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Oil and Gas Energy News Update

Monday, July 25, 2011

Oil & Gas Post - All News Report for Monday, July 25, 2011

Monday, July 25, 2011

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Commodity Corner: Default Fears Push Oil Lower

- Commodity Corner: Default Fears Push Oil Lower

Monday, July 25, 2011
Rigzone Staff
by Matthew V. Veazey

With investors nervous about whether Congress and the White House can agree on a plan by August 2 to raise the U.S. debt ceiling and possibly avert default, crude oil settled lower Monday.

Light sweet crude oil for September delivery lost 67 cents to end the day at $99.20 a barrel. The September Brent contract price fell 73 cents to settle at $117.94 a barrel. Recent debt ceiling negotiations between congressional leaders and the Obama Administration have proven both fruitless and contentious. Key areas of disagreement have been how high to raise the federal government's current $14.3 trillion borrowing limit and how deeply to cut spending to offset the increase. Subsequent negotiations between Democrat and GOP congressional leaders did yield a bipartisan framework proposal, but the White House has increased the specter of default by opposing this potential deal.

The WTI peaked at $99.87 and bottomed out at $98.52 and the Brent fluctuated from $117.00 to $118.31.

The August natural gas contract price ended the day at $4.39 per thousand cubic feet, a penny lower than Friday's settlement price. Natural gas traded within a range from $4.34 to $4.46 Monday.

Front-month gasoline remained flat Monday, again settling at $3.13 a gallon. The August contract price fluctuated from $3.09 to $3.13 during the first session of the week.

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Area Restores Many of Its Lost Jobs

- Area Restores Many of Its Lost Jobs

Monday, July 25, 2011
Houston Chronicle
by Ronnie Crocker

Powered by gains in oil and natural gas and manufacturing and a recent uptick in heavy construction, the Houston metro area has regained nearly 70 percent of the private-sector jobs it lost during the Great Recession, a local analyst says.

"To put it bluntly, that's just phenomenal," said Patrick Jankowski, vice president of research at the Greater Houston Partnership.

Acknowledging lingering concerns in the real estate and government sectors, Jankowski nonetheless was encouraged by the economy's overall resilience. He predicted the strong showing in private industry "will eventually start to influence the public sector."

Others also took heart in the monthly employment figures released Friday by the Texas Workforce Commission.

The report shows unemployment in the Houston region grew to 9 percent in June, up from 8.2 percent a month earlier. Statewide, unemployment rose to 8.2 percent, from 8 percent the previous month. The nation's unemployment rate for the month was a percentage point higher at 9.2 percent.

Part of this can be attributed to the annual influx of teachers and college and high school students into the workforce; the unemployment rate has gone up five of the last six Junes. But Jankowski said that, because of the way the rate is calculated, this particular increase might be yet another signal of an improving economy.

The rate is based on a survey, and only respondents actively seeking work are counted as unemployed. Jankowski said it's likely that some people who had given up during the recession have seen the continued positive jobs reports and rejoined the search for work.

He noted that the Houston region added 10,200 jobs in June, while adding 20,800 people to the workforce.

Statewide, there were 32,000 new nonfarm jobs in June.

In announcing the results, Workforce Commissioner Ronny Congleton, who represents labor on the three-member panel, noted that the state has added 117,600 jobs since January.

"While no state is immune from tough economic times, we're still putting many Texans back to work," Congleton said in a statement.

Jankowski, who has tracked the local employment scene since 1990, said the private sector in the Houston region shed 165,400 jobs by the time the recession bottomed out in January 2010. Since then, he said, the region has added 113,500 private jobs, or 68.6 percent of the number lost.

He cited several positive signs in the Workforce Commission statistics, which are based on local hiring over the past 12 months:

The oil and gas industry added 6,600 jobs, with a ripple of economic benefits that include a boost in the production of durable goods such as oil field equipment and heavy machinery.

Manufacturing added 8,900 jobs. Workers who were not laid off during the recession are getting more overtime pay, as their average work weeks have increased to 50 hours, up from 42 hours at the beginning of the recession.

From auto dealers to clothing stores, retail has added 5,400 jobs, although these increases have slowed during the past couple of months.

Restaurants and bars have added 8,400 jobs, attributable in part to population growth and increased consumer optimism.

There has even been an uptick in heavy construction. Jankowski said the addition of 3,400 jobs in this area is important because of the variety of goods and services associated with large projects such as building refineries and chemical plants.

Jobs tied to real estate continue to lag, the analyst said, along with home sales and commercial leasing.

Also under strain is the government sector. The latest figures show some declines, but Jankowski said he suspects the overall numbers will be revised downward as more data become available.

And while the decline in public-education jobs, at both the local school district and university levels, was about the same as it was last June, a typical seasonal drop-off as school years end, it won't be clear until the fall how many of those job losses are permanent, the result of layoffs brought on by budget cuts.

Copyright (c) 2011, Houston Chronicle

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Statoil to Spin Bit at Visund Sor

- Statoil to Spin Bit at Visund Sor

Monday, July 25, 2011
Petroleum Safety Authority Norway

Statoil has received consent to use the Ocean Vanguard mobile facility in the northern part of the North Sea.

The consent relates to drilling of three production wells on Visund Sør. The plan is to partially complete all three wells, 34/8-V-4 BY1H/BY2H, 34/8-V-3 H, 34/8-V-1 BY1H/BY2H, with Ocean Vanguard.

Visund Sør is located approx. nine kilometers southwest of the Visund field, and approx. 125 kilometers from land, Værlandet in Askvoll, Sogn og Fjordane.

The earliest possible start date for the operation on Visund Sør is in the beginning of August 2011. The operation has an expected duration of 300 days.

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Afren Increases Stake in Madagascar Block

- Afren Increases Stake in Madagascar Block

Monday, July 25, 2011
Afren plc

Afren announced that Government approvals have been received for Afren to assume operatorship and increase its interest in Block 1101, onshore Madagascar, to 90 percent. and a revised work program agreed.

  • Afren interest increased to 90 percent. from 40 percent. (reassignment of 50 percent. from Candax Energy to Afren)
  • Afren assumes operatorship
  • Work program of first two exploration phases now combined, with an additional 150 km of 2D seismic to be acquired
  • Undertaken to drill one commitment exploration well; drilling now planned in 2012

Block overview

Block 1101 is located on the Eastern flank of the Ambilobe basin in Northern Madagascar. The Block encompasses an area of approximately 14,900 km2 onshore and lies adjacent to ExxonMobil's Ampasindava Block. The formation of the Ambilobe basin and the corresponding stratigraphic suites are closely related to the break-up of Gondwanaland and the later separation of eastern Gondwana. There are proven, large heavy oil accumulations in the Isalo formation in Central Madagascar (Bermolanga and Tsimiroro) which attest to the prospectivity of the region.

Some 220 km of 2D seismic was acquired over the block in 2008, identifying three major structures each close to existing wells with recorded oil shows. A working hydrocarbon system on the block is further evidenced by surface oil seeps.

Terms of reassignment and work program

Under the agreed terms of reassignment, Afren has increased its overall participation in Block 1101 to a 90 percent. operated interest through the reassignment of a 50 percent. interest previously held by Candax Energy, who remain partners on the block with a 10 percent. interest. Government approvals for the reassignment have been received and a revised work program agreed with OMNIS, the state oil and gas agency. The agreed work program has combined the first two exploration phases on the block and requires the drilling of one exploration well to a minimum depth of 1,600 meters. The partners have also agreed to acquire an additional 150 km of new 2D seismic. Under the revised ownership structure and work program, it is expected that drilling will now commence in 2012.

Osman Shahenshah, Chief Executive of Afren plc commented, "We see tremendous prospectivity in Madagascar and now, as operator, are keen to explore our high potential acreage. We are grateful to OMNIS and the Malagasy authorities for their endorsement and approval of this transaction and extended work program. We look forward to collaborating with our hosts and partner Candax in the ongoing exploration at Block 1101, and to further establishing Afren's long term commitment to this exciting exploration play."

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Anadarko Touts 2Q11 Results

- Anadarko Touts 2Q11 Results

Monday, July 25, 2011
Anadarko Petroleum Corp.

Anadarko announced second-quarter 2011 net income attributable to common stockholders of $544 million, or $1.08 per share (diluted). These results include certain items typically excluded by the investment community in published estimates. In total, these items decreased net income by approximately $28 million, or $0.06 per share (diluted) on an after-tax basis. Cash flow from operating activities in the second quarter of 2011 was $1.837 billion, and discretionary cash flow totaled $1.838 billion.

Second-Quarter 2011 Highlights
  • Achieved record liquids sales volumes of 297,000 barrels per day
  • Finalized Lucius unitization agreement
  • Successfully tested three wells at the Caesar/Tonga mega project
  • Closed the acquisition of the Wattenberg Processing Plant

"We achieved record liquids sales volumes during the quarter, enhancing margins and generating excellent cash flows," said Anadarko Chairman and CEO Jim Hackett. "Nearly all of the year-over-year volume growth was attributable to a 34,000 barrel-per-day increase in liquids volumes. These results contributed to strong discretionary cash flows of more than $1.8 billion -- approximately $117 million above our capital expenditures, which included a one-time cash investment of $518 million associated with the acquisition of the Wattenberg plant."

During the second quarter of 2011, sales volumes totaled 62 million barrels of oil equivalent (BOE), or 685,000 BOE per day, averaging approximately 2.3 billion cubic feet of natural gas per day, 225,000 barrels of oil per day (BOPD), and 72,000 barrels of natural gas liquids per day.

Operations Summary

The company achieved sales-volumes records during the second quarter of 2011 in Wattenberg, Greater Natural Buttes, Wamsutter (operated), Bone Spring and the Marcellus Shale. In the Eagleford Shale, Anadarko closed its $1.6 billion joint-venture agreement with a subsidiary of Korea National Oil Corporation and exited the quarter with record gross sales volumes of approximately 45,000 BOE per day in the play, an increase of approximately 25 percent from the end of the prior quarter. In Ghana, current gross production from Jubilee is approximately 80,000 BOPD, and production continues to ramp up with further well completions and gas injection.

In the deepwater Gulf of Mexico, Anadarko continued to advance two major projects during the second quarter. The company finalized the Lucius unitization agreement and recently announced plans to develop the field with a truss spar designed for a capacity of 80,000 BOPD and 450 million cubic feet of natural gas per day. Sanctioning is expected to occur later this year, with first production expected in 2014. At the Caesar/Tonga project, Anadarko completed flow and reservoir tests on three wells. Each of the wells tested at flow rates of approximately 15,000 BOPD with high-quality (27º API gravity) oil.

Exploration Summary

Anadarko has mobilized the Discoverer Spirit drillship to begin the company's 2011 exploration program in West Africa, following the drillship's completion of the final test at Caesar/Tonga. This program includes the Montserrado exploration well in Liberia, as well as the Jupiter exploration well and Mercury appraisal well in Sierra Leone. In other deepwater exploration areas, Anadarko continued to delineate its large natural gas discoveries in Mozambique, and to advance appraisal activities in the Tweneboa/Enyenra area offshore Ghana. The company also recently began appraisal drilling in the Campos Basin offshore Brazil.

As previously announced by Diamond Offshore, Anadarko signed long-term contracts in the second quarter for two new-build drillships. The Ocean BlackHawk is expected to be delivered in late 2013, and the Ocean BlackHornet is expected to be delivered in early 2014. These new state-of-the-art rigs are designed to work in up to 12,000 feet of water, and each has been contracted for a term of five years. These new rigs will feature enhanced drilling capabilities and safety equipment designed to meet the highest specifications in the industry.

"We expect the next six to nine months to be the most active period of deepwater exploration and appraisal drilling in our company's history," said Hackett. "Our exploration program is designed to deliver upon our goal of discovering more than 500 million BOE of net risked resources this year. We are continuing to advance our deep inventory of high-impact prospects, and the new rig agreements reinforce our long-term commitment to the safety and success of our global exploration program."

Financial Summary

Anadarko reported total product revenues of approximately $3.5 billion during the second quarter of 2011, a 46-percent increase relative to the second quarter of 2010. The company ended the second quarter of 2011 with approximately $3.4 billion of cash on hand in addition to its five-year, $5 billion undrawn credit facility. As provided in the supplemental information to this release, Anadarko protected an additional 450,000 MMBtu per day of 2013 natural gas production, with three-way collars that have a middle floor of $5.00 per MMBtu and a ceiling of $6.57 per MMBtu.

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Anadarko Petroleum Topped Q2 EPS Estimates

- Anadarko Petroleum Topped Q2 EPS Estimates

Jul 25, 2011

Anadarko Petroleum (NYSE:APC) announced Q2 EPS of $1.14, ex-items, ahead of consensus estimates of $0.95 per share. During the quarter, sales volumes totaled 62 million barrels of oil equivalent, or 685,000 BOE per day, averaging about 2.3 billion cubic feet of natural gas per day, 225,000 barrels of oil per day, and 72,000 barrels of natural gas liquids per day.

Anadarko Chairman and CEO Jim Hackett said, "We achieved record liquids sales volumes during the quarter, enhancing margins and generating excellent cash flows. Nearly all of the year-over-year volume growth was attributable to a 34,000 barrel-per-day increase in liquids volumes. These results contributed to strong discretionary cash flows of more than $1.8 billion -- approximately $117 million above our capital expenditures, which included a one-time cash investment of $518 million associated with the acquisition of the Wattenberg plant."

Anadarko Petroleum has a potential upside of 15.4% based on a current price of $82.58 and an average consensus analyst price target of $95.26.

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FMC Technologies Sees 21% Increase in 2Q Earnings

- FMC Technologies Sees 21% Increase in 2Q Earnings

Monday, July 25, 2011
FMC Technologies Inc.

FMC Technologies reported second quarter 2011 revenue of $1.2 billion, up 21 percent from the prior-year quarter. Diluted earnings per share were $0.39, equal to the prior-year quarter.

Total inbound orders of $1.5 billion were up 18 percent from the second quarter of 2010 and included $939 million in subsea systems orders. Backlog for the Company reached a record $5.0 billion including record subsea systems backlog of $4.2 billion. Subsea systems recorded its sixth consecutive quarterly backlog increase.

"We have booked almost $1.9 billion in subsea orders during the first half of 2011, and continue to believe $4.0 billion in orders for the year is possible," said John Gremp, President and Chief Executive Officer. "Our subsea revenue of nearly $800 million during the second quarter has kept us on track to reach $3.3 billion revenue for the year. Our fluid control business is continuing to produce at record levels and as our capacity expansion comes online, we will be able to meet our customers' growing demands."

Review of Operations – Second Quarter 2011

Energy Production Systems

Energy Production Systems' second quarter revenue was $967.6 million, including subsea systems revenue of $795 million. Surface wellhead revenue was up 13 percent from the second quarter of 2010 with stronger North American activity partially offset by market timing and execution issues in our international operations.

Energy Production Systems' operating profit of $97.3 million decreased 25 percent from the prior-year quarter, due to lower margins in subsea systems combined with increased costs and less favorable mix in surface wellhead.

Energy Production Systems' inbound orders for the second quarter were $1.2 billion, including subsea systems orders of $939 million. Backlog for Energy Production Systems was $4.5 billion, including $4.2 billion in subsea systems at the end of the second quarter.

Energy Processing Systems

Energy Processing Systems' second quarter revenue of $262.9 million was 37 percent higher than the prior-year quarter. The increase came mainly from fluid control, with record revenue in the quarter.

Energy Processing Systems had record operating profit of $53.9 million in the second quarter, up 62 percent from the prior-year quarter. The increase was driven by higher volume in fluid control resulting from strong North American pressure pumping activity.

Energy Processing Systems' inbound orders were a record $339.8 million in the second quarter led by strong orders in fluid control. Backlog for the segment finished the quarter at $421.3 million.

Corporate Items

Corporate expense in the second quarter was $10.6 million, an increase of $0.5 million from the prior-year quarter. Other expense, net, was $2.0 million, a decrease of $7.9 million from the prior-year quarter due largely to $4.0 million in foreign exchange gains in 2011 compared to a $2.7 million loss in 2010.

The Company ended the quarter with net debt of $44.8 million. Net interest expense was $2.1 million in the quarter.

The Company repurchased 149,000 shares of common stock in the quarter, at an average cost of $40.87 per share.

Depreciation and amortization for the second quarter was $26.3 million, up $0.9 million from the previous quarter. Capital expenditures for the second quarter totaled $61.8 million.

The Company recorded an effective tax rate of 30.9 percent for the second quarter.

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Tullow Acquires Ghanian Interests of EO Group

- Tullow Acquires Ghanian Interests of EO Group

Monday, July 25, 2011
Tullow Oil plc

Further to the announcement made on May 26, 2011 in relation to the conditional acquisition of the Ghanaian interests of EO Group Limited for $305 million, Tullow announced that all of the conditions to the acquisition were satisfied and the acquisition completed today.

This acquisition, with an effective date of 1 December 2010, will increase Tullow’s interest in the West Cape Three Points licence offshore Ghana by 3.5% to 26.4% and increase the Group’s interest in the Jubilee field, which Tullow operates, by 1.75% to 36.5%.

Following the completion, 10,137,196 ordinary shares of 10p each in the capital of Tullow (Shares), are expected to be admitted on July 26, 2011 to the official list of the UK Listing Authority and the official list of the Irish Stock Exchange and to trading on the main markets of the London Stock Exchange and the Irish Stock Exchange. The shares satisfy approximately $216 million of the consideration and the balance, which includes certain working capital adjustments, has been paid in cash.

Following Admission, the total number of Shares in issue is 900,315,402, and the total number of voting rights in the Company is 900,315,402. The Company holds no Shares in treasury.

The above figure may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FSA's Disclosure and Transparency Rules.

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Magellan, Santos Finalize Evans Shoal Talks

- Magellan, Santos Finalize Evans Shoal Talks

Monday, July 25, 2011
Magellan Petroleum Corp.

Magellan and Santos have now finalized discussions regarding an appropriate resolution of all remaining issues relating to the non-closure of the Evans Shoal transaction. The Company and Santos have agreed that $10 million of the sums deposited in connection with the Evans Shoal transaction will be returned to the Company and that the Asset Sale Deed should be terminated.

The process of unwinding the Evans Shoal transaction has allowed the Company and Santos to look at their joint operations in the Northern Territory, Australia. This has lead to productive discussions towards rationalizing and more efficiently exploiting their respective interests in the Amadeus Basin, and creating new commercial opportunities. The Company is working with Santos to satisfactorily conclude these discussions in the near term.

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Tethys Lists on LSE

- Tethys Lists on LSE

Monday, July 25, 2011
Tethys Petroleum Ltd.

Tethys Petroleum announced that its entire issued ordinary share capital has been admitted to the standard category of the Official List of the Financial Services Authority and has commenced trading on the main market of the London Stock Exchange under the ticker symbol "TPL". Depository interests, representing Tethys Petroleum ordinary shares, have been admitted to CREST. Shareholders wishing to trade securities in the Company electronically on the London Stock Exchange can trade depository interests representing Tethys Petroleum ordinary shares in CREST.

The primary listing for the ordinary shares of the Company will continue to be the Toronto Stock Exchange in Canada and the Company will continue to retain its secondary listing on the Kazakhstan Stock Exchange.

The Company is not raising any funds or issuing any new shares in connection with its listing in London and, accordingly, the interests of existing shareholders of the Company will not be diluted as a result of Admission. There will remain 260,629,769 ordinary shares of the Company in issue.

Dr David Robson, Chairman, President and Chief Executive Officer of Tethys Petroleum commented, "Our listing on the main LSE exchange represents a further major stage in the development of our company and will, we believe draw attention to our progress to UK and international investors."

Tracey Pierce, Director of Equity Primary Markets at London Stock Exchange Group, said, "We are delighted to welcome Tethys to the London Stock Exchange's Main Market today. This listing will give the company exposure to the world's most international market and to an unrivalled source of liquidity and new investors. Tethys' admission to the Exchange reinforces London's attractiveness to companies which have global reach and ambitions."

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Shale Panel Offers Blueprint for Future

- Shale Panel Offers Blueprint for Future

Monday, July 25, 2011
Pittsburgh Post-Gazette
by Laura Olson

From impact fees to pooling gas rights, boosting fines to rewarding natural gas use, the governor's Marcellus Shale Advisory Commission stuffed dozens of wide-ranging suggestions into its report Friday.

Those 96 recommendations are aimed at encouraging gas companies to invest in Pennsylvania, protecting environmental resources and helping local governments manage the industry that is remaking their communities.

They ranged from specific updates -- setting the number of feet between wellpads and streams, and doubling the fines for companies that break the rules -- to general directions for legislators to review the business climate, analyze spill-containment methods and create a permanent advisory panel.

The report's directions were equally broad on the closely watched issue of an impact fee, urging simply that any fee be directed toward helping local governments with "uncompensated" costs from drilling activity.

And on another controversial issue, the panel gave limited instructions for "modernizing" state law to allow drillers to access gas within Marcellus Shale even against a landowner's wishes. That process, known as pooling, currently is allowed under certain conditions to extract gas more efficiently, but draws fiery opposition from those who see it as impinging on property rights.

One commission member said the goal of the 120-day fact-finding process was to create an outline of potential changes to how the state oversees gas drilling.

"The governor appointed this commission to give him best practices, to use as a base line in negotiating with the Legislature," said David Sanko, who represented the state's township supervisor association on the panel. "I think this plan has laid a nice blueprint for that. Many of those things do have to be worked out."

The governor won't be responding until next week at the earliest: his spokesman said he'll "digest" it and review it with his staff.

It didn't take long for reaction to pour in from outside groups: the drilling industry commended the report, local government officials declared victory, and even some environmental groups touted proposed oversight changes.

"Overall it's a positive thing that the commission took place and existed," said Matt Pitzarella, spokesman for Range Resources. "But it shouldn't be seen as the end all be all, because the technologies are always going to outrun any new provisions."

Others in the industry were more effusive in their praise for the commission's recommendations.

"We're excited about the report," said Kevin West, managing director for external affairs at the Downtown-based EQT Corp. energy company.

The Pennsylvania Independent Oil and Gas Association, which maintains a small lobbying staff in Harrisburg, is working on a response to the recommendation that outlines what it views as a fair impact fee plan, said Al Catanzarite, the association's vice president of public outreach. He said the association's response would be one that "addresses specific and defined impacts," and also funnels money back only to communities where actual drilling is taking place.

Environmentalists who represented the Chesapeake Bay Foundation, Pennsylvania Environmental Council, the Nature Conservancy and Western Pennsylvania Conservancy on the commission gave a mixed assessment of the final report.

"We consider the report to be a meaningful first step toward improving Pennsylvania's oversight of shale gas extraction, but additional improvements must be accomplished as the debate shifts to the General Assembly," the organizations said in a joint release.

Other environmental activists who were not included in the process, however, criticized the 137-page document, saying it was exactly what they feared from a panel that they viewed as stacked with industry executives.

"From day one, we knew that the advisory commission is nothing more than a stalling tactic," said Erika Staaf of the advocacy group PennEnvironment.

But now that report is out of the commission's hands and on the governor's desk. It's up to Gov. Tom Corbett and lawmakers to deem which provisions will move forward, and which will see further tweaks as they're transformed from suggestions to legislation.

Not all were controversial. Much of the report was approved unanimously, particularly recommendations regarding police and fire response to well emergencies and environmental protection. The panel said emergency information should be posted at all drilling sites, response plans should be standardized, and more training should be offered through the fire commissioner.

In addition to requirements for setbacks and bonding, more wastewater tracking and more frequent updates to neighbors and local officials during the drilling process were applauded by observers.

With some recommendations, there's much room for lawmakers to make their mark. The impact fee item does not include any direction on how much should be charged per well or how it should be assessed over time.

They suggested that the fee "include a correlation between the amount of the fee and costs incurred," but Mr. Sanko and others on the commission have acknowledged that calculating those exact costs has been difficult.

That fee also "should recognize the ongoing nature of certain impacts," and must not encourage companies to abandon their current partnerships with local governments, the report said.

Meanwhile, legislative leaders say they want to see a fee that includes funds for statewide environmental programs and other projects. "There are real needs in the commonwealth, and it may not all be where drilling is taking place," Senate President Pro Tem Joe Scarnati, R-Jefferson, said earlier this week.

There also will be legislative pushback on a provision to standardize local zoning laws, a change drillers have sought to help smooth out differences among thousands of municipal codes. The panel said local regulations should not "unreasonably impede" gas development, similar to phrasing that Mr. Scarnati drew criticism for in his impact fee plan.

"That [provision] must come out," said Senate Minority Leader Jay Costa, D-Forest Hills.

But the vague descriptions giving that legislative leeway make some of the items hard to decode, said John Hanger, who headed the state Department of Environmental Protection under Gov. Ed Rendell. "Two to three sentence recommendations is not enough to capture the details of many of these recommendations," Mr. Hanger said.

He was critical of language regarding incentives for switching public vehicle fleets to use natural gas, saying those should have been more aggressive.

The report suggests the creation of "Green Corridors," where natural gas fueling stations would be clustered. It also recommends including natural gas as a Tier 2 alternative fuel source under the state Alternative Energy Portfolio Standards Act. That would allow utilities to purchase natural gas to count toward the 18 percent of their power that must come from alternative sources by 2020.

That was one of a handful of recommendations that the environmental advocates who served on the panel cited as items they did not support. They raised concerns that there was no prohibition against additional surface impacts in future state forest land leasing, and that a suggestion to use money from those leases for infrastructure projects could deplete state conservation funds.

The biggest outcry came on the suggestion of pooling of gas rights, which the report portrayed as a method to ensure that the drilling process maximizes gas output and minimizes surface disturbances.

Pennsylvania already has a conservation law, which allows for mineral resources at a certain depth below the Marcellus Shale to be "pooled" against the owners' wishes into a larger drilling unit. The company wouldn't pay a leasing bonus, but would be required to pay a royalty on the gas extracted.

The report suggests that current law be amended to include the Marcellus and other shale deposits as eligible to be pooled. It also emphasized that property rights would need to be addressed as part of that policy debate, referencing concerns from opponents, including the governor, who say pooling infringes on the rights of landowners to make decisions.

Corbett spokesman Kevin Harley said the governor continues to oppose forcing someone to allow drilling under their property.

But he added that Mr. Corbett is willing to look at a version that would allow for "company-to-company" pooling in situations where landowners in one area have leased to several drillers, impeding development.

Still, that provision, which Mr. Scarnati called a "fatal flaw," will face a steep challenge from both parties in the Legislature.

"It's eminent domain, and you really have to have incredibly strong reasons to impose eminent domain," Mr. Costa said.

Copyright (c) 2011, Pittsburgh Post-Gazette

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Exxon Mobil's Marine Affiliate Announces Plan For Two New Tankers

- Exxon Mobil's Marine Affiliate Announces Plan For Two New Tankers

Jul 25, 2011

Exxon Mobil (NYSE:XOM) U.S. marine affiliate, SeaRiver Maritime, signed a letter of intetn with Aker Philadelphia Shipyard for the construction of two U.S. flag, crude, oil tankers in partnership with Samsung Heavy Industries.

The vessels will be used to transport Alaska North Sloe crude oil from Prince William Sound, Alaska to U.S. West Coast destinations. Project planning work is underway with construction of the 115,000 deadweight ton tankers expected to begin by mid-2012.

The vessels are scheduled for delivery in 2014 and will be capable of carrying 730,000 barrels of crude oil to help meet U.S. energy needs. They will replace two double hull tankers.

Will Jenkins, president of SeaRiver said, "Today's announcement is consistent with our long-term ongoing commitment to safe and reliable marine transportation in the United States and throughout the world. These new vessels will provide jobs for American shipyard workers and help support energy needs along the U.S. West Coast for decades to come."

Exxon Mobil (NYSE:XOM) has a potential upside of 9.3% based on a current price of $85.08 and an average consensus analyst price target of $92.96.

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Bering to Begin Drilling Ops at Tx. Prospect

- Bering to Begin Drilling Ops at Tx. Prospect

Monday, July 25, 2011
Bering Exploration Inc.

Bering will begin drilling operations this week on its South Texas prospect. Bering will re-enter an existing well bore and perforate the Yegua formation which was not originally targeted in this well. This approximate 500 acre prospect has multiple drilling locations and will target the Yegua and Frio formations at various depths and is estimated to have over $9 million in potential gross reserves based upon the current price of oil and gas and assuming all wells are drilled and successful. Bering will retain a 50% working interest in this prospect.

"The well bore that we are re-entering was initially drilled targeting a much deeper zone and was never tested for the Yegua and Frio zones that have historically been productive in this area," stated Steven Plumb, VP of Finance of Bering. "We have ordered the pipe and requested the production unit for Tuesday of this week. We expect to begin oil production in the next few weeks if our completion is successful."

Eagleford Update

Bering has elected to employ an additional unique radiometric technology to further delineate its previously announced Eagleford prospects. Bering believes this additional testing will further reduce its drilling risks and has put its Eagleford operations on hold until such testing can be completed.

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RWE Dea Gets Govt Nod for Breagh Field Development

- RWE Dea Gets Govt Nod for Breagh Field Development

Monday, July 25, 2011

RWE Dea UK announced that the field development plan for its operated Breagh gas field has received the unconditional approval of the Department of Energy and Climate Change (DECC) of the UK Government.

The FDP approval from DECC was formalized today by Charles Hendry MP, Minister of State for Energy at RWE Dea UK's London office, in a ceremony attended by senior management of RWE Dea and its Breagh license partner, Sterling Resources (UK).

"The FDP approval is a hugely significant achievement for our Breagh gas field development. It is an essential element for the realization of our strategic target to boost RWE Dea's annual gas and oil production to more than 70 million barrel of oil equivalents by 2016," said Ralf to Baben, Chief Operating Officer of RWE Dea AG.

René Pawel, RWE Dea UK's Managing Director, commented, "I am delighted with today's announcement by the UK Government. It means that RWE Dea UK remains on course to achieve production from the Breagh field less than three years after we acquired operatorship of the Breagh license."

The FDP approval marks yet another step in a busy summer for the Breagh development. Around 100 kilometers of 20" pipeline has been successfully installed offshore and the platform is due for installation in early September. The platform is being constructed by Heerema Vlissingen in the Netherlands and consists of a jacket approximately 85 meters tall with a total weight of some 4,000 tons and topsides of approximately 1,400 tons. The platform will be installed by Heerema Marine Contractors.

Energy Minister Charles Hendry said, "This is welcome news, Breagh is one of the largest natural gas discoveries in the Southern North Sea in recent years, and developments like this play a vital role in ensuring we have secure energy supplies throughout the UK. It is also encouraging to see the success of initiatives such as the Promote license, developed through PILOT, which originally allowed Sterling Resources to gain access to this acreage and bring the development forward under the partnership and operatorship of RWE Dea."

The Breagh field is located in UKCS blocks 42/12a and 42/13a of the southern North Sea in 62 meters water depth, approximately 100 kilometers east of Teesside. The field is being developed in two phases. Phase 1 entails gas to be exported via the 20" pipeline from the Breagh Alpha platform to Coatham Sands, Redcar on the UK mainland, and a 10 kilometers onshore pipeline for processing at the Teesside Gas Processing Plant (TGPP) at Seal Sands. The TGPP site is owned by Teesside Gas & Liquids Processing, and after processing at the TGPP, the gas will enter the UK National Transmission System. Phase 2, expected to receive FDP approval in early 2012, is expected to include additional wells in the east of the field drilled from a Breagh Bravo platform tied back to Alpha.

RWE Dea holds 70% interest in the Breagh gas field as operator (Sterling Resources UK 30%). The gas field is a conventional carboniferous reservoir and the expected reserves will make a significant contribution to the growth of RWE Dea's gas production. Further upside potential is expected in the surrounding exploration blocks.

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BHP Billiton, Petrohawk Terminate Waiting Period

- BHP Billiton, Petrohawk Terminate Waiting Period

Monday, July 25, 2011
BHP Billiton plc

BHP Billiton and Petrohawk announced that on July 22, 2011, BHP Billiton and Petrohawk received notice from the U.S. Federal Trade Commission of early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act in relation to BHP Billiton’s tender offer for all of the issued and outstanding shares of common stock of Petrohawk for $38.75 per share in cash.

The documents related to the tender offer are being filed with the SEC today. As previously announced, the tender offer has been unanimously recommended by the Petrohawk board of directors and is being made pursuant to the merger agreement between BHP Billiton and Petrohawk. The tender offer is scheduled to expire at midnight, New York City time, at the end of Friday, 19 August 2011, unless the tender offer is extended or earlier terminated in accordance with the rules and regulations of the United States Securities and Exchange Commission (SEC) and the merger agreement.

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Doxa Finalizes Interest Acquisition in Tx. Proj.

- Doxa Finalizes Interest Acquisition in Tx. Proj.

Monday, July 25, 2011
Doxa Energy Ltd.

Doxa has closed on the acquisition of a 16.70625% interest in the County Line North Project, McMullen County, Texas, a new venture targeting various Wilcox formation zones of interest. The County Line North Project, operated by Hurd Enterprises, Ltd., of San Antonio, Texas, is a conventional gas condensate prospect which is situated on an initial 280 acre block of leases. Drilling of the Kynette No. 1, the initial well on this project, has been commenced and is proceeding towards its permitted depth of 10,500'. Doxa owns 16.70625% working interest before payout, reverting to 12.5% after payout of this project, and expects its share of the leasehold and initial completed well cost to total approximately $500,000. This project is situated approximately 2 miles northeast of a recently announced successful completion, the Martin-State Gas Unit No. 1 well, a high rate Wilcox producer completed in the Campana, South (Wilcox 10,200') Field. Hurd Enterprises, Ltd. also operates the Martin-State well.

Doxa Energy Ltd. develops and maintains a portfolio of producing and developing conventional and unconventional assets, including the Eagle Ford shale oil window play in South Texas, and the recently announced acreage acquisition in the Mississippian Oil Play of northern Oklahoma.

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BP Scoops Up Blocks Offshore Trinidad

- BP Scoops Up Blocks Offshore Trinidad

Monday, July 25, 2011
BP plc

BP has been awarded two deepwater exploration and production blocks by the Government of the Republic of Trinidad and Tobago.

BP was awarded a 100 percent interest in blocks 23(a) and TTDAA 14, both in deepwater frontier acreage offshore Trinidad's east coast, under production sharing contracts.

The success follows detailed subsurface research and evaluation by BP whose Trinidad operations account for more than half of Trinidad and Tobago's natural gas output and 12 percent of BP's global oil and gas production. The awards will double the acreage held by BP controlled companies in Trinidad and Tobago.

"BP has a long history and major business in Trinidad and Tobago, and we are keen to participate in the next phase of exploring the country's resources," said Bob Dudley, BP group chief executive. "These awards mean BP has gained access to 31 new upstream blocks across the world since July last year, a significant step up in new access.

"Increasing our efforts in exploration and applying our deepwater experience and expertise to new basins around the world is a key part of BP's strategy to deliver long-term value growth. We are pleased to see the confidence that governments across the world have placed in BP to carefully explore and develop resources."

Since July 2010 BP has gained new exploration access in Azerbaijan, Brazil, Indonesia, Australia, the UK and China. In addition, BP reached agreement in February with Reliance Industries to take a 30 percent interest in 23 oil and gas licences offshore India.

"BP is very pleased to be given this opportunity to be pioneers as we work to unlock Trinidad's deepwater potential using the best in class technology and expertise, potentially bringing additional benefits from our existing business and infrastructure," added BP Trinidad and Tobago regional president Norman Christie. "The decision to participate in this bid round demonstrates BP's long term commitment to Trinidad and Tobago."

Block 23(a), located approximately 300 kilometers north east of BP Trinidad and Tobago's (bpTT's) Galeota Point operations base, covers approximately 2,600 square kilometers in water depths averaging 2,000 meters. Block TTDAA 14 which is located next to block 23(a) covers a further 1,000 square kilometers in water depths averaging 2,000 meters.

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BP Acquires New Offshore Blocks In Trinidad

- BP Acquires New Offshore Blocks In Trinidad

Jul 25, 2011

BP (NYSE:BP) announced that it has been awarded two deepwater gas exploration blocks by the government of the Republic of Trinidad and Tobago.

BP said it has been given a 100% interest in the two areas, both located off the east coast of Trinidad, under production sharing contracts.

Chief Executive, Bob Dudley, said, "These awards mean BP has gained access to 31 new upstream blocks across the world since July last year, a significant step up in new access," in an announcement on Monday.

BP has a potential upside of 20.5% based on a current price of $46.55 and an average consensus analyst price target of $56.1.

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Despite Criticism, Canadian Oil Key to U.S. Demand

- Despite Criticism, Canadian Oil Key to U.S. Demand

Monday, July 25, 2011
Rigzone Staff
by Karen Boman

Despite criticism by environmental groups, U.S. imports of Canadian oil will continue to play a critical role in meeting U.S. energy needs, according to a recent report by the Calgary-based Fraser Institute, In America's National Interest-Canadian Oil.

In recent years, environmental groups have campaigned against the extraction of oil from Canada's tar sands. In advance of planned protests next month near the White House, U.S. actor Danny Glover and Canadian environmentalist David Suzuki are arguing that tar sands development has wrecked large sections of Alberta and disrupted the way of life of indigenous communities in the province.

In 2009, Greenpeace USA launched its "Stop the Tar Sands" campaign, which claimed that northern extraction of oil from Alberta's oil sands has "created a literal hell on earth" because land is visibly scarred by oil sands development, which takes place above ground. Amnesty International also has campaigned against oil sands development, wanting it to end until "no more development without human rights".

Environmental activists attempts to restrict U.S. imports of Canadian oil "ignore the reality of U.S. dependence on foreign oil and could force America to buy oil from repressive governments that restrict civil, political, and economic freedoms," according to the study by the public policy think-tank.

Canada now provides more oil to the U.S. than all the Persian Gulf countries combined, even though America imports 5.5 million more barrels of oil daily than it did in 1973. "Thus, the question is not whether or not the U.S. will import oil, but which country will supply that oil to American consumers, businesses and government," said study author and Fraser Institute director of Alberta policy Mark Milke.

Canada ranks sixth among the world's top oil producers at 3.3 million b/d. Unlike other countries that produce more oil such as Russia, Saudi Arabia, Iran and China, Canada scores well on measurements of civil, political and economic rights, as well as on proxy measures indicating quality of life, such as literacy rates, post-secondary education, and misogynist practices. With the exception of Norway, Canada is the only major oil-exporting country that scores highly on all measurements of civil, political and economic freedom.

Fraser cites the recent forecast by the International Energy Agency (IEA) that oil will remain "the dominant fuel in the primary energy mix to 2035," with global demand for crude oil reaching 99 million barrels daily by that time. IEA also forecasts that unconventional oil, such as oil extracted from Canada's oil sands, will play an increasingly important role in world oil supply through at least 2035, regardless of what government's do to curb demand.

Given that oil will remain a chief component of the global energy mix for the next several decades, America can either continue to embrace oil imports from Canada or resort to importing increasing amounts of oil from governments "that regularly violate human rights as a matter of policy, and in some cases, are state sponsors of terrorism," said Milke.

Milke noted that the perfectionism exhibited by Greenpeace and other environmental groups ignores the reality of actual energy needs and capabilities. "Long-lasting positive reforms are necessarily based upon how human beings actually live, behave, and work, and within the physical limitations they themselves face."

Canadian gas also provides an alternative supply as geo-political events, such as the Iranian Revolution of 1979 and the invasion of Kuwait by Iraq sharply curtailed oil imports on the world market, as well as insurance against disruption in OPEC supply. The study found that claims that oil sands crude does not lower prices because non-conventional oil is more expensive are mistaken, noting that the "final price of oil is determined not only by the initial cost of production but also by demand.

"Reduced supply on the international market from any source creates upward pressure on prices; in reverse, more oil on the market from any source acts to dampen upward pressure on prices. This is straightforward supply and demand."

The study does not recommend that governments restrict oil imports from jurisdictions based upon their relatively poor record for civil, political and economic freedoms. However, just as it is ill-advised for governments to restrict trade for matters unrelated to national security, "it is also ill-advised to allow misleading assertions from lobbyists about Canadian oil to go unchallenged," Milke said.

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AWE Updates 2P Reserves at Tui Area Oil Fields

- AWE Updates 2P Reserves at Tui Area Oil Fields

Monday, July 25, 2011
New Zealand O&G Ltd.

AWE, as Operator of the Tui Joint Venture, has advised that preliminary work completed on the Tui Area Oil Fields indicates that the gross initial developed 2P reserves recoverable from the existing four well development of the fields will be reduced from the previously reported 50.5 million barrels to between 40 and 42 million barrels. This would leave gross remaining developed 2P reserves as at June 30, 2011 of between 9 and 11 million barrels and would represent a reduction of between 1.1 to 1.3 million barrels net to NZOG. An independent review of the reserves estimate is being undertaken by RPS Energy Pty Ltd (RPS). The RPS review is anticipated by AWE to be completed in early August 2011. A finalized 2P reserves estimate will be advised after the Joint Venture and RPS review has been completed.

AWE's evaluation has also identified possible additional volumes of oil not accessed by the current production wells in the Tui fields. To recover this oil additional wells or side tracks of existing wells will be required. Further work is being progressed that may mature these opportunities into a firm project that would add back a portion of the reserves reduction.

The revised 2P reserves estimate indicates an economic cut‐off for production in the 2019 to 2020 period based on operating costs for the FPSO Umuroa, the oil price forecast at that time, and no future infill drilling or exploration drilling success.

Concurrently, reprocessing and reinterpretation of the Tui 3D seismic undertaken by AWE has identified exploration prospects adjacent to the Tui fields which are under ongoing evaluation.

Participating interests in the Tui Joint Venture are:
  • AWE Limited (Operator) 42.5%
  • Mitsui E&P Australia Pty Limited 35.0%
  • Stewart Petroleum Co Limited (NZOG) 12.5%
  • WM Petroleum Limited (PPP) 10.0%

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Songa to Buy Remaining Stake in Semisub

- Songa to Buy Remaining Stake in Semisub

Monday, July 25, 2011
Songa Offshore SE

Songa has entered into an agreement with the minority shareholders in Songa Eclipse to acquire the remaining 48.1% stake, following which Songa will have obtained 100% ownership. The transaction is expected to be completed at delivery of the Rig, subject to inter alia Songa securing the necessary take-out financing. The sellers of the shares are sub-funds of Sector Umbrella Trust managed by Sector Omega ASA (35.1%) and Pareto World Wide Offshore AS (13.1%) (the "Sellers").

Under the terms of the agreement, Songa will acquire the shares for USD 65 million as well as a conditional bonus payment to be made within 18 months from delivery of the Rig.

The conditional bonus payment will be calculated on the basis of the Rig's fair market value at the time of notice by the Seller less the purchase price already paid by Songa.

This new agreement enables Songa to optimize the financing of Songa Eclipse as a 100% owner, and replaces the current agreement between Songa and the Sellers, as described in the press release sent out by Songa on 24 March 2010. Songa is in the process of financing the rig with its existing banking group, and expects to get this in place prior to delivery of the Rig.

Through this transaction, Songa has obtained full ownership of its first modern ultra-deepwater semi-submersible Rig and should be seen as part of the Company's overall strategy to renew its fleet. Songa has been able to secure this position within 16 months from the initial investment, with a gradually increasing ownership. The weighted average total rig cost for Songa before the remaining bonus payment is estimated to be USD 660 million.

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DONG Energy to Take Stake in Siri Field

- DONG Energy to Take Stake in Siri Field

Monday, July 25, 2011
DONG Energy

DONG Energy, the Operator of the Siri field in the Danish sector of the North Sea, and its license partner Noreco have settled on an agreement for DONG Energy to acquire Noreco's 50 percent interest in the Siri field with an acquisition cost of approximately 70 DKK million (13 million USD) with effect from July 1st 2011. DONG Energy will be sole owner of the Siri field. The agreement is subject to customary regulatory approvals, and all conditions of the agreement are expected to be finally resolved before the year-end.

The agreement means that DONG Energy in agreement with Noreco can continue and fully implement the repair work on the cracks that were revealed in parts of the platform's subsea structure in 2009, so the platform can continue to be operated safely and responsibly.

The price reflects the fact that DONG Energy will take over revenues and expenses related to Noreco's share of the Siri license - including the repair costs of the subsea structure. As previously announced, the total estimated repair costs are approximately DKK 2 billion.

The agreement will have effect from July 1st 2011, but Noreco has the right to sell its interest or a part of it to a third party before August 30th 2011, provided that the buyer takes over all of Noreco's rights and obligations, including being required to meet its share's cost of the repair work.

"We are pleased to have a constructive agreement in place so we can carry out the repair work, which we regard as necessary in order to continue safe production from the Siri field and its associated satellite fields for many years to come," said Søren Gath Hansen, Executive Vice President of DONG Energy.

The agreement to acquire Noreco's interest in the Siri field does not comprise the satellite fields outside the Siri license. In 2010, the Siri field produced 1.8 million barrels of oil, including the Stine field, which is a satellite of Siri within the Siri license.

The costs for the permanent solution will be operating costs for DONG Energy and will, as previously announced, be spread over 2011 and 2012. The increased operating costs are expected in 2011 to be only partially offset by an increased share of production from the Siri field.

However, the information provided in this announcement does not change DONG Energy's previous financial guidance for the 2011 financial year or the expected investment level announced.

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O&G Pay Identified at Victory Energy's Jones County Well

- O&G Pay Identified at Victory Energy's Jones County Well

Monday, July 25, 2011
Victory Energy Corp.

Victory Energy, through its partnership with Aurora Energy Partners, announced that its Tx. Jones County, Nassau #1 well has reached target depth of 5,325 feet and is now entering completion.

Mudlog and multiple drillstem tests (DSTs) indicate the presence of two oil and gas pay zones exceeding fifty feet in thickness with several others measuring between ten and twenty feet in thickness. A seventy-foot (gross) oil and gas Pennsylvanian age formation will be the focal point of this initial completion. The targeted formation is expected to produce both oil and gas.

With a successful completion, the well will be production tested to determine rate, gas-to-oil ratio and pressure. An assessment of the type and size of production facilities will be determined by testing. Due to the high gas cut encountered during drilling, a gas delivery line is already being assessed.

This multiple pay zone discovery offers the opportunity for additional development and drilling on held acreage. The company, through its partnership with Aurora Energy Partners, holds a working interest of no less than 1.5 percent and up to 2.5 percent for each acreage block acquired.

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American Standard Spuds 2nd Well in Permian Basin Program

- American Standard Spuds 2nd Well in Permian Basin Program

Monday, July 25, 2011
American Standard Energy Corp.

American Standard announced 2nd spud for 10 net well drilling program in Andrews County, Texas.

The JW #5 rig is on location, rigging up and is expected to spud within 24 hours on the University 8 #1 location in Andrews County, Texas.

The Company intends to drill the University Andrews 8 #1 well to the Strawn and completed in the Strawn, Wolfcamp, Spraberry and Lower Clearfork formations. The Company will own 100% working interests in all 10 wells.

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Production Resumed at CNOOC's BoZhong Oilfileds

- Production Resumed at CNOOC's BoZhong Oilfileds

Monday, July 25, 2011

CNOOC announced that, BoZhong 28-2 South (BZ 28-2S) oilfields which suspended operation in this April due to a malfunction occurred on the Single Point Mooring System, has restarted production.

Currently the operation in BZ 28-2S oilfields is running smoothly. The production capacity of the oil fields has recovered to the level before the incident, reaching approximately 39,000 barrels of oil per day.

In April 2011, due to rough sea conditions, a malfunction occurred on the single point mooring system of the Floating, Production, Storage and Offloading (FPSO) vessel Haiyangshiyou 102 serving in BZ 28-2S oilfields. Operations were immediately shut down at the oilfields.

After the incident, the Company worked out a recovery plan of the oilfields and implemented it in a timely manner.

BZ 28-2S oilfields, located in Bohai Bay, are composed of four fields, including BZ 28-2 S, BZ 28-2 SN, BZ 34-1N and BZ 29-4. The Company owns 100% interest of the oilfields and acts as the operator.

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Foster Wheeler Names New CEO in Leadership Succession Plan

- Foster Wheeler Names New CEO in Leadership Succession Plan

Monday, July 25, 2011
Foster Wheeler AG

Foster Wheeler has approved a senior leadership succession plan under which J. Kent Masters, 50, will become the company's Chief Executive Officer, effective October 1, 2011. It is expected that he will stand for election to the company's board of directors as soon as practicable after October 1. Umberto della Sala, 63, will continue to serve as Interim Chief Executive Officer through September 30 and then will continue with the company in his ongoing roles as President and Chief Operating Officer, CEO of the company's Global Engineering and Construction Group and member of the board of directors.

As part of the leadership succession plan, Raymond J. Milchovich, 61, is expected to continue to serve as Non-Executive Chairman of the board of directors of Foster Wheeler AG through November 3. He has informed the board that he intends to leave the board on that date. The board has been actively planning for Milchovich's eventual departure and expects to announce its succession plan for Chairman on or before November 3, 2011.

Masters comes to Foster Wheeler from The Linde Group, a world-leading gases and engineering company, where he has served as a member of the Executive Board with responsibility for the operating segments Americas, the Global Business Unit Healthcare and the Business Area Merchant & Packaged Gases. He joined Linde in 2006 as a result of Linde's acquisition of The BOC Group, where he had been Chief Executive, Industrial and Special Products and a member of the board of directors.

"Kent has significant operating, technical and contracting experience -- and a demonstrable track record of successfully leading complex global organizations," said Milchovich, Non-Executive Chairman of the Board of Foster Wheeler AG. "Moreover, we believe that Kent's leadership approach is a perfect fit with the cultural norms of Foster Wheeler. I know I speak for the entire board when I say that we have full confidence in Kent to drive the company to reach its full potential."

Milchovich added, "With Umberto under contract through 2013 and having spent considerable time with Kent and Umberto together, I believe that they will be an excellent team. Furthermore, I have assured both Kent and the board that I will remain available to them in the event I can help with the transition in any way."

A native of Atlanta, Georgia, Masters holds a Bachelor of Science degree in Chemical Engineering from the Georgia Institute of Technology and a Master's degree in Business Administration from The Stern School of Business at New York University. He also serves on the board of directors of Rockwood Holdings, a manufacturer of chemicals and advanced materials based in Princeton, New Jersey.

Umberto della Sala joined Foster Wheeler in Milan in 1973 as a process engineer. From 1997 to 2000, he was assigned to FW USA as Vice President and General Manager of Latin American Operations and President of FW Caribe and later as commercial director. In 2000, he returned to Milan as Commercial Director of the newly formed Foster Wheeler Continental Europe Unit. He was appointed in 2001 as President and CEO of FW Continental Europe. In 2005 he was appointed as Foster Wheeler CEO Global Engineering & Construction (E&C) Group. He assumed the additional role of President and Chief Operating Officer of Foster Wheeler in 2007 and has served as the company's Interim Chief Executive Officer since October of 2010. He was elected to the Foster Wheeler board of directors in February 2011.

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