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Oil and Gas Energy News Update

Wednesday, June 22, 2011

Oil & Gas Post - All News Report for Wednesday, June 22, 2011

Wednesday, June 22, 2011

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Commodity Corner: NYMEX Crude Gains 2.2%

- Commodity Corner: NYMEX Crude Gains 2.2%

Wednesday, June 22, 2011
Rigzone Staff
by Matthew V. Veazey

Front-month crude oil on the NYMEX ended the day at $95.41 a barrel. The Brent contract price settled at $110.95 Tuesday.

The U.S. Energy Information Agency (EIA) reported Wednesday that commercial crude oil stocks stood at 363.8 million barrels for the week ending June 17, 2011, representing a 1.7 million-barrel decline from the previous week. The draw was below some analysts' expectations—a Platts survey of analysts projected a 2 million-barrel decline in inventories—but it was nevertheless satisfactory to support a 2.2 percent day-on-day gain.

Oil surged Wednesday despite a stronger dollar. The euro slid nearly 0.3 percent against the greenback as the debt crises in Europe, most notably in Greece, remain at the fore. After the Greek prime minister survived a no-confidence vote in his country's parliament Tuesday, the government can now focus on getting a series of austerity measures passed. Should the parliament approve the package of tax hikes, spending cuts, and privatizations, the government would then qualify for debt restructuring loans from the EU and IMF.

The WTI fluctuated from $93.24 to $95.40 while the Brent futures price ranged from $109.92 to $113.10.

Although EIA figures showed a lower-than-expected draw in gasoline stocks for last week, July gasoline futures managed to gain nine cents to settle at $2.97 a gallon. According to EIA, total U.S. motor gasoline inventories fell by 464,000 barrels last week to 214.6 million barrels. Analysts surveyed by Platts had anticipated a 1 million-barrel draw.

July gasoline traded within a range from $2.88 to $2.96 Wednesday.

Natural gas for July delivery lost seven cents to end the day at $4.32 per thousand cubic feet. It peaked at $4.44 and bottomed out at $4.315.

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Canadian Spirit Resumes Completion Prog. at Montney Wells

- Canadian Spirit Resumes Completion Prog. at Montney Wells

Wednesday, June 22, 2011
Canadian Spirit Resources Inc.

Canadian Spirit (CSRI) announced that the spring road bans have been removed in the Farrell Creek area in northeastern B.C. enabling Canbriam Energy BC Partnership ("Canbriam"), operator of the Farrell Creek Montney joint venture, to begin preparations for additional drilling and development in the second half of 2011.

The capital program will resume with the fracture stimulation and testing of two previously drilled upper Montney horizontal wells at the c-45-I/94-B-1 and c-B18-I/94-B-1 locations on the western portion of the Farrell Creek joint venture lands. Upon completion, the two wells will be tied-into the Farrell Creek gas facility resulting in five Montney wells on production. One upper and two lower Montney horizontal wells are currently flowing gas into the facility. A short lateral to connect the c-45-I well to existing infrastructure has received regulatory approval with construction to begin shortly.

The joint venture is also moving a portion of its planned capital program to its east Farrell Creek lands to test the potential for natural gas liquids in this area. The program will begin with the drilling and testing of a vertical well during the third quarter of 2011. Other Montney operators in the area appear to have indications of natural gas liquids and one has announced that they will invest in the refrigeration equipment required for extraction of the liquids.

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Dril-Quip Scores Supply Contract Offshore Malaysia

- Dril-Quip Scores Supply Contract Offshore Malaysia

Wednesday, June 22, 2011
Dril-Quip Inc.

Dril-Quip announced that Dril-Quip Asia Pacific PTE Ltd, its wholly owned subsidiary located in Singapore, has been awarded a contract valued at approximately US $39 million by Murphy Sabah Oil Company, Ltd. to supply drilling and production equipment for the Kikeh Dry Tree Spar Platform which is located offshore Malaysia in approximately 1,330 meters of water.

Dril-Quip will provide a drilling riser, top tensioned production risers, tensioners, tieback connectors, specialty joints, surface wellheads and production trees to the project. Delivery of these systems is scheduled to begin in 2012.

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EnerMech Clinches Pre-Commissioning Contracts from Subsea 7

- EnerMech Clinches Pre-Commissioning Contracts from Subsea 7

Wednesday, June 22, 2011
EnerMech Ltd.

EnerMech, has been awarded a number of contracts "worth a substantial sum" to provide pipeline pre-commissioning services by Subsea 7.

Two awards are for Dutch sector projects where the workscope includes pre-trench flooding, cleaning and gauge pigging, high speed flushing, hydrostatic strength testing and post tie-in final gauging and hydrostatic leak testing in pipeline systems.

In another Dutch sector award, Subsea 7 has contracted EnerMech to perform pre-commissioning operations comprising pig loading, pig trials, pipeline flooding, cleaning and gauging, pipeline strength testing, Xmas tree isolation barrier testing, flexible riser annulus vacuum testing, pipeline system leak 'tightness' testing and pipeline bulk dewatering.

EnerMech recently invested £20 million in establishing a new Process, Pipeline and Umbilical Services division (PPU) which is targeting the global pre-commissioning market.

EnerMech PPU director, Les Graves, said, "These awards mark EnerMech's first major European pipeline project success and our pro-active approach and strategy of providing excellent personnel and equipment is already paying off.

"Securing these awards demonstrates that the market is receptive to a service provider which is committed to safe, cost effective and innovative solutions. I am confident this will be the first of many awards."

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Farstad Shipping to Build 2 New Vessels

- Farstad Shipping to Build 2 New Vessels

Wednesday, June 22, 2011
Farstad Shipping ASA

Farstad Shipping has reached an agreement with STX OSV AS to build 2 Anchor Handling / Offshore Service vessels (AHTS) of the type UT 731 CD. Contract value is approx. NOK 1.2 billion.

The vessels are designed by Rolls Royce Marine with a total length of 87.4 meters and breadth of 21.0 meters. Bollard pull will be approx. 260 tons and installed power is approx. 24 000 BHP. The vessels will be built according to DNV's strictest environmental class - "Clean Design" - and will be arranged for safe and efficient deepwater operations. The newbuilds are of the same design as Langsten has previously delivered four of to Farstad during 2009-2010.

The steel hulls will be built in Romania and outfitting yard will be STX OSV Langsten in Tomrefjord. Delivery of the vessels will be April and June 2013 respectively.

These newbuilds are part of Farstad's fleet renewal and focus on the segment for deepwater activities.

With this latest order Farstad will have 8 vessels under construction at a contract value of NOK 3.2 billion.

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Noble Appoints New VP, Investor Relations

- Noble Appoints New VP, Investor Relations

Wednesday, June 22, 2011
Noble Corp.

Noble announced that Jeffrey L. Chastain has been named Vice President, Investor Relations effective July 5, 2011. In this capacity, Chastain will be responsible for managing and fostering relationships with the global investment community.

"With his substantial experience and extensive knowledge of our industry, Jeff is well prepared to be an important contributor in this key role," said David W. Williams, Chairman, President and Chief Executive. "We are delighted to have Jeff as part of the Noble team."

Prior to joining Noble, Chastain had most recently served as Vice President, Investor Relations for Pride International. He holds Bachelor and Master of Business Administration degrees from the University of North Texas and is a past president of the Houston Chapter of the National Investor Relations Institute.

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Caza Board Member to Resign

- Caza Board Member to Resign

Wednesday, June 22, 2011

Caza reported that John Rooney, non-executive director of the Company, has informed the Company of his intention not to stand for re-election and to resign from the Board. His resignation will be effective as of July 12, 2011. The Board of Directors of Caza Oil & Gas has nominated David McManus to stand for election as a non-executive director of the Company. Subject to shareholder approval, David McManus' election will become effective at the Company's annual general meeting currently scheduled for July 12, 2011.

David McManus, aged 57, is a petroleum engineer with over 35 years experience in the Oil and Gas industry. In this time, he has worked for companies including Shell, Ultramar, ARCO and BG group. He has extensive Project Management and commercial expertise at a high level, and is currently a Director of Cape plc, Pioneer Natural Resources UK and Rockhopper Exploration plc. David has a first class honours degree in Civil Engineering from Heriot Watt University.

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Fed Cuts 2011 and 2012 Growth Forecasts, Confirms End of QE2

- Fed Cuts 2011 and 2012 Growth Forecasts, Confirms End of QE2

Jun 22, 2011

The Federal Reserve cut its forecast for economic growth this year, saying GDP should increase 2.7% to 2.9% for 2011, down from its forecast in April for 3.1% to 3.3% growth. It's the second time that growth forecasts have been lowered this year.

The Fed said in a statement, "The slower pace of recovery reflects in part factors that are likely to be temporary, including the damping effect of higher food and energy prices on consumer purchasing power and spending as well as supply-chain disruptions associated with the tragic events in Japan."

The central bank said it sees 2012 growth in the range of 3.3% to 3.7%. In April, the bank had projected 2012 growth at a more robust 3.5% to 4.2%.

The Federal Open Market Committee said it anticipates inflation will "subside to levels at or below those consistent with the Committee's dual mandate as the effects of past energy and other commodity price increases dissipate."

The Committee also confirmed it was ending its $600 million bond purchasing program known as "QE2," and that it would maintain interest rates at their current exceptionally low levels for an extended period of time.

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Worker Fatally Injured at BP Refinery in California

- Worker Fatally Injured at BP Refinery in California

Jun 22, 2011

A BP Plc (NYSE:BP) worker was fatally injured at the company's Carson refinery in California on Wednesday, the company said.

The worker died at the refinery's rail-loading site at about 8 a.m. local time, BP said in a prepared statement.

BP spokesman Scott Dean said, "Our focus right now is on taking care of this man's family and our employee assistance personnel are in action as we speak."

An investigation into the incident is ongoing. The refinery is operating normally, according to Mr. Dean.

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Donnybrook Farms-Out Alberta Lands to Cequence

- Donnybrook Farms-Out Alberta Lands to Cequence

Wednesday, June 22, 2011
Donnybrook Energy Inc.

Donnybrook reported that it has finalized an agreement with Cequence whereby Cequence will cash equalize into certain lands totaling 5 sections that Donnybrook currently holds 100% at Simonette, Alberta.

In return, Cequence, as operator, will commit to the drilling of a Test Well on a nearby jointly held section (50% Donnybrook/50% Cequence) with Cequence paying 70% of the drill and complete costs to earn a 50% working interest at tie-in point. Donnybrook will pay 30% of the drill and complete cost to retain a 50% working interest in the subject well which is expected to spud on or around August 1, 2011.

Initially, the Test Well will be drilled as a strat test into the Montney formation and if successful it will then be drilled horizontally for approximately 1,400 meters.

This well will be the first of three Montney horizontal multi-stage frac locations contemplated to be drilled between August and December of 2011 on Donnybrook's 50% lands at Simonette.

At Bigstone, Alberta, Donnybrook, as operator, has received the license for the drilling of its Montney horizontal well (25% BPO/50% APO) with a horizontal length of approximately 1,400 meters. Donnybrook has begun well site construction and the well is expected to spud early in the third quarter of 2011. The well is located within five miles of a recently announced liquids rich natural gas two mile horizontal Montney well that after clean-up reportedly flowed on test over the last day at an average rate of 13.1 MMCF of natural gas and 650 barrels of crude oil and NGLs per day (2,800 boe per day). Donnybrook and its partners hold 7 contiguous sections of Triassic Montney P&NG rights at Bigstone.

The wet spring weather in the area of Donnybrook's operations has delayed the Company's ability to access the DEI Hz 13-27 well at Resthaven which was drilled in the first quarter of 2011 and completed in April. The DEI Hz 13-27 well in which Donnybrook has a 70% working interest is still pending tie-in to the Conoco Phillips plant which will occur as soon as conditions permit. Once the well is tied-in it will be flowed back for an in-line production test. It is reasonable to expect that this may occur by mid July 2011.

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Deep Sea Takes Delivery of Odfjell Drillship

- Deep Sea Takes Delivery of Odfjell Drillship

Wednesday, June 22, 2011
Odfjell Drilling AS

Deep Sea Metro Ltd. has taken delivery of the drillship Deepsea Metro I from Hyundai Heavy Industries (HHI).

Chairman of Odfjell Offshore Ltd. Simen Lieungh stated, "Delivery has been according to plan. The collaboration with the yard has been excellent and we acknowledge their great effort. With the delivery of this state of the art vessel, we are now looking forward to the operations ahead with BG Group and Woodside Energy."

The vessel is a highly efficient, state-of-the-art 6th generation drillship. It is equipped with the latest technology and with focus on zero discharge and other green rig features.

Deepsea Metro I is the first of two ultra deepwater drillships ordered by Deep Sea Metro Ltd. The second vessel Deepsea Metro II is scheduled for delivery from HHI end of November 2011. Deepsea Metro II has a contract with Petrobras.

The Metrostar Group retains 60 percent ownership in Deepsea Metro I & II and Odfjell Offshore Ltd. has a 40 percent ownership. Odfjell Drilling is responsible for the construction follow-up, management and operation of the vessels.

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Iraq Boosts Oil Supplies to Jordan

- Iraq Boosts Oil Supplies to Jordan

Wednesday, June 22, 2011
Knight Ridder/Tribune Business News
by Taylor Luck, Jordan Times, Amman

Jordan has started receiving additional oil supplies from Iraq as officials in Amman continue to explore alternatives to address the Kingdom's energy woes.

According to Minister of Energy and Mineral Resources Khaled Toukan, Jordan has started to receive 15,000 barrels of Iraqi oil daily as part of an agreement struck between Baghdad and Amman earlier this month.

Also under the deal, signed during a visit of Prime Minister Marouf Bakhit to Baghdad, the Kingdom receives 30,000 tonnes of heavy fuel oil per day from Iraq at an $88 per tonne discount.

The boost in Iraqi oil comes amidst a drop in Egyptian gas supplies, which Jordan relies on for 80 percent of its electricity needs. Iraqi heavy fuel oil accounts for the remaining 20 percent.

Jordan currently receives 100 million cubic feet of natural gas from Egypt daily, well below the 250 million cubic feet stipulated in an amended agreement between the two sides, Toukan said.

Officials expect increased amounts of Egyptian gas by July, but remain sceptical of the reliability of supply -- particularly after attacks on the Arab Gas Pipeline earlier this year led to two separate six-week disruptions forcing the country's power plants onto their costly diesel reserves.

Facing popular pressure at home, Cairo made amending a 12-year agreement between the two sides a condition to resuming gas supplies, which the Kingdom previously received at preferential prices of less than half of the international rate.

Meanwhile, the government is set to float a tender in November for the construction of an offshore gas terminal to receive and transport liquid gas to Amman.

According to Toukan, Jordan has received interest from several international firms in the terminal, to be built off the Port of Aqaba within the next two years.

The government has received expressions of interest from British Petroleum, Royal Dutch Shell, GDF Suez, Qatar Gas Cooperation and Lemont/General Electric, among others.

Jordan's drive for liquid gas comes as part of officials' efforts to cover a five- to six-year "gap period" ahead of the development of domestic energy sources including wind, solar and nuclear power.

Copyright (c) 2011, Jordan Times, Amman

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Eidesvik Offshore Secures Charter Party Contracts with Statoil

- Eidesvik Offshore Secures Charter Party Contracts with Statoil

Wednesday, June 22, 2011
Eidesvik Offshore

Eidesvik Offshore has been awarded a 5 year Charter Party Contract by Statoil for the Platform Supply Vessel (PSV) Viking Avant. The contract has further 3 yearly options for extension.

Statoil has at the same time awarded Eidesvik Shipping AS, a subsidiary of Eidesvik Offshore ASA, a 2 year Charter Party Contract for the PSV Viking Lady. The contract has further 2 yearly options for extension.

"Eidesvik have worked for Statoil for more than 30 years. We are convinced that the outstanding performance of our offshore personnel during all these years has been an important factor in the award of these contracts," said President and CEO Jan Fredrik Meling.

Viking Avant was awarded Ship of the Year in 2004 with its Avant design. Viking Avant is built with bridge and engine aft, contrary to all previously built PSV's. When designing this vessel the main emphasis was put on important criteria such as reduced motions and noise in the superstructure due to location of the bridge, improved quality of onboard working hours for the crew, better quality on off duty time onboard and better light conditions in living and working areas, as all of these are located above main deck.

Viking Lady is Eidesviks' third vessel of Avant design with all the advantages listed above. Further Viking Lady are by international media and specialists claimed to be the world's most environmentally friendly ship. Viking Lady employs a dual-fuel LNG/Diesel electric power plant which reduces NOx emission significantly. The ship has also installed a fuel cell of 320kW output and, like the main engines, is fuelled by LNG. This provides a significant portion of the base load when the ship is stationary.

With the contract of Viking Lady all three Eidesvik vessels of Avant design will be in service for Statoil in different locations on the Norwegian continental shelf.

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Iran Parliament Rejects Ahmadinejad's Plan to Merge Ministries

- Iran Parliament Rejects Ahmadinejad's Plan to Merge Ministries

Wednesday, June 22, 2011
Deutsche Presse-Agentur (dpa)

Iran's parliament will not consider a plan by President Mahmoud Ahmadinejad to merge the ministries of oil and energy, a Tehran newspaper said Wednesday amid a political row between his government and parliament and elements of the clergy.

"A relevant parliamentary commission came to the conclusion that the oil ministry is important and should stay independent," deputy Hissein Sobhani-Nia was quoted as saying by Donyaye Eqtesad.

"Therefore, the parliament has removed the merger of the oil and energy ministries from the agenda," he said.

Observers said the dispute between parliament and Ahmadinejad's government is believed to go beyond technicalities and has become an ideological problem.

Ahmadinejad planned to merge the two ministries and become caretaker of the oil ministry himself until the plan was realized.

Parliament and the senate-like Guardian Council rejected the caretaker plan as illegal, forcing Ahmadinejad to introduce a new caretaker.

In the meantime, the president's plan to create a sports ministry failed after parliament on Tuesday rejected his candidate.

The rejections were expected to escalate the crisis between government supporters and conservatives in the parliament, as well as clerical circles who accuse Ahmadinejad and his aides of no longer following the principles of the Islamic establishment.

The main target of the conservatives and clerics is Ahmadinejad's chief of staff and relative by marriage, Esfandiar Rahim Mashaie, whom they accuse of undermining their power.

Parliament presented an ultimatum Monday to Foreign Minister Ali-Akbar Salehi over one of his deputies who is linked to Mashaei. Salehi was told to either fire Mohammad Sharif Malekzadeh or face impeachment. Salehi gave in, and Malekzadeh resigned Tuesday.

Mashaei and other close aides of the president are branded by critics as a "deviant current" for preferring a nationalistic rather than an Islamic political approach.

Some critics have gone so far as to charge Mashaei and his group with plans to remove the clergy from power. Ahmadinejad has denied the charges but at the same time supported his aides, including Mashaei.

Copyright 2011 dpa Deutsche Presse-Agentur GmbH

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Real Goods Solar, Alteris Renewables Announced Definitive Merger Agreement

- Real Goods Solar, Alteris Renewables Announced Definitive Merger Agreement

Jun 22, 2011

Real Goods Solar (NASDAQ:RSOL) and Alteris Renewables announced that they have entered into a definitive merger agreement to create a multi-state solar integration powerhouse.

Real Goods Solar will issue 8 million unregistered shares of its Class A common stock to Alteris equity holders for 100% of Alteris' outstanding equity.

Bill Yearsley, CEO of Real Goods Solar, "I am excited to join Real Goods Solar, the pioneering solar company in the United States. Our ability to execute projects successfully is highly dependent on human resources, our most important asset. Having the opportunity to bring together two very seasoned management teams positions our organization well for the future. The organization we are building will now be capable of providing integrated national project delivery. This is an industry that is built around constant change and I look forward to a program of well planned profitable growth both organically and through acquisitions."

Real Goods Solar has a potential upside of 79.5% based on a current price of $2.6 and an average consensus analyst price target of $4.67.

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Airbus Announces Largest Order In Aviation History

- Airbus Announces Largest Order In Aviation History

Jun 22, 2011

Airbus said today that it had received "the biggest order in aviation history" from low-cost Indian carrier IndiGo, mostly for its new fuel-efficient A320neo jets.

The airline ordered 150 A320neos, and 30 standard A320 single-aisle short and medium haul jets. Airbus has now seen 600 total orders for the A320neo since it began marketing the jet in December 2010.

The company says the plane is 15% more fuel efficient than the older model. A top salesman also said they might have more than 1,000 commitments for the A320neo jet by the time the Paris Air Show ends this weekend.

It's the largest order submitted to a single company in terms of the number of planes. The previous record order was by Central Aircraft Sales Corp. of China for 150 planes each from Airbus and archrival Boeing (NYSE:BA) in 2005.

Shares of Boeing are trading down 1.31% at $73.01.

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Drillings Ops Resume at Harvest Natural's Budong-Budong Block

- Drillings Ops Resume at Harvest Natural's Budong-Budong Block

Wednesday, June 22, 2011
Harvest Natural Resources Inc.

Harvest Natural announced that drilling operations have resumed in its Budong-Budong Block. The KD-1 well spud on June 20, 2011, is the second of two planned exploration wells located in the Budong-Budong Block, onshore West Sulawesi, Indonesia.

The KD-1 well will be drilled to test a thrusted surface anticline with stacked Miocene and Eocene targets to a planned total measured depth of approximately 10,800 feet. Drilling is anticipated to require approximately 43 days. In the event of success, additional time may be required to test and evaluate the well.

Harvest owns a 64.4 percent non-operated working interest in the Budong-Budong Block PSC.

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Connacher O&G to Sell Halfway Creek Leases

- Connacher O&G to Sell Halfway Creek Leases

Wednesday, June 22, 2011
Connacher O&G Ltd.

Connacher O&G announced that in conjunction with Alberta Oil Sands ("AOS"), has engaged RBC Rundle to assist in the sale of a 100 percent working interest (held 50 percent by Connacher and 50 percent by AOS) in 38.5 contiguous sections (24,640 acres) of oil sands leases located at Halfway Creek, in the heart of the Athabasca oil sands region in northeast Alberta.

As at December 31, 2010, in aggregate, the Halfway Creek leases have been assigned 154.5 million barrels of best estimate contingent resources and 47.7 million barrels of best estimate prospective resources based on an independent reserve and resource report prepared by GLJ Petroleum Consultants Ltd. ("GLJ"). To date, a total of 32 core holes have been drilled on the Halfway Creek lands and the lease block has been covered by 2-D seismic. Connacher is disposing of its interest in the Halfway Creek leases to allow the company to continue to focus on its Great Divide assets as its core oil sands region. As evaluated by GLJ in a report as at December 31, 2010, Great Divide has the potential for greater than 55,000 bbl/d of bitumen production, based on estimates of proved plus probable plus possible reserves.

Assuming successful completion of the disposition process, the transaction would further fortify Connacher's liquidity position. The disposition is consistent with the company's previously announced five-point strategy for 2011, which includes asset rationalization, production optimization, streamlining its balance sheet, accelerating its evaluation of its conventional resource plays and accelerating the development of its Great Divide oil sands assets through a process to conclude a joint venture.

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Canacol Kicks Off Drilling Program in Colombia

- Canacol Kicks Off Drilling Program in Colombia

Wednesday, June 22, 2011
Canacol Energy Ltd.

Canacol announced the start of its heavy oil exploration drilling program on its Tamarin and Cedrela Exploration and Production ("E&P") contracts located in the Caguan - Putumayo Basin in Colombia. The Corporation has 100% working interest and is operator of both contracts, which represent approximately 388,000 net acres. The Corporation plans to drill two stratigraphic wells, one on each of the Tamarin and Cedrela contracts, in a back to back drilling campaign that will commence in mid July 2011. This will be followed by the drilling of five conventional exploration wells, the first to start in late 3Q 2011, and the last to end midyear 2012.

Charle Gamba, President and CEO of the Corporation, commented "The stratigraphic wells will target two large structures recently defined by the new 2D seismic acquired on the Tamarin and Cedrela blocks. These wells, which can be drilled relatively inexpensively compared to conventional exploration wells, have the potential to yield useful information concerning the presence and type of oil, as well as basic reservoir thickness and quality information, in advance of the conventional exploration drilling program the Corporation plans to start in late 3Q 2011. Since the discovery of the Capella heavy oil field by Canacol and its partner in 2008, the Corporation has been able to leverage its proprietary knowledge of the geology and potential of the area. The Corporation is now positioned to execute a significant heavy oil exploration program in this emerging heavy oil play in Colombia."

Tamarin ESTR-1 Stratigraphic Well

The Tamarin ESTR-1 well is planned to be drilled to a depth of 3,260 feet measured depth ("ft md") and will target potential heavy oil bearing reservoirs in the Mirador sandstones, the main producing sandstones in the Corporation's Capella heavy oil field. The Corporation has a 100% working interest and is operator of the Tamarin contract, which represents 68,000 net acres and is located on trend approximately 25 kilometers to the southwest of the Capella heavy oil field.

The Corporation has executed a contract with LT Geoperaciones y Mineria Ltda., a service company that will provide the drilling rig. The Corporation anticipates that the well will take approximately 8 weeks to drill, core, and log. The information that the Corporation anticipates to collect include cores through the prospective reservoir intervals and a full suite of conventional openhole wireline logs. This data will yield information concerning the thickness, porosity, permeability, and fluid content of any prospective reservoir intervals that may be encountered within the well. Given the small size of the wellbore, the Corporation will be unable to flow test any of the prospective reservoirs.

The Corporation is currently constructing the surface location and anticipates that the Tamarin ESTR-1 will commence drilling in mid July 2011.

Cedrela ESTR-1 Stratigraphic Well

The Cedrela ESTR-1 well is planned to be drilled to a depth of 2,600 feet measured depth ("ft md") and will also target potential heavy oil bearing reservoirs in the Mirador sandstones, the main producing sandstones in the Corporation's Capella heavy oil field. The Corporation has a 100% working interest and is operator of the Cedrela contract, which represents 320,000 net acres and is located on trend approximately 50 kilometers to the southwest of the Capella heavy oil field.

The Corporation anticipates spudding the Cedrela ESTR-1 stratigraphic well after the drilling of the Tamarin ESTR-1 well has been completed. The Corporation anticipates that the Cedrela ESTR-1 well will take approximately 8 weeks to drill, core, and log. The same information that the Corporation plans to collect in the Tamarin ESTR-1 well will also be collected in the Cedrela ESTR-1 well.

Forward Plans

The two stratigraphic wells will provide useful information that will be used to pick the final surface locations for the five conventional exploration wells that the Corporation plans to drill back to back on the Tamarin, Cedrela, and Sangretoro contracts starting in late 3Q 2011. The Corporation anticipates that the program will conclude with the fifth well in 2Q 2012.

In the meantime, the Corporation advances its 2D seismic acquisition program on its Sangretoro contract. The Corporation has a 100% operated interest in the contract, which represents 385,000 net acres. Once the seismic is complete, the Corporation is prepared to drill additional stratigraphic wells for information purposes before drilling two conventional exploration wells by the end of 2Q 2012.

The conventional exploration wells will be drilled with a normal drilling rig, which will allow for any potential oil bearing reservoirs to be flow tested.

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Platts: China's Oil Demand Up 8% YOY

- Platts: China's Oil Demand Up 8% YOY

Wednesday, June 22, 2011

China's apparent oil demand in May reached 39.4 million metric tons (mt) or an average of 9.31 million barrels per day (b/d), which was 8% higher year on year, as state-owned enterprises continued to increase output to meet local market supply needs, according to a Platts analysis based on recent statistics released by the Chinese government.

Still, May's apparent oil demand was lower than April's oil demand at 9.37 million b/d. It was also the second consecutive month of single-digit demand growth following the October 2010 to March 2011 period of monthly demand growth in excess of 10%.

"China's crude oil imports and refinery throughput continued to grow last month, albeit at a slower pace," said Calvin Lee, Platts senior writer, China. "More importantly, demand appears to have dropped another notch last month, contributing to rising inventories."

Chinese refiners processed a combined 38.47 million mt of crude oil in May, or an average of 9.1 million b/d, equating to a 7.5% increase year over year.

Tasked by the central government to maintain adequate supplies of refined products in the local markets, domestic refineries continued to run at a rapid pace last month in a bid to prevent any oil shortages in the country. Yet, May's throughput was only marginally higher than April's crude runs at 9.09 million b/d.

With China refineries experiencing very low or negative margins, the Chinese companies are not well motivated to process more crude to meet the potential diesel demand surge, industry consultancy FACTS Global Energy said in a brief earlier this month.

In the meantime, net product imports last month were only 930,000 mt, or an average of 0.21 million b/d. Thus, net imports in May were the lowest this year, reflecting the fact that Chinese companies' appetite for imports has ebbed due to high prices in the global markets.

According to an estimate released earlier this month by the National Development and Reform Commission (NDRC), China's consumption of refined products in May grew 5.2% year on year to 20.19 million mt. But consumption was down 28,000 mt from April.

Coupled with increased production, the May drop in consumption helped to boost inventories and oil product stocks at month’s close were one million mt greater than a year ago, the country's top economic planning agency said in its monthly industry report.

A month ago, NDRC reported that consumption of oil products in April grew at a faster pace of 8.3% year over year to 20.4 million mt. Oil product inventories at the end of April were 450,000 mt more than a year earlier.

In a separate report earlier this month, the NDRC said China's state-owned oil majors Sinopec and PetroChina held in storage by late May more than 13 million mt of refined products, a level which the NDRC termed as a "reasonable level."

"A recent supply crunch appears to have dissipated for now. But it could be a different story if power shortages worsen, forcing industrial users to fall back on diesel power generators, and peak summer demand for transportation fuels cause another tightening in supply," Lee said.

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AGR Selected for Eni's Barents Sea Project

- AGR Selected for Eni's Barents Sea Project

Wednesday, June 22, 2011

ENI has chosen technology from AGR Drilling Services for multi-well projects in the Barents Sea and the Norwegian Sea.

The Cutting Transportation System (CTSTM) from AGR will be used on 24 wells drilled by the Norwegian arm of Italian energy company Eni.

The system will mainly be deployed on the Goliat field, the first oil field to be developed in the Barents Sea. Goliat lies some 85km
(51miles) northwest of Hammerfest in the far north of Norway.

CTSTM (example pictured) enables operators to take cuttings up to 2km (1.24miles) away from the wellhead. This means that the well area is kept debris free, helping ensure the operation proceeds as smoothly as possible – particularly when it comes to procedures such as laying cables and tying in umbilicals.

The CTSTM also makes it possible for operators to deposit cuttings away from environmentally sensitive areas.

Johan Møller Warmedal, Executive Vice President of AGR Drilling Services, said, "We are delighted to be working with Eni Norge for the first time and to add such an important new client to our roster of Norwegian Continental Shelf customers. The Barents is an area where we envisage that operators will benefit not only from the capabilities of CTSTM but also our other technologies such as Riserless Mud Recovery."

The use of Riserless Mud Recovery (RMR®) and CTSTM will soon surpass the 500-well milestone. RMR® enables top-hole sections to be drilled more safely, more quickly yet with less environmental impact.

With Eni Norge, 22 wells will be drilled on Goliat with the new semi-sub rig Scarabeo 8. The remaining two wells will be on the Marulk field in the Norwegian Sea and drilled by the Scarabeo 5.

The contract is for four years, with a one-year optional extension.

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Noreco Names New CEO

- Noreco Names New CEO

Wednesday, June 22, 2011
Norwegian Energy Co. ASA

Noreco (Norwegian Energy Co.) announced that Mr. Einar Gjelsvik has been appointed as Chief Executive Officer (CEO) of the company.

Einar Gjelsvik (38) has been with Noreco since 2006, and has served as Acting CEO for the last three months. He has previously held positions as Chief Operating Officer and Vice President Strategy and Investor Relations. Before he joined Noreco, Gjelsvik held various positions in BP. Gjelsvik holds a MSc in Business Administration & Strategic Management, and a MSc in Chemical Engineering.

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Ford Is Work With Nuance Communications To Find A Way To Make Voice Recognition Even Easier

- Ford Is Work With Nuance Communications To Find A Way To Make Voice Recognition Even Easier

Jun 22, 2011

Ford (NYSE:F) is working with its voice technology partner Nuance Communications (NASDAQ:NUAN) to find a way to make voice recognition even easier and more intuitive for drivers to successfully use.

Brigitte Richardson, Ford Global Voice Control Technology and Speech Systems lead engineer commented on the matter, "With each generation of SYNC, we have learned more about how drivers use the voice recognition system, and have continuously refined it so customers can do more and say more to get their tasks done more quickly and efficiently. With intent, we are examining how to take our voice recognition to the next level of command and control, helping further reduce the learning curve and improving ease of use - and ultimately building higher customer satisfaction. In the end, we want the user's wish to be the system's command."

Ford Motor has a potential upside of 49.5% based on a current price of $13.32 and an average consensus analyst price target of $19.91.

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Oilex Makes Progress at Cambay Well

- Oilex Makes Progress at Cambay Well

Wednesday, June 22, 2011
Oilex Ltd.

Oilex advised that the Cambay-76H horizontal well was directionally drilled as planned to casing point at 1,595 meters.
  • Report date: June 21, 2011
  • Status: Preparing to drill 8 ½" hole
  • Past Week's Operations: 
    • Drilled 12 ¼" hole from 601 meters to 1,595 meters
    • Set 9 ⅝" casing to 1,594 meters
    • Tested BOP
  • Objectives: Cambay Eocene "tight" reservoir Y Zone
  • Kick off point for deviation: Approximately 1,100 meters
  • Planned Total Depth (TD): Approximately 2,885 meters
  • Days to TD: Approximately 35 days on a trouble free basis

Cambay Eocene Tight Reservoirs

The Company is making progress in unlocking the potential of the Cambay "tight" Eocene reservoirs that extend across the 161 km2 Cambay Production Sharing Contract ("PSC") area in onshore Gujarat, India. The Company intends to evaluate and exploit these reservoirs using horizontal drilling and fracture stimulation technology that has been developed and proven in North America.

The Cambay-76H "proof of concept" horizontal well will evaluate the production potential of the Y Zone interval of these "tight" reservoirs. An 8 stage fracture stimulation program will be conducted and after well clean-up, it is anticipated that a long term production test will be performed to determine flow rates, quality of hydrocarbons and commercial viability.

The participating interests in the Cambay PSC are:
  • Oilex Ltd (Operator) 30%
  • Oilex NL Holdings (India) Limited 15%
  • Gujarat State Petroleum Corporation Ltd 55%

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PetroNeft Spies Oil Pay at License 61

- PetroNeft Spies Oil Pay at License 61

Wednesday, June 22, 2011
PetroNeft Resources plc

PetroNeft, owner and operator of Licenses 61 and 67, Tomsk Oblast, Russian Federation, provided an update on its operations.

  • Production currently averaging about 2,500 bopd, primarily from 7 wells
  • Autumn production enhancement program planned to re-frac, with larger frac sizes, existing wells on Pad 1 and new wells on Pad 2
  • Planned number of wells required from Pad 3 to be reduced recognizing thinner oil pays
  • Extension of Lineynoye oil field north of Pad 2 with thicker pay zones expected in the longer term to compensate for reserve and production reductions from Pad 3
  • 1Q 2012 production target has been revised to between 4,000 to 5,000 bopd and 2Q 2013 to between 7,000 to 9,000 bopd
  • Kondrashevskoye No. 2 sidetrack well progressing, result expected shortly
  • Exploration wells at Sibkrayevskaya and Cheremshanskaya, the largest prospects in the 2011 program totaling over 100 million barrels to spud in early July and August respectively

2011 License 61 Development program - Lineynoye oil field

Production drilling continues with one additional well successfully drilled from Pad 3. Preliminary log and survey data for well 336 indicate net oil pay of 1.4 meters with an additional possible oil pay of 5.6 meters which we will need to test to confirm.

License 61 Production

Production is currently about 2,500 bopd with the primary contribution coming from 7 of the 9 wells drilled in 2010. As anticipated the wells have been slowly declining since they were fracture stimulated earlier this year. We have begun water injection/pressure maintenance in the field using the Lineynoye No. 6 well as an injection well; this will help maintain production levels.

We are pleased with the post frac performance of the wells particularly those with the larger size fracs. The initial fracture stimulation program incorporated a range of fracture sizes depending on the individual reservoir characteristics at each well. Without exception, the larger volume fracture stimulations have shown better and more sustained results than the small or mid-sized fracs. We consequently plan to re-frac some existing wells to boost production.

We anticipate a significant production contribution from the new Pad 2 wells following fracture stimulation; a contract has been signed to conduct this operation in late September/early October. Our next production update will be made following this work.

The positive results from Pad 2 wells have shown that the northern part of the Lineynoye field has thicker pay and extends further than originally anticipated and this has potentially very positive implications for the ability of structures north of West Lineynoye to be oil bearing. The western portion of the field, particularly in the Pad 3 area, is lower structurally and has thinner pays. As a result we will increase the number of wells drilled from Pad 2 and reduce the number of wells drilled from Pad 3. This will mean fewer wells available for production in 2011, thereby reducing our expected near-term production rate. The overall impact on Lineynoye field reserves is expected to be minimal.

The 1Q 2012 production target for License 61 has been revised to a range between 4,000 to 5,000 bopd and the 1Q 2013 production target to a range between 7,000 to 9,000 bopd. These amendments also incorporate a more conservative initial production estimate for the Arbuzovskoye oil field which we plan to bring on-stream in the second half of 2012.

Exploration / Delineation Program

PetroNeft's high impact 2011 exploration program, which has the potential to more than double our reserves, is targeting over 100 million barrels net to PetroNeft on five prospects in Licenses 61 and 67

License 61 (PetroNeft 100%)

The Kondrashevskoye No. 2 sidetrack well being drilled down dip from the Kondrashevskoye No. 2 well is progressing on schedule and we expect a result in early July.

The second 2011 exploration well will be at Sibkrayevskaya, a prospect of over 40 million barrels. Site preparation and mobilization of the rig and materials and rig-up operations is complete. Drilling should start in July with results expected in August.

The site for the third exploration well, North Varyakhskaya No. 1, has also been prepared and the rig and materials have been moved to the site for a planned spud in August/September 2011 following Sibkrayevskaya.

License 67 (PetroNeft 50%)

The two exploration wells, Cheremshanskaya No. 3 and Ledovoye No. 2a, are located close to existing year-round roads and will be drilled in the second half of the year. We have already mobilized equipment and completed construction of the Cheremshanskaya site and the rig is now being mobilized by barge to a nearby river port. This well is expected to spud in August and is targeting over 60 million barrels net to PetroNeft across three objectives.

Construction of the site for the Ledovoye No 2a well has commenced and we expect to spud in October/November. Ryder Scott have attributed 15 million barrels net to PetroNeft in the Upper Jurassic horizon, however, we will also be testing additional potential in the Lower Cretaceous zone.

Dennis Francis, Chief Executive Officer of PetroNeft Resources plc, commented, "While the results of Pad 2 drilling are encouraging, the Pad 3 drilling results will limit near term production growth. We are currently producing from less than 10% of our current discovered reserves and this year's exploration program has the potential to double these reserves and hence our long term production capability. Further, the experience gained from the drilling program and hydraulic fracturing to date will be applied in this and future developments to deliver improved production performance. We remain confident in the longer term reserve and production potential of Licenses 61 and 67."

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Transocean Briefs Investigation Report on Causes of Macondo Incident

- Transocean Briefs Investigation Report on Causes of Macondo Incident

Wednesday, June 22, 2011
Transocean Ltd.

Transocean announced the release of an internal investigation report on the causes of the April 20, 2010, Macondo well incident in the Gulf of Mexico.

Following the incident, Transocean commissioned an internal investigation team comprised of experts from relevant technical fields and specialists in accident investigation to gather, review, and analyze the facts and information surrounding the incident to determine its causes.

The report concludes that the Macondo incident was the result of a succession of interrelated well design, construction, and temporary abandonment decisions that compromised the integrity of the well and compounded the likelihood of its failure. The decisions, many made by the operator, BP, in the two weeks leading up to the incident, were driven by BP's knowledge that the geological window for safe drilling was becoming increasingly narrow. Specifically, BP was concerned that downhole pressure -- whether exerted by heavy drilling mud used to maintain well control or by pumping cement to seal the well -- would exceed the fracture gradient and result in fluid losses to the formation, thus costing money and jeopardizing future production of oil.

The Transocean investigation team traced the causes of the Macondo incident to four overarching issues:
  • Risk Management and Communication: Evidence indicates that BP failed to properly assess, manage and communicate risk to its contractors. For example, it did not properly communicate to the drill crew the absence of adequate testing on the cement or the uncertainty surrounding critical tests and procedures used to confirm the integrity of the barriers intended to inhibit the flow of hydrocarbons into the well. It is the view of the investigation team that the actions of the drill crew on April 20, 2010, reflected the crew's understanding that the well had been properly cemented and successfully tested.
  • Well Design and Construction: The precipitating cause of the Macondo incident was the failure of the downhole cement to isolate the reservoir, which allowed hydrocarbons to enter the wellbore. Without the failure of the cement barrier, hydrocarbons would not have entered the well or reached the rig. While drilling the Macondo well, BP experienced both lost circulation events and kicks and stopped short of the well's planned total depth because of an increasingly narrow window for safe drilling, specifically a limited margin between the pore pressure and fracture gradients. In the context of these delicate conditions, cementing a long-string casing would increase the risk of exceeding the margin for safe drilling. But rather than adjusting the production casing design to avoid this risk, BP adopted a technically complex nitrogen foam cement program that allowed it to retain its original casing design. The resulting cement program was of minimal quantity, left little margin for error, and was not tested adequately before or after the cementing operation. Further, the integrity of the cement may have been compromised by contamination, instability and an inadequate number of devices used to center the casing in the wellbore.
  • Risk Assessment and Process Safety: Based on the evidence, the investigation team determined that BP failed to properly require or confirm critical cement tests or conduct adequate risk assessments during various operations at Macondo. Halliburton and BP did not adequately test the cement slurry program, despite the inherent complexity, difficulties and risks associated with the design and implementation of the program and some test data showing that the cement would not be stable. BP also failed to assess the risk of the temporary abandonment procedure used at Macondo, generating at least five different temporary abandonment plans for the Macondo well between April 12, 2010 and April 20, 2010. After this series of last-minute alterations, BP proceeded with a temporary abandonment plan that created unnecessary risk and did not have the required approval by the MMS. Most significantly, the final plan called for underbalancing the well before conducting a negative pressure test to verify the integrity of the downhole cement or setting a cement plug to act as an additional barrier to flow. It does not appear that BP used risk assessment procedures or prepared Management of Change documents for these decisions or otherwise addressed these risks and the potential adverse effects on personnel and process safety.

  • Negative Pressure Test: The results of the critical negative pressure test were misinterpreted. Post-incident investigation determined that the negative test was inadequately set up because of displacement calculation errors, a lack of adequate fluid volume monitoring, and a lack of management of change discipline when the well monitoring arrangements were switched during the test. It is now apparent that the negative pressure test results should not have been approved, but no one involved in the negative pressure test recognized the errors. BP approved the negative pressure test results and decided to move forward with temporary abandonment. The well became underbalanced during the final displacement, and hydrocarbons began entering the wellbore through the faulty cement barrier and a float collar that likely failed to convert. None of the individuals monitoring the well, including the Transocean drill crew, initially detected the influx.
  • Well Control: With the benefit of hindsight and a thorough analysis of the data available to the investigation team, several indications of an influx during final displacement operations can be identified. Given the death of the members of the drill crew and the loss of the rig and its monitoring systems, it is not known which information the drill crew was monitoring or why the drill crew did not detect a pressure anomaly until approximately 9:30 p.m. on April 20, 2010. At 9:30 p.m., the drill crew acted to evaluate an anomaly. Upon detecting an influx of hydrocarbon by use of the trip tank, the drill crew undertook well-control activities that were consistent with their training including the activation of various components of the BOP. By the time actions were taken, hydrocarbons had risen above the blowout preventer and into the riser, resulting in a massive release of gas and other fluids that overwhelmed the mud gas separator system and released high volumes of gas onto the aft deck of the rig. The resulting ignition of this gas cloud was inevitable.
  • Blowout Preventer (BOP): Forensic evidence from independent post-incident testing by Det Norske Veritas (DNV) and evaluation by the Transocean investigation team confirm that the Deepwater Horizon BOP was properly maintained and operated. However, it was overcome by the extreme dynamic flow, the force of which pushed the drill pipe upward, washed or eroded the drill pipe and other rubber and metal elements, and forced the drill pipe to bow within the BOP. This prevented the BOP from completely shearing the drill pipe and sealing the well.
  • Alarms, Muster, and Evacuation: In the explosions and fire, the general alarm was activated, and appropriate emergency actions were taken by the Deepwater Horizon marine crew. The 115 personnel who survived the initial blast mustered and evacuated the rig to the offshore supply vessel Damon B. Bankston.

The Transocean internal investigation team began its work in the days immediately following the incident. Through an extensive investigation, the team interviewed witnesses, reviewed available information regarding well design and execution, examined well monitoring data that had been transmitted real-time from the rig to BP, consulted industry and technical experts, and evaluated available physical evidence and third-party testing reports.

The loss of evidence with the rig and the unavailability of certain witnesses limited the investigation and analysis in some areas. The team used its cumulative years of experience but did not speculate in the absence of evidence. The report of the team does not represent the legal position of Transocean, nor does it attempt to assign legal responsibility or fault.

The Gulf of Mexico Oil Spill
Latest Deepwater Horizon Headlines

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Statoil, Partners Aim to Boost Recovery Rate at Njord License

- Statoil, Partners Aim to Boost Recovery Rate at Njord License

Wednesday, June 22, 2011

Statoil and its partners in the Njord license in the Norwegian Sea have decided to invest in low-pressure field production. This, combined with other measures, will prolong the lifetime of the field until 2020.

Reservoir pressure on Njord is falling and the field has entered tail-end production. By lowering the pressure on the first and second stage separators it will be possible to increase production from individual wells and maintain production in each for an extended period.

"Owing to the complexity of the Njord reservoir the recovery rate of proven resources is currently roughly 23%. The aim is to increase the recovery rate to 30%. This type of measure is important with a view to maintaining production on the Norwegian continental shelf (NCS)," stated Ivar Aasheim, head of NCS field development.

There is currently a great deal of activity in the Njord area. The Njord northwest flank project six kilometers northwest of the Njord platform is now being carried out. It consists of two new long-distance wells drilled directly from Njord and tied back to the platform.

Several wells will be drilled in coming years. In addition, Hyme fast-track is being processed via Njord.

"In combination with the low-pressure production project these measures will prolong the lifetime of Njord until 2020," explained Njord production head Arve Rennemo.

The low-pressure production project on Njord will boost volumes by roughly 18.5 million barrels of oil equivalents alone and extend the field's working life by two to three years.

Investments in low-pressure production amount to roughly NOK 500 million.

The contracts for Njord low-pressure production modification and the Hyme topside has been awarded to Reinertsen. The contract for compressor procurement and installation was awarded in March of this year to GE Oil & Gas.

Project execution will take place in the autumn of 2012 and the start-up of low pressure production on Njord is scheduled for the fourth quarter of 2012.

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CarMax Posts Strong Q1, EPS Beats By $0.08, Revenue Grows 18% Year Over Year

- CarMax Posts Strong Q1, EPS Beats By $0.08, Revenue Grows 18% Year Over Year

Jun 22, 2011

CarMax, Inc. (NYSE:KMX) reported Q1 EPS $0.55 today, beating the consensus estimate for $0.47 per share. Revenues for the quarter grew 18% year-over-year to $2.68 billion, topping the consensus estimate for $2.52 billion.

Tom Folliard, president and chief executive officer said, "We are pleased to report another quarter of strong results. Comparable store used unit sales increased 6%, fueled by increased customer traffic. While traffic for the current quarter remained solidly above the prior year level, sales conversion dipped somewhat. We are especially pleased with our performance in light of recent economic and market challenges, including higher gas and vehicle prices, the uptick in the unemployment rate and the recent pull-back in consumer confidence."

Carmax has a potential upside of 29.6% based on a current price of $30.52 and an average consensus analyst price target of $39.56.

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Reliance Hits Gas Pay Offshore India

- Reliance Hits Gas Pay Offshore India

Wednesday, June 22, 2011
Hardy O&G plc

Hardy O&G announced its first gas discovery in the exploration well KG-D9-A2 within the D9 license.

The well KGD9-A2 was drilled to a total depth of 4,881 m MDRT with the objective of exploring the play fairway in the Early and Late Miocene Channel Levee Complex in a water depth of approximately 2,700 m. Three sand reservoirs with a gross thickness of approximately 22 m were encountered and evaluated by wireline MDT. This discovery, named 'Dhirubhai - 54' has been notified to the Government of India and DGH. The potential commerciality of this discovery is being ascertained through more data gathering and analysis. This play fairway is expected to cover a considerable area within the block.

The D9 exploration license is located in the Krishna Godavari (KG) Basin on the east coast of India and presently covers an area of approximately 8,695 km2. Hardy holds a 10 percent participating interest in the license which is operated by Reliance Industries Limited. The license's minimum work program provides for the drilling of four exploration wells.

Commenting on the well results, Yogeshwar Sharma, Chief Executive Officer of Hardy said, "We are encouraged by this discovery which extends the proven Miocene play fairway into the frontier D9 block. The discovery further enhances our understanding of the block's petroleum systems and reinforces our enthusiasm for unlocking its hydrocarbon potential. The D9 joint venture expects to drill the fourth exploration well prior to the end of 2011."

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BP Plans to Build 300 Wells in Oman

- BP Plans to Build 300 Wells in Oman

Wednesday, June 22, 2011
Dow Jones Newswires
by Alexis Flynn

BP aims to develop 300 natural gas wells in Oman in what would be one of the company's largest global projects, Chief Executive Bob Dudley said Wednesday.

"Today we have just the three wells (in Oman), the plan is to have 300," Dudley said. Developing tight gas resources in the Gulf State "will be one of the largest projects in BP's portfolio."

Dudley's comments follow a recent report that BP is considering investing $15 billion over 10 years to develop the Block 61 tight gas fields in the country.

Citing the vice-president of BP Oman, Oil & Gas Journal reported that the company will submit a field development plan to the government early next year, which includes a 1.2 billion cubic-feet-a-day gas processing plant, with production seen starting by early 2017.

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

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