Crude Oil Price by oil-price.net

Oil and Gas Energy News Update

Monday, September 12, 2011

Oil & Gas Post - All News Report for Monday, September 12, 2011

Monday, September 12, 2011


Oil & Gas Post

Promote Your Page Too
LINK

Commodity Corner: Oil Settles Higher on Euro Rebound

- Commodity Corner: Oil Settles Higher on Euro Rebound

Monday, September 12, 2011
Rigzone Staff
by Matthew V. Veazey

Monday came and went without a Greek debt default, and the euro managed to rebound from its lowest point since mid-February.

Because oil becomes a better value for investors when other currencies strengthen against the U.S. dollar, the price of a barrel of light sweet crude oil for October delivery gained 95 cents to settle at $88.19 Monday. The Brent contract price, however, lost 52 cents to end the day at $112.25 a barrel.

Investors increasingly braced themselves last week for Greece to default on its national debt payments, with some expecting the situation to reach a head on Monday. As a result, the euro headed downward for much of the day until bottoming out at $1.3495. The currency regained some positive movement against the dollar. According to the European Central Bank, Monday's reference rate was $1.3656.

The WTI traded within a range from $85.00 to $88.95 while the Brent contract fluctuated from $110.62 to $113.69.

With Tropical Storm Nate steering clear of the U.S. Gulf Coast, instead making landfall in Mexico's Tabasco state, investors see no near-term threats to oil and gas infrastructure in the Gulf. Moreover, forecasters expect Tropical Storm Maria to remain in the Atlantic and veer away from the U.S. East Coast. As a result, October natural gas lost three cents to end the day at $3.885 per thousand cubic feet.

Natural gas peaked at $3.925 and bottomed out at $3.83 Monday.

October gasoline also lost three cents, settling at $2.74 a gallon. The front-month contract fluctuated from $2.71 to $2.78.

Oil & Gas Post

Promote Your Page Too
LINK

Surge Issues Update on Valhalla South Ops

- Surge Issues Update on Valhalla South Ops

Monday, September 12, 2011
Surge Energy Inc.

Surge Energy Inc. on Monday provided the results of its fifth horizontal multi-frac well at Valhalla South, and to announce that it has confirmed its bank line at $150 million.

Operations Update:

Surge provided the following operations update with respect to its Valhalla property due to drilling results which are believed to be material.

Surge's fifth horizontal well (16-7-74-8W6M; 100 percent working interest "WI") in the Valhalla South Doig light oil pool (40 degree API) has been successfully drilled and completed. The well encountered approximately 820 meters of Doig Formation and was completed with nine frac stages averaging approximately 30 Tonnes of proppant per frac. A five day flow test on the well has been recently completed, resulting in flow rates averaging 1,992 boe per day (78 percent light oil and NGLs) with the last day of the test flowing at a rate of 1,866 boe per day (72 percent light oil and NGLs). The well produced through the 114.3mm (4.5") tie back liner.

This five day rate for 16-7, is comparable to that of Surge's previously announced horizontal multi-frac well at 11-18-074-08W6 (71 percent WI), which had a five day flow test rate of 1,979 boe per day (82 percent light oil and NGLs) with the last day of testing flowing at a rate of 1,903 boe per day (77 percent light oil and NGLs). The 11-18 well averaged approximately 1,180 boe per day (72 percent light oil and NGLs) for the first 30 producing days which is well above the Company's type curve for the area (675 boe per day), and it was producing approximately 870 boe per day (73 percent light oil and NGLs) on September 1, 2011 when it was last tested. The first month average production rate for Surge's 16-7 well is expected to be in line with results from 11-18.

Surge began drilling its sixth horizontal multi-frac well into the pool (8-31-073-08W6; 100 percent WI) during August 2011 with plans of having production on stream in the fourth quarter of 2011. The Company has one more horizontal multi-frac well (11-5-074-08W6; 100 percent WI) budgeted for the remainder of 2011 for a total of seven gross horizontal multi-frac wells budgeted for 2011.

In addition to operations at Valhalla South, Surge is actively drilling in each of its other core areas at Windfall, Waskada and South East Alberta. At Windfall, the Company has recently drilled and completed its sixth horizontal multi-frac well and is currently drilling its seventh well into the Bluesky light oil pool (36 degree API). At Waskada, Surge has commenced its nine horizontal multi-frac well drilling program targeting the Spearfish light oil Formation (36 degree API) and now has three wells drilled and cased. In South East Alberta, the Company continues to exploit its low cost, low decline, high rate of return crude oil assets via infill drilling and waterflood. Surge will drill a combination of vertical and horizontal wells in the area during the third and fourth quarters of 2011.

Increase in Bank Line:

Surge has recently confirmed the Company's bank line at $150 million, up from $120 million. The increase is subject to standard legal documentation which is in the process of being finalized.

Oil & Gas Post

Promote Your Page Too
LINK

Ford to Debut 1.0-Liter EcoBoost Engine in Europe

- Ford to Debut 1.0-Liter EcoBoost Engine in Europe



Sep 12, 2011

Ford (NYSE:F) confirmed the first production applications for its smallest-ever EcoBoost engine at the 2011 Frankfurt Motor Show.

The engine will debut in the European Ford Focus early in 2012, offering the performance of a conventional 1.6-liter engine with less than 120g/km CO2 emissions.

Graham Hoare, executive director, Powertrain, Ford of Europe said, "By offering the Focus with an advanced small-displacement petrol engine, Ford is not only making a major statement on how serious we are about engine downsizing - it also shows the strength of our development and engineering capabilities. To produce a 1.0-liter EcoBoost petrol engine with such impressive performance and fuel economy is a clear example of our commitment to be class-leading in fuel economy."

Ford Motor (NYSE:F) has a potential upside of 84.1% based on a current price of $10 and an average consensus analyst price target of $18.41.

Oil & Gas Post

Promote Your Page Too
LINK

Nordic Sets Private Placement for Bakken Drilling Funds

- Nordic Sets Private Placement for Bakken Drilling Funds

Monday, September 12, 2011
Nordic Oil & Gas Ltd.

Donald Benson, President of Nordic Oil and Gas Ltd. ("the Company" or Nordic"), on Monday announced a new non-brokered private placement offering (the "Offering") of up to 30,000,000 units ("Units") at a price of $0.075 per Unit for gross proceeds of up to $2,250,000. Each Unit of the Offering will consist of one Class A common share of the Company issued as a "flow-through share" within the meaning of the Income Tax Act (Canada) and one-half of one Class A common share purchase warrant (a "Warrant"). Each whole Warrant will entitle the holder thereof to purchase one regular Class A common share of the Company at a price of $0.10 per share for a period of 18 months from the date of issuance.

The securities issued pursuant to the Offering are subject to a four-month hold period from the date of issuance. The Company anticipates multiple closings of the Offering in the coming weeks.

Certain finders are expected to assist the Company by introducing potential subscriber(s) to the Offering and, subject to compliance with applicable legislation, will be entitled to receive fees equal to up to 10% of the purchase price of the Units sold pursuant to the Offering, as well as compensation warrants (the "Finder's Warrants") equal to up to 10% of the number of Units sold pursuant to the Offering. Each Finder's Warrant shall entitle the holder thereof to purchase one regular Class A common share of the Company at a price of $0.10 for a period of 18 months from the date of issuance.

All terms of the Offering are subject to the approval of the TSX Venture Exchange.

"It is our intention to use a large portion of the funds raised in this Offering to undertake the drilling of our first exploration well on our Weyburn/Bakken property in southeast Saskatchewan," Mr. Benson stated. "We feel that our Weyburn/Bakken property should be our top priority at this time and we would like to be in position to drill the first well early in the fourth quarter of 2011."

Upon analyzing the seismic shot in the region, Nordic's geophysicist has identified four potential drilling locations on the land. He notes that in addition to the Bakken, the seismic also indicates that both the Midale/Frobisher and Red River zones are prospective as well.

"The offsetting land in the area has been producing from the Midale zone since 1991," Mr. Benson added.

Oil & Gas Post

Promote Your Page Too
LINK

QR to Acquire Acreage in Permian, Ark-La-Tex, Mid-Continent

- QR to Acquire Acreage in Permian, Ark-La-Tex, Mid-Continent

Monday, September 12, 2011
QR Energy, LP

QR Energy, LP ( QRE) announced Monday that it has signed a definitive agreement to acquire oil and natural gas properties from its sponsor, Quantum Resources Fund (QRF) for a purchase price of $577 million. The transaction consists of the issuance by QRE to QRF of $350 million of Convertible Preferred Units and cash of $227 million from borrowings under QRE's existing bank credit facility, subject to lender approval of an increase in the facility's borrowing base. The transaction is expected to close on or about October 1, 2011, subject to third party approvals and customary closing conditions.

Transaction Highlights

-- Properties located in existing core areas: Permian Basin, Ark-La-Tex and Mid-Continent

-- Net production of 8,000 Boed expected for the fourth quarter of 2011

-- Total proved reserves of 37.1 MMBoe are 65% proved developed and 41% liquids (oil and NGLs)

-- More than 1,500 producing oil and natural gas wells

-- Inventory of low risk development opportunities

-- Reserve life (R/P) of 12.7 years

-- 77% operated by value based on standardized measure

-- Expected to be immediately accretive to Distributable Cash Flow per unit

Chief Executive Officer Alan L. Smith commented, "This acquisition from our sponsor has assets that fit our investment criteria of mature, longer life properties and more than doubles QR Energy's production and reserves. The properties are located in our existing core areas and offer an inventory of low risk development projects that will supplement our production in the years to come. We are pleased to be able to finance the transaction with a combination of equity and bank debt, and we expect the transaction to deliver significant accretion to our unitholders."

Asset Profile

QR Energy estimates that the acquisition properties contain approximately 37.1 MMBoe of proved reserves as of October 1, 2011, based on internal estimates using spot oil and natural gas prices as of September 2, 2011 ($86.48/Bbl and $3.87/MMBtu). The proved reserves are 65% proved developed and contain 41% liquids. Operations include 1,574 gross and 960 net wells on approximately 109,305 net acres concentrated in Texas, Oklahoma and New Mexico. They provide numerous low risk development opportunities.

Transaction Financing

As part of the total consideration, QR Energy will issue to QRF $350 million of Convertible Preferred Units (16.7 million units) at a par value of $21.00 per unit. For the first three years, the Convertible Preferred Units will receive a quarterly cash distribution equal to a 4.0% annual coupon on the par value of $21.00. After three years, the quarterly cash distribution will be equal to the greater of (a) $0.475 per unit or (b) the cash distribution payable on each common unit for such quarter.

QRF may convert the Convertible Preferred Units to common units on a one-to-one basis during the first two years after the issuance date following 30 consecutive trading days during which the volume-weighted average price for common units equals or exceeds $27.30 per common unit. In addition, QRF may convert the Convertible Preferred Units to common units on a one-to-one basis anytime after two years from the issuance date.

If QRF has not converted the Convertible Preferred Units to common units by the third anniversary, QR Energy may force their conversion at $21.00 provided that conversion is in the 30 calendar days following 30 consecutive trading days during which the volume-weighted average price for common units equals or exceeds (1) $30.00, provided that (a) an effective shelf registration statement covering re-sales for the converted units is in place or (2) $27.30, provided that (a) from directly above is satisfied plus (b) the arrangement for one or more investment banks to underwrite the converted unit sale following conversion (with proceeds equal to not less than $27.30 less (i) a standard underwriting discount and (ii) a customary discount not to exceed 5% of $27.30). For both (1) and (2) above, the conversion will have a value of not less than $100 million in the aggregate (provided that if less than $100 million remains outstanding, such conversion will relate to all remaining Class C Convertible Preferred Units then outstanding).

QR Energy may force conversion after the fifth anniversary at $21.00 and (a) in the 30 calendar days following 30 consecutive trading days during which the volume-weighted average price for common units equals or exceeds $27.30 and (b) subject to having an effective shelf registration statement covering re-sales for the converted units in place. The conversion will have a value of not less than $100 million in the aggregate (provided that if less than $100 million remains outstanding, such conversion will relate to all remaining Class C Convertible Preferred Units then outstanding).

The debt financing for the transaction is estimated to be approximately $234 million including estimated transaction fees, which will be funded with borrowings under the Partnership's revolving credit facility. These borrowings are subject to lender approval of a $300 million increase in QR Energy's borrowing base related to the pending acquisition of additional oil and gas properties, resulting in a total borrowing base of $630 million effective upon closing.

Oil & Gas Post

Promote Your Page Too
LINK

Mogul Energy Spuds Stafford Well #2

- Mogul Energy Spuds Stafford Well #2

Monday, September 12, 2011
Mogul Energy International, Inc.

Mogul Energy International, Inc. on Monday announced the spudding of the Stafford Well #2 on the La Ward NE Field area in Jackson County, Texas. The drilling rig moved on location over the past weekend and initiated drilling operations late Sunday afternoon.

This offset well is located 600 feet west of the Stafford Well #1, which was initially completed in March of this year. The Stafford Well #2 will be drilled to a total depth of 7,000 feet so as to further delineate the producing intervals seen in Frio formation. It is expected that the new well will be higher on structure and will have several producing intervals with greater producing rates than the Stafford Well #1.

Stafford Well #2 has 100% participation of all working interest owners that participated in Mogul's initial well in the field. Mogul has a 15% working interest in both wells #1 and #2 and is the operator for both.

President and CEO Tim Turner said, "We are very excited about the prospects for our second well in our drilling program as we strive to carry out our mandate to grow value for our shareholders and partners."

Oil & Gas Post

Promote Your Page Too
LINK

Cooper Begins Butlers-4 Drilling

- Cooper Begins Butlers-4 Drilling

Monday, September 12, 2011
Cooper Energy Limited

Cooper Energy Limited announced that the Butlers-4 appraisal/development well in PEL92 spudded at 11:30 pm Sunday. The current operation is drilling ahead in the surface hole at 135 meters.

Butlers-4 is the third appraisal/development well on the Butlers Oil Field in the current PEL92 drilling program. Butlers-4 is targeting the Namur oil reservoir in the crestal part of the field 0.26km to the southeast of the Butlers-1 discovery well. The well will be drilled to a total depth of about 1,390 meters and is expected to take 9 days to drill and complete.

The Butlers oil field is currently producing approximately 1,400 barrels of oil per day from the Namur reservoir from the Butlers-1 well with Butlers-2 and Butlers-3 yet to be completed. It is expected that Butlers-4 will accelerate production as well as draining previously unaccessed reserves. The Butlers surface facilities will be upgraded to handle the increased production. Oil production from Butlers is exported via the pipeline to Tantanna and then exported to Moomba.

Oil & Gas Post

Promote Your Page Too
LINK

CNOOC Contracts Drillship Energy Searcher

- CNOOC Contracts Drillship Energy Searcher

Monday, September 12, 2011
Northern Offshore, Ltd.

Northern Offshore, Ltd. on Sunday announced that CNOOC Palung Aru Ltd. ("CNOOC") has awarded a contract for the drillship Energy Searcher. The contract is for one well offshore Indonesia and has an expected duration of from 60-90 days, including travel time from and back to Singapore. Commencement is expected during October 2011. The estimated contract value for the program is from US$18-25 million, including mobilization fees.

Gary W. Casswell, Northern Offshore's president and CEO, said, "We are pleased with CNOOC's award of this contract for the Energy Searcher, and look forward to a successful drilling program. We remain optimistic of increasing activity in the region and are ready to get the rig back to work following its major shipyard and equipment refurbishment project."

Oil & Gas Post

Promote Your Page Too
LINK

Nuvia Names Hill Business Manager

- Nuvia Names Hill Business Manager

Monday, September 12, 2011
Nuvia SITA NORM Limited

Nuvia SITA NORM has appointed a manager for its new Stoneyhill NORM Treatment Facility, near Peterhead, U.K.

Ewan Hill has been appointed to the position of Business Manager for Nuvia SITA NORM. He is now tasked, not only with managing the new facility, but also overseeing safe operations, ensuring environmental compliance and developing the business as a whole.

Ewan is a Chartered Waste Manager, has a Masters Degree in Environmental Studies and over 10 years' experience in the waste management industry, having worked previously in contaminated soil remediation and as a waste minimization manager with Glasgow City Council. Ewan also has experience of the oil and gas industry through a position with Denholm Industrial Services.

Nuvia SITA NORM is a specialist joint venture company that brings together the nuclear industry experience of Nuvia Limited, one of the UK's leading radiation protection and radioactive waste experts, with the recycling and waste management capabilities of SITA UK.

The company's new NORM treatment facility at Stoneyhill near Peterhead will clean and recycle equipment from North Sea oil and gas operations affected by naturally occurring radioactive materials. It will present the industry with the means to comply with new environmental regulations governing the treatment and disposal of NORM waste.

NORM is the acronym for Naturally Occurring Radioactive Material and is a term used to describe low levels of radioactivity that exist naturally in the geological environment. It is found in a variety of bulk commodities, process wastes and commercial items, such as sands, china clays and soils, granite, coal and groundwater. It is also a by-product of the oil and gas industry and develops as a mineral scale on the inside of pipes and valves.

NORM-affected equipment delivered to Stoneyhill will be cleaned inside a custom built containment with ultra high powered water jets to safely remove mineral scale. Once de-scaled, metals and pipework will either be reused or recycled and the treated waste consigned to landfill under authorization at SITA UK's adjoining Stoneyhill site.

Commenting on his appointment, Ewan said, "With all major works on the construction of the facility now complete, commissioning is well underway and I'm looking forward to firmly establishing the business as an essential part of the supply chain for the region's oil and gas operators."

The company has also appointed a supervisor for the facility and is now seeking to appoint a number of water jetting and descaling operatives at the site and invites applications in writing to Ewan Hill, Business Manager, Nuvia SITA NORM Treatment Facility, Stoneyhill Resource Recovery Park, Long Haven, Peterhead, AB42 0PR.

Oil & Gas Post

Promote Your Page Too
LINK

BOEMRE Names Senior Managers

- BOEMRE Names Senior Managers

Monday, September 12, 2011
Bureau of Ocean Energy Management, Regulation and

Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) Director Michael R. Bromwich on Monday announced several key appointments to high-level positions in the two new, independent agencies that will carry out the offshore energy management and enforcement functions currently under the jurisdiction of BOEMRE. The Bureau of Ocean Energy Management (BOEM) and the Bureau of Safety and Environmental Enforcement (BSEE) will begin operating on October 1, 2011.

"I am pleased to announce my selection of a group of exceptionally qualified individuals," said Director Bromwich. "Throughout the recruitment process, we have looked for leaders who are technically skilled and experienced, and who can lead our ongoing efforts to enhance the safety of offshore exploration and production. The new leadership represents a combination of talented people from inside the agency with an exceptionally well-qualified group of people recruited from outside the agency."

BOEM will be responsible for managing development of the nation's offshore resources in an environmentally and economically responsible way. Functions will include: Leasing, Plan Administration, Environmental Studies, National Environmental Policy Act Analysis, Resource Evaluation, Economic Analysis and the Renewable Energy Program.

Some of the key leaders for BOEM will include:
  • Dr. Walter D. Cruickshank, who will serve as the BOEM Deputy Director. Dr. Cruickshank has more than 25 years of experience at the Department of Interior. He most recently served as the BOEMRE Deputy Director. He earned a Bachelor of Arts in Geological Sciences from Cornell University and Doctorate in Mineral Economics from the Pennsylvania State University.
  • Renee Orr, who will serve as BOEM's Strategic Resources Chief in BOEM. She has more than 23 years of experience with the Department of the Interior. Ms. Orr has overseen the staff implementation teams that have been at the core of the bureau's reorganization effort, and previously served as Chief of Leasing where she was responsible for the development and completion of several 5-Year Oil and Gas Leasing Programs. She earned Bachelor of Arts degrees in Economics and History from Metropolitan State College in Denver.
  • Maureen Bornholdt, who will serve as the BOEM Renewables Chief. Ms. Bornholdt has more than 27 years of experience with the Department of the Interior. She most recently served as the Project Manager for BOEMRE's Offshore Renewable Energy Program. Ms. Bornholdt earned a Bachelor of Science in Public Administration from George Mason University.
  • Ellen G. Aronson, who will serve as the BOEM Pacific Region Director. Ms. Aronson has over 33 years of experience with the Department of the Interior. She most recently served as the BOEMRE Pacific Region Director. Ms. Aronson earned a Bachelor of Arts in Liberal Arts from Sara Lawrence College and a Master's of Urban and Regional Planning from the University of Southern California.
  • Dr. James Kendall, who will serve as the BOEM Alaska Region Director. Dr. Kendall has over 27 years of experience with the Department of the Interior. He most recently served as the BOEMRE Alaska Region Director. Dr. Kendall earned a bachelor's degree in biology from Old Dominion University, Ph.D. in oceanography from Texas A&M University, and a Post-doctoral Fellowship in Marine Biology from the Hebrew University of Jerusalem, Israel. He is also a graduate of the Federal Executive Institute, Charlottesville, Virginia, and the Senior Executive Fellows Program of the John F. Kennedy School of Government at Harvard University.
  • John Rodi, who has been the Deputy Regional Director of BOEMRE's Gulf of Mexico Region since November 2007 and will serve as the BOEM Gulf of Mexico Acting Regional Director until a permanent Regional Director is selected. Mr. Rodi has more than 40 years of federal service with five different agencies. Mr. Rodi has both Bachelor and Master Degrees in Economics from Tulane University and the University of New Orleans, respectively.

BSEE will enforce safety and environmental regulations. Functions will include: All field operations including Permitting and Research, Inspections, Offshore Regulatory Programs, Oil Spill Response, and newly formed Training and Environmental Compliance functions.

Some of the key leaders for BSEE will include:
  • Charles Barbee, who will serve as the BSEE Chief of the Environmental Enforcement Division. Mr. Barbee has more than 20 years of experience with the U.S. Coast Guard. Most recently, he was the Coast Guard's program manager for both marine investigations and environmental crime. During his career, Mr. Barbee has specialized in oil spill contingency planning, pollution investigation and response, marine inspections and marine casualty investigations. He graduated and received his commission from the U.S. Coast Guard Academy and earned a Master's Degree in Organizational Management from the University of Phoenix.
  • Chris Barry, who will serve as the BSEE Director of the National Offshore Training Center. Mr. Barry currently serves as Chief of National Training and Leadership for the Federal Emergency Management Agency in the National Preparedness Directorate. He earned a Bachelor of Arts (dual) degree in Art History and Special Education and a Master of Instructional Systems Design.
  • David Moore, who will serve as the BSEE Oil Spill Response Supervisor. Mr. Moore has more than 14 years of experience with the Department of the Interior. He most recently served as the Coordinator of BOEMRE's Oil Spill Program. He earned a Master of Engineering degree from Tulane University and a Master of Urban and Regional Planning degree from the University of New Orleans.
  • Bob Brown, who will serve as the BSEE Associate Director for Administration. Mr. Brown has more than 30 years of experience at the Department of the Interior, Small Business Administration and U.S. Navy. He most recently served as the BOEMRE Associate Director for Administration and Budget and Chief Information Officer. Mr. Brown earned a Bachelor of Arts degree from Seton Hall University and pursued post-graduate studies in History at Georgetown University.
  • Lars Herbst, who will serve as the BSEE Gulf of Mexico Regional Director. Mr. Herbst has over 27 years of experience with the Department of the Interior. He most recently served as the Gulf of Mexico Regional Director for BOEMRE. He is a registered professional engineer in the State of Louisiana and earned a Bachelor of Science in Petroleum Engineering from Louisiana State University.
  • Jaron E. Ming, who will serve as the BSEE Pacific Region Director. Mr. Ming most recently served as the Pacific Region's Lead Leasing Specialist. He previously served as the Senior Policy Advisor to the Regional Director. He started his career in the federal government as a Presidential Management Fellow. Mr. Ming earned a Bachelor of Arts degree from Georgetown University, a Master of Arts degree in Marine Affairs and Policy from the University of Miami's Rosenstiel School of Marine and Atmospheric Science, and a Juris Doctorate degree from the University of Miami School of Law.
  • Mark Fesmire, who will serve as the BSEE Alaska Region Director. Mr. Fesmire most recently served in the New Mexico Energy Minerals and Natural Resources Department, where he has was the Director of the state oil and gas regulatory agency and Chairman of the Oil and Gas Commission for the past seven years. Prior to attending New Mexico State University where he received bachelor's degrees in Geological and Civil Engineering, Mr. Fesmire worked in the offshore oil fields of the Gulf of Mexico. After 12 years as a petroleum engineer, he completed Law School at the Texas Tech University School of Law. He is a Registered Professional Petroleum Engineer and Licensed Attorney.

BSEE is currently accepting applications for the Deputy Director position.

Oil & Gas Post

Promote Your Page Too
LINK

Bering Spuds Concordia Parish Well

- Bering Spuds Concordia Parish Well

Monday, September 12, 2011
Bering Exploration, Inc.

Bering Exploration, Inc. announced Monday that drilling has begun on the Sharp Heirs A No. 1 well located in Concordia Parish, Louisiana. This well will be drilled to a depth of approximately 7,500 feet to test the prospective zones in the Wilcox formation. This prospect has the potential for multiple wells and potential gross reserves of 500,000 barrels of oil. Bering will have a 10% working interest in this prospect.

"We are excited to begin drilling our initial well on this prospect and expect to reach total depth in a couple of weeks," stated Steven Plumb, VP of Finance of Bering. "If successful, this prospect has the potential to significantly add to our existing production."

Oil & Gas Post

Promote Your Page Too
LINK

Ecopetrol Builds on Cano Sur Success

- Ecopetrol Builds on Cano Sur Success

Monday, September 12, 2011
Ecopetrol S.A.

Ecopetrol on Monday announced the initial test results of the CSE-8 ST1 exploratory well in the Puerto Gaitan jurisdiction, a municipality in the Meta Province, in areas belonging to the eastern block of the Exploration and Exploitation Cano Sur contract.

Production test to date show a stable average production of 532 barrels per day of API 13.8 grade oil, with water cut around 18.5%.

The exploratory well was designed with a deviated wellbore that allowed contact with a thicker net oil pay and a better location within the deposit. Drilling operations began on August 11, 2011 and reached an average depth of 4,594 feet in 7 days.

This new exploratory success brings to four the number of oil findings in Cano Sur Block during 2011, including Mito-1, Fauno-1 and Pinocho-1. This constitutes an important milestone in the exploration of this block, taking into account its importance for Ecopetrol's heavy crude oil growth strategy.

Results of initial tests show that this well has the highest productivity among the recently drilled wells in this region. Test were undertaken using an artificial lift system with an electric submersible pump.

This contract was signed in June 2005 with the National Hydrocarbon Agency (ANH, Agencia Nacional de Hidrocarburos). Ecopetrol is the sole operator and holder of 100% interests.

"Ecopetrol has identified a huge potential for heavy crude oil commercial production in the Llanos Basin. We are very pleased with this new discovery" said Ecopetrol's CEO Javier Gutierrez Pemberthy.

In the coming months, Ecopetrol will continue to evaluate production conditions and the performance of the deposit found, maintaining simultaneous exploratory efforts in the area of the Cano Sur Block in order to make a prompt commercial viability statement.

Oil & Gas Post

Promote Your Page Too
LINK

La Cortez Boosts Net Production on Mirto-1

- La Cortez Boosts Net Production on Mirto-1

Monday, September 12, 2011
La Cortez Energy, Inc.

La Cortez Energy, Inc. on Monday provided the following operational update on the work-over activity conducted on the Mirto-1 well.

Maranta Block – Mirto Field

As previously announced, the work-over on the Mirto-1 well was initiated on August 8th, 2011, with the objective to initiate a long-term production test on the Villeta N sand, which is the same zone that is producing in the Mirto-2 well. The work-over operation was completed on August 23rd, and the well was immediately put on production with the following initial results during the period from August 23rd to September 10th: Average gross production before royalties was 334 bopd of 15 degree API oil, with an average Base Sediment and Water (BS&W) of 1.5%. The well is producing by Electro Submersible Pump (ESP), and is stabilizing at 820 psi (flowing pressure at the ESP inlet) which is the expected pressure needed to maintain current production levels. Production on September 10th increased to 343 bopd (gross before royalties) with an average (BS&W) of 0.5%, indicating a continuous reduction in the water cut as expected for this particular reservoir. The well will be placed on long-term production testing with the purpose of monitoring production behavior as well as to gather additional technical data.

The Mirto-2 well continues producing with an average rate of 484 bopd for the year (gross before royalties), and with an average BS&W of 0.7%. The well continues producing from the Villeta N sand with flow pressure stable at 1065 psi, indicating the potential to increase the ESP frequency in order to maintain production levels closer to 500 bopd.

Current production from the Mirto-1 and Mirto-2 wells is 756 bopd gross before royalties, or 151 bopd net (before royalties) to the company, an increase of more than 50% over the year to date average.

Andres Gutierrez, President and CEO of La Cortez, commented on the announcement, "We are very pleased with the initial results obtained from the work-over on the Mirto-1 N sand. The additional production represents a significant increase in net production to the company, and will give us the opportunity to further assess the results of the work-over, and work closely with Emerald Energy Plc. (the operator of the block) to finalize plans for future exploration activity on the block as well as to determine the production potential from the Villeta formation - U sand in the Mirto field."

Oil & Gas Post

Promote Your Page Too
LINK

Oceaneering Sells Ocean Legend

- Oceaneering Sells Ocean Legend

Monday, September 12, 2011
Oceaneering International, Inc.

Oceaneering International, Inc. announced Monday the sale of the Ocean Legend, a mobile offshore production system, to an undisclosed buyer.

Oceaneering's third quarter 2011 earnings will include an estimated pretax gain in the range of $17 million to $19 million on the sale of this asset in its Subsea Projects segment operating results.

Oceaneering's 2011 EPS guidance previously given did not include the anticipated results of this transaction.

Oil & Gas Post

Promote Your Page Too
LINK

Enegi Prepares Next Stage of Onshore Newfoundland Workover

- Enegi Prepares Next Stage of Onshore Newfoundland Workover

Monday, September 12, 2011
Enegi Oil Plc

Enegi Oil Plc on Monday announced that preparations for the next stage of the workover of its PAP#1 ST#3 well ('the Well'), onshore Newfoundland, are now close to completion. Delays have been experienced due to:
  • Technical complexities associated with safely conducting the proposed operations; and
  • The requirement for repeated stability and compatibility testing to ensure that the program achieves its desired results with no unforeseen long term implications for the well and no negative impact on personnel or the environment.

The results of this extended sequence of detailed tests and analyses are positive and the Company has entered into, and is close to concluding, commercial negotiations with service suppliers to undertake the program.

The Company has also been in regular communication with the Newfoundland and Labrador Department of Natural Resources ('DNR') throughout the planning process to ensure that any questions associated with the program have been addressed as they arise. The Company do not, therefore, anticipate any delays in gaining regulatory approvals, once the details of the program (equipment specifications, suppliers etc.) have been finalized and applications can be formally submitted. As stated previously, all the equipment and personnel required for the workover program will be mobilized to site once approval to commence the program is obtained from the DNR.

Whilst recommencing work at the Garden Hill South site has been the Company's primary focus during recent weeks, work is also ongoing to finalize plans for the proposed seismic survey over the PL2002-01 lease area, with a view to undertaking that survey during winter 2011/2012.

Alan Minty, CEO of Enegi Oil, commented:

"Whilst the last few months have been frustrating, we remain optimistic about the long term potential of these assets. We look forward to the commencement and outcome of the next phase of the work program, which will be the culmination of recent diligent and prudent planning."

Oil & Gas Post

Promote Your Page Too
LINK

Americas Petrogas, Gran Tierra Hit Oil Pay in Argentina

- Americas Petrogas, Gran Tierra Hit Oil Pay in Argentina

Monday, September 12, 2011
Americas Petrogas

Americas Petrogas announced Monday that it, along with its co-venturer, Gran Tierra Energy, have made a new significant discovery of oil (1,023 barrels of oil equivalent per day) in the 1st of the three exploration wells on the Rinconada Norte block located in the Neuquen Basin of Argentina (Americas Petrogas Argentina S.A. is operator).

The RN x-1004 well flowed a total combined test rate of approximately 944 barrels (150 m3) per day of oil and 13,360 m3 per day of gas (79 barrels of oil equivalent per day) for a total of approximately 1,023 barrels of oil equivalent per day from two intervals tested separately in the Precuyo formation. This well also flowed 43 barrels (5 m3) per day of water or a 4% water cut.

From the depths of the zones tested (982-992 meters and 1022-1032 meters) and electric logs information, the Company estimates an oil column thickness of approximately 60 meters or 197 feet. The oil is 29.6 degrees API, sweet light crude similar to crude oil produced from the equivalent formation in Americas Petrogas' Medanito Sur block. This well has been completed and the service rig will now move on to the next two wells, which have already been drilled, logged and production casing has been installed. Americas Petrogas' wholly-owned Argentina subsidiary, Americas Petrogas Argentina S.A., is the operator of the Rinconada Norte block, holding a 65% working interest, while Gran Tierra Energy, through its Argentina subsidiary, holds a 35% working interest.

Commenting on this most recent discovery, Guimar Vaca Coca, Managing Director of Americas Petrogas Argentina S.A., stated, "We are very excited about this new find on the first well of this three-well exploratory drilling program because of the strong production rates and possibility of significant commercial reserves. We are also optimistic about the prospects for the remaining two wells."

The Rinconada Norte block is currently under an Exploitation concession, which will allow Americas Petrogas and Gran Tierra Energy, with previous approvals from the authorities, to move ahead with development activities in the near term. The Company anticipates building test production facilities in the fourth quarter of 2011. This drilling program on Rinconada Norte represents the initial phase of Americas Petrogas' previously-announced drilling plans for 2011-2012 (see press release of June 3, 2011).

The Rinconada Norte block (approximately 96 sq.km or 37 sections) is located immediately south of and adjoins Americas Petrogas' Medanito Sur block in La Pampa Province in the eastern region of the Neuquen Basin of Argentina.

Barclay Hambrook, President & CEO of Americas Petrogas, stated, "We are very pleased with this discovery and Americas Petrogas is well-funded to accelerate and expand its planned capex program in order to increase production and reserves."

Oil & Gas Post

Promote Your Page Too
LINK

PetroMagdalene Announces Copa B-1 Discovery

- PetroMagdalene Announces Copa B-1 Discovery

Monday, September 12, 2011
PetroMagdalena Energy Corp.

PetroMagdalena Energy Corp. on Monday announced that it has discovered a new light oilfield with the Copa B-1 exploration well, with the well testing 1,045 bopd of 39.3 degrees API light oil over the initial 3-day production test. This represents 597 bopd gross working interest share for the Company.

Luciano Biondi, Chief Executive Officer of PetroMagdalena stated, "I am excited as this has a direct impact on our bottom line and follows directly after our Petirrojo-1 discovery, which has produced at an average of 1,831 bopd over the past 20 days. This is a very positive drilling result as it significantly improves the potential of the remaining exploration acreage on the Copa trend in the Cubiro block, our core producing asset in Colombia, and the rig is now moving to spud the Copa AS-1 exploration well."

Located in the Cubiro Block of the Llanos Basin, the Copa B-1 well, in which the Company holds a 57% working interest, was spudded on August 18, 2011 and directionally drilled to a total depth of 6,862 feet measured depth ("MD"). The top of the C5 and C3 Carbonera sections were encountered at depths of 5,251 feet (MD) and 5,045 feet (MD), respectively. Well logs indicate a total of 41 feet of net oil sand, 24 feet in three C5 sands, and 17 feet in two C3 sands. Porosities range from 24% to 28% in the C5 and 27% to 29% in the C3 sands. After perforating 17 feet in the two lower C5 sands and installing an electric submersible pump ("ESP"), the well produced at an average rate of 1,067 bopd of 39.3 degrees API oil over the latest 24-hour period at a BS&W of 0.9% and a downhole pump intake pressure of 1623 psi, a 23.2% drawdown. The well testing program is ongoing and final results will be provided.

Based on seismic interpretations, the accumulation discovered by Copa B-1 is a 1.3 kilometer-long structure with an estimated closure of 140 acres, corresponding to the typical exploration play in the Llanos Basin. The Copa B structure is on trend with the Company's Copa Field, 4 kilometers to the north, which was brought on production last year with the Copa-1 well, which was completed in two C5 sands from the same stratigraphic level as the ones tested in Copa B-1 well, and has produced 200,000 barrels of 40 degrees API oil over the past 16 months.

In Cubiro Block C, the Company is currently moving the drilling rig to drill the Copa AS-1 exploration well from the same operating pad with a target total depth of 7,716 feet (MD). Copa AS-1 will test a similar structure as Copa B, on trend with the Copa Field and immediately north of the Copa B discovery. Once the drilling of the Copa AS-1 well is terminated, a work over rig will be mobilized to test this well and the rest of the C5 and C3 sands penetrated by the Copa B-1 well.

PETIRROJO

The Petirrojo-1 discovery has produced at an average rate of 1,831 bopd (Company share, 1,282 bopd before royalties) over the past 20 days with a sustained pump intake pressure.

TOPOYACO

On August 31, 2011, Trayectoria Oil & Gas, the operator for the Topoyaco Block, spudded the Yaraqui-1X well in the central part of the block. The well is planned to reach a total depth of 10,509 feet MD, or 9,402 feet true vertical depth (TVD), or 8,484 feet TVDSS, and is targeting the Cretaceous Villeta and Caballos formations in a sub-thrust structure called Prospect "D". This prospect is a sub-thrust structure independent from previously drilled structures "B" and "C" in the block. Pacific Rubiales Energy Corp. recently announced that preliminary prospective resources (best estimate) for Prospect "D" are 51 MMbbls.

As previously announced, Pacific Rubiales has requested the approval of the ANH to become the operator of the Topoyaco Block, which approval remains pending.

SENIOR SECURED SERIES A NOTES AND ACCOMPANYING WARRANTS

On September 8, 2011, 31,050 senior secured series A notes and 1,330,714 share purchase warrants, issued pursuant to the Company's debt financing of C$31,050,000 that closed on May 5, 2011, began trading on the TSX Venture Exchange under the symbols "PMD.DB" and "PMD.WT", respectively.

Oil & Gas Post

Promote Your Page Too
LINK

CNOOC Okays ConocoPhillips' Plans for Depressurizing and Sealing

- CNOOC Okays ConocoPhillips' Plans for Depressurizing and Sealing

Monday, September 12, 2011
CNOOC Limited

CNOOC Limited (the "Company") announced that State Oceanic Administration of People's Republic of China ("SOA", according to its decision on September 2, 2011, required ConocoPhillips China Inc ("COPC"), the Operator of Penglai 19-3 oil field to, on the condition of imposing no further environmental damage, develop an effective plan for fluid discharge and depressurization ("Depressurization Plan") in order to ensure safety of the field, protect the reservoir as well as reduce reservoir pressure. In addition, the Operator is required to develop a drilling plan for sealing seep sources ("Sealing Plan"). Those Plans should receive approval from China National Offshore Oil Corporation ("CNOOC").

On Sunday, CNOOC announced that it has approved such Depressurization Plan and Sealing Plan.

According to the Depressurization Plan, a number of wells in the field will be restarted to discharge the fluid from the reservoir and to reduce the pressure. The Plan will be implemented step by step. The general principle for depressurization established in the Plan is to discharge fluid and reduce pressure from the wells located at the high pressure zones or near the natural fault.

According to the Sealing Plan, the Operator will carry out the drilling activities and other related operations on six wells in the area of Platform B and C, as additional measures for sealing seep sources.

CNOOC requires the Operator to strengthen its monitoring of the dynamic reservoir condition, in particular the reservoir pressure during the process of fluid discharge and depressurization. Such monitoring results need to be reported to CNOOC in a timely manner. For the Sealing Plan, CNOOC also requires the Operator to ensure the safety of relevant operations.

As the non-operator, the Company will continue to assist COPC to ensure the implementation of those Plans.

Oil & Gas Post

Promote Your Page Too
LINK

Fox Petroleum to Acquire Renfro, Cameron Parish Pipelines

- Fox Petroleum to Acquire Renfro, Cameron Parish Pipelines

Monday, September 12, 2011
Fox Petroleum Inc.

Fox Petroleum Inc. announced Monday that it is acquiring Renfro Energy LLC and Cameron Parish Pipelines LLC.

Renfro Energy LLC is a Dallas, Texas based limited liability company formed in March 2002 as an asset holding company to house existing oil and gas assets located in Texas, Oklahoma and for acquisitions identified in Louisiana. Since 1995, Renfro Energy LLC and its predecessor company have bought and sold over $6 million of oil and gas properties through approximately fifteen acquisitions.

Renfro Energy LLC and Cameron Parish Pipelines LLC assets are located in the heart of the Johnson Bayou, Louisiana. The Cameron Parish School Board Lease has cumulatively produced over six million barrels of oil since the 1930s.

Terms of the deal are expected in the upcoming days.

Oil & Gas Post

Promote Your Page Too
LINK

Weather Watch: 7 of 10 Missing Workers Rescued Alive in Gulf

- Weather Watch: 7 of 10 Missing Workers Rescued Alive in Gulf

Monday, September 12, 2011
Dow Jones Newswires
by Anthony Harrup

Mexican state oil company Petroleos Mexicanos, or PEMEX, said Sunday that seven of 10 workers missing after abandoning a vessel in the Gulf damaged by Tropical Storm Nate have been rescued alive, and that the bodies of two others who died were also recovered.

Pemex said of the seven who were rescued alive are four Mexicans, a Bangladeshi and two U.S. citizens. It said the bodies of the two dead workers had yet to be identified.

The 10 workers, three employees of U.S. seismic data company Geokinetics Inc. (GOK) and seven contract workers went missing Thursday after the vessel Trinity II was disabled by the storm off the coast of Tabasco state, and they evacuated into a life raft.

PEMEX said the workers were located off the coast of Campeche state, 51 miles from the Cayo Arcas offshore oil export terminal.

The rescued workers were being transported by helicopter to a PEMEX hospital in Cuidad del Carmen, and the search continues for the 10th worker, PEMEX added.

Oil & Gas Post

Promote Your Page Too
LINK

NPD Head: Norway's New Oil Finds May Help Stem Mid-Term Output Fall

- NPD Head: Norway's New Oil Finds May Help Stem Mid-Term Output Fall

Monday, September 12, 2011
Dow Jones Newswires
by Katarina Gustafsson

Two major oil finds this year by Norwegian oil and gas giant Statoil (STO) could stave off a steep decline in Norway's production in the mid-term, but won't reverse the longer downward trend, Bente Nyland, head of the Norwegian Petroleum Directorate has told Dow Jones Newswires.

This summer's find in the North Sea that is one of the 10th biggest discoveries ever on the Norwegian continental shelf and the earlier slightly smaller success in the Barents Sea complement measures to tackle the fall in the short- and mid-term that are being considered and implemented by the Scandinavian country.

However, ultimately Norway will have to open up new areas and that is more problematic.

"In the short- and mid-term it's important to keep and increase recovery, to have new finds in production and build out what you have found. While in the long run, it's necessary to discuss whether to open up new areas. And that is a political question," Nyland said.

Norway this year reached a treaty with Russia over a long disputed maritime border in the Barents Sea. But it could be a while before this new zone is opened up for exploration, Nyland said the quickest scenario would be around two or three years.

The petroleum directorate has started collecting seismic data from the region and Nyland, a geologist and head of the government body since 2008, said some indication of the region's resources could be given in 2012-13.

The state agency, tasked with overseeing Norway's oil and gas activities, predicts total production will be kept at about the current level until around 2020-25, Nyland said.

Norway's oil production peaked in 2001. Gas production is still rising but Nyland said she expects output to begin decreasing some time at the start of the 2020s given the lack of large gas finds.

"Gas production will to some extent fill in the gap in coming years," she said, adding that increasing the recovery rates in existing oil fields will be critical in the short term.

The petroleum sector is Norway's largest industry. Investments next year in oil and gas activities are seen at a record-high NOK172 billion ($32 billion), according to a recent forecast from Statistics Norway.

Last week, the Norwegian krone climbed to an eight-year high as traders sought a new safe haven after the Swiss National Bank capped the value of the Swiss franc against the euro.

"We have no indications that companies have become more restrictive. But it's too early to say," Nyland said.

In January, the Norwegian Petroleum directorate revised down estimates for undiscovered resources on the Norwegian continental shelf, to 2.6 billion standard cubic meters of oil equivalents from 3.3 billion standard cubic meters of oil equivalents.

"This year's finds give no base for changing our analysis," she said.

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

Oil & Gas Post

Promote Your Page Too
LINK

Shell Seeks Okay for 2D Survey Offshore NW Australia

- Shell Seeks Okay for 2D Survey Offshore NW Australia

Monday, September 12, 2011
Shell Australia

Shell is seeking Federal Government environmental approval for a small 2D marine seismic survey off the North West Cape.

Subject to approvals the survey is planned to have a duration of around 12 days and to take place during the period from mid-November 2011 to the end of March 2012 avoiding the humpback whale migration.

At closest point the survey will be around 25km from Ningaloo Reef. As detailed in our environmental documentation Shell has elected that the 2D seismic survey will not come within a 10km buffer zone of the Ningaloo World Heritage Area.

The seismic survey is the final work commitment for permit WA-385-P in the current term.

In July 2011 Shell received environmental approval for the Palta-1 gas exploration well in adjacent permit WA-384-P.

Oil & Gas Post

Promote Your Page Too
LINK

Petrolimex Wins Laos Investment Contract

- Petrolimex Wins Laos Investment Contract

Monday, September 12, 2011
Vietnam National Petroleum Corp.

Vietnam National Petroleum Corp. (Petrolimex) on Saturday received an investment license in Laos.

The investment license granting ceremony was held during the Vietnam-Laos Cooperation and Investment Conference at the International Convention Center with the presence of H.E Prime Minister Nguyen Tan Dung of the Socialist Republic of Vietnam Government and H.E Prime Minister Thongsing Thammavong of the People's Democratic Republic of Laos Government.

Petrolimex investment project in Laos was granted license No. 452/BKHDT-DTRNN of June 21st, 2011, by which Petrolimex would directly conduct business activities in Laos with the cooperation of Chevron.

Chevron is the world third-largest oil group in oil reserve and the fourth largest in oil and natural gas exploitation.

Petrolimex and Chevron are partners in energy sector, having good cooperation and mutual trust.

This investment project in Laos is in line with Petrolimex development strategy. Besides, the project contributes to the materialization of agreements between Vietnam-Laos governments in the direction of all-sided cooperation, in conformity with the tradition of friendship and special solidarity between Vietnam and Laos.

Oil & Gas Post

Promote Your Page Too
LINK

Technip, Global Industries Agree to Merge

- Technip, Global Industries Agree to Merge

Monday, September 12, 2011
Technip

Technip announced Monday an agreement to acquire the entire share capital of Global Industries and reinforce its leadership in the fast-growing subsea segment of oil services. The two companies have entered into a definitive merger agreement whereby Technip will pay US$8.00 per Global Industries share. The transaction values Global Industries at US$1,073 million (EUR768 million at current exchange rates), including approximately US$136 million of net debt. The Board of Directors of Global Industries has unanimously approved the transaction.

The transaction price represents a 55% premium to Global Industries' share closing price on September 9, 2011, the last day prior to announcement of the transaction. The transaction is to be funded using existing cash balances and credit facilities.

Global Industries brings to Technip its complementary subsea know-how, assets and experience, comprising 2,300 employees operating 14 vessels, including notably two newly-built leading edge S-Lay vessels, as well as strong positions in the Gulf of Mexico (US and Mexican waters), Asia-Pacific and the Middle East.

Technip's global presence, world-class technologies, assets and services and strong project management track record will realize the full value and potential of Global Industries' know-how, assets and experience, and broaden opportunities for Global Industries' employees.

The acquisition of Global Industries reinforces Technip's leadership in the fast-growing subsea market. Strong revenue synergies are expected as the acquisition will substantially increase Technip's current capabilities and expand its addressable market by around 30% in deep-to-shore subsea infrastructure. Cost synergies are estimated to be at least US$30 million.

Given the anticipated synergies, the transaction is expected to be accretive to Technip's earnings per share by around 5 to 7% in 2013.

The transaction is expected to close early in 2012. The management teams of Global Industries and Technip will work closely together to define the integration plan. Thierry Pilenko, Chairman and Chief Executive Officer of Technip, said:

"The acquisition of Global Industries reinforces Technip's leadership in Subsea, one of our three market segments alongside Onshore and Offshore. The subsea market looks likely in 2011 to show a record amount of orders for our industry and our own backlog at end-June 2011 is above its previous peak. We see that our customers continue to firm up a substantial number of large offshore developments with Brazil, the Gulf of Mexico, West Africa and Asia Pacific leading the way to drive future growth. Our investment in Global Industries substantially expands our addressable market in subsea. Global Industries' capabilities, know-how and experience, notably in S-Lay and Heavy Lift, add to our already unique vertically integrated range of products and services, enabling us to offer our clients greater value in the execution of complex projects from deep-to-shore. We expect that the application of Technip's own skills in offshore and subsea developments, its commercial footprint and its project management experience will drive a rapid deployment of the Global Industries teams and assets on customer projects. The transaction is expected to meet our hurdle rate, create value for Technip's shareholders, and raise earnings per share starting by around 5 to 7% in 2013."

Oil & Gas Post

Promote Your Page Too
LINK

Goldman Sees US As Top Oil Producer In 2017 - Report

- Goldman Sees US As Top Oil Producer In 2017 - Report

Monday, September 12, 2011
Dow Jones Newswires
LONDON
by London Bureau

The U.S. will soon become the world's top oil producer, The Sunday Times reported Goldman Sachs as forecasting.

U.S. oil production should reach 10.9 million barrels a day by 2017, a third higher than 8.3 million barrels currently, the newspaper reported the investment bank as saying.

Russia, now the top oil producer, should see production increase only 100,000 barrels in the same period, for an output of 10.7 million barrels a day, the report said.

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

Oil & Gas Post

Promote Your Page Too
LINK

Iraq Energy Panel Approves Gas Deal - Oil Minister

- Iraq Energy Panel Approves Gas Deal - Oil Minister

Monday, September 12, 2011
Dow Jones Newswires
AMMAN
by Hassan Hafidh

A top Iraqi government energy committee has approved a deal with Royal Dutch Shell PLC (RDSA) to capture and exploit gas from its giant southern oil fields, the country's oil minister said Sunday.

The Iraqi oil ministry struck a deal in July with Shell and Japan's Mitsubishi Corp. (8058.TO, MSBHY) to develop gas production in southern Iraq. To become valid the deal needs approval from the Baghdad government.

"It was agreed upon by the energy committee and was sent to the cabinet for approval," Abdul Kareem Luaiby told Dow Jones Newswires on the sidelines of an Iraqi energy meeting in Amman, Jordan.

The committee is chaired by the deputy prime minister for energy affairs, Hussein al-Shahristani, and its members include the ministers of oil, electricity and finance.

Luaiby declined to say when exactly the cabinet would approve the deal. The agreement must first be examined by the cabinet's legal and specialized offices, he said.

The 25-year venture calls for an investment of $17.2 billion to create the Basra Gas Company. Baghdad would have a 51% stake, Shell 44% and Mitsubishi 5%.

Some $12.8 billion would be spent on infrastructure and $4.4 billion on construction of a liquefied-natural-gas facility.

Under the agreement, the company must first meet local demand but can export any gas not used by Iraq's fuel-starved power plants. The planned LNG terminal would handle the export of 600 million cubic feet a day.

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

The venture would process associated gas produced from three supergiant Iraqi fields--Rumaila, West Qurna phase 1 and Zubair--all in Basra governorate.

"We are committed to supply the venture with 1.6 billion cubic feet a day from these fields," Luaiby said.

The joint venture would sell produced gas to Iraq's state-owned South Gas Company, at international standard pricing.

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

An Iraqi oil expert, who asked not to be named, however, said Iraq would make nearly $100 billion from the venture because the gas would substitute for the oil currently used to fuel Iraq's power stations.

Iraq would tax Shell and Mitsubishi profits at 35%, he said. The expert said Shell and Mitsubishi will make a 7% profit on the whole venture.

Iraq has natural-gas reserves totaling 112.6 trillion cubic feet, the 10th largest in the world. But it produces only around 1.5 billion cubic feet a day, because of a lack of infrastructure.

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

Oil & Gas Post

Promote Your Page Too
LINK