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Oil and Gas Energy News Update

Friday, September 9, 2011

Oil & Gas Post - All News Report for Friday, September 09, 2011

Friday, September 09, 2011

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Commodity Corner: Oil Falls as Euro Weakens

- Commodity Corner: Oil Falls as Euro Weakens

Friday, September 09, 2011
Rigzone Staff
by Matthew V. Veazey

Light sweet crude oil for October delivery fell below $86.00 a barrel Friday as the U.S. dollar strengthened against the euro.

The WTI bottomed out at $85.64 a barrel before settling at $87.24, still reflecting a day-on-day loss. It peaked at $89.50. The Brent contract price also ended the day lower, settling at $112.77 after trading within a range from $111.09 to $113.89.

A weaker greenback is bullish for crude oil—priced in dollars—because it becomes a better buy for investors holding other currencies. In the case of the euro Friday, the currency weakened amid mounting fears that Greece will default on its debt. The departure of a high-level German official from the European Central Bank Friday contributed to speculation that euro-zone countries will fail to resolve lingering policy disputes that have hindered efforts to resolve debt crises throughout the region.

Equities fell as the euro-zone uncertainty grew, chilling expectations about global demand for oil. The Dow Jones Industrial Average and S&P 500 each lost approximately 2.7 percent while the Nasdaq lost a relatively modest 2.4 percent. President Obama's latest plan to spur job creation in the U.S., presented Thursday night to a joint session of Congress, failed to brighten the demand outlook.

October natural gas also ended the day lower, falling to $3.915 per thousand cubic feet. Gas futures fluctuated from $3.885 to $3.99 during Friday's floor trading.

Front-month gasoline settled at $2.77 a gallon, slightly higher than the $2.76 intraday low. October gasoline peaked at $2.89 Friday.

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API: Obama's Jobs Plan a 'Missed Opportunity'

- API: Obama's Jobs Plan a 'Missed Opportunity'

Friday, September 09, 2011
American Petroleum Institute

API President and CEO Jack Gerard called the president's jobs plan a 'missed opportunity' and said the oil and natural gas industry could create more than a million new jobs for Americans and more revenue for our government with a few sensible changes in national energy policy.

"The president missed an opportunity to pick the low hanging fruit of job creation," said Gerard. "Allowing the responsible development of more of America's vast domestic oil and natural gas resources could generate more than one million new jobs in just seven years, with thousands of shovel-ready jobs that could be created almost immediately."

Gerard cited a study released this week by Wood Mackenzie (PDF file), sponsored by API, that shows the oil and natural gas industry can create 1.4 million additional jobs and more than $800 billion in additional government revenue by 2030.

"Raising taxes on an industry that already contributes more than $86 million every day to the federal government takes us in the wrong direction," Gerard said. "It could put American jobs at risk, decrease oil and natural gas production, harm millions of retirees who rely on income from energy companies, and actually reduce revenue to the government over time."

The oil and natural gas industry actually created jobs in August, a month when there were zero net jobs created in the overall economy, according to the Bureau of Labor Statistics.

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Cabot: Minimal Impact on Pa. Operations from Flooding

- Cabot: Minimal Impact on Pa. Operations from Flooding

Friday, September 09, 2011
Cabot Oil & Gas

Cabot Oil & Gas Corporation, in response to a significant volume of inquiries, today announced that its drilling operations in Susquehanna County, Pennsylvania have experienced only minimal disruptions as a result of the flooding. The Company elected, out of an abundance of caution, to temporarily shut-down its drilling operations last evening to insure the safety of its workers and to allow for individuals to take care of their personal needs. At the same time it reached out to the local emergency providers to offer assistance.

"Clearly the most important thing at this time is to help the community begin the recovery process and immediately help all of the residents who have been impacted," said Dan O. Dinges, Chairman, President and Chief Executive Officer. "To that end, we have committed both monetary and equipment resources to the area and are working with our service providers to engage their assistance as well."

Dinges added, "Least important at the moment, but in response to the questions being asked, the Company has restarted its operations and has continued to produce its wells at pre-flooding levels throughout this crisis, with no anticipated disruptions expected. Because of our closed loop drilling systems and frac staging that is contained in closed containers, the environmental impact to the drilling operation is significantly mitigated."

Cabot Oil & Gas Corporation, headquartered in Houston, Texas is a leading independent natural gas producer with its entire resource base located in the continental United States.

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Editorial: A Jobs Plan that Really Works

- Editorial: A Jobs Plan that Really Works

Friday, September 09, 2011
Louisiana Oil & Gas Association

Last night, President Obama addressed a joint session of Congress to discuss his plan to generate jobs, instill some sense of confidence in the market, and give a greatly needed jolt to the U.S. economy. What was meant to be the "speech of all speeches" turned out to be politically charged campaign rhetoric designed to place the deteriorating economic situation on a do-nothing Congress.

For the first time, the President acknowledged the fact that our nation's economy has stalled. And in an effort to get it going again, President Obama will propose his "American Jobs Act" as the solution to our stagnant economy.

From what was relayed in his speech, the "American Jobs Act" calls for approximately $450 billion to be spent over the next year on a number of initiatives that include infrastructure projects, tax credits for employee raises, an extension of jobless insurance, and money for the hiring of teachers nationwide.

First, let's discuss the positives. To the President's credit, he showed a willingness to work side by side with American businesses and acknowledged that there are many over-burdensome regulations that hinder business growth. His jobs plan calls for tax credits for business owners that hire unemployed workers and a 50% payroll tax cut for small businesses. These are certainly positive solutions that will support our business community and stimulate the economy.

Now, let's talk about the bad news. What was missing from the speech was an explanation as to how he will find the money to pay for these initiatives. How do we generate nearly one-and-a-half trillion dollars at the same time the Congressional "Super Committee" searches for over $1.5 trillion in cuts? Have we forgotten that our nation is bankrupt? Have we also forgotten that nearly 42% of Americans aren’t paying any taxes?

Let's take a look at some numbers. Currently, there are 14 million Americans that are unemployed. Approximately, 7.17 million of those potential workers are collecting unemployment insurance. Nearly 2.4 million jobs have been lost since President Obama took the oval office. The jobless rate in the U.S. has hovered around 9.0% or higher for 26 of the past 28 months. A good sign of how bad things are is the fact that long-term unemployment is at its highest levels since the Great Depression of the 1930s.
So, for the sake of the argument, let's assume that President Obama’s re-election depends on gaining back those jobs that have been lost. Let’s also assume that raising taxes in an economic depression is political suicide. With that said, what if an industry could offer cutting those unemployment numbers in half?

Releasing the stranglehold on America's oil and gas industry can generate those jobs and ensure sound economic growth without one tax increase.

In its recent study, the American Petroleum Institute found that U.S. policies which encourage the development and exploration of natural resources could, by 2030, increase domestic oil and natural gas production by over 10 million boed, generate 1.4 million jobs, and raise over $800 billion in government revenue.

In his speech, President Obama called for more products sold around the world stamped with the slogan, "Made in America." While our manufacturing sector has a long way to go, let's start simple by ensuring that the energy we consume here at home has the stamp, "Produced in America."

West Wing Week: 9/9/11 or "American Jobs Act"

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East Texas, Haynesville Production Stable Despite Wildfires

- East Texas, Haynesville Production Stable Despite Wildfires

Friday, September 09, 2011
Rigzone Staff
by Karen Boman

The wildfires plaguing East Texas have not impacted natural gas production volumes in the region, including Haynesville shale play production, but evacuations and fire-related damage have negatively impacted demand, BENTEK Energy reports.

Over the last three days, evacuations and fire-related damage in Texas have led to a near 1.0 Bcf total demand loss. BENTEK expects demand recovery to be gradual, though some demand should return due to rising temperatures. The Texas gas demand forecast, based on temperatures, shows power burn increasing by nearly 1.0 Bcf in the coming week, BENTEK said.

The Haynesville shale, one of the largest gas shale plays in the U.S., straddles the Texas and Louisiana border. Haynesville shale production from both states totals just above 5.0 Bcf/d, with about half of that production coming from the Texas side, BENTEK reports.

“BENTEK’s sample of production receipts from East Texas and Haynesville has not yet shown a distinct decline in production receipts that could be directly attributable to the fires,” BENTEK said in a report today. However, some of the fires have erupted around the perimeter of Haynesville shale counties, raising concerns about safety and disruptions in the fields.

Wildfires have burned acres in Harrison County, Texas, a core Haynesville production area in the state, and four non-core Haynesville production counties in Texas, Gregg, Marion, Nacogdoches and Rusk.

“If fires were to erupt in more developed areas of the shale, operations would undoubtedly have to be shut in, restricting production,” BENTEK said. “Even without a fire, downed power lines or disruptions in power transmission could also impact operations of pump jacks and compressor stations.”

To date, 26 large fires have burned nearly 114,000 acres in Texas, and are threatening oil and gas operations in the East Texas region as well as Louisiana and Oklahoma. An estimated 1,700 homes were either evacuated or lost, and more are threatened by fires.

“Much of East Texas is experiencing the highest level of drought conditions, and the fire danger in the East Texas Basin remains high to very high,” BENTEK said. Tropical Storm Nate will likely spare Texas from high winds but also withhold chances for rain.

Louisiana’s Department of Natural Resources (DNR) on Sept. 6 issued an advisory calling on oil and gas operators to monitor conditions closely and take necessary steps in case of fire, including shutting in wells, production facilities and pipelines if necessary.

“As drought conditions persist in many areas of our state, so does the risk of wildfire and the potential for wildfires to grow quickly out of control once they start,” said DNR’s Commissioner of Conservation Jim Welsh. He reminded operators that state regulations require combustible vegetation, trash and debris should always be kept at least 100 feet away from wellheads, production equipment, storage tanks and other exploration and production site structures.

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Cargotec Enters Vietnamese Market with Mooring Contract

- Cargotec Enters Vietnamese Market with Mooring Contract

Friday, September 09, 2011

A contract for mooring equipment for a pipelaying barge marks Cargotec’s successful entry to the Vietnamese offshore market

In July this year, Cargotec won a contract from the joint stock company Vinh Nam (VAM JSC)/TECMACH to supply mooring equipment outfits for Vietsovpetro’s 110m-long by 30.5m-breadth pipelaying crane barge, Con Son. The 1969-built vessel is currently undergoing a conversion at Dung Quat Shipbuilding Industry Co Ltd.

“The signing of this maiden contract in Vietnam demonstrates our client’s confidence in our capability,” says Gavin Lim, Cargotec's director of sales for towing and mooring solutions. “It also marks Cargotec’s successful entry to the Vietnamese offshore market.”

As part of the conversion project, Cargotec will supply eight mooring winches complete with local and remote controls, tension and length-monitoring systems, hydraulic power packs, sheaves, and fairleads. The mooring equipment is scheduled for delivery at the beginning of 2012 and will be manufactured at Cargotec’s facility for offshore load handling in Singapore.

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BOEMRE Issues Final Update on Lee Evacuations

- BOEMRE Issues Final Update on Lee Evacuations

Friday, September 09, 2011

The Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE) Hurricane Response Team is concluding its activities related to Tropical Storm Lee. This is the final update of evacuation and shut-in production statistics for Tropical Storm Lee.

Based on data from offshore operator reports submitted as of 11:30 a.m. CDT today, personnel remain evacuated from a total of 4 production platforms, equivalent to 0.7 percent of the 617 manned platforms in the Gulf of Mexico. Production platforms are the structures located offshore from which oil and natural gas are produced. Unlike drilling rigs, which typically move from location to location, production facilities remain in the same location throughout a project’s duration

None of the 70 rigs currently operating in the Gulf remain evacuated. Rigs can include several types of self-contained offshore drilling facilities including jackup rigs, submersibles and semisubmersibles.

As part of the evacuation process, personnel activate the applicable shut-in procedure, which can frequently be accomplished from a remote location. This involves closing the sub-surface safety valves located below the surface of the ocean floor to prevent the release of oil or gas. During the recent hurricane seasons, the shut-in valves functioned 100 percent of the time, efficiently shutting in production from wells on the Outer Continental Shelf and protecting the marine and coastal environments. Shutting-in oil and gas production is a standard procedure conducted by industry for safety and environmental reasons.

From operator reports, it is estimated that approximately 6.2 percent of the current oil production in the Gulf of Mexico has been shut-in. It is also estimated that approximately 4.0 percent of the natural gas production in the Gulf of Mexico has been shut-in. The production percentages are calculated using information submitted by offshore operators in daily reports. Shut-in production information included in these reports is based on the amount of oil and gas the operator expected to produce that day. The shut-in production figures therefore are estimates, which BOEMRE compares to historical production reports to ensure the estimates follow a logical pattern.

After the storm has passed, facilities are inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back on line immediately. Facilities sustaining damage may take longer to bring back on line. BOEMRE will no longer report Tropical Storm Lee statistics.

This survey information is reflective of 21 companies’ reports as of 11:30 a.m. CDT today.

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Abraxas Announces New CFO

- Abraxas Announces New CFO

Friday, September 09, 2011
Abraxas Petroleum Corporation

Abraxas Petroleum Corporation today announced that Barbara M. Stuckey has been elected to serve as Vice President and Chief Financial Officer and George William “Bill” Krog, Jr. has been elected to serve as Chief Accounting Officer and Treasurer of the Company. The Company also announced that Chris E. Williford, Executive Vice President, Chief Financial Officer and Treasurer, has resigned from the Company to accept a job in an executive position with a private company.

Ms. Stuckey has been with the Company since 1997 and most recently served as Vice President – Corporate Finance. Ms. Stuckey received a Bachelor of Arts degree from the University of Texas at San Antonio and a Master of Business Administration degree from the Bordeaux Business School. Mr. Krog has been with the Company since 1995 and most recently served as Information Systems / Financial Reporting Director. Mr. Krog received a Bachelor of Business Administration degree from the University of Texas at Austin and is a Certified Public Accountant.

“I am pleased to announce two promotions from within the Company. Both Barbara and Bill have been instrumental in the growth and success of the Company over the past decade. On behalf of the entire Abraxas family, we thank Chris for 18 years of service and wish him well in his future endeavors,” commented Bob Watson, President and CEO of Abraxas.

Abraxas Petroleum Corporation is a San Antonio based crude oil and natural gas exploration and production company with operations across the Rocky Mountain, Mid-Continent, Permian Basin and Gulf Coast regions of the United States and in the province of Alberta, Canada.

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VAALCO Acquires Bakken Interest in Montana

- VAALCO Acquires Bakken Interest in Montana

Friday, September 09, 2011

VAALCO Energy, Inc. today announced that the Company has entered into a definitive agreement with Magellan Petroleum Corporation to acquire and develop an operating working interest in approximately 23,000 net mineral acres of oil, gas and mineral leases covering the Bakken and deeper formations in the East Poplar Unit and the Northwest Poplar Field in Roosevelt County, Montana. Under the terms of the agreement, VAALCO has paid Magellan $5 million and committed to spend approximately $15 million to drill three wells.

VAALCO has agreed to drill three wells to the Bakken formation and to formations below the Bakken in the Poplar Field. All three wells will be drilled by the end of 2012 and one well will be drilled on or before June 1, 2012. Of these, one well will be drilled horizontally to test the Bakken Formation, one well will be drilled vertically to test the Red River Formation, and the third will be targeted at VAALCO's discretion. Under the terms of the definitive agreement, VAALCO will have a 65% working interest in the Bakken and Deep Intervals within the Poplar Field.

Robert Gerry, Chairman and CEO said, "We are excited to complete this acquisition of additional Bakken Acreage, which we believe will be a powerful source of oil revenues to VAALCO over the next several years. In addition to the potential we see in the Bakken formation, we will also be evaluating deeper objectives in the Three Forks, Nisku and Red River formations. Our seismic studies indicate that there are structures in these deeper objectives that could be the source of prolific production and we are optimistic that we can prove up reserves and create shareholder value."

Magellan will retain its current ownership for all formations above the Bakken, including the currently producing Charles and Tyler formations and will retain the remaining 35% of the Bakken and deeper rights in partnership with VAALCO.

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Salamander Farms Into Gulf of Thailand Block

- Salamander Farms Into Gulf of Thailand Block

Friday, September 09, 2011
Salamander Energy

Salamander Energy plc announced that its fully owned subsidiary, Salamander Energy (Bualuang) Ltd has agreed to farm-in to Block G4/50 in the Gulf of Thailand, earning equity in the acreage from Mitsui Oil Exploration Co Ltd (“MOECO”). Following the completion of the transaction, Salamander will hold a 100% working interest in and operatorship of the acreage, while MOECO will retain certain commercial options in the case of a future discovery. Block G4/50 is located in the western Gulf of Thailand and surrounds the Company’s B8/38 licence that contains the Bualuang oil field and Bualuang East Terrace oil discovery. The farm-in is subject to Thai government and regulatory approval.

Key Points:

G4/50, at over 11,650 sq km, is one of the largest blocks of prospective acreage offshore Thailand. The block surrounds the Salamander-operated B8/38 licence in the western Gulf of Thailand

It consolidates Salamander’s acreage position in an area where it has extensive operating experience and geological knowledge

Major programme of 3D seismic in 2H 2011 will be followed by a multiple well exploration programme

As part of the farm-in agreement MOECO will retain certain commercial options in the case of a future discovery

Exploration expenditures incurred in G4/50 are deductible against tax payable on production revenue from the Bualuang oil field in B8/38

James Menzies, Chief Executive, Salamander Energy, said:

“We are delighted to secure a very substantial area of prospective acreage surrounding our Bualuang operations. Block G4/50 has been of growing interest to Salamander as our geological and subsurface understanding of the immediate play has developed. The region remains under-explored to date and we are looking forward to implementing our work programme, starting with an extensive 3D seismic campaign of over 2,900 sq. km on G4/50 in the fourth quarter of this year.”

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Reliance Industries Confident of Unlocking Field Potential with BP

- Reliance Industries Confident of Unlocking Field Potential with BP

Friday, September 09, 2011
Dow Jones Newswires
by Rakesh Sharma & Saurabh Chaturvedi

Reliance Industries Ltd. (500325.BY) Friday said it was confident of unlocking the full potential of its prolific east coast gas field and other blocks with the help of its partner BP Plc (BP).

The country's largest private explorer is fighting a decline in gas output at its D-6 Block in Krishna Godavri Basin. Reliance on Aug. 30 closed a deal with U.K.-based BP Plc to sell a 30% stake in its 21 oil and gas exploration blocks in India.

Last month, India's junior oil minister R.P.N. Singh said that gas production from Reliance's KG-D6 block during the April-June quarter was 31% below plan. Reliance's average gas production during April-June from the block was 48.60 million standard cubic meters per day.

Based on the approved field development plan, the output should have been 70.39 mmscmd, the minister said.

India's federal auditor Thursday said Reliance Industries had violated the KG D6 production-sharing contract with the government.

The Comptroller and Auditor General said Reliance initially estimated its capital expenditure for the D-1 and D-3 gas discoveries in the block at $2.4 billion, but revised it to $8.8 billion. The company also started implementing the revised plans before the government approved them.

The Mukesh Ambani-controlled company said it had engaged global consultants Ernst & Young, IPA Inc. and Daniel Johnston & Co., who didn't find any irregularity in its capex and management of the block.

Reliance said it commenced gas production from KG-D6 in six-and-a-half years from discovery, in comparison to the global average of nine to 10 years for similar deep-water production facilities.

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

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ADX Increases Stake in Kerkouane Permit

- ADX Increases Stake in Kerkouane Permit

Friday, September 09, 2011
ADX Energy

ADX Energy Ltd is pleased to announce a Sale and Purchase Agreement has been executed to buy back a further 10% interest in the Lambouka Prospect Area in the Kerkouane Permit from PharmAust Limited and to cancel the option of PAA to purchase an interest in that part of the Lambouka prospect that extends into Italian waters.

The key terms of the sale are as follows;

Upon payment of US$50,000 by PAA to ADX, ADX will issue to PAA 1,000,000 ADX shares

As part of the consideration ADX will also forgive outstanding past joint venture costs owed by PAA to ADX totalling $400,473.

The transaction is subject to Joint Venture pre emption.

ADX farmed out a 10% interest in the Lambouka Prospect Area to PAA in early 2010 to provide funding for the Lambouka #1 well. The Lambouka-1 well intersected a gas column interpreted based on comprehensive LWD (logging while drilling) and a wireline logging data set which was recovered during the drilling of the well. Unfortunately due to instability of the borehole while drilling and evaluating Lambouka, it was not possible to test the well.

Lambouka is located approximately 70 km North East of onshore Cap Bon in the Sicily channel. The Dougga gas condensate discovery is located approximately 22 km SSW of Lambouka.

Upon conclusion of this transaction ADX will hold a 60% interest in the Lambouka Prospect Area. ADX holds a 100% interest in the remaining Pantelleria License area, over which some Kerkouane participants have options, and the Kerkouane Permit area. ADX operates all licenses and has recently announced the award of the adjacent offshore exploration permit d 364 C.R-.AX in Italian waters acquired at 100% equity interest.

ADX is pleased to have the opportunity to further increase its interest in Lambouka on favourable terms. ADX believes Lambouka and the nearby Dougga discovery represent a material appraisal and development opportunity for ADX.

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Kilgore Acquires Additional Klondike Interest

- Kilgore Acquires Additional Klondike Interest

Friday, September 09, 2011
Kilgore Oil & Gas

The Board of Kilgore Oil & Gas is pleased to advise that it has entered an agreement to acquire an additional 5.2% WI in the West Klondike Exploration Prospect, which covers an area of 640 acres in Iberville Parish, Louisiana. Kilgore has acquired this additional 5.2% WI through reimbursement of back costs of approximately $40,000 and otherwise on materially the same terms as the recently announced acquisition of a 5% WI from Grand Gulf Energy Ltd.

Kilgore will now earn a cumulative 10.2% WI in the West Klondike prospect by paying 13.5% of the drilling and completion costs of the initial exploration well, due to be spudded in October 2011. The well is expected to take 30 days to be drilled to a total depth of 10,900ft. Kilgore’s share of the dry hole costs are approximately US$360,000.

Kilgore has now gained exposure to 2 significant onshore, exploration prospects in Louisiana, both of which will be drilled and tested in the next 2-3 months. This confirms the Company’s new strategic direction of combining the testing of high impact exploration prospects together with the realisation of value from its Duvernay Shale and Rock Creek Oil Projects in Canada through the partial sale/farmout process currently underway with Macquarie Capital in Calgary.

The West Klondike Prospect is a fault block closure which has been identified on 3D seismic data and is in close proximity to analogous offset production. The targeted sand sections are the Marg Tex, Lario and Upper and Lower Nod Blan. The likely resource potential is 2 million barrels of oil (MMBL) and 6 billion cubic feet of gas (BCF) with unrisked potential of 4.8 MMBL and 17 BCF gas. In addition to the main target there a larger, high pressure, prospect in the leased area that will require a separate deeper well. The target sands of this deeper feature (Bridas) have recently yielded a significant discovery approximately 2.5km to the North-East.

The West Klondike participation terms are favourable, with the Company paying 13.5% of the initial well and completion costs (US$360,000) to earn its 10.2% WI. In a success case the Company’s share of completion costs are estimated to be a further US$100,000.

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CAPP Unveils Hydraulic Fracturing Guidelines

- CAPP Unveils Hydraulic Fracturing Guidelines

Friday, September 09, 2011
Canadian Association of Petroleum Producers

Canadian natural gas producers on Sept. 8 announced new guiding principles for hydraulic fracturing that guide water management and improved water and fluids reporting practices for shale gas development in Canada. The principles were created by members of the Canadian Association of Petroleum Producers (CAPP) and apply to all CAPP natural gas producing members, large and small, operating in Canada.

“Protecting Canada’s water resources is fundamental to our social licence to operate and to grow,” said CAPP president Dave Collyer. “Canada’s upstream industry has a strong track record as a safe and reliable producer of natural gas. With the increase in natural gas production from unconventional sources such as shale, Canadians have told us they want more information as to how industry uses and protects water. We respect that request, and these CAPP principles articulate our water management objectives and water protection practices, as well as our focus on improving our water performance over time.”

CAPP’s guiding principles for hydraulic fracturing apply in all jurisdictions in which the upstream industry operates in Canada. They were created with the understanding that some provinces are working on regulation, and we expect the principles to complement potential future regulatory requirements.

Canada has abundant unconventional natural gas resources, including shale gas. Technological innovations, particularly horizontal multi-well pad drilling and hydraulic fracturing, have made it possible for industry to economically develop shale gas resources in tight rock formations. The application of hydraulic fracturing technology requires the use of significant quantities of water, which necessitates increased focus by industry on both water use and water quality.

“The Canadian natural gas industry supports all regulations that govern hydraulic fracturing, water use and water protection, because we recognize water is a valuable resource,” said Michael McAllister, executive vice-president of Encana. “Strong regulations exist in regions of active unconventional gas development. Similar regulations are being developed in regions with an emerging unconventional natural gas sector, to ensure protection of water resources and provide the public confidence that these resources are being developed responsibly.”

The guiding principles for hydraulic fracturing are available on CAPP’s website at . CAPP is also developing recommended practices to support the guiding principles for hydraulic fracturing. For example, a recommended practice describing CAPP member companies’ requirements for disclosure of fracturing fluid additives is under development. These recommended practices will be available on CAPP’s website as each is finalized.

The Canadian Association of Petroleum Producers (CAPP) represents companies, large and small, that explore for, develop and produce natural gas and crude oil throughout Canada. CAPP’s member companies produce more than 90 per cent of Canada’s natural gas and crude oil. CAPP's associate members provide a wide range of services that support the upstream crude oil and natural gas industry. Together CAPP's members and associate members are an important part of a national industry with revenues of about $100 billion-a-year. CAPP’s mission is to enhance the economic sustainability of the Canadian upstream petroleum industry in a safe and environmentally and socially responsible manner, through constructive engagement and communication with governments, the public and stakeholders in the communities in which we operate.

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Total Hits Gas Pay in Caspian

- Total Hits Gas Pay in Caspian

Friday, September 09, 2011
Total S.A.

Total on Friday announced a major gas discovery in the Caspian Sea in the Absheron block offshore Azerbaijan.

The Absheron X-2 well has encountered more than 500 feet of cumulated net gas pays within high quality sands on the northern flank of a major 270 square kilometers structure. Reservoirs are expected to extend over the entire northern part of the structure.

The well's first results confirm a potential of several trillion cubic feet of gas and associated condensates.

"This discovery could be very significant in terms of resources," said Total's Senior Vice President Exploration, Marc Blaizot. "It is the result of Total's bolder exploration strategy aimed at exploring high risk/high reward prospects both in prolific and frontier basins particularly in high pressure, deeply buried reservoirs. Our geoscientists and drillers have all the skills to make other discoveries in similar environments like the United Kingdom, Brunei, Malaysia or Egypt where new permits have been recently awarded to Total."

The well is currently at a depth of approximately 6,550 meters. Drilling will continue to explore further deeper objectives that look attractive. The well will then be tested to better confirm the reservoir potential.

The Absheron discovery is located in 500 meters of water, 100 kilometers south east of Baku, some 25 kilometers north east of the Shah Deniz gas and condensate field.

Total subsidiary, Total EP Absheron is the operator of the Absheron license with a 40% equity. The partners are SOCAR (40%) and GDF SUEZ (20%).

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Tullow Reports French Guiana Discovery

- Tullow Reports French Guiana Discovery

Friday, September 09, 2011
Tullow Oil plc

Tullow Oil plc announced Friday that the Zaedyus exploration well (GM-ES-1), offshore French Guiana, has made an oil discovery having encountered 72 meters of net oil pay in two turbidite fans. Results of drilling, wireline logs and samples of reservoir fluids show that the well has encountered good quality reservoir sands on prognosis.

The objective of the Zaedyus well was to test whether the Jubilee-play, successfully established in West Africa, was mirrored on the other side of the Atlantic. This discovery therefore opens a new hydrocarbon basin within which several neighboring prospects have been mapped. This result also reduces the exploration risk associated with Tullow's prospect inventory offshore French Guiana, Suriname and Guyana. An appraisal program and extensive follow-up exploration activities will now be considered.

The Zaedyus well is being drilled in the Guyane Maritime license using the ENSCO 8503 deepwater semi submersible. The well was drilled in water depths of 2,048 meters and has been drilled to a depth of 5,711 meters. Drilling operations will now continue and the well will be deepened to over 6,000 meters to calibrate the deeper geology. The well will then likely be sidetracked to enable cores to be obtained over the reservoir sections.

Tullow (27.5%) operates the Guyane Maritime license and is partnered by Shell (45%), Total (25%) and Northpet (2.5%), a company owned 50% by Northern Petroleum plc and 50% by Wessex Exploration plc.

Angus McCoss, Tullow's Exploration Director, commented Friday:

"The discovery at Zaedyus has proved the extension of the Jubilee-play across the Atlantic and made an important new discovery in French Guiana. Tullow has built a commanding and unique acreage position in South America and this result marks the start of a significant and potentially transformational long-term exploration and appraisal campaign in the region."

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PA Resources Kicks Off Lille John Drilling

- PA Resources Kicks Off Lille John Drilling

Friday, September 09, 2011
PA Resources

The oil and gas group PA Resources continues its drilling campaign in Licence 12/06 in the Danish North Sea with the commencement of drilling of an exploration well at the Lille John prospect.

In July an exploration well was drilled on the Broder Tuck prospect on the Danish License 12/06 and gas and condensate was discovered. In August, a side track encountered additional hydrocarbons. The well has now been plugged and abandoned.

The drilling rig ENSCO 70 has mobilized to the Lille John prospect, approximately 8 kilometres south of Broder Tuck, and the drilling of the second exploration well in this drilling programme has now commenced.

The well has targets at three levels; Miocene, Chalk and Middle Jurassic. Lille John is hoped to contain both oil and gas.

The following companies participate in Licence 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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African Petroleum Finds Drilling Success Off Liberia

- African Petroleum Finds Drilling Success Off Liberia

Friday, September 09, 2011
African Petroleum

African Petroleum has completed drilling the first well (Apalis-1) in deep water offshore Liberia in Block LB-09.

The results of Apalis-1 confirm Blocks LB-08 and LB-09 (100% owned by African Petroleum) are located in a prospective oil basin, which is a major step forward. The geological and geophysical data have confirmed the critical components of a working hydrocarbon system are present and functioning. The Company is now accelerating a multi well drilling program on the 25+ exploration prospects identified on Blocks LB-08 & LB-09 offshore Liberia and are planning to drill the next well during 4th quarter 2011 and 1st quarter 2012.

Apalis-1 was drilled to a depth of 3665 meters and encountered oil shows in several geological units including the shallower (Tertiary) and deeper (Cretaceous) and petrophysical analysis indicates the presence of hydrocarbons. The well also confirmed the presence of organic oil prone source rocks confirming that Blocks LB-08 & LB-09 are in an attractive oil basin.

No commercial quality reservoir with hydrocarbons was encountered and consequently no well production test was undertaken.

The well was drilled without any technical problems and the costs have been materially under budget.

Having confirmed a working hydrocarbon system with the first well the forward exploration programme will focus on the deeper basinal zone where improved reservoir quality is anticipated in the well-developed Cretaceous fan system.

Karl Thompson, CEO, comments that “This is the first the first ever frontier well in the deep water in Liberia and has confirmed we are exploring in a highly prospective oil basin which was its key objective and we are committed to continuing exploration in the area”.


The 3D seismic survey underway in Block SL-03 Sierra Leone (100% owned by African Petroleum) to the west of the Anadarko Venus and Mercury discoveries is progressing well and is now 65% complete. The 3D survey is the start of the initial exploration phase in exploring for similar Upper Cretaceous targets as the nearby Mercury and Venus discoveries.


The interpretation of the 3D seismic survey in The Gambia (60% owned by African Petroleum) is progressing very well and an extensive system of Upper Cretaceous fan systems has clearly been identified.

African Petroleum is one of the largest net exploration holders in the West African Upper Cretaceous Exploration fairway and is making continued progress in acquiring new exploration licences.

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