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Oil and Gas Energy News Update

Wednesday, June 8, 2011

Oil & Gas Post - All News Report for Wednesday, June 08, 2011

Wednesday, June 08, 2011

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Commodity Corner: Oil Gains After OPEC Meeting Ends in A Draw

- Commodity Corner: Oil Gains After OPEC Meeting Ends in A Draw

Wednesday, June 08, 2011
Rigzone Staff
by Matthew V. Veazey

Thanks in part to a lack of consensus from OPEC, July crude oil gained $1.65 Wednesday.

The front-month contract settled at $100.74 a barrel after the oil cartel, meeting in Vienna, failed to decide whether to increase production quotas for its 12 member countries.

Saudi Arabia, Qatar, United Arab Emirates, and Kuwait advocated raising production—a position shared by the U.S. and other major oil importers that are trying to bolster their weak economies. Iran, Iraq, Venezuela, and the remaining countries save Nigeria urged keeping production at current levels. Nigeria took neither side in the contentious meeting.

Oil peaked at $101.89 and bottomed out at $98.02 during the midweek session.

Much of the central and eastern U.S. is experiencing a heat wave. Not surprisingly, demand for air conditioning has been on the rise. Also not surprisingly, July natural gas settled higher Wednesday.

Natural gas gained two cents to end the day at $4.85 per thousand cubic feet. The futures price fluctuated from $4.77 to $4.87.

Gasoline for July delivery lost a penny Wednesday, settling at $2.98 a gallon. The front-month contract traded within a range from $2.96 to $3.03.

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Opec talks collapse at 'worst ever' meeting

- Opec talks collapse at 'worst ever' meeting

Jun 9, 2011
Tamsin Carlisle and April Yee

VIENNA // The price of oil soared close to US$120 a barrel yesterday as Opec failed to reach agreement on production targets during a six-hour meeting described by the Saudi delegate as "one of the worst" ever.

The 12-nation group gathered behind closed doors at Opec's headquarters in Vienna while oil traders held their breath.

Earlier in the day it had been suggested the crude producers were close to agreement on a plan to increase production targets and to exclude Libya, which has halted production in the wake of its civil war, from the Opec quota system.

The delegates emerged from their meeting an hour earlier than expected, however, stunning oil markets with their failure to agree.

"We were unable to reach an agreement … this is one of the worst meetings we have ever had," the Saudi Arabian oil minister Ali al Naimi said, adding that his country - the world's largest oil exporter - was committed to keeping the market well supplied.

The UAE, Kuwait and Qatar, he said, had joined Saudi Arabia in supporting an increase in production quotas of 1.5 million barrels per day (bpd) over Opec's 28.8 million current daily production.

Nigeria's delegation head and Chairman of the Organization of the Petroleum Exporting Countries (OPEC) Goni Musa, left, Oil Minister of Iran and OPEC President Mohammad Aliabadi, center, and OPEC Secretary General Abdalla Salem el-Badri, right, talk to each other during the OPEC meeting in Vienna, Austria, Wednesday, June 8, 2011. (AP Photo/Bela Szandelszky) - AP

Libya also sparked intrigue as Muammar Qaddafi unexpectedly sent a delegate to the meeting, stymying plans by Libyan rebels to attend. Libya then joined Algeria, Angola, Ecuador, Venezuela, Iraq and Iran to oppose lifting quotas.

"Unfortunately at this time we are unable to reach any consensus," said Abdalla el Badri, the secretary general of the organisation that controls about 40 per cent of crude oil supply.

The International Energy Agency said it was disappointed with Opec's failure and called for "a prompt increase in supply".

The Paris-based group of energy-consuming nations added that any "potential increases in prices" caused by Opec's failure "risk undermining economic recovery".

Brent crude, the European benchmark, immediately shot up by more than $1 a barrel in late trading in London, hitting $118.58.

That widened the already yawning gap between Brent and the US benchmark West Texas Intermediate crude, which had slipped below $99 this week. The US crude climbed back above $100 early in yesterday's trading session on the New York Mercantile Exchange.

In the absence of a decision to raise the group's official output ceiling, which is some 1.4 million bpd lower than actual production in recent months, Opec will again leave unchanged the target that it set in December 2008, after crude had slid by about 80 per cent from the record $147 per barrel reached the previous July.

In what some analysts see as a reprise of the situation prevailing in the first half of 2008, crude has climbed steeply over the past eight months, with Brent averaging about $109 this year.

"Certain members believed that we should have had a production increase today. Others believed we should have some time to further assess the situation and then come to a decision," said Mohammad Aliabadi, the Opec president.

"The final proposal was that at the most we can wait for about three months during which we will assess the market situation, assess the demand and decide after that." he said.

But even on that modest proposal, the group could not reach agreement yesterday.

"I hope that in the period of three months at the latest we will be able to hold an extraordinary meeting to be able to come to a decision," said Mr Aliabadi, who only last week was appointed the caretaker oil minister of Iran.

Despite the lack of consensus, Opec took the unprecedented step of emphasising yesterday the meeting was not rancorous.

"The ministers are friends. The atmosphere was good. We had no conflict whatsoever," Mr el Badri said. "The reason we were unable to reach a decision was that everyone had their own information and data … so we were unable to agree. But the atmosphere was really friendly.

"As of today we're not in crisis. We have enough stocks; there is no shortage whatsoever."

Mr Aliabadi called for markets to "remain calm", while acknowledging that Opec ministers had failed to achieve their prime objective at yesterday's meeting, which was to reach a decision on the group's output target.

But analysts predicted a choppy market reaction with further oil price volatility virtually assured. "It's going to go up and then it's going to go down to where we are again, because we have demand destruction in the US, southern Europe," said Olivia Meyer, the chief executive of the MRL consultancy in London.

Mr el Badri said the Opec ministers specifically debated whether to raise crude production in the third and fourth quarters of this year.

Mr el Badri said the Opec ministers did not address the situation of Libya. There was no discussion of whether the North African country should be exempted from complying with an output quota when production and exports from its oilfields resume.

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Libya leaves it late for Opec show

- Libya leaves it late for Opec show

Jun 9, 2011
April Yee

VIENNA // Libya waited until the last minute to send a delegate to yesterday's Opec meeting in what is being interpreted as a message the regime led by Muammar Qaddafi remains in control despite the ongoing civil war.

Omran Abu Kraa, Libya's former electricity chief, entered Opec headquarters hours into yesterday's ministerial deliberations through a basement garage, avoiding reporters waiting at the building's entrance. Since conflict gripped the country in February, its energy industry has been crippled by the exit of foreign oil companies, international sanctions and attacks on infrastructure.

"They want to still have a say," said Catherine Hunter, an analyst with IHS in London. "It keeps the illusion of normality. It's not a done deal that the government side will not prevail, so they've got to keep up their representation as a sovereign state. It would be an admission of defeat to not come."

Libyan rebels adjust an anti-aircraft gun as smoke from a damaged oil facility darkens the sky in Ras Lanuf, Libya. Getty Images

The organisation that controls more than 40 per cent of the world's oil supply was meeting for the first time since popular uprisings took place in parts of the Middle East and North Africa and sent the price of oil as high as US$127 a barrel.

In Libya, civil war has shut down most of its production capacity of 1.6 million barrels a day (bpd).

Last week Libya's former top oil official, Shokri Ghanem, announced his defection from Col Qaddafi's regime and stepped down from his post as Libya's head Opec negotiator and chairman of National Oil Corporation, the state oil company.

At stake yesterday was whether Libya should be exempt from a system that caps the production of member countries. If Libya were to join Iraq in being exempt from the quota system, the significance of Opec's output target could be further eroded. The ceiling is now at 24.8 million bpd, but members pump about 1.5 million bpd in excess of that, according to most estimates.

"Libya is almost theoretical at the moment because it can't actually ramp up production," said Ms Hunter, adding that redistributing Libya's quota would be an impractical solution for Opec. "What happens when Libya comes back? There's so much sensitivity about the quota system to begin with. Anything that would affect new lines in the sand on quota distribution would be contentious and would probably take more than a day."

Before the start of yesterday's meeting Libya's seat was conspicuously empty. But officials made an effort to project a common front.

"We have to be united," said Abdullah el Badri, the secretary general of Opec. "We have no other choice."

Mr el Badri deflected questions about Libya, his home country, and said he would "facilitate anybody who will want to come here".

Representatives of Libya's opposition forces, who had said they were interested in sending delegates to the meeting, were nowhere to be seen.

"At Opec, they don't want to do these things — invite rebels — otherwise they might have problems in the future," said Ehsan Ul-Haq, a senior market consultant with KBC, an energy economics consultancy. "And Opec doesn't want to create problems."

Mohammed al Sada, the oil minister of Qatar, who has backed the opposition in Libya by providing military aid and marketing Benghazi crude, insisted the discussions would not be affected by politics.

"The focus today is the economy," he said. "The focus is the supply and demand, the fundamentals.

"This is an economic type of forum so we are not addressing the political issue, though Qatar recognises the National Transitional Council and helping our Libyan brothers in many facets; we're going to continue."

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Statoil Exercises Options in Surface Management Contract

- Statoil Exercises Options in Surface Management Contract

Wednesday, June 08, 2011

Statoil has exercised options in the current framework agreement with AGR Field Operations for surface management services. The extension has an estimated total value of NOK 40 million over a period of 12 months. This contract has an estimated value of 300 million including remaining options.

AGR Field Operations will provide Surface Management services including AGR's proprietary SOLV™ concept to all Statoil on - offshore installations in Norway and on the Norwegian Continental shelf, a total of 44 installations.

Åge Landro, Executive Vice President of AGR Field Operations commented, "This extension will allow us to continue the current relationship between AGR Field Operations and Statoil all across their operations in the North Sea region. We see the extension as a confirmation from Statoil that our products and services are valuable in the effective management of their assets."

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LNG Energy Says Hello to New Management

- LNG Energy Says Hello to New Management

Wednesday, June 08, 2011
LNG Energy Ltd.

LNG Energy announced the hiring of three key people to further support the Company's development projects in Poland and Papua New Guinea.

Dr. Weldon Beauchamp has been appointed as the Company's Vice President, Exploration. Weldon has over 30 years of experience in the oil and gas industry. He worked for Sun International for 10 years, as a production geologist and an exploration geologist in the U.S., North Sea/Europe, Africa, South America, and the Middle East. Additionally, he worked for ARCO as a senior geophysicist in the Middle East, Africa, and South America, most recently as the New Venture Manager for TransAtlantic Petroleum in Morocco, Turkey and Romania.

Weldon received a B.A. degree in geology from New England College, a M.S. degree in Geology from Oklahoma State University, and a Ph.D. in Geophysics from Cornell University. With a strong background in structural geology, remote sensing and geophysics, he is a member of the American Association of Petroleum Geologists, certified by the State of Texas Board of Professional Geoscientists, Society of Exploration Geophysicists, American Geophysical Union, and Geological Society of America. He is an adjunct faculty member of the University of Texas at Dallas.

Trevor Tjostheim has been appointed as the Company's Vice President, Operations. Trevor has over 20 years of experience in the oil and gas industry. He worked for Petro-Canada for 9 years in various roles, the most recent specializing in design and program completion, workover and intervention operations in Syria. He has also held management roles for Daylight Energy and Codeco Energy Group providing project management and technical expertise for completion and workover projects in Canada, the USA and Papua New Guinea. Trevor received a Diploma in Petroleum Engineering from the Northern Alberta Institute of Technology and is a member of the Society of Petroleum Engineers and the Association of Science and Engineering Technology Professionals of Alberta.

Ms. Jenni Lean has been appointed as the Company's Country Manager, Papua New Guinea. Jenni has over 15 years of experience in the oil and gas industry and was most recently the CEO of Rift Oil, PLC from 2004 to 2009, a publically listed company where she was instrumental in the discovery of two wildcat gas discoveries in western Papua New Guinea. Jenni has also worked in senior roles in Indo-Pacific Energy and Austral Pacific Energy and received both a B.Sc. degree and an MBA from the Victoria University of Wellington, New Zealand.

"LNG is developing our portfolio of high impact projects and simultaneously adding commensurately skilled and experienced individuals to our team. We welcome Weldon, Trevor and Jenni," said President Dave Afseth. "All three individuals bring significant knowledge and skills that we need for our acreage in Poland and Papua New Guinea."

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Energy Sector Report: June 8, 2011

- Energy Sector Report: June 8, 2011

Jun 8, 2011

Energy shares are higher in late-session trading as crude futures surge over 2% during the session only to pare back some gains. The July contract finished over $100 a barrel. Light, sweet crude oil for July delivery finished up 1.7% to $100.74 a barrel. OPEC did not reach an agreement on crude oil production as six countries opposed a Saudi Arabia-led coalition to raise output. In late-session energy news, (NYSE:PBR) Petroleo Brasileiro said it expects to triple crude oil production over the next 10 years as it develops recently discovered offshore oil fields. Meanwhile, Exxon Mobil (NYSE:XOM) shares are higher after the company said this morning that it made three deepwater discoveries in the Gulf of Mexico. The discoveries have a combined estimated reserves of 700 million barrels of oil equivalent.

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Walz, Other Lawmakers Say Drill and Dedicate

- Walz, Other Lawmakers Say Drill and Dedicate

Wednesday, June 08, 2011
Knight Ridder/Tribune Business News
by Mark Fischenich, The Free Press, Mankato, Minn.

Congressman Tim Walz and a bipartisan group of other lawmakers are taking another shot at tackling America's looming energy crisis.

A Mankato Democrat, Walz and allies from Pennsylvania to California are pushing a proposal that would allow more oil drilling off the nation's coasts and dedicate some of the resulting trillions of dollars in drilling-rights royalties to energy independence programs.

The bipartisan group first offered the idea three years ago -- when gas prices were approaching $4 a gallon and leaders of the Republican and Democratic parties were locked into opposing positions on how to deal with the nation's long dependence on foreign oil.

After the summer of 2008, gas prices dropped dramatically, partisan gridlock derailed passage of a national energy policy, the Deepwater Horizon drilling disaster unleashed the biggest offshore oil spill in American history, gas prices returned to $4 a gallon, and three years passed with no progress on a national energy plan.

On Tuesday, Walz told a group of business owners, labor representatives and energy researchers at Minnesota State University that continued inaction will cause great harm to the nation's economic outlook.

"(If) we don't anything about this, what does the future look like?" he asked.

The answer, according to Walz, is America sending more and more of its wealth to foreign oil producers. It's already nearly $400 billion a year going to oil-producing countries, some of which actively dislike the United States.

Failing to act now will also mean ceding the jobs and potential for exports that will be available to nations that lead the way in creating alternative energy technology.

"We have all our eggs in one economic basket," he said of the current reliance on fossil fuels. "We don't even own the basket, and it's a fragile basket at that."

No one in MSU's Minnesota Center for Automotive Research disagreed with Walz. The facility, which is doing research on alternative fuel vehicles, needs $480,000 to complete a dynamometer that would allow the testing of hybrid vehicles while they're running at highway speeds.

Federal and state funding was crucial in establishing the center, which moved into a new facility at MSU earlier this year, according to director Bruce Jones. Additional funding is likely to be harder to come by as Washington increasingly focuses on deficit reduction, but Walz made the case for continued -- and growing -- investment in alternative energy.

"We're preaching to the choir," said Joe Lorentz, a local highway contractor.

Lorentz pointed to the students and researchers across the table, urging them to talk to everyone they know about the importance of government investment in renewable energy and infrastructure improvements.

"Champion this bill," Lorentz said. "... Educate the public as best you can."

The bill -- called the Infrastructure, Jobs and Energy Independence Act -- would open up more of America's coastline to drilling for oil and natural gas. Royalties paid by energy companies for the drilling rights, which would total an estimated $2.2 trillion or more, would be dedicated to a variety of specific spending.

Infrastructure improvements -- including highways and bridges -- would get 20 percent. Research, development and production of alternative energy and energy efficiency would receive 15 percent. Another 8 percent would be aimed at cleaning up coal-fired power plants, and 5 percent would go to nuclear and carbon-free energy production.

Smaller amounts would go to environmental restoration, energy conservation, water clean-up and heating assistance for low-income Americans.

States where the additional oil drilling would occur would get 30 percent of the total proceeds, and 10 percent would be applied to reduction of the national debt.

Even as he makes his second attempt at getting the ambitious proposal off the ground, Walz said he thinks it has a genuine chance to become law. Some parts of it could be implemented sooner, but he expects the 2012 presidential election -- including a serious debate about America's energy future -- will have to run its course before the bulk of the proposal could be implemented.

Copyright (c) 2011, The Free Press, Mankato, Minn.

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Norway Preps for Oil Exploration in Barents Sea

- Norway Preps for Oil Exploration in Barents Sea

Wednesday, June 08, 2011
Deutsche Presse-Agentur (dpa)

Norway said it has begun preparations for oil and gas exploration in an uncharted section of the Barents Sea after solving a long-running demarcation row with Russia.

"We will start charting the previously disputed area as soon as the demarcation treaty comes into effect," Prime Minister Jens Stoltenberg said.

The foreign ministers of both countries on Tuesday exchanged documents on the new delimitation agreement, earlier approved by the parliaments of both countries. The treaty enters into force July 7.

Melting ice in the Arctic due to global warming has opened the region for exploration. The Barents Sea region is believed to host rich oil and gas reserves. There was also potential for new shipping routes.

Norway and Russia last year agreed on the demarcation of the area off northern Norway. The talks opened in 1970.

Stoltenberg said he envisaged closer cooperation with Russia, both between government agencies and businesses.

The Norwegian government has reserved 29 million dollars for seismic tests of the seabed in the Norwegian section of the Barents Sea.

The tests were necessary to assess the potential finds in the area, said Ole Borten Moe, minister of petroleum and energy.

Copyright 2011 dpa Deutsche Presse-Agentur GmbH

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TGS Starts Seismic Survey in North Viking Graben

- TGS Starts Seismic Survey in North Viking Graben

Wednesday, June 08, 2011
TGS-NOPEC Geophysical Co. ASA

TGS has commenced the acquisition of a fourth 3D multi-client survey in partnership with PGS.

The survey covers 2,772 km2 in the North Viking Graben over an area which has proven to be a very successful petroleum province of the North Sea.

The data is being acquired by PGS' Atlantic Explorer utilizing GeoStreamer technology. This year's acquisition campaign, combined with the data acquired in 2009-2010, will total over 7,500 km2 of 3D data in this promising region.

The survey is supported by industry funding.

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TransAtlantic Finalizes TBNG Purchase

- TransAtlantic Finalizes TBNG Purchase

Wednesday, June 08, 2011
TransAtlantic Petroleum Ltd.

TransAtlantic has closed on the previously announced acquisition of Thrace Basin Natural Gas (Turkiye) Corporation ("TBNG"). TransAtlantic Worldwide, Ltd., a wholly owned subsidiary of the Company, acquired 100% of the shares of TBNG from Mustafa Mehmet Corporation ("MMC") in exchange for 18,500,000 of the Company's common shares, the transfer of certain overriding royalty interests (ranging from 1.0% to 2.5% of the working interests owned by TBNG on specified exploration licenses) to an affiliate of MMC and $10.0 million in cash, which was paid in November 2010 as an option fee and applied to the purchase price at closing.

With the acquisition, the Company has effectively acquired 41.5% of the total production (approximately 10.0 million cubic feet of natural gas per day, before royalty) and acreage of TBNG and Pinnacle Turkey, Inc. ("PTI") as well as all of the oilfield service assets of TBNG. The acquisition of TBNG closed contemporaneously with the closing of the purchase of PTI by Pinnacle Turkey Holding Company, LLC ("Pinnacle") and the purchase of another affiliate of MMC by Valeura Energy, Inc. ("Valeura"). Valeura and Pinnacle have effectively acquired 40.0% and 18.5%, respectively, of the production, acreage, and other assets held by TBNG and PTI.

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Devon Declares Quarterly Dividend

- Devon Declares Quarterly Dividend

Wednesday, June 08, 2011
Devon Energy Corp.

Devon declared a quarterly cash dividend on Devon's common stock for the third quarter of 2011. The dividend is payable on September 30, 2011 at a rate of $0.17 per share based on a record date of September 15, 2011.

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General Motors Invests $49 Mln on Bedford Powertrain Facility

- General Motors Invests $49 Mln on Bedford Powertrain Facility

Jun 8, 2011

General Motors (NYSE:GM) announced an investment of $49 mln on its Bedford powertrain plant in order to acquire tooling and equipment towards creating components for its announced 8-speed transmission as well as for an upcoming small engine program.

The transmission is expected to improve fuel economy in some of the company's lineup of future vehicles, while the gasoline engine is viewed as a key element towards fuel economy leadership in the small four-cylinder engine segment. The investment is also expected to create or retain 91 jobs.

The investment is part of GM's $2 billion program to generate jobs at multiple facilities in several states announced last May 10, 2011.

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Volkswagen Considering Moving Golf Production to the U.S.

- Volkswagen Considering Moving Golf Production to the U.S.

Jun 8, 2011

According to German media reports, the German automaker Volkswagen AG (PINK:VLKAY) is considering a plan to produce its best-selling Golf model in the U.S.

In a staff meeting Tuesday, VW's top labor representative Bernd Osterloh was cited as saying that management is considering the production of some Golf models in the U.S., according to the newspapers Wolfsburger Allgemeine and Braunschweiger Zeitung. Currently all Golfs are exported from Germany.

The Golf is an important vehicle for the company's main plant in Wolfsburg. Mr. Osterloh wants to discuss the plans with VW's management board, according to Wolfsburger Allgemeine.

A VW spokesman, speaking with Dow Jones Newswires, said CEO Michael Macht plans to discuss the issue with the works council, and they are confident a solution will be found.

Volkswagen AG, is the third largest producer of motor vehicles in the world, making 7.36 million units in 2010. The company has 400,000 employees and 61 production plants across 21 countries.

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ONGC, GAIL Keen to Buy ExxonMobil Stake in Kazakh Oil Field

- ONGC, GAIL Keen to Buy ExxonMobil Stake in Kazakh Oil Field

Wednesday, June 08, 2011
Dow Jones Newswires
by Rakesh Sharma

Oil & Natural Gas Corp. (ONGC) and GAIL are working on a plan to buy at least a part of ExxonMobil's stake in Kazakhstan's Kashagan oil field, in yet another push by the South Asian country to secure energy assets for its expanding economy.

"We are interested. We are working on it," GAIL Chairman B.C. Tripathi told Dow Jones Newswires. He didn't say how much of Exxon's stake in Kashagan were the two state-run companies looking to acquire.

"The discussions have been going on but no decision has been made yet," said a senior ONGC executive, who didn't wish to be named.

ONGC is India's flagship oil explorer while GAIL is the country's largest gas distributor by market share.

Earlier Wednesday, the Hindustan Times newspaper reported that ONGC Videsh Ltd., ONGC's overseas investment arm, and GAIL are jointly planning to buy an 8.4% stake in the Kashagan oil field from Exxon Mobil for about $5 billion.

The consortium has submitted a non-binding bid to Exxon to buy about half of its 16.8% stake in the oil field, the report said, citing documents related to the deal.

Exxon Mobil spokesman Alan Jeffers told Dow Jones Newswires the company doesn't comment "on rumors, speculation or media reports."

"Kazakhstan is an important element of the Exxon Mobil global portfolio and we have a long-term commitment to the country," Jeffers said.

India, which meets nearly four-fifths of its crude oil requirement through imports, has been eying energy assets in Kazakhstan. The Central Asian nation is expected to become one of the world's top 10 oil producers by 2025 and one of the top three contributors to production growth outside the Organization of Petroleum Exporting Countries.

In April, Indian Prime Minister Manmohan Singh and Kazakhstan President Nursultan Nazarbayev underlined the importance of energy cooperation between the two countries.

India has lagged its rival China in the race for energy assets in Kazakhstan, which is home to some of China's largest investments.

China National Petroleum Corp. and Kazakhstan's national oil and gas company, KazMunaiGas, signed a new energy cooperation agreement in February. CNPC has said that its oil and gas production in Kazakhstan reached a record 30 million metric tons of oil equivalent in 2010 and that it plans to double the transmission capacity of the crude oil pipeline linking the two countries to 20 million metric tons a year, or 401,600 barrels a day, by 2013.

"The decision making in Indian state-run companies on acquisitions is very slow as they have to seek too many approvals and there are layers of sanctions required," said Jagannadham Thunuguntla, equity head of brokerage SMC Capitals Ltd. "The multi-billion-dollar deals also need parliament approval, which further slows the speed. India needs to move fast to seal such deals."

Kazakhstan expects its Kashagan oil field, which lies in the northern part of the Caspian Sea, to begin production by the end of 2012. Production is expected to reach 1.0 million tons in the second phase of development and 1.5 million tons in the third phase.

KazMunaiGas, Royal Dutch Shell PLC, ExxonMobil, Total SA and ENI SpA each own 16.81% in Kashagan while ConocoPhillips and Japan's Inpex Corp. hold 8.4% and 7.56%, respectively.

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

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Shell to Develop Cardamom Field in GOM

- Shell to Develop Cardamom Field in GOM

Wednesday, June 08, 2011
Royal Dutch Shell plc

Shell announced a significant, multi-billion dollar investment to develop its major Cardamom oil and gas field in the deep waters of the Gulf of Mexico (GOM). The Cardamom project is expected to produce 50,000 barrels of oil equivalent (boe) a day at peak production and more than 140 million boe over its lifetime.

"Technological advances in seismic imaging and drilling have allowed us to both discover and access this new field," said Marvin Odum, Shell Upstream Americas Director. "This is another sizable deep-water investment by Shell that strengthens energy supplies to the USA. It will also secure employment for more offshore workers."

Shell's rigorous global safety standards underpin our approach to deep-water exploration and production. Our exploration plan for Cardamom (Shell interest 100%) was the first to receive approval since the lifting of the US government moratorium on drilling in the GOM. As a result of today's final investment decision, Shell will move ahead with further development drilling and installing undersea equipment.

Shell discovered the Cardamom reservoir in 2010 using advanced seismic technology that was able to produce improved images versus traditional seismic methods. The discovery was confirmed by drilling a well from Shell's Auger platform that broke records for length and depth. The exploration wells were drilled more than 6.4 kilometers (four miles) below the seabed.

Production from Cardamom will flow through the Auger platform, minimizing the offshore footprint by using existing infrastructure.

The development of the Cardamom field is the latest step in Shell's deep-water energy production activities in the GoM. Perdido, the world's deepest offshore production facility, came on-stream in 2010. Later that year Shell announced the decision to go ahead with a second platform in our Mars B field in the GoM.

Today's final investment decision for Cardamom is in line with Shell's continued drive to increase global oil and gas production. The rapid progress from discovery of the reservoir to the launch of development plans represents Shell's ability to move forward with projects of major value.

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OPEC Unable to Reach Consensus; Outcome 'Unwelcome' by Some Members

- OPEC Unable to Reach Consensus; Outcome 'Unwelcome' by Some Members

Wednesday, June 08, 2011
Dow Jones Newswires
by Benoit Faucon & Summer Said

In a decision that surprised oil markets and sent oil prices higher, OPEC officials said Wednesday the group had failed to reach consensus to boost output.

"Unfortunately, we are unable to reach a consensus at this time to reduce or raise our production," OPEC Secretary General Abdalla Salem el-Badri.

Iranian Oil Minister Mohammad Aliabadi, who is also serving as president of the producer's organization, said the decision was "unwelcome" by some members.

Gulf delegates have been pushing in recent days for an increase of 1-1.5 million barrels a day. But some other OPEC members have criticized the plan, arguing that the global oil supplies are sufficient and that today's prices of $100-$115 a barrel are appropriate.

El-Badri said there was no shortage in the market. The decision means OPEC members will keep their current output unchanged.

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

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Devon Energy To Pay Third Quarter Cash Dividend for Common Stockholders

- Devon Energy To Pay Third Quarter Cash Dividend for Common Stockholders

Jun 8, 2011

Devon Energy (NYSE:DVN) today announced that its board of directors declared a quarterly cash dividend on Devon's common stock for the third quarter of 2011.

The dividend is payable on September 30, 2011 at a rate of $0.17 per share based on a record date of September 15, 2011.

Shares are up 0.56% to $81.18.

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Iranian Oil Min: OPEC Members Couldn't Agree on Timing of Increase

- Iranian Oil Min: OPEC Members Couldn't Agree on Timing of Increase

Wednesday, June 08, 2011
Dow Jones Newswires
by James Herron

No countries from the Organization of Petroleum Exporting Countries opposed an increase in its production ceiling at the group's meeting Wednesday, said Iranian Oil Minister Iranian Oil Minister Mohammad Aliabadi.

However, agreement could not be reached on the timing and amount of an increase, so the group left it's quota unchanged, Iranian Oil Minister Mohammad Aliabadi told reporters at a briefing.

Iran, which currently holds the OPEC presidency, may call an extraordinary meeting ahead of the next scheduled meeting in December, he said.

OPEC Secretary General Abdalla Salem el-Badri said the next OPEC meeting would take place in December in Vienna. The meeting had been expected to take place in Iran, in line with OPEC custom that the December meeting is held in the home country of the organization's president.

OPEC officials announced Wednesday that they had failed to reach an agreement, a move that means output is unchanged. The move sent oil prices higher.

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

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Noble Extends Footprint in West Africa

- Noble Extends Footprint in West Africa

Wednesday, June 08, 2011
Noble Energy Inc.

Noble has joined a venture that is exploring the AGC Profond block located offshore Senegal and Guinea-Bissau in West Africa. The AGC Profond block, covering more than two million gross acres in water depths up to 11,500 feet, is in a designated cooperation area between the two countries. The venture has identified a number of prospects and leads on the acreage. Approximately 45 percent of the block is covered by existing 3D seismic.

The first target to be drilled is the Kora prospect in the northern part of the block, nearly 65 miles offshore in approximately 8,600 feet of water. The Kora prospect has a Cretaceous oil target with gross resources estimated at 450 million barrels of oil equivalent. The chance of success at the prospect is estimated by Noble Energy to be 20 percent. Total well depth is planned to be approximately 15,200 feet. Drilling is anticipated to begin in late June 2011 utilizing the Maersk Deliverer rig, with results expected by the end of August 2011.

David L. Stover, Noble Energy's President and COO, commented, "We are pleased to be adding this new exploration area to the portfolio. Offshore West Africa is a region where the industry has had numerous recent exploration successes, including our own offshore Equatorial Guinea and Cameroon. The AGC Profond block is an area that has not previously been explored and we believe it has significant oil potential. Our new ventures team did a great job of capturing this opportunity for Noble Energy, expanding our already large exploration inventory."

Ophir will operate the Kora-1 exploration well and, in the event of a discovery, Noble Energy will become the operator for appraisal and development activities. Noble Energy has a 30 percent working interest. Other interest owners are Ophir with 36.7 percent, Rocksource AGC Profond AS with 12.5 percent, and FAR Ltd. with 8.8 percent. The remaining interest is held by L'Entreprise, the AGC state-owned entity, with 12 percent.

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CME Group's Subsidiary Announced It Added Two New OTC Diesel, Two Biodiesel Contracts

- CME Group's Subsidiary Announced It Added Two New OTC Diesel, Two Biodiesel Contracts

Jun 8, 2011

CME Group's (NYSE:CME) subsidiary CME Clearing announced it added two new over-the-counter diesel and two biodiesel contracts for clearing as the company expands its European product offerings.

The company also said it would be adding Credit Suisse (NYSE:CS) as a clearing member firm bringing the total number of clearing members to 16.

Andrew Lamb, Chief Executive Officer of CME Clearing Europe said, "We continue to develop opportunities for helping our customers in Europe who need to manage their risk in the energy market, and in the coming weeks we will be adding more agricultural and energy specific contracts as we now start to increasingly expand our service offerings for the region. As the industry looks for ways to manage the risk associated with customer portfolios and to meet new regulatory requirements, we are encouraged by the growing interest from market participants to connect to CME Clearing Europe."

CME Group has a potential upside of 34.1% based on a current price of $265.98 and an average consensus analyst price target of $356.65.

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Statoil Takes Slice in GOM Kakuna Prospect

- Statoil Takes Slice in GOM Kakuna Prospect

Wednesday, June 08, 2011

Statoil has farmed into the Kakuna prospect located approximately 180 miles southwest of New Orleans in deepwater Gulf of Mexico.

"Our agreement is with a subsidiary of Nexen, and the partnership plans on drilling an exploration well on this attractive Miocene structure later this year," said Statoil Exploration North America senior vice president Erik Finnstrom.

A federal exploratory unit for Kakuna has been approved by the Bureau of Ocean Energy Management and Regulatory Enforcement (BOEMRE) in the United States. It encompasses Green Canyon blocks 416 (W ½), 460, 504, 505 (W ½), 548 and 549.

The BOEMRE has determined that the exploration plan for Kakuna is complete and is currently reviewing the application for drilling the well.

Provided all required permits are approved by the BOEMRE, operations on the well will commence in Green Canyon block 504 in the second half of 2011.

Statoil controls 27.5% of the prospect, and Nexen, who controls the remaining 72.5%, is the operator.

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Exxon Mobil announces three discoveries in deepwater Gulf of Mexico

- Exxon Mobil announces three discoveries in deepwater Gulf of Mexico

Jun 8, 2011

Exxon Mobil (NYSE:XOM) announced two major oil discoveries and a gas discovery in the deepwater Gulf of Mexico after drilling the company's first post-moratorium deepwater exploration well. Steve Greenlee, president of ExxonMobil Exploration Company said, "We estimate a recoverable resource of more than 700 million barrels of oil equivalent combined in our Keathley Canyon blocks. This is one of the largest discoveries in the Gulf of Mexico in the last decade. More than 85 percent of the resource is oil with additional upside potential."

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Providence Kicks Off Seismic Ops Offshore Ireland

- Providence Kicks Off Seismic Ops Offshore Ireland

Wednesday, June 08, 2011
Providence Resources plc

Providence announced that it has, on behalf of itself and its partners, commenced its 3D seismic acquisition project in the north Celtic Sea, offshore Ireland. The survey, which is expected to be completed within 2 weeks, forms part of the planned pre-development drilling program on the Barryroe oil discovery ("Barryroe"). Providence operates Barryroe (50%) with partners San Leon Energy (30%) and Lansdowne Oil & Gas (20%).

Using a vessel supplied by Polarcus Limited, the 3D seismic survey will be used to assist in the pre-development drilling program designed to progress Barryroe to first oil. The drilling of Barryroe is scheduled to commence late this summer, with the GSF Arctic III semi-submersible rig already contracted for the drilling program. The partners believe that modern 3D seismic data, in tandem with modern well completions in the current high oil price environment, will be key components to unlocking value at Barryroe.

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Petro Matad Notes 'Positive Drilling Results' at Davsan Tolgoi

- Petro Matad Notes 'Positive Drilling Results' at Davsan Tolgoi

Wednesday, June 08, 2011
Petro Matad Ltd.

Petro Matad provided an update on its drilling activities on the Davsan Tolgoi Prospect on Block XX in Eastern Mongolia.

Drilling operations on the DT-5 well were completed on June 2, 2011 at a depth of 1,954m below surface. Wireline logging has been completed and the logs have been petrophysically assessed. Numerous thin zones of calculated moveable hydrocarbons were identified, with a cumulative net pay of 3m at the upper contact of the Lower Tsagaantsav, at 1,707m. This zone will be tested in due course.

As noted in the news release dated May 19, DT-5 was drilled to test a portion of the paleovalley-filling Uvgan Gol horizon as well as the underlying Lower Tsagaantsav. The well confirmed the presence and configuration of the paleovalley; however, the Uvgan Gol horizon consisted of non-reservoir shales and tight sandstones. The net pay zone at 1,707m is within Lower Tsagaantsav sandstones beneath the basal contact of the Uvgan Gol horizon.

No oil shows were observed during drilling, and petrophysical results indicate low porosity and permeability throughout the entire Tsagaantsav at this locality. The well will be tested during 2011 and, as it is felt likely that stimulation will be required to induce flow at this location, a stimulation contract is being prepared with contractor DQE International.

The drill rig is now being moved to the DT-6 site approximately 2.3km SSE of DT-1. DT-6 will test a thick section of the Uppermost Tsagaantsav (Uvgan Gol horizon) within a well-defined northeast-trending paleovalley, as well as the underlying Lower Tsagaantsav formation.

Petro Matad CEO Douglas McGay said, "It is pleasing that our Davsan Tolgoi drilling program continues to yield positive drilling results, with testable zones in each of the five wells drilled to date. The preliminary results from DT-5 illustrate that while hydrocarbons are present in the Lower Tsagaantsav formation, the Uvgan Gol paleovalley fill varies from the high porosities and permeabilities seen in DT-1 and DT-2 to the low porosity and permeability seen in DT-5.

"As witnessed in Block XIX, the Block immediately north operated by Daqing Oilfields, reservoirs within the Tamsag Basin are not uniform and we have always expected to see variations in well results during the exploration phase. It is gratifying to see the presence of hydrocarbons in the Lower Tsagaantsav formation continuing to be relatively predictable."

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Cooper Drills Duster at Turton Well

- Cooper Drills Duster at Turton Well

Wednesday, June 08, 2011
Cooper Energy Ltd.

The Turton exploration well, located in the Cooper basin onshore South Australia, has drilled to a total depth of 1777.5 mRT and wireline logs have been run and interpreted.

During drilling there were no hydrocarbon shows observed in the primary objective (Namur Sandstone) or secondary objectives (Birkhead and Poolowanna Formations) and the evaluation of the wireline logs has confirmed the absence of hydrocarbons in all objective horizons.

The Turton-1 well has been plugged and abandoned as dry hole, and the rig released on June 6, 2011.

The rig is currently moving to the Westall-1 drill site.

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Circle Oil Sees Increase in 2011 Recoverable Resources

- Circle Oil Sees Increase in 2011 Recoverable Resources

Wednesday, June 08, 2011
Circle Oil plc

Circle Oil announced the 2011 update to Ultimate Recoverable Resources ("URR")1 for the NW Gemsa Concession, Egypt, and the Sebou Permit, Morocco, which indicates a significant increase over the 2010 URR estimates for both permits. The updated gross estimates were compiled by RPS Energy ("RPS"),an independent consultancy specializing in petroleum and gas reservoir evaluation. The estimates use the 2007 Petroleum Resources Management System ("PRMS") produced by SPE/WPC/AAPG/SPEE and are set out in the tables below together with further explanation of the results.


The new resource estimates take account of the results of the drilling and development activity up to but not including Geyad-3.

The RPS report2 states that the most likely (P50) URR for the discoveries in NW Gemsa in Al Amir SE, Geyad plus South Gharib in Al Amir are 30.0MMBO and 34.2 bcf of gas, which together equates to 35.9MMBOE gross (14.4MMBOE net).3 This constitutes a 49% increase over the 2010 figure of 24.1MMBOE gross (9.6MMBOE net). The most likely unrisked URR in the Kareem reservoir in the Al Amir prospect is 3.9 MMBOE gross with a geological probability of success of 84%, as assigned by RPS. The Al Amir Kareem area volume was included in the Al Amir SE URR in the 2010 report, as at that time it was considered as an adjoining portion to Al Amir SE which had and has still not been drilled, but could be reasonably judged to be economically productive on the basis of geological, geophysical and engineering data. The 2011 total most likely (P50) recoverable resources estimate, to compare like with like areas (including Al Amir Kareem) with the 2010 report, is 33.2MMBO and 38.1 bcf of gas, which together equates to 39.8MMBOE gross (15.9MMBOE net). This constitutes a 65.1% increase over the 2010 figure of 24.1MMBOE gross (9.6MMBOE net).

The upside estimate (P10) for the discovered fields increases to 54.5MMBOE gross (21.8MMBOE net) which represents a 33% increase over the 2010 figure of 41.0MMBOE (16.4MMBOE net). The unrisked upside estimate of URR in the Kareem reservoir in the Al Amir prospect is 9.3MMBOE gross (3.7MMBOE net). The 2011 total upside (P10) recoverable resources estimate, to compare like with like areas, is 63.8MMBOE gross (25.5MMBOE net), which constitutes a 55.6% increase over the 2010 figure of 41.0MMBOE gross (16.4MMBOE net).

The increase in URR is due to a large increase in the estimated recovery factor from the Kareem reservoir which results from observation of well production performance data and the positive effect of the planned installation of gas production and water injection facilities, which are expected to be completed by the end of 2011.

The NW Gemsa Concession partners include: Vegas Oil and Gas (50% interest and operator); Circle Oil Plc (40% interest); and Sea Dragon Energy (10% interest).

The NW Gemsa Concession, containing the Al Amir and Geyad Development Leases, covering an area of over 260 square kilometres, lies about 300 kilometres southeast of Cairo in a partially unexplored area of the Gulf of Suez Basin. The concession agreement includes the right of conversion to a production licence of 20 years, plus extensions, in the event of commercial discoveries.


The new resource estimates take account of the results of the drilling up to and including KSR-11.

The RPS estimate of most likely (P50) URR of gas is 30.6 bcf gross (23.0 bcf net).This, together with our own internal estimate of gas production and resources remaining to be produced in areas not included in the report of 1.5 bcf gross, gives a total of 32.1 bcf gross (23.9 bcf net) URR for the Sebou block. This represents a significant increase in gas resources of 83.4% over the 2010 figure of 17.5 bcf gross (13.0 bcf net).

The RPS estimate of upside (P10) URR is 41.7 bcf gross (31.3 bcf net) which together with our own internal estimate of resources in areas not included in the report of 1.5 bcf gross, gives a total of 43.2 bcf gross (32.2 bcf net) for 2011, which represents a 66% increase over the 2010 figure of 26.0 bcf gross (19.3 bcf net).

In the Sebou concession, Circle has a 75% share and ONHYM, the Moroccan State oil company, has a 25% share. In the Oulad N'zala concession, Circle has a 60% share and ONHYM has a 40% share. Both concessions include the right of conversion to a production licence of 25 years, plus extensions in the event of commercial discoveries.

The Sebou permit lies to the north-east of Rabat in the Rharb Basin in Morocco. The Rharb Basin is a foredeep basin located in the external zone of the Rif Folded belt.

Prof Chris Green, CEO, said, "I am very pleased to report this significant uplift in resource numbers for the oil and gas discoveries on our NW Gemsa and Sebou blocks. This is testimony to both the continuing advancement of the partnership's development and appraisal programme in Egypt and the success of our exploration drilling in Morocco. It also highlights the way in which the Company has been utilizing the funds raised from the placing in 2010 to create value for our shareholders. Our drilling success rate over the past three years has been excellent. We continue with our task of increasing both our production capability and resource base."

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Global Petroleum Gets Namibian Nod for Jupiter Acquisition

- Global Petroleum Gets Namibian Nod for Jupiter Acquisition

Wednesday, June 08, 2011
Global Petroleum Ltd.

Global Petroleum has received notification from the Namibian Competition Commission approving the acquisition of Jupiter Petroleum Limited by Global.

Under the sale and purchase agreement, Global will acquire Jupiter which holds prospective oil and gas exploration interests in offshore Namibia and in offshore Juan de Nova, a French dependency in the Mozambique Channel.

The sale and purchase agreement is conditional on the satisfaction of a number of conditions precedent, including due diligence investigations, obtaining necessary consents from governmental authorities, a report from an independent expert that the transaction is fair and reasonable to Global shareholders, and shareholder approval at a General Meeting.

As previously advised, consent for the transaction was required from the Namibian Competition Commission, and the Company is pleased that this requirement has been satisfied.

The Company is continuing to work towards satisfying the remaining conditions precedent as soon as possible and, subject to regulatory review, anticipates sending a Notice of Meeting to shareholders by the end of June.

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Layne Christensen Posts Stellar Q1, Beats EPS Estimates By $0.38

- Layne Christensen Posts Stellar Q1, Beats EPS Estimates By $0.38

Jun 8, 2011

Layne Christensen Company (NASDAQ:LAYN) reported Q1 EPS of $0.66 today, crushing the consensus estimate for $0.28 per share. Revenues grew 15.9% year-over-year to $267.37 million, well above the consensus estimate for $242.88 million.

Andrew B. Schmitt, President and Chief Executive Officer said, "Layne Christensen Company had an all-time record first quarter in revenues and the third best first quarter in earnings, excluding the gain on sale of our Fontana, California facility. The Mineral Exploration Division was up significantly over last year in both revenues and earnings and the Water Infrastructure Division improved in an environment of continued weakness in municipal spending. Our Energy Division remains profitable despite very weak natural gas pricing. The markets in which we operate outside the U.S. still look very strong."

Layne Christensen has a potential upside of 20.4% based on a current price of $27.41 and an average consensus analyst price target of $33.

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FOGL Anticipates Falkland Drilling to Commence in 1Q12

- FOGL Anticipates Falkland Drilling to Commence in 1Q12

Wednesday, June 08, 2011
Falkland O&G Ltd.

FOGL provided the following operational update.
Rig contract

On May 19, 2011, FOGL announced that it had entered into an assignment agreement with Borders & Southern Petroleum plc. ("B&S") and Ocean Rig 1 Inc. to contract the Leiv Eiriksson for two firm drilling slots. The rig is currently expected to arrive in the Falkland Islands in the fourth quarter of 2011. FOGL will utilize the third and fourth slots in the combined B&S and FOGL program and expects to commence drilling in the first quarter of 2012.

Operations and drilling management

FOGL has made significant progress in establishing a strong and experienced drilling team managed by Dave MacKay, who has been appointed drilling manager. Dave has over 29 years of international drilling experience and is a specialist in deepwater drilling having worked for the last 12 years for BHP Billiton. Dave also gained crucial Falklands operational experience as part of the drilling management team on the Toroa well in 2010. Mike Thomas has joined as Operations Manager. Mike has over 30 years oil industry experience with Clyde Petroleum, Paladin Resources and most recently was Chief Operating Officer for Dominion Petroleum Ltd. Mike will be responsible for geological aspects, geotechnical well planning and HSE management.

Northern license area approvals

On May 24, 2011, the Executive Council of the Falkland Islands approved the withdrawal of BHP Billiton from the northern license area and transfer of operatorship to FOGL. They also approved a six month extension of Phase 1 of the northern license area from December 15 to June 15, 2012. This extension requires the final approval of the British Foreign and Commonwealth Office, which is expected shortly.

FOGL is required to make a mandatory relinquishment of 20% of the Northern License area at the end of 2011 as required under the existing license terms. The second phase of the Northern license area does not expire until December 15, 2015 and carries the obligation to drill a single exploration well.

FOGL has already entered Phase 2 of the Southern License area and no further relinquishment is required.

Seismic program and site survey

The latest site survey program has now been completed. A total of five site surveys were completed on the following prospects: Inflexible, Vinson, Scotia, Hero and Loligo.

The site survey on Loligo was the fourth site surveyed on this prospect following three previous site surveys conducted in 2009. Having a range of sites on Loligo will enable us to determine the location of the initial exploration well and also, in the event of encouraging results, potential appraisal drilling sites.

Separately, FOGL is planning to acquire some additional focused 2D seismic over the Scotia and Hero prospects. This data will be used to fine tune the location of an exploration well on either of these two prospects.


FOGL is currently in early stage discussions with several parties who have expressed an interest in participating in our exploration drilling program. The Company does not however anticipate concluding any farmout agreement until later this year.

Tim Bushell, Chief Executive of FOGL, commented, "Since becoming operator and 100% owner of our licenses on March 31, we have secured a suitable rig, put in place funding for a 2 well program and have established an experienced drilling management team. We have also accelerated all the other required work streams in preparation for our drilling program which is expected to commence in the first quarter of 2012."

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ExxonMobil Touts Three Deepwater GOM Discoveries

- ExxonMobil Touts Three Deepwater GOM Discoveries

Wednesday, June 08, 2011
ExxonMobil Corp.

ExxonMobil announced two major oil discoveries and a gas discovery in the deepwater Gulf of Mexico after drilling the company's first post-moratorium deepwater exploration well.

The KC919-3 wildcat well confirmed the presence of a second oil accumulation in Keathley Canyon block 919. The well encountered more than 475 feet of net oil pay and a minor amount of gas in predominantly Pliocene high-quality sandstone reservoirs. The well, which is continuing to drill deeper, is located 250 miles southwest of New Orleans in approximately 7,000 feet of water.

Drilling in early 2010 encountered oil and natural gas at Hadrian North in KC919 and extending into KC918, with over 550 feet of net oil pay and a minor amount of gas in high-quality Pliocene and Upper Miocene sandstone reservoirs.

ExxonMobil encountered 200 feet of natural gas pay in Pliocene sandstone reservoirs at its Hadrian South prospect in Keathley Canyon block 964 during drilling in 2009.

"We estimate a recoverable resource of more than 700 million barrels of oil equivalent combined in our Keathley Canyon blocks," said Steve Greenlee, president of ExxonMobil Exploration Company. "This is one of the largest discoveries in the Gulf of Mexico in the last decade. More than 85 percent of the resource is oil with additional upside potential."

"We plan to work with our joint venture partners and other lessees in the area to determine the best way to safely develop these resources as rapidly as possible," Greenlee said.

ExxonMobil is the operator of KC918, KC919, KC963 and KC964 with 50 percent working interest. Eni Petroleum US LLC and Petrobras America Inc. each hold a 25 percent working interest in KC919, KC963 and KC964. Petrobras America Inc. holds a 50 percent working interest in KC918.

Over the past decade, ExxonMobil has drilled 36 deepwater wells in the Gulf of Mexico in water ranging from 4,000 feet to 8,700 feet.

"As one of the largest lease holders in the Gulf of Mexico with interests in over 370 leases, we are committed to the continued safe exploration and development of this important national resource," Greenlee said.

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Otto Begins Seismic Acquisition Offshore Philippines

- Otto Begins Seismic Acquisition Offshore Philippines

Wednesday, June 08, 2011
Otto Energy Ltd.

Otto has commenced a 3D seismic data acquisition program in Service Contract 69 (SC 69) in the Visayan Basin of the Republic of Philippines.

The seismic vessel BGP Explorer, operated by Exploiter Pte Ltd (a subsidiary of BGP ), has been contracted to record the seismic data. Otto plans to acquire approximately 210 km2 of 3D seismic data in SC69 (as outlined in the attached map).
SC69 covers an area of 5,280 km2 in the central Visayan Basin where the data acquired from the successful 2D seismic campaign last year confirmed the presence of two sizable reef structures, Lampos and Lampos South that sit immediately adjacent to the Calamangan Trough which is modeled to generate both oil and gas. Current “success case” estimates of oil initially in place in the combined structures range between 22 mmbbls and 713 mmbbls with a mean in place volume of 290 mmbbls.

This survey fulfils the service contract commitments in the current sub-phase.

Otto's Managing Director Paul Moore said, "the ongoing exploration program in the Visayan region of the Philippines is a core part of Otto's exploration program with the 3D seismic currently being acquired ahead of the drilling obligation, in the next sub-phase."

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