S&P Lifts BP Outlook To Stable; Sees Less Downside Risk

- S&P Lifts BP Outlook To Stable; Sees Less Downside Risk

Wednesday, July 06, 2011
Dow Jones Newswires
by Melodie Warner

Standard & Poor's Ratings Services revised its credit outlook on BP to stable from negative, saying it sees less downside risk to the oil company's credit quality and little evidence of further erosion to its business standing.

The ratings company also affirmed BP's long-term corporate credit rating of A, which is five steps below the coveted AAA.

"The stable outlook reflects our view that BP is well positioned to meet potentially substantial additional fines and other payments related to the Gulf of Mexico disaster," the firm said. For its analysis, S&P assumes that all Gulf of Mexico-related payments will total less than $55 billion and will be spread over several years.

The ratings firm noted BP's first-quarter average realized oil price was 19.2% higher than the fourth quarter, and rose 31% from a year earlier. BP's refining margins also expanded in 2011, while its underlying downstream operating profit increased to $2.1 billion in the first quarter, from a quarterly average of $1.2 billion in 2010, despite a 6% decline in refining throughput, S&P said.

But, a sustained decline in oil prices below $70 a barrel alongside underlying operating cash flow of less than $25 billion could put downward pressure on the ratings, S&P said. Any upside rating potential is limited until there is more clarity on the penalties BP could face in the U.S. for the Gulf of Mexico oil spill.

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

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Banda Results Poor But Still Encouraging

- Banda Results Poor But Still Encouraging

Monday, June 06, 2011
Kosmos Energy Ltd.
by SubseaIQ

Kosmos announced that the company's Banda-1 exploration well has discovered oil offshore the Republic of Ghana on the West Cape Three Points Block. The results of drilling, wireline logs and reservoir fluid samples show the Banda-1 well penetrated net oil-bearing pay of 3 meters (10 feet). Oil samples recovered from the Cenomanian-age reservoir indicate oil of approximately 40 degrees API gravity.

The Banda-1 discovery opens a new play fairway not previously encountered on the West Cape Three Points Block or adjacent Deepwater Tano Block. The Paradise-1 exploration well, recently drilled by Hess, successfully penetrated a hydrocarbon-bearing, equivalent-age reservoir. The Paradise-1 well is located 32 kilometers (km) (20 miles) southwest of the Banda-1 well location. The Banda-1 well also was designed to test the Upper Campanian interval, which was water bearing. Additional technical evaluation will be required to analyze the impact and extent of this new play discovery, which is deeper than existing Campanian and Turonian discoveries on Kosmos' Ghana blocks.

The Atwood Hunter semi-submersible rig drilled the Banda-1 well in a water depth of 921 meters (3,021 feet) to a total depth of 4,580 meters (15,022 feet) in the eastern portion of the West Cape Three Points Block. The well is located 28 km (17 miles) east of Kosmos' Mahogany-1 exploration well that discovered the Jubilee oil field in 2007.

Tullow's Exploration Director Angus McCoss commented, "The Jobi-East-1 and Mpyo-3 well results mark an excellent start to this next phase of our exploration and appraisal campaign in the Lake Albert Rift Basin. We look forward to many more exciting wells as we endeavor to determine the total oil resource base which will underpin the basin-wide development preparations currently in progress."
West Cape Three Points Block Ownership Interest

Kosmos Energy is the operator of the West Cape Three Points Block in which the company holds a 30.875% interest. An affiliate of Anadarko Petroleum Corporation has a 30.875% interest; an affiliate of Tullow Oil plc has a 22.896% interest; E.O. Group Limited has a 3.5% interest; Sabre Oil & Gas Holdings Limited has a 1.854% interest; and Ghana National Petroleum Corporation has a 10% carried interest.

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Commodity Corner: Crude Tumbles on S&P Debt Outlook

Commodity Corner: Crude Tumbles on S&P Debt Outlook

Monday, April 18, 2011

Rigzone Staff

by Saaniya Bangee

Front-month crude futures plummeted Monday after Standard & Poor (S&P) changed its outlook for U.S. debt from stable to negative. The shift in outlook has increased concerns of the U.S. economy's stability and cuts in government spending.

Oil prices fell by $2.54 Monday, settling at $107.12 a barrel on the New York Mercantile Exchange (NYMEX). Prices fluctuated between $106.54 and $109.44. The S&P move came on the possibility that policymakers may not reach an agreement on how to address long-term fiscal pressures.

Over the weekend, China's central bank announced it would increase bank reserve requirements. In its fourth attempt this year, China hopes to control inflation and curb energy demand. Following the U.S., China is the world's second largest energy consumer.

Additionally, Saudi Arabia's Oil Minister Ali al-Naimi said Sunday that the kingdom has reduced oil production by 800,000 barrels due to lack of demand. Crude output was 8.3 million barrels a day last month, compared to February's 9.1 million barrels a day. Naimi anticipates an increase in April production.

On Monday, the greenback rose against the euro and other currencies further pressuring prices. The euro fell on concerns that Greece will have to restructure its debt. A stronger dollar makes oil more expensive, less attractive to foreign buyers.

May natural gas prices fell for a second day Monday, settling nearly seven cents lower at $4.14 per thousand cubic feet. Analysts do not foresee any near-term pressure increasing prices due to near-average storage and below-average prices. The intraday range for natural gas was $4.087 to $4.27 per thousand cubic feet.

Likewise, gasoline futures fell 1.1 percent, peaking at $3.29 before bottoming out at $3.23. Gasoline priced ended Monday's trading session at $3.25 a gallon.