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Oil and Gas Energy News Update

Thursday, June 2, 2011

Oil & Gas Post - All News Report for Thursday, June 02, 2011

Thursday, June 02, 2011

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Commodity Corner: Crude Rises on Weaker Dollar

- Commodity Corner: Crude Rises on Weaker Dollar

Thursday, June 02, 2011
Rigzone Staff
by Saaniya Bangee

Crude futures inched higher Thursday as the dollar weakened after Moody's announced the U.S. credit rating may undergo scrutiny for a possible downgrade.

Light, sweet crude futures gained 11 cents settling at $100.40 a barrel. Prices fluctuated between $98.46 and $100.90 Thursday. The greenback fell after Moody's Investors Service said it may review lowering the U.S. government's credit rating if Congress does not produce a deal soon to increase the country's debt limit.

For the week ending May 27, U.S. oil inventories rose by 2.9 million barrels, according to the Department of Energy. At 373.8 million barrels, stockpiles reached their highest level since May 2009. The weekly report was published a day later than normal due to the Memorial Day holiday on Monday.

Natural gas for July delivery rose 16.5 cents Thursday, ending the trading session at $4.79 per thousand cubic feet. The Energy Department reported an increase of 83 billion cubic feet in U.S. gas stockpiles, below analyst expectations. The futures price peaked at $4.86, the highest since Jan. 24, and bottomed out at $4.625.

Meanwhile, gasoline futures lost nearly a penny Thursday to settle at $2.97 a gallon. The intraday range for gasoline was $2.925 to $3.00.

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House Panel Passes Bill to Streamline Issuance of Air Permits for Oil Drill

- House Panel Passes Bill to Streamline Issuance of Air Permits for Oil Drill

Thursday, June 02, 2011
Dow Jones Newswires
by Tennille Tracy

A bill to streamline the issuance of clean-air permits for offshore oil drilling cleared an important hurdle Thursday, with the Republican-controlled U.S. House energy committee voting to approve the measure.

The legislation aims to address challenges that Shell faced in securing air permits for exploratory drilling projects off the coast of Alaska. It also marks the latest effort by Republicans to expand or expedite offshore oil production.

The bill was approved by the House Energy and Commerce Committee by a vote of 34 to 14, with the majority of Democrats voting against the measure. Democrats said the bill would strip the Environmental Protection Agency of the ability to ensure clean-air standards would be met.

Thursday's committee vote clears the way for a vote on the floor of the House. While the bill would have a decent chance of passing the House, its fate in the Democrat-controlled Senate would be much more uncertain.

The legislation, introduced by Rep. Cory Gardner (R., Colo.), imposes a six-month deadline on the EPA to either approve or deny clean-air permits being sought. It also forces opponents to object to proposed drilling projects in federal court.

Unlike drilling projects in parts of the Gulf of Mexico, where the Interior Department is responsible for granting air permits, Arctic projects require approval from the EPA.

The EPA's process for approving Clean Air Act permits for offshore drilling came into focus after Shell struggled to secure clean-air permits for drilling projects in the Beaufort and Chukchi seas off Alaska. Shell has spent about $3.5 billion to explore and prepare for those projects, but legal challenges and regulatory hurdles have prevented the company from obtaining necessary approvals.

"It's time to either give the permits now or stop altogether," said Rep. Fred Upton (R., Mich.), chairman of the energy committee.

In May, the EPA's assistant administrator for air and radiation, Gina McCarthy, said the agency was "very close" to issuing three permits to Shell.

No exploratory drilling is currently being done off the coast of Alaska, although there are existing wells producing oil.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Greece Looks to Open South Gas Corridor Via ITGO Project

- Greece Looks to Open South Gas Corridor Via ITGO Project

Thursday, June 02, 2011
Knight Ridder/Tribune Business News
by A. Badalova, Trend News Agency, Baku, Azerbaijan

The Turkey-Greece-Italy gas pipeline must act as the starting point for the South Gas Corridor for gas supplies from the Caspian region to Europe, Greek Environment Minister Tina Birbili said at a meeting with BP senior representatives, Athens News reported.

Birbili later said after there are additional volumes of gas, other pipelines will be connected.

This position was voiced by the Greek environment minister during a meeting with BP Vice President Alasdair Cook.

Gas produced within the second stage of Shah Deniz's development is regarded as the main source, not only for ITGI project.

The peak production is forecasted at over 9 billion cubic meters and 50,000 barrels of condensate. According to the forecasts, gas production can be brought up to 24 billion cubic meters a year within the second stage of field development.

Shah Deniz reserves are estimated at approximately 1.2 trillion cubic meters of gas.

First gas is expected to be received within the second stage of field development in 2017.

ITGI Transport Corridor includes the renovated Turkish pipeline infrastructure, as well as ITG projects and IGI. Edison (Italy) and Depa (Greece) established IGI Poseidon SA for the design and construction of IGI pipeline, known as Poseidon.

Copyright (c) 2011, Trend News Agency, Baku, Azerbaijan

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Hess Declares Quarterly Dividend

- Hess Declares Quarterly Dividend

Thursday, June 02, 2011
Hess Corp.

Hess declared a regular quarterly dividend of 10 cents per share payable on the Common Stock of the Corporation on June 30, 2011 to holders of record at the close of business on June 16, 2011.

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Pacific Drilling Receives Latest Drillship

- Pacific Drilling Receives Latest Drillship

Thursday, June 02, 2011
Pacific Drilling S.A.

Pacific Drilling has received delivery of its newest drillship, the Pacific Mistral. The Pacific Mistral can operate in water depths of up to 12,000 feet and drill wells of up to 35,000 feet total depth. The rig features technologically advanced equipment that allows customers to improve drilling efficiency, including offline handling capabilities.

Pacific Drilling CEO Chris Beckett stated, "We are proud to announce the delivery of the Pacific Mistral. This constitutes the third on-time, on-budget delivery in Pacific Drilling's fleet of six premium ultra-deepwater drillships. The final payment to the shipyard was substantially funded by our Project Facilities Agreement lenders, consisting of two Export Credit Agencies and nine commercial banks based in the United States and Europe. We are in the advanced stages of negotiations with several major E&P companies and expect to announce a drilling contract for the Pacific Mistral in the near future."

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ProSep Strengthens Services with Leading International Team

- ProSep Strengthens Services with Leading International Team

Thursday, June 02, 2011
ProSep Inc.

ProSep announced the assembly of its leading international process engineering and business development teams, and the nomination of Gary Blizzard, M.B.A., as Executive Vice President of Process Engineering and Product Development.

During the last 6 months, ProSep hired a large number of internationally recognized process engineers, scientists, and business development managers. With a broader offering, access to additional customer relationships, agents, and business partners, ProSep is now one of the industry's top technology-focused provider.

"The addition of these leading experts to the ProSep team marks an important milestone in our growth plan. Collectively, these additional professional engineers played a key role in the success of our industry's most renowned process equipment supplier," said Jacques L. Drouin. "By doubling the size of our engineering capacity and business development team, we are reaching critical mass and this should allow us to significantly increase projected revenues and reach profitability."

"To lead our new process engineering team and ensure we unlock significant value residing in our proprietary technologies, we nominated Gary Blizzard, who brings an impeccable track record in international business development and a strong background in the field of innovative process engineering," said Jacques L. Drouin, President and CEO.

Gary Blizzard brings over 25 years of diverse experience within multiple segments of the energy industry in the areas of international business development, marketing, engineering, and project management. Prior to joining ProSep, Gary was Business Development Director at Alcoa Oil & Gas and previously Vice President Marketing & Business Development at NATCO Group where he provided leadership for growing the specialized gas treating technology business. He holds a Bachelor of Science in Chemical Engineering from Texas A&M University and a Master of Business Administration from The University of Texas at Austin.

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EDITORIAL: Govt May Jeopardize Oil Production for Lizard

- EDITORIAL: Govt May Jeopardize Oil Production for Lizard

Thursday, June 02, 2011
The Gazette, Colorado Springs, Colo.
by Wayne Laugesen

It could be a tough summer -- unless one is a lizard.

Fears of a stalling economy sent the Dow on a 280-point plummet Wednesday. Housing values fell to their lowest in 10 years. Federal estimates of 180,000 new private-sector jobs in May fell short by 142,000.

Pain at the pump approaches $4 a gallon, which makes it difficult to prosper and create jobs.

In this time of economic burden, our federal government suddenly wants to protect the dunes sagebrush lizard. The tiny brown lizard lives among oak shrubs on Texas sand dunes, amid some of country's most productive oil wells.

The U.S. Fish And Wildlife Service, bolstered by activists, wants to list the lizard as endangered. In doing so, the government could shut down or hinder production of up to 1 million barrels of oil a day.

There is no proof that oil production threatens extinction of the lizards, and they are not confined to the dunes above Texas oil deposits. It appears as just another effort to exploit the cause of an obscure species at a tremendous risk to the fundamental welfare of humans. It is similar, though many times more serious, to the economic growth barriers erected in Colorado by an urgent need to save the Preble's meadow jumping mouse. The mice are plentiful in Colorado and Wyoming, but environmentalists and the federal government want to protect them only in Colorado -- where they come in useful for impeding economic growth.

"Bad science leads to bad policy," Texas land commissioner Jerry Patterson wrote in the Austin American-Statesman. "And that defines the current administration's domestic energy policy that seeks to close off more and more areas to oil and gas production. A policy which can be summed up as: 'Not here.'"

Our economy needs oil in order to create prosperity and jobs. Without economic growth, we can forget about maintaining federal entitlements and the quality of life enjoyed by all classes of Americans.

Let's be good to God's tiny creatures, taking reasonable measures to ensure their ability to survive. But let's not look for symbolic opportunities to strain to our economy by killing jobs, raising fuel costs and making Americans even more dependent on foreign oil. Let's save the humans, too.

Copyright (c) 2011, The Gazette, Colorado Springs, Colo.

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Eureka Welcomes New CEO

- Eureka Welcomes New CEO

Thursday, June 02, 2011
Eureka Energy Ltd.

Eureka announced the appointment of Mr. Peter Mills as the Company's Managing Director and Chief Executive Officer with effect from July 1, 2011.

Peter is a qualified engineer with extensive oil & gas experience and was appointed as the Company's Technical Director (non-executive) in October 2010.

Commenting on the appointment, Eureka Chairman Ian McCubbing said, "We are fortunate to have been able to attract a Managing Director with Peter's technical capabilities and background with major companies such as BHP Petroleum and Hess. Peter's experience with US companies and assets, particularly in the areas of field development, production optimization, and unconventional oil and gas, along with his expertise in joint venture relations will be of great assistance to Eureka."

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Cairn Energy Files Injunction to Stop Greenpeace Rig Protests

- Cairn Energy Files Injunction to Stop Greenpeace Rig Protests

Thursday, June 02, 2011
Dow Jones Newswires
by Alexis Flynn

Cairn has filed for an injunction against environmental group Greenpeace and two Dutch-registered vessel owners in an attempt to prevent activists from further disrupting its drilling activities offshore Greenland, the Edinburgh-based oil and gas explorer said Thursday.

Cairn "cannot allow any action that poses a potential threat to the safety of our employees or the protesters involved," the company said.

Greenpeace confirmed legal proceedings against the group had begun. It said Cairn is seeking fines of EUR2 million a day for every day its operations are affected after Monday if the injunction is granted.

"Cairn is trying to use a legal hammer to shut down our campaign to kick the oil companies out of the Arctic, but we'll challenge Cairn and its lawyers every step of way," said Greenpeace campaigner Ben Ayliffe.

Cairn said it was requesting the order from an Amsterdam court to stop the future disruption of its "lawful operations offshore Greenland."

Copyright (c) 2011 Dow Jones & Company, Inc.

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Under New Rules, Chevron Ramps Up Activities in US Gulf

- Under New Rules, Chevron Ramps Up Activities in US Gulf

Thursday, June 02, 2011
Dow Jones Newswires
by Isabel Ordonez

Within the maze of gray tanks, pipes and machinery that make up this gigantic oil platform rising from the sea is a small red rectangle about the size of a wine bottle, with a rapidly clicking numeric panel. Rick Bullock, who runs Chevron's deep-water production operations, calls it "the cash register."

The instrument counts every barrel of oil the Tahiti platform, located 190 miles south of New Orleans, pulls from miles beneath the sea floor. During a visit last Friday, the meter showed the field was producing oil at the tune of about 109,000 barrels a day. With oil prices hovering at $100 per barrel, that's about $10 million a day flowing into the coffers of Chevron, which owns 58% of the field, and its partners Total and Statoil.

Making sure the money keeps rolling out of Tahiti is crucial for Chevron, at a time when oil prices are high and the company has ambitious growth projections to meet. The company aims to grow worldwide output this year by 1% to 2.79 million barrels of oil equivalent per day and to 3.3 million barrels of oil equivalent by 2017, or 19% more than it produced last year. That's a prodigious ramp up, especially as it navigates an array of new regulations that have slowed drilling in the U.S. Gulf of Mexico, one of its main theaters of operation. The regulations came in the wake of last year's massive oil spill, which also resulted in a nine-month-long drilling suspension.

Now Chevron, the second-largest U.S. oil company after ExxonMobil, has to cram more work into less time to meet its expectations even as its engineers try to grasp the new rules, a scramble that underscores how oil and gas producers in the Gulf's deep water are adapting to a new legal environment.

The San Ramon, Calif., oil giant is so concerned about the sluggish pace that it is considering contracting more drilling ships than it originally intended in order to meet its 2013 deadlines for the Tahiti expansion and the 2014 start up of two massive ultra deep-water fields, Big Foot and Jack/St. Malo, located 35 and 140 miles south of Tahiti, respectively.

"It's probably a fact that we are going to have to bring additional drill ships into the Gulf of Mexico to be able to meet that schedule," Warner Williams, Chevron's vice president for the Gulf of Mexico Business Unit, said in an phone interview. Williams didn't specify how many more rigs the company could add. Chevron currently has three rigs doing development and exploratory drilling in the Gulf.

With the arrival of hurricane season, which started Wednesday and lasts through November, Chevron and other companies face even more pressure as the presence of a storm could result in lengthy evacuations and lost work days.

Chevron was among the first oil companies to receive government approval to drill back in the Gulf's deep water, including here, where the Transocean's Discovery Clear Leader drillship can be seen floating a few miles from the platform, doing work that will allow the field to increase production to 150,000 barrels a day in 2013. But the company still has 10 development and exploration plans and approximately 15 drilling permit applications pending approval elsewhere in the Gulf.

"The pace of the permitting process has been slow. It's clear we are not where we need to be," Williams said. "We would like the process to go a little bit faster." The federal government says it is approving permits as fast as it deems safe.

Energy consultancy Wood Mackenzie said the drilling suspension, along with a new, more time consuming permitting process, will result in the loss this year of about 375,000 barrels of oil a day--or 20% of previously estimated production levels.

"Nobody really knows when things in the Gulf are going to be back to what we called a new equilibrium," said Mohammad Rahman, Wood Mackenzie's analyst for the Gulf of Mexico. "Our previous assumption was it will be some time in 2012, but now it could be 2013 when we see a more stable, consistent level in permitting process."

The main reason for the slowdown in the permitting process is that the Department of Interior's Bureau of Ocean Energy Management, Regulations and Enforcement--the federal agency on charge of offshore operations--doesn't have enough regulators to handle the backlog of projects, Rahman said.

The bureau, which was created after the oil spill, is still in the midst of a reorganization, Rahman said.

Melissa Schwartz, a spokeswoman for the agency, said the government "is working as expeditiously as is safely possible to approve exploration plans and permits."

It began approving permits in February, when two oil deep-water oil spill containment systems were deemed operationally ready by the authorities.

Tahiti, discovered in 2002, is one of the largest fields in the Gulf, with 400 million to 500 million barrels of oil equivalent in recoverable resources. Oil production, which began two years ago, accounts for about 64% of Chevron's total output in the Gulf.

Copyright (c) 2011 Dow Jones & Company, Inc.

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BHP Billiton Pre-Empts WA-351-P Sale

- BHP Billiton Pre-Empts WA-351-P Sale

Thursday, June 02, 2011
Tap Oil Ltd.

Tap Oil announced on May 4, 2011 that it had agreed to sell its 25% interest in WA-351-P, offshore Carnarvon Basin, Western Australia, to Japan Australia LNG (MIMI) Pty Ltd (MIMI) for a cash consideration of US $30,154,000. In addition, MIMI were to pay Tap's 20% share of the next exploration well in the permit up to a cap of US $10 million (Tap share).

BHP Billiton Petroleum (North West Shelf) Pty Ltd, Tap's existing joint venture partner, has today given notice to Tap to exercise its right of pre-emption to acquire the 25% interest in WA-351-P on the same terms and conditions as agreed upon with MIMI.

Tap's Managing Director/CEO Troy Hayden said, "BHP Billiton pre-empting the MIMI transaction provides further evidence as to the value of this highly prospective permit.

"We are looking forward to working with BHP Billiton to drill the Tallaganda prospect as soon as possible, which at this stage we expect may be drilled sometime in the first half of 2012."

Prospectivity of WA-351-P

The Operator completed a detailed assessment of the plays, prospects and leads in the permit in 2010 including the 3D seismic acquired in 2008. Over 10 leads and prospects were defined in the Triassic Mungaroo Formation which Tap estimates have a combined estimated mean potential of 2-3 Tcf (gross recoverable) of natural gas. Tap considers that a number of these targets have an estimated probability of success over 50%.

Additional leads have been identified in WA-351-P in the Jurassic and Early Cretaceous, both of which are productive elsewhere in the Carnarvon Basin. Current indications are that this shallower potential is larger but higher risk than the Triassic in this permit. Further work will be done on these objectives.

The high chance of success is reinforced by Hess' reporting of 13 gas discoveries from 16 exploration wells drilled to date in the adjacent WA-390-P permit, immediately north of WA-351-P. Hess has commenced a multi-well appraisal program in WA-390-P.

The proximity of WA-351-P to many large-scale liquefied natural gas (LNG) projects being developed should provide the joint venture with many options for the commercialization of any gas discoveries.

Tallaganda Prospect

The Tallaganda prospect in WA-351-P has been high graded as an attractive prospect and an early drilling candidate. Tallaganda straddles WA-351-P and WA-335-P and has a prospective resource range of 0.8 Tcf to 1.3 Tcf (Mean to P10 recoverable) within WA-351-P.

Strong seismic amplitudes within closure and AVO support in the Tallaganda fault block are indicative of reservoir and gas and the prospect is assessed as having a greater than 50% chance of success.

Under the terms of the exploration license, an exploration well is required to be drilled before June 5, 2013. The Operator has advised that a well on the Tallaganda prospect could spud in 2011 or early 2012.

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Tag Completes Initial Flow Test at Sidewinder Well

- Tag Completes Initial Flow Test at Sidewinder Well

Thursday, June 02, 2011
TAG Oil Ltd.

TAG Oil reported that the initial flow test of the Sidewinder-3 discovery well is now complete. The Sidewinder-3 well is located in TAG Oil's 100% controlled Petroleum Exploration Permit 38748 in the Taranaki Basin, New Zealand, where TAG has now drilled four successful discovery wells to date.

Located 1.1 km to the south of the Sidewinder-1 discovery, the Sidewinder-3 well was drilled to a total depth of 2,160 meters (7,085 feet), encountering 15.4 meters (50 feet) of net gas-bearing sandstones. With the four wells drilled to date, the interpreted total hydrocarbon column at Sidewinder exceeds 60 meters (196 feet) in thickness, with no water column evident in any of the Sidewinder wells.

A 4-Point Isochronal test on the Sidewinder-3 discovery well achieved a stabilized flow rate of 7.2 million cubic feet per day (1200 BOE per day) with less than a 50% drawdown. These results are consistent with the Sidewinder-1 well flow test, which achieved stabilized flow rates of 8.5 million cubic feet of gas plus 44 barrels of oil per day (1461 BOE per day) from 14m (46 feet) of net pay encountered.

Further reservoir engineering analysis of the 4-point Isochronal test for the Sidewinder-1 well, calculated the absolute open flow rate to be 30 million cubic feet of gas per day or 5000 barrels of oil equivalent per day. A similar analysis will be completed on Sidewinder-3 once the down hole gauges are retrieved in approximately two weeks.

"The strong flow rates we are achieving in the Sidewinder wells support our decisions to expand the through put capabilities as well as fast-tracking the construction of the new production facilities. As a result, we are on-track to produce the first oil and gas from the Sidewinder discoveries by August 2011." Garth Johnson, TAG Oil CEO commented. "Our Sidewinder acreage is proving to be a very exciting and prolific discovery area that we believe can provide TAG with substantial near-term production increases, as well as significant reserve growth. We also look forward to flow testing the recent Sidewinder-2 and Sidewinder-4 discoveries, and continuing our pursuit of the many high-impact exploration opportunities TAG has identified on 3D seismic permit-wide."

TAG also reports that the service rig has now been moved onto the Sidewinder-4 discovery well for flow testing. The Sidewinder-4 penetration is approximately 1 km to the east of the Sidewinder-1 well and encountered 19 meters (62 feet) of net oil-and-gas bearing sandstones. Once the Sidewinder-4 flow test is complete, the service-rig will move to the Sidewinder-2 well, which encountered 47 meters (154 feet) of net oil-and-gas bearing sandstones to the west of Sidewinder-1 well.

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Petronas Purchases $1.1B Stake in BC Shale Assets

- Petronas Purchases $1.1B Stake in BC Shale Assets

Thursday, June 02, 2011
Progress Energy Resources Corp.

Progress Energy has executed a binding framework agreement to create a strategic partnership with the Malaysian national oil company, Petronas, to develop a portion of Progress' Montney shale assets in the Foothills of northeast British Columbia. Progress will sell 50 percent of its working interest in its Altares, Lily and Kahta properties (the "North Montney Joint Venture") to Petronas for $1.1B (CDN $1.07 billion). The agreement also reflects the desire by both parties to explore additional opportunities to develop liquefied natural gas (LNG) export capacity in British Columbia.

"This is a breakthrough transaction for Progress: the partnership we are launching will enable us to accelerate our growth strategy," said Michael Culbert, President and Chief Executive Officer of Progress. "We are very pleased to form this long-term partnership with Petronas. They share our belief that our North Montney shale assets are a world-class resource that deserves significant investment. We look forward to benefitting from Petronas' significant global expertise including their leadership in developing infrastructure and accessing LNG markets. As well as enhancing Progress shareholder value, this partnership will also generate substantial economic benefits for local communities and the province of British Columbia, while leveraging the environmental benefits of Canada's abundant and clean-burning natural gas resources globally."

Under the terms of the framework agreement, Petronas will pay 25 percent of the total consideration (CDN $267.5 million) in cash at closing and 75 percent of the total consideration in the form of a capital carry whereby Petronas will pay 75 percent of Progress' share of future capital expenditures in the North Montney Joint Venture over the next five years to a total of CDN $802.5 million. The Transaction provides Progress with the capital required to accelerate the development of its unconventional assets and unlock the value underlying the Company's vast Montney land holdings.

In addition to the above Transaction, Petronas and Progress will establish an LNG export joint venture (the "LNG Export Joint Venture") to be 80 percent and 20 percent owned, respectively. The LNG Export Joint Venture will launch a feasibility study to evaluate building and operating a new LNG export facility on the West Coast of British Columbia. PETRONAS would be the operator of this facility, and Petronas and Progress would jointly market the LNG utilizing Petronas' well-established and extensive network of customers in the largest LNG markets globally.

"Canada is poised to take a larger role on the world's energy stage. Developing new export options for Canadian natural gas producers is a logical step in connecting our vast resources with growing Asian demand for environmentally responsible energy sources like natural gas," said Mr. Culbert. "We look forward to working with West Coast British Columbia communities as we pursue this opportunity to build a new facility that will add value to British Columbia's natural resources while creating considerable long-term local economic benefits."

In connection with the LNG Export Joint Venture, Petronas will provide a standby equity financing commitment of up to $600 million, for Progress' capital requirements arising from the North Montney and LNG Export joint ventures from which Progress can draw down at the time of a successful LNG final investment decision.

The North Montney Joint Venture comprises 149,910 working interest acres in which Petronas will acquire a 50 percent interest and Progress will be the operator. The North Montney Joint Venture lands represent approximately 20 percent of Progress' rights in its northeast British Columbia Foothills land holdings, which total approximately 700,000 net acres. Progress holds approximately 900,000 net acres of Montney rights over its entire British Columbia and Alberta land base, making it one of the largest Montney land rights holders. The joint venture properties include five wells with minimal production at this time.

The closing of the transaction is subject to the execution of definitive agreements and receipt of regulatory approval. BMO Capital Markets acted as exclusive financial advisor to Progress on this transaction.

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Ohio's Established Supply Chain for Shale Gas Maximizes ROI

- Ohio's Established Supply Chain for Shale Gas Maximizes ROI

Thursday, June 02, 2011
Ohio Business Development Coalition

Costs associated with accessing markets, shipping products and supplies, and support services can be a considerable business expense for energy companies involved in the extraction and distribution of natural gas. In addition, having efficient access to an established energy supply chain and natural gas delivery system can advance or hinder a project.

Energy companies are looking at both the Marcellus and Utica Shale natural gas reserves to supplement the nation's energy supply and to keep customer utility rates in check. The Marcellus Shale formation stretches from the edge of Maryland to New York, Pennsylvania, West Virginia and Appalachian Ohio along the Ohio River. The boundaries of the deeper Utica Shale formation extend under the Marcellus Shale region and beyond. Experts estimate the Marcellus Shale formation has the potential to produce the energy equivalent of 87 billion barrels of oil -- enough to meet total U.S. natural gas demand for 20 years.

A recent Penn State University study indicates companies involved in the Marcellus Shale gas development plan to increase their investment to more than $11 billion in 2011, up from $4.5 billion in 2009 and $8.8 billion in 2010. The study reported that the next wave of investment would focus on creation of the energy industry supply chain supporting Marcellus Shale gas extraction and distribution.

Already Ohio companies are leveraging ease-of-access to market and a well-developed logistics infrastructure to service the natural gas supply chain at the speed of today's business environment and achieve the fastest return on their investment.

Everything that made Ohio the ideal location choice for suppliers to the automotive industry is in place for Tier I and II suppliers to efficiently and affordably supply the Marcellus and Utica Shale gas industry: central location, logistics infrastructure, skilled workforce and a favorable state tax structure. Like the auto industry, shale gas supply chain companies are finding Ohio is the ideal location choice to achieve the fastest return on their start-up investment and that they will benefit from the state's manufacturing know-how and world-class logistics infrastructure.

Extracting and distributing shale gas requires a lot of supplies from drill bits, pipes and fixtures, machinery, sand, water, containers, measurement tools and safety equipment. And, every well is unique, making it important to have fast access to a full range of support services to ensure commercial success.

Supply chain companies that locate operations in Ohio to support the Marcellus and Utica Shale natural gas industry will find the state's central location places their company in close proximity to all five primary states spanned by the Marcellus Shale Formation. And Ohio's world-class transportation infrastructure makes it fast and easy to service customers. Ohio is within 600 miles of 60 percent of the U.S. and Canadian population and is within a one-day drive of 70 percent of North America's manufacturing capacity, so components and finished goods quickly reach their destination anywhere in North America.

V&M Star, a pipe maker for the oil and natural gas industries in Youngstown, recognized the potential for Marcellus and Utica Shale reducing U.S. dependence on foreign energy sources. In 2010, V&M Star's parent company, Vallourec, invested $650 million in a new pipeline mill, directly attributed to pipeline expansion for the Marcellus and Utica Shale natural gas. V&M Star President and COO Joel Mastervich attributes the company's location in Ohio's Enterprise Appalachia has a key factor to the investment in Marcellus and Utica Shale natural gas.

"Our proximity to the Marcellus and Utica Shale formations was a key factor in our decision for the new pipe mill," said Mastervich. "And, since construction began, we've come to appreciate the emerging potential of the Utica shale, which is even closer to our operations."

In addition, Dearing Compressor & Pump Co., a Boardman-based manufacturer of industrial pumps and compressors used in natural gas drilling, recently announced an investment of about $3 million in a new assembly plant to expand its production capacity.

"We recognized the need for expansion about a year ago, and I would say 99 percent of it was driven by the Marcellus Shale," notes Becky Wall, co-owner of Dearing Compressor & Pump Company, in an interview with the Youngstown Vindicator. "We were able to start reacting to the business potentials in the Marcellus Shale sooner than other companies."

Energy companies have a growing need for engineers, researchers and skilled manufacturing workers, which are readily available in Ohio. Ohio's universities and colleges are ready to meet the need for new technologies and skilled green collar workers through new research, degrees and training specific to the advanced energy industry through programs such as The University Clean Energy Alliance of Ohio (UCEAO) and investments through Ohio Third Frontier.

"We have a skilled and productive workforce in our existing mill and we knew we could find high quality employees for the new mill here," continued Mastervich. "There is an established center of pipemaking expertise in Youngstown. Also, the project received- and continues to receive- a high level of cooperation from local, county, state and federal governments."

In addition, supply chain companies can reduce operating costs with Ohio's favorable business climate, because there is no tax on inventory or corporate income - and boost the return on investment with no tax on purchases of machinery and equipment.

Yet, perhaps the most significant tax benefit that supply chain companies that locate in Ohio can obtain is there is no tax on inventory.

Ohio's comprehensive supply chain is just one of the key benefits for energy companies involved in the commercial development of Marcellus and Utica Shale gas, according to Ed Burghard, executive director of the Ohio Business Development Coalition, the nonprofit organization that markets the state for capital investment.

Ohio promises a perfect balance that allows business owners, their employees and their families the opportunity to achieve both their professional and personal aspirations without having to sacrifice one for the other. Ohio offers businesses an environment that makes it easy to foster work-life balance. The convenience of travel, with short commutes from work to home, lower stress and give more time to priority family activities.

"In Ohio, work-life balance is more than a buzzword; it's the way we do business," said Burghard. "Companies are trying harder to help their employees achieve better work-life balance because this positively impacts a company's bottom line. Ohio's Low-cost, low-stress communities and short commutes create the State of Perfect Balance, where you can achieve both professional and personal success without sacrificing one for the other."

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Norwest to Drill Ahead at Arrowsmith Well

- Norwest to Drill Ahead at Arrowsmith Well

Thursday, June 02, 2011
AWE Ltd.

AWE reported that at 0600 hours (WST) the Arrowsmith-2 exploration well was preparing to drill ahead at a measured depth of 600 meters after running and cementing 13-3/8" casing, as planned.

The Arrowsmith-2 well is designed to test the unconventional gas potential of the Carynginia Formation, Irwin River Coal Measures and Kockatea Shale and will be drilled to a proposed total depth of approximately 3,420 meters.

The well is located approximately 25 kilometers from the Woodada Deep-1 well (deepened by AWE in April 2010 to acquire cores over the Carynginia Shale interval), and approximately 500 meters south east of the Arrowsmith-1 well, which tested gas from the Carynginia Formation.

During drilling, the joint venture is planning to cut conventional cores from the middle Carynginia Shale and Irwin River Coal Measures. On completion of drilling, the well will be suspended for future fracture stimulation and testing which is planned for later in the year.

The participants in EP 413 are:
  • AWE Limited (via subsidiaries) 44.252%
  • Norwest Energy NL (Operator) 27.945%
  • Bharat PetroResources Ltd 27.803%

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Nido Nears TD at Gindara Well

- Nido Nears TD at Gindara Well

Thursday, June 02, 2011
Nido Petroleum Ltd.

Nido, on behalf of the SC 54B Joint Venture, provided the following update on the progress of the Gindara-1 exploration well over the past week.

At 06:00 hrs (WST) on June 2, 2011, the Gindara-1 well was at a depth of 2,745 meters MD (2,723 meters TVDss) and drilling ahead in the Pagasa Formation. Progress for the week was 1,343 meters.

The forward operation is to continue to drill the 12 1/4'" hole through the Pagasa Formation to the section total depth of approximately 3,307 meters MD (3,285 meters TVDss) where the 9 5/8" casing is planned to be set. Prior to reaching the 9 5/8" casing depth, the
Gindara-1 well is prognosed to penetrate the top of the secondary Coron Clastics reservoir objective at approximately 2,872 meters MD (2,850 meters TVDss).

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American Standard Enters LOI for Shale Acreage

- American Standard Enters LOI for Shale Acreage

Thursday, June 02, 2011
American Standard Energy Corp.

American Standard has entered into four non-binding Letters of Intent (LOI) to acquire acreage in its three primary areas of operations: the Bakken of North Dakota and the Eagle Ford and Permian Basin plays of Texas and New Mexico. An LOI was signed for each of the following:
  • Bakken: ASEN has entered into an LOI to purchase approximately 15,000 acres in the Bakken shale play of North Dakota. This acquisition would increase the Company's total acreage in the Bakken to approximately 48,000 net acres. The agreement covers acreage in the heart of the play being mostly in Mountrail, Burke, Williams McKenzie and Divide Counties. A significant portion also lies in the newest "hot spot" of the Bakken being Stark and Dunn counties.
  • Eagle Ford: ASEN has agreed to a transaction that when completed will increase its acreage holdings in the Eagle Ford oil window from 10% Working Interest in 12,000 net acres (two rigs presently running with 8 wells in various stages of development) to a total of over 20,000 net acres. The average well on ASEC holdings has come in at Initial Production (IP) flowing daily rates in excess of 1,000 BOE. Upon completion of these acquisitions ASEN will have positions in LaSalle, Wilson, Gonzales and Maverick Counties.
  • Permian Basin:
    • Wolfcamp Shale: West Texas: ASEN entered into an agreement to purchase 100% Working Interest in over 12,800 acres of the "Wolf camp Horizontal Play" (10,000 acres of which are Held By Production). This position is in the fairway of Crockett and Reagan Counties. The acreage is contiguous to the recent University of Texas leases auctioned in April for over $2,700 per acre by companies such as Pioneer, El Paso, Devon, EOG and Conoco Phillips.
    • Avalon, Wolf-Bone Play: South Eastern New Mexico. A tentative agreement has been reached whereby ASEN will acquire various non-operated working interests in over 65,000 gross acres (approximately 14,400 net acres). The leases are located in Eddy and Lea Counties including two 100 % Working Interest Sections on the Texas side being immediately to the south in Loving, Reeves and Culberson Counties. All of the acreage included in the agreement is Held By Production. Operators of the wells will be Apache, Yates Petroleum, Heyco, Oxy, COG, XOG, Nadel and Gusman, Mewbourne, Nearberg, Chesapeake, Devon and BP.

Recent entry of major oil companies and large independents in these plays has made it difficult for other companies to compete. However, upon completion of these acquisitions with its strategic partner, ASEN will be in a position to participate in a larger number of leases, which not only reduces risk but provides ASEN with more drilling opportunities normally available to a company of similar size.

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UK Tax Increase Hurts South Morecambe Profitability

- UK Tax Increase Hurts South Morecambe Profitability

Thursday, June 02, 2011
Rigzone Staff
by Karen Boman

Centrica will operate its South Morecambe gas field intermittently in the future as the increase in UK Supplementary Corporation Tax means the field's profitability may be marginal.

The tax increase means the South Morecambe field will be taxed at 81 percent. Decisions on when to run the field are made on a commercial basis, taking into account market factors, operating costs and earnings, a company spokesperson said.

"We will continue to monitor the market closely to make production decisions and if it makes more economic sense to buy gas for our customers in the wholesale market we would limit South field production."

Planned maintenance at the field has been completed and the field has been operationally available since May 28, a company spokesperson said.

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Wood Group Wins Contract for Chevron's Jack/St. Malo Facility

- Wood Group Wins Contract for Chevron's Jack/St. Malo Facility

Thursday, June 02, 2011
Wood Group
by SubseaIQ

Wood Group has been granted a multi-million dollar, 42-month contract by Chevron U.S.A. Inc. for the planning, managing and field execution of commissioning for the Jack/St. Malo semi-submersible hub production facility. Work will be performed by DSI, Wood Group PSN's commissioning services business.

The Jack/St. Malo platform will be installed in 7,000 feet of water in the Walker Ridge section of the US Gulf of Mexico and will have an initial design capacity of 170,000 barrels per day of oil.

DSI's commissioning will be performed at a South Texas fabrication yard where the topsides will be fabricated and integrated with the hull, and offshore, during final installation and start-up

DSI has commissioned four other deepwater Gulf of Mexico semi-submersibles, including two that had designs similar to that of Jack & St. Malo. DSI's work for Chevron has included commissioning of the Tahiti spar in the Gulf of Mexico and the South Nemba Enhanced Recovery Project offshore Angola.

"Project commissioning proves the integrity and reliability of all operating and safety systems on a production facility prior to hydrocarbon start-up. Commissioning must be delivered to the highest quality in the deepwater Gulf of Mexico today," stated Trey Lambert, president of DSI. "We look forward to providing these critical services for Jack/St. Malo and to extending our relationship with Chevron."

Wood Group has supported the Jack & St. Malo project throughout its development. Mustang is conducting detailed design for the Jack/St. Malo topsides facilities and the integrated control and safety systems, and J P Kenny is performing detailed design for the deepwater oil export pipeline.

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Ascent Reports 2010 Results

- Ascent Reports 2010 Results

Thursday, June 02, 2011
Ascent Resources plc

Ascent announced its final results for the year ended December 31, 2010.

  • Progressed and refined portfolio of low cost, onshore oil and gas assets with near-term upside potential across Europe - Hungary, Slovenia, Switzerland, Italy, and the Netherlands
  • Advanced the Petišovci/Lovászi/Ujfalu tight gas project in Slovenia/Hungary towards production - P50 gas in place estimates of 412 Bcf. (11.7 Bm3; 68.7 MMboe)
  • Confirmed gas in all of the six Middle Miocene Badenian reservoirs and flow tested gas from the Lower Miocene Karpatian reservoir at Petišovci project - potential to increase gas in place estimate by in excess of 100 Bcf, with preliminary results of Pg-11A expected to be released shortly
  • Established active development program at Frosinone/Strangolagalli project in Italy
  • Sold 90% interest in Hermrigen/Essertines/Linden project in Switzerland to eCORP Europe International Ltd. for €8 million cash - retained various back-in options on specific potentially successful discoveries
  • Strengthened balance sheet post year end with a £17 million placing to institutional investors at 5 pence per share
  • Continued production at 48.8% held Penészlek project in Hungary, currently generating gross gas sales of approximately €300,000 per month
  • Made changes on a corporate level including appointment of new Nominated Adviser and Broker and strengthened Board


I am pleased to report that 2010 was a year of solid progress for Ascent both operationally and in terms of positioning the Company for steady near- and long-term growth in shareholder value.

Our strategy remains to combine lower risk field redevelopment projects in areas with existing infrastructure with selected higher risk exploration projects all designed to provide a balanced risk/reward profile with good potential upside. To this end, we have a diversified portfolio of principally onshore, hydrocarbon exploration, redevelopment and appraisal interests across five European countries: Hungary, Slovenia, Switzerland, Italy, and the Netherlands. We are initiating relatively simple development models to advance these projects, utilizing the latest technology and working with local organizations in each jurisdiction to increase efficiency. As a result of the work undertaken during 2010 and 2011, we anticipate ramping up production towards the end of 2011 and beyond.

Our primary near-term objective is to advance the Petišovci/Lovászi/Ujfalu tight gas project in Slovenia/Hungary. We now hold a 75% interest in the Petišovci asset, having acquired a further 48.75% from EnQuest PLC post year end in return for a 22.5% equity stake in Ascent and a nil cost option of 150,903,958 additional shares, and a 50% interest in the Lovászi and Ujfalu assets. During the year we had independently verified P50 gas in place estimates for the entire project of 412 Bcf. (11.7 Bm3; 68.7 MMboe) and for that reason we consider it relatively low-risk. The challenge for us in 2011 is not so much finding the gas, which we know is there, but how to unlock this gas in a commercial manner given it is largely a tight gas asset.

Phase 1 of the project's development program included the drilling of Pg-11 well in December 2010 to define the main project parameters. On completion of drilling in February 2011, we were able to confirm gas in all of the six Middle Miocene Badenian reservoirs as well as, most excitingly and unexpectedly, the Lower Miocene Karpatian reservoir, which we hope will increase the gas in place estimate by in excess of 100 Bcf. The data collected, in conjunction with the full 3-D seismic which we acquired during the year across the whole project area, has led us to believe that we can extract the gas using modern drilling techniques, either by drilling horizontally or by fracking. In order to determine the right method to use, Phase 2 of the program is currently underway with a deeper horizontal sidetrack to enable us to fully delineate the Lower Miocene Karpatian reservoir and depending on these results we may follow this up with a sidetrack well in the Middle Miocene. Subsequently, in the late summer of 2011, we plan to drill another well, Pg-10. Following this, if successful, it is hoped that production can commence before the end of the year. To achieve this target, a simple pipeline connection and a carbon dioxide ('CO2') reduction plant is required to connect any producing wells in the project to the national pipeline network.

Going forward, our development plan envisages 10-15 more wells being drilled over a three- to four-year period. It is estimated that if production from the wells is in line with current projections, that net operating cash flow from the first well brought on stream during 2011 could be €3 million in 2011 rising to €10 million in 2012 and €24 million for the period 2013-2015, based on €7 Mscf. gas pricing. The project's net CapEx however is not inconsiderable requiring in excess of €150m to develop the entire field.

We are also focused on two other core projects: Hermrigen/Essertines/Linden in Switzerland and Frosinone/Strangolagalli in Italy. The Swiss project is another known oil and gas discovery, which was unexploited due to the low price of gas in 1982 and lack of pipeline infrastructure at that time. We consider that this is also a low risk project as Ascent sold its 90% interest to eCORP European International Ltd ('eCORP') in April 2010 for €8 million, while retaining a 45% back-in right on any success for three conventional appraisal prospects and a 22.5% back-in right for a further three secondary conventional prospects for apportioned cost. eCORP anticipates drilling the Hermrigen well early in the summer of 2011 once the permit is received.

Finally, the Frosinone/Strangolagalli oil exploration and redevelopment project in Italy has also been making headway. New seismic was shot last year in the Strangolagalli Concession and this year a latest generation satellite reconnaissance survey was commissioned, enabling us to plan a new three-well drilling program for 2011/2012. Further seismic has been commissioned at the Frosinone Exploration License to identify drilling locations. We are currently exploring our options in terms of financing an exploration program but as all the drilling would be targeting reservoirs about 1,000 meters deep, costs should be relatively low, yet the upside could be significant for a Company of our size.

Also on the theme of finance, production continues at our 48.8% held Penészlek project in Hungary, where we are currently generating gross gas sales of approximately €300,000 per month. The strong European gas market conditions have been working in our favor; with over 50% of European gas imported and forecast to rise to circa 75% in line with the declining North Sea production, we anticipate these favorable pricing conditions to continue. Production at Penészlek is expected to continue for about another 12 months with another sidetrack well, PEN-105, targeted for the summer of 2011 prior to the field being fully depleted.

The self-financing Penészlek project is useful as it provides the Company with cashflow for overheads, however post the year end in March 2011, it was necessary to raise additional funds by way of a placing in order to progress our core Petišovci/Lovászi/Ujfalu project. We were therefore very pleased to raise £17 million, before expenses, primarily with high quality institutional investors. This has provided the capital to significantly advance our Petišovci/Lovászi/Ujfalu project and we believe that if successful the money could be enough to get us to production/cash flow generation before the year end.

On a corporate level, we have made a number of changes. In September 2010 we appointed finnCap Ltd as the Company's Nominated Adviser and Broker to strengthen our profile within the fund and wealth management arena. Earlier in the same month we also made changes to our Board with the appointment of Dr. Cameron Davies as a Non-executive Director. Cameron is an international energy sector specialist and the former Chief Executive of Alkane Energy plc. He has an excellent track record of exploration success and growing profits in a quoted energy company. He brings with him the technical skills and broad network of international energy industry contacts which will be invaluable in progressing Ascent's extensive portfolio of European oil and gas development and exploration assets.

At the same time, both Legal Director Malcolm Groom and Non-executive Director Jonathan Legg, who had been with the Company since 2005, stepped down from the Board to focus on other commitments. At the end of 2010, Simon Cunningham, our Finance Director, also stepped down from the Board to re-locate to Australia. I would like to take this opportunity to thank them all for their work during their long association with Ascent.

Simon was replaced by Scott Richardson Brown as Executive Finance Director, who had been appointed in November 2010 as a Non-executive Director. Scott is a qualified Chartered Accountant and subsequent to his experience as an auditor, he spent over 10 years working with AIM, FTSE 250 and FTSE 100 companies, both in a corporate finance advisory role and, recently, as Corporate Finance and Investor Relations Director of CSR.

Additionally, post the year end, as part of the agreement with EnQuest PLC, Graham Cooper was nominated to join our Board as a Non-executive Director in February 2011. Graham brings with him a wealth of experience which will be very valuable to the Company. EnQuest will also provide technical support to Ascent for the Petišovci Project, as well as for the evaluation of future European business development opportunities.

With a strong team in place as well as a solid investor base, a healthy balance sheet and an exciting portfolio of diversified assets, the outlook for 2011 and beyond is highly encouraging. Having proved up our core portfolio we are now focused on extracting value from it and in line with this, aggressive work programs are underway. The Petišovci/Lovászi/Ujfalu tight gas project is particularly promising, which in tandem with our other projects, will, I am confident, create real and lasting value for our shareholders.

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Gastar Updates Ops in W. Virginia, E. Texas

- Gastar Updates Ops in W. Virginia, E. Texas

Thursday, June 02, 2011
Gastar Exploration Ltd.

Gastar updated on certain operations in advance of its Annual General and Special Meeting of Shareholders scheduled for 10:00 am CDT today in Houston, Texas.

Marcellus Operations – Gastar has completed the drilling of two horizontal Marcellus wells in Marshall County, West Virginia, the Wengerd 1H and 7H, with lateral lengths of 4,700 and 5,700 feet, respectively. These wells are scheduled to be fracture stimulated starting in mid-June with first production expected by early August. All infrastructure necessary to produce natural gas and condensate from these wells will be in place prior to August. Gastar owns a 50% working interest ("WI") in these wells.

Gastar has successfully put in place several arrangements that will facilitate on-going Marcellus operations. We have entered into an agreement with Baker Hughes to provide well completion services along with two agreements with other parties to provide up to 15,000 barrels of fresh water per day for well completions. We have also buried an array of geophones over 13 square miles of our leasehold to collect microseismic data on future well stimulations. We recently completed the construction of a 131,000 barrel frac pond and are nearing completion on a second frac pond with a capacity of 50,000 barrels. These actions will allow continuous frac operations on multi-well pads while minimizing costs related to water acquisition, transportation and disposal.

Gastar currently has two drilling rigs running in the play and will add a third rig this month. We are currently drilling on two multi-well pads in Marshall County and plan on spudding the Hickory Ridge 2H well (GST 100% WI) in Preston County, West Virginia on the acreage that was acquired in December 2010. Rex Energy has completed the drilling of seven Grosick wells in Butler County, Pennsylvania (GST WI of 19%) and plans to complete three of the wells with fracs scheduled for September and October of this year. First production from these wells is expected in the fourth quarter of this year.

In preparation for future drilling plans in the Marcellus, we are permitting two 3-D seismic surveys; one in Preston and Tucker Counties, West Virginia covering 103 square miles and another in Fayette County, Pennsylvania covering 20 square miles. These surveys are expected to be acquired late this year and in the first half of 2012 and should allow us to execute horizontal wells and avoid potential drilling issues given the somewhat more complex geology in the eastern side of the Marcellus play.

East Texas Operations – Gastar recently fraced the Belin #2 well in two lower Bossier zones. We encountered expected reservoir pressures of over 9,000 psi and good permeability, however these zones are only producing at a gross sales rate of 1 MMCFD due to suspected formation damage. We are currently evaluating a possible re-frac of these zones. Two additional lower Bossier zones remain in the wellbore to be completed at a future date.

We are currently drilling the Belin #3 well at a depth of 16,800 feet with an expected total depth of 19,000 feet. We have no other Bossier wells planned at this time for the remainder of 2011. We are evaluating core data taken from the Eagle Ford/Woodbine interval in the Belin #3 well in order to determine drilling and completion plans for a future Eagle Ford/Woodbine well to be drilled later this year. We are also continuing to evaluate production from the Wildman 8H Glen Rose completion in order to determine whether production warrants further development.

J. Russell Porter, Gastar's President and CEO, commented, "We are moving quickly to capitalize on our position in the liquids-rich area of Marshall and Wetzel Counties, West Virginia and taking full advantage of our joint venture drilling carry. We expect that the economics of drilling in the liquids-rich portion of the Marcellus will be excellent and when coupled with a carry of 75% of our costs this year by our joint venture partner, should result in outstanding rates of return and very short payouts for Gastar. Our gross capital expenditure plan for the Marcellus in 2011 totals $141 million of which Gastar will contribute only $19 million while receiving the benefit of 50% of the total expenditures.

"The results of the Belin #2 well are disappointing and surprising given that the log characteristics and pressure responses seen in this well were very similar to the other lower Bossier zones that have produced at much higher rates. We plan on producing the well while we evaluate future possible operations in this wellbore."

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Ford Plans To Invest About $100 Million In Robotic Laser Technology

- Ford Plans To Invest About $100 Million In Robotic Laser Technology

Jun 2, 2011

Ford (NYSE:F) plans to invest about $100 million in robotic laser technology to make parts fit better and reduce wind noise inside the vehicle.

The company said that it was installing the equipment first at plants that make the Ford Focus and the Explorer crossover sport utility vehicle.

Ford Motor has a potential upside of 39.9% based on a current price of $14.23 and an average consensus analyst price target of $19.91.

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Google Edging Higher as Wall Street Digests News of Gmail Hacking

- Google Edging Higher as Wall Street Digests News of Gmail Hacking

Jun 2, 2011

Google (NASDAQ:GOOG) is modestly firmer in pre-market trading as investors continue to react to news of Gmail hacking.

Google swung to losses in the after-hours session following the company's announcement that "hundreds" of Gmail accounts had been hijacked through malware or "phishing" scams, getting users to share passwords.

The company said on its blog, "This campaign, which appears to originate from Jinan, China, affected what seem to be the personal Gmail accounts of hundreds of users including, among others, senior U.S. government officials, Chinese political activists, officials in several Asian countries (predominantly South Korea), military personnel and journalists."

On Thursday, the Chinese government rejected suggestions that it was linked to the attack.

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Gazprom to Reach Pre-Crisis Output 2013, Sees Increase in 2014

- Gazprom to Reach Pre-Crisis Output 2013, Sees Increase in 2014

Thursday, June 02, 2011
Dow Jones Newswires
by Alexander Kolyandr

Gazprom expects to reach its "pre-crisis production level" in 2013, for which it needs to put the Yamal field on-line in 2012, said the company's Deputy Chief Executive Alexander Ananenkov.

Speaking at a televised press conference, he said the company is aiming to reach a production level of about 550 billion cubic meters (BCM) of gas, first reached in 2006, in 2013.

He said Gazprom is currently producing gas ahead of the planned level of 505.6 BCM and may reach production of 519 BCM in 2011.

By 2014 there will be a significant production growth and the company may increase production to 570 BCM.

Gazprom said late 2010 it expects gas production to be between 570 billion cubic meters and 580 billion cubic meters by 2015.

Ananenkov said to enable this production growth the company needs to start full production on Yamal gas field.

He said the company is not planning to start any production on Kovykta gas field before 2017.

Ananenkov said Russia's total gas production may reach 1 trillion cubic meters by 2030.

Copyright (c) 2011 Dow Jones & Company, Inc.

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Gulfsands Encounters Hydrocarbon Columns in Syria

- Gulfsands Encounters Hydrocarbon Columns in Syria

Thursday, June 02, 2011
Gulfsands Petroleum plc

Gulfsands announced that drilling and testing operations have recently been completed on the Abu Ghazal-1 ("AGZ-1") exploration well in Syria. Potentially significant hydrocarbon columns were encountered within the Triassic aged Butmah and Kurrachine formations. However, a series of drill-stem tests ("DST") undertaken on the well resulted in the recovery of sub-commercial quantities of heavy/viscous oil. The well has now been suspended pending detailed analysis of well results.

The AGZ-1 well commenced drilling operations on January 23, 2011, utilizing the Crosco E-401 drilling rig and was drilled to a depth of 3850 metres Measured Depth ("m MD"). The well was planned to evaluate potential reservoirs within the Cretaceous aged Massive and Triassic aged Butmah and Kurrachine Dolomite formations within a large, fault bound structure identified and mapped on 3D seismic data.

The well encountered the Massive Formation at a depth of approximately 2572m MD, but in spite of elevated gas readings observed while drilling, the section drilled at this location was found to contain relatively poor reservoir properties and drill cuttings indicated only traces of oxidized oil and asphalt.

The Triassic Butmah Formation was encountered at 3287m MD with elevated gas readings and traces of oil in the mud system. Interpretation of wireline logs indicated a significant oil column; however no formation fluids were recovered when testing. The lack of any fluid flow from the formation is currently interpreted to be due to low permeability within the reservoir.

The well encountered the top of the Triassic Kurrachine formations at 3456m MD. Substantially elevated gas readings were encountered while drilling through this section and live oil was recovered in coring operations. Interpretation of wireline logs indicated a significant oil column, with subsequent testing resulting in sub-commercial volumes of very heavy to heavy oil (approximately 12 degree API) being recovered along with highly saline formation water.

The Crosco E-401 rig will now be moved to the Khurbet East No. 19 ("KHE-19") well location on the northwest flank of the Khurbet East field. This well is planned as a further step-out from the successful KHE-18 delineation in the northwest, which encountered high quality karst reservoir in the Massive formation. The KHE-19 well will evaluate an area estimated to contain oil-in-place of approximately 30 MMstb and if the well is successful there will exist an opportunity for possible (3P) Khurbet East reserves to be matured to probable and proven reserves categories at year end 2011.

Gulfsands drilling operations in Syria Block 26, using the Crosco E-401 and E-501 drilling rigs, are continuing as planned and have continued without interruption during recent months.

Ric Malcolm, Gulfsands CEO, said, "While we are pleased to have encountered significant oil columns within the Abu Ghazal well, the production test results have been disappointing. We will now analyze all of the data prior to determining the extent of any further operations at this location. The rig will now move on to drilling the KHE-19 well as we continue with our very busy 2011 program of drilling exploration prospects and development wells."

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Entek Makes Oil Discovery in GOM

- Entek Makes Oil Discovery in GOM

Thursday, June 02, 2011
Entek Energy Ltd.

Entek provided an update on the VR 342 well in the Gulf of Mexico where the Company has a 50% working interest.

The well is at 8,162 ft (Measured Depth) and has penetrated the primary L1 Sand target. Preliminary wire-line logging and RCI (MDT equivalent) analysis indicates greater than 40 ft of net oil pay with an API gravity of 32O based on interpretation of the RCI data.

Current operations are running side-wall cores to obtain additional reservoir and oil character information (including confirmation of the API gravity of the oil). The well will then be deepened to the planned total depth, which is 8,552 ft (Measured Depth) and the new hole section logged. Following this, production liner will be run across the open-hole section and the well will be suspended as a future producer. Development planning will begin immediately leading to first oil as soon as practicable. Further announcements will be made once the timing becomes clear.

The above results are as predicted pre-drill and provide further confidence in the gross 3P potential, established by previous drilling on the block, independently evaluated at circa 7.5 MMBO (1P 2.5 MMBO; 2P 4.8 MMBO; 3P 7.5 MMBO) and 9.5 BCFG (1P 3.8 BCFG; 2P 6.3 BCFG; 3P 9.5 BCFG).

As previously announced, it is not intended to test flow rate in this well. Analogue studies performed independently on Entek's request suggest potential flow rates of 500-1000 BOPD with minimal decline for the first 3-4 years. Further analysis will be conducted once side-wall core data has been analyzed. This is common practice in the Gulf of Mexico where numerous existing producing analogues give a high level of confidence.

CEO and Managing Director Trent Spry commented, "I am very pleased with the successful results of our first VR342 well which has delivered results to date as predicted. This is the first well in the Company's new oil focus and strategy in the Gulf of Mexico. Conventional oil production from the Gulf is an important part of the Company's strategy as it should provide significant cash flow for other value adding activities. We will continue to evaluate and high grade our oil prospects in the Gulf this year for drilling in 2012.
Following the success at VR 342 the Company's operational focus will now shift onshore to the evaluation of its Niobrara Oil Resource Play in Colorado and Wyoming."

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