Chrysler Fully Repays Government Loans, Fiat Stake Increases To 46%
May 24, 2011
Chrysler said today it has fully repaid the U.S. and Canadian governments, more than six years earlier than it was required to, making final payments of $5.9 billion to the U.S. Treasury and $1.7 billion to the governments of Canada and Ontario.
"Less than two years ago, we made a commitment to repay the U.S. and Canadian taxpayers in full and today we made good on that promise," Chrysler and Fiat CEO Sergio Marchionne said in a statement today.
Mr. Marchionne noted that Chrysler repaid its bailout loans faster than the last time the company got a bailout from the federal government back in the late 1970's when Lee Lacocca led the company.
As a result of the repayment, Fiat's stake in Chrysler will rise to 46%, putting the company close to its goal of 51% by the end of 2011. Once Chrysler develops a vehicle that gets 40 miles per gallon on a Fiat platform, a development expected in the fourth quarter, Fiat can increase its stake to 51%.
Chrysler paid more than $1.2 billion in interest on its debt in 2010, and is swapping out government debt with cheaper debt from institutional investors. The refinancing will not reduce the company's debt load, but will save the company more than $300 million a year in interest expenses.
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Oil and Gas Energy News Update
Tuesday, May 24, 2011
Chrysler Fully Repays Government Loans, Fiat Stake Increases To 46%
Commodity Corner: Oil Rises on Forecasts, Dollar
- Commodity Corner: Oil Rises on Forecasts, Dollar
Tuesday, May 24, 2011
Rigzone Staff
by Saaniya Bangee
Crude futures gained nearly 2 percent on a weaker dollar and bullish forecasts Tuesday.
Light, sweet crude settled at $99.59 a barrel, after reaching a high of $100.09 earlier in the trading session. The almost two dollar gain came as the euro recovered a two-month low against the dollar. The greenback slipped against the euro on better-than-expected German business sentiment. The ICE Dollar Index, which gauges the dollar against a basket of foreign currencies, decreased 0.4 percent Tuesday.
On Tuesday, Goldman Sachs increased its year-end target for Brent crude to $120 a barrel, saying it anticipates demand growth will sap global supply and overextend spare oil output capacity. It raised its 2012 forecasts to $140 per barrel from $120. Likewise, rival Morgan Stanley lifted its 2011 forecast to $120 a barrel, previously $100. Morgan Stanley forecasts 2012 Brent to be $130 a barrel from $105.
Meanwhile, natural gas for June delivery lost a penny to settle at $4.345 per thousand cubic feet Tuesday. The drop came on speculation that demand from power plants won't be able to exceed increasing inventories. Prices fluctuated between $4.27 and $4.40 per thousand cubic feet.
After trading between $2.92 and $3.03, June gasoline prices settled at $2.99 per gallon, up 5 cents from Monday.
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Tuesday, May 24, 2011
Rigzone Staff
by Saaniya Bangee
Crude futures gained nearly 2 percent on a weaker dollar and bullish forecasts Tuesday.
Light, sweet crude settled at $99.59 a barrel, after reaching a high of $100.09 earlier in the trading session. The almost two dollar gain came as the euro recovered a two-month low against the dollar. The greenback slipped against the euro on better-than-expected German business sentiment. The ICE Dollar Index, which gauges the dollar against a basket of foreign currencies, decreased 0.4 percent Tuesday.
On Tuesday, Goldman Sachs increased its year-end target for Brent crude to $120 a barrel, saying it anticipates demand growth will sap global supply and overextend spare oil output capacity. It raised its 2012 forecasts to $140 per barrel from $120. Likewise, rival Morgan Stanley lifted its 2011 forecast to $120 a barrel, previously $100. Morgan Stanley forecasts 2012 Brent to be $130 a barrel from $105.
Meanwhile, natural gas for June delivery lost a penny to settle at $4.345 per thousand cubic feet Tuesday. The drop came on speculation that demand from power plants won't be able to exceed increasing inventories. Prices fluctuated between $4.27 and $4.40 per thousand cubic feet.
After trading between $2.92 and $3.03, June gasoline prices settled at $2.99 per gallon, up 5 cents from Monday.
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Tombstone Exploration Welcomes New Member to Board
- Tombstone Exploration Welcomes New Member to Board
Tuesday, May 24, 2011
Tombstone Exploration Corp.
Tombstone Exploration announced that Mr. Laird Cagan has been appointed to the TMBXF Board of Directors.
Mr. Cagan is Managing Director and co-founder of Cagan McAfee Capital Partners, LLC, ("CMCP"), a private investment firm and merchant bank, as well as its predecessor firm, Cagan Capital, LLC. In the '90's, Cagan Capital invested in and helped build 15 high tech companies with over $500 million of equity capital invested in those companies. Since 2000, CMCP has founded, funded and taken public 10 companies in a variety of industries including energy, alternative energy, healthcare, information technologies and environmental. CMCP portfolio companies have raised over $600 million of equity capital and over $2 billion of capital has been invested in those companies or their projects.
Mr. Cagan was the Founder/Chairman of Evolution Petroleum Corporation (EPM), which develops mature oil & gas fields with advanced technologies, and is a former founding director of AE BioFuels (AEBF) and Pacific Asia Petroleum (PAP). He is also a Registered Representative of Colorado Financial Services Corporation (Member FINRA/SIPC) and holds Series 7, 63 and 24 licenses. CMCP is not affiliated with CFSC.
Mr. Cagan previously worked for two of the largest investment banks in the world, Goldman, Sachs & Co. and Drexel Burnham Lambert. In all, he was involved in over 30 transactions valued at more than $15 billion. Mr. Cagan attended M.I.T. and received his B.S. and M.S. degrees in engineering and his MBA from Stanford University. He is also a graduate of the UCLA Director's Training Program.
Cagan stated, "Tombstone controls the mineral resources under a large acreage in an historically prolific mining area in Southern Arizona. Existing testing results show significant promise for a potentially large mineral resource. It is an exciting opportunity for me to be involved at this point in the development of this project. I see parallels with several of the companies I co-founded which developed into AMEX-listed companies. These companies had energy resources with significant initial potential and after accessing development capital, entered into development deals with a large strategic partner to build out the resource."
Alan Brown, President of TMBXF, stated, "We are extremely pleased to announce the appointment of Laird to our Board of Directors. His past experience will be an asset to our company and we look forward to working with him. Laird has had considerable success helping and advising previous firms that he was associated with in raising expansion capital. This experience will be of great value to TMBXF, as we move to the next stage."
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Tuesday, May 24, 2011
Tombstone Exploration Corp.
Tombstone Exploration announced that Mr. Laird Cagan has been appointed to the TMBXF Board of Directors.
Mr. Cagan is Managing Director and co-founder of Cagan McAfee Capital Partners, LLC, ("CMCP"), a private investment firm and merchant bank, as well as its predecessor firm, Cagan Capital, LLC. In the '90's, Cagan Capital invested in and helped build 15 high tech companies with over $500 million of equity capital invested in those companies. Since 2000, CMCP has founded, funded and taken public 10 companies in a variety of industries including energy, alternative energy, healthcare, information technologies and environmental. CMCP portfolio companies have raised over $600 million of equity capital and over $2 billion of capital has been invested in those companies or their projects.
Mr. Cagan was the Founder/Chairman of Evolution Petroleum Corporation (EPM), which develops mature oil & gas fields with advanced technologies, and is a former founding director of AE BioFuels (AEBF) and Pacific Asia Petroleum (PAP). He is also a Registered Representative of Colorado Financial Services Corporation (Member FINRA/SIPC) and holds Series 7, 63 and 24 licenses. CMCP is not affiliated with CFSC.
Mr. Cagan previously worked for two of the largest investment banks in the world, Goldman, Sachs & Co. and Drexel Burnham Lambert. In all, he was involved in over 30 transactions valued at more than $15 billion. Mr. Cagan attended M.I.T. and received his B.S. and M.S. degrees in engineering and his MBA from Stanford University. He is also a graduate of the UCLA Director's Training Program.
Cagan stated, "Tombstone controls the mineral resources under a large acreage in an historically prolific mining area in Southern Arizona. Existing testing results show significant promise for a potentially large mineral resource. It is an exciting opportunity for me to be involved at this point in the development of this project. I see parallels with several of the companies I co-founded which developed into AMEX-listed companies. These companies had energy resources with significant initial potential and after accessing development capital, entered into development deals with a large strategic partner to build out the resource."
Alan Brown, President of TMBXF, stated, "We are extremely pleased to announce the appointment of Laird to our Board of Directors. His past experience will be an asset to our company and we look forward to working with him. Laird has had considerable success helping and advising previous firms that he was associated with in raising expansion capital. This experience will be of great value to TMBXF, as we move to the next stage."
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Ensco Declares Quarterly Dividend
- Ensco Declares Quarterly Dividend
Tuesday, May 24, 2011
Ensco plc
Ensco has declared a regular quarterly cash dividend of US $0.35 per Class A ordinary share payable on June 24, 2011 to holders of Ensco's American depositary shares (ADS) as of the June 13, 2011 record date.
As previously reported, Ensco and Pride International each will hold special shareholder meetings on May 31, 2011 to vote on the merger of their companies, creating the world's second largest mobile offshore drilling fleet. The Ensco and Pride joint proxy statement/prospectus has been distributed to shareholders of both companies and the Ensco and Pride boards of directors have recommended that shareholders vote in favor of the merger.
As disclosed previously, votes for Ensco's special shareholder meeting on May 31, 2011 must be received by today, May 24, 2011, for the ADS depositary to properly record votes.
In preparation for the special shareholder meetings, Ensco and Pride have satisfied antitrust and securities regulatory requirements and Ensco has successfully completed a $2.5 billion senior notes offering, the net proceeds of which will facilitate the Pride acquisition.
If approved by the shareholders of Ensco and Pride at their respective May 31, 2011 special meetings, the merger is expected to close on the same day, at which point, with exceptions for certain U.K. residents, Pride stockholders will have the right to receive 0.4778 newly-issued shares of Ensco plus $15.60 in cash for each share of Pride common stock per the terms of the merger agreement.
Assuming the merger closes as planned on May 31, 2011, the US $0.35 regular quarterly cash dividend noted above also will be paid on the Ensco shares issued to the former Pride stockholders to holders of Ensco's American depositary shares (ADS) as of the June 13, 2011 record date.
At the Annual General Meeting of Shareholders held today, the vote of a sufficient number of shares were cast to approve all proposals as recommended by the Board of Directors, including the non-binding advisory votes by a majority of shares to approve the compensation of our named executive officers and to hold non-binding advisory shareholder votes on the compensation of our named executive officers every year.
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Tuesday, May 24, 2011
Ensco plc
Ensco has declared a regular quarterly cash dividend of US $0.35 per Class A ordinary share payable on June 24, 2011 to holders of Ensco's American depositary shares (ADS) as of the June 13, 2011 record date.
As previously reported, Ensco and Pride International each will hold special shareholder meetings on May 31, 2011 to vote on the merger of their companies, creating the world's second largest mobile offshore drilling fleet. The Ensco and Pride joint proxy statement/prospectus has been distributed to shareholders of both companies and the Ensco and Pride boards of directors have recommended that shareholders vote in favor of the merger.
As disclosed previously, votes for Ensco's special shareholder meeting on May 31, 2011 must be received by today, May 24, 2011, for the ADS depositary to properly record votes.
In preparation for the special shareholder meetings, Ensco and Pride have satisfied antitrust and securities regulatory requirements and Ensco has successfully completed a $2.5 billion senior notes offering, the net proceeds of which will facilitate the Pride acquisition.
If approved by the shareholders of Ensco and Pride at their respective May 31, 2011 special meetings, the merger is expected to close on the same day, at which point, with exceptions for certain U.K. residents, Pride stockholders will have the right to receive 0.4778 newly-issued shares of Ensco plus $15.60 in cash for each share of Pride common stock per the terms of the merger agreement.
Assuming the merger closes as planned on May 31, 2011, the US $0.35 regular quarterly cash dividend noted above also will be paid on the Ensco shares issued to the former Pride stockholders to holders of Ensco's American depositary shares (ADS) as of the June 13, 2011 record date.
At the Annual General Meeting of Shareholders held today, the vote of a sufficient number of shares were cast to approve all proposals as recommended by the Board of Directors, including the non-binding advisory votes by a majority of shares to approve the compensation of our named executive officers and to hold non-binding advisory shareholder votes on the compensation of our named executive officers every year.
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3P to Acquire JSC Tysagaz
- 3P to Acquire JSC Tysagaz
Tuesday, May 24, 2011
3P International Energy Corp.
3P has entered into a definitive purchase agreement to acquire all of the issued and outstanding shares of JSC Tysagaz for cash consideration of US $17,000,000, subject to a working capital adjustment to be determined prior to the closing of the transaction. The entering into of a letter of intent to acquire Tysagaz was announced by 3P on February 14, 2011.
Greg Cameron, Chairman of 3P stated "We are extremely excited about the acquisition of Tysagaz and providing the team there the necessary capital to significantly expand the business. This acquisition is a great fit to our announced strategy of acquiring conventional assets with cash flow and significant reserves to compliment or growing unconventional portfolio, which is currently focused on acquiring and farming into lands with Coal Bed Methane ("CBM") potential.
"Acquiring a proven reserve base with upside potential and selling that gas at an anticipated price in excess of US $8.0 per mcf with strong netbacks should immediately provide returns to 3P and position the Corporation to become a significant player in the Ukraine," stated Ron MacMicken Chief Executive Officer of 3P.
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Tuesday, May 24, 2011
3P International Energy Corp.
3P has entered into a definitive purchase agreement to acquire all of the issued and outstanding shares of JSC Tysagaz for cash consideration of US $17,000,000, subject to a working capital adjustment to be determined prior to the closing of the transaction. The entering into of a letter of intent to acquire Tysagaz was announced by 3P on February 14, 2011.
Greg Cameron, Chairman of 3P stated "We are extremely excited about the acquisition of Tysagaz and providing the team there the necessary capital to significantly expand the business. This acquisition is a great fit to our announced strategy of acquiring conventional assets with cash flow and significant reserves to compliment or growing unconventional portfolio, which is currently focused on acquiring and farming into lands with Coal Bed Methane ("CBM") potential.
"Acquiring a proven reserve base with upside potential and selling that gas at an anticipated price in excess of US $8.0 per mcf with strong netbacks should immediately provide returns to 3P and position the Corporation to become a significant player in the Ukraine," stated Ron MacMicken Chief Executive Officer of 3P.
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CGGVeritas Offers $600MM in Private Placement
- CGGVeritas Offers $600MM in Private Placement
Tuesday, May 24, 2011
CGGVeritas
CGGVeritas intends to pursue an offering of senior notes due 2021 in an aggregate principal amount of approximately $600 million in a private placement in the international capital markets. The notes will rank pari passu with the existing senior notes of CGGVeritas due 2016 and 2017.
The net proceeds of this offering will be used to repay in full CGGVeritas’ term loan B facility and to redeem the remaining $70 million principal amount of its 7½% Senior Notes due 2015.
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Tuesday, May 24, 2011
CGGVeritas
CGGVeritas intends to pursue an offering of senior notes due 2021 in an aggregate principal amount of approximately $600 million in a private placement in the international capital markets. The notes will rank pari passu with the existing senior notes of CGGVeritas due 2016 and 2017.
The net proceeds of this offering will be used to repay in full CGGVeritas’ term loan B facility and to redeem the remaining $70 million principal amount of its 7½% Senior Notes due 2015.
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Quicksilver Resources Counting On A Big Year
- Quicksilver Resources Counting On A Big Year
Tuesday, May 24, 2011
Fort Worth Star-Telegram, Texas
by Jack Z. Smith
Quicksilver Resources CEO Glenn Darden expects 2011 to be "a breakout year" as the company advances into the development phase of its Horn River Basin project in Canada, moves into oil exploration and continues amping up natural gas production from North Texas' Barnett Shale.
"It looks like it's going to be a fabulous year," Darden said at last week's annual shareholders meeting of the Fort Worth-based natural gas producer, which has a healthy $500 million capital budget for 2011. "We're moving more toward oil, but we're still a gas company, and we'll always be a gas company," Darden told shareholders at the downtown Fort Worth Club.
Quicksilver will soon start to show "how valuable Horn River is," as it completes more natural gas wells in cold, remote northeast British Columbia and benefits from new pipeline links allowing it to transport more gas to market more cheaply, Darden said. The company is also testing for oil there.
With 130,000 net acres leased at Horn River, Quicksilver has drilled eight natural gas wells there and completed four, which cumulatively are producing 30 million cubic feet a day. It expects to complete the other four wells this coming winter, when drilling equipment can be transported on ice roads. In warm weather equipment bogs down in the swamplike terrain called muskeg.
Horn River potential
Quicksilver estimates that each Horn River well will have an exceptional "estimated ultimate recovery," or lifetime output, ranging from 8.8 billion to 19.4 billion cubic feet of gas. Those numbers far exceed the 1 billion to 5 billion cubic feet estimated for most Barnett Shale gas wells, although operating costs are considerably lower in the Barnett.
Quicksilver's latest annual report said Horn River "appears to be the largest gas find in the company's history and has the potential to quadruple our current total company reserves." The company estimates that it could recover 10 trillion cubic feet of natural gas from Horn River, or nearly double what it expects from the Barnett.
As of Dec. 31, Quicksilver's proved reserves were equivalent to 2.9 trillion cubic feet of natural gas, with 2.6 trillion from the Barnett. The reserves are 99 percent natural gas and natural gas liquids such as propane and butane.
Getting more 'oily'
Crude oil accounts for a tiny 1 percent of Quicksilver's reserves, but that could rise. U.S. energy producers are increasingly focusing on oil and natural gas liquids, which command higher prices than natural gas. Quicksilver is pushing this year to become more "oily."
The company expects to complete a horizontal well in the Exshaw formation at Horn River this summer, with oil the target instead of natural gas. Quicksilver has "gotten great oil shows" there, Darden said, from both the Exshaw and from natural gas in the Muskwa and Klua formations below it.
Darden said Quicksilver's biggest thrust into oil this year will be in the emerging Niobrara play in the Green River Basin, where the company has 200,000 net acres leased in northwest Colorado. The company expects to drill up to six exploratory wells there this year.
"We're in oily country, and we're very excited about it," Darden said. "The Niobrara has about 1,500 feet of thickness, so it's a very big target."
Quicksilver is also launching some oil prospecting in the Bakken formation in northern Montana, where it has 175,000 net acres.
The company is also "targeting multiple formations" in the Delaware Basin in West Texas that could yield oil, said Rick Buterbaugh, Quicksilver's vice president for investor relations and corporate planning. These targets include the Bone Springs formation that is attracting increasing attention.
The company has 54,000 net acres leased in Culberson, Reeves, Jeff Davis and Presidio counties and expects to acquire more.
Quicksilver can move quickly in West Texas by re-entering "noncommercial natural gas wells" the company drilled in the West Texas portion of the Barnett Shale, Buterbaugh said. The clay content in the Barnett zone made the results from fracking "less than desired," Buterbaugh said.
With the new oil plays, Quicksilver has "some very high-potential prospects that can really change the look of this company," Darden said.
The company has had lackluster earnings the past two years, primarily because of weak gas prices and related write-downs. The company's stock (ticker: KWK) closed Friday at $14.44, up 14 cents. The stock is down about 2 percent this year.
Quicksilver, however, generally has been a low-cost operator and profited from the sale of its majority interest in Quicksilver Gas Services, which helped trim its debt to a manageable $1.7 billion, with major debt maturing in late 2015. It had 65 cents of debt per 1,000 cubic feet of reserves as of Dec. 31, down 44 percent from $1.17 two years earlier.
Barnett still mainstay
The company's bread-and-butter revenue source this year should continue to be the Barnett Shale, where Quicksilver hopes to boost production by 20 percent. Some of the company's biggest gas wells, with estimated lifetime production of 4 billion to 5.5 billion cubic feet, are in the Alliance and Lake Arlington areas, but smaller wells in the southern Barnett provide more natural gas liquids.
Although natural gas prices have barely topped $4 per 1,000 cubic feet, Darden said Quicksilver will benefit by hedging most of its 2011 gas production at just under $6.
In the company's annual report, Darden said Quicksilver doesn't believe today's abnormal price disparity between oil and natural gas will continue. And at the shareholders meeting he said company officials believe its stock is undervalued.
"We believe this presents a tremendous opportunity to invest in natural gas at the bottom of the cycle," he concludes in the annual report.
Copyright (c) 2011, Fort Worth Star-Telegram, Texas
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Tuesday, May 24, 2011
Fort Worth Star-Telegram, Texas
by Jack Z. Smith
Quicksilver Resources CEO Glenn Darden expects 2011 to be "a breakout year" as the company advances into the development phase of its Horn River Basin project in Canada, moves into oil exploration and continues amping up natural gas production from North Texas' Barnett Shale.
"It looks like it's going to be a fabulous year," Darden said at last week's annual shareholders meeting of the Fort Worth-based natural gas producer, which has a healthy $500 million capital budget for 2011. "We're moving more toward oil, but we're still a gas company, and we'll always be a gas company," Darden told shareholders at the downtown Fort Worth Club.
Quicksilver will soon start to show "how valuable Horn River is," as it completes more natural gas wells in cold, remote northeast British Columbia and benefits from new pipeline links allowing it to transport more gas to market more cheaply, Darden said. The company is also testing for oil there.
With 130,000 net acres leased at Horn River, Quicksilver has drilled eight natural gas wells there and completed four, which cumulatively are producing 30 million cubic feet a day. It expects to complete the other four wells this coming winter, when drilling equipment can be transported on ice roads. In warm weather equipment bogs down in the swamplike terrain called muskeg.
Horn River potential
Quicksilver estimates that each Horn River well will have an exceptional "estimated ultimate recovery," or lifetime output, ranging from 8.8 billion to 19.4 billion cubic feet of gas. Those numbers far exceed the 1 billion to 5 billion cubic feet estimated for most Barnett Shale gas wells, although operating costs are considerably lower in the Barnett.
Quicksilver's latest annual report said Horn River "appears to be the largest gas find in the company's history and has the potential to quadruple our current total company reserves." The company estimates that it could recover 10 trillion cubic feet of natural gas from Horn River, or nearly double what it expects from the Barnett.
As of Dec. 31, Quicksilver's proved reserves were equivalent to 2.9 trillion cubic feet of natural gas, with 2.6 trillion from the Barnett. The reserves are 99 percent natural gas and natural gas liquids such as propane and butane.
Getting more 'oily'
Crude oil accounts for a tiny 1 percent of Quicksilver's reserves, but that could rise. U.S. energy producers are increasingly focusing on oil and natural gas liquids, which command higher prices than natural gas. Quicksilver is pushing this year to become more "oily."
The company expects to complete a horizontal well in the Exshaw formation at Horn River this summer, with oil the target instead of natural gas. Quicksilver has "gotten great oil shows" there, Darden said, from both the Exshaw and from natural gas in the Muskwa and Klua formations below it.
Darden said Quicksilver's biggest thrust into oil this year will be in the emerging Niobrara play in the Green River Basin, where the company has 200,000 net acres leased in northwest Colorado. The company expects to drill up to six exploratory wells there this year.
"We're in oily country, and we're very excited about it," Darden said. "The Niobrara has about 1,500 feet of thickness, so it's a very big target."
Quicksilver is also launching some oil prospecting in the Bakken formation in northern Montana, where it has 175,000 net acres.
The company is also "targeting multiple formations" in the Delaware Basin in West Texas that could yield oil, said Rick Buterbaugh, Quicksilver's vice president for investor relations and corporate planning. These targets include the Bone Springs formation that is attracting increasing attention.
The company has 54,000 net acres leased in Culberson, Reeves, Jeff Davis and Presidio counties and expects to acquire more.
Quicksilver can move quickly in West Texas by re-entering "noncommercial natural gas wells" the company drilled in the West Texas portion of the Barnett Shale, Buterbaugh said. The clay content in the Barnett zone made the results from fracking "less than desired," Buterbaugh said.
With the new oil plays, Quicksilver has "some very high-potential prospects that can really change the look of this company," Darden said.
The company has had lackluster earnings the past two years, primarily because of weak gas prices and related write-downs. The company's stock (ticker: KWK) closed Friday at $14.44, up 14 cents. The stock is down about 2 percent this year.
Quicksilver, however, generally has been a low-cost operator and profited from the sale of its majority interest in Quicksilver Gas Services, which helped trim its debt to a manageable $1.7 billion, with major debt maturing in late 2015. It had 65 cents of debt per 1,000 cubic feet of reserves as of Dec. 31, down 44 percent from $1.17 two years earlier.
Barnett still mainstay
The company's bread-and-butter revenue source this year should continue to be the Barnett Shale, where Quicksilver hopes to boost production by 20 percent. Some of the company's biggest gas wells, with estimated lifetime production of 4 billion to 5.5 billion cubic feet, are in the Alliance and Lake Arlington areas, but smaller wells in the southern Barnett provide more natural gas liquids.
Although natural gas prices have barely topped $4 per 1,000 cubic feet, Darden said Quicksilver will benefit by hedging most of its 2011 gas production at just under $6.
In the company's annual report, Darden said Quicksilver doesn't believe today's abnormal price disparity between oil and natural gas will continue. And at the shareholders meeting he said company officials believe its stock is undervalued.
"We believe this presents a tremendous opportunity to invest in natural gas at the bottom of the cycle," he concludes in the annual report.
Copyright (c) 2011, Fort Worth Star-Telegram, Texas
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Strike Shifts Focus to Eagle Ford Shale
- Strike Shifts Focus to Eagle Ford Shale
Tuesday, May 24, 2011
Strike Energy Ltd.
Strike announced the following update on its US activities. Substantial progress is being made on several fronts to expand the US business in the onshore Gulf Coast.
EAGLE FORD SHALE INITIATIVE (STX 27.5%)
The near term focus of Strike's US activities has shifted to leasing in the Eagle Ford shale, Texas.
Currently the joint venture has secured 10,000 acres, with 2,750 acres net to Strike.
The leasing activities are focused within the interpreted oil fairway where drilling by other operators has resulted in published projected recoveries in the range of 450,000 to 1,000,000 barrels of oil equivalent per well based on 160 acres spacing. Similar recoveries, if extended onto leases secured by the Eagle Ford joint venture to date, provide a target potential of gross 28 to 62 million barrels of oil equivalent or 8 to 17 million barrels of oil equivalent net to Strike's acreage position.
WILCOX PROGRAM
Homeplace Prospect, Sadie 1 discovery (STX 40%)
Facilities installation and pipeline tie in is advancing well at the Sadie gas/condensate discovery location. Once this work is completed a fraccing unit will be contracted for the completion of the well for testing. Discussions are already underway to secure this equipment.
The completion of this development work prior to testing is expected to take a further 6 to 8 weeks.
The Sadie 1 well was drilled on the Homeplace Prospect, and was successful in finding hydrocarbon bearing sands in the Wilcox Formation. Successful completion and testing will mark the fourth discovery for Strike after Mesquite, Rayburn and Louise and could significantly increase Strike's production and revenue commencing in the third quarter this year.
Louise Prospect, Gardner Duncan 1 well (STX 40%)
The Gardner Duncan 1 well continues to perform exceptionally well. The well has now been on production since April 2010 without decline. In recent weeks the operator has been able to increase production by 15% to 5.2 million cubic feet of gas equivalent per day (4.2 MMcf gas plus 100 bbls of condensate).
Evaluation of production data and new mapping of seismic will continue prior to any decision with respect to further drilling.
EXPLORATION DRILLING
Strike is planning to participate in the drilling of 3 to 5 wells before the end of 2011. These will come from a combination of Wilcox, Eagle Ford shale or new plays being secured. The drilling program is being restructured in light of these new activities and project priorities.
The Wilcox drilling is likely to start up in the fourth quarter this year once new mapping is completed with the results incorporated from the recent discoveries and production history from the Sadie 1 well at Homeplace.
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Tuesday, May 24, 2011
Strike Energy Ltd.
Strike announced the following update on its US activities. Substantial progress is being made on several fronts to expand the US business in the onshore Gulf Coast.
EAGLE FORD SHALE INITIATIVE (STX 27.5%)
The near term focus of Strike's US activities has shifted to leasing in the Eagle Ford shale, Texas.
Currently the joint venture has secured 10,000 acres, with 2,750 acres net to Strike.
The leasing activities are focused within the interpreted oil fairway where drilling by other operators has resulted in published projected recoveries in the range of 450,000 to 1,000,000 barrels of oil equivalent per well based on 160 acres spacing. Similar recoveries, if extended onto leases secured by the Eagle Ford joint venture to date, provide a target potential of gross 28 to 62 million barrels of oil equivalent or 8 to 17 million barrels of oil equivalent net to Strike's acreage position.
WILCOX PROGRAM
Homeplace Prospect, Sadie 1 discovery (STX 40%)
Facilities installation and pipeline tie in is advancing well at the Sadie gas/condensate discovery location. Once this work is completed a fraccing unit will be contracted for the completion of the well for testing. Discussions are already underway to secure this equipment.
The completion of this development work prior to testing is expected to take a further 6 to 8 weeks.
The Sadie 1 well was drilled on the Homeplace Prospect, and was successful in finding hydrocarbon bearing sands in the Wilcox Formation. Successful completion and testing will mark the fourth discovery for Strike after Mesquite, Rayburn and Louise and could significantly increase Strike's production and revenue commencing in the third quarter this year.
Louise Prospect, Gardner Duncan 1 well (STX 40%)
The Gardner Duncan 1 well continues to perform exceptionally well. The well has now been on production since April 2010 without decline. In recent weeks the operator has been able to increase production by 15% to 5.2 million cubic feet of gas equivalent per day (4.2 MMcf gas plus 100 bbls of condensate).
Evaluation of production data and new mapping of seismic will continue prior to any decision with respect to further drilling.
EXPLORATION DRILLING
Strike is planning to participate in the drilling of 3 to 5 wells before the end of 2011. These will come from a combination of Wilcox, Eagle Ford shale or new plays being secured. The drilling program is being restructured in light of these new activities and project priorities.
The Wilcox drilling is likely to start up in the fourth quarter this year once new mapping is completed with the results incorporated from the recent discoveries and production history from the Sadie 1 well at Homeplace.
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Mustang Services Lassoed for Hess' Expansion at Tioga Facility
- Mustang Services Lassoed for Hess' Expansion at Tioga Facility
Tuesday, May 24, 2011
John Wood Group plc
Mustang, a Wood Group company, has been awarded detailed design and procurement services by Hess Corporation for the expansion of its Tioga natural gas plant in the Bakken oil play in northwestern North Dakota. The project will expand the facility's capacity from approximately 110 MMSFD gas to 250 MMSCFD. The cryogenic gas plant will be designed for ethane recovery, full fractionation and sales of natural gas liquids (NGL).
Mustang Executive Vice President, A.J. Cortez, stated, "We are pleased that Hess has chosen Mustang to deliver our services for this significant onshore facility. We highly value our relationship with Hess and the fact that they look to us to provide both onshore and offshore oil and gas facilities."
Mustang has previously completed engineering design for Hess on their Elon/Okume project offshore West Africa, and all three facility expansions as part of Hess' ROZ/WBD project in west Texas and New Mexico, including the Seminole Gas Processing Plant. The Tioga project team is expected to peak at 150 personnel expending approximately 300,000 manhours. Engineering design services are expected to be completed in the 2nd quarter 2012.
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Tuesday, May 24, 2011
John Wood Group plc
Mustang, a Wood Group company, has been awarded detailed design and procurement services by Hess Corporation for the expansion of its Tioga natural gas plant in the Bakken oil play in northwestern North Dakota. The project will expand the facility's capacity from approximately 110 MMSFD gas to 250 MMSCFD. The cryogenic gas plant will be designed for ethane recovery, full fractionation and sales of natural gas liquids (NGL).
Mustang Executive Vice President, A.J. Cortez, stated, "We are pleased that Hess has chosen Mustang to deliver our services for this significant onshore facility. We highly value our relationship with Hess and the fact that they look to us to provide both onshore and offshore oil and gas facilities."
Mustang has previously completed engineering design for Hess on their Elon/Okume project offshore West Africa, and all three facility expansions as part of Hess' ROZ/WBD project in west Texas and New Mexico, including the Seminole Gas Processing Plant. The Tioga project team is expected to peak at 150 personnel expending approximately 300,000 manhours. Engineering design services are expected to be completed in the 2nd quarter 2012.
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El Paso to Spin-Off into Two Companies
- El Paso to Spin-Off into Two Companies
Tuesday, May 24, 2011
El Paso Corp.
El Paso Corp. announced that its Board of Directors has granted initial approval of a plan to separate the company into two publicly traded businesses by year end 2011.
Following the completion of the proposed spin-off, El Paso Corporation will be comprised of El Paso's Pipeline Group, its Midstream Group, and its general and limited partner interests in El Paso Pipeline Partners, L.P. (NYSE: EPB). It will be the premier pipeline company in North America, uniquely integrated in the major U.S. supply and market regions. With a planned 2012 annual dividend of $0.60 per share and a targeted low double-digit dividend growth rate, it is positioned to be a very attractive corporate yield investment. As a separate publicly traded company, El Paso's exploration & production business is well positioned to compete with the industry's leading independent producers. It has more than 10 years of low-risk, repeatable drilling inventory to fuel its future growth. Current positions in the Eagle Ford and Wolfcamp shales and the Altamont field are expected to provide a profitable and rapidly growing oil production profile.
"We believe that the creation of these two stand-alone public companies will result in significant and sustainable value creation," said Doug Foshee, chairman, president, and chief executive officer of El Paso Corporation. "With the completion of what was an $8 billion pipeline backlog, the elevation of our E&P business to one of the top independent producers, outstanding leadership and employees in each of our businesses, and the accelerated improvement of our balance sheet, we are ready to take this important step."
El Paso plans to complete a separation by year end with a tax-free spinoff of its E&P company. The planned separation is subject to market, regulatory, tax, final approval by the company's Board of Directors and other customary conditions.
Benefits
El Paso believes that there are material benefits to the stand-alone companies from a separation:
Ongoing Management of El Paso Corporation
The seasoned management of El Paso Corporation is in place. Doug Foshee will remain chairman & chief executive officer of the company.
Management of Exploration & Production Company
Brent Smolik will be named as chief executive officer and Dane Whitehead will become the chief financial officer. Doug Foshee will become the non-executive chairman.
Transaction Approvals
The spin-off of the E&P company will be structured as a pro rata distribution of the shares of the exploration and production company to the El Paso shareholders of record. The transaction will not require shareholder approval. El Paso plans to seek a tax ruling from the Internal Revenue Service regarding the tax-free nature of the spin-off for both the company and its shareholders.
Financial & Legal Advisors
Goldman, Sachs & Co. is serving as the financial advisor to El Paso, and Wachtell, Lipton, Rosen & Katz is serving as El Paso's legal advisor.
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Tuesday, May 24, 2011
El Paso Corp.
El Paso Corp. announced that its Board of Directors has granted initial approval of a plan to separate the company into two publicly traded businesses by year end 2011.
Following the completion of the proposed spin-off, El Paso Corporation will be comprised of El Paso's Pipeline Group, its Midstream Group, and its general and limited partner interests in El Paso Pipeline Partners, L.P. (NYSE: EPB). It will be the premier pipeline company in North America, uniquely integrated in the major U.S. supply and market regions. With a planned 2012 annual dividend of $0.60 per share and a targeted low double-digit dividend growth rate, it is positioned to be a very attractive corporate yield investment. As a separate publicly traded company, El Paso's exploration & production business is well positioned to compete with the industry's leading independent producers. It has more than 10 years of low-risk, repeatable drilling inventory to fuel its future growth. Current positions in the Eagle Ford and Wolfcamp shales and the Altamont field are expected to provide a profitable and rapidly growing oil production profile.
"We believe that the creation of these two stand-alone public companies will result in significant and sustainable value creation," said Doug Foshee, chairman, president, and chief executive officer of El Paso Corporation. "With the completion of what was an $8 billion pipeline backlog, the elevation of our E&P business to one of the top independent producers, outstanding leadership and employees in each of our businesses, and the accelerated improvement of our balance sheet, we are ready to take this important step."
El Paso plans to complete a separation by year end with a tax-free spinoff of its E&P company. The planned separation is subject to market, regulatory, tax, final approval by the company's Board of Directors and other customary conditions.
Benefits
El Paso believes that there are material benefits to the stand-alone companies from a separation:
- Greater management focus on distinct business strategies
- Credit enhancing to El Paso Corporation
- Greater flexibility to grow businesses supported by separate equity currencies
- Independent capital structures and credit profiles, which provide a lower cost of capital
- Improved capital markets access
- Increased flexibility and efficiency in capital allocation
Ongoing Management of El Paso Corporation
The seasoned management of El Paso Corporation is in place. Doug Foshee will remain chairman & chief executive officer of the company.
Management of Exploration & Production Company
Brent Smolik will be named as chief executive officer and Dane Whitehead will become the chief financial officer. Doug Foshee will become the non-executive chairman.
Transaction Approvals
The spin-off of the E&P company will be structured as a pro rata distribution of the shares of the exploration and production company to the El Paso shareholders of record. The transaction will not require shareholder approval. El Paso plans to seek a tax ruling from the Internal Revenue Service regarding the tax-free nature of the spin-off for both the company and its shareholders.
Financial & Legal Advisors
Goldman, Sachs & Co. is serving as the financial advisor to El Paso, and Wachtell, Lipton, Rosen & Katz is serving as El Paso's legal advisor.
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Marcellus Shale Motherlode Brings World of Change
- Marcellus Shale Motherlode Brings World of Change
Tuesday, May 24, 2011
The Washington Times
by Ben Wolfgang
Earlier this year, Phillip Whalen packed his bags, left his home in Louisiana and set up shop in western Pennsylvania.
The 15-year oil and gas industry veteran said work has dried up around the Gulf of Mexico, in part because of the fallout from the BP oil spill last year. In what has become a kind of reverse national oil rush, Mr. Whalen said, his motivation for heading north to this small community 20 miles south of Pittsburgh was simple.
"I'm doing what I have to do to keep a roof over the head and pay the bills," the grizzled family man said early one morning. He was dressed in a blue jumpsuit and was smoking a last cigarette outside his hotel before heading off to work.
His company, T3 Energy Services, sent him to Washington, the economic epicenter for exploiting what many think is the nation's path away from dangerous dependence on foreign oil.
Big energy companies have set up shop here to tap the Marcellus Shale, a massive chunk of marine sedimentary rock stretching from the Finger Lakes region of New York as far south as Kentucky and Tennessee, holding within its subterranean grip vast deposits of natural gas.
Technology that essentially uses extreme water pressure to crack open the rock and liberate the natural gas within so that it can be pumped to waiting pipelines has given mining and energy companies access to the plentiful supply of shale oil and gas in recent years.
Proponents tout so-called "hydraulic fracturing" or "fracking" as the key to satisfying the nation's booming energy appetite -- using reliable, domestic sources -- for a century or more. Critics warn that the procedure is dangerous, an untested technology that opens the way for mysterious chemicals to seep into water supplies, while leaving unsuspecting residents of small towns and rural hamlets vulnerable to environmental and economic disruption.
Either way, the industry has and continues to transform small western Pennsylvania outposts such as Washington, Hickory and Canonsburg from sleepy communities to boomtowns and has changed the national conversation about how we heat our homes and power our vehicles.
"All the sudden you've found yourself with an abundant source of energy ... and, by the way, it's made in America," Tom Ridge, former Pennsylvania governor and homeland security secretary, said in an interview. Mr. Ridge now serves as an adviser to the Marcellus Shale Coalition, a fraternity of natural gas drilling outfits.
The new Houston
Analysts estimate that the shale contains between 168 trillion and 516 trillion cubic feet of natural gas, buried as deep as 9,000 feet below ground. Pennsylvania, where the nation's first oil well was drilled in Titusville in 1859, has become the new Houston of the shale business and drilling has skyrocketed in recent years.
In 2007, drillers had 27 wells tapping the Marcellus Shale in the state. The number shot up to 161 in 2008 and to 785 in 2009. Last year, a record 1,445 wells were drilled -- a 53-fold increase in four years. This year, 399 have been drilled as of March 31, according to the Pennsylvania Department of Environmental Protection.
The multibillion-dollar energy corporations drilling those wells have moved in as neighbors to residents in and around Washington, Bradford County and other parts of western and central Pennsylvania. Companies such as Fort Worth, Texas-based Range Resources, one of the largest players in the industry, are putting big checks in the pockets of landowners who lease their acreage for wells. The leases typically last as long as the well produces gas, often for 50 years. Many of the landowners are farmers, who get hefty royalty checks each month in exchange for allowing access to their land.
Mark Wolfe, who owns 22 acres in Mount Pleasant Township, said he was approached by Range Resources agents in 2008. He soon signed a lease with the company.
"I said, 'For the good of the farmers, let's roll with it,' " he said. "We carried on life as usual. I slept at night" during the process.
When the wells are completed and pumping gas around the clock, it's back to business for the landowners. Cows graze just outside many of the sites. Farmers tend to the land and mow their pastures. The only difference is that they're usually riding top-of-the-line tractors, financed with gas royalties.
For Mr. Wolfe and many others in these parts, Marcellus Shale is not just a household term; it has become a way of life. Rig operators head to local bars and restaurants after their 12-hour shifts. Hotel rooms are booked weeks or months in advance, with transient workers such as Mr. Whalen making them their temporary home away from home.
Many of those employees work two or three weeks straight without a day off. The grueling schedule allows them to fly home and see their wives and children during the off weeks.
Getting noticed
But for all its prominence in Pennsylvania and elsewhere, the Marcellus Shale region remains an unknown commodity in Washington, D.C.
"Nobody is hardly mentioning natural gas down here. Nobody in this town is talking natural gas," said Mr. Ridge, sounding almost bewildered as he lamented the nation's lack of a comprehensive energy policy.
That is slowly changing.
Congress now has a Natural Gas Caucus dedicated to promoting the fuel's viability. It was co-founded last year by Rep. Tim Murphy, Pennsylvania Republican.
A Marcellus Shale Caucus, co-founded by Rep. Mark S. Critz, a Democrat who represents Washington County, and Rep. Tom Reed, New York Republican, is in the works.
Texas oilman T. Boone Pickens and other energy moguls have launched public relations campaigns on behalf of natural gas, pushing for vehicle retrofitting and service station upgrades to take advantage of the Marcellus Shale. Some major companies, such as Waste Management Inc., have invested in natural gas fleets. Mr. Ridge said many others will follow suit, especially facing skyrocketing prices at the gas pump.
Many still have reservations, and protests are common outside gas company offices. When drilling is on its way, township meetings are often contentious.
The local resistance is driven by a lack of knowledge, industry backers say. Insiders also acknowledge that they haven't done enough to address some local concerns.
"We suffer from some self-inflicted wounds," said Range Resources spokesman Matt Pitzarella. "We've not been proactive enough as an industry to provide the answers. We used to fly below the radar. That doesn't work anymore. If people have questions and you don't address those questions, you're viewed as having something to hide. And, at that point, anybody can fill that vacuum" with misinformation or politically motivated attacks.
Demystifying the process
One way companies are trying to win over the public is by talking more openly about the processes they use to extract natural gas and to deconstruct the mysteries of fracking.
Using the procedure, companies pump huge volumes of a water, sand and chemical mixture into the ground at tremendous pressure, shattering the rock that traps the gas. They work with subcontractors to set up water lines to and from the sites, a cheaper alternative to running thousands of tanker trucks back and forth to supply the millions of gallons needed for a single well.
Throughout the operation, layers of piping and concrete line the well, which is meant to keep the fracking fluid from contaminating vital water supplies.
The frack job, as insiders call it, is a round-the-clock operation, with 35 to 50 employees at the site day and night. Workers eat on site, with catered meals provided by their employer. They leave only to sleep.
At the heart of the entire operation is the frack van, filled with millions of dollars of technical equipment measuring pressure, depth and a multitude of other factors. Inside, Shawn Hodges and other employees keep an eye on everything.
"It's a very small surface area [we're drilling], but a lot of gas," said Mr. Hodges, a completions-operations manager who has been in the industry for 25 years and has worked on more than 4,000 wells.
In the old days, drilling was purely vertical. While still profitable and effective, the vertical shafts could tap only a tiny potion of the field, requiring large numbers of rigs and huge swaths of land to exploit a find. With each rig, the risk of an accident increased.
Now, companies are able to incorporate horizontal drilling. After drilling the vertical well -- typically about 6,500 feet down -- operators can branch out horizontally, usually at a distance of about 3,000 feet but sometimes much farther. This allows companies to extract gas from a much larger area from a single well site, decreasing land needs and maximizing efficiency.
Range officials concede that the initial process is "noisy and dirty" but stress that it's only temporary. A year after first putting the drill into the ground, land is nearly back to normal. Mr. Wolfe's land, for example, has been restored, with the exception of the well pad, the leftovers from the drilling process that pump gas from the ground and into pipelines.
From those pipelines, the gas heads to market and is sold to homes and businesses in Ohio, Kentucky and many other states. Marcellus Shale companies say they will have one advantage over other fracking centers because of lower transportation costs to the densely populated Northeast and mid-Atlantic markets.
Manning the pumps
To run a safe, effective operation, companies such as Range need competent employees. Increasingly, the talent is homegrown.
At the Western Area Career and Technology Center in Canonsburg, not far from Washington, director Joseph Iannetti has instituted programs geared toward the natural gas industry.
Like Mr. Whalen, some adult students come from across the country to learn the skills needed for jobs that pay, on average, about $75,000 a year.
"From my research, we'll walk out of here and have a job," said Pat Champ, a quiet, out-of-work carpenter from Wisconsin who left the Badger State to find work in the natural gas industry. He sat inside the small classroom with two other students. The class is expected to grow along with the process.
Mr. Champ's optimism is not misplaced. Mr. Iannetti said companies recruit students before they finish the programs, which include a vocational technology offering for high school students and an adult course for Mr. Champ and others.
"When we first heard about this, we thought it was science fiction," Mr. Iannetti said of the Marcellus Shale and the fracking process. "There's excitement [in western Pennsylvania] again. This is not a flash-in-the-pan industry."
He said his school has a 92 percent placement rate. Many graduates head to well sites, working for Range or one of its many competitors. But, Mr. Iannetti said, companies need more than well drillers.
There is high demand for electricians, welders, truck drivers, excavators and even accountants.
It isn't for the faint of heart. It's hard work, exactly the kind western Pennsylvanians are used to after the mighty rise and sudden fall of iron and steel operations, Mr. Iannetti said.
For the nation, it's an opportunity to revolutionize energy policy. For workers, it means a good paycheck in an exciting field, accompanied by backbreaking work and weeks at a time away from home.
"It's a rough lifestyle, staying away from your family," Mr. Whalen said, growing angry when asked about those who demonize the industry and argue that it cares only about money.
"You just have to protect the environment. That's my job," he said.
Copyright (c) 2011, The Washington Times
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Tuesday, May 24, 2011
The Washington Times
by Ben Wolfgang
Earlier this year, Phillip Whalen packed his bags, left his home in Louisiana and set up shop in western Pennsylvania.
The 15-year oil and gas industry veteran said work has dried up around the Gulf of Mexico, in part because of the fallout from the BP oil spill last year. In what has become a kind of reverse national oil rush, Mr. Whalen said, his motivation for heading north to this small community 20 miles south of Pittsburgh was simple.
"I'm doing what I have to do to keep a roof over the head and pay the bills," the grizzled family man said early one morning. He was dressed in a blue jumpsuit and was smoking a last cigarette outside his hotel before heading off to work.
His company, T3 Energy Services, sent him to Washington, the economic epicenter for exploiting what many think is the nation's path away from dangerous dependence on foreign oil.
Big energy companies have set up shop here to tap the Marcellus Shale, a massive chunk of marine sedimentary rock stretching from the Finger Lakes region of New York as far south as Kentucky and Tennessee, holding within its subterranean grip vast deposits of natural gas.
Technology that essentially uses extreme water pressure to crack open the rock and liberate the natural gas within so that it can be pumped to waiting pipelines has given mining and energy companies access to the plentiful supply of shale oil and gas in recent years.
Proponents tout so-called "hydraulic fracturing" or "fracking" as the key to satisfying the nation's booming energy appetite -- using reliable, domestic sources -- for a century or more. Critics warn that the procedure is dangerous, an untested technology that opens the way for mysterious chemicals to seep into water supplies, while leaving unsuspecting residents of small towns and rural hamlets vulnerable to environmental and economic disruption.
Either way, the industry has and continues to transform small western Pennsylvania outposts such as Washington, Hickory and Canonsburg from sleepy communities to boomtowns and has changed the national conversation about how we heat our homes and power our vehicles.
"All the sudden you've found yourself with an abundant source of energy ... and, by the way, it's made in America," Tom Ridge, former Pennsylvania governor and homeland security secretary, said in an interview. Mr. Ridge now serves as an adviser to the Marcellus Shale Coalition, a fraternity of natural gas drilling outfits.
The new Houston
Analysts estimate that the shale contains between 168 trillion and 516 trillion cubic feet of natural gas, buried as deep as 9,000 feet below ground. Pennsylvania, where the nation's first oil well was drilled in Titusville in 1859, has become the new Houston of the shale business and drilling has skyrocketed in recent years.
In 2007, drillers had 27 wells tapping the Marcellus Shale in the state. The number shot up to 161 in 2008 and to 785 in 2009. Last year, a record 1,445 wells were drilled -- a 53-fold increase in four years. This year, 399 have been drilled as of March 31, according to the Pennsylvania Department of Environmental Protection.
The multibillion-dollar energy corporations drilling those wells have moved in as neighbors to residents in and around Washington, Bradford County and other parts of western and central Pennsylvania. Companies such as Fort Worth, Texas-based Range Resources, one of the largest players in the industry, are putting big checks in the pockets of landowners who lease their acreage for wells. The leases typically last as long as the well produces gas, often for 50 years. Many of the landowners are farmers, who get hefty royalty checks each month in exchange for allowing access to their land.
Mark Wolfe, who owns 22 acres in Mount Pleasant Township, said he was approached by Range Resources agents in 2008. He soon signed a lease with the company.
"I said, 'For the good of the farmers, let's roll with it,' " he said. "We carried on life as usual. I slept at night" during the process.
When the wells are completed and pumping gas around the clock, it's back to business for the landowners. Cows graze just outside many of the sites. Farmers tend to the land and mow their pastures. The only difference is that they're usually riding top-of-the-line tractors, financed with gas royalties.
For Mr. Wolfe and many others in these parts, Marcellus Shale is not just a household term; it has become a way of life. Rig operators head to local bars and restaurants after their 12-hour shifts. Hotel rooms are booked weeks or months in advance, with transient workers such as Mr. Whalen making them their temporary home away from home.
Many of those employees work two or three weeks straight without a day off. The grueling schedule allows them to fly home and see their wives and children during the off weeks.
Getting noticed
But for all its prominence in Pennsylvania and elsewhere, the Marcellus Shale region remains an unknown commodity in Washington, D.C.
"Nobody is hardly mentioning natural gas down here. Nobody in this town is talking natural gas," said Mr. Ridge, sounding almost bewildered as he lamented the nation's lack of a comprehensive energy policy.
That is slowly changing.
Congress now has a Natural Gas Caucus dedicated to promoting the fuel's viability. It was co-founded last year by Rep. Tim Murphy, Pennsylvania Republican.
A Marcellus Shale Caucus, co-founded by Rep. Mark S. Critz, a Democrat who represents Washington County, and Rep. Tom Reed, New York Republican, is in the works.
Texas oilman T. Boone Pickens and other energy moguls have launched public relations campaigns on behalf of natural gas, pushing for vehicle retrofitting and service station upgrades to take advantage of the Marcellus Shale. Some major companies, such as Waste Management Inc., have invested in natural gas fleets. Mr. Ridge said many others will follow suit, especially facing skyrocketing prices at the gas pump.
Many still have reservations, and protests are common outside gas company offices. When drilling is on its way, township meetings are often contentious.
The local resistance is driven by a lack of knowledge, industry backers say. Insiders also acknowledge that they haven't done enough to address some local concerns.
"We suffer from some self-inflicted wounds," said Range Resources spokesman Matt Pitzarella. "We've not been proactive enough as an industry to provide the answers. We used to fly below the radar. That doesn't work anymore. If people have questions and you don't address those questions, you're viewed as having something to hide. And, at that point, anybody can fill that vacuum" with misinformation or politically motivated attacks.
Demystifying the process
One way companies are trying to win over the public is by talking more openly about the processes they use to extract natural gas and to deconstruct the mysteries of fracking.
Using the procedure, companies pump huge volumes of a water, sand and chemical mixture into the ground at tremendous pressure, shattering the rock that traps the gas. They work with subcontractors to set up water lines to and from the sites, a cheaper alternative to running thousands of tanker trucks back and forth to supply the millions of gallons needed for a single well.
Throughout the operation, layers of piping and concrete line the well, which is meant to keep the fracking fluid from contaminating vital water supplies.
The frack job, as insiders call it, is a round-the-clock operation, with 35 to 50 employees at the site day and night. Workers eat on site, with catered meals provided by their employer. They leave only to sleep.
At the heart of the entire operation is the frack van, filled with millions of dollars of technical equipment measuring pressure, depth and a multitude of other factors. Inside, Shawn Hodges and other employees keep an eye on everything.
"It's a very small surface area [we're drilling], but a lot of gas," said Mr. Hodges, a completions-operations manager who has been in the industry for 25 years and has worked on more than 4,000 wells.
In the old days, drilling was purely vertical. While still profitable and effective, the vertical shafts could tap only a tiny potion of the field, requiring large numbers of rigs and huge swaths of land to exploit a find. With each rig, the risk of an accident increased.
Now, companies are able to incorporate horizontal drilling. After drilling the vertical well -- typically about 6,500 feet down -- operators can branch out horizontally, usually at a distance of about 3,000 feet but sometimes much farther. This allows companies to extract gas from a much larger area from a single well site, decreasing land needs and maximizing efficiency.
Range officials concede that the initial process is "noisy and dirty" but stress that it's only temporary. A year after first putting the drill into the ground, land is nearly back to normal. Mr. Wolfe's land, for example, has been restored, with the exception of the well pad, the leftovers from the drilling process that pump gas from the ground and into pipelines.
From those pipelines, the gas heads to market and is sold to homes and businesses in Ohio, Kentucky and many other states. Marcellus Shale companies say they will have one advantage over other fracking centers because of lower transportation costs to the densely populated Northeast and mid-Atlantic markets.
Manning the pumps
To run a safe, effective operation, companies such as Range need competent employees. Increasingly, the talent is homegrown.
At the Western Area Career and Technology Center in Canonsburg, not far from Washington, director Joseph Iannetti has instituted programs geared toward the natural gas industry.
Like Mr. Whalen, some adult students come from across the country to learn the skills needed for jobs that pay, on average, about $75,000 a year.
"From my research, we'll walk out of here and have a job," said Pat Champ, a quiet, out-of-work carpenter from Wisconsin who left the Badger State to find work in the natural gas industry. He sat inside the small classroom with two other students. The class is expected to grow along with the process.
Mr. Champ's optimism is not misplaced. Mr. Iannetti said companies recruit students before they finish the programs, which include a vocational technology offering for high school students and an adult course for Mr. Champ and others.
"When we first heard about this, we thought it was science fiction," Mr. Iannetti said of the Marcellus Shale and the fracking process. "There's excitement [in western Pennsylvania] again. This is not a flash-in-the-pan industry."
He said his school has a 92 percent placement rate. Many graduates head to well sites, working for Range or one of its many competitors. But, Mr. Iannetti said, companies need more than well drillers.
There is high demand for electricians, welders, truck drivers, excavators and even accountants.
It isn't for the faint of heart. It's hard work, exactly the kind western Pennsylvanians are used to after the mighty rise and sudden fall of iron and steel operations, Mr. Iannetti said.
For the nation, it's an opportunity to revolutionize energy policy. For workers, it means a good paycheck in an exciting field, accompanied by backbreaking work and weeks at a time away from home.
"It's a rough lifestyle, staying away from your family," Mr. Whalen said, growing angry when asked about those who demonize the industry and argue that it cares only about money.
"You just have to protect the environment. That's my job," he said.
Copyright (c) 2011, The Washington Times
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Two Large Directional Drilling Sites Proposed in Greeley
- Two Large Directional Drilling Sites Proposed in Greeley
Tuesday, May 24, 2011
Greely Tribune, Colorado
by Sharon Dunn, Greeley Tribune, Colo.
Two new oil and gas well projects that would involve dozens of new wells are being proposed within Greeley's city limits now that directional drilling methods have basically been proven and commodity prices are cooperating.
These drilling projects come in a much larger scale than typical vertical drilling, with several wells proposed from one site.
"This is the changing face of the oil and gas industry, with more directional drilling," said Brandon Gossard, a planner with the city of Greeley. "We seem to be getting more applications for directional than otherwise.
"Only recently has that technology been reliable and cost effective to the point where a lot of bigger players have started to use the directional drilling platforms more and more often," Gossard said.
Greeley residents may remember letters from Mineral Resources they got earlier in the year, seeking permission to drill beneath their properties. Some of those letters relate to two projects under consideration this week:
Copyright (c) 2011, Greeley Tribune, Colo.
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Tuesday, May 24, 2011
Greely Tribune, Colorado
by Sharon Dunn, Greeley Tribune, Colo.
Two new oil and gas well projects that would involve dozens of new wells are being proposed within Greeley's city limits now that directional drilling methods have basically been proven and commodity prices are cooperating.
These drilling projects come in a much larger scale than typical vertical drilling, with several wells proposed from one site.
"This is the changing face of the oil and gas industry, with more directional drilling," said Brandon Gossard, a planner with the city of Greeley. "We seem to be getting more applications for directional than otherwise.
"Only recently has that technology been reliable and cost effective to the point where a lot of bigger players have started to use the directional drilling platforms more and more often," Gossard said.
Greeley residents may remember letters from Mineral Resources they got earlier in the year, seeking permission to drill beneath their properties. Some of those letters relate to two projects under consideration this week:
- The Bestway Gravel Pit site off of 4th Street and 35th Avenue, where the company has proposed drilling 40 wells. Residents will get to sound off on the project at a neighborhood meeting Wednesday.
- The Island Grove site off of 11th Avenue across from Island Grove Regional Park, where the company has proposed drilling 22 wells. The Greeley Planning Commission is considering this project Tuesday. Neither project would need Greeley City Council approval, but ultimate planning commission decisions could be appealed to the council within 10 days of a decision.
Copyright (c) 2011, Greeley Tribune, Colo.
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Most Drilling-Related Legislation Appears Dead in Texas Legislature
- Most Drilling-Related Legislation Appears Dead in Texas Legislature
Tuesday, May 24, 2011
Fort Worth Star-Telegram, Texas
by Aman Batheja
With just a week left in the legislative session, most proposed drilling-related bills appear dead but a handful still have a chance of becoming state law.
Lawmakers filed more than three dozen bills this session that would have affected natural gas drilling operations in the Barnett Shale against a backdrop of increasing concerns about how the process is affecting the environment. For the most part, only bills not opposed by industry have moved forward.
"There's not a lot out there that we're actively fighting right now," said Bill Stevens, executive vice president of the Texas Alliance of Energy Producers. "I think this has been a good session for public policy, not just for the oil and gas industry but for the state."
Gov. Rick Perry recently signed a bill allocating funding for air monitors in the Dallas-Fort Worth area. There are also other bills still in play, including one that would require drillers to disclose most of the chemicals they use in the controversial hydraulic fracturing process.
Drilling critics and environmentalists agree that, as in past sessions, industry has called the shots.
"The industry in Texas is strong," said Cyrus Reed, conservation director of the Lone Star Chapter of the Sierra Club. "They definitely have a seat at the table."
Fort Worth lawmakers
Two Fort Worth lawmakers filed more drilling bills this session than anyone else: state Rep. Lon Burnam and state Sen. Wendy Davis, both Democrats. Several of their bills proposed increasing state regulation of parts of the drilling process or giving local governments more control. Nearly all of their drilling bills, about 20 in total, never came up for votes on the House or Senate floor.
"This industry has controlled state government for over 100 years, and there's nothing to suggest that's going to change," Burnam said.
Several of Burnam's bills were the subject of committee hearings but now remain stuck in different committees. Nearly all of Davis' bills are parked in the Senate Natural Resources Committee. Committee Chairman Sen. Troy Fraser, R-Horseshoe Bay, chose not to hold hearings on more than a dozen drilling bills from Davis. That's a switch from last session, Davis said, when several of her drilling bills not only received hearings when that committee was run by a different chairman but went on to be approved by the full Senate.
When asked about Davis' bills, Fraser said his committee has focused on "the bills that we thought were good public policy that warranted hearings."
Davis said she was able to get three of her proposals added on as amendments to the House version of a bill revamping the Railroad Commission. The House and Senate have passed different versions of the bill. Lawmakers are now working to hammer out the differences, and a major sticking point is whether the agency should continue with three commissioners or switch to just one.
"What I fear is that the debate over the different versions will end up leading to no bill getting passed in time," Davis said.
Rep. Rob Orr, R-Burleson, said he supported several drilling bills proposed by fellow North Texas lawmakers but most did not gain traction this session. "I do not feel like there has been a lot of progress in improvements to the Barnett Shale," he said.
While there still are situations where residents are not happy with the drilling activity in their communities, Orr said he's heard less of an outcry this session than he did when the price of natural gas was higher and companies were in the midst of a leasing frenzy that left some communities frustrated or confused.
One measure that drew bipartisan attention was suspending or limiting a tax exemption on high-cost natural gas production. The exemption, which has encouraged production in the Barnett Shale, accounted for $7.4 billion in lost revenue to the state over the past six years, according to a state report.
Supporters of a pullback said the money could go toward education, but industry officials predict that such a move would deter drilling activity and hurt economic growth. No changes to the tax break appear likely this session.
"That's one we will continue to be vigilant on," Stevens said.
Fracking fluids
The most significant piece of drilling legislation still alive is a measure to require drilling companies to disclose the fluids they use in the controversial practice of hydraulic fracturing.
"We think it will alleviate some of the public fears that are out there right now related to our fracking process," said Debbie Hastings of the Texas Oil & Gas Association.
Reed said the fracking disclosure bill could indirectly lead to safer drilling practices.
"The hope is if you have to disclose, you will be more careful about what chemicals you're using," Reed said.
After months of negotiations with stakeholders, the measure passed the House earlier this month. Though not as strong as some environmental groups and drilling activists had hoped, it has still drawn broad support.
Copyright (c) 2011, Fort Worth Star-Telegram, Texas
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Tuesday, May 24, 2011
Fort Worth Star-Telegram, Texas
by Aman Batheja
With just a week left in the legislative session, most proposed drilling-related bills appear dead but a handful still have a chance of becoming state law.
Lawmakers filed more than three dozen bills this session that would have affected natural gas drilling operations in the Barnett Shale against a backdrop of increasing concerns about how the process is affecting the environment. For the most part, only bills not opposed by industry have moved forward.
"There's not a lot out there that we're actively fighting right now," said Bill Stevens, executive vice president of the Texas Alliance of Energy Producers. "I think this has been a good session for public policy, not just for the oil and gas industry but for the state."
Gov. Rick Perry recently signed a bill allocating funding for air monitors in the Dallas-Fort Worth area. There are also other bills still in play, including one that would require drillers to disclose most of the chemicals they use in the controversial hydraulic fracturing process.
Drilling critics and environmentalists agree that, as in past sessions, industry has called the shots.
"The industry in Texas is strong," said Cyrus Reed, conservation director of the Lone Star Chapter of the Sierra Club. "They definitely have a seat at the table."
Fort Worth lawmakers
Two Fort Worth lawmakers filed more drilling bills this session than anyone else: state Rep. Lon Burnam and state Sen. Wendy Davis, both Democrats. Several of their bills proposed increasing state regulation of parts of the drilling process or giving local governments more control. Nearly all of their drilling bills, about 20 in total, never came up for votes on the House or Senate floor.
"This industry has controlled state government for over 100 years, and there's nothing to suggest that's going to change," Burnam said.
Several of Burnam's bills were the subject of committee hearings but now remain stuck in different committees. Nearly all of Davis' bills are parked in the Senate Natural Resources Committee. Committee Chairman Sen. Troy Fraser, R-Horseshoe Bay, chose not to hold hearings on more than a dozen drilling bills from Davis. That's a switch from last session, Davis said, when several of her drilling bills not only received hearings when that committee was run by a different chairman but went on to be approved by the full Senate.
When asked about Davis' bills, Fraser said his committee has focused on "the bills that we thought were good public policy that warranted hearings."
Davis said she was able to get three of her proposals added on as amendments to the House version of a bill revamping the Railroad Commission. The House and Senate have passed different versions of the bill. Lawmakers are now working to hammer out the differences, and a major sticking point is whether the agency should continue with three commissioners or switch to just one.
"What I fear is that the debate over the different versions will end up leading to no bill getting passed in time," Davis said.
Rep. Rob Orr, R-Burleson, said he supported several drilling bills proposed by fellow North Texas lawmakers but most did not gain traction this session. "I do not feel like there has been a lot of progress in improvements to the Barnett Shale," he said.
While there still are situations where residents are not happy with the drilling activity in their communities, Orr said he's heard less of an outcry this session than he did when the price of natural gas was higher and companies were in the midst of a leasing frenzy that left some communities frustrated or confused.
One measure that drew bipartisan attention was suspending or limiting a tax exemption on high-cost natural gas production. The exemption, which has encouraged production in the Barnett Shale, accounted for $7.4 billion in lost revenue to the state over the past six years, according to a state report.
Supporters of a pullback said the money could go toward education, but industry officials predict that such a move would deter drilling activity and hurt economic growth. No changes to the tax break appear likely this session.
"That's one we will continue to be vigilant on," Stevens said.
Fracking fluids
The most significant piece of drilling legislation still alive is a measure to require drilling companies to disclose the fluids they use in the controversial practice of hydraulic fracturing.
"We think it will alleviate some of the public fears that are out there right now related to our fracking process," said Debbie Hastings of the Texas Oil & Gas Association.
Reed said the fracking disclosure bill could indirectly lead to safer drilling practices.
"The hope is if you have to disclose, you will be more careful about what chemicals you're using," Reed said.
After months of negotiations with stakeholders, the measure passed the House earlier this month. Though not as strong as some environmental groups and drilling activists had hoped, it has still drawn broad support.
Copyright (c) 2011, Fort Worth Star-Telegram, Texas
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Ahmadinejad Will Not Attend OPEC Meeting in Vienna
- Ahmadinejad Will Not Attend OPEC Meeting in Vienna
Tuesday, May 24, 2011
Knight Ridder/Tribune Business News
by Farshid Motahari, dpa, Berlin
President Mahmoud Ahmadinejad will not attend the next OPEC meeting scheduled for June 8 in Vienna, an Iranian oil ministry official said Monday.
Shojaeddin Bazargani told the official news agency IRNA that in a recent meeting, the president said that a minister would be assigned to represent the country both in the Vienna meeting and OPEC's joint session with the European Union.
Ahmadinejad last week dismissed oil minister Massoud Mirkazemi and took over the ministry himself, which would have also made him rotating chairman at the OPEC meeting in Vienna.
But Iran's constitutional watchdog, the Guardian Council, rejected the plan as illegal and said that Ahmadinejad could not run the oil ministry as caretaker.
The president's legal deputy, Fatemeh Bodaghi, said however that Ahmadinejad would remain caretaker of the ministry since the Guardian Council can only intervene on future decisions but not on those already made.
Ahmadinejad had 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 plan led to wide-spread criticism in Parliament.
Ahmadinejad is involved in a row with Iran's clergy and conservative factions over his reform plans, which include reducing the cabinet from 21 to 17 ministries.
As caretaker of the oil ministry, Ahmadinejad would have been obliged to chair as well the OPEC meeting next month in Vienna, where protests against the Iranian president are reportedly being planned.
Copyright (c) 2011, dpa, Berlin
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Tuesday, May 24, 2011
Knight Ridder/Tribune Business News
by Farshid Motahari, dpa, Berlin
President Mahmoud Ahmadinejad will not attend the next OPEC meeting scheduled for June 8 in Vienna, an Iranian oil ministry official said Monday.
Shojaeddin Bazargani told the official news agency IRNA that in a recent meeting, the president said that a minister would be assigned to represent the country both in the Vienna meeting and OPEC's joint session with the European Union.
Ahmadinejad last week dismissed oil minister Massoud Mirkazemi and took over the ministry himself, which would have also made him rotating chairman at the OPEC meeting in Vienna.
But Iran's constitutional watchdog, the Guardian Council, rejected the plan as illegal and said that Ahmadinejad could not run the oil ministry as caretaker.
The president's legal deputy, Fatemeh Bodaghi, said however that Ahmadinejad would remain caretaker of the ministry since the Guardian Council can only intervene on future decisions but not on those already made.
Ahmadinejad had 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 plan led to wide-spread criticism in Parliament.
Ahmadinejad is involved in a row with Iran's clergy and conservative factions over his reform plans, which include reducing the cabinet from 21 to 17 ministries.
As caretaker of the oil ministry, Ahmadinejad would have been obliged to chair as well the OPEC meeting next month in Vienna, where protests against the Iranian president are reportedly being planned.
Copyright (c) 2011, dpa, Berlin
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Unemployment Rates Decrease in Odessa, Midland
- Unemployment Rates Decrease in Odessa, Midland
Tuesday, May 24, 2011
Odessa American, Texas
by Jon Vanderlaan
The unemployment rate in the Permian Basin continued to fall last month as oilfield and service jobs have seen yet more increases in employees.
Willie Taylor, the executive director of the Permian Basin Texas Workforce Development Board, said as long as the oil and gas industry stays strong, the unemployment numbers will continue to drop.
"We don't want to use the 'boom' word right now, but our market is really great," he said.
Employment in the goods producing industry in Odessa, including mining (which includes oil) and manufacturing, increased by 1,300 jobs from April 2010 to April 2011, with service providing employment rising by 1,400 jobs.
Midland numbers reflect a similar increase with 1,200 service providing jobs added and 1,500 goods producing jobs added.
Taylor said as long as the oil and gas industry continues to do well, the unemployment rate will continue to lower. Forecasters predict the good market in those industries could last another three years, he said.
"We will continue to see (unemployment rates) drop as long as we got people coming in and going into the job market," he said. "We're looking at a strong economy and it's going to be around for quite some time."
Unemployment in the Odessa metropolitan statistical area dropped to 6.1 percent in April after a 6.3 percent unemployment rate in March. There was a 7.9 percent unemployment rate in April 2010.
The number of those employed has increased more than the 1,000 people that joined the workforce in Odessa, growing 2,350 from April 2010 to April 2011.The number of unemployed dropped by almost 1,300 people in the area to 4,466 people.
The Midland metropolitan statistical area saw a drop in unemployment during the past year from 5.3 percent to 4.4 percent, retaining its grip on the state's lowest unemployment for cities.
The Midland area had 2,221 people join the employment ranks from April 2010 to the same time this year to bring the total up to 75,202 people. The number of unemployed in the area dropped from 4,055 to 3,441, despite an increase of almost 1,600 people in the workforce.
The Texas Workforce Commission said Friday the state added 32,900 jobs, the seventh consecutive month of job growth in Texas.
The jobless rate dropped to 8.0 percent from 8.1 percent in March and 8.2 percent a year ago. The Texas unemployment rate remained well below the national rate of 9.0 percent.
The unemployment rate fell last month in more than three-quarters of nation's states, evidence that companies are feeling more confident in the U.S. economy.
The Labor Department said Friday that the unemployment rate dropped in 39 states in April. That's an improvement from March when 34 states had reported decreases. The rate rose in three states and the District of Columbia. It was unchanged in eight states.
Copyright (c) 2011, Odessa American, Texas
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Tuesday, May 24, 2011
Odessa American, Texas
by Jon Vanderlaan
The unemployment rate in the Permian Basin continued to fall last month as oilfield and service jobs have seen yet more increases in employees.
Willie Taylor, the executive director of the Permian Basin Texas Workforce Development Board, said as long as the oil and gas industry stays strong, the unemployment numbers will continue to drop.
"We don't want to use the 'boom' word right now, but our market is really great," he said.
Employment in the goods producing industry in Odessa, including mining (which includes oil) and manufacturing, increased by 1,300 jobs from April 2010 to April 2011, with service providing employment rising by 1,400 jobs.
Midland numbers reflect a similar increase with 1,200 service providing jobs added and 1,500 goods producing jobs added.
Taylor said as long as the oil and gas industry continues to do well, the unemployment rate will continue to lower. Forecasters predict the good market in those industries could last another three years, he said.
"We will continue to see (unemployment rates) drop as long as we got people coming in and going into the job market," he said. "We're looking at a strong economy and it's going to be around for quite some time."
Unemployment in the Odessa metropolitan statistical area dropped to 6.1 percent in April after a 6.3 percent unemployment rate in March. There was a 7.9 percent unemployment rate in April 2010.
The number of those employed has increased more than the 1,000 people that joined the workforce in Odessa, growing 2,350 from April 2010 to April 2011.The number of unemployed dropped by almost 1,300 people in the area to 4,466 people.
The Midland metropolitan statistical area saw a drop in unemployment during the past year from 5.3 percent to 4.4 percent, retaining its grip on the state's lowest unemployment for cities.
The Midland area had 2,221 people join the employment ranks from April 2010 to the same time this year to bring the total up to 75,202 people. The number of unemployed in the area dropped from 4,055 to 3,441, despite an increase of almost 1,600 people in the workforce.
The Texas Workforce Commission said Friday the state added 32,900 jobs, the seventh consecutive month of job growth in Texas.
The jobless rate dropped to 8.0 percent from 8.1 percent in March and 8.2 percent a year ago. The Texas unemployment rate remained well below the national rate of 9.0 percent.
The unemployment rate fell last month in more than three-quarters of nation's states, evidence that companies are feeling more confident in the U.S. economy.
The Labor Department said Friday that the unemployment rate dropped in 39 states in April. That's an improvement from March when 34 states had reported decreases. The rate rose in three states and the District of Columbia. It was unchanged in eight states.
Copyright (c) 2011, Odessa American, Texas
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Govt Regulators Sign Pact for Offshore Energy Development
- Govt Regulators Sign Pact for Offshore Energy Development
Tuesday, May 24, 2011
BOEMRE
As the International Oil Spill Conference kicks off in Portland, Ore. today, co-sponsors the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) and the National Oceanic and Atmospheric Administration (NOAA) announced that they have signed a landmark Memorandum of Understanding (MOU) to increase their coordination and collaboration to ensure the environmentally sound offshore energy development.
"BOEMRE and NOAA have enjoyed a long and productive relationship, but there is room for improvement. We can and will broaden and enhance the communication, cooperation and collaboration between our agencies," said BOEMRE Director Michael R. Bromwich. "This MOU creates new mechanisms to ensure the early and close coordination of BOEMRE and NOAA science and agency priorities to promote stronger environmental stewardship and stimulate greater efficiency in developing and implementing Outer Continental Shelf (OCS) energy policy and conservation."
"This agreement improves how we coordinate and collaborate to ensure energy resources are developed in an environmentally sound manner that protects marine life and ecosystems under our respective authorities," said Jane Lubchenco, Ph.D., under secretary of commerce for oceans and atmosphere and NOAA administrator. "We look forward to continuing to work with BOEMRE to ensure NOAA science informs offshore energy development and oil spill response."
This MOU, which is consistent with recommendations from the National Commission on the Deepwater Horizon Oil Spill and Offshore Drilling, specifies how BOEMRE and NOAA will cooperate and coordinate by:
Other key elements of the MOU include meeting regularly to develop potential ways to appropriately align regulatory and decision-making processes and identify the best available science to support future regulatory decisions; increased collaboration on oil spill exercises and response issues; and annually evaluating activities and progress related to National Ocean Policy objectives.
BOEMRE and NOAA have a history of nearly 40 years of successful scientific collaboration. These collaborative efforts encompass all OCS planning areas, from the highly successful Outer Continental Shelf Environmental Assessment Program in Alaska to ongoing joint funding of the environmental monitoring at the Flower Gardens National Marine Sanctuary in the Gulf of Mexico. These and other collaborations cover all technical disciplines from marine mammals and physical oceanography to the joint development of environmental documents in compliance with the National Environmental Policy Act.
BOEMRE and NOAA have had many significant and successful partnerships, including those conducted under the National Oceanographic Partnership Program. This has enabled both agencies to leverage their research capabilities to significantly increase the body of knowledge about our nation's marine environment.
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Tuesday, May 24, 2011
BOEMRE
As the International Oil Spill Conference kicks off in Portland, Ore. today, co-sponsors the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) and the National Oceanic and Atmospheric Administration (NOAA) announced that they have signed a landmark Memorandum of Understanding (MOU) to increase their coordination and collaboration to ensure the environmentally sound offshore energy development.
"BOEMRE and NOAA have enjoyed a long and productive relationship, but there is room for improvement. We can and will broaden and enhance the communication, cooperation and collaboration between our agencies," said BOEMRE Director Michael R. Bromwich. "This MOU creates new mechanisms to ensure the early and close coordination of BOEMRE and NOAA science and agency priorities to promote stronger environmental stewardship and stimulate greater efficiency in developing and implementing Outer Continental Shelf (OCS) energy policy and conservation."
"This agreement improves how we coordinate and collaborate to ensure energy resources are developed in an environmentally sound manner that protects marine life and ecosystems under our respective authorities," said Jane Lubchenco, Ph.D., under secretary of commerce for oceans and atmosphere and NOAA administrator. "We look forward to continuing to work with BOEMRE to ensure NOAA science informs offshore energy development and oil spill response."
This MOU, which is consistent with recommendations from the National Commission on the Deepwater Horizon Oil Spill and Offshore Drilling, specifies how BOEMRE and NOAA will cooperate and coordinate by:
- Defining specific processes to ensure effective and timely communication of agency priorities and upcoming activities;
- Identifying and undertaking critical environmental studies and analyses;
- Collaborating on scientific, environmental and technical issues related to the development and deployment of environmentally sound and sustainable offshore renewable energy technologies; and
- Increasing coordination and collaboration on decisions related to OCS activities, including with respect to research and scientific priorities.
Other key elements of the MOU include meeting regularly to develop potential ways to appropriately align regulatory and decision-making processes and identify the best available science to support future regulatory decisions; increased collaboration on oil spill exercises and response issues; and annually evaluating activities and progress related to National Ocean Policy objectives.
BOEMRE and NOAA have a history of nearly 40 years of successful scientific collaboration. These collaborative efforts encompass all OCS planning areas, from the highly successful Outer Continental Shelf Environmental Assessment Program in Alaska to ongoing joint funding of the environmental monitoring at the Flower Gardens National Marine Sanctuary in the Gulf of Mexico. These and other collaborations cover all technical disciplines from marine mammals and physical oceanography to the joint development of environmental documents in compliance with the National Environmental Policy Act.
BOEMRE and NOAA have had many significant and successful partnerships, including those conducted under the National Oceanographic Partnership Program. This has enabled both agencies to leverage their research capabilities to significantly increase the body of knowledge about our nation's marine environment.
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Baker Hughes Awarded Deepwater ESP Gig at Chevron's Big Foot Proj.
- Baker Hughes Awarded Deepwater ESP Gig at Chevron's Big Foot Proj.
Tuesday, May 24, 2011
Baker Hughes Inc.
Chevron has awarded Baker Hughes a contract to supply electrical submersible pumping (ESP) systems and production packers for seven producing wells, plus mud line packers for three injection wells for their Gulf of Mexico deepwater Big Foot Project. This award marks the first deployment of ESP systems inside the wellbore in the deepwater Gulf of Mexico. The ESP systems will be placed at a true vertical depth of approximately 16,000 feet.
Discovered in 2006, Big Foot is in 5,200 feet of water in the Walker Ridge area of the Gulf of Mexico. The Big Foot production facility will be an extended tension leg platform with an onboard drilling rig and production capacity of 75,000 barrels of oil and 25 million cubic feet of gas. Deployment of the ESP systems is scheduled to begin in 2014.
ESP systems were selected to boost the production stream and maximize asset recovery while extending production life and accelerating recovery. Improved ESP technology and manufacturing controls has extended ESP run times for critical well applications. The 1200 horsepower dual ESP systems will be the highest horsepower in-well systems ever deployed in an offshore environment. The ESP systems are deployed on dual by-pass systems, allowing for reservoir access and the ability to switch between ESPs without intervention.
"Longer-term, the experience and knowledge gained from Big Foot can potentially be applied to other developments in the deepwater market to extend field productivity," said Richard Williams, president of the Gulf of Mexico for Baker Hughes. "We are happy to be working with Chevron on this groundbreaking project to extend the application of ESP technology in the deepwater environment."
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Tuesday, May 24, 2011
Baker Hughes Inc.
Chevron has awarded Baker Hughes a contract to supply electrical submersible pumping (ESP) systems and production packers for seven producing wells, plus mud line packers for three injection wells for their Gulf of Mexico deepwater Big Foot Project. This award marks the first deployment of ESP systems inside the wellbore in the deepwater Gulf of Mexico. The ESP systems will be placed at a true vertical depth of approximately 16,000 feet.
Discovered in 2006, Big Foot is in 5,200 feet of water in the Walker Ridge area of the Gulf of Mexico. The Big Foot production facility will be an extended tension leg platform with an onboard drilling rig and production capacity of 75,000 barrels of oil and 25 million cubic feet of gas. Deployment of the ESP systems is scheduled to begin in 2014.
ESP systems were selected to boost the production stream and maximize asset recovery while extending production life and accelerating recovery. Improved ESP technology and manufacturing controls has extended ESP run times for critical well applications. The 1200 horsepower dual ESP systems will be the highest horsepower in-well systems ever deployed in an offshore environment. The ESP systems are deployed on dual by-pass systems, allowing for reservoir access and the ability to switch between ESPs without intervention.
"Longer-term, the experience and knowledge gained from Big Foot can potentially be applied to other developments in the deepwater market to extend field productivity," said Richard Williams, president of the Gulf of Mexico for Baker Hughes. "We are happy to be working with Chevron on this groundbreaking project to extend the application of ESP technology in the deepwater environment."
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Tullow Strengthens Portfolio with North Sea Buy
- Tullow Strengthens Portfolio with North Sea Buy
Tuesday, May 24, 2011
Tullow Oil plc
Tullow has entered into an agreement to acquire Nuon Exploration and Production (Nuon E&P) for a cash consideration of €300 million ($421.5 million) from the Vattenfall Group.
The acquisition of Nuon E&P will significantly enhance Tullow's North Sea business adding a portfolio of 25 licenses that include over 30 producing fields, numerous development and exploration opportunities and ownership of key infrastructure. This portfolio will increase the Group's North Sea gas production by 9,000 boepd to approximately 23,000 boepd and add reserves and resources of 28 mmboe.
The Nuon E&P assets are very complementary to the Group's existing Dutch assets and will provide a stronger platform for growth in an area that the Group considers has significant potential. The portfolio includes a number of near term development and exploration opportunities with the potential to sustain and grow production in the short term. The ownership and access to key infrastructure is an excellent strategic fit with Tullow's existing exploration acreage in the area.
The Nuon E&P transaction has an effective date of January 1, 2011 and is expected to complete by July 2011.
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Tuesday, May 24, 2011
Tullow Oil plc
Tullow has entered into an agreement to acquire Nuon Exploration and Production (Nuon E&P) for a cash consideration of €300 million ($421.5 million) from the Vattenfall Group.
The acquisition of Nuon E&P will significantly enhance Tullow's North Sea business adding a portfolio of 25 licenses that include over 30 producing fields, numerous development and exploration opportunities and ownership of key infrastructure. This portfolio will increase the Group's North Sea gas production by 9,000 boepd to approximately 23,000 boepd and add reserves and resources of 28 mmboe.
The Nuon E&P assets are very complementary to the Group's existing Dutch assets and will provide a stronger platform for growth in an area that the Group considers has significant potential. The portfolio includes a number of near term development and exploration opportunities with the potential to sustain and grow production in the short term. The ownership and access to key infrastructure is an excellent strategic fit with Tullow's existing exploration acreage in the area.
The Nuon E&P transaction has an effective date of January 1, 2011 and is expected to complete by July 2011.
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TGS Commences Seismic Survey in Barents Sea
- TGS Commences Seismic Survey in Barents Sea
Tuesday, May 24, 2011
TGS-NOPEC Geophysical Co. ASA
TGS commences the acquisition of multi-client 3D seismic data in the Hoop Fault Complex area of the Barents Sea. This survey is an extension of the previously announced Hoop Fault Complex survey and will add 1,800 km2 to the existing data in the area.
Approximately 500 km2 of the survey are infill in the Northern area of the 2009 survey and the remaining 1,300 km2 are an extension to the east of the 2009 survey area. TGS is very pleased with the historical client response to the coverage in this new exploration province. Blocks have been awarded in the survey area during the last two rounds and with the 2011 acquisition, TGS will be able to provide extended coverage for future rounds.
The M/V Polar Duke towing 10 x 6,000 m streamers with 75 m separation will acquire the 2011 survey. Data processing will be performed by TGS and will be available to clients in Q4 2011. The survey is supported by industry funding.
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Tuesday, May 24, 2011
TGS-NOPEC Geophysical Co. ASA
TGS commences the acquisition of multi-client 3D seismic data in the Hoop Fault Complex area of the Barents Sea. This survey is an extension of the previously announced Hoop Fault Complex survey and will add 1,800 km2 to the existing data in the area.
Approximately 500 km2 of the survey are infill in the Northern area of the 2009 survey and the remaining 1,300 km2 are an extension to the east of the 2009 survey area. TGS is very pleased with the historical client response to the coverage in this new exploration province. Blocks have been awarded in the survey area during the last two rounds and with the 2011 acquisition, TGS will be able to provide extended coverage for future rounds.
The M/V Polar Duke towing 10 x 6,000 m streamers with 75 m separation will acquire the 2011 survey. Data processing will be performed by TGS and will be available to clients in Q4 2011. The survey is supported by industry funding.
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Global Energy Plans Seismic Acquisition at Bocachico Area
- Global Energy Plans Seismic Acquisition at Bocachico Area
Tuesday, May 24, 2011
Global Energy Development plc
Global Energy Development announced that, in addition to the previously announced seismic plan for its Bolivar Association Contract area, it is now also planning the acquisition of 200 square kilometers of new 3D seismic over the Company's Bocachico Association Contract area.
As with the seismic plan for its Bolivar Contract area, the Company has engaged Third Coast Enterprises, Inc. to aid in the design of an approximately 200 square kilometer 3D survey. The reservoirs of the Torcaz field in this block are in a stratigraphically complex group of formations. A high resolution 3D survey is key to delineating the extent of individual reservoirs, thus ensuring proper well placement. The current model for the field indicates that higher gravity crude exists on the flanks of the field, and the 3D survey will ensure proper mapping of these reservoirs where the Company has little data currently. The 3D survey will also delineate areas of improved reservoir continuity which will aid in the design and implementation of the overall field development plan including future secondary recovery projects.
The Company is still in the design phase of its 3D seismic survey for its Bolivar Contract area and, with the addition of the 3D seismic plans for its Bocachico Contract area, expects to complete the design phase during the second quarter 2011.
Steve Voss, the Company's Managing Director, indicated "By moving forward with these new 3D programs in both Bolivar's and Bocachio's reserve rich contract areas, we can gain much higher resolution data to identify fracture intersections in the various productive reservoirs of Bolivar and characterize areas of improved sand quality in the main Mugrossa-Bocachico reservoir. Achieving these objectives will ensure proper placement of lateral wellbores in the Bolivar fractured reservoirs and high grade the early development drilling locations in the Torcaz/Bocachico field."
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Tuesday, May 24, 2011
Global Energy Development plc
Global Energy Development announced that, in addition to the previously announced seismic plan for its Bolivar Association Contract area, it is now also planning the acquisition of 200 square kilometers of new 3D seismic over the Company's Bocachico Association Contract area.
As with the seismic plan for its Bolivar Contract area, the Company has engaged Third Coast Enterprises, Inc. to aid in the design of an approximately 200 square kilometer 3D survey. The reservoirs of the Torcaz field in this block are in a stratigraphically complex group of formations. A high resolution 3D survey is key to delineating the extent of individual reservoirs, thus ensuring proper well placement. The current model for the field indicates that higher gravity crude exists on the flanks of the field, and the 3D survey will ensure proper mapping of these reservoirs where the Company has little data currently. The 3D survey will also delineate areas of improved reservoir continuity which will aid in the design and implementation of the overall field development plan including future secondary recovery projects.
The Company is still in the design phase of its 3D seismic survey for its Bolivar Contract area and, with the addition of the 3D seismic plans for its Bocachico Contract area, expects to complete the design phase during the second quarter 2011.
Steve Voss, the Company's Managing Director, indicated "By moving forward with these new 3D programs in both Bolivar's and Bocachio's reserve rich contract areas, we can gain much higher resolution data to identify fracture intersections in the various productive reservoirs of Bolivar and characterize areas of improved sand quality in the main Mugrossa-Bocachico reservoir. Achieving these objectives will ensure proper placement of lateral wellbores in the Bolivar fractured reservoirs and high grade the early development drilling locations in the Torcaz/Bocachico field."
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Solo Oil to Take Stake in Ausable Field
- Solo Oil to Take Stake in Ausable Field
Tuesday, May 24, 2011
Solo Oil plc
Solo Oil has entered into a binding Heads of Agreement with Reef to earn a 38.1% direct working interest in the Ausable Field and surrounding properties in South Western Ontario.
Highlights:
Neil Ritson, Solo Executive Director, commented, "The initial facilities upgrade and drilling of Ausable #5 has provided proof of concept at Ausable in the last 6 months and Solo now has sufficient confidence to convert its existing loan to a direct participation in the Reef properties and to commit to co-invest with Reef in the further development of the field and the surrounding opportunities. This is an important watershed in the project and we look forward to reporting on it further as the year progresses."
Terms of the Working Interest Acquisition
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Tuesday, May 24, 2011
Solo Oil plc
Solo Oil has entered into a binding Heads of Agreement with Reef to earn a 38.1% direct working interest in the Ausable Field and surrounding properties in South Western Ontario.
Highlights:
- Production testing will soon commence on Ausable #5
- Ausable #5 contains 72 meters of net hydrocarbon bearing pay
- Further wells are planned along with expansion of the production facility during 2011
- To gain a 38.1% working interest Solo will:
- Convert its existing Participating Loan of CDN $1.65 million into a direct working interest in the Properties, and
- Invest up to an additional CDN $2.35 million in the Properties
Neil Ritson, Solo Executive Director, commented, "The initial facilities upgrade and drilling of Ausable #5 has provided proof of concept at Ausable in the last 6 months and Solo now has sufficient confidence to convert its existing loan to a direct participation in the Reef properties and to commit to co-invest with Reef in the further development of the field and the surrounding opportunities. This is an important watershed in the project and we look forward to reporting on it further as the year progresses."
Terms of the Working Interest Acquisition
- Solo will convert its existing Participating Loan to a direct working interest in the Properties at a rate of 1% interest per CDN $105,000.
- Solo will advance a further CDN $200,000 following execution of the Heads of Agreement on the same terms.
- These additional funds will be used for the testing and completion of the Ausable #5 well, the tie-in of the South Airport gas well to the Ausable Field production facilities and the return to production of the Ausable #2 well.
- Solo and Reef will, within 30 days, agree and sign a First General Conveyance Agreement totaling 23.8% direct working interest in the Properties. On signature of this agreement Solo will advance a further CDN $650,000 to the project.
- Upon execution of the conversion of the Participating Loan as envisaged in the Heads of Agreement, Solo has additionally agreed to pay CDN $2.5 million to purchase an additional 14.3% direct working interest in the Properties.
- This additional payment will be released against agreed work programs and budgets following execution of a Second General Conveyance Agreement and Joint Operating Agreement, and when Reef raises equivalent equity funding of CDN $1.5 million.
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Bahamas Petroleum, Fugro Sign Contract for Seabed Survey
- Bahamas Petroleum, Fugro Sign Contract for Seabed Survey
Tuesday, May 24, 2011
Bahamas Petroleum Co. plc
Bahamas Petroleum has signed a contract with Fugro N.V. ("Fugro") to undertake a high resolution seabed survey on the Company's license area. The survey will begin in early June; will take approximately six weeks to complete; and will also be used for the 3D seismic survey being undertaken by CGGVeritas.
Dr. Paul Crevello, CEO of Bahamas Petroleum, said, "We are pleased to have signed this contract with Fugro and look forward to receiving the results of the seabed survey in due course, which will be applied towards the hydrocarbon seep detection and environmental assessment of the area. This is another important step in the Company's exploration program."
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Tuesday, May 24, 2011
Bahamas Petroleum Co. plc
Bahamas Petroleum has signed a contract with Fugro N.V. ("Fugro") to undertake a high resolution seabed survey on the Company's license area. The survey will begin in early June; will take approximately six weeks to complete; and will also be used for the 3D seismic survey being undertaken by CGGVeritas.
Dr. Paul Crevello, CEO of Bahamas Petroleum, said, "We are pleased to have signed this contract with Fugro and look forward to receiving the results of the seabed survey in due course, which will be applied towards the hydrocarbon seep detection and environmental assessment of the area. This is another important step in the Company's exploration program."
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Cairn to Resume Drilling Ops Offshore Greenland
- Cairn to Resume Drilling Ops Offshore Greenland
Tuesday, May 24, 2011
Cairn Energy
Following Cairn's three-well drilling operations in 2010; the Company's exploration campaign is to continue in 2011 with the drilling of up to four further exploration wells. The Government of Greenland has recently approved the location of seven exploration drill sites which allows some flexibility in program planning and possible options for follow up appraisal wells in the event of a discovery.
The main elements of the primary 2011 exploration program are:
The total cost of the drilling campaign is estimated to be in the region of $600MM, in line with previous guidance.
Atammik and Lady Franklin Blocks
Cairn increased its equity and acquired the operatorship of these blocks with effect from 1 January 2011.
The final selection of prospects for the 2011 exploration campaign is the LF-7 prospect in the Lady Franklin block and the AT-7 prospect in the Atammik block. Both prospects contain multiple structural targets in the Tertiary and Cretaceous sections, with expected mean prospective resources of 480 and 350 mmbbls respectively, with the probability of success estimated to range from around 10% to 20% dependent on the individual target horizons. The planned TD of the AT-7 prospect well is 3600m and 4,500 meters for the LF-7 prospect well.
Follow-up prospects are present in both blocks with an estimated combined gross mean in-place resource of more than eight billion barrels or 14 Tcf.
Napariaq
This block was awarded to Cairn in the Baffin Bay Bid round the results of which were announced by the Government of Greenland in December 2010.
The exploration well in this block will target the Delta prospect, which is a large structural culmination in the Cretaceous section where the overlying Tertiary volcanics are prognosed to be thin or possibly even absent. The Delta Prospect has an expected mean prospective resource of 530 mmbbls and probability of success estimated at around 10%. The potential for stacked pay could add further volumes to these estimates. The well is scheduled to be drilled to a depth of 4,750 meters and targets the potential reservoirs of Cretaceous age not reached in the Alpha-S1 well drilled in 2010. The Alpha-S1 well encountered oil shows in the thick (>1 km) Tertiary volcanic section. Geochemical analysis of the oil samples confirm three types of oil one of which comes from a pre-Tertiary source rock which is presumed Cretaceous in age as it has similarities with known Cretaceous oil seeps seen onshore in the Disko area. The Delta well is important for understanding the potential of a regional Cretaceous play in the offshore Disko area.
Eqqua
The Eqqua block lies to the south of the Sigguk block where the 2010 activities were focused and it was acquired by Cairn in the Disko West license round in late 2007.
The Gamma prospect in the Eqqua block is a combination structural-stratigraphic trap in an interpreted Tertiary basin floor fan at 2,500 meters overlying a deeper Mesozoic structural culmination at around 4,500 meters. The fan targets potentially thicker reservoir sands 100 km from the T-8 well but at the same stratigraphic level as the gas seen in thin sands in the T-8 well drilled in 2010. The Tertiary Gamma Prospect has a mean prospective resources of 1,840 mmbbls or 7 Tcf and probability of success of around 10%. The planned Gamma well is not designed to drill to the deeper Mesozoic target this year as this prospect will require proof of offshore Cretaceous reservoirs from the Napariaq Delta prospect well.
Pitu and Southern Greenland blocks
The Pitu block was acquired in the December 2010 Baffin Bay Bid round, the southern Greenland blocks were acquired in 2008.
Two 1,500km2 3D seismic surveys are planned to be acquired in each of these areas over structural complexes where leads and prospects with material potential have been identified.
The location of a third and contingent 3D seismic survey is yet to be decided and is dependent on operational results.
Mike Watts, Deputy Chief Executive, Cairn Energy, said, "The Group's strong financial position and entrepreneurial exploration focus has allowed it to build a strategic and leading early entry position in the frontier offshore basins of Greenland, which Cairn believes has the necessary geological ingredients for exploration success."
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Tuesday, May 24, 2011
Cairn Energy
Following Cairn's three-well drilling operations in 2010; the Company's exploration campaign is to continue in 2011 with the drilling of up to four further exploration wells. The Government of Greenland has recently approved the location of seven exploration drill sites which allows some flexibility in program planning and possible options for follow up appraisal wells in the event of a discovery.
The main elements of the primary 2011 exploration program are:
- The drilling of up to four exploration wells, with one in each of the Atammik and Lady Franklin blocks offshore to the west of the capital Nuuk, and one in each of the Napariaq and Eqqua blocks in the southern Baffin Bay west Disko area;
- The acquisition of up to three 3D seismic surveys (combined total ~ 4,500km2), one in the north of Baffin Bay, one in the south of Greenland and one contingent location to be decided dependent on operational results.
- The four well campaign will test prospects with different structural styles and play types and is targeting a gross unrisked mean prospective resource potential of 3.2 billion barrels of oil equivalent at target subsurface depths between 2,500 and 4,750 meters.
- In each case the principal target is oil but evidence of both oil and gas generation is found regionally. In view of the frontier nature of the exploration and paucity of offset well information the individual prospects are estimated to have chances of success ranging from around 10% to 20%. The wells will be drilled in water depths ranging between 288 meters and 1,530 meters.
The total cost of the drilling campaign is estimated to be in the region of $600MM, in line with previous guidance.
Atammik and Lady Franklin Blocks
Cairn increased its equity and acquired the operatorship of these blocks with effect from 1 January 2011.
The final selection of prospects for the 2011 exploration campaign is the LF-7 prospect in the Lady Franklin block and the AT-7 prospect in the Atammik block. Both prospects contain multiple structural targets in the Tertiary and Cretaceous sections, with expected mean prospective resources of 480 and 350 mmbbls respectively, with the probability of success estimated to range from around 10% to 20% dependent on the individual target horizons. The planned TD of the AT-7 prospect well is 3600m and 4,500 meters for the LF-7 prospect well.
Follow-up prospects are present in both blocks with an estimated combined gross mean in-place resource of more than eight billion barrels or 14 Tcf.
Napariaq
This block was awarded to Cairn in the Baffin Bay Bid round the results of which were announced by the Government of Greenland in December 2010.
The exploration well in this block will target the Delta prospect, which is a large structural culmination in the Cretaceous section where the overlying Tertiary volcanics are prognosed to be thin or possibly even absent. The Delta Prospect has an expected mean prospective resource of 530 mmbbls and probability of success estimated at around 10%. The potential for stacked pay could add further volumes to these estimates. The well is scheduled to be drilled to a depth of 4,750 meters and targets the potential reservoirs of Cretaceous age not reached in the Alpha-S1 well drilled in 2010. The Alpha-S1 well encountered oil shows in the thick (>1 km) Tertiary volcanic section. Geochemical analysis of the oil samples confirm three types of oil one of which comes from a pre-Tertiary source rock which is presumed Cretaceous in age as it has similarities with known Cretaceous oil seeps seen onshore in the Disko area. The Delta well is important for understanding the potential of a regional Cretaceous play in the offshore Disko area.
Eqqua
The Eqqua block lies to the south of the Sigguk block where the 2010 activities were focused and it was acquired by Cairn in the Disko West license round in late 2007.
The Gamma prospect in the Eqqua block is a combination structural-stratigraphic trap in an interpreted Tertiary basin floor fan at 2,500 meters overlying a deeper Mesozoic structural culmination at around 4,500 meters. The fan targets potentially thicker reservoir sands 100 km from the T-8 well but at the same stratigraphic level as the gas seen in thin sands in the T-8 well drilled in 2010. The Tertiary Gamma Prospect has a mean prospective resources of 1,840 mmbbls or 7 Tcf and probability of success of around 10%. The planned Gamma well is not designed to drill to the deeper Mesozoic target this year as this prospect will require proof of offshore Cretaceous reservoirs from the Napariaq Delta prospect well.
Pitu and Southern Greenland blocks
The Pitu block was acquired in the December 2010 Baffin Bay Bid round, the southern Greenland blocks were acquired in 2008.
Two 1,500km2 3D seismic surveys are planned to be acquired in each of these areas over structural complexes where leads and prospects with material potential have been identified.
The location of a third and contingent 3D seismic survey is yet to be decided and is dependent on operational results.
Mike Watts, Deputy Chief Executive, Cairn Energy, said, "The Group's strong financial position and entrepreneurial exploration focus has allowed it to build a strategic and leading early entry position in the frontier offshore basins of Greenland, which Cairn believes has the necessary geological ingredients for exploration success."
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Tullow Strengthens North Sea Portfolio with Nuon E&P Acquisition
- Tullow Strengthens North Sea Portfolio with Nuon E&P Acquisition
Tuesday, May 24, 2011
Tullow Oil plc
Tullow has entered into an agreement to acquire Nuon Exploration and Production (Nuon E&P) for a cash consideration of €300 million ($421.5 million) from the Vattenfall Group.
The acquisition of Nuon E&P will significantly enhance Tullow's North Sea business adding a portfolio of 25 licenses that include over 30 producing fields, numerous development and exploration opportunities and ownership of key infrastructure. This portfolio will increase the Group's North Sea gas production by 9,000 boepd to approximately 23,000 boepd and add reserves and resources of 28 mmboe.
The Nuon E&P assets are very complementary to the Group's existing Dutch assets and will provide a stronger platform for growth in an area that the Group considers has significant potential. The portfolio includes a number of near term development and exploration opportunities with the potential to sustain and grow production in the short term. The ownership and access to key infrastructure is an excellent strategic fit with Tullow's existing exploration acreage in the area.
The Nuon E&P transaction has an effective date of 1 January 2011 and is expected to complete by July 2011.
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Tuesday, May 24, 2011
Tullow Oil plc
Tullow has entered into an agreement to acquire Nuon Exploration and Production (Nuon E&P) for a cash consideration of €300 million ($421.5 million) from the Vattenfall Group.
The acquisition of Nuon E&P will significantly enhance Tullow's North Sea business adding a portfolio of 25 licenses that include over 30 producing fields, numerous development and exploration opportunities and ownership of key infrastructure. This portfolio will increase the Group's North Sea gas production by 9,000 boepd to approximately 23,000 boepd and add reserves and resources of 28 mmboe.
The Nuon E&P assets are very complementary to the Group's existing Dutch assets and will provide a stronger platform for growth in an area that the Group considers has significant potential. The portfolio includes a number of near term development and exploration opportunities with the potential to sustain and grow production in the short term. The ownership and access to key infrastructure is an excellent strategic fit with Tullow's existing exploration acreage in the area.
The Nuon E&P transaction has an effective date of 1 January 2011 and is expected to complete by July 2011.
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Statoil Farms-In Blocks Offshore Indonesia
- Statoil Farms-In Blocks Offshore Indonesia
Tuesday, May 24, 2011
Statoil
Statoil has farmed in to three offshore exploration licenses in Indonesia, significantly expanding the presence in the country.
Statoil will acquire a 40% equity interest in a North Makassar Strait Production Sharing Contract (PSC) and a similar interest in two additional offshore PSCs (West Papua IV and Halmahera-Kofiau).
The three production sharing contracts (PSC) will be operated by Niko Resources Ltd.
Given exploration success, Statoil has the option to become the operator in the development and production phases.
"This is an early access opportunity that adds significant additional acreage to our portfolio," said Pål Haremo, senior vice president for Exploration.
"Our focus is to support Statoil's exploration strategy, by adding materiality to our existing portfolio in Indonesia and increasing Statoil's acreage position in general," he added.
The agreement signed includes one exploration well commitment for the North Makassar Strait PSC.
The agreement is effective from 1 January 2011, and is subject to governmental approval in Indonesia.
Statoil is already an operator in the Karama offshore PSC in Indonesia and partner in the neighboring Kuma PSC in the Makassar Straits.
Exploration drilling is planned for both these licenses in 2011.
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Tuesday, May 24, 2011
Statoil
Statoil has farmed in to three offshore exploration licenses in Indonesia, significantly expanding the presence in the country.
Statoil will acquire a 40% equity interest in a North Makassar Strait Production Sharing Contract (PSC) and a similar interest in two additional offshore PSCs (West Papua IV and Halmahera-Kofiau).
The three production sharing contracts (PSC) will be operated by Niko Resources Ltd.
Given exploration success, Statoil has the option to become the operator in the development and production phases.
"This is an early access opportunity that adds significant additional acreage to our portfolio," said Pål Haremo, senior vice president for Exploration.
"Our focus is to support Statoil's exploration strategy, by adding materiality to our existing portfolio in Indonesia and increasing Statoil's acreage position in general," he added.
The agreement signed includes one exploration well commitment for the North Makassar Strait PSC.
The agreement is effective from 1 January 2011, and is subject to governmental approval in Indonesia.
Statoil is already an operator in the Karama offshore PSC in Indonesia and partner in the neighboring Kuma PSC in the Makassar Straits.
Exploration drilling is planned for both these licenses in 2011.
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Chevron Spins Bit in GOM
- Chevron Spins Bit in GOM
Tuesday, May 24, 2011
Maersk Oil
Maersk Oil is participating in a new deepwater well in the U.S. Gulf of Mexico after operator Chevron received a drilling permit from the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).
The permit marks the restart of the drilling campaigns Maersk Oil has been a part of in the U.S. Gulf of Mexico after deepwater activities were suspended last year as a consequence of the Deepwater Horizon accident.
"We are very pleased that this permit has been issued as it will allow us to move forward with appraisal activities on the exciting Buckskin prospect," said Bruce Laws, President at Maersk Oil in the U.S.
"The U.S. Gulf of Mexico remains a world class region for exploration and production and we look forward to continuing our work there with our partners."
The Buckskin appraisal well is located in the Keathley Canyon in Block 785, offshore Louisiana, at water depth of 6,540 feet. It is being drilled 8 kilometers from the discovery well that encountered oil in 2008 with drillship Discoverer Deep Seas.
Drilling began on May 16, 2011 and the planned total depth is 29,400 feet. Drilling will last some 136 days.
Chevron is operator of Buckskin, holding a 55% interest with Maersk Oil (20%), Repsol (12.5%) and Samson (12.5%) as co-owners.
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Tuesday, May 24, 2011
Maersk Oil
Maersk Oil is participating in a new deepwater well in the U.S. Gulf of Mexico after operator Chevron received a drilling permit from the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE).
The permit marks the restart of the drilling campaigns Maersk Oil has been a part of in the U.S. Gulf of Mexico after deepwater activities were suspended last year as a consequence of the Deepwater Horizon accident.
"We are very pleased that this permit has been issued as it will allow us to move forward with appraisal activities on the exciting Buckskin prospect," said Bruce Laws, President at Maersk Oil in the U.S.
"The U.S. Gulf of Mexico remains a world class region for exploration and production and we look forward to continuing our work there with our partners."
The Buckskin appraisal well is located in the Keathley Canyon in Block 785, offshore Louisiana, at water depth of 6,540 feet. It is being drilled 8 kilometers from the discovery well that encountered oil in 2008 with drillship Discoverer Deep Seas.
Drilling began on May 16, 2011 and the planned total depth is 29,400 feet. Drilling will last some 136 days.
Chevron is operator of Buckskin, holding a 55% interest with Maersk Oil (20%), Repsol (12.5%) and Samson (12.5%) as co-owners.
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