately recoverable proved & probable reserves increased 7 MMbo to 33.5 MMbo
  • Contract signed for construction of Bualuang Bravo Platform
  • Completion of new debt facility imminent

Exploration and Appraisal

Thailand

The Group completed one appraisal well during the period, the Dao Ruang-2 well in block L15/50, Northeast Thailand, while progressing its analysis of a follow up location on the Dao Ruang structure ahead of drilling during the current year. The well intersected a number of the targeted fracture zones with associated gas shows. Gas was seen all the way to TD, without any water, demonstrating a significant gas column in the Dao Ruang structure. An openhole DST was undertaken but only sub-commercial flow rates were recorded indicating a low permeability formation with a limited open, connected fracture network at the Dao Ruang-2 location. The Dao Ruang-3 well spudded at the end of April and is targeting an independent fault network in the Dao Ruang structure where it is hoped the well will encounter an open fracture network.

Offshore in block B8/38 in the the Gulf of Thailand, development drilling on the Bualuang platform is underway and the East Terrace prospect will be tested as part of this program. Exploration drilling elsewhere in the B8/38 block will follow the completion of development drilling.

Indonesia

The Group has been continuing its technical analysis of the Angklung-1 discovery well and the existing 3D seismic data in order to better understand and map the play systems in the Northern Kutei area. This analysis will assist in identifying the location of the follow up wells in the Bontang PSC planned for 4Q 2011, which will be aimed at appraising the gas play and exploring the oil play.

In the SE Sangatta PSC, adjacent to the Bontang PSC, the Group completed 2D and 3D seismic surveys during 1Q. The results of these surveys are now being interpreted, with early indications of a number of prospects on trend with the Angklung discovery, confirming the continuation of the prospective trend into the SE Sangatta license. A well on this license is planned for 4Q 2011.

In the Tarakan Basin the HPS-1 land rig has commenced mobilization to the South Sebuku-2 well site and is expected to spud during May 2011.

Vietnam

The Aquamarine Driller jackup rig has been contracted to drill the Cat Ba prospect, offshore North Vietnam. This well is expected to spud in July 2011.

Production and Development

The Group's producing assets have performed broadly to plan. During 1Q 2011 production averaged 19,434 bopd. The Group reiterates its average production forecast for 2011 of 22-23,000 bopd. The current development drilling program on the Bualuang oil field, Gulf of Thailand, incorporating six development wells, will drive increased volumes in the second half of the year.
During the first quarter the Group announced a reserves upgrade on the Bualuang field adding a further 7 MMbo of proved and probable (2P) reserves which take the ultimately recoverable 2P reserves on the Bualuang field to 33.5 MMbo. It has also awarded the contract for the Bravo Wellhead Platform, to be delivered and installed in mid-2012. This will be a 16 slot platform and further development drilling from the Bravo platform in H2 2012 will see production from the Bualuang field increase to 15,000 bopd in 2013.
A Gas Sales Agreement for the Kerendan gas field, Bangkanai PSC, Onshore Kalimantan has been agreed and is awaiting signature. This will see the commercialization of circa 135 Bcf of gas at a price in excess of $4.50 per Mcf.

Balance Sheet

The Group is in an advanced stage of negotiation and expects imminently to announce agreement on a new debt facility. It will be a $325 million senior and junior reserves based lending facility that will replace the existing senior, junior and acquisition bridge facilities in addition to providing additional liquidity.

At March 31, 2011, total Group debt, including the $100 million convertible bond, was $273 million, total available funds were $103 million, and net debt (including the convertible bond) was $170 million.

Directorate Change

As announced on 3 May Nick Cooper, Chief Financial Officer, will be leaving the Company to join Ophir Energy as Chief Executive Officer with effect from 31st May. The Company has begun a search for a successor and anticipates an orderly transition. A further announcement will be made in due course.

Outlook

Through a combination of higher than expected commodity prices, a growing production base and the expected refinancing of its debt facility the Group's solid financial position has been further strengthened. Operationally the focus is on delivering the 2011 exploration and appraisal program that combines a mixture of low risk, high value wells with higher impact drilling in both Vietnam and Indonesia with the Angklung follow up wells in Bontang and SE Sangatta PSCs.

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Nido Spuds Ginadara Well

- Nido Spuds Ginadara Well

Friday, May 20, 2011
Nido Petroleum Ltd.

Nido announced that the Atwood Falcon deepwater semi-submersible drilling rig spudded the Gindara-1 exploration well at 00:45 hrs on May 20, 2011.

The Atwood Falcon rig arrived over the Gindara-1 location at approximately 02:00 hrs on May 18, 2011. Following the setting of the primary and secondary anchors, the 36 inch hole opener was picked up and the well spudded. The 36" hole will be drilled to approximately 396 meters Measured Depth (MD) equivalent to 374 meters Total Vertical Depth below sea-level (TVDss).

The Gindara-1 well will be drilled to a total depth of 3,672 meters MD (3,650 meters TVDss). The top of the primary Nido limestone reservoir objective is prognosed at 3,422 meters MD (3,400 meters TVDss) and the top of the secondary Coron Clastic reservoir at 2,872 meters MD (2,850 meters TVDss). The well is expected to reach the primary objective Nido limestone reservoir in approximately 16 days from spud.

Jon Pattillo, Head of Exploration, said, "Mobilization of the Atwood Falcon rig from Labuan to the Gindara1-1 well location went very smoothly. With the rig anchors successfully set and the well now spudded, the SC 54B Joint Venture is looking forward to drilling to the reservoir objectives in a safe and efficient manner. For Nido, the Gindara-1 well marks an important milestone for the company as it represents the first well in our planned five well NW Palawan drilling program."

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Samson O&G Updates ND Ops

- Samson O&G Updates ND Ops

Friday, May 20, 2011
Samson O&G Ltd.

Samson O&G advised that the Everett #1-15H well has landed in the middle member of the Mississippian Bakken Formation at a total vertical depth of 11,147 feet. While drilling into the middle member, significant levels of oil and gas shows were recorded. Production casing will now be run in the hole and cemented in preparation to drill the 5,500 foot horizontal lateral.

The Everett #1-15H well is located in Township 154N, Range 99W, Section 15 in Williams County, North Dakota. The Everett #1-15H well is Samson's sixth Bakken well in the North Stockyard Field. Based on the previous wells drilled by the operator, the Everett #1-15H well is expected to take approximately 17 days to drill.

Earl #1-13H (32% working interest)

The drilling of the frac isolation plugs continues to experience delays due to weather and operational issues. It has been necessary to bring in a coiled tubing unit to aid in the previously reported recovery operation. This operation commenced this morning and should enable the tubing string to be cut and then recovered. The well, which has been flowing when operationally possible, has produced approximately 9,500 bbls of oil to date.

The Earl #1-13H well is located in Township 154N, Range 99W, Section 13 in Williams County, North Dakota.

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Nitro Commences Workover Program at Ok. Wells

- Nitro Commences Workover Program at Ok. Wells

Friday, May 20, 201
Nitro Petroleum Inc.

Nitro has commenced a workover program on the Plummer #1 and #2 wells located in Garvin County, Oklahoma. The Company can report that the Plummer #1 procedure was to open into the Lower Viola section and was completed on Thursday. The well is now back on and currently in production. The increased production rates from the procedure are being monitored and will be released next week. The service equipment has been moved to the Plummer #2 and the Company has started the rework program on this well. Nitro has a 25% work interest in this project which consists of 7 wells. Once we have a stable production rate, we will be able to predict the added cash flow for Nitro Petroleum Inc.

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Farstad Shipping Orders 2 Platform Supply Vessels

- Farstad Shipping Orders 2 Platform Supply Vessels

Friday, May 20, 2011
Farstad Shipping ASA

Farstad Sipping ASA has declared their options for building 2 platform supply vessels (PSV) at STX OSV. One of the vessels will be built at the STX Yard in Vietnam and one at the STX Yard in Tomrefjord, Norway (Langsten).

The newbuilds are part of Farstad Shipping's continuous fleet renewal and represent an investment of approx. NOK 600 mill. Delivery of the vessels will take place during first half of 2013.

The vessels ordered are of the STX PSV 08 CD design, identical to three of the vessels ordered in November 2010. This design is a newly developed, medium sized, diesel electric PSV with a net deck area of approx. 800 m².

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CGGVeritas, PetroVietnam Enter Seismic JV

- CGGVeritas, PetroVietnam Enter Seismic JV

Friday, May 20, 2011
CGGVeritas

CGGVeritas has signed an agreement with PetroVietnam Technical Services Corporation (PTSC) to create a marine joint venture company. The newly established company, PTSC CGGVeritas Geophysical Survey Company Limited, is 51% owned by PTSC and 49% owned by CGGVeritas and will deliver 2D and 3D marine seismic acquisition services to oil and gas company clients mainly operating in Vietnamese waters and the region.

CGGVeritas will contribute the Amadeus, a high-capacity 3D seismic vessel, to the joint venture and PTSC will contribute the Binh Minh II, a 2D seismic vessel.

Jean-Georges Malcor, CEO of CGGVeritas, said, "This joint venture builds on our long-term partnership with PTSC by supporting growing demand for 3D marine seismic for deepwater exploration and production in Vietnamese waters and by providing infrastructure for PTSC's international E&P activity and expansion globally."

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Yingli Green Energy Reports Disappointing Q1, Big Revenue Misses

- Yingli Green Energy Reports Disappointing Q1, Big Revenue Misses



May 20, 2011

Yingli Green Energy Holding Company Limited (NYSE:YGE) reported Q1 EPS of $0.38 today, just missing the consensus estimate for $0.39 per share. Revenue for the quarter grew 41% year-over-year to $527.31 million, well under the consensus estimate for $573.46 million.

Mr. Liansheng Miao, Chairman and Chief Executive Officer of Yingli Green Energy commented, "In the first quarter of 2011, we experienced a sudden demand slowdown in Europe, primarily due to the uncertainties relating to the feed-in-tariff policy change in Italy and the severe winter season conditions in Germany. However, despite a lower than expected shipment in the past quarter, we remain confident to accomplish our full year shipment guidance of 1.7 to 1.75 GW through continuously optimized global sales strategies."

Based on current market and operating conditions, estimated production capacity and forecasted customer demand, Yingli reaffirmed its PV module shipment target to be in the range of 1,700 MW to 1,750 MW for fiscal year 2011, which represents an increase of 60.1% to 64.8% compared to fiscal year 2010.

Yingli Green Energy has a potential upside of 33.5% based on a current price of $9.96 and an average consensus analyst price target of $13.29.

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BP, MOEX Agree to $1.1B Settlement for Macondo Spill

- BP, MOEX Agree to $1.1B Settlement for Macondo Spill

Friday, May 20, 2011
BP plc

BP has reached agreement with MOEX and its affiliates, Mitsui Oil Exploration and MOEX USA, to settle all claims between the companies related to the Deepwater Horizon accident.

MOEX - which had a ten percent interest in the Macondo well - has joined BP in recognizing and acknowledging the findings by the Presidential Commission that the accident was the result of a number of separate risk factors, oversights and outright mistakes by multiple parties and a number of causes. Like BP, MOEX Offshore has also recognized and acknowledged the conclusions of the United States Coast Guard that, among other things, the safety management systems of both Transocean and its Deepwater Horizon rig had significant deficiencies that rendered them ineffective in preventing the accident. MOEX has concluded that entering into a settlement with BP is in its best interest. The agreement is not an admission of liability by any party regarding the accident.

Under the settlement agreement, MOEX USA Corporation, the parent company of MOEX Offshore 2007, will pay BP $ 1.065 billion. BP will immediately apply the payment to the $20 billion trust it established to meet individual, business and government claims, as well as the cost of the Natural Resource Damages.

The parties have also agreed to mutual releases of claims against each other. BP has agreed to indemnify MOEX for compensatory claims arising from the accident. BP's indemnity excludes civil, criminal or administrative fines and penalties, claims for punitive damages, and certain other claims.

"This settlement is an important step forward for BP and the Gulf communities," said BP group chief executive Bob Dudley. "MOEX is the first company to join BP in helping to meet our shared responsibilities in the Gulf, and Mitsui, through MOEX USA Corporation, is showing great corporate citizenship in standing behind its affiliate and making a contribution to meet the costs of this tragic accident. We call on the other parties involved in the Macondo well to follow the lead of the MOEX and Mitsui parties."

BP and the Mitsui group are committed to enhancing their business relationship globally now that the issues surrounding the Macondo well have been resolved between the two companies.

Today's settlement is the most recent step BP has taken to raise funds to help BP meet its commitments in the Gulf of Mexico. BP has so far concluded agreements for asset divestments totaling approximately $25 billion, and has recently announced that it will also divest a number of operated oil and gas fields in the UK and two of its US refineries - Texas City and Carson - along with their associated marketing interests.

BP is also working to ensure that the other parties involved in the Macondo well - notably, Transocean, which owned and operated the Deepwater Horizon rig; Halliburton, which designed and pumped the unstable cement that the Presidential Commission found was a key cause of the accident; and Anadarko, which owned 25 percent of the project - contribute appropriately. From the outset, BP has committed to paying all legitimate claims and fulfilling its obligations to the Gulf communities under the Oil Pollution Act. To date, BP has paid nearly $6 billion in claims.

The Gulf of Mexico Oil Spill
Latest Deepwater Horizon Headlines

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Shell to Develop World's 1st Floating LNG Proj.

- Shell to Develop World's 1st Floating LNG Proj.

Friday, May 20, 2011
Royal Dutch Shell plc

Shell's final investment decision announced to proceed with the development of its Prelude Floating LNG Project will deliver billions in economic benefits and put Australia on the map as a world leader in this cutting-edge technology.

Analysis indicates Prelude will add over $45 billion to Australia's GDP, create around 1,000 jobs, contribute $12 billion in tax revenues, spend $12 billion on Australian goods and services and improve Australia's balance of trade by at least $18 billion over the 25-year life of the project.

The facility will be the largest floating structure ever built and will be used to develop both the Prelude and Concerto fields in the Browse Basin about 475km north-northeast of Broome.

Welcoming the announcement in Perth, the Minister for Resources and Energy, Martin Ferguson AM MP, congratulated Shell on its decision which reflects continued confidence in Australia as an investment destination for major projects.

"Today's announcement by Shell comes after many years of hard work to get this project off the ground," Minister Ferguson said.

"It opens the doors to countless new opportunities both here in Australia and around the world to use new technology that makes it more economical to develop remote deposits.

"Floating LNG technology can unlock petroleum resources that are either too far from existing infrastructure or too small to develop via a conventional LNG project and has the added benefit of a smaller environmental footprint.

"This project will also be Shell's first upstream development in Australia as operator and I welcome their intention to invest even further here in coming years.

"It is also important not to lose sight of the longer term benefits Prelude will deliver. In addition to the jobs, increased revenue and opportunities for local companies it will create, Shell will also use Prelude to offer training, education and research opportunities in Australia.

"Australia is already the world's fourth-largest LNG exporter. This year we forecast our LNG exports to be worth more than $8 billion. Projects like Prelude put us securely on the road to becoming the world's second-largest exporter of LNG in the near future."

The Commonwealth Government has granted environmental approvals for Prelude. The project will be subject to strict environmental conditions to ensure any environmental impacts are managed and minimised.

Shell's final investment decision announced to proceed with the development of its Prelude Floating LNG Project will deliver billions in economic benefits and put Australia on the map as a world leader in this cutting-edge technology.

Analysis indicates Prelude will add over $45 billion to Australia's GDP, create around 1,000 jobs, contribute $12 billion in tax revenues, spend $12 billion on Australian goods and services and improve Australia's balance of trade by at least $18 billion over the 25-year life of the project.

The facility will be the largest floating structure ever built and will be used to develop both the Prelude and Concerto fields in the Browse Basin about 475km north-northeast of Broome.

Welcoming the announcement in Perth, the Minister for Resources and Energy, Martin Ferguson AM MP, congratulated Shell on its decision which reflects continued confidence in Australia as an investment destination for major projects.

"Today's announcement by Shell comes after many years of hard work to get this project off the ground," Minister Ferguson said.

"It opens the doors to countless new opportunities both here in Australia and around the world to use new technology that makes it more economical to develop remote deposits.

"Floating LNG technology can unlock petroleum resources that are either too far from existing infrastructure or too small to develop via a conventional LNG project and has the added benefit of a smaller environmental footprint.

"This project will also be Shell's first upstream development in Australia as operator and I welcome their intention to invest even further here in coming years.

"It is also important not to lose sight of the longer term benefits Prelude will deliver. In addition to the jobs, increased revenue and opportunities for local companies it will create, Shell will also use Prelude to offer training, education and research opportunities in Australia.

"Australia is already the world's fourth-largest LNG exporter. This year we forecast our LNG exports to be worth more than $8 billion. Projects like Prelude put us securely on the road to becoming the world's second-largest exporter of LNG in the near future."

The Commonwealth Government has granted environmental approvals for Prelude. The project will be subject to strict environmental conditions to ensure any environmental impacts are managed and minimised.

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Nautical Finalizes Stake Acquisition in UKCS License

- Nautical Finalizes Stake Acquisition in UKCS License

Friday, May 20, 2011
Nautical Petroleum plc

Nautical Petroleum announced the completion of the acquisition of an additional 15% interest in UKCS License P1077 Blocks 9/2b and 9/2c (the "License), which includes the Kraken discovery, from Canamens Energy North Sea Limited.

The transaction has received approval from the Department of Energy and Climate Change and joint venture partners. The effective completion date of the transaction is May 18, 2011.

Nautical now has a 50% interest in the License.

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