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Tuesday, August 30, 2011

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Tuesday, August 30, 2011

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Commodity Corner: WTI, Brent Settle Higher

- Commodity Corner: WTI, Brent Settle Higher

Tuesday, August 30, 2011
Rigzone Staff
by Matthew V. Veazey

The WTI and Brent crude oil benchmarks settled higher Tuesday after the Federal Reserve left investors contemplating whether the central bank will try yet again to shore up the sagging U.S. economy.

Light sweet crude oil gained $1.63 to settle at $88.90 a barrel while the Brent picked up $2.14 to end the day at $114.02 a barrel after the Fed released the minutes of the August 9, 2011, joint meeting of the Federal Open Market Committee and the Federal Reserve Board of Governors. The minutes reveal support among some members for more monetary action to spur economic growth.

One possible Fed move, which the central bank has initiated twice since the 2008-2009 financial crisis, is quantitative easing. The approach calls for the Fed's purchase of U.S. Treasury bonds so that banks would have more money available to lend to businesses and consumers.

Both "QE1" and "QE2" yielded a weaker U.S. dollar, which in turn was bullish for crude oil. When the dollar weakens, oil—priced in greenbacks—becomes a better value for investors holding other currencies. The minutes show that the Fed voted to extend its September meeting to two days rather than one, giving it more time to consider the merits of "QE3" and any other options remaining at its disposal.

Also boosting oil was the development of Tropical Storm Katia in the eastern Atlantic Ocean. Located approximately 750 miles west of the Cape Verde Islands late Tuesday, Katia was moving toward the west-northwest at 20 miles per hour. The National Hurricane Center expects the storm to be a major hurricane by Saturday afternoon, when it should be centered to the east of the Lesser Antilles.

During Tuesday's floor trading, the WTI fluctuated from $86.46 to $89.21. The Brent peaked $114.20 and bottomed out at $111.22.

Natural gas for October delivery settled at $3.91 per thousand cubic feet, up a nickel from the final price for the now-expired September contract. October natural gas traded within a range from $3.78 to $3.92.

September gasoline gained nine cents to end the day just under $3.00 a gallon. The futures price fluctuated from $2.897 to $3.00.

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PwC Names Niloufar Molavi as Firm's U.S. Energy Leader

- PwC Names Niloufar Molavi as Firm's U.S. Energy Leader

Tuesday, August 30, 2011

PwC US today announced that Niloufar Molavi has been appointed as the firm's U.S. Energy Leader and new Market Managing Partner (MMP) for Greater Houston. In her new role, Molavi leads a practice comprised of 920 professionals serving U.S. energy clients in the oil and gas industry and is responsible for all client services – assurance, advisory and tax – for the geographic markets of Houston, Tulsa and New Orleans.

"Having spent my entire career in Houston, I've had many opportunities to grow, to gain new experiences, and to make a difference here at PwC – and I've been fortunate to work with so many talented and dedicated individuals along the way to help serve our energy clients in the U.S. and abroad," said Molavi. "I'm excited to continue to build our robust energy practice, and as I take on this new role, I'm eager to give back to the market that has helped me gain so many great experiences."

She previously served as energy leader within PwC's Tax practice and as the firm's U.S. Chief Diversity Officer, overseeing the firm's diversity strategy and all of its related programs and initiatives. With over 20 years experience with PwC, Molavi has served a wide range of energy companies both in the U.S. and abroad, advising clients on international and U.S. tax structuring, mergers, acquisitions and potential public offerings. She began her career with PwC in 1991 and was promoted to partner in 2001. She joined the firm's U.S. Leadership team in 2009.

Molavi earned her degree in Accounting as well as a Masters in Professional Accounting with a concentration in Taxation from the University of Texas at Austin. She currently serves on the Advisory Board of the McCombs School of Business at the University of Texas and also serves on the non-profit board of Dress for Success Houston. She is a licensed CPA in Texas.

PwC has also appointed two new partners in the Greater Houston Assurance practice, focusing on Energy – Craig Friou and Jade Walle.

As a newly appointed Assurance partner, Craig Friou brings over 15 years of experience to clients in Houston and New Orleans. Friou has worked on audits of private and public companies, internal audit outsourcing projects and accounting advisory services in Houston, Dallas, Aberdeen (U.K.), and New Orleans. His clients have included multinational integrated oil and gas companies, independent exploration and production companies and oilfield services companies. Friou graduated from the University of Texas where he earned a BBA and a MPA degree in accounting. He is a licensed CPA in Texas and a member of the planning committee for the AICPA/PDI National Oil and Gas Conference, the Texas Society of CPAs and Rotary International.

Based in Tulsa, newly-appointed Assurance partner Jade Walle has worked on audits of both public and privately held energy companies in the natural gas industry, specializing in capital raising activities including initial public offerings (IPOs), public and private debt offerings, mergers and acquisitions (M&A) and carve-outs. Walle joined PwC in 1996 and previously worked in the Houston and London offices. While in London, he provided consulting services assisting foreign private issuers in accessing the U.S. capital markets and in their recurring US GAAP filing requirements. He graduated from Oklahoma State University with an M.S. in accounting and a B.S. in business administration, with a major in accounting and a minor in international business. Walle is a member of the AICPA, the Texas Society of CPAs, and the Oklahoma Society of CPAs. He also serves on the Oklahoma State University School of Accounting Advisory Board. Walle is a licensed CPA in both Texas and Oklahoma.

Additionally, Chris Gilbert and Frank Saputo have also joined PwC and will be based in the Houston, TX office.

Chris Gilbert has joined PwC US as a partner in PwC's International Tax practice, based in Houston. Gilbert, who brings more than ten years of industry experience to PwC, has focused on international tax for manufacturing and industrial product companies, as well as for the financial services industry. In his new role, he will serve both the oil and gas industry sector and the financial services industry in the Greater Houston market. Gilbert spent the last five years as the tax director, first for GE Commercial Finance and then GE Capital Asia Pacific, based in Tokyo. Previously he was a senior director of International Tax for the Pepsi Bottling Group in New York and prior to that a tax attorney for Koch Industries in Wichita, Kansas. Gilbert has a JD/MBA from Washburn University and an LL.M. in Taxation from the University of Missouri in Kansas City.

Frank Saputo has joined PwC US as a managing director in PwC's risk assurance practice. Based in Houston, Saputo brings more than 25 years of experience in the healthcare industry to PwC. In his new role, he will serve health industries clients in the Greater Houston market. Saputo spent the last 11 years as an executive at US Oncology, the last 3 of which he served as the chief administrative officer, responsible for Internal Audit, Regulatory Compliance and Risk Management activities. He graduated from California State University at Fullerton with a B.A. in business administration finance. Saputo is a member of the Institute of Internal Auditors, the Health Care Compliance Association, the Association of Internal Auditors, and the Risk Insurance Management Association. He is a Certified Internal Auditor and a Certified Fraud Examiner.

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Penn State Study Finds Smaller Marcellus Jobs Impact; 'Still Big Numbers'

- Penn State Study Finds Smaller Marcellus Jobs Impact; 'Still Big Numbers'

Tuesday, August 30, 2011
Pittsburgh Post-Gazette
by Bill Toland

Jobs related to natural gas drilling in Pennsylvania's Marcellus Shale field were about half what previous studies had estimated for 2009, but the industry still supported about 23,500 jobs that year, according to a new study issued by Penn State researchers.

"It's still big numbers," said Timothy W. Kelsey, professor of agricultural economics with Penn State's College of Agricultural Sciences, and one of the study's authors.

"It's just not as big as what the industry is talking about."

The study, issued Monday by the Marcellus Shale Education & Training Center, a partnership of the Pennsylvania College of Technology and the Penn State Extension, also said that about half of the land being leased by drillers was owned by people living in those counties in 2009 -- the rest was owned by people or firms based out of state or elsewhere in Pennsylvania, or owned by the state itself.

That means much of the leasing and royalty money derived from drilling goes out of the county in which the drilling takes place, according to the study.

It's an economics phenomenon known as "leakage" -- money that looks as if it is benefitting a particular area is actually going elsewhere. And it's not an economic phenomenon native to gas drilling: Coal interests, limestone and gravel deposits and other mineral-related economic activity is subject to the same kind of leakage.

The study, "Economic Impacts of Marcellus Shale in Pennsylvania: Employment and Income in 2009," bills itself as the first paper to look at not just the number of jobs and amount of revenue generated by drilling but also where that money is going and how quickly it's being spent.

The jobs figure, as with previous studies, accounts for actual jobs created -- front office jobs, drilling jobs, engineering jobs -- as well as "induced" and "indirect" jobs, which are those not created by the industry itself but by the money the industry spreads around to local suppliers, hotels and restaurants, for example.

The study suggested that the industry generated around $3.1 billion in economic activity -- $1.2 billion in income and $1.9 billion in "added value."

Also of note was that locals who benefit from the gas play do not spend their lease and royalty checks immediately, meaning the money is not a direct, immediate benefit to the local economy. By surveying landowners in Bradford and Tioga counties, the study's authors estimate that leaseholders save or invest about 55 percent of leasing proceeds and about 66 percent of royalty payments in the year they are received, instead of spending the money.

The study's attempt to get a more accurate read on who -- and which areas -- benefit from drilling activity was hampered, Mr. Kelsey said, by the absence of any state or county database for who owns mineral rights (and thus owns the royalty rights to gas and shale deposits).

While it was relatively easier to find out who owns the land being leased -- about 51 percent of drilling plots are owned by people in that county -- it's far less clear who owns the rights to the gas below the surface and where those people live. The researchers, in calculating the economic benefits of the shale play, assumed an identical local ownership share (51 percent) for the mineral rights as well as the surface rights.

"We know that's not accurate," Mr. Kelsey said. "But there isn't anybody who has that data."

In many cases, mineral rights were separated from surface rights decades ago. It's more likely, he said, that the mineral rights owner lives out of state than the actual landowners, which means that it's also more likely gas royalty payments are going out of state.

But suspecting that and finding data to prove it are two different things, he said.

The state and county assessment offices need to do a better job of tracking that information if they want to have a more accurate picture of where mineral rights royalties are going, he said.

The study also surveyed 2,000 randomly selected businesses in Bradford and Washington counties to "identify the impacts they are experiencing from Marcellus Shale development." The responses "indicated positive economic impacts are occurring broadly across the economy in the communities where drilling is very actively occurring."

About 23 percent of Washington County business respondents said that natural gas drilling had helped to improve sales, while only 2 percent of respondents said that the drilling had hurt sales.

The full paper is available at

The study was paid for by funding from state Department of Community and Economic Development and money from Penn State and the Pennsylvania College of Technology.

(c)2011 the Pittsburgh Post-Gazette. Distributed by MCT Information Services.

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Noble Energy, Delek, Ratio Start Drilling Dolphin 1

- Noble Energy, Delek, Ratio Start Drilling Dolphin 1

Tuesday, August 30, 2011
Knight Ridder/Tribune Business News
by Yael Gruntman, Globes, Tel Aviv, Israel

The Sedco Express rig on Monday began initial exploratory drilling of Dolphin 1 Exploratory Prospect, located in the Hanna license, near Leviathan. Dolphin 1 drilling will take place 100 km west of Haifa, and the purpose of the drilling is to discern if there is natural gas in Dolphin 1. Netherland, Sewell & Associates, Inc. (NSAI) best estimate of the gross natural gas reserves at Dolphin 1 is 550.5 billion cubic feet (BCF), with a geologic probability of success of 73 percent.

The drilling is based on the report by NSAI. Well operator, Noble Energy Inc. (NYSE: NBL), owns 39.66 percent of the license, Delek Group Ltd. (TASE: DLEKG) and Avner Oil and Gas LP (TASE: AVNR.L), each own 22.67 percent, and Ratio Oil Exploration (1992) LP (TASE:RATI.L) owns 15 percent.

The decision to drill is partly based on NSAI's prospective resources report. The resources report also says that if there is a gas discovery, based on previous experience in developing similar fields, best estimate has a reasonable chance of being commercially viable.

The drilling will be implemented in two phases. The first phase, is based on Noble Energy's recommendation to take advantage of the time needed for periodic treatment of the rig's blowout preventer (BOP) system. The rig is currently drilling the initial well at Tamar. The first phase will only drill to a depth of 2,560 meters, and will not reach the target strata. Casing pipes will be installed during the first phase, which will strengthen the borehole with cement.

The well's second phase will be drilled later, apparently using the same rig. The two phases are expected to last two months, with the first phase lasting only two weeks. The total budget of both phases, not including production test costs, is $51 million, $8 of which is for the first phase. The final drilling depth is expected to reach 6,000 meters, including 1,560 meters of water, to the target strata 1,440 meters.

Dolphin 1 is one of the 3 dolphin prospects in the Hanna license. According to the NSAI prospective resources report, Dolphin 1 has the largest potential for gas, and for now is the only prospect that has been chosen for exploratory drilling.

(c)2011 the Globes (Tel Aviv, Israel). Distributed by MCT Information Services.

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W.Va. Official Signs Emergency Marcellus Rule

- W.Va. Official Signs Emergency Marcellus Rule

Tuesday, August 30, 2011
Knight Ridder/Tribune Business News
by Mannix Porterfield, The Register-Herald, Beckley, W.Va.

While legislators toil on something permanent and vastly more comprehensive, Secretary of State Natalie Tennant signed an emergency rule Monday regulating Marcellus shale natural gas.

Two specific meetings are planned during Sept. 12-14 interims by a select panel formed by the Joint Committee on Government and Finance, and a co-chairman says he expects to see the final amendments put to a vote.

Legislation bogged down in the final night of the regular session March 13, but acting Gov. Earl Ray Tomblin recently produced an emergency rule that Tennant said didn't reach her office until about a week ago.

"I am disappointed this matter took so long to resolve," the secretary said after signing the rule.

"This is a huge development opportunity that would diversify West Virginia's economy that has to be done promptly and responsibly."

If the Legislature fails to provide a permanent rule within 15 months, the emergency rules will expire under state law.

Tennant had 42 days to approve or deny the filing by the Department of Environmental Protection and said she signed it in the belief there should be no further delay for the industry. The DEP is scheduled to file a permanent rule Sept. 8, allowing a 30-day public comment period. All comments are to be posted on the secretary of state's Web site.

"I recognize there will be differing opinions about this rule, but I remind all those concerned that I can legally only approve the filing of the emergency rule or leave the process regulated in its current manner," she said.

Marcellus shale was put on the back burner this month in back-to-back special sessions, giving the Legislature an opportunity to smooth out legal obstacles in a controversial House of Delegates redistricting plan.

A co-chairman of the select panel, Sen. Doug Facemire, D-Braxton, expects at least 13 amendments to be debated when members convene Sept. 12 and again two days later during next month's interims session.

"I'm confident we can probably finish this up in our September interims and have it ready to go back to our respective bodies and see if we can sell it to them," Facemire said in a recent interview.

Facemire said the panel is focusing on three major goals in seeking a workable piece of legislation -- protecting the environment, safeguarding the rights of surface owners, and giving the fledgling industry room in which to operate.

(c)2011 The Register-Herald (Beckley, W.Va.). Distributed by MCT Information Services.

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EPA Seeks Comments on Drilling Air Quality

- EPA Seeks Comments on Drilling Air Quality

Tuesday, August 30, 2011
The News Herald, Panama City, Fla.
by Ali Helgoth

The Environmental Protection Agency (EPA) is accepting public comment on an air quality permit sought by a company that plans to conduct exploratory oil drilling 200 miles off the coast of Panama Cit Beach.

Shell Offshore applied for an Outer Continental Shelf air permit for mobilization and operation of deepwater drilling vessels and support vessels in two area lease blocks in the Gulf of Mexico, DeSoto Canyon and Lloyd Ridge.

Drilling would last about 150 days per year for five to 10 years, according to a preliminary determination issued by the EPA, which has proposed approval of the permit. Shell does not have plans to establish permanent production platforms, and if the exploration project leads to resource discoveries, additional permits would be required, according to information from the EPA.

The project is southwest of Bay County, about 160 miles southeast of the mouth of the Mississippi River.

A representative from Shell, which initially filed the permit in April 2010, could not be reached Monday for comment.

Public comment is being accepted through Sept. 19 and is limited to air quality issues. Other concerns, like those with drilling safety, the leasing process or discharge, should be directed to the Bureau of Ocean Energy Management, Regulation and Enforcement, which is the lead permitting agency for the project.

Air pollution emissions generated from the project "are primarily released from the combustion of diesel fuel in the drillships' main engines, as well as in engines that supply power for operating drilling equipment and support vessels," according to the EPA's preliminary determination.

The document states "since the project is located well away from land, the project's emissions impacts will be dispersed over a wide area with no elevated concentration levels affecting any onshore populated area."

The project isn't expected to result in job growth. According to the EPA, "the potential growth of industrial, commercial and residential sources as a result of the proposed DeSoto Canyon and Lloyd Ridge drilling exploration activities in the area just west of the proposed drilling activities is well developed. It is expected that the current infrastructure is more than adequate to support the proposed drilling activities, and no additional growth is expected."

(c)2011 The News Herald (Panama City, Fla.). Distributed by MCT Information Services.

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Cambodia Calls for Talks with Thailand on Disputed Oil and Gas Zone

- Cambodia Calls for Talks with Thailand on Disputed Oil and Gas Zone

Tuesday, August 30, 2011
Deutsche Presse-Agentur (dpa)

Cambodia called Tuesday for the newly elected Thai government to resume talks on resolving claims to a 27,000-square-kilometer stretch of seabed considered rich in oil and gas.

The Cambodian National Petroleum Authority, a government body, said it had "a firm commitment to finding an equitable and transparent resolution to the overlapping claims area."

"The [government] would welcome the resumption of open and official negotiation on this issue and will pursue such a course as soon as practicable," it said.

The statement marked the second time in little more than a month that Cambodia has sought to restart the talks.

The authority said discussions held from 2001 to 2007 had been "fruitful," adding that the government of Abhisit Vejjajiva, which took power in 2008 and had rocky relations with Phnom Penh, had sought to resolve the dispute prior to this year's election.

To that end, it said, Bangkok and Phnom Penh had held secret talks to try to reach a deal.

A number of major oil companies have signed exploration deals with Cambodia in the Gulf of Thailand, including the US firm Chevron Corp and France's Total SA.

In 2001, the two nations signed an agreement that outlined their joint management of resources in the disputed zone, but the details have yet to be worked out.

Cambodia hopes to reap a windfall from oil and gas revenues that could transform the impoverished nation.

Copyright 2011 dpa Deutsche Presse-Agentur GmbH

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Sionix to Build Bakken Water Treatment Plant

- Sionix to Build Bakken Water Treatment Plant

Tuesday, August 30, 2011
Sionix Corporation

Sionix Corporation has executed an agreement with Dakota Solutions, Inc. (DSI) for the lease of property in Tioga, North Dakota for the construction and operation of a Waste Water Treatment Facility (WWTF) in the Bakken Shale Formation.

Under the terms of the agreement Sionix plans to design, build, own and operate a WWTF on an 80 acre parcel of leased property near Tioga, ND, the center of drilling operations in North Dakota. Once constructed, this will be the first WWTF of its kind in the Williston Basin. The WWTF will be designed specifically for the treatment of heavily contaminated production, flowback and frac water generated by the rapidly expanding oil and gas drilling activities in the region, and will be equipped with the company's proprietary MWTS products and underlying dissolved air flotation technology. DSI, based in Tioga, North Dakota, owns and operates a fleet of waste hauling tankers for the transport of oil and gas drilling waste water in the Williston Basin region of North Dakota. DSI will transport oil and gas drilling waste to the WWTF as well as treated water back to drillers so that continued draw down on threatened fresh water resources is minimized.

Drilling activities in the energy rich Bakken Shale area of the Williston Basin are in the early stages of development. Drillers in the Williston Basin region of North Dakota currently dispose of their drilling wastes primarily in deep injection wells and continually access fresh water resources for their fracking operations, which is critical to the liberation of energy resources in the shale formation. The Williston Basin has limited availability of fresh water from glacial or bedrock aquifers, ground water resources, and municipal supplies to support drilling operations.

"After months of evaluating available data, we are moving forward with plans to construct and operate a waste water treatment facility in the Bakken Shale Formation," said James R. Currier, Chairman and CEO of Sionix. "We believe the combination of current and projected oil and gas drilling activities, limited availability of fresh water resources, and the absence of a comprehensive waste water treatment and water recycling facility makes this high energy reserve area an ideal location for the installation and operation of a WWTF equipped with our proprietary MWTS. It is expected to provide a critical resource for oil and gas drillers to treat and recycle (millions of gallons of) contaminated production, flowback and frac waste water (daily) without unnecessary stress on limited fresh water resources in the area. We expect the facility will serve not only oil and gas interests but also other industrial, agricultural, commercial and general public demands that require access to the limited public water supplies. With DSI hauling waste water exclusively to the Sionix WWTF, expected contracts with a number of drillers, and anticipated cooperation from local regulators, we believe we will have significant demand for our services."

John Hennessy and Mark Tudahl, co-owners of DSI, commented, "With deep roots, strong family ties, and a life long love for the prairies of North Dakota, we feel this is a great opportunity to preserve and maintain one of the prairies' most vital resources, simply water."

About Sionix Corporation
Sionix designs innovative and advanced Mobile Water Treatment Systems (MWTS) intended for use in energy projects including subterranean fracturing used in oil and gas drilling, government facilities, healthcare facilities, emergency water supplies, housing development projects, and various other industrial processes. These systems can be located adjacent to contaminated water sites or as a pre-treatment for reverse osmosis and other membrane applications. Industries involved in dairy, agribusiness, meat processing, mining, poultry operations, and many others can benefit from Sionix' cost-effective, easily maintained, portable water treatment systems. For more information about the company, go to

About Sionix Technology
Using a patented dissolved air flotation (DAF) technology packaged in a mobile shipping container, air bubbles between the size of 1 and 2 microns are injected and float organic contaminants to the surface where 99.95% are skimmed off, and a majority of inorganic contaminants are also captured and removed. This compares to standard DAF units which historically have been limited to using bubble sizes of 50 microns or larger. The size of these bubbles is important because the smaller the bubble, the greater the surface tension. They can then hold together longer and elevate more organic contaminants to the surface for removal.

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Pa. Gas Lease, Royalty Income Taxes Top $100MM

- Pa. Gas Lease, Royalty Income Taxes Top $100MM

Tuesday, August 30, 2011
Knight Ridder/Tribune Business News
by Timothy Puko, The Pittsburgh Tribune-Review

Pennsylvania landowners are paying hundreds of millions of dollars in income taxes on money earned from Marcellus shale gas activity, and the tax revenue, like the drilling, is growing fast.

"I wrote the checks to pay the taxes, so I know," said Rita Resick, a Somerset County farm owner who has collected lease money twice since 2007. "This thing is generating tax revenue. And rightly so. We make money, so we pay taxes. That's how things work."

When Resick paid taxes on the lease-signing bonus in 2007 for gas drilling on her 300-acre farm, she was an early player in what has become a tax boon for the state. Lease and royalty income taxes totaled $17 million in 2007; that swelled to more than $100 million from 2010 earnings so far.

The state has maybe half of the collections still to count for 2010, according to figures from the state Department of Revenue.

Since the shale gas rush started in Pennsylvania in 2005, drillers have bored more than 3,700 wells into the gas-rich Marcellus rock layer, a mile or deeper underground, according to the Department of Environmental Protection. They have sought nearly 8,600 well permits through Aug. 12, the most recent statistics available.

An Associated Press survey identified at least 8 million acres of leased gas land -- more than a quarter of the state's total area. Department of Revenue figures show that more than 50,000 taxpayers a year collected oil and gas revenue between 2007 and 2009.

Until this year, leases and bonus payments were the biggest expense for drillers. They spent about $2 billion a year just on leases from 2008 to 2010, according to industry figures from a survey released this summer.

As more wells are drilled and production increases, lease payments will shrink and royalty payments will skyrocket. Royalties are expected to jump from $53.4 million in 2009 to nearly $1.9 billion in 2012, according to the survey, which was funded by the Marcellus Shale Coalition industry group and conducted by professors at Penn State University and the University of Wyoming.

"For counties with heavy (Marcellus shale) drilling activity, the increase in rent and royalties income offers the best proof of the positive economic impact of the industry," Frank Gamrat, a researcher at the Allegheny Institute for Public Policy, wrote in an e-mail. "The question is: How much more will it grow? It may eventually contribute a lot to income tax coffers, but right now is small in terms of total income reported."

Pennsylvania treats the money as earned income. Individual landowners pay at the 3.07 percent income tax rate, and corporate owners pay at the 9.99 percent corporate tax rate.

The state so far tallied $102.7 million in such tax revenue for 2010 on an estimated $2.4 billion in earnings, according to state and industry figures. That's the first time the tax revenue topped $100 million, and it was collected from only 29,396 taxpayers -- compared with 64,848 in the prior year.

Why the difference? The state still must count returns from all the taxpayers who requested extensions, which should be finished this fall, Department of Revenue spokeswoman Elizabeth Brassell said. State officials are not sure how big the late-coming payments are, but economists who reviewed the number said the tax revenue might double to more than $200 million if as many taxpayers file for 2010 as there were in 2009.

The partial counting of returns is just one reason why 2010 collections could be considerably higher, said Seth Blumsack, an assistant professor of energy policy and economics at Penn State. The department counted oil and gas rent, and royalty revenue from the 23 counties in the state that have extensive drilling. Another Penn State study will note that about 25 percent of the owners of that gas land live in other counties and were not counted in those numbers, although they still pay taxes to the state, Blumsack said.

"The conclusion is the state's bringing in a non-trivial amount of tax revenue from this," said Blumsack, one of three academics who studied numbers for the Marcellus Shale Coalition.

Analysts are still debating drilling's true potential tax impact on Pennsylvania.

Drillers have at times overstated their impact on the economy to gain public and political favor, said Sharon Ward, director of the Pennsylvania Budget and Policy Center. Pennsylvania is the only major drilling state without a severance tax on the fuel that drillers extract.

The state could have collected another $220 million if it had passed a tax similar to West Virginia's when then-Gov. Ed Rendell proposed it in 2009, according to the center's calculations. Gov. Tom Corbett has said he opposes an extraction tax.

"The way I liken the industry is that it's like a newborn baby. It's tiny, and it gets all of the attention," Ward said. "The public should look at all the numbers bandied about with the Marcellus shale because they're (often) publicity numbers, and they're used as publicity numbers."

A drilling tax might be useful if its proceeds go back to drilling communities, said Resick, who, with her husband, bought Laurel Vista Farms in Lincoln, Somerset County, in 1988. Now drilling communities have extra road repairs and government and legal work -- without any gas tax money to pay for it. But she isn't sure whether a tax limited to paying for local impacts could even work or get approval statewide, she said.

"It's complex," she added. "Taxing -- it depends on how the tax is structured, what they do with the proceeds for the tax. It's a hard thing to consider in a vacuum. I don't know what to think about it."

(c)2011 The Pittsburgh Tribune-Review (Greensburg, Pa.). Distributed by MCT Information Services.

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Repsol: Sacyr, Pemex Deal Excludes Majority of Shareholders

- Repsol: Sacyr, Pemex Deal Excludes Majority of Shareholders

Tuesday, August 30, 2011
Dow Jones Newswires
by Santiago Perez

Spain's Repsol YPF SA (REP.MC) said Tuesday that it will seek to ensure that the interest of all shareholders is met after two of its top shareholders joined forces to control close to 30% of the voting rights at the oil firm.

As with previous attempts by Sacyr to sell a stake in Repsol to Russia's Lukoil Holdings (LKOH.RS), the Spanish oil company "will ensure that the interest of all shareholders is met, particularly in light of an agreement that excludes a majority of shareholders," Repsol spokesman Kristian Rix said in an emailed statement.

As part of an agreement disclosed late Monday by Spanish construction firm Sacyr-Vallehermoso SA (SYV.MC), Mexican state-owned oil company Petroleos Mexicanos will increase its Repsol stake to 9.8% from 4.8%, and vote together on key company issues with Sacyr.

The two companies said they want to split the chairman and chief executive roles, which are now both held by Antonio Brufau. Brufau has the backing of Catalan lender Caixabank SA (CBNK.MC), Repsol's second-largest shareholder with a stake of about 12%.

In 2008, Sacyr, owner of about 20% of Repsol, sought to sell Repsol shares to Lukoil as part of an effort to cut down on debt.

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

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Lucrative Mineral Rights Driving Force to Find Rightful Heirs

- Lucrative Mineral Rights Driving Force to Find Rightful Heirs

Tuesday, August 30, 2011
Knight Ridder/Tribune Business News
by Jeremy Boren, The Pittsburgh Tribune-Review

Imagine winning the lottery without buying a ticket.

It was much like that for Glenn Pore when the Fayette County retiree accepted an energy company's offer to pay him and 10 relatives thousands of dollars to lease mineral rights beneath farmland his ancestors plowed a century ago.

"I was shocked to find out that I had any oil and gas rights," said Pore, 77, of Fairhope. "Remember, I don't own the land."

That doesn't matter.

In Pennsylvania, property owners can sell surface property but retain control of minerals. That includes natural gas trapped in the mile-deep Marcellus shale formation that was out of reach until the technology behind hydraulic fracturing evolved enough to extract it.

Mineral rights stick to the branches of a family tree no matter how many times the surface property sells. The rush to make money from the lucrative gas reserve includes a cadre of genealogists, title experts and landmen the energy companies hire to hunt down living heirs of last century's business-savvy relatives.

"They were old-time farmers, and they owned a bunch of land between Perryopolis and Arnold City," Pore said. "I thought they never left me anything, until this."

Pore's share, passed down from his great-grandmother, amounted to 5 percent, netting him $2,300 for a five-year lease but potentially much more from 14 percent in royalties if the firm drills a productive well. He plans to pass on the lease in his will so it can benefit his two children and six grandchildren.

"People are either really excited or really skeptical," said David Szuhay of Szuhay and Associates, a Robinson-based consultant to oil and gas companies. "When I call, I try to quickly mention great-grandpa Joe Flanagan, and if that name clicks, they're listening."

The larger number of eligible descendants, the smaller their shares.

"We've had cases that have gone down to 1/512th of a share," said Lester Greevy, a Lycoming County lawyer who specializes in estate planning and elder law. "They had a family tree that was eight feet long."

Finding family members spread across five or six generations comes with high stakes.

Relatives can sue an energy company for millions of dollars if it drills a well and takes natural gas without permission from everyone who owns a portion of the mineral rights.

"There is a line of cases in Pennsylvania where if you take somebody's gas, and you don't have a lease with them, they can become a partner in the well," said Harry Klodowski Jr., an attorney in Pine. "They certainly don't want to give them 50 percent of a well, when it could be 18 percent."

A typical title search before a home purchase goes back 60 years, said John Ward, a Greensburg attorney. Oil and gas searches reach back to about 1860, the year Abraham Lincoln was elected president.

Ward said drilling companies want to make deals quickly before regulations or scrutiny threaten profits. He advises clients to ensure firms accept responsibility for tracking down relatives and agree to pay royalties even if someone isn't found.

In 2006, state lawmakers enacted the Dormant Oil and Gas Act to address the problem of missing heirs. It allows the missing person's share to be put into escrow after a rigorous search.

"I like to think of ourselves as genealogists in reverse," said Dave Fittros, owner of Identifax Research Service in Clarksburg, W.Va., who works for energy companies. "Genealogists start with you and go backwards. We start with someone in 1894 and come forward."

Fittros' firm checks cemetery records, marriage certificates, death notices, genealogy websites, deeds and many other records to find family members. In one case, it took 2 1/2 years to find a man with the last name of White who moved as a child from West Virginia to California and was the sole heir to a natural gas well that later generated up to $20,000 a month.

Generally, people work with a genealogist to learn about family roots for religious reasons, medical issues or simply because they're proud of their heritage, said Elissa Powell, owner of Powell Genealogical Services in Marshall.

Searching for heirs who might benefit from an ancestor's mineral rights has created business opportunities for her and her industry as the Marcellus shale boom grows.

"That's the glamorous side of it," Powell said. "I enjoy the thrill of the hunt."

Szuhay of Robinson said energy companies typically go to the trouble of dealing with so many heirs because the cost of routing a mile-long horizontal drilling operation around a property can be high. Those who refuse probably won't get another chance, he said.

He advised family members to sign with large companies capable of drilling wells and generating royalties, rather than taking a high-dollar, up-front payment from an investment firm.

"There is so much work that goes into it before a well can be drilled," said Szuhay, whose 25-year business grew from a one-man operation to 60 employees and four offices thanks to Marcellus shale. "We want families to be happy they signed a lease."

(c)2011 The Pittsburgh Tribune-Review (Greensburg, Pa.). Distributed by MCT Information Services.

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Eni, Libyan Rebels Sign Deal to Restore Pre-Civil War Role

- Eni, Libyan Rebels Sign Deal to Restore Pre-Civil War Role

Tuesday, August 30, 2011
Knight Ridder/Tribune Business News
by Adnkronos International, Rome

Paolo Scaroni, chief executive officer of Eni met with Libyan rebel leaders in Benghazi Monday where they signed a non-binding agreement to restore the Italian oil company's pre-civil war role as the North African country's biggest oil and natural producer.

"With the memorandum, Eni and the National Transition Council (NTC) are working to recreate the conditions for a swift return of Eni's activities in the country," the Rome-based company said in a statement.

The agreement would allow Eni to resume gas imports to Italy via the Greenstream pipeline, a move that Scaroni last week said was important ahead of winter when demand for the fuel increases.

Scaroni's trip to Libya makes him the first head of a major oil company to visit Libya since rebels last week took over the capital Tripoli, putting an end to Muammar Gaddafi's 42-year-old authoritarian government.

News reports said Scaroni met with the head of Libya's National Oil company, in addition to the NTC, the rebel's political leadership.

Eni is expected to supply Libyan rebels with fuel as part of an international effort to create security and infrastructure in post-Gaddafi Libya.

Oil traders said Eni was trying to hire a tanker to travel to Libya this week, Reuters news agency reported.

Eni needs between 6 and 18 months to restart its oil and gas fields in Libya, Scaroni said Thursday in Milan following a meeting with NTC prime minister Mahmoud Jibril.

Eni has been in the country since 1959 and got 13 percent of its revenue from Libyan natural resources prior to the conflict that broke out in February.

(c)2011 Adnkronos International (Rome). Distributed by MCT Information Services.

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Texas Suit Focuses on Drilling Site Attendant Status

- Texas Suit Focuses on Drilling Site Attendant Status

Tuesday, August 30, 2011
Houston Chronicle
by L.M. Sixel

Some are winter Texans looking for extra cash to supplement their retirement. For others, it's a job like any other.

Either way, the Department of Labor believes the Gate Guard Services attendants who live in their recreational vehicles while logging traffic at oil and gas drilling sites were improperly classified as independent contractors.

Last year the government told Gate Guard that it owes its 345 attendants $6.2 million in minimum wage and overtime for the 24-hour/seven-day-a-week job. The back wage tally also includes overtime pay for service technicians who empty the septic tanks and provide fuel for the attendants' RVs. Some worked as many as 96 hours a week, according to the Labor Department.

But Gate Guard and its Houston-based owner, Bert Steindorf, reject the government's position.

Anticipating a Labor Department lawsuit, Gate Guard sought legal action through a declaratory judgment in a Victoria federal court, hoping to gain the upper hand on procedural issues such as choosing where the case will be heard.

The government filed its lawsuit in February, three months after Gate Guard filed its case.

Corpus Christi-based Gate Guard provides gate attendants at drilling sites all around Texas, including several locations near Houston and San Antonio.

"Companies believe they have to accept what the government tells them," said Annette Idalski, an employment lawyer with Chamberlain Hrdlicka in Atlanta who is representing Gate Guard. "They don't. They can fight back."

Other experts question that aggressive stance, noting that Gate Guard's preemptive declaratory judgmentlawsuit won't keep the government's wage and hour case from going forward.

Nor will it provide much in the way of procedural advantages, predicted Houston employment lawyer Rex Burch of Bruckner Burch, who is not involved in the case.

The company's strategy was the brainchild of Daniel D. Pipitone, a maritime and commercial litigation lawyer at Chamberlain Hrdlicka in Houston. He figured he could borrow some of the same aggressive litigation techniques he uses when he's wrestling with a commercial case.

"Why can't we be proactive here?" said Pipitone, recounting a conversation he had with Idalski, his colleague in Atlanta. Idalski said she explained that companies typically wait for the Labor Department to take legal action and then respond.

Pipitone said being first to file gives a party the advantage of being the plaintiff, the side that gets the first and last word in jury arguments.

But Burch said that, from his reading of the ruling last month by senior U.S. District Judge John D. Rainey, he expects the court will end up hearing the case in traditional fashion with Gate Guard as the defendant.

Rainey's order combined the two cases into one and moved it to Victoria. That was Gate Guard's choice because many of its gate attendants live there. The Labor Department's preference was federal court in Corpus Christi.

Ed Sullivan, an employment lawyer who represents management clients with Oberti Sullivan in Houston, agrees that the ruling will have little effect. It's a novel strategy, he said, but one that won't likely change the course of the case.

"At the end of the day, the question will be whether they're independent contractors," said Sullivan, who regularly represents clients in wage and hour disputes. And companies typically lose, he added, citing the Labor Department's high rate of success in cases it brings.

A Labor Department spokeswoman said the agency doesn't comment about ongoing cases.

Legal wrangling aside, Pipitone agrees that the heart of the issue is whether the 345 attendants are independent contractors who are responsible for paying all their own taxes and providing their own benefits, or whether they're employees who are subject to federal wage and hour laws such as minimum wage and overtime.

The attendants are on site 24-hours a day and earn $100 to $175 a day. Nothing prevents them from hiring someone else to watch the gate, said Idalski. And nothing stops them from reading, watching television or even drinking beer while they're in their trailers.

The gates are rigged with a bell to summon the attendants, said Idalski, estimating that they only spend a few hours a day actually working.

They're not supervised, she said, and the workers sign contracts agreeing they are independent contractors.

If Gate Guard doesn't convince a jury that its workers are independent contractors, it will argue that they're not really working when they're in their RVs, said Idalski.

The Labor Department has already agreed to subtract eight hours a day per attendant for sleeping and eating, which reduces the company's back wage bill to $2 million, she said.

Generally speaking, people who work from home can take care of their children, cook dinner and do laundry while they wait for assignments and that personal time isn't considered work time, she said.

Similarly, full-time employees who are on-call are free to do what they wish unless they're called in, according to the Labor Department rules.

They make a distinction between workers who are "waiting to be engaged" and those who are "engaged to wait" -- such as firefighters who play checkers while waiting for alarms or factory workers who chat with their co-workers while machinery is repaired.

(c)2011 the Houston Chronicle. Distributed by MCT Information Services.

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Exxon Mobil and Rosneft Team Up

- Exxon Mobil and Rosneft Team Up

Aug 30, 2011

Exxon Mobil (NYSE:XOM) and Rosneft teamed up with U.S. company ExxonMobil to develop Russian Arctic oil fields, that had eluded BP earlier this year.

Rustam Kazharov, a spokesman for Rosneft told the Associates Press the deal was signed Tuesday in the presence of Russia's Prime Minister Vladimar Putin.

Rosneft struck a deal with BP in January to jointly increase Russia's Arctic but the deal fell through after BP's Russian shareholders managed to block the deal.

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Rosneft and ExxonMobil Plan $3.2B Program in Black, Kara Seas

- Rosneft and ExxonMobil Plan $3.2B Program in Black, Kara Seas

Tuesday, August 30, 2011
ExxonMobil Corp.

Rosneft and ExxonMobil have executed a Strategic Cooperation Agreement under which the companies plan to undertake joint exploration and development of hydrocarbon resources in Russia, the United States and other countries throughout the world, and commence technology and expertise sharing activities.

The agreement, signed by Rosneft President Eduard Khudainatov and ExxonMobil Development Company President Neil Duffin in the presence of Russian Prime Minister Vladimir Putin, includes approximately US $3.2 billion to be spent funding exploration of East Prinovozemelskiy Blocks 1, 2 and 3 in the Kara Sea and the Tuapse License Block in the Black Sea, which are among the most promising and least explored offshore areas globally, with high potential for liquids and gas.

In the course of these projects, the companies will use global best practices to develop state-of-the-art safety and environmental protection systems.

The agreement also provides Rosneft with an opportunity to gain equity interest in a number of ExxonMobil's exploration opportunities in North America, including deep-water Gulf of Mexico and tight oil fields in Texas (USA), as well as additional opportunities in other countries. The companies have also agreed to conduct a joint study of developing tight oil resources in Western Siberia.

The companies will create an Arctic Research and Design Center for Offshore Developments in St. Petersburg, which will be staffed by Rosneft and ExxonMobil employees. The center will use proprietary ExxonMobil and Rosneft technology and will develop new technology to support the joint Arctic projects, including drilling, production and ice-class drilling platforms, as well as other Rosneft projects.

"We have a clear vision for Rosneft's strategic direction — building world-class expertise in offshore business and enhancing oil recovery," said Rosneft president Eduard Khudainatov, following the signing ceremony. "The partnership between Rosneft with its unique resource base, and the largest and one of the most highly capitalized companies in the world reflects our commitment to increasing capitalization of our business through application of best-in-class technology, innovative approach to business management, and enhancement of our staff potential. This venture comes as a result of many years of cooperation with ExxonMobil and brings Rosneft into large scale world-class projects, turning the company into a global energy leader."

ExxonMobil Development Company President Neil Duffin said: "Today's agreement with Rosneft builds on our 15-year successful relationship in the Sakhalin-1 project. Our technology, innovation and project execution capabilities will complement Rosneft's strengths and experience, especially in the area of understanding the future of Russian shelf development."

Rex Tillerson, chairman and chief executive officer of Exxon Mobil Corporation, who attended the ceremony, said ExxonMobil will benefit Russian energy development by working closely with Rosneft.

"This large-scale partnership represents a significant strategic step by both companies," said Tillerson. "This agreement takes our relationship to a new level and will create substantial value for both companies."

The agreement provides for constructive dialogue with the Russian Federation government concerning creation of a fiscal regime based on global best practices.

Additionally Rosneft and ExxonMobil will implement a program of staff exchanges of technical and management employees which will help strengthen the relationships between the companies and provide valuable career development opportunities for personnel of both companies.

The East Prinovozemelskiy License Blocks have a total area of 126,000 square kilometers (30 million acres) in water depths ranging between 50 and 150 meters (165 feet and 500 feet). Tuapse Block in the Black Sea has the total area of 11,200 square kilometers (2.8 million acres) and water depths ranging from 1,000 to 2,000 meters (3,300 feet and 6,500 feet). Rosneft equity interest in both joint ventures will be 66.7 percent, while ExxonMobil will hold 33.3 percent.

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Alberta Makes Concessions To Oil-Sands Producers In Parks Plan

- Alberta Makes Concessions To Oil-Sands Producers In Parks Plan

Tuesday, August 30, 2011
Dow Jones Newswires
by Edward Welsch

A final version of the Alberta government's land conservation plan for the oil-sands region released Monday made some concessions to oil companies after the original plan threatened to cancel parts of several oil-sands leases in order to preserve them for caribou habitat.

"What we think this plan achieves is a balance between the environment, development and the community aspect of living and working in Alberta," Sustainable Resource Development Minister Mel Knight said during a press conference.

Knight said there may still be parts of some oil-sands leases cancelled, but that the effect would be "very, very little," and the plan "is going to be quite satisfactory to most operators in the area."

The original parks plan released in April, which sets aside more than 7,000 square miles for recreational parks and wildlife including caribou, was panned by some of the oil-sands developers who were seeing parts of their leases cancelled.

However, most developers in the area, including Cenovus Energy Inc. (CVE) and Athabasca Oil Sands Corp. (ATH.T) said they had worked with the government to ensure that the parts of their leases that would be revoked were on plots that weren't economically viable.

Knight said the government worked with other companies to shift conservation land around for the final conservation plan, but he declined to provide any specific details.

Jennifer Grant, director of oil-sands research for the Canadian environmental think tank Pembina Institute, said it appeared that the government had shifted some lands around to accommodate oil-sands leases owned by Sunshine Oil Sands Ltd., a privately owned developer that was particularly hard hit under the draft plan.

Executives of Sunshine Oilsands, which is planning an initial public offering in Hong Kong later this year, weren't immediately available to comment because they were traveling in China.

"The government's efforts to accommodate industry interests are apparent in this version of the Lower Athabasca Regional Plan, with the adjustment of some protected areas," Grant said. She said more loopholes were introduced in the latest plan that allow companies to get exemptions to environmental standards.

Knight said though the plan had critics, it set aside a large portion of land for protection that wasn't there during the industry's last resource boom in the mid-2000s.
Copyright (c) 2011 Dow Jones & Company, Inc.

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BOEMRE Unveils New Development, Permit Tools

- BOEMRE Unveils New Development, Permit Tools

Tuesday, August 30, 2011

Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich today announced that the bureau has developed and implemented several new tools to help offshore oil and gas operators improve their exploration and development plan and permit applications. These tools will allow offshore operators to better track their submissions and improve the quality and completeness of their applications, which will decrease processing delays.

“We continue to meet with operators individually and in large groups on a frequent basis. We take very seriously requests for additional information and additional clarity regarding our plan and permit review process. Recently, we have been asked to identify the most common errors and the most frequently-encountered reasons for plan and permit applications to be returned to operators,” said Director Bromwich. “Our goal is to reduce the amount of back and forth with plan and permit applications and to help the industry learn from the best practices that many operators have developed to submit successful applications. That will result in higher quality applications in the first instance and reduce the need for them to be returned to operators. We will continue to search for additional ways to improve our own processes and make them more efficient, without in any way modifying or relaxing the more stringent safety and environmental rules we have implemented over the past year.”

For a complete list of BOEMRE’s reforms to date, go to:

With respect to permits, BOEMRE has added a new feature to its online application system (eWells), which allows authorized users to track the status of permit applications. This allows operators to follow where their application is in the processing system. This increases transparency and provides greater predictability for operators.

With respect to plans, BOEMRE has announced a new online resource to help operators improve the accuracy of their exploration plan (EP) and development operation coordination document (DOCD) submissions. The website offers fact sheets and documents to assist offshore operators in submitting complete applications, which will decrease processing delays. Guidance includes a fact sheet that offers information on how operators can submit stronger applications, frequently asked questions on the specific elements of a successful submission, and a new EP/DOCD checklist that can be used to ensure the inclusion of needed information in an operator’s application. The page is online at:

Today’s announcements were shared with more than 200 offshore industry personnel at a workshop held by BOEMRE in its Gulf of Mexico Regional office. The full-day workshop includes a discussion of common errors and omissions found in the submission of permit applications, and overviews and updates on sub-sea containment and the bureau’s well screening tool. One highlight will be an industry panel that will discuss proven methods and strategies for the completion of fully compliant permit applications focusing on the well screening tool, a critical aspect of the sub-sea containment requirements which is most often a cause of returned permit applications.

These improvements in the permit and plan review process are consistent with other reforms in the process that have recently been implemented. In early June, BOEMRE announced specific improvements to the permit application and review process, including the publication of a permit application checklist to assist offshore oil and gas operators in submitting complete applications to drill. The bureau also implemented a requirement that BOEMRE personnel conduct completeness checks before beginning an in-depth, substantive review of the application. This allows staff to capture the major gaps in the submission early in the review process. In addition, we developed clear permit review priorities that will expedite our review. For more information, go to:

BOEMRE has approved 113 deepwater permits for 34 unique wells that require subsea containment since an applicant first successfully demonstrated containment capabilities in mid-February. There are currently 17 permits pending and 22 permits have been returned to the operator with requests for additional information, particularly information regarding containment. Additionally, BOEMRE has approved 45 permits for activities including water injection wells and procedures using surface blowout preventers. Only 1 of these permits is pending and 1 permit has been returned to the operator for additional information.

BOEMRE has also approved 69 new shallow water well permits have been issued since the implementation of new safety and environmental standards on June 8, 2010. Permits have averaged more than 7 per month since fall 2010, compared to an average of 8 permits per month in 2009. Just 13 of these permits are currently pending; with 10 having been returned to the operator for more information.

For more information on permit approvals, go to:

For more information on plan approvals, go to:

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ExxonMobil, Americas Petrogas to Explore Argentina Shale

- ExxonMobil, Americas Petrogas to Explore Argentina Shale

Tuesday, August 30, 2011
Americas Petrogas

Americas Petrogas, a Canadian company, is pleased to announce that it has, through its wholly-owned Argentina subsidiary, Americas Petrogas Argentina S.A., entered into a farm-out agreement (FOA) with ExxonMobil Exploration Argentina S.R.L., a wholly-owned subsidiary of Exxon Mobil Corporation for the exploration and potential exploitation of Americas Petrogas's Los Toldos blocks (163,500 gross acres or 255 sections or 660 square kilometers) located in Neuquen, Argentina. The Los Toldos blocks are located in the western region of the Neuquen Basin and are in a favorable location relative to other recent discoveries of shale oil and shale gas in the Vaca Muerta formation.

Barclay Hambrook, President and CEO of Americas Petrogas, stated "As the world's largest publicly-owned integrated oil and gas company, ExxonMobil brings vast experience, technology, research and financial resources to this joint venture with Americas Petrogas."

Pursuant to the terms of the FOA, ExxonMobil has committed to fund US$53.9 million (including taxes) during the exploration phase with a further US$22.4 million (including taxes) if the parties proceed to the exploitation phase, for a total potential initial investment of US$76.3 million. This focus of exploration, exploitation and other related activities is expected to be directed towards the Los Toldos 1 and 2 blocks. ExxonMobil will earn a 45% interest in the Los Toldos blocks with Americas Petrogas retaining a 45% interest and the government entity, Gas y Petroleo del Neuquen ("G&P"), maintaining a 10% interest. ExxonMobil will also provide technical assistance on the Los Toldos blocks. The FOA is subject to approval by G&P.

Americas Petrogas is the operator of the Los Toldos blocks and expects to spud the first well in the fourth quarter of 2011 with the primary target being the unconventional Vaca Muerta formation and potential secondary targets in other conventional and unconventional formations.

In addition to the Los Toldos blocks, Americas Petrogas has five other blocks within the Neuquen Basin's western shale corridor, including the Huacalera block which is located south of the Los Toldos blocks and which was recently drilled, cased and cemented, having intersected 1,742 feet of Vaca Muerta shale. In published reports, the U.S. Energy Information Administration has cited a risked, recoverable resource of 240 trillion cubic feet ("TCF") of gas for the Vaca Muerta shale in the Neuquen Basin.

Mr. Guimar Vaca Coca, Managing Director of Americas Petrogas' Argentina subsidiary, said, "We believe the next major shale development outside of North America will be in the Neuquen Basin. Our Argentina management and technical personnel look forward to working with ExxonMobil to explore the substantial hydrocarbon potential of the Los Toldos blocks."

Daniel De Nigris, General Manager of ExxonMobil Exploration Argentina, said, "We are pleased to be working with Americas Petrogas on the highly prospective Los Toldos blocks and if successful, look forward to providing clean and reliable energy for Argentina."

About Americas Petrogas Inc.

Americas Petrogas Inc. is a Canadian company whose shares trade on the TSX Venture Exchange under the symbol "BOE". Americas Petrogas has oil and gas interests in numerous blocks involving exploration, development and production. Americas Petrogas has proven conventional oil and gas reserves, as well as evolving unconventional resource plays including shale gas, shale oil, and tight sand oil and gas in Argentina's prolific Neuquen Basin. For more information about Americas Petrogas, please visit

About Vaca Muerta Shales

The Vaca Muerta Shale is one of two principal source rocks in the Neuquen Basin of Argentina. The shale is late Jurassic-early Cretaceous in age, covers an area of approximately 8,500 square miles, varies in depth between 5,500 to 14,000 feet and in places is up to 2,000 feet in thickness.

The Vaca Muerta characteristics are believed to be similar to shale reservoirs such as the Eagle Ford, Haynesville and Horn River in North America which have so far resulted in discoveries of both shale gas and shale oil. The shale has recently become the focus for many of the important shale gas players in North America, including Apache, ExxonMobil, Total as well as YPF in Argentina.

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Novatek Awarded Yamal-Nenets Licenses

- Novatek Awarded Yamal-Nenets Licenses

Tuesday, August 30, 2011

OAO NOVATEK today announced that its subsidiary OOO NOVATEK- Yurkharovneftegas was granted four new license areas for exploration and production in the Yamal-Nenets Autonomous Region based on a ruling by the Russian Government.

Two of the license areas –Salmanovskiy (formerly, Utrenniy) and Geofizicheskiy - are located in the hydrocarbon-rich Gydan peninsula, and have combined reserves of 978.6 billion cubic meters of natural gas and 46.3 million tons of liquid hydrocarbons under Russian reserve classification “ABC1 + C2”. The remaining two license areas - North-Obskiy and East-Tambeyskiy – are located offshore in the northern portion of the Gulf of Ob, and have a combined resource base of 1,763 billion cubic meters of natural gas and 220.7 million tons of liquid hydrocarbons according to the Russian reserve classification “D1 + D2”. All the license areas are adjacent to the Yamal peninsula where the Company is developing its Yamal LNG project.

According to NOVATEK’s Management Board Chairman, Leonid Mikhelson, “These new license areas significantly expand our current reserve and resource base and provide access to a region with enormous resource potential to support NOVATEK’s long-term growth plans”.

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MEO Australia, Fugro Execute Zeus Survey Contract

- MEO Australia, Fugro Execute Zeus Survey Contract

Tuesday, August 30, 2011
MEO Australia Ltd.

MEO Australia Limited advises that a contract has been executed with Fugro Multi Client Services Pty Ltd for the acquisition and processing of a 323 km2 3D multi-client seismic survey (‘Zeus 3D survey’) in WA-361-P, in the Carnarvon Basin, offshore Western Australia. WA-361-P is located in close proximity to the existing North West Shelf Gas Project (16.3 Mtpa), the Pluto LNG project (4.3 Mtpa) under construction and the proposed Wheatstone LNG project (8.6 Mtpa).

The 3D survey is designed to enable improved mapping of Heracles and other leads which are potential candidates for drilling in 2014. The survey covers an area of poor seismic data quality and also fills some large gaps in the 3D seismic coverage for this area. In addition, the 3D survey is being acquired in an East - West direction which enables enhanced imaging via multi-azimuth reprocessing.

The 3D survey over WA-361-P is part of a 1,318 km2 multi-client survey to be acquired utilising the ‘M/V Seisquest’ commencing on or about 1st September. The survey will take approximately 7 weeks depending on weather and possible extensions to the planned program. The final processed volume is expected to be delivered during Q2-2012.

The 3D survey brings forward and fulfils the minimum Permit Year 2 (Jan 2012 – Jan 2013) work program commitment of 150 km2 new 3D seismic.

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Treaty Updates Belize Operations

- Treaty Updates Belize Operations

Tuesday, August 30, 2011
Treaty Energy Corporation

Treaty Energy Corporation, a growth-oriented energy company in the oil and gas industry, today reported on its continued progress on the Belize project.

Treaty Energy is pleased to provide the following updates on projects that the Company is working on in Belize.

1) The surface lease agreement has been signed in partnership with one of the largest landowners in Belize, which covers a significant percentage of the 200,000 acre land portion of the concession.

2) The environmental approval for drilling of the two initial wells has been signed by Mr. Martin Alegria, Director of the Belize Ministry of the Environment and on file.

3) The passage way through a stream/ditch has been completed and pictures have been posted to Treaty Energy's Website, Twitter and Facebook sites. Continue to look for company updates, news and pictures on these sites

4) A roadway has been cut and cleared to the first drilling site and the well pad prepared.

5) All equipment cleared customs after approximately three weeks of paperwork and relocated to a secure site until our permanent 10 acre compound is ready to accept the equipment and become our established staging location near the Town of Independence. This Compound will include staff lodging; in addition, all buildings are being constructed by local craftsman at a very reasonable rate.

6) Mr. Keon Garbutt, a Belizean citizen, has been hired as Project Manager of the drilling operations in Belize for Treaty Belize Energy, Ltd.

7) Brian Luczywo has been promoted to Treaty Belize Energy Vice President of Operations.

The following is an update from Mr. Luczywo as of August 24th.

The Treaty Belize Energy office in Placencia is up and operating. In addition; our recently hired personnel and support staff are doing an excellent job. We have been busy getting our office functional. The following work has been completed:

Selected an office location key to the planning, implementation and coordination of the details of our day to day operations in Placencia

General maintenance repairs and upgrades to facility. Furniture and accessories delivered and suitable for office personnel

Central Air Conditioning installed in office and conference room. Internet, local phone, fax, US phone all installed and operational

Regular expense reports, accounting, banking, and communications back to the United States has been established

All project expenses brought under administration by the Belize office

Excitement is building in the area and Treaty Belize Energy is experiencing an influx of job applicants. We are currently building a database of names from which we will examine and determine the best qualified persons to ask and join the Treaty Belize Workforce

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