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Oil and Gas Energy News Update

Wednesday, May 25, 2011

Commodity Corner: Oil Settles Above $101

- Commodity Corner: Oil Settles Above $101

Wednesday, May 25, 2011
Rigzone Staff
by Matthew V. Veazey

July crude oil gained $1.73 Wednesday to settle at $101.32.

The midweek rally occurred as the U.S. Energy Information Administration reported an unexpected increase in oil stocks and evidence that refiners are processing greater volumes of crude. In the former case, EIA announced that crude oil inventories have risen 600,000 barrels since last week to a total of 370.9 million barrels. Analysts polled by Platts had expected a 1.6 million-barrel decline in oil stocks.

EIA figures also showed a 1.4-percent week-on-week drop in total distillate stocks, with a May 20, 2011, figure of 141.1 million barrels. During the same period last year, distillate stocks stood at 152.5 million barrels. Last week's distillate stocks decline, coupled with a 502,000-barrel-per-day increase in refinery inputs (to 14.841 million b/d) week-on-week, indicate stronger demand for crude.

July crude oil traded within a range from $98.20 to $101.54 Wednesday.

Natural gas for June delivery gained three cents to $4.38 per thousand cubic feet as the eastern half of the U.S. faces more summer-like conditions. The June contract price fluctuated from $4.32 to $4.385 during the session.

Front-month gasoline also gained three cents to end the day at $3.02 a gallon. June gasoline peaked at $3.02 and bottomed out at $2.94.

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WGP Completes Seismic Survey at Valhall Field

- WGP Completes Seismic Survey at Valhall Field

Wednesday, May 25, 2011
WGP Exploration Ltd.

WGP announced the successful completion of the thirteenth Life of Field Seismic (LoFS) survey over the Valhall field in the North Sea.

BP Norge AS, and operating partner Hess Norge AS, have contracted WGP to provide the precisely positioned source sub-arrays necessary to maintain the high level of repeatability required for an effective Permanent Reservoir Monitoring (PRM) project. With the trenching of 120km of Ocean Bottom Cable (OBC), Valhall LoFS began in 2003 with an average of 2 surveys performed per year.

WGP installed Thalassa Energy Services' containerized seismic source system onto the PSV Stril Myster during a 6 day mobilization period in Stavanger. Thalassa's source system is the same design as used on all of the LoFS surveys since the project's inception and thus affords the required level of source repeatability.

James Pryor, WGP's Business Development Manager, commented, "As proven in past Valhall LoFS surveys and other PRM projects for which WGP have used a Portable Modular Source System (PMSS™), this technology affords rapid conversion of an available PSV, familiar with the particular oilfield's operations, into a working seismic source vessel. Combining WGP's comprehensive operational
experience with Thalassa's industry leading source systems makes both good sense and presents great value for our clients."

The Valhall LoFS 14 survey is planned for Q3 2011.

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Rockbridge Buys Acreage in Pembina

- Rockbridge Buys Acreage in Pembina

Wednesday, May 25, 2011
Rockbridge Resources Inc.

RockBridge announced that in addition to a deal struck with EnCana Corporation in the first quarter of this year to acquire rights to the NW quarter of section 28-48-3W5, the Company has now also acquired the NE quarter of section 28-48-3W5 at a crown land sale. The net working interest for RockBridge in the entirety of section 28-48-3W5 will now be 37.5%. The Company is also pursuing additional acquisitions and land swaps in its two core Pembina Cardium properties to rationalize and maximize future drilling locations and reserves capture. For example the above acquisition has added two horizontal drilling locations to the company's inventor increasing it from 20 to 22. The Company has been approached by nearby parties to farm-in on our acreage; however, to date no transaction has been consummated.

RockBridge President and CEO, Richard J. Wolfli, stated, "We are consolidating and rationalizing our southern Pembina Cardium lands to maximize the exploitation schemes and the total reserves we can exploit and prove on the acreage. This is important in crystallizing value for the resource in future drilling or farm-out opportunities."

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Terra Resources Contracts Baker Hughes for Development of Russian Fields

- Terra Resources Contracts Baker Hughes for Development of Russian Fields

Wednesday, May 25, 2011
Terra Resources plc

Terra Resources has engaged Baker Hughes to manage the development of its oil and gas assets in Russia.

Terra Resources and Baker Hughes have entered into a Master Services and Sales Agreement on April 21, 2011 and subsequently approved a work program for the next 4 to 6 months. The objective of the initial work program is to analyze all available data, produce reservoir studies, production forecasts and field development optimization models, develop performance and dynamic modeling, re-entry design, (casing inspection, and additional data acquisition program including but not limited to logging, sampling, and PVT analysis). Additionally, Baker Hughes plans to perform geomechanical modeling for surface completion design and production optimization, workover design (analysis of potential stimulation, re-perforation and side tracking), final subsurface completion design, and surface gathering system design and optimization.

"We are excited about working with Baker Hughes, as we begin to develop our oil and gas assets," stated Dmitriy Salop, Terra Resources' President. "Baker Hughes has performed a comprehensive data review, which enables it to construct a geological model, and move forward rapidly," explains, Mr. Salop. Baker Hughes and Terra Resources expect to start the field execution phase by or before November 2011.

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MODEC, Mitsui, Mitsubishi to Charter FPSO for Guara Field

- MODEC, Mitsui, Mitsubishi to Charter FPSO for Guara Field

Wednesday, May 25, 2011
Mitsubishi Corp.

MODEC, Mitsui and Mitsubishi have agreed to invest in building and chartering a floating production, storage, and offloading system (FPSO) to GUARA B.V, a Dutch company belonging to BM-S-9 consortium members. The FPSO will be delivered offshore Brazil and used to develop the giant pre-salt region of the Santos Basin, in the BM-S-9 block (Guara Area) under concession to the consortium comprised of the following three companies: Petróleo Brasileiro S.A – Petrobras (45%), BG E&P Brasil Ltda – BG (30%), and Repsol Sinopec Brasil S.A – Repsol Sinopec (25%).

Mitsui and Mitsubishi shall soon finalize their capital investment in Dutch company Guara MV23 B.V. (MV23), a subsidiary established by MODEC. MODEC is currently converting the VLCC (very large crude oil carrier) Radiant Jewel into an FPSO under the ownership of MV23. Upon completion of the conversion, the system shall be named the FPSO Cidade de Sao Paulo MV23 and be deployed to the BM-S-9 (Guara) Block off the Brazilian coast, where vast oil reserves lay beneath a layer of rock and salt at a depth of 5,000 meters.

The topsides modules will be lifted and integrated on the FPSO in Brazil. The FPSO is scheduled for delivery during the 4th quarter of 2012, and is expected to be engaged in oil production for 20 years. MODEC is responsible for the engineering, procurement, construction, mobilization, and operation of the FPSO, including topsides processing equipment as well as hull and marine systems.

This is the second FPSO chartering project for the pre-salt area oil field, following the one announced in March 2010 also by us. MV23’s Brazilian local partner as joint venture partner in the tender, Schahin Group, is considering the participation as a shareholder of MV23 for a certain share. Schahin Group will also take some roles in the operation of the FPSO.

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BOEMRE Appoints New Regional Director for Alaska

- BOEMRE Appoints New Regional Director for Alaska

Wednesday, May 25, 2011

Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich named Dr. James Kendall as the Director of the Alaska Outer Continental Shelf (OCS) Region. Dr. Kendall has been serving as the Acting Director for the region since January 1, 2011.

"Jim is absolutely the right person for the job. We have very difficult decisions to make regarding energy development offshore Alaska, and the American public must have complete confidence that those decisions will be informed by the best scientific information available," said Director Bromwich. "Jim embodies the principles of scientific integrity. He is committed to openness and transparency, and he is a dedicated public servant. The feedback I have received regarding Jim's tenure over the last few months as Acting Regional Director from environmental organizations, industry groups, and other stakeholders has been uniformly positive – they have praised Jim's openness, his accessibility, and his willingness to listen to all points of view. This praise has been universal, including from stakeholders who have been critical of our office in the past. I am very pleased to have him at the helm of the Alaska Regional office."

Dr. Kendall most recently served as the Chief of BOEMRE's Environmental Division, where he was responsible for overseeing the Bureau's $30 million applied environmental and socioeconomic research program, its responsibilities under the National Environmental Policy Act, its environmental compliance responsibilities and the Coastal Impact Assistance Program. Prior to joining the BOEMRE Headquarters Office in 2000, Dr. Kendall served as the Chief of the Environmental Sciences Section of BOEMRE's Gulf of Mexico Region.

"Working with the Regional BOEMRE team these past few months has been an honor. They are true professionals, committed to environmental protection, responsible energy development and our nation," Dr. Kendall said. "The Alaska OCS is both an environmental treasure and a vital, strategic national resource and I am committed to ensuring safe and environmentally sound stewardship of its resources."

BOEMRE's Alaska Region oversees the exploration and development of oil and gas resources in federal waters offshore Alaska. This includes assessments of the oil and gas resources, preparation of environmental analysis and research, coordination with local, state, tribal and federal governments, and others interested in the OCS program.

Dr. Kendall will eventually transition to become the head of the Alaska region for the Bureau of Ocean Energy Management, one of the new agencies that will replace the former Minerals Management Service on Oct. 1, 2011.

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Wartsila Awarded Design, Equipment Contract for Vestland PSV

- Wartsila Awarded Design, Equipment Contract for Vestland PSV

Wednesday, May 25, 2011
Wartsila Corp.

Wärtsilä has been awarded the contract to supply the design and equipment for a new Platform Supply Vessel (PSV) for offshore operations. The order has been placed by Hellesøy Verft AS, the Norwegian shipyard that will build the vessel, which is to be owned and operated by Norwegian ship owner, Vestland Offshore. The vessel is scheduled to be delivered towards the end of 2012.

In response to the customer's demand for a modern, high quality, and fuel efficient PSV, Wärtsilä Ship Design has developed a highly energy and environmentally efficient vessel solution. Based on the well-proven VS 485 design, the new vessel has an optimized hull design for greater efficiency, with corresponding reduced emission to air. The Vessel will be fitted with Wärtsilä medium speed engines and Wärtsilä NOx Reducer.

In addition to the design package, Wärtsilä's scope of supply includes four Wärtsilä 9L20 diesel generator sets, the electric propulsion system, the power management system, and an integrated automation system.

"Vestland Offshore is building a fleet of vessels that emphasize energy efficiency, safety, reliability, and environmental sustainability. These are all major focus areas for today's oil industry, and Wärtsilä's designs are at the forefront of achieving these aims," said Tor Østervold, Chairman of the Board of Vestland Offshore.

The VS 485 Mk III fulfils the highest possible Environmental Rating Number (ERN), which represents the vessel's capability for maintaining its position and normal operations under certain weather conditions. The new Wärtsilä PSV design includes a unique power and propulsion system based on the company's patented Low Loss Concept. This provides both additional safety and extra reliability for continuous operation, in various failure modes.

"Over the years, Wärtsilä has gained considerable experience in the development of energy efficient vessels. In particular, the optimization of hull lines has been a major focus area of this development work. By combining this know-how with our overall expertise and experience, new design optimization tools, and state-of-the-art power and propulsion solutions, we have been able to produce a highly efficient portfolio of Offshore Service Vessel designs," said Johannes Eldøy, Director, Project Development for Wärtsilä Ship Design.

Wärtsilä has had a long and successful relationship with the Hellesøy Verft yard, and this will be the seventh VS 485 vessel that they have built. However, this is the first ship of the new Mk III design that they have ordered. The new ship will be one of the most cost and fuel-efficient supply vessels ever to be launched. It is designed to be suitable for world-wide operations.

The vessel is 85.6 meters long, has a breadth of 20 meters, a cargo deck area of approximately 1000 square meters, and has a dead weight at 7 m of 5,000 tonnes.

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Paradigm Signs Agreement for Seismic-to-Stimulation Workflow

- Paradigm Signs Agreement for Seismic-to-Stimulation Workflow

Wednesday, May 25, 2011

Paradigm announced the signing of a multi-year software license agreement with JKX O&G for a seismic-to-simulation workflow to be deployed as the company's standard toolkit. The announcement was made at the 2011 European Association of Geoscientists and Engineers (EAGE) Annual Conference and Exhibition, during the Paradigm 2011 Industry Briefing. The contract will provide JKX with access to Paradigm™ SeisEarth® for seismic interpretation, Paradigm™ SKUA® for reservoir modeling and Paradigm™ Geolog® for formation evaluation and petrophysics.

"For several years JKX has successfully used Paradigm SeisEarth for our exploration 2D and 3D based seismic interpretation. After a thorough review process JKX selected additional Paradigm petrophysical and model building software. We believe it offers the most technologically advanced and time efficient platform on which to develop our reservoir models," said Ritchie Wayland, exploration manager at JKX.

Historically, seismic interpretation, well data analysis and the creation of the reservoir model have been largely serial and disconnected processes. Today, Paradigm workflows significantly reduce project timelines while delivering far greater accuracy through connected and iterative processes that incorporate all available data.

The combination of a leading seismic interpretation environment with new and innovative geomodeling technologies enables seismic-to-simulation workflows that are not possible on any other platform. These include the validation of interpretation with true 3D paleo-flattening, prospect qualification with spill-point uncertainty analysis, the generation of high-resolution velocity models, and the construction of geologically-correct reservoir models.

"I am delighted that JKX has selected Paradigm's advanced integrated interpretation, modeling and geophysical tools to enable the extraction of optimum reservoir understanding from their field and reservoir data," said Richard Jefferies, Paradigm's regional vice-president. "We look forward to supporting JKX's exploration and development objectives of fully-informed drilling decisions and reduced reservoir risk across the region."

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AGR Creates New Advisory Services Dept.

- AGR Creates New Advisory Services Dept.

Wednesday, May 25, 2011

AGR Field Operations has established a new Advisory Services department. AGR Field Operations has previously provided early life asset and project services as part of the standard offering under different product lines.

The establishment of the Advisory Services department strengthens the company's focus on pre-operational and early life asset integrity support. The move will consolidate and provide a focal point for the delivery of these services to Oil and Gas companies, asset owners, fabricators, EPC and project management companies. The new department will have its Centre of excellence in Norway and will expand to all AGR hubs worldwide with immediate effect.

Åge Landro, EVP AGR Field operations commented, "The launch of our Advisory Services department complements our unique position in the industry. We have gained this position due to our experience and involvement across the entire lifecycle of oil and gas assets. We participate through all stages, from concept and engineering to O&M and decommissioning. Advisory Services will focus on the phases starting with planning, through feasibility, concept definition and execution. We wish to help our clients establish the foundations for optimal operational performance at an early stage of the asset lifecycle."

The department will be led by Thomas Aas Sæthre who previously held the position of Section Manager within Maintenance Engineering.

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CSA Adds ROV System to Fleet

- CSA Adds ROV System to Fleet

Wednesday, May 25, 2011
CSA International Inc.

CSA International has acquired a state-of-the-art inspection class remotely operated vehicle (ROV) system to support its offshore environmental and scientific fleet. The ROV has been configured to carry a high-definition (HD) video system, complete with LED lighting, sighting lasers for image sizing and measurements, and a computer-based HD video recording capability. The ROV is now on its first project in the Gulf of Mexico. Due to its compact size, the ROV system is easily shipped to both domestic and foreign locations in a cost-effective manner and is able to work from a variety of vessels.

"The recent refinement of HD video imaging and recording technology makes this ROV a powerful tool in support of our environmental and scientific surveys," stated Kevin Peterson, CEO of CSA. "We've utilized ROV systems for many years in our segment of the industry, but only recently have we been able to pull together all of the components for HD imaging and archiving in a cost-effective and portable package."

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RBG Scores Safety Milestone at Trinidad and Tobago

- RBG Scores Safety Milestone at Trinidad and Tobago

Wednesday, May 25, 2011

RBG has recorded a significant safety achievement by completing more than 2,000,000 man-hours without a lost time incident across the company's Trinidad and Tobago operations.

The achievement marks another major milestone in the company's REACH safety program which, since its launch in December 2009, has played a major role in reducing Lost Time Incident Frequency (LTIF) by 38.5% globally. REACH aims to create a stronger, safer culture throughout RBG and in 2011 the initiative will expand to improve the company's full HSEQ remit.

In 2010, RBG's Trinidad and Tobago team was recognised for its contribution to Neal & Massy Wood Group's (NMWG's) achievement of 5,000,000 man-hours LTI free.

RBG's facilities in Point Lisas and Galeota employ approximately 430 personnel and offer the company's full range of innovative products and services including fabric maintenance, bolt torquing, fabrication and welding, scaffolding and habitat supply to the regional oil, gas and petrochemical industry.

RBG's Trinidad and Tobago country manager, Ricardo Mahadeo said, "I am very proud of our employees and we are delighted to have reached such a significant milestone. Reaching more than 2,000,000 hours without an LTI is testament to the commitment of our team to highlight and eliminate risk from our operation. It is a remarkable accomplishment and we will continue to work hard to maintain the high safety standards we have set.

"REACH has helped us achieve these excellent levels of safety by engraining good safety practice as a normal part of our daily working lives."

RBG's Group HSEQ director, Mike Mann, said, "The commitment demonstrated by our Trinidad and Tobago employees to achieve this goal is a tremendous example of the RBG safety culture we are striving for. This represents the best of our company in terms of leadership, engagement, communications, and commitment to achieving safety excellence."

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Aceton Concludes Acquisition of NCS Survey

- Aceton Concludes Acquisition of NCS Survey

Wednesday, May 25, 2011
Aceton Group Ltd.

Acteon has acquired Aberdeen-based NCS Survey Limited. The acquisition adds to Acteon's capability in the rig-positioning market and provides an additional suite of survey services to clients that operate rigs and vessels.

NCS Survey provides high-precision rig-positioning, construction-support and subsea-visualization services to the global offshore market, including upstream oil and gas and offshore wind. As the market leader in providing surveys through lightweight autonomous underwater vehicle technology, NCS Survey has performed over 600 projects in 35 countries since it was founded in 2005.

The company will retain its existing personnel and management team, headed up by current managing director, Andy Gray.

Gray said, "NCS Survey has enjoyed continued growth thanks to the early adoption and delivery of technologies that deliver tangible benefits for clients. Joining Acteon will enable NCS to accelerate this expansion through the group's international footprint."

Paul Alcock, Acteon executive vice president, said, "The acquisition of NCS Survey continues our strategy of defining and shaping the subsea services industry – allowing us to support our customers with an increased service offering that complements the skills we already have within the group."

NCS Survey joins Acteon's other branded companies, linking subsea services across a broad range of interconnected disciplines.

The transaction, the terms of which are not being disclosed, was completed on May 25, 2011. Acteon enjoys the financial backing of First Reserve Corporation, a leading private equity company in the energy sector. Corporate finance advice to Acteon was provided by KPMG Corporate Finance, Aberdeen, UK. Legal advice was provided by Birketts LLP, Norwich, UK. NCS Survey's vendors were advised by Simmons & Company International and Paull & Williamsons LLP, Aberdeen, UK.

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BOEMRE Deems Heater-Treater Cause of Vermilion Fire

- BOEMRE Deems Heater-Treater Cause of Vermilion Fire

Wednesday, May 25, 2011

The Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) released the findings of its investigation into a fire that occurred Sept. 2, 2010, on Mariner Energy Inc.'s, Vermilion 380 A oil and natural gas production platform located approximately 102 miles off the coast of Louisiana.

A BOEMRE Accident Investigation Panel concluded that the fire was caused by the collapse of a fire tube located inside of the platform's Heater-Treater. The Heater-Treater, a nearly 30-year-old piece of equipment, used heat from a fire tube as well as chemicals and electricity to separate oily water emulsions into oil and water. The fire tube had been weakened over time due to a variety of factors, including heat, corrosion and pitting. Investigators also found that after the platform lost primary power because of the fire, the emergency generator failed to start and supply power to the firewater pump, leaving the 13-member crew without a firewater system to aid them in trying to fight the fire. Ultimately, the crew was forced to evacuate the platform, and all were later transported to safety.

"This report reflects a careful and comprehensive investigation by the BOEMRE Accident Investigation Panel, led by the Investigations and Review Unit," said BOEMRE Director Michael R. Bromwich. "The report underscores the need for offshore operators to maintain their equipment consistent with existing standards, to protect the safety of personnel working onboard and to protect the environment."

The investigation included interviews of the Vermilion 380 A crew, review of documentary and physical evidence, examination of equipment onboard the platform, and consultation with an expert in oil production platforms and Heater-Treaters.

In addition to its investigative findings, the BOEMRE panel recommended several Incidents of Non-Compliance be issued to Mariner Energy, Inc., which may be used as the basis for future civil penalties. BOEMRE will now consider the panel's recommendations before taking further action in this case. Production from the platform remains shut-in until BOEMRE personnel approve all safety and structural corrections.

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Cairn India Reports Record Quarterly Profit

- Cairn India Reports Record Quarterly Profit

Wednesday, May 25, 2011
Cairn India Ltd.

The following commentary is provided in respect of the audited financial results and operational highlights of Cairn India Limited and its subsidiary companies (referred to as Cairn India) during the financial year 2010-11 (FY 2010-11). Please note that FY 2010-11 refers to the period April 2010 - March 2011.
    • Revenue in Q4 FY 2010-11 at R 36,545 million (US $808 million); FY 2010-11 at R 102,779 million (US $2,255 million)
    • Profit after tax (PAT) in Q4 FY 2010-11 at R 24,578 million (US $543 million); FY 2010-11 at R 63,344 million (US $1,390 million)
    • Cash Flow from Operations in Q4 FY 2010-11 at R 26,110 million (US $577 million); FY 2010-11 at R 67,122 million (US $1,473 million)
    • Net Cash of R 29,070 million (US $651 million) as on 31 March, 2011
    • Gross cumulative Rajasthan development capital expenditure at US $2,995 million of which US $703 million was spent during FY 2010-11
    • Average Daily Sales (Working Interest) for Q4 FY 2010-11 at 96,417 barrels of oil equivalent (boe); FY 2010-11 at 81,254 boe
    • Average Daily Gross operated production for Q4 FY 2010-11 at 161,194 boe; FY 2010-11 at 149,103 boe
    • Maintained low cost operations; field direct opex at US $2.3 per barrel (bbl) for FY 2010-11
    • Gross crude oil production in excess of 13 million barrels (mmbbls) from operated assets in Q4FY 2010-11; contributing ~20% of India's current domestic crude production
    • Won the "Golden Peacock Award for Corporate Social Responsibility" for the year 2011
  • Rajasthan
    • Mangala Field
      • Current production at 125,000 barrels of oil per day (bopd); cumulative crude sales in excess of 39 mmbbls to Indian refiners
      • Development drilling progresses as planned; 143 wells drilled to date, 85 completed and 62 producing

Chevron CEO Highlights 2010 Performance, Future Growth

- Chevron CEO Highlights 2010 Performance, Future Growth

Wednesday, May 25, 2011
Chevron Corp.

Chevron highlighted the company's 2010 performance and discussed the company's future growth at the 2011 Annual Meeting of Stockholders.

"A combination of safe, reliable operations and superior execution helped make 2010 an outstanding year both operationally and financially," said John Watson, chairman and CEO. "As we look ahead to the next decade, we remain committed to safety and delivering profitable growth."

Watson discussed Chevron's strong 2010 financial and operational performance, which produced earnings of $19 billion. The company
increased the quarterly dividend by 5.9 percent in 2010, marking 23 consecutive years of annual dividend increases. During this period,
dividends grew at an average annual rate of 7 percent. Chevron announced another quarterly dividend increase in April 2011. Watson said that Chevron led its peers in total stockholder return over the past five years, besting the S&P 500 by more than 14 percentage points. The company maintained its leading position in total stockholder return through the first quarter of 2011.

Watson reinforced Chevron's long-standing commitment to safe, reliable operations. Chevron is an industry leader in safety and in 2010 achieved the best safety performance in the company's history. He also discussed the partnerships Chevron has formed to address health, education and economic development issues in the communities where the company operates. Over the past four years, Chevron's social investments around the world have more than doubled.

George Kirkland, Chevron vice chairman and executive vice president for Global Upstream and Gas, discussed Chevron's world-class queue of projects to meet the world's future energy needs. Chevron plans on investing $26 billion in 2011, with 87 percent of that amount expected to fund upstream activities.

Kirkland noted that since late 2009, Chevron has added 14 million acres to its portfolio, including the acquisition of Atlas Energy in the
northeast United States, and deepwater opportunities in Liberia and China. Kirkland also discussed Chevron's queue of major capital
projects, including Gorgon and Wheatstone in Australia. Over the next three years, 25 projects with a Chevron share of more than $250 million each are scheduled to start production, nine of which have a net Chevron share that exceeds $1 billion. Chevron has four major capital projects planned to start up in 2011. Additionally, over the next three years, the company expects to make final investment decisions on 13 more projects, each with a Chevron share in excess of $1 billion. Construction on the Gorgon project is nearly 25 percent complete, with startup expected in 2014, and Chevron remains on schedule to reach a final investment decision this year on the Wheatstone project, with startup planned for 2016.

Kirkland also discussed Chevron's Downstream and Chemicals business, which delivered improved earnings and competitive performance in 2010. After completing a restructuring, Downstream and Chemicals has a lower cost structure and a portfolio focused on core markets, including North America and Asia. Last year, Chevron had three key downstream project startups at plants in South Korea, in Qatar, and in Pascagoula, Mississippi. Kirkland also discussed Chevron's investments in projects that improve energy efficiency, flexibility and product diversity, including the 25,000-barrel-per-day base-oil plant in Pascagoula. When complete in 2013, Chevron will be one of the world's leading suppliers of premium base oil. In addition, Chevron plans to deliver $700 million in improvements to its refinery system by the end of 2012, through a combination of improved efficiency, and controllable margin and yield

Stockholders voted on 11 proposals and supported the board's recommendation on each of the proposals. As of May 25, 2011, the
preliminary report of the Inspector of Election was as follows:

  • Item 1: More than 1.2 billion shares, or approximately 90 percent of the votes cast, were voted for each of the 13 nominees for election to the board of directors.
  • Item 2: More than 1.6 billion shares, or approximately 99 percent of the votes cast, were voted to ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm.
  • Item 3: Approximately 98 percent of the votes cast were voted to approve, on an advisory basis, the compensation for the company's executive officers.
  • Item 4: Approximately 84 percent of the votes cast were voted to hold advisory votes on named executive officer compensation every year.
  • Item 5: Approximately 25 percent of the votes cast were voted for the stockholder proposal regarding the appointment of an independent director with environmental expertise.
  • Item 6: Approximately 3 percent of the outstanding shares of Chevron common stock were voted for the stockholder proposal to amend Chevron's bylaws regarding a human rights committee of the board.
  • Item 7: Approximately 6 percent of the votes cast were voted for the stockholder proposal regarding a sustainability metric for executive compensation.
  • Item 8: Approximately 24 percent of the votes cast were voted for the stockholder proposal regarding guidelines for country selection.
  • Item 9: Approximately 8 percent of the votes cast were voted for the stockholder proposal regarding financial risks from climate change.
  • Item 10: Approximately 41 percent of the votes cast were voted for the stockholder proposal regarding hydraulic fracturing.
  • Item 11: Approximately 9 percent of the votes cast were voted for the stockholder proposal regarding offshore oil wells.

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General Motors to Add 2,500 Jobs at Detroit/Hamtramck Plant

- General Motors to Add 2,500 Jobs at Detroit/Hamtramck Plant

May 25, 2011

General Motors (NYSE:GM) on Wednesday said it would add two shifts and about 2,500 jobs at its Hamtramck Assembly factory straddling the border of Detroit and Hamtramck, Michigan.

The plant is the exclusive manufacturer of the Chevy Volt, and will produce the new Chevy Malibu midsize sedan and the next generation Impala.

The company said it is investing another $69 million in tools and equipment to support the Impala, which is in addition to the $121 million investment announced last month to support Malibu production.

GM North America President Mark Reuss, in a prepared statement said, "Filling this plant with new work is very satisfying because GM is dedicated to helping rebuild this city. We are confident in the flexibility of the plant, the excellence of our workers and the great cars assembled here."

General Motors has a potential upside of 37.9% based on a current price of $31.06 and an average consensus analyst price target of $42.85.

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Statoil, Petrobras to Join Forces in Exploration Agreement

- Statoil, Petrobras to Join Forces in Exploration Agreement

Wednesday, May 25, 2011

Statoil and Petrobras have signed a letter of intent (LOI) to expand the cooperation between the companies within exploration, and to assess how the two companies can benefit from operational synergies.

The agreement focuses on two key initiatives, including the possible joint acquisition of new exploration acreage in areas of mutual interest (AMI).

This would be acquired through joint participation in public bid rounds. The second initiative will entail a joint screening study to evaluate possible operational synergies.

"For a number of years Statoil has had a technology agreement with Petrobras. A lot of good work has been done in both companies through information sharing and a joint commitment to common technology projects," said Statoil CEO Helge Lund. "I look forward to exploring this cooperation further on the basis of the letter of intent that we signed today."

Statoil in Brazil

The Peregrino field is located 85 kilometers offshore Brazil in the Campos basin at about 100 meters of water depth in licenses BMC-7 and BMC-47.

The first phase of the development includes two drilling and wellhead platforms and a large floating production, storage and offload unit (FPSO). A total of 37 wells are planned, all of them using advanced horizontal well technology to maximize recovery.

The field contains 300 to 600 recoverable million barrels of oil equivalents, with a significant yet-to-find potential. An exploration well is currently being drilled at Peregrino South to explore this potential. Following completion of this well, one additional well will be drilled in the area.

Production started at Peregrino in April this year.

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Exxon Mobil Gains 1.1%; Makes Progress Resolving Dispute with Nigeria

- Exxon Mobil Gains 1.1%; Makes Progress Resolving Dispute with Nigeria

May 25, 2011

Exxon Mobil (XOM) shares are higher on a Reuters report that the oil major and the Nigerian government are moving closer to resolving a dispute over oil licensing renewals.

The report said the renewals concern fields that produce over 500,000 barrels of oil per day.

Exxon shares are up 1.09%, or $0.87, to $82.15.

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El Paso Sees Great Value in Spinning Off E&P Unit

- El Paso Sees Great Value in Spinning Off E&P Unit

Wednesday, May 25, 2011
Houston Chronicle
by Tom Fowler

Natural gas pipeline giant El Paso Corp. will spin off its growing exploration and production business into a stand-alone public company, a move that has long been anticipated by analysts and investors.

The new company would be a midsize E&P company with significant acreage in a number of shale plays, including the Haynesville gas shales in Louisiana, the Eagle Ford and Wolfcamp oil shales in Texas and Utah's Altamont oil shales.

Following the spinoff, El Paso Corp. will be a natural gas pipeline business with more than 43,000 miles of pipe, midstream processing business and general and limited partner interests in El Paso Pipeline Partners, a public master limited partnership that owns some of the pipeline assets.

The as-yet-unnamed company will be Houston-based with about $4.7 billion in assets. The current head of El Paso Exploration and Production, Brent Smolik, will be CEO. The tax-free spinoff is expected to be completed by year's end.

"We believe that the creation of these two stand-alone public companies will result in significant and sustainable value creation," said Doug Foshee, chairman and chief executive officer of El Paso.

Also on Tuesday, El Paso raised its full-year earnings outlook from the 90-cent to $1.05-per-share range to a range of $1 to $1.10 per share, based largely on its improving E&P business. The 2011 exploration and production budget has also been increased by $300 million to $1.6 billion in order to step up activity on the oil-rich Eagle Ford shale in South Texas.

El Paso was one of several companies that tried its hand at the merchant energy business model in the 1990s -- owning and operating a wide range of assets from pipelines to power plants to energy trading businesses. With the collapse of the biggest of the energy merchants in late 2001, Enron Corp., many of the other companies fell on hard times and had to sell off assets and exit businesses.

In 2003, El Paso went from being involved in around 20 different industries to just two: pipelines and E&P, Foshee said.

"We got down to our core and thought we could be good and competent managers of those two businesses," he said.

Rebuilding came first

The E&P business was tough shape, however, he said, the company as a whole was saddled with a lot of debt and the pipeline business was about to embark on nearly $8 billion in expansion projects.

The idea of a spinoff of the E&P business has been considered for quite some time, but the unit needed to first rebuild itself and the corporation to strengthen its balance sheet, Foshee said in an interview.

The turnaround for E&P between 2007 and the end of 2010 has been strong. From about 3.7 trillion cubic feet equivalent of reserves in 2007, El Paso now has about 8 tcf equivalent, due largely to the unconventional shale plays. Reserve replacement costs have declined from $3.55 per mcf equivalent in 2007 to $1.40 at the end of 2010.

In 2007, 38 percent of the company's reserves were considered oil, but by the end of 2010 it was 48 percent. More than two-thirds of future growth prospects are in the oil area, the company said.

El Paso's exploration business has operations in Brazil and Egypt and some shallow-water Gulf of Mexico holdings, but the bulk of its efforts are focused on onshore unconventional oil and gas.

The company became active in the Haynesville in 2007 when it acquired leases through the acquisition of People's Energy. The company perfected its drilling and production techniques in the Haynesville, driving down costs significantly.

El Paso acquired 138,000 acres in the Wolfcamp play in West Texas and has seven years to assess and develop the field. In the Eagle Ford, El Paso has 170,000 net acres, with about 60 percent of them in areas considered rich with more valuable oil and natural gas liquids.

In Utah's Altamont field, El Paso has about 193,000 net acres. It plans to use enhanced oil recovery techniques, like CO2 injection and infill drilling, to boost production in the coming years.

Shares in El Paso closed up Tuesday $1.24, or almost 7 percent, at $20.22.

Analysts not unanimous

Analysts are not of one mind on an El Paso split. In a research note this week, Tudor Pickering Holt & Co. said it believed the company would be better off focusing on creating cash flow to continue to reduce debt for the next few years before doing a spinoff that would generate relatively little cash.

But Pearce Hammond, director for E&P research for Simmons & Co., said it's a sensible move that will appeal to shareholders.

"I would think they would pick up a number of investors who didn't want a piece of the pipeline business," Hammond said.

El Paso's focus on oil production growth makes sense given how much more oil is getting on the market compared to natural gas, Hammond said.

"But gas will have its day in the sun again," he said. "There seems to be a lot more demand for natural gas in the U.S. in the next decade than for oil."

Copyright (c) 2011, Houston Chronicle

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East West Petroleum Enters MOU to Develop Romania Blocks

- East West Petroleum Enters MOU to Develop Romania Blocks

Wednesday, May 25, 2011
East West Petroleum Corp.

East West Petroleum and Naftna Industrija Srbije j.s.c. Novi Sad ("NIS") announced the final stage of conclusion of agreements for upstream cooperation which is to rapidly advance the development of its four Romanian onshore blocks EX-2 (Tria), EX-3 (Baile Felix), EX-7 (Periam) and EX-8 (Biled). The joint exploration programs planned will include the collection and processing of approximately 900 km of 2D and 600 sq km of 3D seismic data with a minimum of 12 wells to be drilled on the four blocks in Romania. The terms of the agreement are: NIS will fully fund all environmental work, 2D and 3D seismic acquisition and processing, and the drilling of 12 wells, to earn an 85% participation interest. NIS will also refund 100% of EWP's sunk costs which total C$525,000 and EWP will retain a 15% carried interest to commercial production on all four blocks.

In an earlier agreement the Company signed Concession Agreements for four onshore exploration blocks EX-2 (Tria) EX-3 (Baile Felix), EX-7 (Periam) and EX-8 (Biled) with the Romanian National Agency of Mineral Resources.

The new petroleum licenses are located in the western region of Romania within the prolific Pannonian Basin. The blocks have a combined area of approximately 1,000,000 acres. The blocks, which contain multiple exploration targets, lie within a major producing region of western Romania. The blocks have been only moderately explored, with previous exploration on the acreage generally limited to shallow structural traps. The Company has identified a number of structural and stratigraphic leads in the deeper section and plans to focus its exploration activities on the conventional oil and gas potential in addition to unconventional shale gas potential.

EWP and NIS plan to cooperate extensively to explore for and produce oil and gas from the four concession areas. Both conventional and unconventional resource potential has been identified on the acreage, which is situated close to numerous oil and gas fields. The joint work programs planned will include the acquisition and processing of approximately 900 km of 2D and 600 sq km of 3D seismic data during the first two years of operations. The new seismic data will be used to high-grade a number of prospective conventional oil and gas leads already identified on the acreage, to further study the unconventional shale potential and select drilling sites. Under the terms of the agreement East West will retain a 15% carried interest through Phase 1 (compulsory) and Phase 2 (optional) exploration periods as well as a carried interest on any discovery through to the declaration of commerciality. EWP will retain a 15% share of all production realized from the four concessions.

NIS is a leading explorer in this sector of the Pannonian Basin. NIS is currently carrying out extensive E&P operation in the Vojvodina region of northern Serbia, immediately adjacent to the Romanian Periam and Biled Concessions. NIS's operational capabilities and knowledge of regional geology are expected to contribute significantly to the success of the Romanian exploration programs.

The exploration programs are subject to final ratification of the Concession Agreements by the Government. The farmout to NIS will be subject to further agreements and approval of NAMR, which is expected to take place soon after the Government of Romanian ratifies the Concessions.

"The cooperation agreement with East West will allow NIS to expand its presence outside Serbia and to implement NIS's strategy of becoming an active player in the Balkan energy market. Participation of NIS in the project as operator will allow us to further our experience in the region and to apply innovative technologies for developing conventional and unconventional resources," commented Kiril Kravchenko, NIS Chairman of the Management Board.

Denis Sugaipov, the COO of NIS Company said, "The deal with East West Petroleum has several operational synergies for both companies and benefits for the Romanian energy sector. NIS's geological knowledge of Pannonian basin and its success in development can be applied to an area which is analogous to the Serbian North Banat region. In addition, EWP can contribute its technical expertise in unconventional resources. I hope that this deal will show results in the near future and contribute to the development of the Romanian energy sector, enabling the sustainable development of the entire region."

David Sidoo, Chairman of East West commented, "These agreements are the culmination of many months of hard work and we are confident that in Naftna Industrija Srbije, a subsidiary of Gazprom Neft, we have sourced a key and strategic partner, with substantial operating experience and the necessary financial and operating capabilities which can be applied to the Romanian concessions and can very quickly advance with the development of the Romanian concessions."

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Cabot's Marcellus Production Exceeds 400MMcf/d

- Cabot's Marcellus Production Exceeds 400MMcf/d

Wednesday, May 25, 2011
Cabot O&G Corp.

Cabot O&G announced that on Tuesday, May 24 it surpassed 400 Mmcf per day of production from the Marcellus shale in N.E. Pennsylvania. Specifically, the Company was able to increase its production stream after the recent upgrades of the Lathrop Compressor Station that included the commissioning of new compression, new dehydration and a second suction line to the facility.

"First I want to commend our North region personnel and the staff of Williams Field Services Company, LLC for this safe, flawless start-up of the Lathrop Station upgrades. It is equally impressive that we were able to increase our production 100 Mmcf within a 24-hour period," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "Just prior to this upgrade, we were producing at a restricted rate of 310 Mmcf per day from 67 horizontal wells. After the upgrade, we now have 69 horizontal wells producing and have reached a new maximum restricted rate of 420 Mmcf per day. Clearly a portion of this increase in production was realized from previously curtailed wells."

Noteworthy are the two new wells that were completed and turned in-line at 29.5 and 29.7 Mmcf per day. "These two wells represent new highs for our program in the Marcellus and both of these wells and others are choked back because we have reached another temporary maximum through-put rate into the Tennessee Gas Pipeline," added Dinges.

All current volumes are being transported on Tennessee's 300 Line through various customer agreements with Cabot. "Due to significant volumes coming from the Marcellus and capacity constraints on the pipe, we expect our production in northeast Pennsylvania will be at 400 to 420 Mmcf per day until the Springville line is commissioned during the fourth quarter," stated Dinges. "These volumes clearly accelerate our current growth profile, and as such we will adjust production guidance for the second half of the year during the second quarter teleconference call in July."

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Antrim Reports Financial, Operational Results for 1Q11

- Antrim Reports Financial, Operational Results for 1Q11

Wednesday, May 25, 2011
Antrim Energy Inc.

Antrim reported its financial and operational results for the three month period ended March 31, 2011.

All financial figures are unaudited and in US dollars unless otherwise noted

  • Antrim to drill three wells in the UK North Sea
  • Joint venture with Premier Oil on the Fyne Field proceeding
  • Heads of Terms export agreement signed for Causeway oil production
  • Average gas price in Argentina increased 12% to $2.08 per mcf
  • Antrim raised Cdn $48.5 million from equity financing
  • Current cash position of $76 million and no bank debt

In the first quarter 2011, average production in Argentina was 1,640 barrels of oil equivalent per day ("boepd") compared to 1,835 boepd in the first quarter 2010. The decline in production is attributable to the sale of the Puesto Guardian property in February 2010, as well as scheduled gas plant maintenance and service rig repairs in Tierra del Fuego.

Oil and gas revenue, net of royalties, was $2.4 million for the three months ended March 31, 2011 compared to $2.7 million for the same period in 2010. Net revenue decreased as a result of lower oil and gas sales partially offset by higher oil and gas prices received. Antrim generated cash flow from operations of $0.6 million for the three months ended March 31, 2011 compared to a cash flow deficiency of $0.2 million for the same period in 2010.

Antrim's average gas price for the first quarter of 2011 was $2.08 per mcf compared to $1.85 per mcf for the same period in 2010, a 12% increase. For the first quarter, oil prices averaged $55.00 per barrel compared to $46.54 per barrel for the same period in 2010, an 18% increase.

On April 5, 2011, Antrim announced that a Heads of Terms agreement had been signed for the export of Causeway crude oil to the Cormorant North production platform. The Cormorant North platform is operated by TAQA Bratani Limited and is located approximately 15 km west of the Causeway Field.

On April 4, 2011, Antrim announced that Premier Oil UK Limited ("Premier") had elected to drill the East Fyne well under the Earn-In Agreement ("EIA") previously announced on October 6, 2010. The well is an appraisal well designed to de-risk the eastern extent of the Fyne Field and is expected to be drilled before the end of 2011. Under the terms of the EIA, Antrim will be carried for all development expenses, including the East Fyne drilling costs, up to $50 million.

On March 28, 2011, Antrim announced that it had signed a Letter of Award ("LOA") to provide well project management and drilling services for two wells commencing in the third quarter of 2011.

On March 17, 2011, Antrim issued 48,191,700 common shares at a price of Cdn $1.07 per common share for gross proceeds of Cdn $51.6 million (net proceeds Cdn $48.5 million) which included 6,191,700 common shares issued to the underwriters pursuant to the 98.3% exercise of the over-allotment option. Net proceeds from the equity financing will be used for exploration of the Greater Fyne Area including the West Teal Prospect and either the Carra or Erne Prospects.


United Kingdom

Fyne Field

On April 4, 2011, Antrim announced that Premier had elected to drill the East Fyne well in the Fyne Field in P077 Block 21/28a (the "Fyne License") under the

OMV Names New CEO of Turkish Ops

- OMV Names New CEO of Turkish Ops

Wednesday, May 25, 2011

Today, OMV Chief Executive Officer Gerhard Roiss announced Gülsüm Azeri as new CEO of OMV's Turkish operations including Petrol Ofisi as of July 1, 2011. Mrs. Azeri has a good track record in leading various global acting companies.

Commenting on Mrs. Azeri's appointment, Gerhard Roiss said, "I am delighted that Gülsüm Azeri will join Petrol Ofisi as Chief Executive Officer. She brings a wealth experience and expertise to this role, which will complement the existing set of skills of the Executive Board. I look forward to her contribution and input as we further develop OMV's strategic review for Turkey."

Gülsüm Azeri said, "I am excited by the prospect of taking on the challenge of becoming Chief Executive Officer as of July 1, 2011. My background and experience are a very relevant fit for this role and I look forward to working with Gerhard Roiss and his team as we set about our future path for profitable growth."

Melih Türker, Chief Executive Officer of Petrol Ofisi since 2007, will leave the company after a structured hand over period. "We want to thank Melih Türker for his commitment to Petrol Ofisi, which he has positioned as clear market leader in the retail and wholesale business, especially in challenging times," Roiss stated.

Related to the corporate structure in Turkey, OMV decided to pool its power generation as well as power and gas sales and logistics activities in Turkey under a Turkish Gas and Power Holding which is currently in the process of being established. Petrol Ofisi will continue to focus on its core strengths, in particular the marketing and wholesale of refined oil products. The new Turkish Gas and Power Holding's parent company will be OMV Enerji Holding A.Ş. which is also the majority shareholder of Petrol Ofisi A.Ş.

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NC KMG, KMG EP Sign MOU for Joint Participation in Caspian Sea

- NC KMG, KMG EP Sign MOU for Joint Participation in Caspian Sea

Wednesday, May 25, 2011
JSC KazMunaiGas Exploration Production

JSC NC KazMunaiGas (NC KMG) and JSC KMG EP (KMG EP) have signed a Memorandum of Understanding, providing KMG EP with access to the detailed geophysical, financial and economic data of a number of oil and gas projects, including those located in the Kazakhstan sector of the Caspian sea. The list of projects includes, in particular, the offshore blocks Zhambyl, Ustyurt, Zhenis, Godina, С-1, С-2 as well as an onshore block Urikhtau. By agreement between the two parties the list of oil and gas projects may be expanded.

On the basis of the provided data KMG EP will conduct a technical, economic and investment evaluation of the above-stated projects to consider the Company's participation in these projects, subject to negotiations with NC KMG and on the same commercial terms as other participants.

Kairgeldy Kabyldin, Chairman of the Management Board of NC KMG noted, "The engagement of the resources and experience of KMG EP in the joint development of the Caspian sea shelf along with the large international oil companies is an important step for the KazMunaiGas group of companies. Enhanced participation of the National Company KMG in the offshore projects corresponds to the strategic interests of the country in the oil and gas sector."

Askar Balzhanov, Chief Executive Officer of KMG EP said, "Signing of the Memorandum is an important step in implementation of our Strategy which envisages participation in the development of the Caspian sea shelf as a way to increase the Company's resource base and hydrocarbons production. KMG EP possesses the necessary technical and financial resources for carrying out offshore oil operations."

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Toyota Motor Said It Will Increase Production Capacity At Its Indonesian Plant

- Toyota Motor Said It Will Increase Production Capacity At Its Indonesian Plant

May 25, 2011

Toyota Motor Corp. (NYSE:TM) said it will increase production capacity at a plant in Indonesia in its first manufacturing investment deal since the earthquake in Japan as the company continues efforts to bring output operations back to normal.

Toyota plans to lift annual output capacity at Karawang to 140,000 vehicles, up from the current 100,000.

Toyota Motor has a potential upside of 14.4% based on a current price of $80.76 and an average consensus analyst price target of $92.4.

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Texon to Begin Drilling Eagle Ford Well by June

- Texon to Begin Drilling Eagle Ford Well by June

Wednesday, May 25, 2011
Global Petroleum Ltd.

Texon has advised that Tyler Ranch EFS #2H, the second Eagle Ford horizontal well in which Global Petroleum has an interest, is now due to commence drilling by mid June, due to the late arrival of the rig from another operator.

Tyler Ranch EFS #2H is located immediately north of the first Eagle Ford well ("Tyler Ranch EFS #1H"). Global has a 7.939% working interest (5.95% NRI) in Tyler Ranch EFS #1H and Tyler Ranch EFS #2H. A successful Eagle Ford well will be able to use the tanks and other production facilities already in place for the first Eagle Ford well.

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Directional Drilling Commenced at North Oklahoma Project

- Directional Drilling Commenced at North Oklahoma Project

Wednesday, May 25, 2011
American Petro-Hunter Inc.

American Petro-Hunter updated the drilling progress of the NOM1H Horizontal well at the Company's North Oklahoma Project.

Directional drilling has now commenced. The K.O.P. (kick off point) has been reached, and the well is now entering the curved section of the hole. The well plan calls for approximately 1,600 feet of lateral to be drilled in the Mississippi formation before reaching a total depth of about 5,300 feet, with a true vertical depth of about 3,900 feet.

The NOM1H well is the first of a planned series of horizontal wells designed to test and develop oil and gas in the 100 foot thick limestone Mississippi Formation. Once the lateral portion reaches its engineered length, a period of testing and evaluation will commence.

In related news, a neighboring major independent oil company has received a permit to proceed with the drilling of its first horizontal test of the Woodford Shale in Payne County. This nearby well is engineered for a total depth of 9,177 feet with a true vertical depth of 4,300 feet. As American Petro-Hunter is planning a horizontal well into the Woodford Shale as part of our 2011 development program, the results of this neighboring well will prove instrumental towards the timing of our first horizontal efforts in the formation.

Company President Robert McIntosh stated, "The lateral turn of the drill into the horizontal phase means we are now entering the objective pay zone in the Mississippi Formation. Over the next week, drilling operations will be closely monitored by the directional drilling engineer to ensure we stay in the Mississippi for the duration of the operation. The upcoming testing phase is a critical step in the determination of our next well as we gear up for a very busy summer of drilling."

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Coastal Strikes Again at Bua Ban North

- Coastal Strikes Again at Bua Ban North

Wednesday, May 25, 2011
Coastal Energy Co.

Coastal announced the successful results of the Bua Ban North B-05 exploration well.

The Bua Ban North B-05 well was drilled to 7,600 feet TVD and encountered 178 feet of net pay in the Miocene objective with average porosity of 27%. The B-05 is currently being cased and will then be suspended pending the arrival of testing equipment. The Company then plans to spud the B-04 well to appraise the Miocene reservoir updip from the discovery in the B-01 well.

The Company's offshore production is currently averaging 8,500 bopd. Onshore production is averaging 2,000 boe/d, bringing total Company production to 10,500 boe/d.

Randy Bartley, Chief Executive Officer of Coastal Energy, commented, "The B-05 well was designed to encounter maximum net pay by drilling along the bounding fault plane within a single structural trap. The Bua Ban North A-03 well was drilled with a similar well design and had similar results. We plan to utilize this drilling technique in future wells to optimize pay zones.

"Given the exceptional results thus far at Bua Ban North B, we have decided to divert the MOPU from Bua Ban North A to begin testing Bua Ban North B first. We are in the process of procuring an additional MOPU for Bua Ban North A, which we expect to be on location during the third quarter.

"The results of the B-05 further validate the tremendous upside potential of the Miocene trend in the Songkhla basin. Based on recent drilling results, we believe the Miocene trend extends into the central part of the basin and becomes shallower as it moves east. Once appraisal work is completed at Bua Ban North B and testing has begun, we plan to move the rig to a new location further to the east to continue exploring the Miocene trend.

"Production at Songkhla A has fallen recently due to declining rates from the wells drilled in Q410 and Q111. These three wells discovered new reservoirs which are not in communication with the main Songkhla reservoir and consequently are not benefiting from existing water injection wells. We are planning to drill water injection wells on these reservoirs to restore aquifer support and production rates once EIA approval is received, which is expected within two months."

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Apache Northwest Reaches TD at La Rocca Well

- Apache Northwest Reaches TD at La Rocca Well

Wednesday, May 25, 2011
Oilex Ltd.

Oilex has been advised by the Operator that the La Rocca-1 exploration well has reached total depth of 4,864 meters after drilling through the Intra Mungaroo Formation channel sandstone primary objective. There are no indications of gas in the LWD and mud log data and
final wireline logs will now be run.

The participating interests in the WA-388-P permit after satisfaction of the requirements of the farm- in agreement and amendment, are set out below:

Joint Venture Party/ Participating Interest
  • Oilex Ltd 8.4%
  • Apache Northwest Pty Ltd (Operator) 40%
  • Sasol Petroleum Australia Ltd 18%
  • Videocon Industries Ltd 8.4%
  • Gujarat State Petroleum Corporation Ltd 8.4%
  • Bharat PetroResources Limited 8.4%
  • Hindustan Petroleum Corp. Ltd 8.4%

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Otto to Commence Abandonment Ops at Duhat Sidetrack

- Otto to Commence Abandonment Ops at Duhat Sidetrack

Wednesday, May 25, 2011
Otto Energy Ltd.

Otto provided the following update on the progress of the Duhat-1A sidetrack well, located in the Philippines.

Since the last update, the well was drilled to 321 m TVD (True Vertical Depth) in the 12 ¼” section before becoming stuck, again due to unstable hole conditions (similar to those experienced in the Duhat-1 nearby well).

The well was subsequently plugged back to 200 m TVD and abandonment operations have commenced.

Information obtained during drilling from both Duhat-1 and the Duhat-1A sidetrack are very encouraging. In both wells, high general background gas levels have been observed during drilling, consistent with the presence of an oil generative area. These high gas levels, in formations of relatively weak rock strength coupled with unexpected shallow overpressure in the Miocene Tagnocot interval require further study prior to the recommencement of exploration in the block.

Drilling further ahead in Duhat-1A is now considered to be imprudent on safety grounds and abandonment is now in progress.
Otto Energy Ltd and its partners in SC-51 are excited by the geotechnical results of this initial drilling campaign and further work will be programmed once the data from recent operations have been fully analyzed.

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Santos Hits Oil Pay at Finucane South

- Santos Hits Oil Pay at Finucane South

Wednesday, May 25, 2011
Santos Ltd.

Santos has announced an oil discovery at Finucane South in the Carnarvon Basin, offshore Western Australia. Well logs and wire line testing have confirmed a net oil column of 18 meters in excellent quality reservoir sands in the Angel Formation. The well was drilled using semisub Stena Clyde.

The Finucane South oil discovery is located approximately 7 kilometers from the Fletcher oil field discovered in 2009 and approximately 14 kilometers from existing oil production facilities at Mutineer Exeter. Both Finucane South and Fletcher are located within WA-191-P.

Engineering studies for a dual field development of the Finucane South and Fletcher discoveries are well advanced, with the WA-191-P participants expected to be in a position to make a final investment decision before the end of 2011.

A number of development options have been considered, including a sub-sea tie back to the Santos operated floating production, storage and offloading facility servicing Mutineer Exeter. This would enable first oil production from Finucane South and Fletcher by the end of 2013.

Santos Vice President Exploration and Subsurface Trevor Brown said the Finucane South result was on the high side of pre-drill expectations and is another valuable discovery for Santos following the Zola gas discovery in April this year.

Santos Vice President WA & NT John Anderson said Finucane South when combined with Fletcher would allow the WA-191-P partners to progress an oil development with an exceptionally quick cycle time to first oil production.

The well will be suspended after finalization of the evaluation program.

Santos holds a 33.4% interest in WA-191-P and is operator. Other participants are Kufpec Australia (33.4%), JX Nippon Oil & Gas Exploration Corporation (25%) and Tap Oil (8.2%).

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NPD Gives E.ON Ruhrgas Go-Ahead for North Sea Drilling

- NPD Gives E.ON Ruhrgas Go-Ahead for North Sea Drilling

Wednesday, May 25, 2011
Norwegian Petroleum Directorate

The Norwegian Petroleum Directorate has granted E.ON Ruhrgas Norge AS a drilling permit for wellbore 31/8-1, cf. Section 8 of the Resource Management Regulations.

Wellbore 31/8-1 will be drilled from the Borgland Dolphin drilling facility at position 60°22'11.23" N and 3°34'04.94"E after it has completed drilling development well 6507/5-A-1 H on the Skarv field in the Norwegian Sea where BP Norge AS is the operator.

The drilling program for wellbore 31/8-1 relates to the drilling of a wildcat well in production license 416 in the North Sea. E.ON Ruhrgas Norge AS is operator with a 50 percent ownership interest. The other licensees are Rocksource ASA (35 percent) and Det norske oljeselskap ASA (15 percent). The area in this license consists of block 31/8. The well will be drilled approx. 15 kilometers southwest of Troll and approx. 30 km southeast of Brage.

Production license 416 was awarded on February 16, 2007 (APA 2006). This is the first well drilled in the license.

This permit is contingent upon the operator having secured all other permits and consents required by other authorities before the drilling activity starts.

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RWE Dea Divests Acreage in Norwegian Sea

- RWE Dea Divests Acreage in Norwegian Sea

Wednesday, May 25, 2011

RWE Dea Norge AS, a wholly-owned subsidiary of the German upstream company RWE Dea, has entered an agreement with Marathon Petroleum Norge AS and with Lundin Norway AS to farm-down a total of 60 percent in production license 330 in the northern Norwegian Sea.

"We are pleased to join forces with two experienced and highly qualified partners in a license regarded as important and promising in our asset portfolio. We have spent significant time and resources to improve the seismic imaging in the demanding and unexplored Utgard High area. These efforts now show encouraging results," said Hugo Sandal, Managing Director of RWE Dea Norge AS.

The agreement is effective of January 1st 2011, and is subject to Norwegian governmental approval.

After completing a transaction in agreement with Hess Norge in 2010, RWE Dea Norge AS continues as the operator of PL330 with a 40 percent share, and Marathon Petroleum Norge AS and Lundin Norway AS as partners with 30 percent each.

The farm-down is part of RWE Dea's strategy of a balanced portfolio in its core regions. Norway plays an important role in the company's strategic target to boost its annual gas and oil production to more than 70 million barrel of oil equivalents by 2016. In Norway, RWE Dea Norge holds a solid license portfolio and is the operator of the recent and promising discoveries Zidane in the Norwegian Sea and Titan in the North Sea. In 2011, RWE Dea Norge has already been awarded five new licenses and is currently participating in 25 production licenses on the Norwegian Continental Shelf.

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