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Oil and Gas Energy News Update

Thursday, July 7, 2011

Oil & Gas Post - All News Report for Thursday, July 07, 2011

Thursday, July 07, 2011

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Commodity Corner: Oil Rises on Economic Data

- Commodity Corner: Oil Rises on Economic Data

Thursday, July 07, 2011
Rigzone Staff
by Saaniya Bangee

Propelled by forecasts that better days—and improved petroleum demand—are ahead for the global economy during the second half of this year, oil prices ended the day higher Thursday.

The front-month WTI contract price rose 2.09 percent Thursday, settling at $98.67 a barrel. Positive employment news contributed to the increase. According to the U.S. Labor Department, claims for unemployment benefits fell by 14,000—the lowest level in seven weeks. Meanwhile, payroll processor ADP said private-sector employment grew by 157,000 jobs last month. This is more than double of what economic experts had anticipated.

In addition, top U.S. retailers reported better-than-average sales for the month of June.

Light, sweet crude oil futures traded between $96.99 and $99.42—the highest intraday since June 15.

Its European counterpart gained nearly 5 dollars, settling at $118.59 per barrel on the ICE futures exchange. Brent prices fluctuated between $114.20 and $118.68 Thursday.

Natural gas for August delivery fell 8.8 cents Thursday on EIA reports. The U.S. Energy Information Agency reported a 634,000 barrel-decline in gasoline stocks, while distillate stocks fell by 191,000 barrels. Prices for natural gas peaked at $4.25 and bottomed out at $4.11, before settling at $4.138 per thousand cubic feet.

Gasoline futures added 9.23 cents a gallon, ending the trading session at $3.09 a gallon.

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Quetzal Appoints New Board Member

- Quetzal Appoints New Board Member

Thursday, July 07, 2011
Quetzal Energy Ltd.

Quetzal announced the appointment of Andrew DeFrancesco ("Andy") to the Board of Directors effective July 7, 2011.

Mr. DeFrancesco ("Andy") is Chairman & CEO of Delavaco Capital Inc, a private equity and merchant banking group with a primary focus on natural resources. He is also Founder, Chairman and CEO of Colcan Energy, Executive Chairman of Tolima Gold Corp a Colombian gold company, Co-Founder and Former Chairman & CEO of Colombian oil companies APO Energy and P1 Energy which combined in 2010 in a merger valued at approximately $445 million. Andy was also Founder and Executive Chairman of Delavaco Energy a Colombian oil company which was sold to Allange Energy in 2009 for $100 million.

Bob Szczuczko, Quetzal Chairman and CEO stated "Andy and I were a very good team at Delavaco Energy and I look forward to working closely with him again; in his formal role as a director, Andy will provide Quetzal with strong capital markets guidance to fully exploit the significant underlying value in Quetzal."

Mr. Cameron Dow has resigned as the CFO of Quetzal effective immediately. The Board of Directors would like to thank Mr. Dow for his contributions and wish him well in his future endeavors.

Mr. John Martin CA has joined Quetzal as CFO effective July 7, 2011. John was the founding and senior partner of EvansMartin LLP, a midsize firm of Chartered Accountants. John has many years experience in finance, merger and acquisition activities, including assisting clients in establishing and integrating operations in the U.S., Europe and for the past two years, primarily in the oil and gas industries in Colombia. Through his role as CFO of APO Energy Inc. and other Colombian assignments, John has developed extensive banking, legal and accounting contacts in Colombia. John has been a CA for 37 years and is a graduate from the University of Western Ontario.

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WESI, TEI Join Forces to Form New Company

- WESI, TEI Join Forces to Form New Company

Thursday, July 07, 2011
Waterford Energy Services Inc.

Waterford Energy Services (WESI) and Trendsetter Engineering (TEI) have entered into an agreement to form a joint venture company to leverage the strengths of both companies in the areas of subsea solutions, drilling, completions and well control.

"We are well positioned to provide expertise and solutions to Canadian clients in areas such as capping stacks and containment, secondary blow out preventer (BOP) controls, subsea trees, manifolds, and related equipment. Our primary goal is to provide the Canadian offshore market with a capping stack and containment service," said Ian O'Leary, Project Manager at Waterford Energy NL Inc.

"We have developed a First Response Well Containment System (FRWCS) using equipment and technology located in Newfoundland and Labrador so we will be able to provide an immediate and local response to contain spills at the source. The technology we're using is the first of its kind in Newfoundland and Labrador and in Canada. We can help protect and save our environment in a timely manner, and show that our province has the capability and infrastructure to be a legitimate industry center, serving Canada and the North Atlantic region."

Delays in oil spill response time can have disastrous consequences as demonstrated by the 2010 spill in the Gulf of Mexico. Reliance on comparable containment systems located elsewhere in the world would result in potentially catastrophic delays in mobilization to Newfoundland and Labrador, Nova Scotia, the Gulf of St Lawrence, Beaufort Sea, or other parts of Canada due to their location and possible contractual commitment(s) to other operators.

WESI has consulted extensively with the Canada-Newfoundland Offshore Petroleum Board (CNLOPB) to ensure alignment with evolving regulatory requirements and the CNLOPB has been very supportive of the direction WESI is taking with the containment system. O'Leary said its FRWCS is designed to be compatible with the rigs operating in the harsh North Atlantic environment.
"We have the ability to export this capability to frontier regions where exploration is in its early stages. We're confident that this is the answer to an existing gap in the local oil and gas industry. With the locally-based FRWCS, we can be ready to protect our waters and coastlines, sustain future growth, and help industry explore in a responsible manner."

WESI's containment system is managed by an advisory board of world class industry experts and local professionals in areas such as spill response, subsea equipment, environment-health-safety, insurance and law; their role is to assist in the design and oversight of the manufacturing and commissioning process. O'Leary said Canadians should feel confident that the best industry practices and equipment will be located in an area where immediate access is assured. "We have the equipment and expertise to create a solution to oil spills off our coast and beyond, helping to ensure that past tragedies are never to be repeated."

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Ithaca Welcomes New Chief Production Officer

- Ithaca Welcomes New Chief Production Officer

Thursday, July 07, 2011
Ithaca Energy Inc.

Ithaca announced the appointment of Mr. Mike Travis as Chief Production Officer. Mr. Travis is anticipated to commence employment as an officer of the Company at the beginning of 2012.

Mike Travis (aged 51) has over 28 years of diverse offshore and onshore experience in the oil industry which has been acquired in the North Sea and other challenging international locations. He has held key leadership positions throughout his career in all aspects of Production and Development projects including asset management, drilling and operations. Mr. Travis has previously been employed by BP, LASMO, Venture Production and more recently by Premier Oil. He has a strong track record of generating outstanding team performance and delivering results, throughout his career.

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Devin International Names New Deepwater Projects Coordinator

- Devin International Names New Deepwater Projects Coordinator

Thursday, July 07, 2011
Devin International

Devin International has promoted Craig Latch to Deepwater Projects Coordinator, Gulf of Mexico, announced Joe Miller, Vice President of Sales and Marketing.

Latch will coordinate the initiation and execution of equipment orders for customers' projects from Devin International's Lafayette, La. office. He previously served as International Projects Coordinator for the company.

"Craig's proven track record of organizational and leadership skills makes him the perfect fit to fill this position," said Miller." He has proven himself effective through consistent personal performance and continued growth for Devin."

Latch earned a bachelor's and a master's degree in communications/ marketing from the University of Louisiana at Lafayette. He is a member of Young Professionals in Energy and the Intervention and Coiled Tubing Association

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Aroway, Partner Conclude Acquisition Transaction

- Aroway, Partner Conclude Acquisition Transaction

Thursday, July 07, 2011
Aroway Energy Inc.

Aroway and its Joint Venture Partner have completed a transaction to acquire certain lands in its core area with a third party private oil and gas company. The particulars of the agreement are as follows:
  • The Partnership will acquire 10 sections of land, typically, all rights, and
  • The acquisition includes six (6) existing wellbores, typically drilled to the base of the Leduc, and
  • The Partnership acquired the lands and wellbores in exchange for a variable gross overriding royalty ranging from 6% to 8%

As a result of the agreement, the Partnership will begin a recompletion program on the 6 acquired well bores in addition to 2 other wellbores that have become available under the Company's initial partnership deal. At least 2 additional wellbore opportunities will follow later in the year. Consistent with the Partnership's strategy, all the wellbores are multi-zone prospects for oil, gas and gas liquids. Each of the wellbores are covered by 3D seismic, and are in close vicinity to tie-in to the Joint Venture Partners gathering and plant infrastructure. The Company anticipates releasing recompletion results once the well bores have consistently produced at stabilized economic volumes.

Aroway's 3rd well of the 2011 exploration program will be tested and completed in the coming days, as operations were delayed by wet weather.

Chris Cooper, President and CEO, commented, "We are confident that the recompletion program will deliver economic material production at a substantially low cost per flowing boe from the existing well bores acquired. Success with this program along with our 2011 drill program will further contribute to Aroway achieving its year-end target of 600 boe/day."

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Deep Down Secures Large Carousel Orders

- Deep Down Secures Large Carousel Order

Thursday, July 07, 2011
Deep Down Inc.

Deep Down has just completed the assembly and test running of its own 3,200 MT carousel located at Core Industries near Mobile, Alabama and has recently been awarded two more large carousel contracts in excess of $8 million. Deep Down is presently under full construction of a 3,000 MT onshore carousel system with a delivery date at the end of the third quarter 2011 for one of the world’s leading umbilical manufacturers.

The 2nd carousel awarded, a 3,500 MT offshore system will be DNV certified and will be completed in the first quarter of 2012 for an international installation contractor. As an extra bonus, Deep Down has just undergone and passed several audits by our clients and safety organizations supporting the safety, and quality of our company and the upcoming construction of the carousels. Both carousels will be manufactured in Channelview, Texas, then placed on a barge and assembled for our clients in Mobile, Alabama.

Ronald E. Smith, Chief Executive Officer stated, "We have always had innovative approaches to handling terminations, transporting and putting umbilicals into the water. This award winning carousel system, as described in the Deep Down news release on May 18, 2011 is exciting and its compact nature allows our clients to place a large amount of product on an optimum foot print which opens the doors for both onshore and offshore applications. We believe these orders will have a significant impact on the Company’s future growth. We have several more systems quoted where the delivery schedules are ideal."

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Sudan President Agreed to Keep Southerners at Oil Ministry

- Sudan President Agreed to Keep Southerners at Oil Ministry

Thursday, July 07, 2011
Knight Ridder/Tribune Business News

North Sudan president, Omer Al-Bashir, has agreed to retain South Sudanese employees at the country's federal ministry of petroleum for as long as the south's oil is being exported through the north, the country's federal minister of petroleum announced.

North and South Sudan have been evenly splitting proceeds of the country's oil wealth since 2005 when the two sides signed the Comprehensive Peace Agreement (CPA), ending nearly half a century of intermittent civil wars between them.

The South, whose oilfields produce most of the country's daily oil output of 500,000 barrels, is due to declare independence from the north on July 9 in line with the outcome of the CPA-mandated referendum on the region's independence which was held at the start of this year.

The north, however, owns the refinery and pipeline infrastructure necessary to transport the oil to export terminals, leaving the south with almost no other viable option but to maintain oil-cooperation with the north after independence.

Lual Achuek Deng, Sudan's federal minister of petroleum, announced that Al-Bashir had acquiesced to his request of exempting southern employees of the petroleum ministry from dismissal ahead of the south's independence.

Deng, who is a southerner and a member of South Sudan's ruling Sudan People's Liberation Movement (SPLM), broke the news during a farewell party organized for him by the ministry's staff on Tuesday.

According to the outgoing minister, Al-Bashir had agreed that southern employees in the ministry should keep their positions for as long as the south's oil is being exported through the north and until a new oil-sharing deal is reached.

North and South Sudan have been engaged in talks with sluggish progress to strike a new oil-sharing deal, but the two parties failed to seal a news deal and talks will continue after the declaration of South Sudan.

The new deal will substitute the current 50-50 split with an arrangement whereby the south pays fees for using the service of the north's pipeline and refineries.

Deng, who was appointed to his position in 2010, is currently embroiled in a public dispute with the SPLM's secretary-general Pagan Amum who accused him of selling and giving half of South Sudan's oil revenues for the month of July to North Sudan in violation of the CPA which ends the current 50-50 split when the south secedes on July 9.

The minister defended himself against Amum's accusations, saying the July sale was approved by South Sudan's president Salva Kiir.

Copyright (c) 2011, Sudan Tribune

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Petrom Announces Potential Significant Gas Find in NW Romania

- Petrom Announces Potential Significant Gas Find in NW Romania

Thursday, July 07, 2011
Dow Jones Newswires

Romania's dominant oil company OMV Petrom said drilling success at its 4539 Totea exploration well in the southwestern region of Oltenia, in what could be the "most important onshore gas discovery in the last six years," news agency Mediafax reported.

The 4539 Totea well was drilled following a recent 3D seismic exploration program. Three successful production tests were carried out, with a maximum stabilized production rate of around 3,100 barrels of oil equivalent/day gas and associated condensate, Petrom said in a statement.

"I am happy to announce this success which might represent the most important onshore gas discovery in Romania during the last six years. The results obtained during tests confirm the reservoir's potential as well as our expectations from the Oltenia region where we directed major investments," said Johann Pleininger, member of the Petrom Executive Board, responsible for Exploration and Production.

Petrom said it will start an appraisal program to determine the size of the accumulation, which is located in an area with a high geological complexity. Experimental production on well 4539 Totea is estimated to start by year-end, once the well is linked to the nearby gas pipeline infrastructure.

Petrom is Romania's largest vertically integrated oil company. Austrian OMV owns 51% of the company's shares, while Romanian Economy Ministry and regional investment fund Fondul Proprietatea hold 20.64% and 20.11% in Petrom, respectively. The reminder 8.24% stake is traded on the Bucharest bourse.

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

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Caza IDs Potential Pay at O.B. Ranch Well

- Caza IDs Potential Pay at O.B. Ranch Well

Thursday, July 07, 2011
Caza O&G Inc.

Caza O&G provided an operational update on the Company's Bongo Property concerning the O.B. Ranch #2 development well in Wharton County, Texas.

Caza, as operator, announced that the O.B. Ranch #2 development well has reached its target depth of 13,210 feet and electric logs have been obtained through the target depth. The logs indicate potential pay in the Frio, Yegua and targeted Cook Mountain formations.

Data from the logs and core samples from the well have confirmed Caza's geologic and seismic modeling, which hypothesized that the O.B. Ranch #1 discovery well (which originally targeted a deeper Wilcox structure) was producing from the fringe of a more extensive Cook Mountain sand package. The O.B. Ranch #2 development well has been drilled closer to what Caza believes to be the center of the Cook Mountain anomaly with the aim of gaining valuable geologic knowledge of the Bongo/Cook Mountain sand and the regional Cook Mountain sand picture, while adding further production to the Company's portfolio.

The O.B. Ranch #2 is in a higher structural position than the O.B. Ranch #1 well, and log and seismic data support thicker, better sorted, potential pay sands with better porosity within the Cook Mountain section than those found in the O.B. Ranch #1. Due to concerns over existing downhole conditions, Caza was unable to run the micro imaging tool used in the O.B. Ranch #1 well, which helps to identify net effective pay. However, the Company was able to run a high resolution triple combination logging tool, which was more than adequate to define lithology and potential pay sections within the wellbore.

Caza is currently running production casing and preparing the O.B. Ranch #2 well for further completion operations in the Cook Mountain. The completion procedure will include a fracture stimulation program, which is scheduled for the end of July, 2011. The initial rate will be announced following completion of the fracture stimulation procedure.

The log data also indicates potential pay in the shallower Frio and Yegua formations at approximately 5,530 feet and 9,000 feet respectively.

Caza currently has a 45.28% working interest and an approximate 33.51% net revenue interest in the Bongo property and wells.

W. Michael Ford, Caza's Chief Executive Officer commented, "We are very pleased with the results of the O.B. Ranch #2 well. The data from this well has confirmed our scientific model and will be instrumental in efficiently developing the Bongo property. Additionally, Caza is beginning to receive the initial data from our proprietary seismic reprocessing in this area, which looks very promising. The Company currently has several exploration prospects under lease that should benefit from this newly gathered data as should Caza's future exploratory prospect development in Wharton County."

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Antrim to Farm-Out N. Sea Erne Prospect

- Antrim to Farm-Out N. Sea Erne Prospect

Thursday, July 07, 2011
Antrim Energy Inc.

Antrim has signed a Heads Of Agreement (HOA) to farm out a portion of its Erne Prospect located in the Greater Fyne Area in the Central North Sea.

Premier Oil UK Limited (Premier) has agreed to earn a 50% working interest in Antrim's 100% owned License P1875 by funding a promoted share of the costs to drill a well on the Erne Prospect on Block 21/29d. The well is expected to commence drilling in the third quarter of 2011 as part of the Greater Fyne Area drilling program announced by Antrim on March 28, 2011. A contract has been signed with AGR Well Management Limited to provide well project management and drilling services, including the provision of the WilPhoenix semi-submersible drilling rig, and a site survey has been completed.

The Erne Prospect is an Eocene Tay Formation oil prospect located between the Fyne and Guillemot NW fields at a drilling depth of approximately 6,000 feet. Erne is analogous to the Guillemot NW Field, which produces oil from the Eocene Tay Formation.

The Erne farmout is part of Antrim's strategy of managing risk and reducing cost while maintaining significant interest in its North Seas properties.

Assignment of the license interest to Premier will be subject to approval by the UK Department of Energy and Climate Change (DECC).

As previously announced on April 04, 2011, Antrim and Premier, along with First Oil Expro Limited, will also collaborate on the drilling of an appraisal well on the eastern flank of the Fyne Field, License P077 Block 21/28a. The East Fyne well is anticipated to be spud in 4Q 2011.

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Drilling Commenced at GMX's Williston Well

- Drilling Commenced at GMX's Williston Well

Thursday, July 07, 2011
GMX Resources Inc.

GMX has begun drilling its first well in the Williston Basin.

The Company has spudded its first Williston Basin well in Stark County, North Dakota. The Wock 21-2-1H is a Three Forks well being drilled in Township 140N, Range 98W. The Company expects the well to be completed in the third quarter of 2011.

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Marcellus Group Develops Middle School Curriculum

- Marcellus Group Develops Middle School Curriculum

Thursday, July 07, 2011
Knight Ridder/Tribune Business News
by Jodi Weigand, The Pittsburgh Tribune-Review

A jobs curriculum funded by the Marcellus shale industry could be in Western Pennsylvania middle schools as early as fall.

Four Marcellus shale drilling companies donated most of the $65,000 that the nonprofit Junior Achievement of Western Pennsylvania spent to research and develop its new Careers in Energy program, said Bill Lucas, JA's chief development officer.

The Energy Corporation of America Foundation, the grant arm of the Denver gas and oil well drilling company, donated $25,000, the largest amount. Other money came from Cabot Oil & Gas, Talisman Energy, Chesapeake Energy and the Marcellus Shale Coalition, a Cecil-based trade group.

"We all realized that no matter what side of the fence you're on, these jobs are here, and if we don't educate our kids about them, we're doing them a disservice," Lucas said.

Marcellus shale gas drilling has been touted as an economic boon for the area. But concerns abound about the impact that the drilling, which uses millions of gallons of water to extract the natural gas, could have on land, water and air.

Junior Achievement assembled an 18-person committee of representatives from the drilling industry, environmental groups and local and state governments to review the final version of the curriculum to ensure it is balanced, Lucas said.

"The one thing we wanted to make sure was that this was going to be completely unbiased," he said. "From an educational point of view, schools wouldn't let us teach it if it wasn't."

Nathan Sooy, a campaign coordinator for Clean Water Action of Pennsylvania, which opposes Marcellus shale drilling, is wary.

"If the industry is going to exist in Pennsylvania, it's going to need to, and probably should, make its way into the vocational school curriculum," he said. "I think the appropriateness of it being in the curriculum depends on what that looks like."

Junior Achievement needs about $35,000 to complete the rollout of the curriculum to about 11,000 middle school students. Marcellus shale gas drilling-related jobs will be among the many the energy industry offers, Lucas said.

Industry-funded curriculum is not unusual for Junior Achievement, which teaches more than 61,000 K-12 students in Western Pennsylvania about work force readiness, entrepreneurship and financial literacy through hands-on programs. It relies on business representatives, parents and other volunteers to teach the lessons.

JA's in-school and after-school programs are free to schools. Locally, Pittsburgh Public Schools and numerous Catholic schools partner with JA.

Careers in Energy is one of two industry-funded educational initiatives in the region. The other is a traveling energy education exhibit funded by the Drake Well Museum, in Titusville, which touts the benefits of oil and gas drilling.

Outside the industry, teachers, an independent nonprofit environmental group, state agencies and the Pennsylvania College of Technology have completed or are working on lessons about Marcellus shale.

What's pushing the effort, said Jeannette Carter, director of outreach for K-12 education at Penn College, which is part of Penn State University, is the desire to impart background knowledge about Marcellus shale like many people have about the steel industry.

"We're ... not understanding the occupations, science and geology of Pennsylvania," she said. "We don't have the knowledge we need to make fact-based decisions about the industry."

Penn College is working with vocational technical teachers to incorporate into existing lessons the skills students might need if they choose a career in Marcellus shale gas drilling. It's also working to include additional lessons in chemistry or geology to touch on things specific to Marcellus shale.

The challenge is keeping the lesson fact-based.

Teachers can pose questions like, "What do we know? What does the research show? What do people think? And then ask students to take a position and support it," Carter said.

The Pennsylvania Geological Survey, overseen by the state Department of Conservation and Natural Resources, recently released a fact-based lesson plan for middle and high school students about the natural-gas-rich rock formation that includes the history of drilling and how it works.

The state Department of Environmental Protection plans to develop its own lesson plan that schools and communities can use detailing the more controversial aspects of water contamination and other environmental issues, a spokeswoman said.

The Junior Achievement program will teach younger students about the science of energy, where it comes from and the pros and cons of both renewable and non-renewable forms, Lucas said. For older students, it will focus on the economic and job side of the industry.

The program takes an approach similar to that of the Drake Well Museum's Mobile Energy Educational Training Unit. The museum, which is located where Edwin Drake drilled the oil well that launched the petroleum industry, is seeking a more substantial place in public education.

Right now the unit travels to fairs, community meetings and vocational technical schools, but project manager Joe Hulsizer said the museum wants to winterize the 44-foot trailer so it can travel during the school year.

The trailer has three sections, with the first focusing on oil well drilling, the second showing artifacts from the Drake museum and the third covering all forms of energy sources, including Marcellus shale.

"There are so many people who don't understand what's involved with all the products we use every day," Hulsizer said. "We wanted to educate the kids because it's going to be up to them to create new forms of energy."

Chartiers Valley Middle School English teacher Lisa Schultz is one local teacher who has taught students about Marcellus shale drilling.

She asked her students to create impartial websites presenting the facts, pros and cons of drilling. She directed them to sources such as the Penn State Cooperative Extension for information.

"I guess I did a good job (of being impartial) because I'm opposed to it in Allegheny County, and most of the students were in favor of it," she said.

Copyright (c) 2011, The Pittsburgh Tribune-Review

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GeoPark All Smiles over 2Q Operations

- GeoPark All Smiles over 2Q Operations

Thursday, July 07, 2011
Geopark Holdings Ltd.

GeoPark provided an operations update for the Second Quarter 2011. Financial results for the interim period ended June 30, 2011 will be released during September 2011.


During 2011, GeoPark is carrying out an aggressive 26-30 well drilling and investment program with expectations of achieving its sixth successive year of continuous performance growth. Currently, GeoPark's assets and operations include:
  • Six petroleum blocks (operated by GeoPark) in Chile and Argentina covering a gross area of approximately 3.8 million acres - with a balanced portfolio of production, development and high-impact exploration opportunities.
  • Proved and probable (2P) reserves of 49.6 million barrels of oil equivalent (boe).
  • Current oil and gas production of approximately 8,000 barrels of oil equivalent per day (boepd).
  • Fully-funded 2011 work program of US $80-90 million with three rigs in operation.
  • Cash of approximately US $150 million and a strategic partnership with LG International from Korea to support new project acquisitions.
  • Proven technical and management team built for expansion.

Drilling Performance
  • Drilling operations resumed in late February 2011 on the Fell Block in Chile after the late arrival of a drilling rig and since that time GeoPark has drilled or is currently completing the drilling of nine wells - of which six have been completed, with four being put on production, and three wells are remaining to be completed and tested.
  • Results of new wells are summarized below:

Well Geological Formation Depth (Meters) Principal Hydrocarbon Current Status Approximate Production
Nika Sur 2 (Fell Block) Springhill 2,983 Gas/Oil Suspended --
Monte Aymond 35 (Fell Block) Springhill 2,404 Gas On Production 8.8 mmscfd gas 100 bpd condensate
Copihue 1 (Fell Block) Springhill 2,472 Gas On Production 8.1 mmscfd gas 160 bpd condensate
Williche 1 (Fell Block) Springhill 3,074 Gas/Oil Waiting on Further Evaluation --
Monte Aymond 36 (Fell Block) Springhill 2,551 Oil On Production 12 bopd
Konawentru 1 (Fell Block) Tobifera 3,030 Oil On Production 2,000 bopd
Alakaluf 10 (Fell Block) Springhill 2,296 Oil On Completion Testing Beginning
Municion Oeste 2 (Fell Block) Springhill -- Gas/Oil Drilling Not Yet Reached Objective
Renoval 1 (Tranquilo Block) Morro Chico -- Gas Drilling Not Yet Reached Objective

Recent wells to be noted include the Konawentru 1 well which had an initial short term test in excess of 2,000 bpd of oil from the Tobifera formation (a non-conventional volcanic clastic formation underlying the Springhill) and the Williche 1 well which had an inconclusive well test with only minor hydrocarbons recovered and is now under further evaluation.
  • Renoval 1, the first well to be drilled on the Tranquilo Block in Chile, has reached total depth of 3,027 meters and is now being logged and completed. Renoval 1 is targeting a 715 bcf (unrisked mean resources) prospect.

Seismic Operations
  • Seismic data acquisition on the Tranquilo and Otway Blocks continued throughout the first half of 2011 - with 293 km of 2D seismic and 165 km2 of 3D seismic being shot in total. Additional seismic will be carried out in Otway during 4Q11.
  • Geophysical processing and interpretation of these surveys are now underway to develop additional drilling prospects on these high potential blocks.

Production Performance
  • GeoPark's oil and gas production increased to approximately 8,000 barrels of oil per day equivalent (boepd) at the end of June led by the drilling results detailed above -- with an average for the first half of 2011 of approximately 6,400 boepd. For the first half of the year, oil production averaged approximately 1,600 bpd of oil and gas production averaged 29 mmscfd of gas.
  • GeoPark continued to invest in surface facilities to commercialize its drilling successes on the Fell Block and render its operations more efficient by continuing implementation of its performance management processes.

Strategic Developments and New Project
  • GeoPark closed the sale of a 10% stake in its Chilean upstream business to LG International for US $70 million in May 2011. This development cements the strategic relationship between GeoPark and LGI, demonstrates the value of the business GeoPark has built in Chile and creates a strong foundation for a significant expansion of GeoPark's footprint in Latin America.
  • As part of its partnership with LGI to acquire a portfolio of upstream assets throughout Latin America, GeoPark has been actively reviewing a range of asset and corporate opportunities, from a risk-reward and shareholder value creation perspective, in Chile, Colombia, Peru, Brazil and Argentina.
  • Consistent with its objective of building access to multiple capital markets, GeoPark is evaluating the possibility of a full listing on the Santiago Stock Exchange in Chile.

Commenting, James Park, Chief Executive Officer, said, "We are pleased with our continuing progress and improvement during the Second Quarter, including the impactful Konawentru discovery, and look forward to further results throughout the remainder of the year from our active drilling program. Importantly, GeoPark has now positioned itself with, and provided funding for, three exciting growth platforms: 1. steady low risk organic growth from the Fell Block; 2. high-impact exploration opportunities from the Tranquilo and Otway Blocks; and 3. new project acquisitions in Latin America."

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Baraka: Rig Headed to Georgina Basin

- Baraka: Rig Headed to Georgina Basin

Thursday, July 07, 2011
Baraka Energy and Resources Ltd.

Baraka and joint venture partner PetroFrontier announced that the long awaited Rig mobilization by Major Drilling has begun from Brisbane, Queensland to the Southern Georgina Basin in the Northern Territory, Australia.

Drilling Program Update

The rig will mobilize approximately 3,000 kilometers and is expected to arrive at the Baldwin-2 well site in approximately one week. Once the rig arrives on location and is rigged up, it will be subject to a final government audit prior to spud. PetroFrontier will provide a further update once a spud date has been confirmed.

Baldwin-2 is located in the southern part of EP 103 in the Southern Georgina Basin. Its primary target is the Basil Arthur Creek "hot" shale with a secondary target being the Hagen Member above the hot shale. Management believes that the Arthur Creek is analogous to the Bakken play found in Saskatchewan, Canada and North Dakota, USA. PetroFrontier has identified 13 older unconventional wells within the Arthur Creek "hot" shale zone on its lands.

PetroFrontier has a 100% working interest in EP 103 and is the operator.

After completion of drilling the Baldwin-2 well, the rig will then move to the MacIntyre-2 well site located in the northeastern corner of EP 127. MacIntyre-2 will be fracked and completed immediately after it is drilled and then the rig and frac crew will return to Baldwin-2 to conduct fracking and completion operations on that well.

According to a report prepared by Ryder Scott Company Canada (independent oil and natural gas reservoir engineers), dated November 1, 2010, the unrisked, undiscovered, prospective (recoverable) resource, based on a best (P50) scenario, for the unconventional Basil Arthur Creek shale zone in EP 103 and EP 127 may contain approximately 13.2 billion barrels and 2.7 billion barrels (gross) of oil respectively.

The Ryder Scott Resource Report on the resource potential of the Southern Georgina Basin describes the prospective (recoverable) portion of "Undiscovered Resources", as defined by the Canadian Oil and Gas Evaluation Handbook and does not represent an estimate of reserves. The Ryder Scott Resource Report is compliant with National Instrument 51-101 "Standards of Disclosure for Oil and Gas Activities" (NI 51-101). There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

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Several Firms Show Interest in New Iraq Oil Bidding Round

- Several Firms Show Interest in New Iraq Oil Bidding Round

Thursday, July 07, 2011
Dow Jones Newswires
by Hassan Hafidh

Several international companies have submitted documents to the Iraqi oil ministry to qualify them to take part in the country's fourth oil and gas licensing auction scheduled for January, one document and persons close to the ministry said Thursday.

According to people who saw a recent document issued by the oil ministry, at least 27 international companies have paid fees to the ministry to qualify them to take part in the bidding round to auction 12 exploration blocks located in various parts of Iraq.

"The ministry is studying documents of these companies and a list of pre-qualified companies is expected to be issued within the next two weeks," a ministry official, who asked not to be name for security reasons, said.

Among the companies mentioned on the oil ministry's list that want to take part in the auction are Chevron, ONGC Videsh Ltd., Vitol Holding B.V., GulfSands Petroleum, Enel Energia, Petrol Resources PLC, TNK-BP, and Dana Petroleum.

The list also includes six Japanese firms. They are INPEX, Japan Oil, Gas and Metals National Corp., or JOGMEC, Mitsui Oil Exploration, JX Nippon O&G, or JX-NOEX, Itochu and Toyota Tsusho.

The only Arab company in the list is Mubadala Oil & Gas of the United Arab Emirates.

Iraq, which sits on the world's third largest oil reserves, has held three bidding rounds in the past two years to auction off 15 of the country's most prized oil and gas fields.

Three of the announced blocks are located in the western Anbar province while two others are shared by the Anbar, Nineveh and Najaf governorates. The sixth is in Nineveh governorate in northern Iraq. These six are believed to contain gas resources, oil ministry officials said.

The remaining five blocks, believed to contain crude oil resources, are located in other governorates including Basra, Dhi Qar (Nassiriyah), Muthanna (Samawa), Babil, Najaf, Wasit and Diyala provinces, the officials said.

The size of the blocks range from 5,500 square kilometers to 9,000 square kilometers, they added.

Iraq needs to boost gas production and build more gas-fired power plants to increase its power output, currently at 6,500 megawatts, which represent less than half the country's needs.

Although international companies would prefer production-sharing contracts for exploration blocks, Iraqi oil officials said the deals would be based on a service contract, which means winning companies will be paid a flat fee for their services rather than be given a share in the resources. But it would be slightly different from the 20-year service contract offered in the previous three bidding rounds, they said.

"The remuneration fee for each produced barrel or equivalent in the exploration contracts is expected to be more than that in the awarded oil fields," one official said.

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

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Treaty Finalizes C&C Acquisition

- Treaty Finalizes C&C Acquisition

Thursday, July 07, 2011
Treaty Energy Corp.

Treaty Energy has fully paid off the acquisition of C&C Petroleum Management LLC.

Andrew V. Reid, Chairman and CEO of Treaty Energy Corporation, commented, "As of June 25, 2011, the C&C Petroleum Management LLC, acquisition was paid in full. We are all excited here at Treaty that we could accomplish the payoff of this acquisition eight months early and ahead of schedule. The $600,000 purchase price of C&C Petroleum was paid utilizing a combination of cash and stock. I am very pleased to have paid this acquisition off in the second quarter."

Mr. Reid commented further, "Our team at Treaty Energy continues to work diligently and earnestly to accomplish dramatic improvements in our company's net worth and operating profits, and this early payoff of the C&C acquisition and numerous other positive financial events will be reflected in our soon to be announced 2Q results."

Finally, Mr. Reid commented, "Treaty Energy stakeholders will see remarkable improvements in every aspect of our company over the balance of this year."

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Total Eyes Brazil Pre-Salt Resources Development Role-Exec

- Total Eyes Brazil Pre-Salt Resources Development Role-Exec

Thursday, July 07, 2011
Dow Jones Newswires
by Geraldine Amiel

Total is "well prepared" to take part in the development of Brazil's pre-salt oil resources, Total's head of exploration and production, said Yves-Louis Darricarrere.

Speaking during a conference on Brazil here, Darricarrere said the country is "a land of opportunity" for oil groups such as his.

Brazil's pre-salt resources are located on the deep-offshore field of Santos.

Total acquired in June 2010 a 20% interest in the BM-S-54 block on Santos, operated by Shell. The block is being explored, and no production has been planned yet.

"Total is well prepared to participate and is waiting for Brazil to decide when these interesting areas will be open," Darricarrere said on the country's pre-salt resources.

"In the short term, the announced 11th concession round which deals with non pre-salt discoveries will certainly be of interest to us," he also said.

Total also owns a 41.2% interest in the BC-2 block and a 50% interest in the BM-C-14 block both located on the Campos field, which is non pre-salt.

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

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Victoria O&G Updates Ops at West Medvezhye

- Victoria O&G Updates Ops at West Medvezhye

Thursday, July 07, 2011
Victoria O&G plc

Victoria O&G provided an update on its appraisal and delineation program in the West Medvezhye, (West Med) oil, gas and condensate license area in Russia.

West Med Regional Background

VOG's wholly owned subsidiary, ZAO SeverGas-Invest (SGI), holds a 20-year Exploitation License for West Med covering 1,224 km2. The block is located in the Yamal Peninsula in the Nenets region of Siberia and was independently assessed in 2006 by DeGolyer and MacNaughton (D&M) to have total prospective resources of approximately 1.1 billion barrels of oil equivalent (boe). West Med is located in one of the most prolific oil and gas producing areas of the world and is adjacent to Gazprom's giant Medvezhye field that has already produced over 70 trillion cubic feet of gas.

In total, D&M identified 25 leads and prospects and the Company's first discovery in West Med, Well 103, was based on a prospect defined by D&M. The discovery has C1 and C2 reserves, independently assessed, under the Russian classification convention of 14.4 million boe as approved by the Russian Ministry of Natural resources.

West Med Appraisal Update

While VOG's principal focus has been the development and commencement of gas and condensate production at Logbaba in Cameroon which is scheduled for 4Q 2011, SGI's technical team and consultants Blackwatch Petroleum Services (Blackwatch) have been utilizing this time to acquire data and to carry out integrated multi-discipline studies in West Med.

This work has involved integration of new data with previous seismic and well data to screen and firm up the prospects and leads identified by D&M.

Passive Seismic and Gas Tomography Surveys

New data acquired in 2010 included 155 passive seismic points recorded by GeoDynamics Research S.r.l. (GDR) and 289 km lines of gas tomography data recorded by Exotrad Limited. The surveys identified direct hydrocarbon indications in six areas covering a total of 79 km2 in the opinion of GDR and VOG.

Preliminary internal volumetric estimates by the Company, based on these passive seismic areas and regional well and seismic data for reservoir properties, indicate hydrocarbons initially in-place estimated at 400 mmboe by SGI and Blackwatch.

The features are all part of previously identified prospects by D&M, based on conventional seismic, and the volumes were incorporated into the overall assessment of 1.1 billion boe Un-risked Prospective Resource potential for the West Med Block.

Conventional Seismic work

Further to these positive results, in February 2011, the Company commissioned a seismic reprocessing and geological modelling study to be carried out by a Russian geoscience consulting institute, Mineral. The first phase of the technical work, which included reprocessing of 845 km of 2D seismic, was completed in June 2011.

Re-interpretation of the reprocessed seismic data has now commenced and will incorporate the passive seismic and gas tomography results. The results of Mineral's work are scheduled to be considered in a workshop in Tyumen, Russia in July 2011.

West Med Appraisal / Development Planning

In addition to the subsurface technical studies, development studies have commenced for commercialization of the large prospective resources and exploitation of the Well 103 discovery. These include but are not limited to the following:

Drilling & Well Engineering

Studies have commenced on well design and engineering for future appraisal and development well drilling planned for 4Q 2012. The company is in discussions with international and Russian service companies and has compiled initial budgetary estimates for the wells and drill pads.

These studies conclude that the wells may be drilled in clusters of 3 to 10 to significantly reduce location preparation and access cost. This will have a marked impact on development economics.

Surface Production Facilities & Infrastructure

Conceptual design work has commenced to establish costs and schedules for oil, gas and condensate production facilities and supporting infrastructure. The gathering and distribution network design and engineering will be phased with facilities design, starting with fast track development of the Well 103 discovery.

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Porto Commences Drilling Ops at Portugal Well

- Porto Commences Drilling Ops at Portugal Well

Thursday, July 07, 2011
Porto Energy Corp.

Porto Energy has commenced its drilling operations in the Torres Vedras onshore concession in Portugal. The SPC-1 well is the first well of a proposed two to four well exploration drilling program in the Company's Jurassic Reef Trend. The target depth of this well is anticipated to be approximately 1,970 meters and is expected to test multiple Jurassic Reef oil prospect levels as delineated by the Company's recently completed 120 km2 3D seismic survey of this area. The Company expects to reach total depth on this well in approximately thirty days.

The Torres Vedras rig is under contract from KCA Deutag and recently completed the re-entry of the ALJ- 4 well to a depth of 2,600 meters, prior to being moved to the new SPC-1 location. The ALJ-4 well is a direct offset to the Company's ALJ-2 fractured carbonate gas discovery well. The Company recovered 65.25 meters of conventional core and 430 meters of open hole logs in the Jurassic Brenha gas reservoir. The Company is currently testing and analyzing the core, logs and associated data. The Company anticipates results from this testing and analysis within the next three months and has temporarily abandoned the ALJ-4 well until then.

"With the successful re-entry of the ALJ-4 well and the collection of critical engineering and geological data, we continue to advance our asset appraisal and exploration drilling programs on our onshore concessions," said Joseph Ash, President and CEO of Porto.

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Wood Group Awarded Commissioning Services for Chevron's Big Foot Facility

- Wood Group Awarded Commissioning Services for Chevron's Big Foot Facility

Thursday, July 07, 2011
Wood Group

Wood Group has been granted a multi-million dollar, three-year contract by Chevron U.S.A. Inc. to commission the Big Foot extended tension leg platform (E-TLP) in the deepwater Gulf of Mexico. Work will be performed by DSI, Wood Group PSN's commissioning services business.

DSI's scope of work covers the full commissioning process, from development of procedures, through inspection and testing of every operational component at the South Texas fabrication yards and offshore, to the final hand-over of systems to Chevron.

Big Foot is the eighth TLP/ETLP DSI has commissioned worldwide and is the fifth facility commissioned for Chevron, including the Jack & St. Malo semi-submersible platform in the deepwater Gulf of Mexico, which DSI is currently commissioning.

"Commissioning is critical to the safe start-up of a production facility, proving the integrity and reliability of all safety and operating systems," stated Trey Lambert, president of DSI. "Chevron can rely on DSI to provide safe, consistent and quality commissioning services across its projects."

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Economic Data Reveals Positive Outlook in Jobs and Unemployment

- Economic Data Reveals Positive Outlook in Jobs and Unemployment

Jul 7, 2011

Exciting news in economic data today....

The Labor Department reported that people applying for unemployment benefits fell last week to the lowest level in seven weeks. Applications for benefits dropped by 14,000 to a seasonally adjusted 418,000.

Claims for the prior week were revised up to 432,000 from an original reading of 428,000. Economists had expected new requests for jobless benefits to drop to 424,000. The average of new claims over the past four weeks fell by 3,000 to 424,750.

Continuing claims fell 43,000 to 3.68 million in the week ended June 25. Overall, 7.46 million people received some form of state or federal benefit in the week of June 18, down 61,327 from the prior week.

Not only were jobless claims down in the month but private sector jobs were up.

Private sector companies in the U.S. increased adding 157,000 jobs in the month of June, according to the Automatic Data Processing Inc. (ADP) report.

The job reading in June is higher than what analysts had expected of a increase of 70,000. The ADP announced that the goods-price sector totaled 27,000 jobs in June along with 24,000 in manufacturing. As for the service sector, it added 130,000 jobs.

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Kosmos Seeks Force Majeure on Transocean Semisub

- Kosmos Seeks Force Majeure on Transocean Semisub

Thursday, July 07, 2011
Kosmos Energy Ltd.

Kosmos Energy provided an update on the company's drilling of the Cedrela-1 exploration well offshore the Republic of Ghana. The Transocean Marianas semisubmersible drilling rig, under contract to another operator in Ghana, was expected to arrive at the Cedrela-1 well location on the West Cape Three Points Block on or about July 10 to commence drilling Kosmos' Cedrela-1 well near the block's southern boundary. The rig was rendered temporarily inoperable following a reported anchor-handling incident on the Offshore Cape Three Points Block, which is east of the Kosmos-operated West Cape Three Points Block. The incident occurred while preparations were being made to move the rig from the other operator's block to the Cedrela-1 well location.

Kosmos has delivered a force majeure notice to the government of Ghana and the Ghana National Petroleum Corporation due to the delay in the rig's scheduled arrival at the Cedrela-1 well location. As a result, Kosmos has begun a search for a substitute drilling rig and intends to drill the Cedrela-1 well when either the Transocean Marianas or an alternative rig becomes available. The company has the necessary approvals to drill the Cedrela-1 well and anticipates that a rig will be available soon.

Kosmos is the operator of the West Cape Three Points Block in which the company holds a 30.875% interest. An affiliate of Anadarko Petroleum Corporation has a 30.875% interest; an affiliate of Tullow Oil plc has a 22.896% interest; E.O. Group Limited has a 3.5% interest; Sabre Oil & Gas Holdings Limited has a 1.854% interest; and the Ghana National Petroleum Corporation has a 10% carried interest.

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Dragon Oil's Lam Well Tests Rates of 1,767 bopd

- Dragon Oil's Lam Well Tests Rates of 1,767 bopd

Thursday, July 07, 2011
Dragon Oil plc

Dragon Oil announced the completion and initial testing of the Dzheitune (Lam) B/157 development well. The Dzheitune (Lam) B/157 well was drilled to a depth of 2,900 meters and completed as a single producer by the Iran Khazar rig. The initial test result from the well was 1,767 barrels of oil per day ("bopd"). The Iran Khazar rig has skidded to the next slot and spudded the Dzheitune (Lam) B/159 well. The NIS rig is currently drilling the Dzheitune (Lam) 28/158 well.

Dr Abdul Jaleel Al Khalifa, Chief Executive Officer, commented, "We have put into production six wells within the 2011 drilling campaign, having today reported the completion and initial testing of the Dzheitune (Lam) B/157 development well. We are making good progress on the drilling program and will update the market on the production numbers for the first half of the year on July 21, 2011 in the trading statement."

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Faroe Spins Bit at Fulla Well

- Faroe Spins Bit at Fulla Well

Thursday, July 07, 2011
Faroe Petroleum plc

Faroe announced that drilling operations have commenced on the Fulla exploration prospect (Faroe Petroleum 50%), located in the west of Shetland area of the Atlantic margin.

This west of Shetlands well, located to the north east of the producing Clair oil field, is targeting potentially oil-bearing Devonian Clair reservoir sands at a depth of 2,100 meters. Faroe is operator of the well which is being drilled by the WilPhoenix semisubmersible drilling rig under contract with Awilco Drilling in a water depth of 120 meters. Operations are expected to be completed well within the summer weather period.

UK License P.1161 contains both the Freya oil discovery and the nearby Fulla exploration prospect. The Freya discovery was drilled by Mobil in 1980 and encountered 140 meters of oil-bearing Devonian Clair reservoir sands. Similarly to a number of the Clair appraisal wells, a valid surface oil sample was not obtained in the Freya discovery well. Since Freya was drilled, horizontal well drilling on the Clair oil field has led to a very successful extended well test in 1997 which in turn led to development sanction. The BP operated Clair field is under phased development and has been on production since 2005, having to date produced in excess of 75 million barrels of oil with current rates at approximately 40,000 barrels per day.

The Fulla exploration prospect is located in the same Clair reservoir sands at a depth of approximately 2,100 meters and is situated along the same structural trend to the north east of both Clair and Freya, thereby de-risking the prospectivity of the target.

The objectives of the Fulla exploration well are to prove a significant column of oil-bearing Devonian Clair reservoir sands on the Fulla structure and, in that event, to obtain an oil sample using advanced wire-line technology. If these objectives are met, uncertainties related to a possible Freya and Fulla combined development project will be significantly reduced.

In December 2010 Faroe farmed out a 50% interest in License P.1161 to Canadian Overseas Petroleum Limited (COPL) on promoted terms, such that COPL will pay 60% of estimated well costs for the Fulla well.

Graham Stewart, Chief Executive of Faroe Petroleum plc, commented, "We are delighted to be drilling the Fulla prospect, as operator. Should the Fulla drilling operations be successful, this will present an excellent opportunity when combined with the already defined Freya discovery to prove up sufficient resources for a significant standalone field development.

"The next exploration wells scheduled after Fulla are all located on our Norwegian acreage and are the Butch well followed by the T-Rex and Kalvklumpen prospects, which are expected to spud in 3Q and 4Q. Faroe's ongoing multi-well exploration drilling program will carry on through 2011 and beyond as we push forward to test our substantial northern seas portfolio of over 40 significant licenses."

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Rockhopper Adds Additional Appraisal on Semisub

- Rockhopper Adds Additional Appraisal on Semisub

Thursday, July 07, 2011
Rockhopper Exploration plc

Rockhopper has entered into a further assignment agreement to secure an additional well slot on the Ocean Guardian drilling rig. Rockhopper will shortly drill well 14/10-6, its third appraisal well on the Sea Lion feature, followed by an additional three wells in succession.

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