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Oil and Gas Energy News Update

Tuesday, August 16, 2011

Oil & Gas Post - All News Report for Tuesday, August 16, 2011

Tuesday, August 16, 2011

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Commodity Corner: Oil Declines on GDP Data

- Commodity Corner: Oil Declines on GDP Data

Tuesday, August 16, 2011
Rigzone Staff
by Matthew V. Veazey

The WTI and Brent contracts settled lower Tuesday after the release of a key European Union economic indicator supported a pessimistic outlook for global crude oil demand.

Light sweet crude oil for September delivery lost $1.23 to end the day at $86.65 a barrel while Brent slipped 44 cents to settle at $109.47 a barrel. Eurostat, the statistical arm of the EU, on Tuesday announced that gross domestic product throughout the bloc rose by only 0.2 percent in the second quarter. GDP growth during the first quarter was a more robust 0.8 percent; however, Eurostat pointed out that the latest second quarter figure beats that of the corresponding period in 2010 by 1.7 percent.

The WTI contract price fluctuated from $85.62 to $87.93 during Tuesday's session.

Front-month natural gas lost nine cents to settle at $3.93 per thousand cubic feet. Forecast models show milder temperatures from the Midwest to the Northeast through the remainder of this month, chilling cooling demand projections for the regions.

The September natural gas contract traded within a range from $3.90 to $4.04 Tuesday.

The price of a gallon of reformulated gasoline fell two cents to end the day at $2.85. September gasoline peaked at $2.87 and bottomed out at $2.83.

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Edge Begins Summer Drilling Program

- Edge Begins Summer Drilling Program

Tuesday, August 16, 2011
Edge Resources Inc.

Edge Resources has moved a drilling rig to the first of six wells that will be drilled as part of Edge's summer drilling program.

The first well has been spud and should be drilled, logged and cased within the next 48 hours before moving to the next location. Wet weather continues to be an issue in the area and may delay one or more of the subsequent rig moves; however, the Company has taken all necessary steps to minimize disruptions due to weather and complete a successful drilling program on or under budget.

Brad Nichol, President and CEO of Edge commented, "We are pleased to be moving a drilling rig and kicking off our summer drilling program. Work on the tie-in of additional production will continue throughout the summer, as well." Nichol added, "This drilling program means we will continue to add land and value through the drill bit but, in this low-priced natural gas environment, we are also continuing our acquisition efforts, which we hope will result in additions to the land and production base in the near future."

The Company also is pleased to announce that, as planned, Ian Thomson has stepped down as the Company's CFO and has been replaced by Nathan Steinke, effective August 1, 2011. Mr. Thomson will remain as a consultant to the Company for the foreseeable future. The Board was very pleased with Mr. Thomson's performance and is glad to support him in the future.

Nathan Steinke was formerly the CFO of Milestone Exploration Inc., a private junior oil and gas exploration, development and production company focused on growth opportunities and recently achieved production of approximately 2,800 boe/day. Mr. Steinke is a Chartered Accountant and articled in Calgary with a well known accounting firm. Mr. Steinke also worked as a field operator with Husky Energy, prior to pursuing his accounting designation.

Nichol added, "We were very pleased with Ian's work and are glad to continue our working relationship with him. Nathan is an excellent, full-time replacement that I am confident will provide shareholder value well into the future. He is pragmatic and experienced - and it is exceptional that he has hands-on field experience that is very rare for most people in his position. He is a great fit with our existing team and has contributed very quickly by playing a key role in securing our recently increased debt facilities."

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Polarcus Snags Seismic Projects in Austral-Asia

- Polarcus Snags Seismic Projects in Austral-Asia

Polarcus has received a contract award and a separate Letter of Intent from two undisclosed clients for 3D seismic acquisition projects in Austral-Asia. The projects, to be acquired back-to-back by POLARCUS ALIMA, will commence in 4Q 2011 and are expected to run from 5 to 7 months in total.

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Superior Energy Says Hello to VP of Well Control Engineering

- Superior Energy Says Hello to VP of Well Control Engineering

Tuesday, August 16, 2011
Superior Energy Services

Wild Well Control, a Superior Energy Services company, has named Kerry Girlinghouse Vice President of Well Control Engineering.

Girlinghouse has been with Wild Well Control since 2004. In his most recent position he served as a Senior Technical Advisor within the engineering division. Based in Houston, Girlinghouse will lead the engineering division, increasing his role in global well control and prevention and response services.

"Kerry has been an integral part of the success of Wild Well Control and the engineering services division. In his new role, Kerry will continue to build the engineering services we offer and maintain our commitment to fully supporting our client’s needs," said Freddy Gebhardt, President, Wild Well Control.

Girlinghouse graduated from Southeastern Louisiana State University in 1980 with a Bachelor of Science in Industrial Technology. He is a member of the Society of Petroleum Engineers, International Association of Drilling Contractors and American Association of Drilling Engineers.

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New Slope Exploration Renews Oil Tax Debate

- New Slope Exploration Renews Oil Tax Debate

Tuesday, August 16, 2011
Knight Ridder/Tribune Business News
by Sean Cockerham, Anchorage Daily News, Alaska

Gov. Sean Parnell is getting ready to renew his push to roll back Alaska's oil tax while supporters of the tax are pointing to news of increased exploration and jobs on the North Slope. The latest report getting attention from lawmakers came from Petroleum News. It reported in an Aug. 14 article that "operators on the North Slope and nearshore Beaufort Sea are preparing for what promises to be one of the busiest exploration seasons since 1969, when 33 exploration wells were drilled following the discovery of the Prudhoe Bay oil field."

Legislators opposed to Parnell's attempt to lower oil taxes forwarded the article by email with comments like "amazing news" and "great article." But advocates of lowering the tax say exploration does not necessarily mean production, and that the tax dissuades companies from investing in the development of Alaska fields instead of elsewhere in the world.

Parnell spokeswoman Sharon Leighow said Monday the governor will continue to push for lower oil taxes when the next session of the Alaska Legislature begins in Juneau in January.

Fairbanks Democratic Sen. Joe Paskvan sent a statement to the press soon after the Petroleum News article first appeared. Paskvan is among the skeptics in the state Senate who blocked Parnell's tax cut.

"It appears that Alaska's tax credits under its production tax system are working to promote capital expenditures, including new exploration wells. Good news for the industry and the state, which relies upon the industry for revenues to its treasury. Exploration should mean increased oil production and increased throughput down the pipeline," he said.

Paskvan went on to say he didn't want to be overly optimistic and wanted to learn more from the companies, but that "this is strong evidence that the independents in the oil industry are both looking at Alaska as a place to do business and that they are actually coming to Alaska to develop our abundant oil resources."

The Petroleum News reported that, if all goes as planned, as many as 28 exploration wells could be drilled between October 2011 and mid-2012. The trade industry publication cited exploration by Brooks Range Petroleum Corp., UltraStar Exploration, Repsol, Linc Energy and Great Bear Petroleum.

Leighow, the Parnell spokeswoman, on Monday sent a statement from the governor saying that such exploration is "great news" but that Alaska also needs to get a big financial investment in the currently producing fields just to maintain the existing level of flow in the trans-Alaska oil pipeline.

The flow of oil through the pipeline has been declining since 1988 and is now at about 600,000 barrels per day. Parnell has said he would like to see production up to a million barrels a day within a decade, which he figured would require a $4 billion annual investment from the companies instead of $2.5 billion now.

"If we don't see renewed investment in the legacy fields to keep production on a slow decline, any new discoveries are going to be entering a pipeline with substantially reduced throughput and, therefore, higher tariffs. We need more than new exploration to keep the pipeline full (enough) and functioning well," Parnell said.

Parnell's bill, which the Department of Revenue estimated could result in more than $8 billion in lost production tax revenue to the state over the next five years, passed the Alaska House of Representatives this spring. But state senators resisted and the bill didn't make it very far in the Senate.

Parnell's plan still has little support in the Senate. Some senators cite Alaska Department of Labor employment figures that show oil industry employment up around record levels.

The Senate Finance Committee has paid for a review of what is happening with oil employment in Alaska, including data showing nearly half the North Slope jobs go to nonresidents. The review, by the McDowell Group of Juneau, is supposed to be turned in to the Legislature in December.

Advocates for lowering Alaska's tax attribute the increased jobs to maintenance, rather than production, and say Alaska is missing out on the kind of drilling boom enjoyed by North Dakota.

Anchorage Sen. Lesil McGuire said Monday she's seeking an effective way to get some certainty that the companies would reinvest any Alaska tax reductions in the state.

McGuire said she's heard from oil companies that Alaska has a good tax structure when it comes to exploration, but that at high oil prices the state takes too big a bite from production in comparison to other places they could develop.

Senate President Gary Stevens said he's interested to see if there might be "compromise between what the governor might be thinking and what we're thinking" in the Senate.

Copyright (c) 2011, Anchorage Daily News, Alaska

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Philippines May Soon Own Vast Gas-Rich Area

- Philippines May Soon Own Vast Gas-Rich Area

Tuesday, August 16, 2011
Knight Ridder/Tribune Business News
by Cathy Yamsuan, Philippine Daily Inquirer, Manila /

The Philippines will gain 13 million hectares in additional territory, an area slightly smaller than Luzon, should the United Nations approve next year the government's claim on a region off the coast of Isabela and Aurora, Environment Secretary Ramon Jesus Paje said.

Paje said the undersea region, called Benham Rise, could turn the Philippines into a natural gas exporter because of the area's huge methane deposits.

Studies conducted by the Department of Environment and Natural Resources (DENR) for the past five years indicate large deposits of methane in solid form, Paje said after a Senate budget hearing.

The government is only awaiting a formal declaration from the UN Convention of the Law of the Sea (Unclos) that Benham Rise is on the country's continental shelf and therefore part of its territory, Paje said.

Legal basis

Once the Unclos establishes that Benham Rise is part of the Philippines, "we would have legal basis to enter into exploration agreements with private companies to explore...(the area's) resources," said Sen. Franklin Drilon, chair of the chamber's finance committee.

Drilon said a favorable Unclos declaration would mean "increasing our territory from present 30 million hectares to possibly 43 million" with the inclusion of Benham Rise.

Discussion over Benham Rise generated excitement especially after Paje said that Philippine representatives were just awaiting one more meeting "to answer questions" before a special Unclos committee.

Only claim

Paje said there was no reason for the Unclos committee not to issue a decision favorable to the country "since we are the only claimant, unlike in the western side (where the Spratly Islands are)."

"We have submitted a claim under (Unclos) sometime in late 2008. We got a reply from the UN lately (asking us) to answer some questions. They intend to pass a resolution sometime in mid-2012 to approve our claim (that it is) part of the Philippine continental shelf," Paje told reporters after the hearing.

Records showed that the Philippines officially submitted a claim with the UN Commission on the Limits of the Continental Shelf in New York on April 8, 2009.

Davide submission

Hilario Davide, then Philippine ambassador to the United Nations, filed the country's partial submission with the commission.

The United Nations says the continental shelf is "the seabed and subsoil of the submarine areas that extend beyond its territorial sea" up to 370 km (200 nautical miles) from the archipelagic baseline. An extended continental shelf goes farther than 370 km.

The Philippines claims that Benham Rise is an extension of its continental shelf.

Paje said Benham Rise was within the country's 370-km exclusive economic zone.

American geologist

The environment secretary said an American geologist surnamed Benham discovered the area that was between 40 and 2,000 meters below the waterline in 1933.

"But we are able to define categorically that it is attached to our continental shelf only recently. We have proven (to) Unclos that it is attached. So now the UN is considering it for decision sometime in 2012," Paje said.

He said gas deposits in the area would enable the country to achieve energy sufficiency.

"Benham Rise is very relevant because of its gas deposits (which has been) confirmed particularly by (the) National Mapping Resource Information Agency. It has given us the data that (the area) contains solid methane. We have not explored it but we have found nodules of methane in the surface and this is very important to us," he said.

Kalayaan, Scarborough

The Kalayaan Island Group, which is part of the disputed Spratly Islands and Scarborough Shoal, both located in the West Philippine Sea (South China Sea) and claimed by the Philippines, are also believed to contain oil and natural gas.

Paje said there was the possibility that the country could export gas in the future.

The secretary added that there would be a demand for gas deposits in Benham Rise "because it's much cleaner than (other) fossil fuels."

The DENR formally submitted its proposed P16.99-billion (US$40 million) budget for 2012 to the Senate finance committee.

Copyright (c) 2011, Philippine Daily Inquirer, Manila / Asia News Network

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Halliburton Breaks Ground at Brazil Technology Center

- Halliburton Breaks Ground at Brazil Technology Center

Tuesday, August 16, 2011
Halliburton Co.

Halliburton broke ground at the construction site of its new Technology Center at the Federal University of Rio de Janeiro (UFRJ) Technology Park, located at Ilha do Fundão, Rio de Janeiro, Brazil. The groundbreaking represents a milestone in the Cooperation Agreement signed in 2010 between Halliburton and the UFRJ for the purpose of providing research and technology development projects in Brazil.

"The Halliburton Brazil Technology Center will provide solutions and services that Halliburton can implement to accelerate deepwater field
development and to continue enhancing production from mature fields," said Tim Probert, president of Strategy and Corporate Development for Halliburton. "It is also an excellent opportunity for our company to collaborate with leading Brazilian universities and customer research centers to solve subsurface challenges in an innovative and economical manner."

The new 7,062-square-meter technology center will have three floors and include specialized laboratories, a collaboration room, a testing area, and conference and training rooms.

Halliburton has had a presence in Brazil for more than 50 years.

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TWMA Wins 1st Offshore Contract in W. Africa

- TWMA Wins 1st Offshore Contract in W. Africa

Tuesday, August 16, 2011

TWMA has won its first offshore service contract in West Africa, signifying its intention to expand its business in this important region.

The contract was awarded by AGR Petroleum Services and is worth around £1million over six months. It covers supply, installation and operation of an integrated drilling waste management solution.

TWMA will provide a range of solids control technologies to AGR for its drilling campaign in the Hyperdynamics' concession offshore the Republic of Guinea.

The drillship Jasper Explorer has been contracted by AGR, on behalf of Hyperdynamics, for this exploration project. It will leave Singapore where it is currently based for Conakry in Guinea later this month with drilling due to commence in August.

The service package, which includes cuttings dryers, centrifuges and pumps along with TWMA's field proven CCDS cuttings handling, storage and transfer system has been deployed from TWMA's facilities in Aberdeen, UK, and Egypt.

A crew of up to 15 technicians will be mobilized from Aberdeen to install the equipment on the drillship and a team will remain onboard for the duration of AGR's drill program.

Ronnie Garrick, managing director of TWMA, said, "West Africa is a priority region for our ongoing internationalization plans and this landmark contract offshore Guinea provides a basis for us to continue expanding our waste management services in the region.

"Our ability to provide a complete solids control package to AGR and deliver short mobilization times for projects worldwide sets us apart from other companies. We are delighted that AGR has chosen to work with TWMA again and look forward to this latest campaign.

"As we continue to strengthen and build relations in West Africa through a focused and dedicated resource for the region, we are confident of winning further new business for all our service lines."

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Schlumberger Unveils New Intelligent Completions System

- Schlumberger Unveils New Intelligent Completions System

Tuesday, August 16, 2011
Schlumberger Ltd.

Schlumberger announced the release of the IntelliZone Compact modular multizonal management system. The IntelliZone Compact system is the first in the industry to integrate modular components in one compact unit, which enables operators to optimize well production and reduce time to deployment.

"The streamlined process of design through assembly reduces time to deployment from the typical eight to 10 months required for conventional intelligent completions to only eight to 10 weeks," said Mike Garding, president, Schlumberger Completions. "The compact length and integrated assembly of the IntelliZone Compact system makes it easier, faster and safer to deploy. This fully integrated intelligent completions system will encourage more operators to deploy intelligent completions technology."

The IntelliZone Compact system enables multizonal production management and selective control of multiple zones. The system can be installed in up to 15 zones, using only five hydraulic control lines. A software-controlled automatic power unit allows multiple zones to be controlled simultaneously and in real time, greatly increasing selective well control capabilities.

The system components are engineered, preassembled and pre-tested to work together as a single unit, a radical shift from the individual component approach of the past. The units are delivered to the well site ready to install, right out of the box, which decreases installation rig time.

Installation complexity and cost are reduced through the hydraulic multidrop module that allows for flow control valves to be deployed on fewer hydraulic control lines than with traditional systems. The IntelliZone Compact dual-gauge station provides annulus and tubing pressure and temperature measurements as well as the absolute position of the flow control valve choke.

The system is available for a wide variety of applications:
  • brownfield wells with bypassed marginal reserves requiring zonal management,
  • wells with water cut issues, compartmentalizing long horizontal wells,
  • cost effective extended well testing,
  • commingled-flow completions to accelerate well productivity and allow back allocation and zonal control in artificially lifted wells.

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Shell NZ to Join Great South Basin JV, Seismic Program to Begin in 4Q11

- Shell NZ to Join Great South Basin JV, Seismic Program to Begin in 4Q11

Tuesday, August 16, 2011

OMV New Zealand and Shell New Zealand announced major milestones for the Great South Basin joint venture, with the addition of Shell into the venture and confirmation that a comprehensive 3D seismic program will begin later this year on Permits 50119 and 50120. Permit 50121 will be returned to the Crown.

Subject to ministerial approval, under the new joint venture agreement Shell, a world leader in deep water exploration and production with a 100 year history in New Zealand, will take a 50% share while the existing joint venture partners OMV and PTTEP retain 18% each and Mitsui Australia retains 14%.

OMV New Zealand will remain operator of the Great South Basin permits until the end of the seismic acquisition program which is expected to be completed in early 2012. The 3D program itself will be undertaken by the state of-the-art vessel Polarcus Alima and is expected to cover about 3,000 km2.

Shell will become the joint venture's operator once the seismic acquisition program is completed.

"We are very pleased to announce these developments which we believe clearly demonstrate the joint venture's commitment to the Great South Basin. It is important to be geared up for the next steps in the exploration of a frontier basin," said OMV New Zealand Managing Director Peter Zeilinger.

"We have allocated significant manpower to studying the Great South Basin over the past four years and invested over NZ$50 million to date. The joint venture is now committing to an additional significant investment for the next phase of the project," he said.

In late 2010 OMV and its joint venture partners began an in-depth review of their planning for the Great South Basin. As part of that assessment, the joint venture identified the need for an additional partner with considerable deep water experience and best practice exploration and operating processes.

OMV New Zealand

"We undertook a detailed evaluation of several companies who could meet these tests. Shell's proven track record as an internationally experienced deep water operator with high safety and environmental standards made them the logical partner of choice," Mr. Zeilinger said.

Shell brings valuable technical expertise to the joint venture from safely delivering more than 20 groundbreaking deepwater projects around the globe. Shell's membership in the Great South Basin joint venture builds on its continuing investment in Taranaki, where it is a joint venture partner in the Maui, Kapuni and Pohokura fields.

Chairman Shell Companies in New Zealand Rob Jager said the new Great South Basin venture reflected Shell's continuing commitment to exploration and production in New Zealand.

"Shell has been investing in New Zealand for more than 100 years and safely operating offshore for more than 30 years in the challenging conditions off the coast of Taranaki. We have been impressed by the work of the joint venture to date, and see this as an exciting opportunity to bring our local and global experience to another promising region," he said.

Exploring a new frontier area is very much a long term process, Mr. Zeilinger explained.

"There are no guarantees that drilling will take place, but we are hopeful that the seismic survey will yield positive results. Our focus right now is on carrying out a robust survey," he said.

Mr. Jager said that as the new joint venture partner and future operator Shell is looking forward to working with OMV on the next stage of the project.

"Safety comes first for Shell. We have a Goal Zero operating philosophy which demands no harm to people and protect the environment. Another top priority is to get to know the local stakeholders better so that we have a strong understanding of their views and a positive foundation for continuing engagement over the coming years," he said.

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Entek Flows Rates of 9.5 MMcfd at GA A133 Discovery

- Entek Flows Rates of 9.5 MMcfd at GA A133 Discovery

Tuesday, August 16, 2011
Entek Energy Ltd.

Entek announced the development of its GA A133 gas discovery, made in 2010, has been completed and gas is flowing at the planned 9.5 MMcfd on restriction. At current gas prices this should net Entek around US $250,000 per month. Entek has a 38% working interest in the block which is operated by Peregrine Oil & Gas II, LLC.

The GA A133 block has gross reserves of approximately 10 BCF associated with the recent discovery, with additional reserves linked to previous gas discovered on the block to be targeted at a later date.

Due to proximity to analogue production the GA A133 discovery well was not tested. This is common practice in the Gulf of Mexico where numerous existing producing analogues give a high level of confidence. The well is performing as predicted based on wireline log interpretation and correlation with offset analogue production.

For the same reason the Company did not flow test its recent oil discovery in VR 342. In this case analogue studies based on numerous existing producing analogues (performed independently on Entek's request) suggest potential flow rates of 500-1000 BOPD with minimal decline for the first 3-4 years.

Development planning is currently underway for the VR 342 oil discovery based on the flow rates described above and the independently certified gross reserves of circa 7.5 MMBO (1P 2.5 MMbo; 2P 4.8 MMbo; 3P 7.5 MMbo) and 9.5 Bcfg (1P 3.8 Bcfg; 2P 6.3 Bcfg; 3P 9.5 Bcfg) or 9.1 MMboe.

Additional wells are expected to be drilled in first half of 2012. First oil production is anticipated in 3Q 2012. Entek has 50% working interest in the VR 342 block.

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Candax Resumes Production at Robbana Field

- Candax Resumes Production at Robbana Field

Tuesday, August 16, 2011
Candax Energy Inc.

Candax has resumed production from its Robbana field onshore Tunisia.

As disclosed on March 18, 2011 and March 29, 2011, Candax initiated a workover of the existing Robbana-1 well following very positive results from an independent reservoir study. Pressure data obtained in March during the first phase of the workover were significantly better than expected, indicating very significant volumes of fluids connected to the well of approximately 27 million barrels. The Company then expected to stimulate the well before resuming production, however stimulation was not possible in the current configuration of the well and it was decided to resume production with the existing completion.

Production resumed in early August and the pumping parameters are still being adjusted. The current production of 20 bopd, although low and below the well's theoretical capacity, makes the well economic at the current oil price and is similar to the production experienced before the well was shut-in in 2009.

Candax is now accelerating the design of a full field development plan, which will include the drilling of several wells, the implementation of a waterflooding program and potentially the stimulation of the Robbana-1 well to access the full potential of that well.

Pascal Mirville, COO, stated, "We are pleased by the resumption of the production at the Robbana-1 well and are excited by the untapped potential of the field, with indications that the recoverable volumes may approach 9 million barrels (80% to Candax). We are now dedicating significant resources to the design of the development plan of the field and we expect the first wells to be drilled in the first quarter of 2012, or even earlier depending on rig availability and mobilization."

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Rockwell Awarded $4 Million Order from Grizzly Oil Sands

- Rockwell Awarded $4 Million Order from Grizzly Oil Sands

Aug 16, 2011

Grizzly Oil Sands, and independent oil sands company, has awarded a $4 million order to Rockwell (NYSE:ROK) and its Global Solutions team.

Global Solutions will use the company's PlantPax process automation system to help Grizzly produce more than 5,000 barrels of oil per day at the first phase of its Algar Lake Project.

The solution supports steam-assisted gravity drainage, an enhanced oil recovery technology for producing heavy crude oil and bitumen.

Rockwell Automation is currently below its 50-day moving average (MA) of $77.93 and below its 200-day MA of $79.74.

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NRG Energy Inc. To Purchase Energy Plus

- NRG Energy Inc. To Purchase Energy Plus

Aug 16, 2011

NRG Energy Inc. (NYSE:NRG) plans to purchase a Philadelphia retail electricity and natural-gas provider for $190 million in cash.

Based in Princeton, New Jersey NRG announced Tuesday that acquiring Energy Plus Holdings LLC would give the company an opportunity to widen its retail business in the Northeast.

The deal requires regulatory approvals from the Justice Department and the Federal Energy Regulatory Commission. It is expected to close in October.

NRG Energy (NYSE:NRG) has a potential upside of 21.1% based on a current price of $22.57 and an average consensus analyst price target of $27.33.

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Serimax Clinches Welding Contract for Subsea 7 in Brazil

- Serimax Clinches Welding Contract for Subsea 7 in Brazil

Tuesday, August 16, 2011

Serimax, a 100% subsidiary of Vallourec, has been awarded the welding contract for the Gas Sul North Capixaba (GSNC) project by Subsea 7 in Brazil.

Serimax will provide welding services on 151km of 18" sour service pipeline, which will run parallel to the Brazilian coast and links the Camarupim Field gas pipeline to the Parque des Baleias complex.

The project management will be run from Serimax's Brazilian facility, with welder performance qualification taking place in Houston and offshore installation onboard the vessel Polaris scheduled to start in November and completed toward the end of February 2012.

Mickael Dolou, Serimax's Brazil area manager, said, "Winning this award is a reflection of the commitment we have made to establishing Serimax as the leading welding contractor for the export/shallow water pipeline market in Brasil and South America.

"We have invested in infrastructure and manpower to offer clients extensive local contact both pre and post project, and hope that our quality of service and strong commitment for continuous improvement will open up further opportunities to work with Subsea 7."

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Shell: Gannet Alpha Pipe Leaked in Two Places, From Same Source

- Shell: Gannet Alpha Pipe Leaked in Two Places, From Same Source

Tuesday, August 16, 2011
Dow Jones Newswires
by Alexis Flynn

Two leaks have occurred on an undersea pipeline at Shell's Gannet Alpha platform in recent days, the Anglo-Dutch major confirmed Tuesday, but said it believed both come from the same initial source.

"The leak source remains the same. The initial release path was stopped on Thursday, however the oil found a second pathway to the sea," Shell said in a statement.

"We believe now that the flow is coming from a relief valve adjacent to the original leak and from the same source," said Shell. "Once we've confirmed this we will then develop a series of mitigation options to stop this leak. There is no new leak."

Shell said Monday it estimates 216 metric tons, or 1,300 barrels, of oil has already spilled into the sea. This would make the spill the U.K.'s largest since 2000.

Earlier Tuesday, a senior Shell executive was cited by local media as saying a second leak is continuing to spill crude into the North Sea after the main leak discovered last Wednesday was effectively stemmed.

Shell said the second leak took longer to find because of its awkward position "amid complex subsea infrastructure."

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

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Chevron Lines Up Atwood Semisub

- Chevron Lines Up Atwood Semisub

Tuesday, August 16, 2011
Atwood Oceanics Inc.

Atwood Oceanics announced that one of its subsidiaries has been awarded a six month contract by Chevron Australia Pty. Ltd. for the Atwood Eagle. With this contract, the firm contractual commitments for the Atwood Eagle are expected to extend through July 2012. The day rate will be approximately $370,000.

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CB&I Awarded Contract for AU Arrow LNG Proj.

- CB&I Awarded Contract for AU Arrow LNG Proj.

Tuesday, August 16, 2011

CB&I has been awarded, through its joint venture with Chiyoda Corporation and Saipem S.p.A., the Preparation and Supply of the Project Specification contract for the Arrow LNG Plant Project in Australia.

Arrow Energy Pty Ltd., the project operator, is a 50/50 joint venture partnered by Royal Dutch Shell and PetroChina.

The project, which will be designed with a production capacity of 8 million tonnes per annum (4.0 MTPA x 2 trains), is planned to be constructed on Curtis Island, off the coast of Gladstone, on the east coast of Queensland, Australia. The project plans to expand its capacity up to 16 MTPA in the future. The LNG plant will be supplied with coal seam gas from the Surat and Bowen basins in Queensland and will process, treat and liquefy the gas for export.

"We are pleased to be selected for this significant project, which will help meet the world's demand for clean energy," said Philip K. Asherman, President and CEO. "This award builds on our proven worldwide LNG technical expertise and our 75-year history in Australia."

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Imperial: Sidetrack Operations Underway at Green Tide SWDF

- Imperial: Sidetrack Operations Underway at Green Tide SWDF

Tuesday, August 16, 2011
Imperial Resources Inc.

Imperial Resources announced that the sidetrack operation to deepen the disposal well at the Company's Green Tide Salt Water Disposal Facility ("SWDF") is underway and on track.

Operations are progressing well and costs are generally as anticipated. A whipstock was set and a window milled in the casing at approximately 2,865 feet. The sidetrack was initiated as expected and the new well bore drilled ahead, turning to 3 degrees from vertical, so as to establish a clear separation from the existing hole.

The drilling program is designed to establish a horizontal separation of approximately 100 feet from the lower section of the redundant well bore after turning vertical. As of 18:30 hours on August 15, 2011 the well was at 3,552 feet drilling ahead toward the target formation at a rate of approximately 30 feet per hour with the aim of casing the bottom 1,000 feet of the well to at least 500 feet into the Ellenburger formation. The well is then expected to be drilled ahead by a large workover rig to ideally create about 2,000 feet of open hole exposure in the Ellenburger so as to maximize disposal capacity.

Subject to success, commercial disposal operations are expected to start immediately targeting full disposal capacity of 15,000 barrels per day as quickly as possible. At full capacity, the Company believes the Green Tide SWDF has the potential to generate significant cash flow at relatively low operating costs.

Tom Barr, Director of Imperial, commented, "I am delighted that Imperial's rigorous approach to the sidetrack has been vindicated and this phase of the well deepening operation appears to be successful. Once drilling is complete our aim is to deliver a best-in-class disposal business to service the strong demand in the immediate area."

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EMAS AMC, Chevron Cement Installation Services Deal

- EMAS AMC, Chevron Cement Installation Services Deal

Tuesday, August 16, 2011

EMAS and operating brand for Ezra continues to boost its orderbook of marine and/or offshore construction contracts. The latest contract win was awarded to EMAS AMC, the Group's offshore construction division, by Chevron Thailand Exploration and Production Ltd, Chevron Offshore (Thailand) Ltd and Chevron Pattani Ltd (collectively, "Chevron Thailand").

This award will see EMAS AMC installing a number of wellhead platforms and associated pipelines in the Gulf of Thailand. This project is expected to commence in early 2012 for a three year firm period (2012 – 2014) with an option period for an additional two years (2015 – 2016), which in aggregate is estimated to increase the orderbook for EMAS AMC to over US $600 million.

Mr. Lionel Lee, EMAS's Managing Director, said, "This award is an important milestone for us and reaffirms the growing relationship that we have with Chevron in the Asia Pacific region."

"The total subsea orderbook for EMAS AMC is now past the halfway mark and is closer to our short-term target of US $1 billion for the segment. EMAS AMC is moving steadily closer towards becoming fully integrated within the EMAS Group and the combined entity will propel us towards our objective of being a global leader in marine and offshore construction."

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Drilling Commenced at Sunwing's 1st Mongolian Exploration Well

- Drilling Commenced at Sunwing's 1st Mongolian Exploration Well

Tuesday, August 16, 2011
Ivanhoe Energy Inc.

Ivanhoe and Sunwing announced that N16-1E-1A, Sunwing's first exploration well on its Nyalga Block XVI in Mongolia, spudded Saturday, August 13. As of Tuesday, the well has been drilled to 437m and surface casing has been run and cemented.

"This is an important step in our exploration program in Mongolia," said David Dyck, President and COO of Ivanhoe. "Given the results of our 2D seismic study, we are optimistic of the potential to discover oil resources in Mongolia."

The well is located on a structure approximately 32 km2 in size and will be drilled to a total depth of approximately 2500m. The well is being drilled by the Daqing Exploration Company and drilling of the well will take approximately 30 days, with completion and testing to be carried out as required. The Company intends to drill two wells on two separate structures, with the option to drill up to three additional wells in this initial exploratory program.

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VAALCO Brings Granite Wash Well Online

- VAALCO Brings Granite Wash Well Online

Tuesday, August 16, 2011
VAALCO Energy Inc.

VAALCO announced first production from its successful exploration well drilled in Hemphill County, Texas in the Granite Wash formation. The Hefley 90-01H well was drilled during June and July 2011 with fracturing operations completed earlier this month. Initial production rates during the flowback period were 11 MMcfpd and 175 barrels of condensate per day.

Robert Gerry, Chairman and CEO, commented, "We are excited to report the success of our first well drilled in our recently acquired shale play portfolio. Initial production rates are in-line with our expectations and we have staked out a site for the second well to be drilled on the lease. In addition, VAALCO is developing plans for drilling additional wells on the Granite Wash formation properties in Texas as well as the Bakken formation properties in Montana."

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Statoil Submits Gas Compression Plan to Ramp Asgard Volumes

- Statoil Submits Gas Compression Plan to Ramp Asgard Volumes

Tuesday, August 16, 2011

The partners in the Åsgard licenses have submitted a plan for development and operation (PDO) of subsea gas compression to maintain production from the Mikkel and Midgard reservoirs.

Øystein Michelsen, Statoil's executive vice president for Development and Production Norway (DPN), presented the PDO to Ola Borten Moe, Norway's minister for petroleum and energy.

"The decision to improve recovery from Åsgard is one of the most important we are taking this year to sustain output on the Norwegian continental shelf," said Michelsen.

"This solution has been made possible through an innovative partnership on the Åsgard license."

The PDO represents a quantum leap in technological terms, which could contribute to a substantial boost in recovery factor and production life for a number of gas fields.

Subsea compression on Åsgard is expected to improve recovery from the Mikkel and Midgard fields by some 278 million barrels of oil equivalent.

That makes the project one of the most important contributors to new volumes, and provides future opportunities for improved recovery from a number of fields.

Quantum leap

Natural pressure in Midgard and Mikkel will become too low over time to maintain stable flow and a high production profile from the Åsgard B platform in the Norwegian Sea.

To compensate for this decline, Statoil intends to install seabed compressors near the wellheads and so increase the pressure. Wellstreams will be piped in a common line to Åsgard B.

"This represents a quantum leap in subsea technology, and an important step in realizing our vision of a complete underwater plant," said Margareth Øvrum, Statoil's executive vice president for Technology, Projects and Drilling.

"The technology has a substantial potential for improving recovery," she added, and emphasized that it is important for future field development in deep water and Arctic regions.

"Testing and qualifying new solutions is vital to the success of our technological developments," Øvrum noted. "We have already come a long way, but know that the remaining stretch will be a demanding one.

"Developing technology is always challenging, but we have surmounted technological obstacles before and are confident that we will succeed in doing so again on Åsgard together with our partners."

She adds that substantial synergy exists between technological qualification on Åsgard and the work being done by Statoil together with operator Shell on the Ormen Lange gas field.

Åsgard's bright future

Åsgard is a crucial hub on the Halten Bank and a key factor in the Norwegian Sea. Subsea compression from Mikkel and Midgard will safeguard future production from the field, said Michelsen.

Statoil is working continuously on other measures to improve recovery in the same area – including reducing processing pressure, drilling and maintaining wells, and applying innovative solutions.

Åsgard is an important hub in a prospective area, and spare processing capacity which becomes available in its facilities can also be offered to others.

"Our vision is a field which is still producing in 2050 with a recovery factor among the best in the world," said Michelsen.

The subsea compression development will also expand capacity in the Åsgard Transport pipeline, which carries gas from Norwegian Sea installations to the Kårstø plant north of Stavanger.

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Iraq Oil Ministry: Shell, Iraq Gas JV to Produce 2 Bcfpd

- Iraq Oil Ministry: Shell, Iraq Gas JV to Produce 2 Bcfpd

Tuesday, August 16, 2011
Dow Jones Newswires
by Hassan Hafidh

Iraq's gas deal with Shell to capture and exploit associated gas from its giant southern oil fields is expected to produce two billion cubic feet a day, according to an official agreement summary obtained by Dow Jones Newswires Tuesday.

The Iraqi oil ministry signed in July a final draft deal with Shell and Japan's Mitsubishi to develop gas production in southern Iraq. However, in order to become valid the deal still needs approval from the Baghdad government.

The two sides disclosed few details about the agreement when they signed it in July.

The investment required for the 25-year venture--in which Baghdad has 51%, Shell 44% and Mitsubishi 5%--is $17.2 billion instead of the previously announced $12 billion, the document said.

It said some $12.8 billion would be spent on rehabilitation of existing infrastructure and building new ones, while an additional $4.4 billion is required for an liquefied natural gas facility to be built by Shell and Mitsubishi.

The joint venture, called the Basra Gas Company, or BGC, initially would deliver gas to Iraq's domestic market to fuel-starved Iraqi power plants, but would then export the extra gas after meeting local need. The planned LNG terminal would handle the export of 600 million cubic feet a day.

Baghdad needs to contribute $5.236 billion in the venture, some $1.524 billion of which is existing infrastructure. While Shell and Mitsubishi need to contribute nearly $7 billion, and the remaining money will be financed through the venture's returns, according to the summary submitted by Iraq's oil ministry to the country's parliament.

Shell and Mitsubishi are also offering an optional loan of $1 billion to the Iraqi side in the venture, it added.

The joint venture would sell produced gas to Iraq's state South Gas Company, or SGC, at international standard pricing. The crude and gas linked pricing formula in the agreement summary implies that, at Brent price of $75 a barrel, the BGC joint venture would get $3.22 per million British thermal units of dry gas sold to SGC.

But the SGC would have to sell the gas it buys back from the joint venture at just $1.04/mmbtu to Iraqi power plants and industry, meaning the SGC would pay huge subsidies, which would further increase if world's gas prices rise.

Iraq estimates, however, it should still make around $31.1 billion over the 25 years of the project from taxes, fees and the raw gas sales to the joint venture, the document said.

The BGC would use Shell technology to gather and process gas from the giant southern oil fields of Rumaila, West Qurna Phase 1 and Zubair.

Iraq, which has natural gas reserves totaling 112.6 trillion cubic feet, the tenth largest in the world, produces only around 1.5 billion cubic feet a day, with half of that amount is being flared daily, because of lack of infrastructure to produce and market the gas.

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

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Heritage Bumps Production at Russian Field

- Heritage Bumps Production at Russian Field

Tuesday, August 16, 2011
Heritage Oil plc

Heritage announced that the drilling and testing of horizontal well 363 has been completed in the Zapadno Chumpasskoye Field in Russia, resulting in a significant increase in production.

  • Production from the field has increased from 431 bopd in the first quarter to a current level of c.1,600 bopd
  • Oil is light gravity (39˚ API) and sweet
  • The well tested at rates of up to 1,405 bopd and is currently producing 1,205 bopd
  • Maximum well potential calculated to be 2,365 bopd
  • Further horizontal drilling is planned with the next well scheduled to spud in the fourth quarter

Heritage announced the drilling and testing of the first horizontal well in the Zapadno Chumpasskoye Field has completed and results have exceeded pre-drill expectations. Production from the field is currently c.1,600 bopd, which is a significant increase on the level achieved in the first quarter of 431 bopd.

Well 363 is currently producing at a controlled rate of 1,205 bopd. During the flow test, the well produced at rates of up to 1,405 bopd and the well potential has been calculated to be 2,365 bopd. Currently, we plan to drill a further horizontal well in the field in the fourth quarter.

Historical development of this reservoir throughout the region has been through conventional drilling on a grid pattern. Heritage recognized a potential opportunity to improve the efficiency and economics of field development by utilizing horizontal drilling technology, thus decreasing the number of wells and the total cost required to develop the field while potentially improving recovery. The previous reserves review and development plan undertaken by RPS Energy in June 2009 will be updated in due course incorporating the results of well 363 and management expect these results will increase the valuation of the field.

Tony Buckingham, Chief Executive Officer, commented, "We are delighted that the first horizontal well drilled on the field has surpassed our expectations and provided a step change in our production levels. This is the fourth well we have drilled on the license and its success indicates this is the best technique to optimize development of the field. We look forward to further increases in production with the next horizontal well scheduled to spud in the fourth quarter."

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JinkoSolar Holding Reported In Line Q2 EPS

- JinkoSolar Holding Reported In Line Q2 EPS

Aug 16, 2011

JinkoSolar Holding (NYSE:JKS) reported Q2 EPS of $1.38, in line with consensus estimates. Revenues for the quarter rose 152% year-over-year to $350.6 million, topping consensus estimates of $320.3 million.

The company sees Q3 revenues of $310 to $330 million, vs. consensus estimates of $343.13 million, with shipments of about 230 to 250 MW. For 2011, JinkoSolar sees revenues of $1.4 to $1.5 billion, vs. consensus estimates of $1.36 billion, with shipments of 950 to 1k MW.

Mr. Kangping Chen, JinkoSolar's chief executive officer said, "We are pleased to announce the second quarter results that came in ahead of our expectations, despite the challenging market environment. During the quarter, we exceeded our shipment and revenue guidance, and were able to maintain relatively healthy margins as a result of further improvements to our cost structure. The healthy growth is a testament to our ability to capitalize on our brand name and maintain the strong relationships we have built with our existing customers across the globe."

JinkoSolar has a potential upside of 81.2% based on a current price of $16.76 and an average consensus analyst price target of $30.37.

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Statoil Boosts Estimates at N. Sea Find

- Statoil Boosts Estimates at N. Sea Find

Tuesday, August 16, 2011

Communication between the Aldous and Avaldsnes oil discoveries in the North Sea has now been confirmed. In combination these discoveries may represent an oil structure of between 500 million and 1.2 billion barrels of recoverable oil equivalent.

If the upper part of the interval strikes pay dirt, the discovery will be one of the ten largest oil finds ever on the Norwegian continental shelf (NCS). Statoil has a 40% stake both in license PL 265, where Aldous was discovered, and in PL 501, where the Avaldsnes discovery was made.

"Aldous/Avaldsnes is a giant oil discovery, and according to our estimates the combined discovery may make the top 10 list of NCS oil discoveries. Norway has not seen a similar oil discovery since the mid-eighties," said Tim Dodson, Statoil's executive vice president for Exploration.

This is the third "high-impact discovery" for Statoil as an operator in 2011. In April of this year the 250 million barrel Skrugard oil discovery was made in the Barents Sea, and the 150-300 million barrel Peregrino South oil field was discovered offshore Brazil.

"The discoveries are a result of Statoil's exploration strategy of prioritizing high-impact opportunities, while focusing on our established core areas," said Dodson.

As the company announced on August 8, a minimum 65-meter oil column has been confirmed in Aldous Major South well 16/2-8 in the North Sea. The discovery was made in Jurassic sandstone in a very good quality reservoir consisting of coarse-grained, unconsolidated sand.

The well has also established common oil/water contact between the Aldous and Avaldsnes structures, and according to preliminary estimates the combined discovery in the two licenses (PL 265 and PL 501) totals between 500 million and 1.2 billion barrels of recoverable oil equivalent. Between 200 and 400 million barrels of these resources have been discovered in well 16/2-8, with strong indications from well data of another 200 to 400 million barrels of recoverable oil equivalent in the same structure, whereas a resource base of 100 to 400 barrels previously has been estimated in the Avaldsnes structure (PL 501).

The well was drilled by the Transocean Leader drilling rig, which soon will spud Aldous Major North well 16/2-9 (PL265) to clarify the further potential and any communication with Aldous/Avaldsnes. In addition the partners plan further appraisal drilling in license PL 265 next year to clarify the full volume potential for a future development solution.

"As we said at the Capital Market Day event in New York in June, the NCS is a world-class petroleum province. The Aldous/Avaldsnes discoveries are evidence that the NCS is still attractive. Making a discovery of this size in a mature area shows that exploration is all about perseverance, creativity and obtaining new knowledge," said Dodson.

Aldous Major South is located in license 265. Statoil is the operator and has a 40% interest. The other partners are Petoro (30%), Det norske oljeselskap (20%) and Lundin (10%).

Avaldsnes is located in license 501. Lundin is the operator and has a 40% interest, whereas partners Statoil and Mærsk have 40% and 20% interests, respectively.

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Total Awarded Tanzania Tanganyika O&G Rights -TPDC

- Total Awarded Tanzania Tanganyika O&G Rights -TPDC

Tuesday, August 16, 2011
Dow Jones Newswires
by Nicholas Bariyo

Tanzania's state oil company, Tanzania Petroleum Development Corp., has awarded rights to explore for oil and gas in its Lake Tanganyika Rift Basin to France's Total E&P Activities Petrolieres, with further negotiations and details on a production sharing agreement to follow, TPDC announced Tuesday.

"Total has shown itself to be able to comply with the minimum work commitment and has superior technical as well as financial capability over the other bidders to undertake exploration in the Lake Tanganyika North area," TPDC said. Total beat at least four other companies.

The Lake Tanganyika Rift Basin is part of the western arm of the East African rift valley, where at least a billion barrels of oil have been discovered in neighboring Uganda.

The Lake Tanganyika rift basin is divided into two blocks. Total will operate the northern block. The Southern block was awarded to Australia's Beach Energy in 2008.

Next year, Tanzania will open another bidding round for at least 13 blocks sitting between 1,200 meters and 3,500 meters of water depth off its coast in the Indian Ocean.

However, in recent months, licensing and exploration activities off the Tanzanian coast have been overshadowed by disputes between mainland Tanzania and the semi-autonomous archipelago of Zanzibar over the control of oil and gas in around five blocks near the isles.

Currently, Tanzania has licensed 12 deepwater blocks and recent exploration works have encountered at least 7.5 trillion cubic feet of natural gas. The country is yet to discover commercial oil reserves.

At the moment, there are no production projections Tanganyika project since no discoveries have been made, and formal exploration has yet to commence.

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

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