Crude Oil Price by oil-price.net

Oil and Gas Energy News Update

Monday, June 27, 2011

Oil & Gas Post - All News Report for Monday, June 27, 2011

Monday, June 27, 2011


Oil & Gas Post

Promote Your Page Too

Commodity Corner: Oil Ends Lower on Greece Debt

- Commodity Corner: Oil Ends Lower on Greece Debt

Monday, June 27, 2011
Rigzone Staff
by Saaniya Bangee

Crude prices slipped lower Monday on an upcoming vote debating Greece's debt crisis.

This week the Greek parliament will vote on a $40 billion austerity package in order to receive another bailout from the European Union and the International Monetary Fund. The budget-cuts could affect other European countries.

Crude for August delivery lost 55 cents Monday settling at $90.61 on the New York Mercantile Exchange. Crude retrieved earlier losses on reports that French banks had agreed to accept slower repayment of Greece's debt. The intraday range for oil was $89.61 to $91.30 Monday.

Oil prices were also pressured by the Commerce Department's reports indicating flat U.S. consumer spending for May.

For the first time in three sessions, Brent crude gained ground. The European benchmark gained 0.8 percent Monday ending the session at $105.99 a barrel. Prices swung between $102.28 and $106.40, responding to each update on the Greek vote.

Front-month natural gas rose 2.7 cents Monday settling at $4.26 per thousand cubic feet. Futures for natural gas increased on weather forecasts predicting above-average temperatures for this week. Prices peaked at $4.28 Monday.

After trading between $2.74 and $2.82, gasoline futures settled at $2.81 a gallon.

Oil & Gas Post

Promote Your Page Too

JayHawk: Weather Dampens Production at ND Well

- JayHawk: Weather Dampens Production at ND Well

Monday, June 27, 2011
JayHawk Energy Inc.

JayHawk announced that due to ongoing unfavorable weather conditions in North Dakota, including the recent flooding, there has been no well production for the last 3 months from its Divide County, North Dakota producing property. JayHawk currently has approximately 2,000 barrels of oil in its tanks awaiting delivery. JayHawk is continually monitoring weather conditions for a window of opportunity to come back online and begin production again. Severe weather conditions, including heavy flooding, have been ongoing throughout North Dakota since February, 2011. Due to these harsh weather conditions, the Federal Emergency Management Team (FEMA) declared a Major Disaster on May 10, 2011, for several parts of North Dakota, including Divide County. The National Weather Service in Bismarck, North Dakota issued a hazardous weather outlook for portions of the state, including northwest North Dakota from Thursday, June 23, 2011 through Friday, June 24, 2011, with chances of thunderstorms, strong winds and hail.

Additionally, a report from the Associated Press, dated June 22, 2011, states, "water from the Souris River, which loops down from Canada through north central North Dakota, has been bloated by heavy spring snowmelt and rain on both sides of the border. The resulting deluge is expected to dwarf a historic flood of 1969, when the Souris reached 1,554.5 feet above sea level. The river is expected to hit nearly 1,563 feet this weekend -- eventually topping the historical record of 1,558 feet set in 1881."

JayHawk's focus, over the course of this current fiscal year, is to enhance the production rate of its current wells in the North Dakota basin and also increase its acreage with additional proved producing properties or properties which will allow for additional production and development. The Company's focus remains on its North Dakota properties as management has surmised its best opportunity for increased production remains in the Bakken/Three Forks formations.

Lindsay Gorrill, President of JayHawk Energy, stated, "The unusually poor weather conditions have delayed our delivery of production. However, once these conditions clear, we anticipate moving forward with our operations. We expect normal operations and production which will assist in facilitating our operational expenses and provide flexibility to develop additional opportunities within the region. As weather conditions improve, we look forward to also shipping approximately 2,000 BBLs of oil currently in our tanks that are presently inaccessible."

Oil & Gas Post

Promote Your Page Too

Atlas Increases Borrowing Base

- Atlas Increases Borrowing Base

Monday, June 27, 2011
Atlas Energy, L.P.

Atlas announced that its lending group on its senior secured credit facility has completed its borrowing base redetermination and has increased Atlas Energy's borrowing base from $125 million to $160 million. Atlas Energy currently has no amounts borrowed against its credit facility. Wells Fargo Securities, LLC led the lending group in the redetermination process and there were no other changes to the terms of the credit facility.

Oil & Gas Post

Promote Your Page Too

GDI Buys Ensco Jackup

- GDI Buys Ensco Jackup

Monday, June 27, 2011
Gulf Drilling International Ltd.

Gulf Drilling International has purchased from ENSCO Offshore the jackup drilling rig known as ENSCO 95 on June 22. The rig is a 3 legged Hitachi cantilevered drilling rig rated for 250 feet of water depth. GDI are most satisfied with the fine cooperation and support that ENSCO has extended to make this transaction possible. This is not GDI's first encounter with Ensco as the Al-Rayyan jack-up rig (formerly the ENSCO 55) was acquired from them back in 2005.

GDI will have a full Special Survey performed prior to placing the rig into service in order to obtain a new Class Certificate. This will necessitate the rig being put into shipyard for a 3 to 4 month period where major refurbishment will be done. The rig will be deployed for operating in Qatari waters on completion.

Oil & Gas Post

Promote Your Page Too

Baker Hughes Welcomes New VP, Investor Relations

- Baker Hughes Welcomes New VP, Investor Relations

Monday, June 27, 2011
Baker Hughes Inc.

Baker Hughes announced that Adam B. Anderson will be appointed Baker Hughes' vice president, investor relations effective July 1, 2011. In this position, he will be located in Houston and will report to Peter A. Ragauss, senior vice president and chief financial officer.

Adam will succeed Gary R. Flaharty, who will assume a senior role in Baker Hughes' supply chain organization effective August 1, 2011.

Chad Deaton, chairman and chief executive officer of Baker Hughes said, "Gary has been instrumental in helping Baker Hughes communicate our message and strategy to the Street during his tenure in investor relations and we look forward to his continued success at Baker Hughes.

Adam brings a broad understanding of International and North America operations, sales and marketing to his new position. His knowledge and experience will be helpful in enabling us to communicate Baker Hughes' strategic plans and operational results to our investment community."

Biographical Information

Adam B. Anderson, 35, has most recently been the vice president of completion systems for Baker Hughes in the US Land geomarket. Prior to this role, he held a variety of marketing and operations management positions for Baker Hughes in the Gulf of Mexico, the Middle East and the Product Development Center. Mr. Anderson began his career with PES/WellDynamics and served in a variety of engineering and sales positions. He earned a BS in Petroleum Engineering from Colorado School of Mines and a MBA from the Fuqua School of Business at Duke University.

Oil & Gas Post

Promote Your Page Too

Hornbeck Offshore Says Hello to New Board Members

- Hornbeck Offshore Says Hello to New Board Members

Monday, June 27, 201
Hornbeck Offshore Services Inc.

Hornbeck Offshore announced that John T. Rynd and Kevin O. Meyers, Ph.D. have been appointed to its Board of Directors (the "Board"), effective June 23, 2011. Mr. Rynd and Dr. Meyers were appointed to fill the vacancies created by a prior resignation and the Board's decision to increase the number of its directors from seven to eight members. In addition, at the Company's Annual Meeting on June 23, 2011, the shareholders reelected Todd M. Hornbeck and Patricia B. Melcher to the Board.

Todd Hornbeck, President and CEO, commented, "We are very pleased that Mr. Rynd and Dr. Meyers have joined our board. We will greatly benefit from the collective wealth of executive management experience, leadership skills and industry insight that they bring to the Company. As an active chief executive officer of a publicly traded drilling and marine services company with a major presence in the Gulf of Mexico, Mr. Rynd has a deep understanding of the unique challenges currently facing our Company and the rest of the offshore energy industry in our core geographic market. Dr. Meyers brings to the Board significant major oil company executive experience and critical insights into the issues facing the global oil and gas industry from the perspective of one of our customers."

Oil & Gas Post

Promote Your Page Too

Calpine Corp, GE Energy Financial Services Announced Credit Facility

- Calpine Corp, GE Energy Financial Services Announced Credit Facility



Jun 27, 2011

Calpine Corp. (NYSE:CPN) and GE Energy Financial Services (NYSE:GE) announced they obtained an $844.5 million credit facility to finance construction of the 619-megawatt, combined-cycle Russell City Energy in California.

Jack Fusco, Calpine's President and Chief Executive Officer said, "This financing marks an important milestone in our effort to bring much-needed electric power supply to California's Bay Area, allowing us to complete the construction of a modern, flexible, highly efficient, clean and low-carbon energy resource. Building upon our 27-year history in the state, this project demonstrates our ongoing commitment to providing reliable and sustainable electricity."

Calpine has a potential upside of 16% based on a current price of $15.82 and an average consensus analyst price target of $18.35.

Oil & Gas Post

Promote Your Page Too

EMGS Scores Barents Sea Survey for Statoil

- EMGS Scores Barents Sea Survey for Statoil

Monday, June 27, 2011
Electromagnetic Geoservices ASA

Electromagnetic Geoservices (EMGS) has signed a contract with Statoil to acquire high-resolution, full-azimuth 3D electromagnetic (EM) data for continued research purposes in the Barents Sea.

The survey will be performed by the vessel Atlantic Guardian using densely sampled receiver grids, thereby providing high-resolution data.

Following the survey in the Barents Sea, which is expected to take approximately twelve days, the vessel will complete its campaign of back-to-back surveys with a work program in the North Sea before heading to the Americas towards the end of July.

Oil & Gas Post

Promote Your Page Too

Shell Awards FMC Technologies Supply Contract for Prelude Field

- Shell Awards FMC Technologies Supply Contract for Prelude Field

Monday, June 27, 201
FMC Technologies Inc.

FMC Technologies has signed an agreement with Shell Development (Australia) Pty. Ltd. to supply subsea production and associated topside systems for the Prelude field development. The companies also announced an aftermarket agreement that will result in FMC Technologies Australia Ltd. performing installation and commissioning services for the project. Orders associated with this award will be received throughout the remainder of 2011.

The Prelude field is located in the Browse Basin, northeast of Broome Western Australia, in water depths of approximately 820 feet (250 meters). It will become Shell's first field development to utilize a floating liquefied natural gas (FLNG) facility. FMC's scope of supply includes seven large bore subsea production trees, production manifolds, riser bases, subsea control systems and other related equipment. All subsea equipment will be delivered from FMC's Asia-Pacific operations.

"Prelude is a landmark project, being the first floating LNG development, and we are proud to support Shell with this project," said Tore Halvorsen, FMC's Senior Vice President of Global Subsea Production Systems.

Oil & Gas Post

Promote Your Page Too

Rosneft Discovers Additional Oil Deposits in Krasnodar Region

- Rosneft Discovers Additional Oil Deposits in Krasnodar Region

Monday, June 27, 2011
Rosneft

Rosneft geologists have discovered a new high-yield oil deposit in the western part of the Sladkovsko-Morozovsky oil and gas region of the Slavyansko-Temryuksky license field in the Krasnodar Region. Recoverable reserves are initially estimated at over 500,000 tons of oil.

The first well in development is Zapadno-Mechetskaya No. 4 at a depth of 3,525 meters. Preliminary results indicate that the deposit has significant potential. Expected well production could be between 220 and 350 tons of oil per day.

Rosneft has stepped up exploration work in the Krasnodar Region in line with management goals set out during the working visit of Rosneft President Eduard Khudainatov to the region in December 2010. The company is also developing a reserve replacement program in the southern regions of Russia in which it operates. The program will include deposits controlled by Krasnodarneftegaz, Stavropolneftegaz and Grozneftegaz, as well as deposits in Dagestan and Ingushetia. The program will run between 2012 and 2020.

One of Russia's oldest oil and gas provinces is located in the Krasnodar Region, where oil deposits have been developed since the end of the 19th century. The region has been well explored and is considered to have highly depleted deposits (85-87%) making it challenging to discover new deposits in the area.

In 2010 Krasnodarneftegaz extracted 950,000 tons of oil and gas condensate and 2.8 billion cubic meters of gas. Krasnodarneftegaz has proven reserves of 10.13 million tons of oil and 48.528 million cubic meters of gas.

Oil & Gas Post

Promote Your Page Too

Drilling Started at Cooper's Parsons-5 Well

- Drilling Started at Cooper's Parsons-5 Well

Monday, June 27, 2011
Cooper Energy Ltd.

Cooper announced that the Parsons-5 appraisal/development well in PEL92 spudded at 3:00 am Friday, June 24, 2011. PEL92 lies in the north of South Australia on the western margin of the Cooper Basin. The current operation is drilling the surface hole.

Parsons-5 is targeting the Namur oil reservoir and is to be located 2.1 km to the north of the Perlubie-1 and 1.1 km to the south of Parsons-4 discovery wells. The well will be drilled to a total depth of about 1,358 meters and is expected to take approximately 8 days to drill and complete.

The Parsons South oil field is currently producing about 50 barrels of oil per day from the Parsons-2 discovery well in the Namur reservoir. Parsons-5 will be drilled at the crest of the mapped structure of the field. The well is expected to more efficiently develop the field and accelerate production.

Oil & Gas Post

Promote Your Page Too

EGPI Signs LOI for Tx. Acreage

- EGPI Signs LOI for Tx. Acreage

Monday, June 27, 2011
EGPI Firecreek Inc.

EGPI Firecreek has signed a Letter of Intent with Capco Resources of Texas to acquire the Brown Snyder Oil and Gas Leases covering over 640 acres located near Abilene, Jones County, Texas.

EGPI has already begun due diligence and project evaluations with CAPCO in anticipation of the acquisition, including proposed Well Recompletion and Enhancement Work programs. The Company has set a projected date of July 31, 2011, to complete the acquisition of the Brown Snyder property and its oil and gas interests.

The final acquisition will be subject to final negotiations, documentation and requisite approvals. The Company expects to acquire working interests and half of the corresponding 75% Net Revenue Interest associated with the oil and gas leases, including oil and gas reserves and all assets located in Abilene, Texas, inclusive of all surface equipment associated with seven of the nine existing wells that are to be reworked, and participation rights in all future drilling activities.

The proposed operator, Chan West Oil Corporation, is evaluating potentials for a rework program on five to seven of the existing oil wells on the Brown Snyder leases. The wells are currently drilled at a depth of about 3,000 feet, and the rework procedures proposed will consist of fracing the zone at a shallower depth of approximately 2,500 feet where offset wells have shown success.

Dennis Alexander, CEO and Chairman, stated, "We look forward to working with the CAPCO management in order to move forward now that we have entered into a Letter of Intent. We also continue our plans for growth within our oil and gas division, through the acquisition of the Brown Snyder lease interests." He further stated, "We believe the upside potential for production activity and enhancement on this property, utilizing modern state-of-the-art techniques, will present an excellent opportunity for the Company."

Oil & Gas Post

Promote Your Page Too

Brigham Notes Bakken Well's Early Peak Rate

- Brigham Notes Bakken Well's Early Peak Rate

Monday, June 27, 2011
Brigham Exploration Co.

Brigham announced the successful completion of the Gobbs 17-8 #1H Montana Bakken well at an early 24-hour peak rate of approximately 1,818 barrels of oil equivalent (1,544 barrels of oil and 1.64 MMcf of natural gas) after being fracture stimulated with 36 stages. The Gobbs 17-8 #1H, which is located approximately 16 miles west of the border between North Dakota and Montana in Roosevelt County, represents Brigham's second best early peak rate in Montana, relative to Brigham's Johnson 10-19 #1H which is located just under five miles from the border. Brigham anticipates that it will complete and bring on line to production four additional Montana Bakken wells over the next several months.

Bud Brigham, the Chairman, President and CEO, commented, "Our operations department has delivered another outstanding Montana Bakken well. We believe the Gobbs' result clearly begins to de-risk our Roosevelt County acreage, given that the well is located approximately 17 miles northwest of Brigham's Johnson 10-19 #1H, which came on line at a Montana Bakken well record of 2,962 barrels of oil equivalent per day. Finally, our operational activity in the Williston Basin continues to accelerate, we currently anticipate bringing on line to production a record operated 10 gross, or 5.8 net wells in the month of June, which will positively impact third quarter production and beats our previous record of 6 gross, or 3.9 net wells."

Oil & Gas Post

Promote Your Page Too

Aroway Boosts Production at Peace River Arch Prospect

- Aroway Boosts Production at Peace River Arch Prospect

Monday, June 27, 2011
Aroway Energy Inc.

Aroway reported that the Company's first well of the 2011 drilling program has been on a stable production for 20 days and is producing oil, natural gas liquids and gas from the targeted Leduc formation. The well, which is located in Peace River Arch oil and gas exploration prospects, was placed on restricted flow rate in late May, and in early June the well began to produce oil. Based on the present well pressures and the operators' conservative production practises, the well is expected to stabilize at a rate of 400 boe/day, 200 boe/day net to Aroway. The oil produced from the well is produced and pipelined to a facility owned by the Company's Joint Venture Partner and well operator. Aroway is paying 50% of all costs associated with this well to earn a 50% interest in the well.

The Company also reports that total depth has been reached on the third well of the 2011 drilling program. The well encountered numerous potential hydrocarbon bearing zones in the Triassic deposits and based on the drilling logs, the well will be evaluated in each of the prospective zones. A 100 meter pipeline tie-in has begun and will be complete in the next week, and the well will be production tested directly into the pipeline. Aroway is paying 50% of all costs associated with this well to earn a 50% interest in the well.

Testing on the Company's second well of the 2011 drill program will commence as soon as the roads dry out as heavy rains have hit the area over the past week. We are confident the service rig will be on the location and testing will begin within the next 10 days.

Chris Cooper, President of Aroway commented, "We were quite confident that our first well of 2011 would end up as an oil well as soon as the gas cap was produced. We will have concrete Company production numbers in coming weeks which will bring us much closer to our year-end target of 600 boe/day."

Oil & Gas Post

Promote Your Page Too

Brazil OSX Gets Go-Ahead to Start Building Acu Shipyard

- Brazil OSX Gets Go-Ahead to Start Building Acu Shipyard

Monday, June 27, 2011
Dow Jones Newswires
RIO DE JANEIRO
by Jeff Fick & Diana Kinch

Brazilian oil-field services company OSX Brasil said Monday that it had received approval to start construction of a shipyard at the Acu Port complex in Rio de Janeiro state.

OSX will start work next month to build "the largest shipyard in the Americas," the company said. OSX, part of billionaire Brazilian businessman Eike Batista's industrial conglomerate, will partner with South Korea's Hyundai Heavy Industries Co. to build the shipyard, the company said.

Brazil's ship-building industry is undergoing a renaissance as the company ramps up production to meet growing demand from the country's oil and natural-gas industry. Several new shipyards are under construction along Brazil's Atlantic Ocean coast, while many yards that were closed during an industry downturn in the early 1980s are being revived.

Brazil was among the world's largest ship producing countries in the 1980s before a global downturn in the industry saw the local docks shuttered.

Last week, OSX said that it had received approval for a credit line worth up to 2.7 billion Brazilian reais ($1.69 billion) from Brazil's Merchant Marine Fund to finance construction of the shipyard.

OSX plans to build vessels for sister company OGX Petroleo e Gas Participacoes, which will produce crude oil from the Campos Basin off the coast of Rio de Janeiro state. The 2,400-meter docks at the shipyard will have the capacity to build up to 11 floating production, storage and offloading vessels, or FPSOs, at the same time. The FPSOs use hulls about the size of an oil supertanker.

Another OSX sister company, LLX Logistica, which is responsible for construction of Acu port, said Monday it gained an environmental permit to construct a navigation channel within the port. The channel, called TX2, will provide 8,000 meters of quayside, substantially boosting the quayside capacity available on the port's coastal stretch.

Part of the additional quayside space will be used by the OSX shipyard, while the rest is planned for use in loading and unloading of products including steel, coal, granite and oil, LLX said.

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

Oil & Gas Post

Promote Your Page Too

Energy Transfer Tells Southern Union It Cannot Hold Talks With Williams

- Energy Transfer Tells Southern Union It Cannot Hold Talks With Williams



Jun 27, 2011

Energy Transfer Equity (NYSE:ETE) said in a letter to Southern Union Co (NYSE:SUG) that it cannot hold deal talks with Williams Companies (NYSE:WMB).

In the letter to Southern Union, Energy Transfer wrote that company's board "is not permitted by the merger agreement to engage in any discussions or negotiations with Williams." It also stated that Southern Union cannot provide nonpublic information to Williams.

The filing also said that Energy Transfer, "does not believe that the board can conclude, in good faith, that the Williams proposal constitutes, or is reasonably likely to result in, a superior offer."

It was also disclosed in a letter from Southern Union that Williams had bid $30 per share for the company in January, an offer that was inferior to one Southern had already received at the time from another, unnamed company.

Oil & Gas Post

Promote Your Page Too

Range Resources CEO Pinkerton to Step Down amid Transition Plan

- Range Resources CEO Pinkerton to Step Down amid Transition Plan

Monday, June 27, 2011
Dow Jones Newswires

Range Resources Chief Executive John H. Pinkerton will step down and be succeeded by the natural-gas company's president and chief operating officer, Jeffrey L. Ventura, part of a company shift in focus to the Marcellus shale region in Pennsylvania.

The process of passing the CEO responsibilities to Ventura "has been underway for some time," said Pinkerton, who will stay on as executive chairman. "Having worked side by side with Jeff for eight years, I have great confidence that he will successfully lead Range for the benefit of all our stakeholders."

The company last month sold its Barnett shale properties in Texas for about $900 million to focus on developing its Marcellus shales operations. It plans to more than double its production there by year's end. Range's Marcellus fields are more productive than some of the company's holdings in other areas and are richer in natural-gas liquids, which sell at a higher price than dry gas.

Brian Gamble, an analyst with Simmons & Co., said the transition has been in the works "for some time" and "should not come as a surprise. Range, Gamble wrote in a client note, "should not miss a beat during this transition and is left in very capable hands."

The company will be relying on Ventura's technical and engineering skills as Pinkerton focuses on broader policy issues, a company spokesman said.

Ventura, 53 years old and a longtime industry veteran, will focus on day-to-day operations. He joined Range in 2003 and was elected to the board in 2005.

Pinkerton, 57, joined the company in 1990 and has been CEO since 1992. He was named chairman in 2005.

The moves are effective Jan. 1.

Range has posted a string of losses in recent quarters amid various charges and write-downs. The company has been selling non-core properties in recent years, using proceeds to develop areas with higher returns.

The company in April reported that it swung to a first-quarter loss on mark-to-market derivative losses and higher charges, while adjusted results topped analysts' expectations as higher production offset a decline in realized prices.

The leadership transition "may dampen near-term merger and acquisition expectations" on Wall Street, which "ogles Range's asset base versus capitalization," analysts with Tudor, Pickering, Holt & Co. said. "But high-return assets are always desirable especially given Range's Marcellus position," the analysts wrote in a client note.

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

Oil & Gas Post

Promote Your Page Too

Iran Oil Minister Accuses IEA of Breaching Principles

- Iran Oil Minister Accuses IEA of Breaching Principles

Monday, June 27, 2011
Dow Jones Newswires
VIENNA
by Benoit Faucon & Neena Rai

Amplifying criticism by oil producers of last week's release of oil from emergency stockpiles, Iran's oil minister Mohammad Aliabadi Monday accused the International Energy Agency of violating "principles" that limit when energy-consuming countries can tap reserves.

Alibabadi's comments, which preceded a formal energy dialogue between OPEC and the European Union later Monday, underscored how the IEA's controversial emergency release is straining relations between producers and consumers. The remarks came amid new signs Monday that suggested OPEC member Saudi Arabia will continue to raise output and as the IEA disclosed new details about its emergency release of oil.

Aliabadi, who is also OPEC president, said the IEA's move flouted the agency's commitment to respect market forces. His comments echoed other remarks in recent days by figures from the Organization of Petroleum Exporting Countries, who have said the IEA's move was aimed at lowering oil prices, not in responding to a true oil supply crisis. OPEC produces about one-third of the world's oil and meets regularly to try to influence oil prices.

"They, the IEA, have these principles. Why are they not abiding by those principles?" he said.

"Instead they are intervening in the market," Aliabadi said. "We believe that prices have to be set by markets."

An IEA spokesman Monday had no immediate comment on Aliabadi's remarks.

IEA officials have emphasized that they undertook the emergency release, just the third in agency history, in response to a lengthy outage of Libyan crude and not in an effort to reduce oil prices. The IEA is a Paris-based energy watchdog that represents the governments of the U.S. and other energy-consuming countries.

Some IEA members, including Germany and Japan, released equal amounts of oil and refined products, while the United States, released only crude oil, according to IEA data released Monday. Still other countries, including France and Italy, released refined products and not crude, according to the data.

In total, an additional 41.6 million of the 60.6 million in emergency oil will come from crude oil with the rest coming from refined product, according to the data.

Oil prices continued to decline Monday following the IEA's actions and as markets continued to fret over the Greek debt crisis. Light, sweet crude for August delivery traded down $1.11, or 1.3%, to $90.05, on the New York Mercantile Exchange. Brent crude on the ICE Futures Europe exchange fell $1, or 0.1%, to $104.12 a barrel.

Many market watchers anticipate that some leading OPEC producers will proceed with plans to raise oil output, in spite of the IEA's action. Following the breakdown of OPEC talks on June 8, Saudi Arabia, Kuwait and the United Arab Emirates signalled they would unilaterally boost oil output to meet expected demand. The thinking is that even if the IEA oil goes to industrialized countries, the additional oil from OPEC members could go to Asia.

An official with Maersk Tankers, one of the world's largest owners of crude oil carriers, said Monday he expects an increase in July and August crude shipments from Saudi Arabia to Asia.

"We anticipate that crude oil transportation from Saudi to Asia should be even stronger than it was for June," said Claus Gronborg, head of crude for Maersk Tankers. Maersk Tankers, is a unit of Danish industrial conglomerate A.P. Moller-Maersk A/S.

Gronborg said it was "too early" to predict how it would impact the global shipping market.

"How the IEA news will impact the market short term will depend on where the extra oil goes to. Long term, we do not expect the release of Strategic Petroleum Reserve to have any impact."

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

Oil & Gas Post

Promote Your Page Too

U.S. Gas Exports to Mexico Could Grow in 2012

- U.S. Gas Exports to Mexico Could Grow in 2012

Monday, June 27, 2011
Rigzone Staff
by Karen Boman

Exports of U.S. natural gas into Mexico are expected to average 1.3 Bcf/d, a 450 MMcf/d increase from 2010, and the tightening of Mexican supply/demand balances should lead to further U.S. export growth in 2012, Barclays Capital reported last week.

Exports to Mexico grew sharply in the beginning of the past decade before stabilizing in the 850 MMcf/d range from 5001-2010; however, first quarter 2011 exports averaged the highest in the past 10 years.

U.S. gas exports to Mexico represent a relatively small part of U.S. gas balance, or one percent in 2010, and have not attracted much attention, but the exported BTUs are starting to add up, and more important, several factors suggest this trend could continue in the next few years. Barclays expects U.S. flows to Mexico to increase by another 200 MMcf/d in 2012, to an average of 1.5 Bcf/d.

While gas is primarily used for refining and petrochemicals production and reinjection for oil production, power generation has been driving gas demand growth, and plans for generation capacity additions suggest that Mexico's gas consumption should grow rapidly in the next few years.

Domestic production also is in decline, showing a growing need for imports. more than 60 percent of Mexico's gas output comes in association with oil production. While associated gas is growing slightly, non-associated production is steeply declining, with PEMEX reporting a decline of non-associated gas output of 13 percent year/year for the first four months of 2011. "While LNG imports could meet some of the incremental demand, they are disadvantaged in favor of cheaper U.S.- sourced gas," Barclays said in a June 21 report.

Shale gas development in Mexico is one bright spot for Mexican non-associated gas output. Earlier this year, PEMEX reported production of its first shale gas at an exploratory well in the Eagle Ford shale formation in the northeastern state of Coahuila. PEMEX plans to drill 10 additional wells, including in the La Pena and Glenrose formations, targeting gas and condensates.

"While the potential for Mexico shale gas production could be significant, its development is at an early stage, and there is considerable uncertainty about the scale and time-frame for shale production growth," Barclays said.

Mexico has technically recoverable shale gas resources of 681 Tcf, according to the U.S. Energy Information Administration's April report, World Shale Gas Resources: An Initial Assessment of 14 Regions Outside the United States. Mexico has five basins, including the Burgos, Sabinas, Tampico, Tuxpan and Veracruz, and eight gas shale formations.

Thick, organic-rich and thermally mature source rock shales of Jurassic and Cretaceous-age occur in northeast and east-central Mexico, along the country's onshore portion of the Gulf of Mexico Basin. These shales are time-correlative with gas productive shales in the U.S., including the Eagle Ford, Haynesville, Bossier and Pearsall shales.

However, compared with the shale belts of Texas and Louisiana, Mexico's coastal shale zone is narrower, less continuous and structurally much more complex.

Advanced Resources International estimates that the five Mexico onshore basins assessed in the EIA study contain approximately 2,366 Tcf of geologically risked shale gas-in-place. Structural complexity (faulting and folding), excessive depth of over 5,000 meters, and locally thin or absent shale on paleo highs constrain the resource assessment.

Oil & Gas Post

Promote Your Page Too

Premier IDs O&G Shows at Indonesia's Tuna Block

- Premier IDs O&G Shows at Indonesia's Tuna Block

Monday, June 27, 2011
Premier Oil plc

Premier updated its exploration and appraisal operations in Norway, Indonesia and Pakistan.

Grosbeak, Norway (Premier 20%)

The Grosbeak well 35/12-4 S, which spudded on April 24, 2011, has completed the drilling and testing of the primary well bore and will now be sidetracked to further delineate the extent of the Jurassic oil accumulation. The sidetrack is expected to be completed by the end of July.

Gajah Laut Utara, Indonesia (Premier 65%)

In Indonesia on the Tuna block, the Gajah Laut Utara-1 exploration well has reached a total depth of 4,688 meters in pre-Tertiary basement and is being plugged and abandoned with oil and gas shows. Oil shows were reported throughout a 350 meter thick succession of interbedded sandstones and shales in the Oligocene. However, logs suggest that the majority of these Oligocene sandstones are tight. One zone was sampled and gas was recovered. The well also encountered good quality water wet reservoir rocks within the Miocene sequence and source rocks within the Oligocene. A working oil and gas petroleum system has therefore been established on the Tuna block. The Ocean General rig will now move to drill the Belut prospect. Belut Laut is located approximately 10 kilometers north-west of Gajah Laut Utara, in a separate sub-basin and is an independent test of the petroleum system on the Tuna acreage. The results of the Belut well are expected in early August.

K-27, Pakistan (Premier 15.79%)

The K-27 exploration well, which spudded on April 4, 2011 in the Kadanwari block, has been successful, testing gas with a flow rate of 51.3 MMscfd through a 56/64 inch choke. The operator (ENI) plans to tie the well to the production facility by the end of the third quarter, delivering around 30 MMscfd.

Simon Lockett, Chief Executive Officer, commented, "The Grosbeak appraisal has provided valuable information and we look forward to the results of the sidetrack confirming the size of the oil reserves in the field.

"The Gajah Laut Utara well is the first exploration well drilled by Premier in the Tuna acreage and established the presence of a working petroleum system. We look forward to the results of drilling the Belut Laut prospect.

"In Pakistan, the K-27 test results are extremely positive providing additional resources and near term production to the Kadanwari asset."

Oil & Gas Post

Promote Your Page Too

Petro Matad Spuds Davsan Tolgoi-7

- Petro Matad Spuds Davsan Tolgoi-7

Monday, June 27, 2011
Petro Matad Ltd.

Petro Matad announced that the Davsan Tolgoi-7 ("DT-7") exploration well was spudded at 12:30 Mongolian time (5.30 a.m. BST) on June 27, 2011.

The DT-7 well is being drilled vertically to an estimated target depth of 1,800 meters. The well is being drilled by the Company's contractor, DQE International.

This well will test a portion of the Uvgan Gal paleovalley as well as part of the Lower Tsagaansav Formation. DT-7 is 2.3km south-southwest of DT-6 and 3.2km south-southeast of DT-2. The well will test the Davsan Tolgoi Mod Prospect with dual objectives in the Uppermost Tsagaantsav paleovalley system and the Lower Tsagaantsav sandstones.

Oil & Gas Post

Promote Your Page Too

Drilling Commences at Barquentine Appraisal

- Drilling Commences at Barquentine Appraisal

Monday, June 27, 2011
Cove Energy plc

Cove issued the following operational update.
  • Mozambique Rovuma Offshore Area 1 ("Rovuma Offshore")
    • Appraisal Drilling Commences. The Belford Dolphin drillship has commenced appraisal drilling in the Barquentine gas discovery area. Currently the rig is top setting the upper casing strings on Barquentine 3 after which it which it will drill Barquentine 2, located approximately 4kms SE of the discovery well and then return to finish Barquentine 3. This initial appraisal program which will include flow testing and core analysis is to focus on proving sufficient resources in the Oligocene gas reservoirs of the Windjammer/Barquentine discovery area in order to lay the foundations for the first LNG train.
    • New 3D Acquisition Completed. Acquisition of the new 3D seismic survey of approximately 4,448 km2over the southern and northern section of Rovuma Offshore block is now complete. This data is now being processed and will be integrated with reprocessed existing 3D data to obtain a consistent subsurface image across the entire deepwater hydrocarbon fairway. Final results are expected in Q4 this year.
    • Liquefied Natural Gas (LNG) Project. As sufficient volumes for an LNG project were encountered in the Windjammer, Barquentine and Lagosta wells the operator, Anadarko, has mobilized, in an extremely short time, a full team to pursue the LNG project such that a Final Investment Decision (FID) can be taken in 2013. Progress to date includes the identification of coastal land sites for the LNG facilities and a preliminary gas development plan.
  • Kenya Deepwater Offshore.
    • Blocks L5, L7, L11A, L11B & L12. Encouraged by the interpretation of the 2010 2D seismic the partnership has elected to accelerate the work program with the acquisition of over 3,500sq kms of new 3D seismic split in to two surveys centered on L7 and straddling L11A & B.
    • Blocks L10A & L10B. Preliminary interpretation by the operator B G Group has identified a number of leads. A 3D seismic survey over the eastern part of the blocks is planned later this year.

John Craven CEO of Cove commented, "We are very pleased with the significant progress on our East Africa portfolio. The beginning of appraisal drilling offshore Mozambique is another important milestone and is the start of a continuous sequence of exploration and appraisal wells scheduled to be drilled over the coming two years complimented by a second deepwater rig arriving later this year. The new and reprocessed 3D will ensure that we are equipped to optimally evaluate the numerous oil and gas prospects on the block.

"We are also delighted with the significant progress made by the operator in pursuit of the LNG project which is running concurrently with the appraisal drilling activity.

"Our Kenya offshore blocks are also showing considerable promise which fully justifies the extensive 3D seismic that will be acquired this year."

Commenting on progress over the last year Michael Blaha, Executive Chairman of Cove said, "Looking back over the past year Cove has gone through a transformation. After the Windjammer gas discovery, offshore Mozambique, followed by three additional gas discoveries, Cove has evolved from a small exploration company to a company with significant market value participating in a world class LNG project. Current activities focus on the appraisal of the existing discoveries to enable early certification of gas reserves. This work stream is being undertaken simultaneously with the development of LNG market (sales contracts), front end engineering, environmental impact studies, the establishing of financial, commercial and legal frameworks for the project.

"After the initial Mozambique success Cove acquired equity positions in seven deep water blocks offshore Kenya. These blocks cover most of Kenya's deep water potential where extensive new 3D seismic will be acquired this year.

"Cove will continue to expand its portfolio by seeking high potential opportunities in keeping with our strategy of exploration/appraisal and monetization at the appropriate time."

Oil & Gas Post

Promote Your Page Too

President Petroleum Farms-In to Argentina License

- President Petroleum Farms-In to Argentina License

Monday, June 27, 2011
President Petroleum Co. plc

President Petroleum announced the farm-in of a 50% working interest in the CNO-8 Puesto Guardian license in Salta Province, Argentina.

Highlights
  • Entry into very prospective onshore license block with existing oil production, and material upside potential through exploitation of reserve base and further exploration
  • Immediately increases net production to President by approximately 225 bopd
  • Targeting net 1200 bopd from Argentina by end 2Q 2012 from an initial firm five well drilling program; with further production drilling in 2012 planned.
  • Acquisition price $2.20 per 2P barrel
  • Acquisition increases Company estimates of net 2P reserves by approximately 500 percent (estimate 2.1 million 1P and 6.6 million 2P barrels of oil, assuming license period extended to 2026), based on assessment performed by internationally recognized reserve auditors
  • 2P reserves (net) valued by President at NPV10 US $60 million, assuming license extension to 2026, with material further upside from bringing in Possible reserves and exploration
  • Consideration of US $1.5 million cash, 5,102,041 President shares (equivalent to approximately US $2 million at the closing middle share price on 24 June 2011 and an exchange rate of GBP1:US $1.60), a US $10.75 million carry (representing 50% of drilling costs on a US $21.5 million drilling program), plus 1 million warrants to purchase President shares at £0.50 per share
  • Acquisition and work program expected to be funded from existing cash resources and current and anticipated production
  • Creation of Latin American business unit, charged with managing the acquired business and expanding regional interests
  • Energy pricing dynamic in Argentina undergoing positive structural change
  • Completion of transaction July 1, 2011

Peter Levine, Chairman of President Petroleum Company Holdings BV commented, "This transaction reflects the determination of the new management of President to concentrate on acquiring producing assets with proved and probable reserves combined with realistic near term potential to materially increase production.

"This acquisition has a solid foundation around existing producing fields, and holds significant exploitation potential with the ability to materially grow production through a clearly thought out near term drilling and completion program. This production is complemented by our production assets in Louisiana, where as previously announced we are embarking on a series of PUD wells and workovers.

"President considers Argentina a very fertile location to build a major hydrocarbon producing business, making material investments in the local economy, engaging with well connected partners, training and growing a local workforce and benefiting the communities where the Company works. President expects to achieve rapid progress in the short to medium term in this regard."

Oil & Gas Post

Promote Your Page Too

Nostra Terra Acquires Stake in Oklahoma

- Nostra Terra Acquires Stake in Oklahoma

Monday, June 27, 2011
Nostra Terra O&G Co. plc

Nostra Terra, as part of their continuing plan to take larger working interests (WI) in prolific US oil fields, has entered into an agreement with Pathfinder Development Capital LLC ("Pathfinder") to acquire a 30% WI in the Bale Creek prospect, located in northern Oklahoma.

Highlights of the Bale Creek prospect include:
  • Shallow oil, with associated liquids-rich natural gas;
  • Extensive regional structural mapping;
  • Multi-pay potential from as many as 8 reservoirs, from the Ordovician up through Permian-aged rocks; and.
  • 2-D and 3D Seismic to pinpoint locations and steer the horizontal well paths;

The Area of Mutual Interest (AMI) covers a contiguous area of over 3,500 acres. It is located in a very prolific oil system, proven to produce from multiple, stacked-pay reservoirs.

The project development plan consists of two phases. The first step in Phase I calls for the acquisition and interpretation of proprietary 2D and 3D seismic. Based on the tightly-controlled interpretation, a pilot hole will be drilled and logged to determine the most promising of all the potential productive zones. The next step will be to drill 3 horizontal wells into that zone, along with all production and transmission facilities to support the project. Leasing for drilling and seismic permitting in Phase I are already underway. The total estimated cost of pre-drilling activities is US $672,700, of which Nostra Terra's estimated portion is US $201,810.

The drilling budget is being finalized with drilling of the first well being planned for beginning of 4Q 2011.

Phase II will include up to four additional horizontal wells plus the additional production facilities. This phase will entail further leasing and seismic permitting within the existing AMI, prior to drilling. The final determination to move into Phase II will be made in H1 2012.

Based in Norman, Oklahoma, Pathfinder Exploration Company, LLC is a multi-disciplined geotechnical company specializing in finding new oil from old fields within the US. Combining the most advanced technology with cost-effectiveness, Pathfinder is able to identify, delineate and grade additional prospects where there are known oil and gas reserves and frequently multiple pay zones, thereby reducing risk and increasing upside potential. Pathfinder acted as operator on behalf of Shell in the Fayetteville Shale play in Arkansas, which has become an important source of natural gas through the use of horizontal drilling.

Matt Lofgran, Chief Executive Officer of Nostra Terra, commented, "Nostra Terra is delighted to have entered into this agreement with Pathfinder, which marks a strong step into Oklahoma. This agreement is in line with our stated strategy to step up the pace of our growth by acquiring a diverse pipeline of assets in established oil and gas plays - including larger interests, where we can generate added value and strong, sustainable cash flow through disciplined cost control and the use of advanced technology. Pathfinder has aligned interests and we look forward to furthering opportunities with them."

Pathfinder Development, Alden McCall, Chief Operating Officer added, "It is a genuine pleasure to be engaged with Pathfinder on this project from the purely technical point of view as well. It is a key to our growth plan to utilize leading edge technology (3D seismic, sophisticated log suites, 3D-steered horizontal well bores and modern multi-stage completions) to produce oil from compartmentalized reservoirs that have been grossly under-produced. Pathfinder Exploration has created an impressive screening and evaluation process to locate numerous prospective reservoirs in which to apply these technologies."

Oil & Gas Post

Promote Your Page Too

LDK Solar Announces $110 Million Share Repurchase Program

- LDK Solar Announces $110 Million Share Repurchase Program



Jun 27, 2011

LDK Solar Co (NYSE:LDK) announced today that its board of directors has approved a $110 million share buyback program.

The program authorizes the company to purchase up to $110 million of its American Depositary Shares in the open market or through privately negotiated transactions.

Mr. Xiaofeng Peng, Chairman and CEO of LDK Solar, commented, "We remain confident in our current outlook as well as the long-term prospects for our business. However, we believe our ADSs are currently grossly undervalued. We believe our share buyback program not only represents a good investment for our company, but also demonstrates our commitment to enhance shareholder value."

LDK Solar has a potential upside of 80.6% based on a current price of $6.81 and an average consensus analyst price target of $12.3.

Oil & Gas Post

Promote Your Page Too

Hanwha SolarOne Announces Executive Appointments

- Hanwha SolarOne Announces Executive Appointments



Jun 27, 2011

Hanwha SolarOne (NASDAQ:HSOL) announced this morning that its board of directors has appointed Ki-Joon Hong as CEO, Jung Pyo Seo as CFO, and Chris Eberspacher as CTO.

The appointments are effective as of July 1, 2011. Mr. Hong is currently the Chairman of the Board of SolarOne and CEO of Hanwha Cehmical.

Mr. Seo joins the company from Azdel, an automotive manufacturer of thermoplastic materials based in Virginia, where he was that company's CFO and COO.

Hanwha SolarOne has a potential upside of 36.8% based on a current price of $5.9 and an average consensus analyst price target of $8.07.

Hanwha SolarOne is currently below its 50-day moving average (MA) of $5.94 and below its 200-day MA of $8.45.

Oil & Gas Post

Promote Your Page Too

Technip Secures Contract for E. Rochelle Development

- Technip Secures Contract for E. Rochelle Development

Monday, June 27, 2011
Technip

Endeavour Energy UK Ltd, a subsidiary of Endeavour, awarded Technip an EPCI lump sum contract, worth around €70 million, for the East Rochelle development in the United Kingdom North Sea. The field is located approximately 185 kilometers north-east of Aberdeen, Scotland in 140 meters of water.

The contract covers full project management and detailed design, fabrication, installation and pre-commissioning of 30 kilometers of pipe-in-pipe, flexible riser, free issue umbilical, subsea isolation valves and manifolds. It also covers tie-in spools, trenching, backfill and rockdumping work.

Technip's operating center in Aberdeen will execute this contract. The pipe-in-pipe will be welded at Technip's spoolbase in Evanton, Scotland, while the flexible riser will be manufactured at the Group's flexible pipe plant in Le Trait, France. The offshore installation campaign is scheduled to be completed during the second half of 2012 and will use vessels from the Technip fleet.

Oil & Gas Post

Promote Your Page Too

Rockhopper Tests Flow Rates of 5508 bpd at Sea Lion Appraisal

- Rockhopper Tests Flow Rates of 5508 bpd at Sea Lion Appraisal

Monday, June 27, 2011
Rockhopper Exploration plc

Rockhopper provided the following update on the flow test carried out at well 14/10-5.
  • Well flowed at commercially viable rates
  • Well flowed at stabilized rates of 5508 stb/d
  • Well achieved a maximum stabilized flow rate of 9036 stb/d

A total section of 86m, incorporating 79m of reservoir, was perforated between 2379m and 2465m (md) over the Sea Lion Main Fan Complex. No lower fan sands were perforated on this flow test.

The well flowed for a main 48 hour flow period at a stabilized rate of 5508 stb/d and 940 mscf/d of gas with a flowing well head pressure (WHP) of 783 psi on a 48/64 inch choke. The gas oil ratio (GOR) was 170 scf/stb over the 48 hour period. The well was flowed through a separator under artificial lift by means of a downhole electric submersible pump (ESP). The flowing wellhead temperature was 62 degrees C. This temperature is significantly higher than that achieved during the test of well 14/10-2 and demonstrates the highly effective nature of the Vacuum Insulated Tubing (VIT) used during the test at 14/10-5. It was not necessary to use any wax inhibitors or pour point suppressants and no water or H2S were produced during the test.

The well was flowed for a second main flow during which the final maximum flow rate of 9036 stb/d was achieved with a flowing WHP of 625 psi on a fixed 1 inch choke over a 2 hour period before shutting the well in for a final build up and injectivity tests. The GOR during the maximum rate flow period was 153 scf/stb.

During the test down hole pressures were recorded and both surface and downhole crude oil samples were collected and will now be analyzed by the Company.

Downhole mini DSTs (Drill Stem Test) were also performed on two of the three sands making up the 14m of net pay encountered in the well, which form part of the lower fan. These 2 sands had net pay of 8m and 4.5m. Interpretation of the results of the mini DST indicate that these 2 sands could have contributed an additional 800 stb/d flow rate using the same flow test techniques (artificial lift by ESP and thermal insulation by VIT) as used during the main DST performed on the upper fan in well 14/10-5.

The Board views the flow rates achieved as being commercially viable. Further appraisal drilling is being progressed over the coming months to continue to define the extent of the Sea Lion resource.

The Ocean Guardian drilling unit will now drill well 14/10-6, which will be the third appraisal well within the Sea Lion discovery area. 14/10-6 is located some 4.5km to the west of well 14/10-5 and is located within the Company's currently mapped mid-case area.

Sam Moody, Chief Executive of Rockhopper, commented, "This very positive well test result is another key milestone in establishing Sea Lion commerciality. We will now review the wealth of data gathered during the testing process and continue our preparations for the next appraisal well on the field."

Oil & Gas Post

Promote Your Page Too

Lundin Confirms Avaldsnes Extension

- Lundin Confirms Avaldsnes Extension

Monday, June 27, 2011
Lundin Petroleum AB

Lundin announced that the first appraisal well, 16/3-4 has confirmed the extension of the Avaldsnes field to the south-east of the 16/2-6 discovery well in PL501 on the Norwegian Continental Shelf (NCS). The well was successfully tested and a comprehensive logging and coring program has been acquired.

Avaldsnes was confirmed as an oil discovery by the Lundin Norway operated well 16/2-6 in 2010 and is located approximately 25 km east of the Lundin Norway operated Luno discovery.

The first appraisal well 16/3-4 was drilled approximately 6.5 km south-east of the discovery well and has proved an oil column of 13,5 meters in excellent quality sandstone of Jurassic age. A high net to gross has resulted in net pay at the appraisal location in excess of that at the discovery well. The data acquired confirms excellent reservoir properties, with average porosity of approximately 30 percent and multi-Darcy permeability. The average production rate was in excess of 5,500 barrels of oil equivalent per day through a restricted choke size of 60/64 inch.

The well will now be side-tracked to confirm the lateral continuity of the reservoir towards the west.

The well will then be plugged and abandoned. The total depth of the well is 2020 meters.

Ashley Heppenstall, President & CEO of Lundin Petroleum commented, "We are very pleased with the results of the first Avaldsnes appraisal well which encountered oil bearing reservoir of thickness and quality which is better than the discovery well. We will now sidetrack the appraisal well to provide information regarding the lateral continuity of the reservoir towards the part of the structure we had assumed in our previous resource estimates was non- hydrocarbon bearing. We will update our Avaldsnes resource estimates following the sidetrack and second appraisal well."

Lundin Norway is using the semi submersible drilling rig Bredford Dolphin to drill the well. The rig will start drilling the second appraisal well on Avaldsnes, 16/2-7, immediately after 16/3-4.

Lundin Norway is the operator with 40 percent interest. Partners are Statoil Petroleum AS with 40 percent interest and Maersk Oil Norway AS with 20 percent interest.

Oil & Gas Post

Promote Your Page Too

BG Group Signs MOU with Bank of China for $1.5B Funding

- BG Group Signs MOU with Bank of China for $1.5B Funding

Monday, June 27, 2011
BG Group plc

BG Group and Bank of China have signed a key cooperation agreement that enhances the existing close working relationship between the organizations and also allows for up to $1.5 billion of new funding options to support the Group's major growth program.

The Memorandum of Understanding (MOU) signed today builds upon existing commercial relationships between BG Group and Bank of China and confirms the intention to make extended credit facilities available that can be used to help deliver the Group's global growth plans - including its operations in China where the Group has an established commercial presence and where an initial offshore exploration program is underway.

The MOU also identifies other areas of potential cooperation including investment banking services, derivatives products, bank deposits, insurance and international settlement and trade finance facilities. Separately, BG Group already has a US$200m lending facility in place with Bank of China which is just one of a series of committed lending facilities that the company has with a group of international banks. These lending facilities in aggregate have been recently increased and extended and now total US$4.4 billion.

On signing the MOU with the Chairman of the Bank of China Gang Xiao, BG Group Chief Executive Sir Frank Chapman said, "This is a significant agreement for BG Group. It affirms and enhances our existing excellent relationship with the Bank of China. BG Group has a well established presence in China as a result of our LNG sales into this valuable and rapidly growing market, through a long-term sales and equity agreement with CNOOC in our QCLNG project in Australia, and with an extensive exploration program offshore China that has already produced a discovery.

"This agreement builds on our existing facilities with Bank of China and provides the option for substantial additional funding for our commitments in China and also our global growth program."

Oil & Gas Post

Promote Your Page Too

Salamander Strikes Oil Offshore Thailand

- Salamander Strikes Oil Offshore Thailand

Monday, June 27, 2011
Salamander Energy plc

Salamander provided the following update on its current drilling activity in Thailand, including the announcement of a material oil discovery in the East Terrace prospect.

B8/38 License (Salamander 100%, operator)

The current drilling program, using the Ocean Sovereign jack-up rig located on the Bualuang Wellhead Platform ("WHP"), includes three new horizontal production wells, two horizontal sidetracks of existing wells and a pilot hole to test the East Terrace prospect. To date, two producers have been drilled and completed and the East Terrace exploration pilot hole drilled.

East Terrace Oil Discovery

A long reach well was drilled from the WHP to 2,961m measured depth to test the East Terrace fault block. This well encountered approximately 35 meters of net oil pay within three zones. Over 6 meters of net pay was encountered in the upper T5 sandstone interval. In the deeper T4 interval (the main reservoir unit in the Bualuang oil field) an additional 18 meters of net oil pay was encountered, while in the lower T3 interval a further 11 meters of net pay was found.

A full evaluation program including pressure measurements and fluid sampling was conducted over the intervals of interest, confirming the East Terrace as being a separate accumulation to the main field, with a different oil viscosity, gas/oil ratio and oil-water contact than the main Bualuang field. The preliminary evaluation of the data indicate a mid-case estimate of 50 MMbo in-place and a most likely recoverable volume in the range 8 - 14 MMbo. This range represents the high end of pre-drill estimates.

Bualuang Development Drilling

The development drilling program commenced on April 22nd, having been delayed due to administrative issues and necessary repairs to the rig's legs. To date, two of the five development wells planned for this phase of development have been completed and brought on stream, including a long-reach well into the previously undrilled northern area of the Bualuang structure. At this location the top T4 main reservoir came in some 4 meters high to prognosis, offering scope for an upgrade to gross rock volume and hence reserves for the field overall.

The next two development wells in the Bualuang field are to be completed, as planned. The final horizontal producer will be completed either in the East Terrace or in main body of the field, subject to a decision based on analysis of data acquired from the East Terrace exploration pilot hole.

Following this development drilling campaign, the Ocean Sovereign jack-up rig will be moving off location for a scheduled inspection and certification.

During the fourth quarter of 2011, a sidetrack of an existing well will be conducted with a workover rig (under an existing contract). In addition, Salamander is currently preparing to tender for another jack up rig to complete the exploration campaign in B8/38, which is now anticipated to take place in 4Q 2011.

Block L15/50 (Salamander 50%, operator)

The Dao Ruang-3 appraisal well was spudded on 25th April and to date has reached a depth of approximately 1,590 m measured depth. The well encountered difficulties while drilling the Kuchinarai shale interval. The well has been sidetracked twice in order to by-pass the shale which it has now done. With the challenging shale formation now behind casing, drilling will continue to the planned total depth of approximately 2,565 m MD in order to test the Pha Nok Khao target interval. Approximately 14 days of additional drilling time is anticipated in order to complete the well.

Commenting on the progress of the B8/38 drilling program, James Menzies, Chief Executive, said, "We are pleased to deliver a material oil resource addition through the exploration drill bit, at the top end of pre-drill estimates. The ability to immediately tie-in to nearby infrastructure means these are high value barrels, which we expect to book and which will lead to a sharp upward revision to Bualuang reserves.

In addition, the development wells, though delayed, are performing in-line with our expectations, giving us further confidence in our ability to predict the behavior of the Bualuang field reservoir."

Oil & Gas Post

Promote Your Page Too