Crude Oil Price by

Oil and Gas Energy News Update

Tuesday, June 14, 2011

Oil & Gas Post - All News Report for Tuesday, June 14, 2011

Tuesday, June 14, 2011

Oil & Gas Post

Promote Your Page Too

Commodity Corner: Oil Rallies on Economic Data

- Commodity Corner: Oil Rallies on Economic Data

Tuesday, June 14, 2011
Rigzone Staff
by Saaniya Bangee

Oil prices surged Tuesday on brighter economic news and the dollar's decline. Light, sweet crude futures gained $2.07 to settle at $99.37 a barrel on the New York Mercantile Exchange (NYMEX).

According to U.S. government reports, retail sales dropped for the first time in 11 months. A decline in car sales, which were affected by the earthquake in Japan, caused retail sales to fall by 0.2 percent. However, ruling out auto sales, purchases rose by 0.3 percent. Additionally, the U.S. Labor Department reported a decrease in food costs.

For the first time in two weeks, the Dow Jones Industrial Average, Nasdaq and the S&P 500 were up by more than 1 percent.

On Tuesday, the greenback declined against the euro and other foreign currencies after Chinese economic reports eased concerns about global demand. As the dollar drops, the dollar-denominated commodity becomes cheaper amongst foreign buyers.

The intraday range for oil was $96.51 to $99.44 a barrel.

Prices for front-month gasoline surged 2.3 percent, settling at $3.065 a gallon Tuesday. The increase came on news of BP’s 457,000 bpd refinery being shut down Monday night and an upset at Shell's 327,000 bpd refinery. Both refineries are located in Texas. The 6.78 cent-gain came after fluctuating between $2.997 and $3.07 Tuesday.

Meanwhile, natural gas for July delivery fell 6.5 cents to settle at $4.581 per thousand cubic feet. Natural gas prices traded between $4.56 and $4.65 Tuesday.

Oil & Gas Post

Promote Your Page Too

Zion O&G Reaches TD at Israel Well

- Zion O&G Reaches TD at Israel Well

Tuesday, June 14, 2011
Zion O&G Inc.

Zion O&G has reached its target depth of approximately 19,357 feet (5,900 meters) in drilling its Ma'anit-Joseph #3 well into the Permian geologic layer in Northern Israel. The Company is now preparing for open-hole logging operations, planned to commence this week.

Zion also announced that its shares of Common Stock were added to the preliminary list of both the Russell Global Index and the U.S. broad-market Russell 3000(R) on June 10, 2011. Russell Investments will publish the final inclusion lists of its indexes on June 27, 2011.

Zion's inclusion is part of the Russell's regular reconstitution of its U.S. equity indices each year. Russell indexes are widely used by investment managers and institutional investors for index funds and as benchmarks for both passive and active investment strategies. An industry-leading US $3.9 trillion in institutional assets currently are benchmarked to them.

Oil & Gas Post

Promote Your Page Too

Zion O&G Applies for Israel Exploration Permit

- Zion O&G Applies for Israel Exploration Permit

Tuesday, June 14, 2011
Zion O&G Inc.

Zion O&G announced that on June 13, 2011, the Company submitted an application to the Israeli Petroleum Commissioner's Office, requesting the grant of a new petroleum exploration permit area adjacent to Zion's Joseph License area. The new permit application has been named by Zion, the "Asher-Joseph Permit Application".

The Asher-Joseph Permit Application area covers approximately 80,000 acres of land and is to the west and south of Zion's Joseph License area. It is onshore Israel and traverses a section of land, adjacent to the coastline, between Haifa and Tel Aviv. The grant of a permit would allow us to conduct, on an exclusive basis through a specified period, preliminary investigations to ascertain the prospects for discovering petroleum in the area covered by the permit. Unlike a license area, where test drilling may take place, no test drilling is allowed on a permit area.

Zion's Chief Executive Officer, Richard Rinberg, said, "We have three applications for new exploration areas pending before the Israeli Petroleum Commissioner's Office: the Asher-Joseph Permit, the Zebulun Permit and the Dead Sea License.

"We continue to implement our exploration and drilling program and build on our progress to date. If granted the new exploration areas, we intend to acquire additional seismic and other geological and geophysical data, as we work towards refining potential drilling prospects.

"Currently, drilling operations at our Ma'anit-Joseph #3 well continue. We have reached our target depth of approximately 19,357 feet (5,900 meters), in the Permian geologic layer in Northern Israel, and are now preparing for open-hole wireline logging operations, planned to commence this week. Depending on the outcome of our wireline logging and subsequent interpretation, we may determine to drill this well deeper."

Oil & Gas Post

Promote Your Page Too

Eagleford Energy to Boost Productivity at San Miguel Formation

- Eagleford Energy to Boost Productivity at San Miguel Formation

Tuesday, June 14, 2011
Eagleford Energy Inc.

Eagleford Energy has performed a nitrified acid injection treatment in the San Miguel formation on its Matthews/Dyami #3 well. A nitrified acid treatment was injected into the wellbore using a coil tubing unit to improve conductivity around the wellbore, increase productivity and satisfy a condition of the lease purchase agreement. These objectives have been accomplished. The injection operation was successful and fluid level measurements within the wellbore are considerably higher which is indicative of materially improved inflow of oil from the reservoir. The well is currently undergoing production testing and has been recovering minimal amounts of treatment water and is primarily producing oil. The oil gravity is approximately 10 degree API and production rates are varying due to ambient surface conditions.

Under the terms of a Farmout Agreement announced by the Company on April 8, 2011, the farmee may spend up to $1,050,000 on exploration and development to earn a maximum of 50% of the Company's working interest or a 42.50% working interest (31.875% net revenue interest) from surface to the base of the San Miguel formation on the Company's Matthews Lease. The farmee earns an initial 21.25% working interest by paying 100% of the costs to drill, complete, equip and perform an injection operation on the Matthews/Dyami #3. The farmee may increase its working interest to 42.5% by spending the entire $1,050,000 on additional operations on the San Miguel in a good faith effort to produce hydrocarbons.

Albert Dawsey of Dawsey Operating LLC stated, "We are pleased with the initial production results from completing this first San Miguel oil well. The data gathered from drilling this well and the completion results indicate enhanced recovery processes for this heavy oil can sustain production of the field. This new data also supports prior information about the oil in place and the ability to produce significant amounts of oil from the reservoir."

The Company's Matthews Lease comprises 2,629 acres of land in Zavala County, Texas. Zavala County, Texas is part of the Maverick Basin of Southwest Texas and downdip from the United States Geological Studies north boundary of the Smackover-Austin-Eagle Ford total petroleum system. This area is often referred to as the oil window of the present Eagle Ford shale play.

Oil & Gas Post

Promote Your Page Too

Penn Virginia Briefs on Eagle Ford Wells

- Penn Virginia Briefs on Eagle Ford Wells

Tuesday, June 14, 2011
Penn Virginia Corp.

Penn Virginia provided an update of its activity in the Eagle Ford and Marcellus Shales.

Eagle Ford Shale

We currently have six producing Eagle Ford Shale wells. These six wells, in which we have an approximate 83 percent working interest, are currently producing an aggregate of 4,096 barrels of oil per day (BOPD) and 2,072 thousand cubic feet (Mcf) of natural gas per day on a gross basis. The natural gas associated with these wells is also expected to yield approximately 150 barrels of natural gas liquids (NGLs) per million cubic feet (MMcf).
  • Our initial well, the Gardner #1-H, had a peak 24-hour production rate of approximately 1,250 barrels of oil equivalent (BOE) in late February 2011 and is still producing approximately 350 BOPD and 240 Mcf of natural gas per day after 129 days of production, bringing cumulative production to approximately 68,000 barrels of oil and 56 MMcf of natural gas all of which was flared, or approximately 77,000 BOE.
  • We recently completed five additional wells, the Hawn Holt #1-H, #2-H, #4-H, #6-H and #9-H, which had peak 24-hour production rates, as reported to the Texas Railroad Commission, of approximately 726, 986, 560, 711 and 1,876 BOE per day, respectively. These same wells had corresponding peak 24-hour oil production rates of 650, 869, 514, 670, and 1,652 BOPD. The Hawn Holt #1-H and #4-H had subsequent increases in peak rates of production to 830 and 582 BOE per day, respectively. These five new wells were tested at restricted rates with flowing pressures that ranged between 1,180 and 2,994 pounds per square inch. The total horizontal lateral lengths ranged between 3,827 and 5,063 feet with between 14 and 18 frac stages per lateral.
  • In addition to our six producing wells, we are currently drilling three wells and have three wells waiting on completion.

We extended our agreement with a private service contractor to provide hydraulic fracturing services primarily in the Eagle Ford Shale, as well as other plays in east Texas and Oklahoma. This agreement has a one-year term with an option to extend for additional one-year terms.

Our natural gas midstream service provider in Gonzales County recently connected our wells to its pipeline and processing facilities. As a result, we have begun to recognize sales revenue associated with NGL and residue gas production.

Marcellus Shale

We continue to test our approximately 35,000 net acreage position in Potter and Tioga Counties, Pennsylvania and have drilled four horizontal wells. We have completed and commenced testing of three of these wells, while the fourth well is waiting on completion. The three completed wells are located in the central portion of our acreage, and the fourth well is located in the western portion. We plan to move a drilling rig to test the eastern portion of our acreage during the second half of the year. In addition, pipeline construction is in progress with sales expected to begin by early August. Earlier in 2011, we conducted a formal process to seek a joint venture partner or other alternatives for this capital-intensive play. Although we are no longer conducting a formal process, we will continue to consider alternatives for our Marcellus acreage position.

Management Comments

H. Baird Whitehead, President and Chief Executive Officer, stated, "The strong results from our first six Eagle Ford Shale wells are consistent with our geological and economic models. Extending our fracturing services agreement in light of potential completion crew availability issues for the industry, as well as establishing our initial natural gas midstream takeaway and processing capacity, are important accomplishments as we look to maximize our returns from this play. We are currently running three drilling rigs in the Eagle Ford Shale play and expect to accelerate the growth of our oil and NGL production over the course of 2011 and beyond.

"We also continue to test our Marcellus Shale position, having recently completed our initial wells in the central portion of our acreage and looking to test primarily the eastern area later in the year. Once the pipeline is completed to these initial wells we will monitor the production and longer term results."

Oil & Gas Post

Promote Your Page Too

ATP Commences Public Offering

- ATP Commences Public Offering

Tuesday, June 14, 2011
ATP O&G Corp.

ATP O&G has commenced a public offering of approximately $150 million of convertible perpetual preferred stock. The underwriters for the offering will also have a 30-day option to purchase up to 225,000 additional shares of convertible perpetual preferred stock to cover any over-allotments. We intend to use a portion of the net proceeds of this offering to pay the cost of a capped call transaction to cover all shares convertible in this transaction and our outstanding preferred shares, 13.1 million shares. The capped call transaction can prevent any dilution of outstanding common shares as long as the share price is below $27.50.

The convertible perpetual preferred stock has a liquidation preference of $100 per share and will be convertible into shares of ATP common stock at a $22.20 conversion price. ATP intends to use the net proceeds from this offering to fund capital expenditures and for general corporate purposes.

The offering will be made under the Company’s existing shelf registration statement filed with the Securities and Exchange Commission (“SEC”). This announcement is neither an offer to sell nor a solicitation of an offer to buy any securities and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful. Any offers of the shares will be made exclusively by means of a prospectus supplement and accompanying prospectus.

Credit Suisse Securities (USA) LLC will act as book-running manager for the offering. A copy of the preliminary prospectus supplement and related base prospectus for the offering may be obtained on the SEC website at Alternatively, the underwriter will arrange to send you the preliminary prospectus supplement and related base prospectus if you request them by contacting Credit Suisse Securities (USA) LLC, Prospectus Department, One Madison Avenue, New York, NY 10010.

Oil & Gas Post

Promote Your Page Too

EnQuest Welcomes Non-Executive Director

- EnQuest Welcomes Non-Executive Director

Tuesday, June 14, 2011
EnQuest plc

EnQuest announced the appointment of Clare Spottiswoode CBE as a Non-Executive Director with effect from July 1, 2011.

Clare has held a number of senior positions in the energy sector including most recently serving as a non-executive director of Tullow Oil PLC in addition to previous roles as Deputy Chairman of British Energy PLC and Director General of Ofgas. She is currently Chairman of Gas Strategies Consulting Ltd and EnergySolutions Inc and serves as a non-executive director at G4S plc and Ilika PLC. Clare is also a member of the Independent Commission on Banking for the UK Treasury.

James Buckee, Chairman of EnQuest, said, "I am delighted to welcome Clare to EnQuest as a Non-Executive Director. Clare's wealth of experience from both within and beyond the energy industry will make her an invaluable addition to the Board. I look forward to working with her as EnQuest continues to develop and execute its strategy."

Oil & Gas Post

Promote Your Page Too

Facebook May Be Losing Viewers, Possible Affect On IPO

- Facebook May Be Losing Viewers, Possible Affect On IPO

Jun 14, 2011

A world map produced by Vincenzo Cosenza found that Facebook is now the most popular social network in 119 out of 134 countries despite rumors of losing users in the United States in the month of May. Although Cosenza did not break out exact traffic data, he did say however that Facebook was the most popular social network in the United States, beating out Twitter and LinkedIn.

However, a report from Inside Facebook did say that they lost U.S. users in the month of May, going from 155.2 million to 149.4 million by the end of the month.

Facebook did make a statement with regards to the Inside Facebook data, stating that, "from time to time, we see stories about Facebook losing users in some regions. Some of these reports use data extracted from our advertising tool, which provides broad estimates on the reach of Facebook ads and isn't designed to be a source for tracking the overall growth of Facebook."

However, the question arises about whether or not this user data will affect Facebook's plans for an initial public offering.

Oil & Gas Post

Promote Your Page Too

Energy Sector Update: June 14, 2011

- Energy Sector Update: June 14, 2011

Jun 14, 2011

Energy shares are higher mid-day as the broader market is looking to regain lost ground. Light, sweet crude oil for July delivery traded up 1.5% to $98.78 a barrel. Cloud Peak Energy (NYSE:CLD), a U.S. coal producer, today, announced an agreement with Westshore Terminals LP to permit coal shipments through the Westshore Terminal in Vancouver, BC for ten years. Cloud Peak Energy exported 3.3 mln tons to Asian customers in 2010 through the terminal. The contract will commence in 2013 once the current contract ends, pending a definitive agreement between the parties.

Oil & Gas Post

Promote Your Page Too

ANALYSIS: OPEC Indecision Underscores Market Sensitivity

- ANALYSIS: OPEC Indecision Underscores Market Sensitivity

Tuesday, June 14, 2011
Rigzone Staff
by Barbara Saunders

Like a seesaw poised to go this way or that, the oil market teeters in a delicate balance in the wake of OPEC's indecisive most recent meeting.

The major producing nations failed to reach an accord on a plan to raise production quotas at the June 8 meeting, marking the first time in some two decades that OPEC members were unable to agree.

Those nations opposed to output increases — Venezuela, Iran, Iraq, Ecuador, Libya, Angola and Algeria — feared that they would lead to a price crash. This would be devastating to the revenues of the already-wobbly economies of these poorer OPEC nations, which have little to no spare production capacity. At the other side, the four proponents of increased output quotas — Saudi Arabia, the United Arab Emirates, Kuwait and Qatar — worry that shortages could loom as spare OPEC production capacity continues to dwindle. This could cause prices to soar, and in turn, snuff out still-fragile recoveries from the extended economic recession.

Analysis: OPEC Indecision Underscores Market Sensitivity
Swing supplier Saudi Arabia is concerned that its spare capacity is already in the danger zone as consumption continues to be brisk.
Saudi Arabia, determined to remain a reliable supplier, previously swore to expand production regardless of the meeting's outcome. Meanwhile, the consuming-member nations of the International Energy Agency (IEA) have vowed to drawdown emergency stocks if Saudi Arabia doesn't keep its pledge to hike production. The IEA believes that OPEC spare capacity may be much lower than statistics released by the organization. As part of the IEA commitment to energy security, U.S. President Obama says that he's willing to tap the rarely used, roughly 730 million barrel Strategic Petroleum Reserve (SPR.) At this level, the SPR would last for about 34 days at consumption levels of 21 million b/d.

Although there is plenty to be concerned about, one analyst said that the OPEC decision is not one. "The split in OPEC doesn't really affect production plans. In the short-run, the Saudis have already said they're going to be increasing output," Adam Sieminski, director of energy research at Deutsche Bank told Reuters news service. "But what it does do is show the mess the decision making process is in."

But John Feller, chief economist for the American Petroleum Institute, told Rigzone that Saudi additions to supply from spare productive capacity may be of small comfort. "We don't know what the Saudis are going to do," Feller said. "We don't know what they can do. We don't know what volume and type of oil they have to produce in their spare capacity. It might not be very easily refinable."

'Fragile Equilibrium'

Recalling the seesaw analogy, whatever the outcome of the Saudi moves and OPEC, the oil market today is in a very "fragile" equilibrium and it would take little to teeter-totter it in a vastly different direction, Feller noted.

Analysis: OPEC Indecision Underscores Market Sensitivity

For months, crude oil has hovered around $100 per barrel, fluctuating relatively little around that level on day-to-day market news. Fears of steadily rising consumption — particularly in China — have both some OPEC factions and IEA member nations concerned about the potential for actual supply shortages and price spikes.

On the other hand, there also are worries about whether $100 per barrel is the "magic mark" perhaps already putting a drag on the economy. There is a lag-time between the gathering and assessment of statistics and an actual event, so higher oil prices could conceivably already have led to an economic slowdown. This is why economists watch employment statistics so closely, as these will tend to precede an overall economic deceleration.

The U.S. Bureau of Labor reported very little change from May in its June 3 statistics, with unemployment still hovering at a much higher than normal 9.1 percent. This would tend to indicate that the U.S. economy is still not strong enough to withstand higher priced oil.

Oil & Gas Post

Promote Your Page Too

MWCC Increases Water Depths for Capping Stack

- MWCC Increases Water Depths for Capping Stack

Tuesday, June 14, 2011
ExxonMobil Corp.

Marine Well Containment Company (MWCC) announced that its capping stack has met the requirements for containment operations in water depths up to 10,000 feet, which is an increase from the previous water depths of up to 8,000 feet.

"This increase in our capability demonstrates our commitment to providing a comprehensive deepwater well containment system for the U.S. Gulf of Mexico," said Chief Executive Officer Marty Massey. "Our goal is to continually advance deepwater well containment technology to keep pace with our member companies' needs."

The capping stack is the centerpiece of an interim response containment system and is designed to cap or contain the flow of hydrocarbons in a deepwater well control incident. It can handle pressures of up to 15,000 pounds per square inch.

The capping stack provides a dual barrier for containment through a blowout preventer ram and a containment cap. Through its side valves, the capping stack can also redirect the flow of fluid to surface vessels through flexible pipes and risers, if necessary. The capping stack is tested and maintained in a continuous state of readiness for mobilization and measures approximately 30 feet in height, 14 feet in width and weighs almost 100 tons.

A Shell permit application, which cited the MWCC interim system for drilling in 9,800 feet of water in the Tobago Field, met the requirements of the Bureau of Ocean Energy, Management, Regulation and Enforcement and was approved.

An expanded containment system is on track for delivery in 2012. In addition to operating in water depth up to 10,000 feet, the system will have the capacity to capture up to 100,000 barrels of fluid and 200 million cubic feet of gas per day.

Oil & Gas Post

Promote Your Page Too

Lundin to Spin Bit in North Sea

- Lundin to Spin Bit in North Sea

Tuesday, June 14, 2011
Petroleum Safety Authority Norway

Lundin has received consent to carry out exploration drilling of well 16/2-7 in the North Sea with the Bredford Dolphin mobile facility.

The well will be drilled in production license 501, approx. 167 kilometers west of Stavanger.

The well has the coordinates N 58º 46' 47.79'', E 02º 39' 16.34''. The water depth at the site is approx. 113 meters.

The activity has an estimated duration of 53 to 67 days, depending on whether the well is dry or if a discovery is made.

Oil & Gas Post

Promote Your Page Too

Credo Confirms New Oil Field in Kansas, Updates Ops

- Credo Confirms New Oil Field in Kansas, Updates Ops

Tuesday, June 14, 2011
Credo Petroleum Corp.

Credo, with significant assets in the North Dakota Bakken, Kansas, Nebraska, the Texas Panhandle and Oklahoma, provided an operations update.

Marlis E. Smith, Jr., Chief Executive Officer, stated, "Our oil focused growth strategy is firmly on course with our horizontal drilling in the North Dakota Bakken and Texas Panhandle, combined with our shallow drilling plays in Kansas and Nebraska. Credo is adding high value oil production from new drilling as oil continues to command a three to one price advantage over natural gas.

"This press release updates our oil drilling operations, and highlights what we believe is a new field discovery in Kansas where Credo owns 47%. Based on our statistical success rates in Kansas and Nebraska, Credo is retaining increasingly larger interests in both drilling plays. In Kansas, most of our recent wells were drilled with interests averaging around 50%, and we are drilling with interests ranging from 50% to 70% in Nebraska. Our objective is to make each new discovery more meaningful to Credo through larger ownership interests."

Excellent Drilling Success Continues in Kansas

The Company has just added three new producing wells, two of which are higher-ownership wells, in its Kansas shallow oil play. The new wells bring the total number of company wells drilled in the play to 79, of which about 40% have been completed as producers.

The Company has recently completed its first confirmation well to a new field discovery in Kansas. Seismic analysis indicates that the new field may ultimately contain four to six wells in the Lansing Kansas City formation. The 4,100 foot well was swabbed during completion operations and tested at the rate of 240 BOPD (barrels of oil per day). A pumping unit is being installed. The Company expects that, on pump, the well will initially produce about one-half its swab rate. Additional development drilling is scheduled for this summer. The Company owns a 46.5% working interest.

The Company has also completed two other new producers in Kansas. One of the wells initially tested at 50 BOPD from the Lansing Kansas City formation. Credo owns a 75% working interest and is the operator. The seismic survey is currently being evaluated for offset drilling potential. The second new well was also initially tested at 50 BOPD from the Lansing Kansas City formation. The Company owns a 12.5% interest in the well.

Nebraska Drilling Program Off to a Strong Start

In southwestern Nebraska, the Company has completed three of its first five wells for a 60% success rate. The Company owns a 70% interest in all of the wells and is the operator.

The Nebraska drilling play is an extension of the Company's Central Kansas Uplift drilling play. To date, Credo has assembled approximately 35,000 net acres in southwestern Nebraska. A significant inventory of drilling prospects has already been generated and assembled utilizing a combination of detailed subsurface geology and advanced 3-D seismic technology to identify highly economic shallow oil targets. The Company is continuing to aggressively generate and lease additional prospects. Drilling commenced in the second quarter of 2011 and targets the Lansing Kansas City formation at about 4,000 feet. The Company has retained between a 50% and 70% working interest in the play in order to participate significantly in what it believes will be a very successful project.

Texas Panhandle Horizontal Oil Production Continues to Increase

In the Texas Panhandle, the Company owns an average 33% working interest in about 3,000 gross acres. As previously reported, the Company's first horizontal well was drilled to a vertical depth of 7,600 feet and has an approximate 4,000-foot horizontal lateral. The well is producing oil from the Tonkawa formation, and Credo owns a 22% working interest. Fracture stimulation fluids are continuing to be recovered. The well is currently producing approximately 180 barrels of oil equivalent per day (BOEPD) and has produced approximately 22,500 barrels of oil equivalent (BOE) in six months.

Also as previously reported, the Company's second horizontal Tonkawa well was also drilled to a vertical depth of 7,600 feet and encountered sloughing shale about 2,400 feet into the projected 4,000-foot lateral. Because the well had previously encountered good quality sand and very good shows, the decision was made to cease drilling operations at about 2,400 feet and set pipe. The well was hydraulically fractured and, is recovering frac fluid with a steadily increasing oil cut. Currently the well is producing approximately 100 BOEPD and has produced approximately 4,500 BOE in two months. Credo is the operator and owns a 32% working interest.

North Dakota Bakken Drilling Expected to Escalate in the Second Half

Credo has leased approximately 8,000 gross (6,000 net) acres on the Ft. Berthold Reservation containing about 50 initial drillable spacing units, however, it is expected that more than one well will be drilled on many spacing units. The Company's interests range up to 51% depending on the size of the spacing unit. The Company's acreage is generally located south and west of Parshall Field and is in the vicinity of considerable Bakken drilling and development activity. The Reservation has become a "hot spot" in the play and drilling activity is rapidly escalating.

The Company has drilled and completed a total of seven Bakken producers on its acreage. All of the wells are high rate producers. Credo expects to drill at least nine additional Bakken wells during 2011. The Company's interest in six of the nine additional wells will range from 12% to 20%.

As previously reported, the Company has added four horizontal Bakken wells on the Ft. Berthold Reservation. While Credo's working interests in the wells are small, ranging from 1% to 3%, the Company's share of initial production from the four wells is approximately 140 BOEPD. One of these wells, the Enerplus Ethan Hall, reported an initial production rate of 3,732 BOEPD, which is the highest initial rate of any Credo Bakken well drilled to date and ranks among the highest rates in the play.

"Credo intentionally chose not to operate wells in the Bakken play due to the drilling volume required to assure timely field services and favorable contracts," Smith said. "The downside of not being the operator is that we do not have substantial control over when wells are drilled. Nevertheless, we believe that the advantages to Credo of participating with larger operators far outweigh the disadvantages. Some operators have told us they are experiencing drilling delays due to a harsh winter in North Dakota followed by extremely wet spring conditions."

Calliope Activity on the Increase

Credo remains committed to monetizing its patented Calliope Gas Recovery System. During March 2011, Calliope was successfully installed on the Carmella State well located in Harper County, Oklahoma. Calliope has eliminated downtime due to liquid loading, and increased production to a steady rate of 150 thousand cubic feet per day (Mcfd). Credo is the operator of the well and owns an 85% working interest. Final paperwork is currently in progress to purchase another well for Calliope, and the Company is actively pursuing other acquisition opportunities. Calliope also continues to generate interest from new players with fresh ideas as rapidly growing international companies seek innovative solutions to capture energy reserves.


"The new oil producers highlighted in this press release are excellent examples of the Company's ability to discover and develop oil reserves at very moderate costs. One of the benefits of an active drilling program is that an occasional 'bell-ringer' comes in. Not only will the volume of oil from the high-rate, high-ownership Kansas wells be impactful to Credo, it adds even more value by setting up offset drilling opportunities.

"I am also pleased that we are again making some real progress on our Calliope Gas Recovery System. We have dedicated new resources to generating Calliope activity which are beginning to pay off.

"We are looking forward to a very active second-half of the year with our aggressive oil drilling in Kansas and Nebraska, combined with our horizontal oil drilling in the North Dakota Bakken and the Texas Panhandle. Credo's drilling schedule should be especially active in the North Dakota Bakken, where we expect to drill at least nine new Bakken wells with working interests ranging from 12% to 20%."

Oil & Gas Post

Promote Your Page Too

Beach Starts Flow Stimulation at Holdfast-1

- Beach Starts Flow Stimulation at Holdfast-1

Tuesday, June 14, 2011
Beach Energy Ltd.

Beach advised that the flow stimulation of Holdfast-1 commenced over the weekend.

This is the first time flow stimulation has specifically targeted shale target zones at depth in the Cooper Basin, with the flow stimulation of Holdfast-1 to be undertaken in eight stages.

It is expected that the stimulation process will be completed within two weeks, after which the flow testing will commence (early July).

Participants in PEL 218 (Permian JV) are:
  • Beach (Operator) 90%
  • Adelaide Energy Ltd 10%

Oil & Gas Post

Promote Your Page Too

Candax Notes Production Results at Ezzaouia Field

- Candax Notes Production Results at Ezzaouia Field

Tuesday, June 14, 2011
Candax Energy Inc.

Candax announced that the Ezzaouia field (31.4% WI), operated by Maretap, a joint operating company between Candax and ETAP, the Tunisian national oil company, is currently producing at over 1,000 bopd subsequent to the previously announced 2010/2011 side-track and work-over campaign. The campaign side-tracked wells Ezzaouia-5 and Ezzaouia-2 and performed work-overs on Ezzaouia-1, Ezzaouia-9 and Ezzaouia-11. Although the results have not been fully in line with expectations, they remain encouraging especially in regards to well Ezzaouia-2 which is performing well with sustained production of 400 bopd and an 8% water-cut. The campaign also provided critical data on reservoir performance and indications of additional upside have been identified.

Richard Norris, President and CEO of Candax commented, "Although we are very pleased with the current level of production, we believe this is just the beginning. We see near term additional production coming from on-going interventions on two shut-in wells. More significantly we believe that this campaign has proven that there is additional production possible from this venerable old field. After production of some 22 mmbbls to date, we note that the recovery factor has been approximately 15%, thus we believe there is significant upside in the implementation of targeted secondary recovery techniques, and we look forward to working with our partners in accessing these reserves."

Oil & Gas Post

Promote Your Page Too

Samson O&G Charges Ahead in North Dakota, Wyoming

- Samson O&G Charges Ahead in North Dakota, Wyoming

Tuesday, June 14, 2011
Samson O&G Ltd.

Samson O&G provided operational updates.


The work over to drill out the frac plugs on the Earl #1-13H well has been completed, and a tubing string is being run into the hole so that oil and gas production can be effected on a permanent basis. During the last phase of the work over, the well was flowing whilst pressure control equipment was being used to allow tubing to be run in and out of the hole. While this is not an ideal test condition, the well flowed at an average rate of 1033 BOPD with 1.9 mmcfd of gas during this 6 day period. Cumulative oil production for the well to date is 24,680 barrels.

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


The work over rig that has been operating on the Earl well is expected to be moved to the Rodney #1-14H well to drill out the frac plugs in that well.

The Rodney #1-14H well is located in Township 154N, Range 99W, Section 14 in Williams County, North Dakota.


Samson is in the final phases of contracting a drilling rig to be used to drill two wells in the Hawks Springs project. The first of these wells is the Defender US 33 #2-29H. This well will be drilled as a 4,300 foot horizontal in the Niobrara B. The horizontal portion of the well will then be fracture stimulated.

The well will be fully funded by our farminee and Samson will retain a 37.5% equity in the well.

The spud of this well is expected the first week of July.

The Defender US 33 #2-29H well is located in Township 25N, Range 63W, Section 29 in Goshen County, Wyoming.


Following the drilling of the Defender well, a vertical exploration well will be drilled to test multiple targets, in the Permian and Pennsylvanian sections. Samson is currently expecting to fund this well in its entirety. The other partners in the well have indicated that they are unlikely to participate for various strategic reasons, rather than on any technical basis. The formal proposal to participate was issued to our partners last week, and they still have the remainder of the 30 day notice period in which to elect into the well.

The Spirit of America US 34 #1-29 well is located in Township 25N, Range 63W, Section 29 in Goshen County, Wyoming.

At the Pennsylvanian level the prospect is a structural trap, mapped as a fault bounded compressional fold.

Within the 3D seismic survey previously acquired by Samson, there are numerous follow ups to these targets if they prove to be productive. Both targets are productive elsewhere in the Denver-Julesburg Basin, and Samson therefore considers them attractive add-ons to the Niobrara project. Critical risks are that the 3D seismic data has yet to be tested and also that the reservoir quality in the Permo-Pennsylvanian section is somewhat of an unknown.

Oil & Gas Post

Promote Your Page Too

Sevan Marine Reports Financial Results for 1Q11

- Sevan Marine Reports Financial Results for 1Q11

Tuesday, June 14, 2011
Sevan Marine ASA

Sevan Marine reported the results for the first quarter of 2011.

The Company's working capital is insufficient to support its present requirements and there is an immediate need to solve the Company's financial situation. The Company, together with its advisors, is in the process of seeking a debt restructuring, potentially in combination with a share issue as well as a reduction of overhead cost to secure the Company's financial position. A robust financial structure coupled with the Company's FPSO assets and technology should form the basis for creating shareholder value and securing stakeholders going forward. However, the Company is dependent on a successful restructuring in order to meet its commitments. The Company is in constructive dialogue with its stakeholders, but at the date of this report, no firm resolution has been reached.

The Board confirms that the 1Q 2011 financial statements have been prepared based on a going concern assumption. The basis for this assumption is the Company's strategic plan and a successful outcome of the restructuring plans described above. The outcome of the restructuring is however, at the date of this report, still uncertain and may impact the assumptions applied in the preparation of the 1Q 2011 financial statements. In addition to the going concern assumption, this particularly relates to "Sevan Capital Assets" and "Deferred Tax Assets" as further described in the attached report. Sevan Marine has engaged ABG Sundal Collier, DnB NOR Markets, Pareto Securities and SEB Enskilda to address a financial and strategic restructuring of Sevan Marine.

The loss from continued business carry only rounding differences compared to the preliminary figures presented in the announcement on May 20, 2011. However, a temporary breach of an equity covenant as further described in note 9 in the attached report, requires that amounts which formally could be held to be mandatory repayable at balance sheet date to be classified as current. All interest-bearing debt was therefore classified as current as per March 31, 2011.

Operating revenue for the quarter amounted to USD 51.1 million (USD 53.5 million). EBITDAFX was USD 20.4 million (USD 27.6 million). Operating profit was USD 3.8 million (USD 13.0 million), and net loss was USD 53.3 million (net loss of USD 63.3 million).

Operating revenue was USD 2.4 million lower than the previous quarter mainly as a result of a non-recurring compensation received from the Oilexco administration in previous quarter. This effect was partly offset by higher revenue from rebillable expenses from FPSO Sevan Voyageur and FPSO Sevan Hummingbird and higher revenue from the Topside and Process Technology segment.

Operating expense was USD 4.7 million higher than the previous quarter mainly due to higher rebillable operating expense on FPSO Sevan Voyageur and FPSO Sevan Hummingbird as well as higher operating expense in the Topside and Process Technology segment, all of which are also reflected in the revenues above.

A net foreign exchange loss relating to financing of USD 21.4 million (gain of USD 0.7 million) was mainly a result of unrealized disagio on NOK-nominated bonds following a strengthening in NOK compared to USD of 5.8% during the quarter.

Financial expense through profit and loss decreased by USD 25.4 million to USD 22.0 million (USD 47.4 million) mainly due to non-recurring expenses relating to refinancing activities in previous quarter.

Net loss on continued business was USD 39.7 million (loss of USD 45.4 million) for the quarter. Net pro forma loss reflects the net loss as if the drilling segment was a third party to the Sevan Marine Group and amounted to USD 33.6 million for the quarter.

Net loss on discontinued business, which reflects the net loss from the drilling segment to be de-consolidated following the initial public offering executed on May 3, 2011, amounted to USD 13.6 million (USD 17.9 million) for the quarter.

As of March 31, 2011, total assets amounted to USD 2.723 billion (USD 2.587 billion), of which USD 1,169.7 million (USD 2,145 billion) was capitalized as 'Sevan Capital Assets'. Assets of disposal group, which reflect the total assets in the drilling segment, amounted to USD 1.298 billion. Cash and cash equivalents amounted to USD 29.2 million (USD 116.1 million).

As of March 31, 2011, Sevan Marine has undrawn USD 52.1 million on a bank facility to part finance the upgrade of FPSO Sevan Voyageur which is not reflected on the balance sheet as per March 31, 2011. As at the date of this report, USD 10.0 million remains undrawn under the financing facility. In addition, the discontinued operation has undrawn USD 342.9 million on a bank facility to fund the construction of Sevan Brasil which is not reflected on the balance sheet as per March 31, 2011.

Oil & Gas Post

Promote Your Page Too

GE O&G Inks Frame Agreement with Shell Brasil for Offshore Projects

- GE O&G Inks Frame Agreement with Shell Brasil for Offshore Projects

Tuesday, June 14, 2011

GE O&G has signed a three-year frame agreement valued at approximately $30 million to supply 26 subsea wellhead systems and associated services to Shell Brasil Ltda. for exploration and production projects offshore Brazil. The agreement means GE Oil & Gas will supply all Shell Brasil's requirements for subsea drilling systems for all offshore exploratory and development wells to be drilled by Shell Brasil at least until the end of 2013.

Under the agreement, GE will supply 13 MS-700 Slimbore and 13 MS-700 deepwater high capacity (DWHC) systems. The GE MS-700 is the only subsea wellhead system on the market with metal-to-metal sealing, and has demonstrated high reliability for projects offshore Brazil.

Suheyl Ozyigit, Wells Delivery Manager for Shell Brasil said, "Based on our previous experiences, we are confident that the new agreement with GE will help us to reach our ongoing exploration and production goals. The agreement also meets our delivery requirements, provides competitive pricing and includes substantial local content."

Fernando Martins, Vice President—Latin America, Drilling & Production, GE Oil & Gas, said, "We're very pleased to again have been selected to help Shell Brasil achieve its deepwater production goals. The new frame agreement builds upon our successful relationship with Shell Brasil and further supports our growing role as a technology supplier for projects offshore Brazil, one of the world's most active oil and gas development regions."

GE's MS-700 technology offers high flexibility in terms of casing programs and is designed to help Shell Brasil reach exploratory and development targets in ultra-deep water reservoirs efficiently, saving operational rig time and costs. Most of the new projects will be located in the Santos and Campos basins offshore Brazil.

Under the new frame agreement, Shell Brasil will be able to leverage the operational lessons learned and benefits coming from earlier applications of the same MS-700 Slimbore technology. GE had a similar contract with Shell Brasil from 2007-2010 for the supply of wellhead systems for the BC-10 phase 1 development.

Much of the equipment will be manufactured at GE's facility in Jandira, São Paulo State, Brazil. Shipments are expected to start by September 2011.

The latest agreement with Shell Brasil underlines GE's position as a leading supplier of subsea drilling systems for offshore operators in Brazil. Since 2007, when GE acquired VetcoGray, the GE drilling & production business has provided more than 300 subsea wellhead systems to 11 different operators for projects offshore Brazil.

Underscoring its commitment to Brazil, GE has announced that it plans to invest $500 million to expand its operations in the country, including the establishment of a multi-disciplinary Research and Development Center in Rio de Janeiro. Among the focus areas for the new center will be advanced technologies for the oil and gas sector. In addition, GE's recent acquisition of Wellstream, a leading producer of flexible pipe equipment, significantly expands GE's capabilities to serve the Brazilian offshore market.

Oil & Gas Post

Promote Your Page Too

Well Completion Prog. Underway at American Petro-Hunter's N. Oklahoma Proj.

- Well Completion Prog. Underway at American Petro-Hunter's N. Oklahoma Proj.

Tuesday, June 14, 2011
American Petro-Hunter Inc.

American Petro-Hunter advised that the well completion program is fully underway and that production testing of the Mississippi oil formation is currently ongoing at the recently drilled NOM1H Horizontal well at the Company's growing North Oklahoma Project. The well is being readied and prepared for the onset of commercial production.

The completion phase of the well, including swab and production testing, is being undertaken in combination with the immediate installation of long term production facilities including a pumping unit, tank battery, ancillary metering and electrical equipment on the lease. The determination to rapidly move forward and complete the production facilities was based on a confident expectation that the Company will be generating oil sales from the lease near the end of June or early July.

A decision to move ahead with a full completion program was initiated when NOM1H reached the engineered T.D. of the 1,600 foot horizontal leg with excellent oil and gas shows encountered in the form of strong oil fluorescence; gassy oil shows and gas kicks along the drilled lateral. Subsequent results have offered continued favorably trending data, and as such, have reinforced the Company's expectations for viable commercial production at the lease.

The NOM1H well is the first of a planned series of horizontal wells designed to test and develop oil and gas in the 100 foot thick limestone Mississippi Formation.

Oil & Gas Post

Promote Your Page Too

Senex Discovers New Oil Field in Cooper Basin

- Senex Discovers New Oil Field in Cooper Basin

Tuesday, June 14, 2011
Senex Energy Ltd.

Senex advised that the Vintage Crop-1 exploration well in South Australian Cooper Basin permit PEL 516 (Senex 100%) has discovered a new oil field with the successful testing of the McKinlay Member.

A gross oil column of 10 meters with a three meter net pay was encountered in the McKinlay Member of the Murta Formation. A Drill Stem Test on the McKinlay Member recovered 39 barrels of 54.6 API, light brown oil in a 3 hour flow period, equivalent to a flow rate of 312 barrels of oil per day. Preliminary interpretation of the Drill Stem Test and wireline log data indicates at least 305,000 barrels of oil in place from this well.

Oil shows were also detected in the Namur Sandstone and the Birkhead Formation. The Namur Sandstone interval will be tested after production casing has been run and coring of the Permian section has been completed.

At present the well is being set up to run the 7" production casing after which the well will be deepened into the Permian sequence to provide a preliminary evaluation of unconventional gas targets in the coals and shales underlying the oil targets.

A 9 meter core will be cut in the coal sequences of the Toolachee Formation and four 9 meter cores will be cut in the shale sequences of the Roseneath and Murteree Shales. The Toolachee Formation is over 100 meters thick and the Roseneath and Murteree Shales are expected to be at least 100 meters thick.

Senex will run a specialized logging suite to help determine the minerals present in the shales. Subsequently, the cores will be used for desorption tests to determine gas and hydrocarbon liquids contents, and to evaluate porosity, permeability and mechanical properties.

Senex Managing Director Ian Davies said, "This very pleasing result from the oil targets for Vintage Crop-1 in Senex's 100% owned PEL 516 further underpins the rationale for the acquisition of Stuart Petroleum, and the oil discovery will pay for the testing of the unconventional gas targets in the underlying coals and shales."

Vintage Crop-1 is located approximately 65 kilometers south east of Moomba, close to Santos' oil-producing Narcoonowie and Caroowinnie fields.

Oil & Gas Post

Promote Your Page Too

Egdon Equalizes Interest, Completes Seismic Survey in UK

- Egdon Equalizes Interest, Completes Seismic Survey in UK

Tuesday, June 14, 2011
Egdon Resources plc

Egdon updated on changes to certain of its UK license interests as well as details of a recent seismic survey.

Egdon have reached agreement with Europa O&G and Celtique to equalize working interests across contiguous Petroleum Exploration and Production Licenses ("PEDL") 180 and 182 in the East Midlands. Egdon is the current operator of PEDL182 and will assume operatorship of PEDL180. On conclusion of the transaction, which is subject to approval from the Department of Energy and Climate Change ("DECC"), Egdon will hold a 33.33% interest in both licenses reducing from its current 50%. The transaction provides alignment for the planned exploration program for this area, which contains a trend of oil prone structures including the Broughton oil discovery and Wressle Prospect, which spans the two licenses. A joint 3D seismic survey is planned for later in 2011 to firm up drilling locations for the licenses. It is hoped to drill during 2012 as part of a planned multi-well drilling program in the East Midlands.

Egdon have also reached agreement with Celtique whereby Celtique will acquire a 25% interest in PEDL181 from Egdon, again subject to approval by DECC. Following completion, Egdon will hold a 25% interest. Europa is the operator of PEDL181 with a 50% interest.

Egdon's interests in PEDL180 and 181 were acquired from Valhalla Oil and Gas Limited ("Valhalla") earlier in 2011. The licenses are covered by an Area of Mutual Interest agreement between Egdon and Celtique. Celtique will assume 50% of the consideration to Valhalla. This will comprise the payment of a 10% Net Profit Interest ("NPI") on each 25% interest in PEDL180 and PEDL181 assigned to it by Egdon (2.5% net). The NPI is payable from revenues after recovery of pro-rata exploration, development and production costs.

Elsewhere in the East Midlands, Egdon reported the successful completion of a 13 kilometer 2D seismic program over the Burton on the Wolds Prospect in PEDL201 where Egdon holds a 50% operated interest. The Burton on the Wolds prospect is located on the southern margin of the Widmerpool Basin to the South-East of the Rempstone Oil Field and is a four-way dip-closed prospect associated with an underlying seismic anomaly. Indicative prospective resources are estimated by Egdon at around 1.5 million barrels.

Commenting on the recent developments, Egdon's Managing Director Mark Abbott said, "We are pleased to have reached agreement with Europa and Celtique in relation to PEDLs 180, 181 and 182 and to have assumed operatorship of PEDL180. We are now in a position to operate the forthcoming 3D seismic program and develop plans for drilling on this highly prospective trend with a uniform Joint Venture partnership. The early results of the seismic program over the Burton on the Wolds Prospect look encouraging and we hope will lead to a firm drilling location."

Oil & Gas Post

Promote Your Page Too

Google Signs Deal With SolarCity

- Google Signs Deal With SolarCity

Jun 14, 2011

Google Inc. (NASDAQ:GOOG) said on Tuesday that it has made a deal with SolarCity, and it is the biggest deal it has ever made. SolarCity will use the Google fund to help finance rooftop installations. Google Inc. is creating a $280-million fund to help finance the rooftop installations.

Lyndon Rive, chief executive of SolarCity said "Google's leading the way and other companies could follow suit...It's not just about a dramatic environmental impact, it's also a good return." SolarCity is known for its lease programs and power purchase agreements, which allow customers to avoid the thousands of dollars of upfront expenses.

SolarCity is Google's first dip into the solar market, but the company has put nearly $700 million into wind farms, solar power systems, and electric vehicle programs. The buses at Google's Mountain View, California headquarters are equipped with solar panels.

Google has a potential upside of 40.1% based on a current price of $508.15 and an average consensus analyst price target of $711.8.

Oil & Gas Post

Promote Your Page Too

IEA 'Still Assessing' Oil Market after OPEC Stalemate

- IEA 'Still Assessing' Oil Market after OPEC Stalemate

Tuesday, June 14, 2011
Dow Jones Newswires
by Geraldine Amiel

The International Energy Agency is in talks with member countries following last week's OPEC meeting and is "still assessing" the oil market situation before considering any potential response, Executive Director Nobuo Tanaka said Tuesday.

Tanaka reiterated that the IEA "stands ready to act" if the market requires additional oil. At the same time, Tanaka, whose organization represents consuming countries, expressed confidence that Saudi Arabia could pump additional oil to meet supplies, he said in an exclusive interview with Dow Jones Newswires. The IEA has authority to coordinate an emergency response of oil from its member governments.

Tanaka's remarks came less than a week after a Vienna meeting of the Organization of Oil Exporting Countries concluded in acrimony after members failed to agree to boost output to meet anticipated demand growth. The surprising outcome continued to reverberate Tuesday, as OPEC's Secretary General expressed concerns that oil prices could rise later this year.

OPEC split last week on whether to boost output by some 1.5 million barrels a day, a plan favored by Saudi Arabia and some other Gulf producers. Some OPEC members, including Iran, were skeptical additional supplies were needed. The members that fought the increase have also tended to favor somewhat higher oil prices.

OPEC Secretary General Abdalla Salem Al-Badri, the official spokesman for the organization, said Tuesday that oil prices "will go up for sure" if the would rise later this year if the supply gap in many official forecasts comes to fruition, Reuters reported. The OPEC official was also quoted as saying high prices will hurt economic growth, Reuters said.

Also Tuesday, EU Energy Commissioner Gunther Oettinger told Dow Jones Newswires in Stockholm that the European Union plans to discuss oil market issues at a meeting with OPEC in Vienna later this month.

"We want to speak (with OPEC) about security of supply for 2011 and 2012 and to speak about what is a feasible price," Oettinger said in an exclusive interview.

Asked whether he was worried about a high oil price, Oettinger said: "No, I'm not worried".

Meanwhile, Tanaka said he was confident Saudi Arabia could use its spare production capacity to put additional oil on the market following the OPEC meeting. Saudi Arabia plans to immediately boost output to as much as 10 million barrels a day, Gulf sources have said.

The issue will be "how fast" the Saudis can put additional oil on the markets, Tanaka added, noting that Saudi domestic oil consumption is expected to increase during the summer.

Tanaka later told the audience that the at the IEA, "we stand ready to take all our options." But Tanaka said the IEA would tap emergency supplies only after a "disruption" such as if Saudi Arabia and other OPEC members were unable to pump more oil. He said some of the current anxieties were reminiscent of the oil market in 2008.

The IEA warned on May 19 that it was prepared to "consider using all tools" if OPEC failed to boost output, a statement that was seen by producers as a veiled threat that the IEA would tap strategic supplies if OPEC didn't pump more oil.

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

Oil & Gas Post

Promote Your Page Too

China Says Won't Use Force in South China Sea

- China Says Won't Use Force in South China Sea

Tuesday, June 14, 2011
Dow Jones Newswires

China said Tuesday it wouldn't resort to the use of force in the tense South China Sea, after its neighbors expressed concern about its more assertive maritime posture.

"We will not resort to the use of force or the threat of force," Foreign Ministry spokesman Hong Lei told reporters.

"We hope relevant countries will do more for peace and stability in the region," Hong said.

Vietnam on Monday staged live-fire exercises following recent confrontations at sea with China, which reignited a long-standing dispute over the sovereignty of two potentially oil-rich archipelagos--the Paracels and Spratlys.

Hong insisted Vietnam was to blame for the recent flare-up, sparked by a confrontation between Chinese surveillance vessels and a Vietnamese oil survey ship.

"Some country took unilateral actions to impair China's sovereignty and maritime rights and interests, and released groundless and irresponsible remarks with the attempt to expand and complicate the issue of the South China Seas," Hong said, in a thinly veiled reference to Hanoi. "This is where the problem lies."

He said China was willing to hold direct negotiations with the other nations embroiled in territorial disputes in the South China Sea within the framework of a code of conduct agreed to in 2002.

Tensions have also risen this year between China and the Philippines, another claimant to the Spratlys, which on Monday said it would from now on refer to the South China Sea as the "West Philippine Sea".

Taiwan at the weekend reiterated its claim to the Spratlys, and said missile boats and tanks could be deployed to disputed territory.

Brunei and Malaysia have also staked claims in the area.

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

Oil & Gas Post

Promote Your Page Too

Rise of Oil Brings A Visit from Ghana

- Rise of Oil Brings A Visit from Ghana

Tuesday, June 14, 2011
Houston Chronicle
by Jenalia Moreno

Ghana has long relied on its exports of cocoa and gold.

But oil is becoming much more important to its economy since production began last year at Ghana's offshore Jubilee field.

The emerging Ghanaian oil industry brought the nation's vice president, John Dramani Mahama, to Houston this week for meetings with energy companies to encourage investment in the western African nation.

"With this trip, we're going to build a partnership between Ghana and Texas," he said during a news conference Monday at the Greater Houston Partnership.

Total annual trade between Houston and Ghana rose to $244 million in 2010 from $159 million in 2009, according to the partnership.

Since the Jubilee discovery a few years ago, several foreign energy companies have set up operations in Ghana. But the region's offshore geology makes exploration challenging.

"Drilling on the west coast of Africa is very tricky business," Mahama said.

Many of the companies working in Ghana are from developing nations, he said.

"Their businessmen are crawling over Africa and looking for opportunities," he said.

His delegation also visited the Port of Houston, and at the news conference Mahama discussed his nation's transportation needs .

Ghana must upgrade its rail lines and roads to make it easier to move products through Africa, he said.

Partnership officials said they are pushing for a nonstop flight from Houston to Ghana's capital of Accra. United Airlines plans to start flying between Houston and Lagos, Nigeria, later this year.

Copyright (c) 2011, Houston Chronicle

Oil & Gas Post

Promote Your Page Too

Impact Fee Proposed on Natural Gas Wells

- Impact Fee Proposed on Natural Gas Wells

Tuesday, June 14, 2011
Pittsburgh Post-Gazette
by Laura Olson

A state Senate measure to charge natural gas drillers a per-well impact fee will be getting some tweaks today, in an effort to move forward on the measure as lawmakers head into final budget talks.

One lawmaker says those are the beginning of a more comprehensive revamp to the drilling fee legislation, which is being negotiated by supporters in that chamber.

The Senate Environmental Resources and Energy Committee this morning will be taking up the impact fee bill from the chamber's President Pro Tem Joe Scarnati, R-Jefferson. An amendment from the panel's chairwoman would raise the initial amount of that fee, Although no fee would be assessed after the 10th year of production.

Under Mr. Scarnati's current bill, a $10,000 base fee would be charged, with that fee rising based on the price of natural gas and level of production. The senator's staff estimates that the average fee for a well in its first year of production would be between $25,000 and $30,000.

Of the revenue collected, 60 percent would go to local and county governments with drilling activity. The other 40 percent would go for environmental initiatives.

Changes from Sen. Mary Jo White, R-Venango, would start that fee at a flat $40,000, lowering it by $10,000 per year in the second, third and fourth years. A fee of $10,000 would be assessed from years four through 10.

Adam Pankake, the Senate panel's executive director, said that reflected the decrease they'd seen in the impacts on local communities as a well ages. As production decreases -- which occurs rapidly during the first few years that a shale well is producing -- the truck traffic and other strains on a municipality also shrink, he said.

Ms. White's proposed changes would also narrow how the 40 percent that goes toward environmental initiatives could be used. With the current measure, some funds could be used for open-space preservation and recreation trails. That option would be removed, Mr. Pankake said.

Another change would allow drillers a credit of up to 30 percent of their overall fee if they donate to a county housing trust fund or a nonprofit involved in affordable housing.

Drew Crompton, Mr. Scarnati's chief of staff, said the senator was pleased that his measure will probably be moving forward, but added that there were "some aspects that are going to need further conversation." Those include the proposed changes to how the environmental funds can be spent, he said.

Sen. Tim Solobay, D-Canonsburg, said other changes were under discussion for a broader overhaul of the fee proposal. Funding for continued training of emergency responders, as well as incentives for converting fleet vehicles to natural gas, could be included, he said.

Mr. Solobay said he supported the general aim of the impact fee plan to send the majority of funding to communities with drilling and reserve the remainder for environmental or infrastructure projects.

While he was optimistic that the measure "definitely" can be approved this month alongside the state budget, Mr. Scarnati's staff gave a more cautious forecast.

"It doesn't mean it gets done, but we are going to push the issue," Mr. Crompton said.

Copyright (c) 2011, Pittsburgh Post-Gazette

Oil & Gas Post

Promote Your Page Too