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Oil and Gas Energy News Update

Friday, August 26, 2011

Oil & Gas Post - All News Report for Friday, August 26, 2011

Friday, August 26, 2011


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Commodity Corner: Ben, Irene Contribute to Volatility

- Commodity Corner: Ben, Irene Contribute to Volatility

Friday, August 26, 2011
Rigzone Staff
by Matthew V. Veazey

The price of a barrel of light sweet crude oil experienced some volatility Friday before settling at $85.37, or just seven cents day-on-day.

The WTI fell as low as $82.95 after Federal Reserve Chairman Ben Bernanke, speaking at a symposium in Jackson Hole, Wyo., did not announce any Fed plans to launch a third round of quantitative easing. A "QE3" would be bullish for oil and other commodities because it would weaken the U.S. dollar.

Hurricane Irene's pending arrival along the East Coast did create upward momentum for the benchmark, however. The WTI peaked at $85.64 as investors weighed the possible effects the storm may have on refining infrastructure and gasoline supplies in the Mid-Atlantic and Northeast.

The Brent contract price also settled higher Friday, gaining 74 cents to end the day at $111.36 a barrel. It traded within a range from $109.38 to $111.65.

Despite Irene's potential impact on East Coast fuel supplies, reformulated gasoline lost four cents to settle at $2.93 a gallon. The U.S. Coast Guard's lack of a decision during floor trading to close New York Harbor prevented a bullish outcome Friday.

September gasoline peaked at $2.98 and bottomed out at $2.91 during the pre-storm session.

Natural gas for September delivery settled flat at $3.93 per thousand cubic feet. It fluctuated from $3.90 to $3.96.

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GAO: More Action Needed to Secure Maritime Energy Supply

- GAO: More Action Needed to Secure Maritime Energy Supply

Friday, August 26, 2011
Rigzone Staff
by Karen Boman

The Coast Guard and the Federal Bureau of Investigation (FBI) have made progress implementing prior recommendations made by the U.S. General Accountability Office (GAO) to enhance energy tanker security, but further action is needed to secure maritime energy supply, GAO said in an Aug. 24 report.

GAO in 2007 made five recommendations to ensure effective response by federal agencies to protect tankers and implement response plans. Two recommendations have been implemented, including the development of protocols by the Coast Guard and U.S. Customs and Border Protection to facilitate the recovery and resumption of trade following a disruption to the maritime transportation system. The Coast and the FBI have participated in local port exercises that executed multiple response plans simultaneously.

The Coast Guard also has made progress on a third recommendation through work on a national strategy for the security of certain dangerous cargoes. The Coast Guard plans to develop a resource allocation plan, starting in April 2012, which may help address the need to balance security responsibilities.

"However, the Coast Guard and the FBI have not yet taken action on a fourth recommendation to develop an operational plan to integrate the national spill and terrorism response plans," GAO reported.

The Department of Homeland Security (DHS) plans to revise the National Response Framework, but no decision has been made regarding whether the separate response plans will be integrated. DHS also has not yet taken action on the final recommendation to develop explicit performance measures for emergency response capabilities and use them in risk-based analyses to set priorities for acquiring needed response resources. According to DHS, it is revising its emergency response grant programs, but does not have specific plans to develop performance measures as part of this effort.

While the Coast Guard has taken steps to assess the security risks to offshore infrastructure, including Outer Continental Shelf (OCS) facilities and deepwater ports, the agency faces complex and technical challenges in assessing risks. The Coast Guard has used its Maritime Security Risk Analysis Model (MSRAM) to examine security risks to offshore facilities, but does not have the data on the ability of an OCS facility to withstand an attack.

GAO has determined that as of May 2011, the Coast Guard had not assessed security risks for 12 of the 50 security-regulated OCS facilities that are to be subjected to such assessments. Coast Guard officials later added these facilities to MSRAM for assessment and have completed the required assessments. However, current Coast Guard policies and procedures do not call for Coast Guard officials to provide an annual updated list for regulated OCS facilities to MSRAM analysts.

"Given the continuing threat to such offshore facilities, revising its procedures could help ensure that the Coast Guard carries out its risk assessment requirements for security-regulated OCS facilities," GAO said.

Stephen L. Caldwell, director on Homeland Security and Justice Issues, testified before the House of Representatives in Houston on Aug. 24 that Al-Qa'ida and other groups with malevolent intent continue to target energy tankers and offshore energy infrastructure because of their important to the nation's economy and national security.

In May of this year, DHS reported that intelligence information showed that; throughout 2010, there was continuing interests by members of al-Qa'ida in targeting oil tankers and commercial oil infrastructure at sea. "While a terrorist attack on energy tankers or offshore energy infrastructure has not occurred in the United States, other countries have experienced such attacks."

While the Deepwater Horizon incident in April 2010 was not the result of an attack, it showed that the "consequences of an incident on offshore energy infrastructure could be significant."

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The Spin on Changing Marcellus Gas Estimates

- The Spin on Changing Marcellus Gas Estimates

Friday, August 26, 2011
The Philadelphia Inquirer
by Andrew Maykuth

So how much natural gas is in the Marcellus Shale?

The U.S. Geologic Survey on Tuesday estimated the formation contains 84 trillion cubic feet (Tcf) of natural gas, up from a mere 2 Tcf in 2002. Headlines exploded across the Internet: "Federal report boosts Marcellus Shale estimate."

But on Wednesday another federal agency, the U.S. Energy Information Administration, which just a month ago estimated the shale contained 410 Tcf, announced it was revising its number downward in response to the USGS estimate. New headlines: "U.S. Slashes Marcellus Shale Gas Estimate 80%."

Up? Down?

For adversaries in the increasingly politicized and polarized world of shale gas, the USGS's new assessment cuts both ways.

Anti-drilling activists said the EIA's downward revision supported their view that the industry has hyped the new discoveries to generate political and investor excitement.

"I remain concerned about the processes which lead to the original estimates, and I have additional questions about how this change will impact the outlook for shale gas," U.S. Rep. Maurice Hinchey (D., N.Y.) said in a statement.

But the Marcellus Shale Coalition, an industry trade group, touted the USGS's upward revision as further proof of the abundance of shale gas.

The issue is important because of the growing controversy about shale gas, which the EIA says accounts for about a quarter of the nation's natural gas production. The nation consumes about 25 Tcf a year, mostly for heating and power production.

The Securities and Exchange Commission and the New York State Attorney General's Office are investigating industry estimates of gas reserves, which are more optimistic than the federal projections.

Indeed, during recent sessions with investment analysts, four big Marcellus operators -- Chesapeake Energy Corp., Range Resources Corp., Ultra Resources Inc., and Cabot Oil & Gas Corp. -- estimated their combined 2.9 million acres contain 76 Tcf, nearly as much as the USGS estimates for the entire formation.

The EIA says it is waiting to set its estimate once the USGS provides more information about its assessment to understand where the agencies diverge. "We will not be able to be more precise until that work is completed," said Jonathan Cogan, an administration spokesman.

Even at 84 Tcf, the Marcellus still contains a lot of gas, more than any of other shale-gas plays, according to the USGS.

Just three years ago, Pennsylvania State University professor Terry Engelder and a colleague, Gary Lash, estimated the Marcellus Shale could contain as much as 50 trillion cubic feet of recoverable gas, a number so astonishing that it triggered a land rush.

Engelder later increased his estimate to 363 Tcf and then nearly 450 Tcf, based upon actual production data.

The Marcellus Shale Coalition argues that the USGS numbers are low because its methodology discounts undeveloped parts of the shale.

"Hence, during early development of a gas shale play when there is very little production data anyway, the USGS numbers will be commensurately low as is the case now," said Travis Windle, a coalition spokesman.

USGS says there are many reasons that assessments might disagree -- the use of different data, or proprietary information. Doug Duncan, associate program coordinator of the USGS's energy resources program, said the agency only makes its assessment after observing reliable production data over at least a 30-month period.

"We don't have a preconceived idea about what kind of answer we want to get," he said. "We try to get it right."

Without mentioning other estimates, the USGS asserted its primacy on the issue in its announcement Tuesday.

"USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources of onshore lands and offshore state waters," it said.

Copyright (c) 2011 The Philadelphia Inquirer

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Cooper Subsidiary Enters Farm-In Agreement for Romania Stake

- Cooper Subsidiary Enters Farm-In Agreement for Romania Stake

Friday, August 26, 2011
Cooper Energy Ltd.

Cooper announced that its wholly owned subsidiary, CE Bobocu Pty Ltd (CE Bobocu), has entered into a staged farm-in agreement with Zeta Petroleum (Romania) SRL (Zeta), a wholly owned subsidiary of Zeta Petroleum Limited (UK) (Zeta Petroleum), to earn up to a 50% interest in the Bobocu Gas Field on-shore Romania (Farm-in Agreement).

The Bobocu Gas Field is described in Cooper Energy's announcement of August 2, 2010.

The Farm-in Agreement replaces the Share Subscription Agreement and Joint Study and Bidding Agreement between Cooper Energy and Zeta Petroleum announced by Cooper Energy on August 2, 2010.

Subject to the satisfaction of certain conditions to the proposed acquisition by Key Petroleum Limited (Key) of all of the shares in Zeta Petroleum, the existing shareholding of Cooper Energy in Zeta Petroleum will be exchanged for Key shares.

The Farm-in Agreement is conditional on various matters, including:
  • Implementation of the Key Proposal.
  • Formal approval of the arrangement by the Cooper Energy and CE Bobocu boards of directors.

The drilling of the first well in the Bobocu Gas Field under the Farm-in Agreement is conditional on various matters, including:
  • Key / Zeta Petroleum raising US $4 million to be made exclusively available for the purposes of the Bobocu Gas Field first well program.
  • Zeta depositing US $2.24 million (of the US $4 million raised) in an escrow account.

Under the Farm-in Agreement, CE Bobocu will contribute farm-in costs up to a cap of US $2.24 million towards the first well in the Bobocu Gas Field.

All operations in relation to the first well will be operated by Zeta.

Following completion of the first well, CE Bobocu may elect to withdraw from the farm-in or to proceed.

If CE Bobocu elects to withdraw from the farm-in, CE Bobocu will be reimbursed from the escrow account all of CE Bobocu's expenditure on the first well.

If CE Bobocu elects to proceed, it will acquire (subject to governmental approvals and at no further cost) a 20% interest in the Bobocu Gas Field and have the right to earn up to a 50% interest in the Bobocu Gas Field.

CE Bobocu can surrender its right to earn in at any stage and will be entitled to retain the interest earned to that date. CE Bobocu will thereafter only be obliged to contribute its participating interest share of costs in respect of any further work on the Bobocu Gas Field.
Should it elect to proceed to each stage, CE Bobocu's financial obligations in relation to these subsequent programmes (in respect of which CE Bobocu will be the operator) are as follows:

Drilling of additional well $1.8MM, plus 30% of costs thereafter To earn an aggregate 30% interest
Design of plant $2MM, plus 30% of costs thereafter To earn an aggregate 40% interest
Construction of plant $7.4MM, plus 30% of costs thereafter To earn an aggregate 50% interest

Steve Twartz, Cooper Energy Exploration Manager, commented, "This revised arrangement provides CE Bobocu an option in the evaluation of the Bobocu Gas Field. Should the first well be successful, CE Bobocu will have preserved its risk managed options to earn further interests in the Bobocu Gas Field. Alternatively, should the first well not be successful, CE Bobocu can withdraw and it will have incurred no costs in respect of the first well."

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Wood Mackenzie Reviews Recovery of Production in Libya

- Wood Mackenzie Reviews Recovery of Production in Libya

Friday, August 26, 2011
Wood Mackenzie

Following recent events in Libya, Wood Mackenzie has reviewed its analysis of how long it could take for a recovery of oil and gas production. One of the key issues in this respect is how quickly the National Transitional Council (NTC) can stabilise the security situation across the country.
  • It is too early to expect a material recovery in Libya's oil and gas production. "Once a resolution is reached, we believe it will take around 36 months for oil production to recover to the pre-conflict level of 1.6 million barrels a day (b/d). It may be possible, however, for up to 600,000 b/d to be restored within three months assuming a swift end to hostilities, and an early focus by the NTC and international community on stability and infrastructure repair," said Ross Cassidy, North Africa Upstream Research Analyst for Wood Mackenzie.
  • Wood Mackenzie's global gas research shows that gas production could take less time to recover. Eight billion cubic meters of gas per year is contracted from Libya to Italy, with Eni as primary off-taker selling to customers in Italy. The Greenstream gas pipeline routes gas from Eni-operated fields in Libya to Italy.
  • Massimo Di-Odoardo, European Gas & Power Research Analyst for Wood Mackenzie says, ”The Italian market is presently oversupplied with gas and Eni has had to delay off-take obligations from other suppliers because insufficient market is available. During the Greenstream outage, Eni increased off-take of Russian pipe gas supplies therefore, resumption of Greenstream will add gas to an already oversupplied Italian market with implications for downside price risk and reduced flows of pipe gas from other suppliers, notably Russia. It could take as little as three months to restart Greenstream supply and reach pre-crises production levels, however the time to resume supply will depend on local security and the state of infrastructure.”
  • Wood Mackenzie estimates that it will take around 36 months for the country to recover its full production capacity, from whenever the current crisis reaches a resolution. This depends on the scale of damage to oil infrastructure being limited, swift removal of international sanctions and the timely return of international oil companies and foreign workers.
  • The Libya state-owned National Oil Company (NOC) and the international industry will have to work in partnership to repair facilities, re-start production and ramp-up to pre-crisis rates. Production recovery is likely to vary by basin. It will take longer in the mature and complex Sirte basin, in eastern Libya, which is the foundation of Libyan production, than in the more modern and less complex fields of the Murzuk and Pelagian Shelf basins, of western Libya.
  • Substantial oil volumes could be back in the market by late 2012, if a resolution is achieved by the end of 2011. But the recovery period will extend if production remains shut-in for longer, as infrastructure continues to deteriorate. There is unlikely to be any increase in production or re-start of exports, whilst Libya's oil infrastructure is open to sabotage by either side.
  • In the longer-term, the production outlook will be largely dependent on the nature of the outcome to the conflict and its political fallout. Libya has the potential to produce up to 3 million b/d of oil and become a major gas exporter through partnering with the international industry, who will bring finance, skills and technology to existing fields. But, for now, this brighter future remains on hold until military operations are concluded.

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AWE Updates Activities in Perth Basin

- AWE Updates Activities in Perth Basin

Friday, August 26, 2011
AWE Ltd.

AWE advised that preparations have continued for the planned hydraulic stimulation activities in the onshore Perth Basin. Preparation works on the Woodada Deep-1 and Arrowsmith-2 wells have been completed, and the final preparatory workover activities on the Senecio-1 well are now under way.

As previously advised to ASX, these stimulation activities are planned to proceed in the September quarter, subject to the receipt of all regulatory approvals.

Currently, the Woodada Deep and Arrowsmith activities have been referred to the Western Australian Environmental Protection Agency and a decision is expected in September.

The forward program for operational activities will be dependent on the receipt of these final regulatory approvals and the availability of the stimulation equipment, which is currently located at Dongara, in the Perth Basin. Given the current delays in the receipt of these approvals, there is a risk the stimulation equipment may not be available to commence this work in the September quarter.

AWE will advise further on this timing and the progress towards the stimulations when further information is made available from the regulators.

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Kencana Expands Drilling Fleet

- Kencana Expands Drilling Fleet

Friday, August 26, 2011
Kencana Petroleum Berhad

Kencana announced that its wholly-owned subsidiary, Kencana Marine Drilling Sdn. Bhd., is building 2 units of Tender Assisted Drilling Rigs (TADRs).

The TADRs are currently being constructed by Kencana HL Sdn. Bhd., another wholly-owned subsidiary of Kencana Petroleum at its fabrication yard in Lumut, Perak at a cost of USD 145 million each and are expected to be completed by first quarter of calendar year 2013. The total cost of the 2 units of TADR of approximately USD 290 million will be financed by a combination of internal funds and borrowings.

The building of these rigs is in line with Kencana Petroleum Group's plan to expand its drilling business and service offerings in the upstream oil and gas services value chain. The new rig design is a further refinement to the existing TADR (KM-1). They will include enhanced safety features, heavier crane for efficient operation and lighter derrick equipment set to accommodate utilization on a wider range of drilling platform.

The TADRs when completed and in operation are expected to enhance the earnings of Kencana Petroleum Group.

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NES Buys FairfieldNodal Cable-Free Systems for Apache's Cook Inlet Proj.

- NES Buys FairfieldNodal Cable-Free Systems for Apache's Cook Inlet Proj.

Friday, August 26, 2011
FairfieldNodal

FairfieldNodal recently completed a significant sale of its true cable-free nodal recording systems to NES, LLC, on behalf of Apache Corporation. The $30 million transaction, which includes ZLand and Z700 marine nodes, represents several industry firsts: the first use of Z700 marine nodes in the United States and the first major use of Z700 and ZLand together in a complementary operation.

NES will use these systems for Apache's extensive 3D land, marine and transition-zone seismic acquisition project in Cook Inlet, Alaska, where unpredictable ice and ground conditions as well as strict governmental requirements present some of the most difficult environmental challenges in North America. They expect the project to continue for up to three years.

"We're very excited about Apache's decision," said Gary Bartlett, FairfieldNodal's regional sales manager for North America. "We recently performed a rigorous 10-day test survey for them in the same area, using our ZLand and Z700 nodes in combination. To have Apache specify our nodes for such a difficult and important project shows how confident they are that our cable-free systems are up to the task."

Because all FairfieldNodal nodes are entirely self-contained, they are easier and faster to deploy and retrieve. In the Apache test survey, they performed flawlessly in the same onshore and shallow-water regions NES will tackle in their upcoming long-term project for Apache.

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Oliver Valves Seals Supply Deal with Brazilian Co

- Oliver Valves Seals Supply Deal with Brazilian Co

Friday, August 26, 2011
Oliver Valves

Oliver Valves has secured a £7.2m deal to supply two projects for Brazil's leading oil and gas firm.

The deal, which is the biggest single contract in the firm's 30-year history, is for delivery of 391 valves, ranging in size from 2" to 12" in diameter.

Delivery of the first units has already begun and all installations are scheduled to be completed by September 2012.

The valves will be used on two Floating Production, Storage and Offloading (FPSO) vessels operating of the coast of Rio de Janeiro.

David Cornwell, managing director of Oliver Valves, said, "This is a landmark contract for the business as it is not only the biggest we have ever secured but it also represents a major success in an international market that is relatively new to us.

"Just five years ago, Brazil was hardly even on our radar in terms of sales, but this year it will generate more revenue for the business than any other territory.

"We secured this project on the basis of our technical ability, rather than by beating our competitors commercially.

"We undertook nine months of specification work before securing the project and we committed the time up front to ensure we would be delivering the best possible solution.

"This approach has clearly paid off and this demonstrates that it is possible for British manufacturers to compete internationally by outperforming others in terms of quality, if not always on price."

The win follows a series of other international contract wins in 2011 including a £1 million order to supply subsea valves for a project in the Gulf of Mexico, a separate £800,000 order from a major Brazilian oil company, and Oliver Valves' first subsea contract in Chinese waters – worth £400,000.

David Cornwell said, "We have achieved a lot of success in securing new orders in the past six months, and delivering these projects will mean increasing the capacity of the business through significant recruitment."

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Mid-Con Energy Seeks Approval for IPO

- Mid-Con Energy Seeks Approval for IPO

Friday, August 26, 2011
Tulsa World, Okla.
by Rod Walton

Privately held waterflood oil producer Mid-Con Energy LP is seeking federal approval for an initial public offering as a master limited partnership.

The form S-1 registration request, filed earlier this month with the U.S. Securities and Exchange Commission, estimates a maximum of $140 million in equity from the proposed IPO. If granted, Mid-Con Energy hopes to be listed on the Nasdaq electronic exchange under the ticker symbol MCEP.

"Our management team has significant industry experience, especially with waterflood projects and, as a result, our operations focus primarily on enhancing the development of producing oil properties through waterflooding," the S-1 filing reads.

Mid-Con President Randy Olmstead founded the company seven years ago with capital from equity firm Yorktown Partners. Mid-Con's operating subsidiary, RDT Properties Inc., was started in 1986 to buy and operate mature waterflood properties.

The new partnership was incorporated last month in Delaware. Mid-Con Energy's production is focused on properties in southern and northeastern Oklahoma and Colorado.

The fields "primarily consist of mature, legacy onshore oil reservoirs with long-lived, relatively predictable production profiles and low production decline rates," the federal filing reads. More than 90 percent of Mid-Con's properties are produced under waterflood techniques, in which water is injected into the reservoir formation to displace residual oil and into adjacent production wells.

Mid-Con Energy's proved reserves totaled an estimated 7.9 million barrels of oil equivalent, most of that crude oil.

The master limited partnership structure eliminates corporate taxes on profits. The MLP is required to distribute much of its available cashflow through distributions to unitholders, who are taxed on those payouts.

Mid-Con is the fourth Tulsa energy firm to go public or announce a planned IPO in recent months. On Wednesday, Laredo Petroleum filed its own SEC papers seeking an initial public offering raising up to $450 million in equity.

Tulsa-based propane marketer NGL Energy Partners LP held its IPO earlier this year and is listed on the New York Stock Exchange.

Williams Cos. Inc. plans to set a partial IPO for its exploration and production subsidiary, WPX Energy Inc., later this year. The rest of WPX will be separated in a tax-free spinoff to Williams shareholders in 2012, according to reports.

Copyright (c) 2011 Tulsa World (Tulsa, Okla.)

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TransCanada Pipeline Will Have Limited Environmental Impact

- TransCanada Pipeline Will Have Limited Environmental Impact



Aug 26, 2011

The U.S. State Department concluded that TransCanada (NYSE:TRP) proposed $7 billion KeyStone XL pipeline will have limited impact on the environment, potentially bringing the department closer to a final decision on the controversial project.

TransCanada (NYSE:TRP) has a potential upside of 8.2% based on a current price of $42.48 and an average consensus analyst price target of $45.97.

TransCanada is currently above its 50-day moving average (MA) of $41.96 and above its 200-day of $40.16.

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ConocoPhillips Finds New Leaks Off China's Northern Coast

- ConocoPhillips Finds New Leaks Off China's Northern Coast



Aug 26, 2011

ConocoPhillips (NYSE:COP) has found seven new leaks off China's northern coast.

According to the State Oceanic Administration's North China Sea branch, ConocoPhillips found the new leaks near the Platform C of 19-3 Oilfeld in Bohai Bay.

Last week, the company reported nine leaks near the same platform, and is facing legal action for the spills.

ConocoPhillips (NYSE:COP) has a potential upside of 28.9% based on a current price of $64.24 and an average consensus analyst price target of $82.8.

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BP, Coast Guard Find No Sheen near Macondo

- BP, Coast Guard Find No Sheen near Macondo

Friday, August 26, 2011
BP plc

On Aug. 25, 2011, BP confirmed through a standard visual wellhead inspection that there is no release of oil from the Macondo well (MC252).

In addition, BP also conducted a visual inspection of the Macondo relief well confirming the same result.

Remotely Operated Vehicle (ROV) video inspection was conducted in the presence of representatives from the Gulf Coast Incident Management Team (GCIMT) (MC252 Unified Command) located in New Orleans. GCIMT members watching the live video feed included representatives of the US Coast Guard, the Bureau of Ocean Energy Management, Regulation and Enforcement, and representatives from the states of Louisiana, Mississippi and Florida.

The inspection was prompted by press reports that sheens of oil observed in the vicinity were from the Macondo well. The Macondo well was capped on July 15, 2010 and permanently killed by sealing the well and annulus with cement on Sept. 19, 2010. The well was later plugged and abandoned with the approval and oversight of the US government.

During the course of inspecting both wellheads, small, intermittent bubbles were observed emanating from cement ports at the base of the wellheads. These observations are consistent with testing and sampling performed last year that detected nitrogen bubbles, a residual byproduct of the nitrified foam used in setting the wells’ surface casing cement.

BP and the US Coast Guard have conducted multiple surveys of the area in recent days and found no evidence of oil sheens in the Macondo vicinity.

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Total Starts Up Taps at Pazflor Field

- Total Starts Up Taps at Pazflor Field

Friday, August 26, 2011
Total
by SubseaIQ

Total, operator of Block 17, announced that the giant Pazflor field offshore Angola has come on stream ahead of the initial schedule. The Pazflor field lies 150 kilometers off Luanda in water depths ranging from 600 to 1,200 meters and has estimated proved and probable reserves of 590 million barrels. The field will gradually ramp up to its full production capacity of 220,000 barrels per day over the coming months.

"Pazflor's start-up, several weeks ahead of schedule and within budget, is a remarkable achievement of the teams involved. The support and trust of Sonangol, our concession holder and partner, also made an invaluable contribution to our efficiency," said Yves-Louis Darricarrère, President Exploration & Production at Total. "Pazflor required a development effort on the same scale as the field. Paving a way with new technologies, the project showcases Total's expertise in highly complex environments. The project facilities have been designed and thoroughly tested in accordance with the strictest health, safety and environmental standards. This is another step in the ongoing saga of our deep offshore feats, begun right here in Angola. Deepwater developments are a core driver of our future production growth."

Pazflor comprises a vast subsea gathering network, the most complex ever built in Angola: 180 kilometers of lines tying in 49 subsea wells, 10,000 metric tons of subsea equipment and the giant Pazflor floating production, storage and offloading (FPSO) vessel. Held in position by 16 subsea mooring connectors, with its 325 meters long, 62 meters wide and a weight of more than 120,000 metric tons, the FPSO is the largest in the world. It can store up to 1.9 million barrels of oil that is then exported to tankers via an offloading buoy. The associated gas is reinjected into the reservoir, but could also be exported to the Angola LNG plant once the latter becomes operational.

A key technical challenge was producing two very different grades of oil from four separate reservoirs. Producing the heavy, viscous oil from the three Miocene reservoirs, which account for two-thirds of the reserves, and the related flow assurance constraints, represented a major challenge. The gas has to be separated from the liquids on the seabed so that the viscous liquids can then be pumped to the surface. The design and installation of subsea gas-liquid separation units and pumps are a world first on this scale. The pumps were purpose designed and tested for Pazflor.

Total's wholly owned subsidiary Total E&P Angola operates Block 17, with a 40% interest, while Sonangol is the concession holder. The other partners are Statoil ASA (23.3%), Esso Exploration Angola (Block 17) Limited (20%) and BP Exploration (Angola) Ltd (16.67%).

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KBR Bags Hyundai Gig for BP Quad 204 Proj.

- KBR Bags Hyundai Gig for BP Quad 204 Proj.

Friday, August 26, 2011
KBR Inc.

KBR has received a letter of award from Hyundai Heavy Industries Co. Limited to perform engineering design and procurement support services for the BP Quad 204 Floating Production Storage and Offload (FPSO) Project to be located west of Shetland Isles in UK waters.

The Quad 204 FPSO will be designed to meet the strict safety and environmental regulations for harsh weather operations. KBR has been involved in the Quad 204 Project since 2008, when work started on the select and define engineering of the FPSO. Services for the Quad 204 Project will be provided through KBR's offices in Singapore and Jakarta, Indonesia. This award follows the recent announcement by BP and its co-venturers, to progress with a major re-development of the Schiehallion and Loyal oil fields.

"This award follows on from the successful performances by KBR on BP offshore projects in the North Sea, Caspian Sea and West Africa thus solidifying KBR's position as a leading contractor," said Dennis Calton, President, KBR Oil & Gas. "We are proud of the long-standing relationship KBR has developed with BP and our growing relationship with Hyundai Heavy Industries."

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Aker Solutions Scores Drilling Equipment Contract for DSME

- Aker Solutions Scores Drilling Equipment Contract for DSME

Friday, August 26, 2011
Aker Solutions

Aker Solutions has received a Letter of Award from Daewoo Shipbuilding & Marine Engineering (DSME), to supply two drilling equipment packages to the new 'Cat D' drilling rigs the yard is building for the rig operator Songa Offshore. Options (if exercised) for two additional units are included. Contract value is undisclosed.

The development of the two Cat D semi-submersible drilling rigs has been initiated by Statoil, the international energy company, which awarded two long-term contracts for the units to Songa in July 2011.

The first two units will be delivered in 2014, and the main deliveries from Aker Solutions will take place in 2012 and 2013. The contract includes topside drilling equipment, procurement and commissioning of the rigs at the DSME yard. The two optional units (if exercised) are scheduled for completion in 2015.

"We are very pleased to win these contracts, which demonstrate the good cooperation between Statoil and the drilling operators and drilling system providers. Together, we have developed a new generation drilling and well intervention design, purpose made for the needs for North Sea operations, through a joint FEED (front end engineering and design) phase. We are also looking forward to continuing the good, long-term collaboration with DSME on this project, the latest addition to a long string of successful joint projects," said Thor Arne Håverstad, head of Aker Solutions' drilling technologies business.

Work on the project will start immediately in Kristiansand, Norway, and in other Aker Solutions drilling technologies units in Asker, Norway, Erkelenz, Germany and Houston in the US.

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Sevan Marine: Cost Increase for FPSO Sevan Voyageur

- Sevan Marine: Cost Increase for FPSO Sevan Voyageur

Friday, August 26, 2011
Sevan Marine ASA

Sevan Marine informed that the results for the second quarter of 2011 will be postponed until August 31, 2011. There will be no public presentation for 2Q-2011.

Following detailed project reviews and assessments on the FPSO Sevan Voyageur upgrade project, there has been identified additional costs to be incurred by the Company, resulting in a current cost estimate for the project in the range of USD 170-190 million. The increase from the previously announced cost estimate of USD 160-170 million is mainly a result of time related costs due to additional delays, in part as a result of the Company's challenging liquidity situation, as well as certain increased procurement costs for equipment and yard services. First oil is currently expected to take place during the second quarter of 2012. FPSO Sevan Voyageur is contracted to E.ON Ruhrgas UK E&P for the Huntington field in the UK North Sea. Estimated contract value is USD 535 million for the fixed term of five years. The contract has extension options.

The Board of Directors continues to hold constructive dialogue with bondholders and other relevant parties regarding a global restructuring of the Company's balance sheet.

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Land Camp to Serve Influx of Eagle Ford Workers in South Texas

- Land Camp to Serve Influx of Eagle Ford Workers in South Texas

Friday, August 26, 2011
Rigzone Staff
by Karen Boman

The exploration and drilling boom in South Texas' Eagle Ford shale play has drawn hundreds of workers to the region, crowding the existing hotels and housing beyond capacity. To meet housing needs, oil service companies that including Halliburton, Weatherford and Schlumberger invited Houston-based Remote Logistics International to set up the Three Rivers Lodge, a lodging camp for oil service workers in Three Rivers, Texas, approximately 70 miles south of San Antonio.


The facility, which held its grand opening on Aug. 6, is part of Remote Logistics' offerings of support services for both the offshore oil and gas industry as well as land camp harsh remote environments. For oil service companies, offering the housing is about safety. Workers driving great distances to and from work sites, and then looking for food on the way back to their lodgings, are more exhausted and at greater risks on the road, said Hud Gibbins, who works in business development at the company and helps directly oversee the lodge.

Founded by Jenny Savage, who comes from a background in hotel and restaurant management, Remote Logistics caters to what it considers niche markets like South Texas with facilities providing housing, laundry, meals and entertainment under one roof. Remote Logistics has handled catering and housekeeping duties for onshore and offshore rigs and facilities in the Gulf of Mexico and the Middle East for five years; the company also offers remote medical services for oil and gas operations. Remote Logistic's roster of clients includes Rowan and Cal Dive International.


Though the buildings are temporary, the landscaping and facilities feel more like a ski lodge, said Gibbins. The facility offers three meals a day, prepared by a culinary staff of four-star rated chefs from across the globe. The menu includes heart healthy offerings such as a salad bar and grilled chicken to southern fried chicken, biscuits and all the pies, cakes and cookies you can eat. Workers are sent out each day with a box lunch containing sandwiches, fruit and two bottles of water.

"The lodge caters to workers ranging from the mid-20s to 40s and 50s who are away from their homes and families for 21 days at a time," said Gibbins. "Offering food, entertainment and lodging under one roof, including a movie room, wireless internet and DVD players makes them feel more at home."

The facility offers 192 beds and 48 rooms. The lodge is made up of trailers 28 feet wide by 60 feet long, but the kitchen and rec room are each doubled up to make one 56 foot by 60 foot trailer. There are two dedicated to the kitchen and dining room, two for the reception, rec room, movie room and business center/conference room, six for crew quarters and bathroom/shower, and one for the camp boss and medic's office. A company spokesperson said the lodge is already almost entirely booked and additional buildings will need to be ordered to keep up vacancy given the enormous demand.

While Three Rivers was built with oil service workers in mind, the occasional traveler in the area would be welcome and receive the same treatment. In fact, some rooms are being set aside to accommodate hunters for the upcoming deer season. Three Rivers Lodge also will serve as a flagship facility for Remote Logistics training, said Gibbins, with all workers hired by the company will undergo training at the lodge before heading to assignments overseas.

Demand for worker housing is so great in South Texas, Remote Logistics has plans to open another lodging camp by year-end near Ashterton in Dimmit County or Cuero in DeWitt County to accommodate workers. Remote Logistics is conducting demographic work to determine the site for the new camp. The company also will begin offering its catering and housekeeping services to land camps geared towards the Bakken oil play, where the surge in exploration and production activity has created a similar influx of workers into North Dakota communities that lack the hotels and housing to accommodate all the newcomers.

Positive Outlook for Eagle Ford Development

Eagle Ford exploration and development activity has created positive economic output for South Texas, an area of the state that traditionally has had higher unemployment and lower income per household compared to other portions of the state, said Dr. Dominique Halaby, former director of the University of Texas at San Antonio's Center for Community and Business Research, who worked on a study of the Eagle Ford's economic impact on South Texas that was released earlier this year.

Since the Eagle Ford boom began, unemployment in South Texas has declined, going against the national trend of rising unemployment, and creating wealth for ranchers and farmers who have faced difficult financial times in the past, said Halaby, now a professor at Georgia Southern University, at the North American Prospect Expo in Houston earlier this month.

In 2020, Eagle Ford shale activity is expected to account to about $11.6 billion in gross state product, $21.6 billion in total economic output and support nearly 67,900 full-time jobs in the region.

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BHP Billiton Completes Petrohawk Acquisition

- BHP Billiton Completes Petrohawk Acquisition

Friday, August 26, 2011
BHP Billiton plc

BHP Billiton has completed its acquisition of Petrohawk through a short-form merger under Delaware law of its wholly owned subsidiary with and into Petrohawk, with Petrohawk being the surviving corporation as a wholly owned subsidiary of BHP Billiton. The merger was the final step of the acquisition process and follows the previously announced completion of the tender offer by BHP Billiton to acquire all outstanding shares of common stock of Petrohawk.

BHP Billiton Petroleum Chief Executive, J. Michael Yeager, said the Petrohawk acquisition adds high-quality growth to the company.

"With the completion of this transaction, BHP Billiton Petroleum is on track to deliver compound annual growth in production volumes of ten percent for the remainder of the decade. We are excited that Petrohawk's sizable U.S. workforce is joining our talented group of professionals and we are ready to grow this business over the long-term."

Petrohawk has requested the New York Stock Exchange to take the necessary steps with the U.S. Securities and Exchange Commission to delist Petrohawk's common stock from the NYSE.

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Transocean Bid Gets Green Light from Aker Investors

- Transocean Bid Gets Green Light from Aker Investors

Friday, August 26, 2011
Transocean Ltd.

Transocean Services, a wholly owned subsidiary of Transocean, after receiving clearance by the Oslo Stock Exchange, launched its all cash voluntary offer (the "Offer") for 100 percent of the shares of Aker Drilling ASA ("Aker Drilling") for NOK 26.50 per share. The Offer has been made on the same terms as the previously announced voluntary offer, except that it has been made on an unconditional basis and with settlement guaranteed by a financial institution.

The Offer period begins August 26, 2011 and ends on September 23, 2011 at 11:30 a.m. (EDT), 5:30 p.m. (CEST). To date, Transocean and its affiliates have acquired 13.7% of the shares and votes in Aker Drilling, and shareholders representing 59.5% of the total share capital of Aker Drilling have given their unconditional and irrevocable pre-acceptances to the Offer.

The Offer document has been reviewed and approved by the Oslo Stock Exchange in accordance with Section 6-14 of the Norwegian Securities Trading Act. The document will also be sent to the shareholders of Aker Drilling, subject to restrictions under applicable securities laws.

The Offer and the distribution of this announcement and other information in connection with the Offer may be restricted by law in certain jurisdictions. Transocean assumes no responsibility in the event there is a violation by any person of such restrictions. Persons into whose possession this announcement or such other information should come are required to inform themselves about and to observe any such restrictions.

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Transocean Launches All Cash Voluntary Offer For Aker Drilling

- Transocean Launches All Cash Voluntary Offer For Aker Drilling



Aug 26, 2011

Transocean (NYSE:RIG) announced after receiving clearance by the Oslo Stock Exchange, that it launched its all cash voluntary offer for 100% of the shares of Aker Drilling for 26.50 Kroner per share. The offer has been made on an unconditional basis and with settlement guaranteed by a financial institution.

Transocean has a potential upside of 51.7% based on a current price of $51.47 and an average consensus analyst price target of $78.07.

Transocean is currently below its 50-day moving average (MA) of $59.22 and below its 200-day MA of $70.28.

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Cameco Announces Intention to Acquire Hathor Exploration

- Cameco Announces Intention to Acquire Hathor Exploration



Aug 26, 2011

Cameco (NYSE:CCJ) announced that it intends to make an offer to acquire all of the outstanding shares of Hathor Exploration for cash consideration of $3.75 per share in a transaction which values the fully diluted share capital of Hathor at approximately $520 million.

Cameco delivered a written proposal to Hathor following a close of market on Friday, August 19 outlining its interest in acquiring the company for cash in a transaction vaulued ay 3.75 per share.

Cameco made today's announcement after discussions with Hathor regarding a potential board-supported transaction failed to result in an agreement.

Cameco (NYSE:CCJ) has a potential upside of 65.4% based on a current price of $22.3 and an average consensus analyst price target of $36.88.

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PA Resources Confirms Additional Gas Pay Offshore Denmark

- PA Resources Confirms Additional Gas Pay Offshore Denmark

Friday, August 26, 2011
PA Resources AB

The sidetrack of the recent gas discovery at the Broder Tuck prospect in License 12/06 offshore Denmark has confirmed additional hydrocarbon column while sample analyses from the initial exploration well have indicated a higher than expected condensate content.

Bo Askvik, President and CEO at PA Resources, commented, "We are pleased to have confirmed additional hydrocarbons with the sidetrack and to be able to update on the condensate content of the gas, which exceeds our expectations and adds value to the find. This is an exciting discovery for PA Resources and we now look forward to the Lille John exploration well."

The initial Broder Tuck exploration well (5504/20-4), located approximately 10 kilometers south of Gorm Field in the Danish part of the North Sea, encountered hydrocarbon pay in the primary Middle Jurassic target during July. The well has now been sidetracked to a location approximately 680 meters from the initial well, where the Middle Jurassic sandstone again contained hydrocarbons, albeit less well developed than in the initial wellbore. The 2011 drilling program has therefore established a gross hydrocarbon column of at least 360 meters from the crest of the structure down to the base of the Middle Jurassic sandstone in this sidetrack.

Ongoing sample analyses from the initial exploration well have now confirmed the discovered hydrocarbons to be a high quality gas with condensate of approximately 44º API gravity at a ratio of approximately 80-90 barrels of condensate per million standard cubic feet of gas.

Following plugging and abandonment of Broder Tuck, the Ensco 70 rig will shortly move to drill the second exploration well in this program, Lille John, some 8 kilometers to the south.

The following companies participate in License 12/06: PA Resources UK Limited (64%), Nordsøfonden (Danish North Sea Fund) (20%), Danoil Exploration A/S (8%) and Spyker Energy APS (a wholly-owned subsidiary of Spyker Energy Plc) (8%).

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Maersk Buys Stake in HKN Energy

- Maersk Buys Stake in HKN Energy

Friday, August 26, 2011
Maersk Oil

Maersk Oil, a fully-owned subsidiary of the A.P. Moller – Maersk Group, has acquired a 20% shareholding in HKN Energy Ltd., a subsidiary of U.S.-based Hillwood International Energy, whose sole asset is a license in Kurdistan Region.

The acquisition is a step into the prolific but as yet underdeveloped area of Kurdistan in oil output terms, as Maersk Oil explores opportunities in the region.

"We want to gain knowledge and experience of operations in Kurdistan, which is why we have acquired a shareholding in a company already active in the region," said Jón Ferrier, Head of Business Development and Strategy in Maersk Oil. "In return, we will contribute our technical knowhow and expertise."

HKN Energy holds a 75% interest in and operatorship of the Sarsang license area in northern Kurdistan, on the highly prospective Zagros fold belt. HKN Energy drilled one discovery well in 2011 which is expected to be brought into production in 2012. Marathon Oil holds the remaining 25% interest in the license area.

The parties have agreed not to disclose the terms of the transaction.

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Aminex Drills Ahead Offshore Tanzania

- Aminex Drills Ahead Offshore Tanzania

Friday, August 26, 2011
Aminex plc

Aminex reported progress on the Nyuni-2 exploration well, currently being drilled from Nyuni Island off the coast of Tanzania in the Indian Ocean.

Nyuni-2 was spudded on June 17 using the Caroil Rig-6, to target Lower Cretaceous age Neocomian sandstones, similar to those found in Aminex's nearby Kiliwani North gas field and in the producing Songo-Songo gas field. The well is being drilled from a pad on Nyuni Island at an angle of 30 degrees from vertical, to target a bottom hole location approximately 1,200 meters SE of the surface location. Planned measured total depth is 3,325 meters from the rotary table on the rig.

With the exception of an 8 day period when the rig was shut down due to a requirement to replace damaged equipment, drilling operations have made satisfactory progress to date and 9 ?" casing is now being run to the current total measured depth of 2,945 meters. Once the well has been safely cased to this point, drilling will resume towards its target. The result of the well will be announced at the earliest opportunity.

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Gulfsands Makes Oil Discovery in Syria

- Gulfsands Makes Oil Discovery in Syria

Friday, August 26, 2011
Gulfsands Petroleum plc

Gulfsands provided this update on operations in Syria.

Block 26 Drilling Operations

Yousefieh East Exploration Well (Yous-6)

The Yousefieh East exploration well ("Yous-6") has been drilled using the Crosco-E401 rig to test an undrilled structural high in Cretaceous age carbonates located approximately 3 kilometers to the east of the Yousefieh field discovery well (note, this well was erroneously referred to as Yousefieh-8 in a Gulfsands Petroleum plc News Release dated July 11th 2011). The Yous-6 well was deviated at an angle of up to 36 degrees to the vertical in order to avoid obstructions to drilling operations on the surface directly above the target location.

The Yous-6 well encountered oil bearing Cretaceous Massive Formation reservoir at a depth of 2045 meters Measured Depth Below Rotary Table ("m MDBRT") or 1560 meters True Vertical Depth Sub-Sea ("m TVDSS"), 28 meters deep to prognosis. The well penetrated the hydrocarbon bearing Massive reservoir section at an angle of approximately 29 degrees to the vertical. Two twelve meter core sections, parts of which were oil stained, were recovered from the wellbore over the interval 2055-2079m MDBRT (1569-1590m TVDSS). Interpretation of wireline logs indicates a gross porous reservoir interval of 18.1 meters was encountered overlying a non-porous interval, and having a net oil column of 12.8 meters, average porosity of 18% and average oil saturation of 69%.

Pressure data obtained via wireline logs indicates that the oil bearing reservoir is slightly depleted versus initial reservoir conditions, indicating that the Yousefieh East structure is likely to represent an eastern flank extension of the Yousefieh field which is currently on production at approximately 2,600 barrels of oil per day ("bopd"). Reservoir permeability in the Yous-6 net reservoir section is interpreted to be of similar quality to that encountered in the main producing areas of the Yousefieh field.

The Yous-6 well was production tested and produced at an average oil flow rate of approximately 250 bopd of 20 degree API oil for 4 hours on 2 inch choke under nitrogen assisted lift conditions with no water production. The well will be tested further following acidization of the reservoir in a rig-less operation.

Due to a thinner oil column encountered in this well versus other Yousefieh wells, the Yous-6 well will require the installation of permanent artificial lift facilities in order to flow continuously. The Yous-6 well is located within the Yousefieh field Development License Area and can be quickly tied back and produced into the existing Yousefieh field production facilities once artificial lift facilities are secured. Procurement of the relevant equipment is in progress.

The impact of Yous-6 on Yousefieh reserves will be evaluated as part of the year-end reserves review.

Safa-1 Exploration Well

Operations have been completed on the Safa-1 exploration well which was drilled using the Crosco M-501 rig. This well targeted a fault-bound dip closed structure of Cretaceous aged reservoir on trend and approximately 7 kilometers north of the Khurbet East Field.

The Safa-1 well is interpreted to have encountered the Cretaceous Shiranish Formation at 1937m MDBRT (1448m TVDSS) and the Cretaceous Massive Formation at 1953m MDBRT (1464m TVDSS). Three consecutive core sections were cut between 1942m and 1975m MDBRT (1453m and 1486m TVDSS), with a total recovery of 31.4 meters of core, sections of which were stained with viscous oil. Evaluation of wireline logs indicates a net reservoir interval of 9.9 meters with an average porosity of 13% and an average oil saturation of 74%.

Well testing operations were conducted in open hole over sections of the gross reservoir column in three stages, however only formation water of low salinity plus traces of viscous oil were recovered to surface, even after an acidification of the net reservoir interval was performed.

The Safa-1 exploration well therefore has been plugged and abandoned as a non-commercial heavy oil discovery.

Forward Drilling Program

Gulfsands drilling operations in Syria Block 26, using the Crosco E-401 and M-501 drilling rigs, will continue as planned with the drilling of one development and one exploration well.

The Khurbet East-20 well is planned as a delineation well to further evaluate the northern flank of the Khurbet East field. The Wardieh-1 exploration well will target a new exploration play, a combined structural/ stratigraphic trap located on the southern flank of the Souedieh Field at the Cretaceous "Massive" level.

Block 26 Oil Production

Production operations on Block 26 continue without interruption. Combined gross oil production from the Khurbet East and Yousefieh fields has averaged in excess of 24,000 bopd to date during the month of August following commissioning of an additional Khurbet East sub-station facility on August 6, 2011.

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Ithaca Finalizes Acquisition of Cook Stake from Hess

- Ithaca Finalizes Acquisition of Cook Stake from Hess

Friday, August 26, 2011
Ithaca Energy Inc.

Ithaca announced that further to announcements on April 4, 2011 and May 16, 2011, the Company has completed the transaction to acquire a 28.46% non-operated interest in the Cook oil field ("Cook") from Hess Limited ("Hess"). At completion of the transaction, Ithaca paid an adjusted cash consideration of US $57 million and transferred to Hess a 10% interest in three Southern North Sea exploration blocks. The transaction has been funded from the Company's existing cash reserves.

At completion, Ithaca is also entitled to an oil inventory of approximately 185,000 barrels. This inventory is anticipated to be lifted and sold in Q4 2011. The adjusted consideration does not reflect this anticipated cash receipt.

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BPTT Begins Gas Flow Offshore Trinidad

- BPTT Begins Gas Flow Offshore Trinidad

Friday, August 26, 2011
BP plc

BP Trinidad and Tobago (bpTT) announced the start of natural gas production from the Serrette field, offshore Trinidad. Serrette is located in 280 feet (90 meters) of water off Trinidad's south east coast. BPTT holds a 100 percent interest in the field.

Serrette is a normally unmanned installation (NUI). It was locally designed by Fluor Summit Engineering and constructed locally at the Trinidad Offshore Fabricators (TOFCO) yard in La Brea, south Trinidad. It is the fifth platform to be built locally using a using the standardized "clone" approach which has allowed bpTT to deliver these platforms with increased efficiency and significant local content. The Serrette platform and jacket were installed in 2010.

With Serrette, bpTT now has production from 13 offshore Trinidad platforms.

Production from Serrette is tied into bpTT's Cassia B hub via a 26-inch diameter, 32-mile long pipeline. The platform is expected to average 400 million standard cubic feet a day (mmscfd) of gas and associated condensate from five wells. Production from this facility will supply the domestic market and Atlantic LNG's liquefaction plant for export as LNG to international markets, such as the US and Europe.

BPTT President Norman Christie said, "The completion of Serrette demonstrates our commitment to local content. BPTT is proud to continue the tradition of local design and fabrication that we initiated with the Cannonball platform in 2001. We have also been able to refine the standardization concept by applying the lessons learned to improve design and delivery of each platform."

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