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Oil and Gas Energy News Update

Tuesday, June 21, 2011

Oil & Gas Post - All News Report for Tuesday, June 21, 2011

Tuesday, June 21, 2011

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Commodity Corner: Oil, Natural Gas Edge Upward

- Commodity Corner: Oil, Natural Gas Edge Upward

Tuesday, June 21, 2011
Rigzone Staff
by Matthew V. Veazey

Crude oil for July delivery settled higher Tuesday on optimism that Greece's parliament would vote in favor of the country's existing government, paving the way for an austerity program and bailout.

Oil ended the day at $93.40 a barrel, a 14-cent gain, as investors speculated about the outcome of a pending confidence vote in Greek Prime Minister's George Papandreou's government. The country's parliament was set to begin voting at midnight local time.

Surviving the confidence vote would give the Papandreou government momentum to pass a slate of austerity measures through parliament that are key for Greece to obtain debt restructuring loans from the European Union and International Monetary Fund. The austerity program includes tax increases, spending cuts, and privatization measures.

July crude traded within a range from $92.50 to $94.74 Tuesday.

Thanks to new weather forecast models predicting hotter-than-normal temperatures from the Southwest to the Northeast, front-month natural gas gained seven cents Tuesday to settle at $4.39 per thousand cubic feet.

July natural gas futures peaked at $4.41 and bottomed out at $4.305. Gasoline lost three cents to end the day at $2.88 a gallon. The July contract price fluctuated from $2.85 to $2.94.

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Spectrum Secures Seismic Acquisition Deal with Seabird

- Spectrum Secures Seismic Acquisition Deal with Seabird

Tuesday, June 21, 2011

Spectrum has secured a significant 2D seismic acquisition capacity with Seabird for expansion of their Multi-Client library, together with a re-let agreement for Spectrum's vessel, the GGS Atlantic.

As part of the continued growth of Spectrum's Multi-Client library, the company has now committed to the acquisition of 2D seismic data worth 23 million dollars (US) over the next 3 years. This commitment is part of a signed frame agreement with SeaBird Exploration to draw on their extensive worldwide seismic fleet. Acquisition costs to Spectrum will be fixed at competitive market rates.

This agreement will ensure an efficient and sustainable working partnership perpetuated by Spectrum and Seabird since Spectrum's Big Wave in the Eastern Gulf of Mexico that utilized Seabird's vessel the R/v Munin to acquire infill data for this flagship product.

Under the agreement the bareboat charter of Spectrum's own seismic acquisition vessel, the GGS Atlantic will be assigned to Seabird until August 2012 on the same terms currently enjoyed by Spectrum.

This important Agreement is appropriate for both companies in that it ensures Spectrum can concentrate on and maintain core company objectives, values and expertise in the Multi-Client field, while simultaneously giving Seabird a progressive financial incentive commensurate with their own central company competence.

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Fugro Names International Marketing Manager

- Fugro Names International Marketing Manager

Tuesday, June 21, 2011
Fugro Multi Client Services Pty Ltd.

Ewa Ginal has been named International Marketing Manager at Fugro Multi Client Services, Rachel Masters, Managing Director of Fugro Multi Client Services Pty Ltd, announced.

Operating out of the Perth, West Australia office, Ginal will be responsible for the sales and marketing of non-exclusive seismic data projects to the oil and gas market, primarily in the Asia Pacific region to include; Australia, New Zealand, Timor, Papua New Guinea, Indonesia, India and the Seychelles Islands.

"Ewa has proven herself through her history with Fugro," said Masters. "She knows Fugro on an international business level and that will definitely contribute to her continued success with the company."

Ginal joined Fugro Robertson in 2005 as a client manager where she was responsible for supporting the clients of Fugro Robertson's flagship geological product, Tellus™. Her other positions with Fugro Robertson have included, Tellus™ Sales Manager and Business Development Manager where she was responsible for the sales of the entire Fugro Robertson portfolio of non-exclusive products and new business in the Far East.

Ginal holds a Master of Science in Geology from the University of Warsaw, Poland. She is a member of the American Association of Petroleum Geologists, the South Asia Petroleum Exploration Society and the Petroleum Exploration Society of Great Britain.

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Expro Strengthens Position with New Investment Program

- Expro Strengthens Position with New Investment Program

Tuesday, June 21, 2011
Expro International Group

Expro has announced a major new investment program that will reinforce the company's leading position as a supplier of innovative technology and specialist services to the upstream oil and gas sector.

The program includes expanding Expro's established fleet of subsea safety systems and well test packages, as well as globalization of the group's strong drill stem testing (DST) heritage and emerging, innovative telemetry capability.

Investments are also being made to fuel specific customer growth initiatives in the wireline and production systems product lines as well as new product developments in production surveillance (multi-phase metering) and fluid analysis.

The funds for the program are being provided by a $250MM equity injection from the company's shareholders. Additional flexibility and the opportunity to accelerate growth have also been provided by increased covenant headroom under the Mezzanine Facility and the expansion of the group's Revolving Credit Facility from $100MM to $160MM.

Commenting upon the investment program, Charles Woodburn CEO said, "This is excellent news for Expro and our customers and demonstrates the shareholders continued confidence in Expro. We are now even better positioned to deliver our market-leading technology and uniquely personalized customer service to the highest standards of safety and quality.

"Last year they backed the acquisition of PTI entirely from new equity, this year they are backing our organic growth plans in the same way. This puts us in a strong position to invest in our business to take full advantage of the upturn in the market."

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Kodiak Says Hello to New Board Members

- Kodiak Says Hello to New Board Members

Tuesday, June 21, 2011
Kodiak O&G Corp.

Kodiak has approved the appointment of three of its executives to new positions with the Company. Effective immediately, James P. Henderson, currently Chief Financial Officer, will serve as Executive Vice-President, Finance and Chief Financial Officer, Russ D. Cunningham, currently Vice-President of Exploration, will serve as Executive Vice-President, Exploration, and Russell A. Branting, currently Vice-President of Engineering, will serve as Executive Vice-President, Operations.

The Board also announced that James Catlin, the Company's Chief Operating Officer, has informed the Company that for personal reasons, effective December 31, 2011, he intends to step down from that position. Mr. Catlin has agreed to begin a new role at Kodiak as Executive Vice-President of Business Development. The Board also appointed the Company's President and CEO Lynn A. Peterson to serve as Chairman of the Board, effective immediately. Mr. Catlin will remain a Director of the Company.

Mr. Henderson most recently joined Kodiak in April 2010 as Chief Financial Officer and has over 20 years of oil and gas industry financial and reporting experience, the majority of which was spent with public companies. He will remain the Company's principal financial officer.

Mr. Cunningham joined Kodiak in September 2004 as Northern Rockies Exploration Manager and has over 30 years of experience in oil and gas exploration, primarily in the Rocky Mountain Region and the Mid-Continent Region.

Dr. Branting joined the Company in June 2007 as Kodiak's Operations Manager. He has more than 20 years of Rockies oil and gas experience, with extensive experience in the Williston and Green River Basins.

"We are pleased to name Russ, Russell and Jimmy as executive officers of Kodiak," said Mr. Peterson. "Each has shown tremendous dedication to the Company in their geologic, engineering and operations and financial and capital markets functions. Their diligent work is evidenced by Kodiak's continued success in the Williston Basin. These gentlemen are instrumental in our efforts to improve field-level efficiencies and financial reporting functions. We appreciate Jim's leadership as COO and Chairman over the years, and we look forward to his contributions in his new role. While Jim's new position is intended to lessen the extraordinary time commitment that his prior position demanded, the Company will continue to have the benefit of his experience and strategic vision."

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TTS Inks Jackup Agreement with Jurong Shipyard

- TTS Inks Jackup Agreement with Jurong Shipyard

Tuesday, June 21, 2011

TTS has signed a Letter of Intent with Jurong Shipyard Pte Ltd in Singapore, for delivery of a high performance drilling equipment packages for a new CJ70 jackup to be built for North Atlantic Drilling Ltd.

The new jack up, named West Linus, is specifically built to operate on the Norwegian Continental shelf and has been contracted to ConocoPhillips for five years. The new rig is an advanced, ultra large, harsh environment, high performance drilling unit matching the specifications of the largest jack ups in the world.

The new drilling equipment package has a value of approximately NOK 350 million plus various optional equipment yet to be decided on. The drilling equipment is scheduled for delivery during 3Q and 4Q 2012. TTS Energy has also granted Jurong Shipyard two options valid until September 30th, 2011 for identical drilling equipment packages.

TTS Energy has previously supplied a similar drilling equipment package to West Elara, which is a CJ70 jackup rig currently being finalized at Jurong Shipyard for North Atlantic Drilling where Seadrill holds a majority share. West Elara has been contracted to Statoil under a five year contract on the Norwegian Continental Shelf.

"We are very pleased to again have been chosen to deliver a high specification rig package to Jurong Shipyard and North Atlantic Drilling," said Johannes Neteland, President & CEO of TTS Group. "This new contract confirms our strong position in the high end drilling equipment market," he added.

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Spectrum Wraps Up Reprocessing at Adriatic Proj.

- Spectrum Wraps Up Reprocessing at Adriatic Proj.

Tuesday, June 21, 2011

Spectrum has completed the reprocessing of approximately 9,000 km of regional 2D seismic data from the Italian sector of the Adriatic Sea on a Multi-Client basis. The original surveys were acquired by the Italian government as part of a study to highlight the hydrocarbon potential of the Adriatic Sea.

The majority of production in the region is from Pliocene age gas fields, many of which have multi-TCF reserves. However, the deeper potential of the Adriatic has yet to be fully explored and this reprocessed data library, which shows many un-drilled structures, should lead to a greater understanding of the hydrocarbon potential within the Adriatic Sea.

The reprocessing was carried out in Spectrum's state-of-the-art processing center. The data is now available and it has already triggered significant industry interest through the direct hydrocarbon indicators highlighted.

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Dejour Discovers Hydrocarbons at Co. Well

- Dejour Discovers Hydrocarbons at Co. Well

Tuesday, June 21, 2011
Dejour Enterprises Ltd.

Dejour has drilled and set casing on an initial vertical well to test the Mancos/Niobrara potential on its South Rangely leasehold in Rio Blanco County, Colorado.

The test well was drilled to a depth of 3863' and encountered approximately 90 feet of hydrocarbon bearing siltstone in the Lower Mancos "C" sands. After a thorough review of the well data the well will be completed, fractured and flow tested to determine the commercial potential of the Lower Mancos "C" Sand in this area. Definitive results of this test well will be forthcoming in Q3 2011.

Dejour has a 30% WI in the test well and an average 56% WI in the surrounding 8000 acres.

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Shell Extends Ormen Lange Contract with AGR

- Shell Extends Ormen Lange Contract with AGR

Tuesday, June 21, 2011

Norske Shell AS is extending its use of AGR's deep-water excavation technology and expertise on the Ormen Lange field.

Originally, a £9m (NOK84m) deal announced in February between the Aberdeen-based Excavation & Trenching arm of AGR Drilling Services and Norske Shell was to last until June 2, 2011.

Now Norske Shell has called upon AGR to provide its excavation spread for a further 48 days. This extends the contract until July 20, with further options until August 20. The extension to July 20 increases the contract value to approximately £16m (NOK141m).

AGR's ClayCutter X™ route preparation tool is being used on the project to excavate seabed highs.

Its powerful seawater jetting system will enable Shell to install the Ormen Lange Northern template, plus associated pipelines and umbilicals.

Despite the short turnaround period between the awarding of the contract in February and arrival in the field in early May, vessel mobilisation was completed safely and on schedule.

AGR's VP of Excavation & Trenching, John Sands, said, "We are delighted to receive this substantial increase in scope from Shell. The ClayCutter X™ spread has again proven its ability to add value to subsea projects. Shell's fast-track approach to the project presented a number of challenges which were met to the client's complete satisfaction."

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NOAA: US Unprepared for Changes in Arctic Ice

- NOAA: US Unprepared for Changes in Arctic Ice

Tuesday, June 21, 2011
Knight Ridder/Tribune News Service.
by Renee Schoof

The National Oceanic and Atmospheric Administration is being inundated with requests for weather and ice forecasts as well as navigation information about the Arctic, but isn't able to provide all of the information that the Coast Guard, industries and native Alaskans need, NOAA chief Jane Lubchenco said Monday.

The NOAA chief, the commandant of the Coast Guard and the chief of naval operations spoke at a symposium about challenges ahead for the United States as summer Arctic sea ice declines, opening the Arctic to oil and gas extraction, fisheries, tourism and shipping.

Lubchenco, a marine ecologist, said her agency doesn't have nearly the same capacity for Arctic weather forecasting, oceanography and navigational charting that it has in other regions.

"It's a matter of insufficient observing, insufficient information to do the modeling and forecasting. So there's a huge disconnect between what is expected we will be able to deliver and what we are actually able to provide," she said.

Lubchenco said NOAA needs more funding for this work, despite current pressure to cut the federal budget.

As the ice retreats, the need for information will increase, she said. She cited needs for weather and sea ice forecasts for the Navy and Coast Guard, Alaska native communities, shipping companies and the fossil fuel industry, which wants permits for exploration in Arctic Alaska next year.

NOAA also needs better models to be able to show how the loss of sea ice and rising ocean temperatures will affect pollock, cod, salmon and crab, as well as other species such as ice seals and whales, she said.

The commandant of the Coast Guard, Adm. Robert J. Papp Jr., said the Coast Guard doesn't have a base or the ships it would need to respond to a cruise ship in distress or an oil spill.

Towns in northern Alaska have hotel rooms for only a few dozen people. During last year's oil spill in the Gulf of Mexico, the Coast Guard needed rooms for 3,000 people. In all, the government sent in 30,000.

"How do you place people up in the Arctic in those conditions is just the start," Papp said. "Then it's pre-staging equipment. It's having facilities you can operate out of. And right now we have nothing."

Papp said new icebreakers would be expensive to build and operate, but the United States nonetheless needs them.

The country's two heavy icebreakers, Polar Star and Polar Sea, are both out of service. The Polar Star is being decommissioned, and the 30-year-old Polar Sea is being refurbished. It's expected to return to service in 2013. Another icebreaker, the Coast Guard cutter Healy, is now on an Arctic research mission.

Adm. Gary Roughead, the chief of national operations, said the Navy sees its role expanding as it includes the Arctic in its mission. He noted that 22 percent of oil and gas reserves are thought to be in the Arctic. In addition, new northern shipping routes are expected to open in about 25 years, he said.

(c) 2011, McClatchy-Tribune Information Services. Distributed by Mclatchy-Tribune News Service.

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General Electric Expects to Win $10 Billion Worth of Contracts at Paris Air Show

- General Electric Expects to Win $10 Billion Worth of Contracts at Paris Air Show

Jun 21, 2011

Executives of General Electric (NYSE:GE) said on Tuesday that they expect to win more than $10 billion worth of new orders at the Paris Air Show occurring this week, led by orders for its new engines and expanding business services.

The company also said it saw the potential to supply engines and other systems for 3,000 of Comac Ltds C919s, 33% more than its previous estimate. Comac, founded in 2008, is a Chinese aircraft manufacturer that has yet to begin selling its planes on the market. The C919 is projected to begin deliveries in 2016.

David Joyce, CEO of the GE Aviation unit, said he also saw the opportunity to provide 4,000 of the new A320neo range from Airbus. He added that the company's chief focus is on emerging markets, but that he also sees the potential for 2,000 replacement aircraft in North America.

General Electric has a potential upside of 28.7% based on a current price of $18.82 and an average consensus analyst price target of $24.21.

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India's ONGC to Invest $7.7B in Gas Field

- India's ONGC to Invest $7.7B in Gas Field

Tuesday, June 21, 2011
Deutsche Presse-Agentur (dpa)

India's state-run Oil and Natural Gas Corporation plans to invest 7.7 billion dollars to develop one of the country's largest gas fields off the eastern coast, officials said Tuesday.

ONGC was planning to drill eight additional wells in the block in the Krishna-Godavari (KG) basin and had sought permission from the Directorate General of Hydrocarbons, a company spokesperson said.

"A total life-cycle cost as per the proposal for Declaration of Commerciality (DoC) is of the order of 7.7 billion dollars," the official said.

The gas field could produce upto 30 million cubic meters a day in five years, according to the report in the Economic Times daily.

The oil major is also looking for tie-ups with international partners to maximize the output from the deep-sea field.

The KG basin is India's most prolific gas basin and home to some of India's biggest natural gas discoveries in recent years.

India depends on imports for about 70 percent of its oil and gas needs.

Copyright 2011 dpa Deutsche Presse-Agentur GmbH

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Govt Says Open to Review of Profit-Sharing Formula

- Govt Says Open to Review of Profit-Sharing Formula

Tuesday, June 21, 2011
Knight Ridder/Tribune Business News
by Utpal Bhaskar, Mint, New Delhi

In an attempt to deflect criticism by the country's apex auditor, petroleum minister S. Jaipal Reddy said the government was open to revisiting its profit-sharing formula for awarding hydrocarbon blocks and will strengthen the office of the oil regulator.

The Comptroller and Auditor General of India (CAG) had criticized Reddy's ministry and regulator Directorate General of Hydrocarbons (DGH) for allegedly allowing Reliance Industries Ltd (RIL) to inflate development costs on the D6 block in the Krishna-Godavari (KG) basin.

RIL has denied the charge.

Under India's new exploration licensing policy (Nelp), companies win exploration blocks in a competitive bidding process that involves revenue-sharing (or production-sharing) agreements with the government. According to this contract, the government's share from hydrocarbon blocks, known as profit petroleum, comes only after the companies recover all their costs.

"Today's formula of investment multiple was evolved in 1995. If (a) more foolproof formula is possible, why not look at that," said Reddy. "If there is an alternative formula which is less controversial and is fail-safe, then why not?"

Reliance Natural Resources Ltd (RNRL) had earlier alleged that RIL had "gold-plated" exploration costs in KG D6 by almost four times--from $2.47 billion in 2003 to $8.83 billion--to undermine its demand for cheaper gas.

RIL, an oil-to-yarn conglomerate, is controlled by Mukesh Ambani. RNRL is controlled by his brother Anil.

The accusations were made at a time when the brothers were at loggerheads, before patching up in May 2010.

The Communist Party of India (Marxist), or CPM, and the main opposition Bharatiya Janata Party have criticized the Congress-led United Progressive Alliance (UPA) government over the findings in the CAG's draft report. The CPM has demanded "immediate amendment of the present pricing formula in the production-sharing contract in consultation with CAG" and "immediate action" against the officials involved, including former director general of hydrocarbons V.K. Sibal.

It has also demanded that the price of gas be "delinked from international dollar price of crude" and the price of KG basin gas "be revised on the basis of actual cost of production and a cost-plus formula."

CAG's draft report also states that the British Gas Exploration and Production India Ltd-operated Panna/Mukta and Tapti fields, which have other partners such as RIL and state-owned Oil and Natural Gas Corp. Ltd (ONGC), too, increased development costs, and that Cairn India Ltd was allowed to carry out exploration in areas not covered under its RJ-ON-90/1 block in Rajasthan. "The institution of DGH is not capable of handling the technical and financial issues of this size," Reddy said.

The ministry of petroleum and natural gas has sought eight weeks to submit its response to CAG's draft report. "Our ministry will approach the subject with an open mind... we will not hesitate to correct ourselves," Reddy said.

Reddy declined to comment on whether CAG's draft report will affect approval for RIL's proposed move to offload a 30% stake in its hydrocarbon blocks to London-based BP Plc., only saying the deal "was under consideration."

In a separate development, Reddy said the cabinet committee on economic affairs (CCEA) may take up this week Vedanta Resources Plc.'s proposed acquisition of a majority stake in Cairn India Ltd.

A group of ministers (GoM) set up to vet the deal has recommended that CCEA approve the transaction but with riders to protect the interests of Cairn's partner, ONGC.

The state-owned company had made the resolution of a royalty payment dispute with its partner a precondition for approving the deal. The ministry had placed the issue before CCEA, which, in turn, recommended it to a GoM. An external spokesperson for RIL and a Cairn spokesperson declined comment.

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Shoal Point Confirms Oil in Green Point Shales

- Shoal Point Confirms Oil in Green Point Shales

Tuesday, June 21, 2011
Shoal Point Energy Ltd.

Shoal Point has received the preliminary results of a petrophysical analysis from NuTech Energy Alliance Ltd ("NuTech") for the 3K-39 well in the Green Point Shales in the near offshore Newfoundland which has confirmed a thick section of producible unconventional light oil.

Significant hydrocarbon shows were encountered over a gross interval between the surface casing shoe at 400 meters measured depth and current drilled depth of 1745 meters.

The analysis of the 3K-39 logs reflects NuTech's previous analyses of unconventional potential in the Green Point Shales from the Shoal Point 2K-39 and Long Point M16 wells. It shows a similar thick section of hydrocarbon pay and, for the first time, have enabled interpretation of an abundance of fractures throughout the borehole.

This analysis will be updated once studies on core collected in the well are complete and assimilated. Approximately 26 meters of core is being shipped to Houston for 3D image analysis, which will provide valuable information on porosity, permeability and hydrocarbon saturations, as well as images of the internal geometry of fractures. Other core-based studies including rock properties, pyrolysis, and porosity-permeability are being concluded and incorporated in the data set.

A series of open-hole tests are being conducted, prior to completion and stimulation to assess the natural producibility of the formation; these tests are warranted by the high proportion of naturally fractured rock, (seen in core and the NuTech log analysis), the possibility of zones of naturally occurring ("conventional") porosity and permeability and of the presence of oil shows throughout the borehole. These shows include (1) gas chromatography, indicating the presence of liquids over roughly 70% of the drilled section, (2) blue-white fluorescence (indicating light oil) in drill cuttings and cores, particularly after application of a solvent, and (3) mobile, visible oil in fractured core.

Operations have been made difficult by the tectonized and fractured nature of the reservoir and therefore considerable effort and time has gone into keeping the borehole open and in good condition for coring, logging and testing, which has been the principal cause for the delay in operations to date. However, this is a positive sign for the potential producibility of the resource.

The company now expects to proceed to running casing within a number of days and to retain the well for future re-entry and re-completion as a potential producing well.

George Langdon, President of Shoal Point, commented, "Like any first well in a new basin or new play, the operation has met with challenges related to the nature of the rocks. However, the really good news is that, along with very thick matrix pay sections identified now in several wells by our petrophysical specialists, we are seeing a new and important element - pervasive natural fracturing, recognized on various scales - from very fine "spider-web" geometry, all the way up to large scale faults and fractures seen in the field. This fracturing should provide a natural permeability network to complement the artificial stimulation of the formation, which like all resource plays, will be an important part of its development. Operations are continuing on the well to maximize data recovery, and it is expected that the well will be completed shortly."

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Gas Permits, Leases Accumulate in Beaver County

- Gas Permits, Leases Accumulate in Beaver County

Tuesday, June 21, 2011
Knight Ridder/Tribune Business News
by Bill Utterback, Beaver County Times, Pa.

While five months have passed since a natural gas well was last drilled in Beaver County, gas-related paperwork continues to accumulate.

The Pennsylvania Department of Environmental Protection has issued 10 drilling permits for Beaver County sites through the first six months of 2011, including one in May and six in June, according to the DEP online records.

Rolling Acres management received four drilling permits, three this month, for property in South Beaver Township, according to DEP records. All four of the permits are for horizontal natural gas wells to be developed by Chesapeake Appalachia.

Permits were also issued this year for one property in Economy (two permits for the site, both for gas and oil drilling, to be developed by Airdale Oil & Gas); and four Ohioville properties (including two gas permits and two combined gas/oil permits, to be developed by Chesapeake Appalachia).

Of 15 DEP drilling permits issued for Beaver County sites over the past 18 months, only one, located in South Beaver, has been developed.

Permits granted to two sites in Franklin Township and one in Independence Township in 2010 have likely expired because, according to DEP spokesman John Repetz, they must be used within a year.

A permit was issued to a Hanover Township site on Nov. 3, 2010.

Keith Hohenshel, council president in Industry, said borough council was approached by Chesapeake Appalachia representatives recently about the potential of developing a well on Engle Road, but no formal application has been made to the borough.

"It was nothing set in cement," Hohelshel said. "They still have some work to do. They can't do anything until they get a permit (from the borough)."

But Chesapeake Appalachia is continuing to lease gas rights in Beaver County. The company has filed 1,770 documents with the Beaver County Recorder of Deeds office in 2011, an average of more than 10 per day. Chesapeake Appalachia filed 138 documents in the first 17 days of June.

Copyright (c) 2011, Beaver County Times, Pa.

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Landowners Lose Cash, Rights in Some Drilling Deals

- Landowners Lose Cash, Rights in Some Drilling Deals

Tuesday, June 21, 2011
Vindicator, Youngstown, Ohio
by Karl Henkel

Gas and oil drilling is a quickly growing industry, but Mahoning Valley landowners looking to capitalize should proceed with caution, according to a local lawyer and a nonprofit oil and gas leasing organization.

Many oil businesses, including Oklahoma City-based Chesapeake Energy Corp., one of the largest oil companies in the U.S., are using a newer tactic which, while perfectly legal, potentially could cost landowners thousands of dollars.

The most popular oil or gas drilling agreements -- the kind signed with Columbiana County residents -- are giving way to a new strategy: mineral-rights purchases.

Instead of lease agreements, which could net landowners thousands of dollars a month plus royalties, a mineral-rights purchase would forfeit land rights and any royalties, said Alan D. Wenger, an attorney for the Youngstown law firm of Harrington, Hoppe & Mitchell.

Wenger helped draft an April contract between Chesapeake and the Associated Landowners of the Ohio Valley, a nonprofit organization that seeks to educate and protect landowner rights.

Potential royalties are as high as 15 percent to 20 percent in the Mahoning Valley.

Wenger said the difference between signing leases, which under Chesapeake are often five-year deals with a potential three-year extension, and a mineral-rights purchase amounts to thousands of dollars per acre, per month.

The mineral-rights purchases are generally one-time payments of $2,500 an acre.

"Deciding how to benefit from potential mineral development is a personal decision," said Scott Rotruck, vice president of corporate development for Chesapeake. "Some risk-tolerant mineral owners prefer to lease their minerals, potentially receiving a bonus payment and then royalty payments over time, while others who are more risk-averse prefer to sell their mineral rights outright and receive their compensation up front."

Wenger said oftentimes it won't be a large oil company that tries to purchase mineral rights; a smaller company such as Oklahoma City-based MC Mineral Co. LLC, which is actually a subsidiary of Chesapeake, would be the purchaser.

By acquiring mineral rights, the oil company becomes the beneficiary of any royalties negotiated under a previously-signed lease, which equates to about 12.5 percent.

"Given the shale developments of the last year around here, the companies that are actively exploring for shale development or speculating and trying to get rights are trying to take advantage of existing leases," Wenger said.

MC Mineral, in a letter to a Mahoning County resident that was acquired by The Vindicator, clearly states it "is interested in purchasing, not leasing" oil and gas minerals.

One problem though, said Bob Rea, president of ALOV, is that landowners will lose control of their property.

"They can put a drill wherever they want and they have no recourse," Rea said. "If you sell mineral rights, they have full access to your property."

And selling mineral rights potentially could decrease land and property value.

Patti Mika, Real Living real-estate agent, says it may be too early to tell the true impact on values. Mika said she recently sold about 50 acres to owners who think the land will eventually net a large reward, but that normally homeowners aren't interested in owning mineral rights.

"People that want that house, it's an extra bonus if they have the mineral rights because they get a royalty," she said.

Landowners who know they have current leases with other oil companies have a couple of options.

They can try to get a dormant lease legally terminated. It's not easy and the process can vary depending on the terms of the lease. Some agreements state that if an oil well becomes dry, the lease terminates, but others state that as long as oil companies continue to pay the amount outlined in the agreement, the contract remains valid. A lease can even continue beyond its current term. It's called "held by production," Wenger said.

In the case of mineral-rights ownership, if it's been more than 20 years and a landowner gives a 30-day public notice, an affidavit can be filed to take back mineral rights. If the gas or oil company responds within 30 days, the next step is likely a lawsuit.

In either scenario, Wenger said most landowners don't understand the differences between leasing and selling, the latter of which is significantly more beneficial to the gas or oil company.

"They're really kind of playing into the greed or the need for cash," Wenger said. "Or they're trying to get the folks that have acreage around here to sell it for what looks like a nice piece of cash."

Copyright (c) 2011, Vindicator, Youngstown, Ohio

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Ptarmigan Completes Additional Option for Exploration License 1120

- Ptarmigan Completes Additional Option for Exploration License 1120

Tuesday, June 21, 2011
Ptarmigan Energy Inc.

Ptarmigan has completed an option agreement for its Western Newfoundland exploration license with Canadian Independent Oil and Gas Company (CIOGC), a privately held, Calgary based oil and gas exploration company.

President and CEO Craig Boland says that a discovery under this agreement will yield Ptarmigan a gross overriding royalty based upon a percentage of the gross production proceeds without deductions. "We are excited and very pleased that this agreement, coupled with the recent gas-in-shale farm out agreement with Shoal Point Energy (April 2011), has established strong partners to explore both traditional and non-traditional targets within Exploration License 1120, with very favorable terms for our shareholders."

Under the terms of the agreement CIOGC has 90 days to review existing seismic data and decide whether or not to exercise its option to acquire, a minimum of 1000 square kilometers of high definition 3D seismic data within the area of Exploration License 1120; 100% owned by Ptarmigan Energy. Exploration License 1120 is currently undergoing an environmental assessment and permitting process required by the Canada Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB).

Should CIOGC exercise its option to collect additional seismic data, it would be in a position to execute a definitive agreement with a seismic acquisition contractor by October, 2011 with a view to starting that work in September 2012 following completion of the environmental assessment process. CIOGC has until December 2013 to exercise its option to drill a test well to the depth of 3,250 meters or 50 meters into the top of the Labrador Formation; the established marker below all anticipated targets. That well must then be spudded by no later than December 2014.

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Pemex to Lease 8 Platforms in Deal Worth $1.2B

- Pemex to Lease 8 Platforms in Deal Worth $1.2B

Tuesday, June 21, 2011
Dow Jones Newswires
by Laurence Iliff

Pemex said it expects to issue soon an international tender to lease eight offshore oil platforms, along with other work in the southern Gulf of Mexico, in a deal worth more than $1.2 billion.

Pemex said the rigs will be used for the drilling, termination, maintenance and repair of wells as part of its program to maintain crude-oil output at its two biggest oil complexes in the Gulf: the mature Cantarell fields and nearby Ku-Maloob-Zaap, or KMZ.

A Pemex Exploration and Production committee has approved the tender, which now moves to the board of directors. If authorized, Pemex said, the tender would be published in the official government gazette and posted on its website in July, with some contracts to begin by the end of the year and early next year.

Five of the platforms are destined for KMZ, Pemex's No. 1 production site, which averaged about 845,000 barrels a day during the first five months of the year, according to Pemex preliminary figures.

Two of the platforms are to be used at Cantarell, a supergiant field that began declining in 2004. Cantarell averaged about 465,000 barrels a day in the January-to-May period of this year. Pemex's total crude-oil output averaged about 2.570 million barrels a day over the same five months.

The platform leasing program will be staggered and end in 2016, Pemex said.

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

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Total Completes Tender Offer With SunPower, 60% Stake Acquired for $1.4 Billion

- Total Completes Tender Offer With SunPower, 60% Stake Acquired for $1.4 Billion

Jun 21, 2011

Total S.A. (NYSE:TOT) and SunPower Corp (NASDAQ:SPWRA) announced today the final results of Total's all-cash tender offer for shares of SunPower and confirmed the success of the transaction.

Total now owns 60% of both SunPower's Class A and Class B common stock, the companies said in the announcement.

Total has accepted for payment an aggregate of about 34.7 million shares of Class A stock, and 25.2 million shares of class B stock, at a purchase price of $23.25 per share, for a total cost of approximately $1.4 billion.

The tender offer, announced in April, has been noted as being fairly odd, as the stock never traded at the offering price of $23.25 per share.

SunPower's shares will continue to trade on the Nasdaq exchange under the symbols "SPWRA" and "SPWRB."

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Maersk Interested in Oil, Port Projects in Russia

- Maersk Interested in Oil, Port Projects in Russia

Tuesday, June 21, 2011
Dow Jones Newswires
by Jacob Gronholt-Pedersen

Danish shipping giant A.P. Moller-Maersk plans to spend around $1 billion a year on oil exploration in the coming years and is considering participation in offshore oil service projects in Russia's Arctic region, the company's chief executive, Nils S. Andersen, said.

"We would be interested in entering the oil service sector in Russia," S. Andersen told Dow Jones Newswires in an interview.

Russian Prime Minister Vladimir Putin met with the Maersk CEO in April at the company's headquarters in Copenhagen during an official visit to Denmark.

Maersk, whose oil reserves are declining in the North Sea, is actively seeking to increase oil reserves in the North Sea, Angola, Brazil and the Gulf of Mexico. The company could also be interested in joining Russian oil and gas projects, not only as a service contractor, but possibly as a partner in upstream projects.

"I won't exclude there are possibilities of joining upstream projects in Russia," S. Andersen said. "There are a number of international players over here. The possibilities are huge, but at the moment we have no concrete plans."

Russian state oil producer Rosneft is seeking to unlock vast energy reserves in its Arctic waters. Earlier this month, Rosneft's chief executive, Eduard Khudainatov, mentioned Maersk Oil alongside Norway's Statoil as possible partners in the Arctic.

Maersk has invested $1 billion a year in exploration activities in the last three years and plans to keep spending around that level, S. Andersen said.

During Putin's visit, investments in Russian ports were discussed.

"We are looking at investing in port terminals in Russia," S. Andersen said. "Our primary interest is in the gateways in the Gulf of Finland, the Black Sea and Russia's Far East.

Maersk, the biggest shipping company to and from Russia, owns a strip of land in the Kaliningrad port area on the Baltic Sea.

"We also have an option in Kaliningrad, but whether or not we will make use of it will depend on market developments," he said.

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

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Novatek CFO: To Be Granted 4 Licenses Next Week

- Novatek CFO: To Be Granted 4 Licenses Next Week

Tuesday, June 21, 2011
Dow Jones Newswires
by Alexis Flynn

Novatek will next week be granted four new licenses on the Yamal and Gdansk gas condensate fields in the Arctic, Chief Financial Officer Mark Gyetvay said Tuesday.

Novatek will get two licenses on each block, which are estimated to hold 8 billion barrels of oil equivalent in potential and proven reserves, said Gyetvay, who was addressing a business audience here.

Separately, Novatek will sign a deal with French major Total SA (TOT) July 1 to build the Sabetta onshore liquefied natural gas plant.

Total will take a 25% stake in the terminal project. In March, Total bought a 12% stake in the Yamal LNG project for $4 billion. At the time, Total Chief Executive Christophe de Margerie said it plans to raise its holding in Yamal to 19.4% within three years.

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

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Icon to Abandon Lydia Well

- Icon to Abandon Lydia Well

Tuesday, June 21, 2011
Icon Energy Ltd.

Icon announced that the current drilling operations in the ATP626P Lydia Block have come to a conclusion with the joint venture making a decision to plug and abandon the Lydia-13 well.

The decision to plug and abandon the well was made following an assessment that the coal permeability was insufficient to warrant economic gas production from the well.

The well was drilled to a total depth of 825 meters, and was cored and tested.

Lydia-13 was the last well in the four well drilling program in ATP626P for the current budget year ending June 30, 2011. Subject to board and joint venture partner approval, a following drilling program is expected to commence in the new budget year beginning July 1, 2011. This program would be located in the most promising areas found so far and not necessarily restricted to the farmin area.

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Inpex Briefs Final Investment Decision for Ruby Field

- Inpex Briefs Final Investment Decision for Ruby Field

Tuesday, June 21, 2011
Inpex Corp.

Inpex announced that through its wholly owned subsidiary, INPEX South Makassar, Ltd. the final investment decision was made for the Ruby gas field in the Sebuku Block. Upon this decision, development activities will start towards the commencement of gas production in the field in the second half of 2013.

The Block is located 300km south of the Offshore Mahakam Block, where TOTAL and INPEX are producing oil and gas since 1974. The Block covers 2,345km2 with a water depth ranging from 50m to 200m. With the Ruby gas field having obtained the approval of the plan of development from the Government of Indonesia in July 2008, and following this final investment decision, four development wells are planned to be drilled from an offshore platform. The gas production will flow to and be processed at the onshore production facilities of Offshore Mahakam Block with certain synergy effects expected. The gas production rate is estimated at 100MMscf per day with sales principally to a fertilizer plant located in North Bontang, East Kalimantan. The total capital investment is projected at 500MM US dollars.
Pearl Oil (Sebuku) Limited operates with a 70% participating interest, TOTAL and INPEX each holds a remaining 15% participating interest in the Block.

INPEX has been expanding its exploration and development activities in Indonesia as one of its international core business areas. INPEX is conducting production activity in the Offshore Mahakam Block with the largest gas production in Indonesia. INPEX is also in the process of developing the large scale Abadi LNG project in the Masela Block, the Arafura Sea, for which INPEX is now preparing for the Front End Engineering and Design (FEED) as the Operator. INPEX will further endeavor to explore for and develop oil and gas resources in Indonesia.

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Maurel & Prom Sells Drilling Unit to Tuscany International

- Maurel & Prom Sells Drilling Unit to Tuscany International

Tuesday, June 21, 2011
Maurel & Prom

Maurel & Prom and Tuscany International are entering a definitive agreement whereby Tuscany's wholly-owned subsidiary Tuscany Rig Leasing S.A. will acquire all of the issued and outstanding shares of Caroil SAS, the drilling and work-over subsidiary of Maurel & Prom.

The purchase price will be paid by Tuscany in the delivery of US $120 million in cash, 82.5 million Tuscany shares and 27.5 million zero cost, non-transferable, non-voting common share purchase warrants (1/1).

Closing is expected to occur in the third quarter of 2011.

On the completion of the acquisition, it is expected that Maurel & Prom will own approximately 29% of the issued and outstanding Tuscany shares. Tuscany will be required to obtain the approval of a simple majority of its shareholders for the issuance of Tuscany shares and warrants to Maurel & Prom pursuant to the acquisition.

Caroil & Tuscany are joining forces to create a leading emerging market player, active in two high growth areas: Latam & Africa.

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Africa Oil Concludes Acquisition of Lion Energy

- Africa Oil Concludes Acquisition of Lion Energy

Tuesday, June 21, 2011
Africa Oil Corp.

Africa Oil has completed the acquisition of all of the issued and outstanding common shares of Lion Energy. Pursuant to an acquisition agreement previously announced April 3, 2011, Africa Oil acquired all of the issued and outstanding shares of Lion in consideration of 0.2 Africa Oil shares for each common share of Lion. Under these terms, Africa Oil issued 17,462,447 common shares to complete the acquisition. In addition, outstanding options to acquire common shares of Lion will be exchanged for options to acquire 287,250 Africa Oil shares, issued pursuant to the terms of the Africa Oil stock option plan, and outstanding warrants to acquire Lion shares have been amended to provide for the issuance of 2,289,000 shares of Africa Oil upon exercise. In each case the exercise price and number of shares to be acquired has been adjusted to account for the exchange ratio of 0.2 Africa Oil shares for 1 Lion shares.

The acquisition was approved by the Lion shareholders at a special shareholders meeting held on June 8, 2011, with 99.96% of the votes cast being voted in favor of the acquisition, and by the Supreme Court of British Columbia on June 9, 2011. Trading in the common shares of Lion will be halted by the TSX Venture Exchange before markets open on Tuesday, June 21, 2011.

Lion was a farm in partner with Africa Oil in Blocks 9 and 10BB in Kenya, and in the production sharing contracts for the Dharoor Valley Exploration Area and the Nugaal Valley Exploration Area in Puntland (Somalia). As a result of the completion of the acquisition of Lion, Africa Oil's direct and indirect interest in Blocks 9 and 10BB has increased to 100% and 50% respectively, and its interest in each of the Puntland (Somalia) production sharing contracts has increased to 60%.

Keith Hill, Africa Oil's President and Chief Executive Officer commented, "The acquisition of Lion consolidates our interests in the East African rift basins in Kenya and Puntland (Somalia). The cash portion of the deal will further strengthen our balance sheet to allow us to fully fund the upcoming aggressive exploration drilling campaign."

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Seadrill to Sell Jackup West Janus

- Seadrill to Sell Jackup West Janus

Tuesday, June 21, 2011
Seadrill Ltd.

Seadrill has entered into an agreement to sell the 1985 built jackup drilling rig West Janus to Harrington LLC in Dubai for a total consideration of US $73 million.

Seadrill expects to record a gain on the sale in excess of US $50 million on closing. Closing of the agreement and the transfer of ownership of the unit is scheduled upon completion of the rig's present drilling assignment in the second half of 2011.

Seadrill's fleet of jack-up rigs remains the world largest modern jack-up fleet with a total of 19 units built after 2006, including rigs under construction. Furthermore, Seadrill has options for construction of six further units at attractive prices.

Alf C Thorkildsen, CEO of Seadrill Management AS said, "We remain optimistic about the market outlook for premium jack-up rigs, and at the same time continue to highgrade our fleet by disposing some older units, while adding new rigs to it. The disposal of West Janus further reduces the average age of the modern Seadrill jack-up fleet to 2.6 years, and is in line with our strategy of focusing our company on modern, premium offshore drilling units."

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Aker Signs 3-Year Frame Agreement with Eni

- Aker Signs 3-Year Frame Agreement with Eni

Tuesday, June 21, 2011
Aker Solutions

Aker Solutions' geo business has signed a three-year frame agreement with Eni Norge AS to supply sub-surface consultancy services within the areas of geology, geophysics, petrophysics, reservoir technology, well site and operations geology. Contract value is undisclosed.

The agreement is valid a period of three years. In addition, Eni Norge has options to extend the agreement with three one-year periods.

"This is an important contract for us with an oil company that has great ambitions for its activities in Norway," said Helge Nyrønning, head of sales and marketing in Aker Solutions' geo business.

"We are currently experiencing significant growth in demand for our services on the Norwegian continental shelf, which remains a highly attractive offshore market. To be awarded long-term frame agreements like this demonstrates that we possess the expertise that is needed to support oil companies with their exploration and field development work," added Nyrønning.

Aker Solutions' sub-surface consultancy business delivers services through the whole subsurface value chain, from exploration to production. The unit comprises a team of 70 geologists, geophysicists and reservoir engineers. Its main fields of activity are geological and geophysical interpretation, petrophysics, reservoir modeling and simulation, well site geology as well as production technology and operations.

Aker Solutions' contract party is Aker Geo AS.

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Atwood Mourns Loss of Board Member

- Atwood Mourns Loss of Board Member

Tuesday, June 21, 2011
Atwood Oceanics Inc.

Atwood Oceanics announced the untimely death of its Board member Mr. Robert W. "Bob" Burgess, who passed away this past weekend in Massachusetts at the age of 69. Bob joined Atwood's Board of Directors in 1990 and has served as Chairman of the Audit Committee since 2008. Bob was the former Chief Financial Officer (Senior Vice President) of CIGNA Investment Division, CIGNA Companies, a diversified financial services company with major businesses in insurance, health care, pensions and investments.

Mr. George S. Dotson, Chairman of the Atwood Board of Directors, commented, "for over twenty years, the Board relied on Bob's experience and incisive mind in financial matters. He was a great friend to all on the Board, and we will miss his counsel and presence going forward."

Atwood's President and Chief Executive Officer Mr. Robert J. Saltiel added, "we have lost a valuable member of our Board who made many contributions to Atwood's success throughout his years of dedicated service. On behalf of all Atwood employees, I extend my deepest sympathies to Bob's family and many friends."

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Encana, Petrochina Call Off $5.43B Canadian Shale Deal

- Encana, Petrochina Call Off $5.43B Canadian Shale Deal

Tuesday, June 21, 2011
Encana Corp.

Encana and PetroChina have ended negotiations for a proposed joint venture concerning Encana's Cutbank Ridge business assets after the parties were unable to achieve substantial alignment with respect to key elements of the proposed transaction, including the joint operating agreement.

"After close to a year of exclusive negotiations with PetroChina, we were unable to reach alignment on the planned transaction. The disciplined and determined process we undertook on this one initiative in our multi-faceted and ongoing joint-venture strategy has gone a long way to demonstrate the tremendous value that we have created at Cutbank Ridge and it validates our plans to accelerate recognition of that value. As such, we have determined that the best way for us to advance our plans to unlock value from our Cutbank Ridge business assets is to offer up a variety of joint venture opportunities for portions of the undeveloped resources, and, separately, to examine a transaction with respect to our midstream pipeline and processing assets in the area. Each of these opportunities has the potential for strong long-term growth and value generation. We have an accomplished history of realizing significant value from our enormous resource potential through competitive processes that secure premium joint venture partners. We have retained RBC Capital Markets and Jefferies & Company, Inc. to conduct this process and we look forward to discussing these very attractive opportunities with an array of potential investors in the upcoming months," said Randy Eresman, Encana's President & Chief Executive Officer.

Horn River and Greater Sierra joint venture discussions well underway

In April 2011, Encana announced plans seeking investors in two joint ventures on Encana assets outside Cutbank Ridge in northeast British Columbia, one on undeveloped Horn River shale lands and one in the company's Greater Sierra resource play. Discussions are well underway on these potential transactions as well as a potential divestiture of producing assets in the northern portion of Greater Sierra. Encana expects that these transactions, plus other divestitures and joint venture pursuits that the company has initiated, will generate 2011 proceeds and joint venture investments of between US $1 billion and $2 billion, a level that exceeds Encana's net divestiture target for 2011 of $500 million to $1 billion. That estimate for higher 2011 divestiture and joint venture proceeds does not include any potential investments in Encana's Cutbank Ridge undeveloped resources and associated midstream assets. To reflect this increase, Encana has updated its 2011 guidance for net divestitures to between $1 billion and $2 billion. All other components of Encana's guidance remain unchanged.

Encana on track for 2011

"As we look ahead to the rest of this year, our strong operating performance in the first half of this year and our prudent risk management measures mean that we remain on track to achieve our 2011 production and financial guidance. We expect future natural gas prices to reflect the forward price curve, and, over time, to return to a long-term level of about $6 per thousand cubic feet (Mcf), which we believe reflects the cost of adding new supply. Across Encana, we are relentlessly focused on driving down supply costs, which this year we expect to average about $3.70 per Mcf. Over the next three to five years, we are targeting a supply cost of $3 per Mcf, based on 2011 cost structures. These low cost structures, combined with our continued emphasis on capital discipline and the high grading of our portfolio, help us maximize margins and maintain a healthy balance sheet through the lower end of the price cycle - a market condition that has persisted in North America during the past two years," Eresman said.

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NPD Grants Statoil Drilling Permit in North Sea

- NPD Grants Statoil Drilling Permit in North Sea

Tuesday, June 21, 2011
Norwegian Petroleum Directorate

The Norwegian Petroleum Directorate (NPD) has granted Statoil Petroleum AS a drilling permit for well 16/7-10, cf. Section 8 of the Resource Management Regulations.

Well 16/7-10 will be drilled by the drilling facility Ocean Vanguard at position 58º 29' 56.56" N, 02º 01' 31.42" E, following completion of wildcat well 30/11-8 A for Statoil in production license 035.

The drilling program for well 16/7-10 concerns the drilling of a wildcat well in production license 569. Statoil is the operator with a 59.6 percent ownership share. The other licensees are ExxonMobil with 30.4 percent and Total with 10 percent.

The area in the license comprises the southwestern section of block 16/4. The well will be drilled about 10 kilometers northeast of the Volve field in the central section of the North Sea.

Production license 569 was awarded on February 4, 2011 (APA 2010). This is the first well to be drilled in the license area.

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

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