PA Resources Claims Azurite Production Levels In Line with 1Q

- PA Resources Claims Azurite Production Levels In Line with 1Q

Wednesday, June 15, 2011
PA Resources AB

PA Resources reported an update on production and sales at the Azurite Field offshore Republic of Congo.

The last production well on the Azurite Field was commissioned as communicated on June 8 and is presently being monitored after initial clean-up.

Present level of production on the Azurite Field is in line with the average production level seen in the first quarter of 2011.

PA Resources has over the last couple of days performed a lifting from the Azurite Field priced at approximately USD 114 per barrel.

PA Resources has a 35 percent working interest in the production sharing contract for the Azurite Field, the operator Murphy Oil Corporation has a 50 percent working interest and Société Nationale Petroles du Congo 15 percent.

Oil & Gas Post

Promote Your Page Too

Seadrill 1Q Earnings Soar to $816MM

- Seadrill 1Q Earnings Soar to $816MM

Friday, May 27, 2011
Seadrill Ltd.

Seadrill reports first quarter 2011 results:

• Highlights
  • Seadrill generates first quarter 2011 EBITDA of US $573 million
  • Seadrill reports first quarter 2011 net income of US $823 million and earnings per share of US $1.84
  • Seadrill distributes cash dividend of US $0.75 per share
  • Seadrill establishes a harsh environment focused drilling company, North Atlantic Drilling Ltd, subscribe for 75% of the shares in a US $1.7 billion private placement, lists the company on the Norwegian OTC and transfers five existing drilling units with contracts and staff, and one unit under construction to the new company
  • Seadrill orders a new harsh environment jack-up rig to be named West Linus and signs a five-year contract with ConocoPhillips
  • Seadrill orders two new tender rigs and signs five-year contracts for both units with Chevron
  • Seadrill takes delivery of one ultra-deepwater semi-submersible rig and one semi-tender rig
  • Seadrill subsidiary Seawell completes the merger with Allis-Chalmers Energy Inc in late February, leading to a reduction in Seadrill's shareholding to 36.5% and a deconsolidation in Seadrill accounts
• Subsequent events
  • Seadrill exercises its right to call the remaining US $750 million of the 2012 convertible bond
  • Seadrill repurchases 2.5 million of its own common shares
  • Seadrill orders a new ultra-deepwater drillship at Samsung for an all-in cost of US $600 million
  • Seadrill secures new contracts with an estimated value of US $1.2 billion
  • Seadrill orders a new tender rig for a total consideration of US $115 million
  • Seadrill agrees to sell the jack-up rig West Juno for a total consideration of US $248.5 million
  • Seadrill transfers the construction contract and drilling contract for jack-up rig West Linus to North Atlantic Drilling Ltd

First quarter results

Seadrill today reports consolidated revenues for the first quarter 2011 of US $1,110 million compared to US $1,169 million for the fourth quarter 2010.

Operating profit for the first quarter was US $430 million, down from US $479 million in the fourth quarter 2010, which included US $26 million in gain on sale of the jack-up rig West Larissa. The results for the first quarter were also impacted by lower contribution from Floaters, Tender Rigs and Well Services, following the deconsolidation of Archer/Seawell.

Operating profit from the Floaters was US $312 million as compared to an operating profit of US $322 million in the fourth quarter 2010.

Operating profit from the Jack-up Rigs amounted to US $64 million as compared to an operating profit of US $40 million in the fourth quarter, adjusted for the US $26 million gain on sale of West Larissa in the same quarter 2010.

Operating profit from the Tender Rigs was US $49 million, down from US $75 million in the fourth quarter 2010. The decrease was due to certain non-recurring revenues being recorded in the fourth quarter and the West Menang being idle in the first quarter.

Operating profit from Well Services was US $5 million, down from US $18 million in the preceding quarter, as Well Services was deconsolidated from the Seadrill accounts in February.

Net financial items for the first quarter amounted to a gain of US $441 million as compared to a loss of US $176 million in the previous quarter. The improvement is mainly related to a gain of US $477 million recognized in connection with the deconsolidation of Well Services that triggered an adjustment of the book value of our holding to reflect the market value of the underlying shares.

Income before income taxes amounted to US $871 million, while income taxes were US $48 million.

Net income for the quarter amounted to US $823 million and earnings per share were US $1.84 for the first quarter.

Chief Executive Officer in Seadrill Management AS Alf C Thorkildsen commented, "We are pleased to report another solid quarter for Seadrill reflecting a strong underlying operational performance. Furthermore, over the last three months Seadrill has secured new contracts for approximately US $1.2 billion. These contracts demonstrate the continued strength of the market for quality drilling units. In response to our solid operations, strong contract backlog and favorable market outlook, we are pleased to announce a quarterly cash dividend of US $0.75."

Oil & Gas Post

Promote Your Page Too

Lukoil Reports $3.5B in 1Q Profit

- Lukoil Reports $3.5B in 1Q Profit

Thursday, May 26, 2011
OAO Lukoil Holdings

LUKOIL has published consolidated US GAAP financial statements for the first quarter of 2011.

The Company's net income was $3.517 billion in the first quarter of 2011, which is 71.3% higher y-o-y. EBITDA was $5,343 million, which is 43.3% higher y-o-y. Sales revenues were $29.626 billion (+23.9% y-o-y). Positive dynamic of our financial results was mainly due to a sharp increase in hydrocarbon prices in the first quarter of 2011 compared to the respective period of 2010.

Capital expenditures including non-cash transactions in the first quarter of 2011 were $1.7 billion, which is 17.3% higher y-o-y. Free cash flow increased by 43.3% and reached $2.013 billion in the first quarter of 2011.

In the first quarter of 2011, lifting costs per boe of production were $4.52, which is 13.9% higher y-o-y. The growth was mainly due to the real ruble appreciation and increased expenses for power supply.

In the first quarter of 2011, LUKOIL Group total hydrocarbon production available for sale reached 2,186 th. boe per day, which is a 4.1% decrease y-o-y. Crude oil production of LUKOIL Group in the first quarter of 2011 totaled 22.84MM tonnes. Natural and petroleum gas output available for sale increased by 1.4%, to 4.79 bcm. Meanwhile, the production of gas on our major gas field - Nakhodkinskoe field amounted to 2.13 bcm in the first quarter of 2011 compared to 2.10 bcm for the respective period of 2010.

In the first quarter of 2011 throughputs at the Company's refineries (including its share in crude oil and petroleum product throughput at the ISAB and TRN refining complexes) decreased by 1.0% y-o-y and reached 15.19MM tonnes. Throughputs at the Company's refineries in Russia remained flat y-o-y, throughputs at the Company's international refineries decreased by 3.5% y-o-y due to the scheduled maintenance at ISAB Complex in the first quarter of 2011 and shutdown of operations at the Odessa Refinery due to unfavorable economic conditions.

Measures aimed at higher efficiency and cost control allow the Company to generate strong free cash flow and increase net income.

Oil & Gas Post

Promote Your Page Too

Petrobras Touts $6.5B in 1Q Net Earnings

- Petrobras Touts $6.5B in 1Q Net Earnings

Thursday, May 26, 2011
Petrobras

Petrobras announces its consolidated results of the first quarter 2011 (1Q11), in accordance with generally accepted accounting practices in United States (US GAAP).

The consolidated net income reached US $6.5 billion in the 1Q11, (US $1.00 per ADS), compared to US $4.3 billion in the 1Q10 (US $ 0.98 per ADS). The increase of 51% was primarily due to higher production volumes, higher prices and higher domestic sales volumes. The increase was also due to higher foreign exchange gains on net debt denominated in U.S. dollars.

Adjusted EBITDA was US $9.5 billion in 1Q11, compared to US $8.4 billion in the 1Q10.

Capital expenditures amounted to US $9.9 billion in the 1Q11, most of which allocated to the expansion of future oil and gas production capacity.

Oil & Gas Post

Promote Your Page Too

OXY Touts $1.1B in 1Q 2011

OXY Touts $1.1B in 1Q 2011

Thursday, April 28, 2011
Occidental Petroleum Corp.

Occidental Petroleum Corporation (OXY) announced core income of $1.6 billion ($1.96 per diluted share) for the first quarter of 2011, compared with $1.1 billion ($1.35 per diluted share) for the first quarter of 2010. Net income for the first quarter of 2011 was $1.5 billion ($1.90 per diluted share), compared with $1.1 billion ($1.31 per diluted share) for the first quarter of 2010.

In announcing the results, Dr. Ray R. Irani, Chairman and Chief Executive Officer, said, "The first quarter of 2011 core income of $1.6 billion was 45-percent higher than the first quarter of 2010. Our oil and gas production for the first quarter of 2011 increased over 4 percent, as compared to the first quarter of 2010, to 730,000 BOE per day."

QUARTERLY RESULTS

Oil and Gas

Oil and gas segment earnings were $2.5 billion for the first quarter of 2011, compared with $1.9 billion for the same period in 2010. The increase in the first quarter of 2011 results was due to higher crude oil prices and higher sales volumes in the Middle East, partially offset by higher operating costs and DD&A rates.

For the first quarter of 2011, daily oil and gas production volumes averaged 730,000 barrels of oil equivalent (BOE), compared with 701,000 BOE in the first quarter of 2010. Volumes increased over 4 percent, primarily in domestic gas and NGL production and Middle East/North Africa crude oil volumes. The domestic gas increase was from the new acquisition in South Texas, which closed in the first quarter of 2011. The Middle East/North Africa increase included new production from Iraq and higher volumes from the Mukhaizna field in Oman.

As a result of higher year-over-year average oil prices affecting production sharing and similar contracts, production was negatively impacted in the Middle East/North Africa, Long Beach and Colombia by 12,000 BOE per day. Dolphin and Elk Hills volumes were also lower from planned maintenance and production shut-downs in the first quarter of 2011.

Daily sales volumes increased over 6 percent from 685,000 BOE per day in the first quarter of 2010 to 728,000 BOE per day in the first quarter of 2011.

Oxy's realized price for worldwide crude oil was $92.14 per barrel for the first quarter of 2011, compared with $74.09 per barrel for the first quarter of 2010. Worldwide realized NGL prices rose from $47.48 per barrel in the first quarter of 2010 to $52.64 per barrel in the first quarter of 2011. Domestic realized gas prices dropped from $5.62 per Mcf in the first quarter of 2010 to $4.21 per Mcf for the first quarter of 2011.

Apache Boosts 1Q Production by 25%

Apache Boosts 1Q Production by 25%

Thursday, April 28, 2011
Apache Corp.

Apache reported production of 732,000 barrels of oil equivalent (boe) per day and earnings of $1.1 billion, or $2.86 per diluted share, for the three-month period ending March 31, 2011. These compare with production of 586,000 boe per day and net income of $705 million, or $2.08 per diluted share, for the same period in the prior year.

"Apache is beginning the year with a solid, strong performance," said G. Steven Farris, chairman and chief executive officer. "Despite a number of challenges, our diversified portfolio of assets delivered exceptional earnings and operating results. Liquids production increased 57,000 barrels to 358,000 barrels per day, which enabled Apache to achieve stand-out earnings and cash flow as a leading beneficiary of rising oil prices."

Higher oil prices and production from new wells drilled during the quarter and assets acquired during 2010 combined to increase revenues to $3.9 billion, up from $2.7 billion last year. Cash from operations before changes in operating assets and liabilities* increased 43 percent from the prior year to $2.2 billion. Excluding certain items that management believes affect the comparability of operating results, Apache reported adjusted earnings* of $1.1 billion in first quarter 2011 compared with $712 million in the year-earlier period. On a per-share basis, adjusted earnings were $2.90 in the first quarter compared with $2.10 per diluted share in the prior-year period.

Liquid hydrocarbons represented 49 percent of production and 77 percent of revenues. Approximately 60 percent of the company's oil production came from operations outside North America and received in excess of a $10 premium per barrel compared with domestic production benchmarked to West Texas Intermediate prices.

On the operational front, the company achieved several milestones. These include:

• Apache's most prolific development well in the Forties field (North Sea), which came online at approximately 11,800 barrels of oil per day.
• In the Permian Basin, Apache is operating 24 rigs, up nearly five-fold from a year ago. Targeting primarily oil objectives, Apache drilled 110 wells including 15 horizontals during the first quarter.
• Since drilling the first-ever horizontal Hogshooter well last year, Apache has drilled six wells into this oil-rich segment of the Anadarko basin's Granite Wash formation. To date, every well has tested in excess of 1,000 barrels of oil and 2 million cubic feet of gas per day.
• The company's first operated deepwater production in the Gulf of Mexico with start-up at the Balboa field.
• Offshore Australia, Apache's Zola discovery well encountered 410 feet of net gas pay.
• In Egypt, Apache operated 22 rigs during the quarter, drilling 33 wells, including the company's first wells in the Tayim development lease in West Kalabsha producing from deeper Paleozoic pay. Apache's production remained online throughout the quarter, increasing sequentially from the previous three months.

"We continue to strengthen our land position, both in North America and internationally. Our LNG initiatives, Kitimat in Canada and Wheatstone in Australia, are steadily progressing toward project sanction with their respective joint venture partnerships," Farris said.

"Apache's opportunity set has never been more robust. We have a deep backlog of exploitation opportunities across our portfolio. In addition to our legacy plays in core areas, we have other potentially large-scale, long-life assets such as deepwater, LNG, and unconventional plays that can provide lasting, long-term value to our shareholders."

Noble Energy 1Q Earnings Fall on Charges

Noble Energy 1Q Earnings Fall on Charges

Thursday, April 28, 2011
Noble Energy Inc.

Noble reported first quarter 2011 net income of $14 million, or $0.08 per share diluted, on revenues of $899 million. The Company's first quarter 2010 net income was $237 million, or $1.34 per share diluted, on revenues of $733 million. First quarter 2011 net income includes items that are not typically considered by analysts in published estimates. Excluding the impact of these items, which were primarily unrealized commodity derivative losses and a rig standby charge in the deepwater Gulf of Mexico, first quarter 2011 adjusted net income was $240 million, or $1.35 per share diluted. Adjusted net income for the first quarter of 2010 was $138 million, or $0.78 per share diluted.

Discretionary cash flow for the first quarter 2011 was $576 million, compared to $447 million for the similar quarter in 2010. Net cash provided by operating activities was $484 million, and capital expenditures were $545 million.

Key highlights for the first quarter 2011 include:

• Increased sales volumes 9 percent versus the first quarter 2010 to 215 thousand barrels of oil equivalent per day (MBoe/d)
• Drilled 12 additional horizontal Niobrara wells in the DJ basin, 9 of which were located in the Wattenberg field
• Received industry's first drilling permit post-moratorium to resume deepwater Gulf of Mexico drilling at the Santiago prospect
• Finalized field development drilling and well completions at the Aseng oil project offshore Equatorial Guinea
• Completed seismic acquisition of 3D data offshore Nicaragua and 2D data offshore France
• Issued $850 million of 30-year unsecured notes and enhanced liquidity position to over $3.5 billion between cash and available credit

Charles D. Davidson, Noble Energy's Chairman and CEO, commented, "Noble Energy's first quarter has delivered a great start to 2011. With high liquid volumes and pricing, combined with good cost control, the business generated very strong cash flow. Our balance sheet was further fortified with a successful debt offering, and as a result, the Company is in a very strong position. Operationally, we remain focused on delivering production and cash flow growth from our base of discovered resources and major project developments. We are excited to have active investment programs ongoing in all four of our core areas, including development of our major projects, as well as exploration, appraisal, and development drilling underway throughout our global portfolio."

Total sales volumes for the first quarter 2011 averaged 215 MBoe/d. Approximately 40 percent of the Company's sales volumes were liquids, with 31 percent international natural gas, and the remainder U.S. natural gas. Production volumes were 216 MBoe/d.

The Company's international sales volumes were 101 MBoe/d, a 25 percent increase versus the first quarter 2010. Lower facility maintenance downtime and higher liquid liftings in Equatorial Guinea resulted in a 15 MBoe/d increase. Natural gas sales in Israel were up 61 percent to 140 million cubic feet per day (MMcf/d), with the higher volumes attributable to increased overall demand for natural gas in power generation, as well as the impact of lower competing imports. In the North Sea, strong performance and additional deliverability at Dumbarton and Lochranza accounted for increased oil volumes. The Company's 2010 volumes included 30 MMcf/d of natural gas in Ecuador, where the Company's production sharing contract was terminated in late 2010.

Noble Energy's U.S. volumes were 114 MBoe/d for the first quarter of 2011. Winter storms reduced the Company's onshore U.S. volumes in the first quarter 2011 by nearly 2 MBoe/d on average. In addition, U.S. volumes do not include the approximately 6 MBoe/d of Mid-continent and Illinois basin oil assets which were sold in the third quarter 2010. In the DJ basin, first quarter 2011 volumes averaged over 56 MBoe/d, up 12 percent from the first quarter 2010. The increase is primarily attributed to ongoing vertical and horizontal drilling at Wattenberg, as well as the impact of the asset acquisition that closed in the first quarter last year. The Company experienced natural declines in various onshore natural gas plays and the deepwater Gulf of Mexico versus the first quarter last year.

Global crude oil pricing averaged $97.15 per barrel for the first quarter 2011, up 31 percent from the same period last year. Natural gas realizations in the U.S. averaged $4.07 per thousand cubic feet (Mcf), down from $5.46 per Mcf in the first quarter 2010. In Israel, natural gas realizations continue to benefit from strong global liquid markets, with pricing averaging $4.19 per Mcf. Natural gas liquid pricing in the U.S. averaged $47.80 per barrel, or 52 percent of the Company's average U.S. crude oil realization.

Total production costs per barrel of oil equivalent (Boe), including lease operating expenses, production and ad valorem taxes, and transportation were down 6 percent from the first quarter of 2010 to $7.34 per Boe. Lease operating expense was $4.75 per Boe and depreciation, depletion, and amortization was $11.42 per Boe. The Company's mix of production, with higher volumes in low-cost areas such as Equatorial Guinea and Israel, contributed to lower per unit rates versus the first quarter last year.

Exploration expense for the first quarter 2011 included $26 million of seismic expenditures, including data acquisitions in the DJ basin, offshore Nicaragua and offshore France. General and administrative expenses were up primarily related to increased staffing for the development of the Company's major development projects. The Company's adjusted effective tax rate and deferred portion were both 34 percent for the first quarter 2011.

Other operating income/expense includes an $18 million rig standby charge incurred as a result of the time required to obtain deepwater Gulf of Mexico drilling permits post the moratorium. Included in other income/expense for the first quarter 2011 is a $10 million deferred compensation charge relating to the quarterly value change of Noble Energy stock held in a benefit program.

Exxon Mobil 1Q Profit Soars 69% on Higher Oil Prices

Exxon Mobil 1Q Profit Soars 69% on Higher Oil Prices

Thursday, April 28, 2011

Dow Jones Newswires

by Tess Stynes

ExxonMobil's first-quarter earnings surged a bigger-than-expected 69% as the company benefited from high oil prices and stronger refining margins.

The world's largest publicly traded oil company by market value has reported stronger results in recent quarters due to rising oil profits and improved refining industry profitability. The growth was a reflection of a recovery from the recession for the broader energy sector, which appears poised for a return toward the boom days that preceded the financial collapse in 2008.

Exxon's $25 billion takeover of natural-gas producer XTO Energy Inc. acquisition last year boosted its production and reserves, though prices have remained soft. The move is anticipated to be highly profitable in the long term, on expectations that natural-gas consumption will grow.

Exxon Mobil reported a profit of $10.65 billion, or $2.14 a share, up from $6.3 billion, or $1.33 a share, a year earlier. Revenue climbed 26% to $114 billion after climbing 41% a year earlier.

Analysts polled by Thomson Reuters most recently forecast earnings of $2.07 on revenue of $114.85 billion.

Exploration and production earnings rose 49%. Exxon Mobil's production rose 10%, boosted by its acquisition last year of XTO Energy Inc., which boosted its natural gas production by 24%.

Refining and distribution business earnings soared amid stronger refining margins and sales of petroleum products.

Exxon Mobil said it spent $5.7 billion for stock repurchases, buying back 69 million shares. The total included $5 billion of buybacks to reduce shares outstanding.

Shares were down 0.5% at $87.32 in premarket trading. The stock through Thursday's close is up 27% in the past year.

Husky's 1Q Profit Leaps on Higher Output, Prices

Husky's 1Q Profit Leaps on Higher Output, Prices

Wednesday, April 27, 2011
Husky Energy Inc.

Husky achieved strong earnings and cash flow growth in the first quarter of 2011 compared to the same quarter of 2010. Performance was driven primarily by increased production volumes, higher realized crude oil prices for the Atlantic Region and South East Asia, and higher throughput rates and margins within the downstream segment.

"Our first quarter results are in accordance with our execution plan," said CEO Asim Ghosh. "Actions undertaken to grow near-term production have achieved the intended result during a period of strengthening prices. At the same time, our downstream refining segment posted strong performance, with higher throughput enabling us to capitalize on improving market conditions."

"In addition, we have made steady progress in advancing our mid and long-term growth initiatives. Steps taken in the quarter have enabled Husky to achieve important milestones towards progressing the Liwan Gas Project offshore China. This project will create shareholder value by tapping into the fast growing energy markets in Hong Kong and mainland China."


A summary of first quarter results, together with recent key highlights, follows:

• Net earnings of $626 million, or $0.70 per share (diluted), including an after-tax gain of $143 million on the sale of non-core assets, an increase of 70 percent from a year ago.
• Cash flow from operations of $1,164 million, or $1.30 per share (diluted), an increase of 36 percent from a year ago.
• Total production before royalties for the quarter averaged 310,400 boe/day, 5 percent above the same quarter of last year and 11 percent higher than the fourth quarter of 2010.
• Progressed the Liwan Gas Project as the Company expects to submit the Overall Development Plan for Liwan 3-1 to the Chinese authorities in the second quarter. The Liwan Gas Project includes several fields; Liwan 3-1, Liuhua 34-2 and Liuhua 29-1 with first gas anticipated from Liwan 3-1 and Liuhua 34-2 in late 2013, ramping up through 2014. Liuhua 29-1 production is anticipated late 2014. Husky's production share is 49 percent.
• Liwan gas is expected to be sold under a long-term contract at competitive prices in the Guangdong and Hong Kong markets.
• Phase I of the Sunrise Energy Project progressed on schedule as development drilling commenced in early 2011 with 12 horizontal wells spud and seven drilled in the quarter.
• In the Atlantic Region, the Company continued to ramp up North Amethyst volumes.
• The Lloydminster Upgrader resumed normal operations in April at which time repairs were completed.
• Closed the previously announced Western Canada asset acquisition on February 4th.
• Closed a $300 million preferred share financing to enhance our liquidity and financial flexibility.

First quarter production averaged 310,400 boe/day in line with guidance. Volumes compare positively with 280,500 boe/day in the fourth quarter of 2010 and 295,900 boe/day in first quarter of 2010. Production volumes were driven higher by the February closing of the Western Canada asset acquisition and good performance from White Rose and North Amethyst.

First quarter cash flow and earnings growth were driven by higher upstream production volumes, higher realized light crude oil prices for the Atlantic Region and South East Asia, and stronger throughput rates and margins within the downstream segment. These were partially offset by the impact on Western Canada realized crude oil pricing of higher discounts to WTI, the impact of a strong Canadian dollar, lower throughput at the Lloydminster Upgrader and weak natural gas prices.

Light crude oil prices averaged U.S. $104.97 per barrel for the quarter, 38 percent higher compared to same period of 2010. Of the Company's total production, approximately 20 percent is priced and sold relative to light crude prices (North Sea Brent). U.S. refining market crack spreads were stronger during the quarter with the average Chicago 3:2:1 crack spread at U.S. $16.58 per barrel, compared to U.S. $6.23 in the same period of 2010.

"We continue to prudently manage our financial position and exercise discipline in all aspects of our capital and operating expenditures," said Alister Cowan, CFO.

KEY AREA SUMMARY AND GROWTH UPDATE:

Western Canada - Unconventional and Conventional

The Company continues to maintain production levels from Western Canada and has accelerated development drilling.

Oil Resource Plays

Within the oil resource portfolio, the Company is focused on developing its opportunities in the Lower Shaunavon and Bakken zones in Southern Saskatchewan along with the Viking zone in Southwest Saskatchewan and central Alberta. Husky has approximately 500,000 net acres in its oil resource portfolio. Seventeen wells were drilled during the period with six placed on production.

Gas Resource Plays

Husky advanced development drilling of its liquids-rich gas assets in the Alberta Deep Basin. In the Ansell area, four rigs were active and a total of 20 Cardium formation wells were drilled during the quarter and an additional six exploration and development wells were drilled in Kakwa, Bivouac, the Horn River Basin and on the Cypress acreage.

Through a combination of crown land sales and private purchases, Husky increased its land holdings in its gas resource portfolio during the first quarter by 29,000 acres.

Heavy Oil

Husky is amongst the industry leaders in heavy oil production and has a significant land and resource portfolio along with a solid integrated infrastructure position. Within its heavy oil operations, the Company's strategy is focused on maintaining production levels, being a low cost producer and continuing to drive new enhanced recovery techniques to sustain production volumes.

Construction of the 8,000 bbl/day South Pikes Peak project was approximately 58 percent complete at the end of the first quarter with production expected in mid 2012. The project continues to progress as expected.

The 3,000 bbl/day Paradise Hill project activity commenced in the first quarter, and will utilize the existing Bolney infrastructure. Production is anticipated in late 2012.

Oil Sands

The Company advanced the recently sanctioned Phase I Sunrise Energy Project. Twelve horizontal wells were spud and seven drilled during the quarter. The Company made several significant equipment orders that included the steam generators, vessels, water treating plant and a camp to support the project.

Tucker contributed positive earnings in the quarter with an average production volume of 6,200 bbls/day. Further wells will be brought on production in the second quarter.

Atlantic Region

Through the first quarter, North Amethyst performed well with average production of 21,400 bbls/day net to Husky. In 2011, Husky expects to tie-in an additional producer and one more injector well.

The West White Rose satellite pilot development is progressing on schedule. These wells will provide additional information on the reservoir to refine understanding of the best development scheme for the full West White Rose field. First production from the pilot is anticipated in the third quarter of 2011.

Husky holds exploration rights to nineteen parcels of land in the area. In 2011, the Company plans to participate in the drilling of an appraisal well at the Mizzen discovery and an exploration well to the south of Terra Nova.

South East Asia

Development of the Liwan Gas Project is progressing in accordance with the Heads of Agreement signed with China National Offshore Oil Corporation (CNOOC) in December 2010. Under the Heads of Agreement, Husky will operate the deepwater portion of the project involving development drilling and completions, subsea equipment and controls, and subsea tie-backs to a shallow water platform. CNOOC will operate the shallow water portion of the project including a shallow water platform, approximately 270 km of subsea pipeline to shore, and the onshore gas processing plant.

Development of the Liwan Gas Project comprises three discoveries on Block 29/26; Liwan 3-1, Liuhua 34-2 and Liuhua 29-1, with first gas production expected in late 2013, ramping up through 2014. Official project sanction is expected later in 2011. It is anticipated the natural gas will be sold under a long-term contract at competitive prices in the Guangdong and Hong Kong markets.

The partnership has made considerable progress in advancing the Liwan Gas Project as the Overall Development Plan (ODP) for Liwan 3-1 has been prepared and is undergoing final reviews with submission to authorities scheduled in the second quarter. Development of the Liwan 3-1 and Liuhua 34-2 fields are proceeding in parallel and will share infrastructure. The ODP for the Liuhua 34-2 field is in preparation and planned for submission to authorities mid-2011. Liuhua 29-1 is expected to be fully delineated later this year with an ODP submission targeted before year end.

All nine development wells for the Liwan 3-1 field have been successfully drilled confirming the quality and extent of the reservoir. Fabrication and construction has begun, and long lead time items ordered in accordance with the schedule. Deepwater installation and pipe lay work are planned to take place in 2012 and 2013.

CNOOC is progressing with the development of the shallow water portion of the project. The infrastructure is designed to allow for the tie-in of incremental wells and fields. Gas from the Liuhua 29-1 field will be processed through the same shallow water platform and onshore gas plant as the other two fields and is expected to come on stream in late 2014.

In Indonesia, Husky and its partners continue to progress and plan for the development of the BD and MDA gas fields with first gas production expected in 2014. The long lead time items for the BD field, including the FPSO, are set to go to tender by mid-year. An appraisal well for the MDA field will be drilled later this year as well as a nearby low risk exploratory well targeting the same type of reservoir.

National Oilwell Varco Reports 1Q Income for 2011

National Oilwell Varco Reports 1Q Income for 2011

Wednesday, April 27, 2011

National Oilwell Varco Inc.

National Oilwell Varco reported that for its first quarter ended March 31, 2011 it earned net income of $407 million, or $0.96 per fully diluted share, compared to fourth quarter ended December 31, 2010 net income of $440 million, or $1.05 per fully diluted share. The first quarter 2011 results included charges related to Libya asset write-downs and the Company's acquisition of APL totaling $19 million pre-tax, or $0.04 per share after-tax. Net income for the first quarter of 2011 excluding the Libya and APL charges was $422 million, or $1.00 per fully diluted share.

Reported revenues for the first quarter of 2011 were $3.15 billion, a decrease of one percent from the fourth quarter of 2010 and an increase of four percent from the first quarter of 2010. Operating profit for the quarter, excluding the Libya and APL charges, was $628 million or 20 percent of sales.

Capital equipment orders for the Company's Rig Technology segment increased significantly, both sequentially and year-over-year, to $2.28 billion during the first quarter, reflecting higher demand for drilling equipment for new build offshore rigs. At March 31, 2011 the segment's backlog was $6.16 billion, up 23 percent from the end of the fourth quarter.

Pete Miller, Chairman, President and CEO of National Oilwell Varco, remarked, "Our Company got off to a good start in the first quarter of 2011. Our Petroleum Services & Supplies segment performed exceptionally well, and helped offset expected lower revenues from new rig projects. The high levels of oilfield activity are spurring demand for all our products and services, serving to reload our backlog of Rig Technology capital equipment, and enabling our Distribution Services team to put up very solid revenues and margins once again.

"We are very excited that bookings into our capital equipment backlog were more than double our shipments this quarter. Overall, efficient execution of orders in our backlog, our leading technologies, great service, and, most importantly, the best workforce in the industry, led to solid earnings this quarter.

"Gradually recovering economies, high oil prices, a pressing need for modern, efficient drilling and well stimulation equipment, and rising consumption of drillpipe, downhole tools, and other critical oilfield products provide a great outlook for National Oilwell Varco."

Rig Technology

First quarter revenues for the Rig Technology segment were $1.61 billion, a decrease of eight percent from the fourth quarter of 2010 and a decrease of 15 percent from the first quarter of 2010. Operating profit for this segment was $422 million, or 26.2 percent of sales. Revenue out of backlog for the segment declined 25 percent year-over-year, and was down 12 percent from the fourth quarter of 2010, to $1.1 billion for the first quarter of 2011, reflecting the completion of many new offshore rig projects which were won in preceding years.

Petroleum Services & Supplies

Revenues for the first quarter of 2011 for the Petroleum Services & Supplies segment were $1.27 billion, up 11 percent compared to fourth quarter 2010 results and up 37 percent from the first quarter of 2010. Operating profit was $246 million, or 19.4 percent of revenue, an increase of 45 percent from the fourth quarter of 2010. Operating profit flow-through, or the change in operating profit divided by the change in revenue, was 59 percent sequentially and 39 percent from the first quarter of 2010 to the first quarter of 2011.

Distribution Services

The Distribution Services segment generated first quarter revenues of $410 million, which were down three percent from the fourth quarter of 2010 and represented a 23 percent increase from the first quarter of 2010. First quarter operating profit was $28 million or 6.8 percent of sales. Operating profit flow-through was 22 percent from the first quarter of 2010 to the first quarter of 2011.

ConocoPhillips 1Q Earnings Increase to $3B

ConocoPhillips 1Q Earnings Increase to $3B

Wednesday, April 27, 2011

ConocoPhillips

ConocoPhillips reported first-quarter earnings of $3.0 billion, compared with first-quarter 2010 earnings of $2.1 billion. Excluding gains from asset dispositions, first-quarter 2011 adjusted earnings were $2.6 billion, or $1.82 per share.

"While our financial results were much improved from a year ago, E&P production and R&M capacity utilization did not meet our targets," said Jim Mulva, chairman and chief executive officer. "The quarter was negatively impacted by approximately $200 million from unplanned downtime and from variable compensation expense related to prior-year performance."

Exploration and Production's (E&P) first-quarter 2011 adjusted earnings were higher, compared with the same period in 2010, primarily due to higher prices, partially offset by lower volumes and higher taxes.

Production for the first quarter of 2011 was 1.7 million barrels of oil equivalent (BOE) per day, a decrease of about 125,000 BOE per day versus the same period in 2010. Field decline, primarily in the North Sea, Lower 48, China and Alaska, decreased production by approximately 190,000 BOE per day, which was largely offset by about 180,000 BOE per day of new production and improved well performance. The new production was primarily from the company's Qatargas 3 project, Bohai Bay's development optimization program and the liquids-rich shale plays in the Lower 48. Unplanned E&P downtime, primarily from the temporary shutdown of the Trans Alaska Pipeline System in January, a supply vessel collision with the company's Britannia platform and civil unrest in Libya, adversely impacted production by about 65,000 BOE per day. Asset dispositions in 2010 and the first quarter of 2011 also negatively impacted year-over-year production by approximately 50,000 BOE per day.

The unplanned E&P downtime of approximately 65,000 BOE per day reduced earnings for the quarter by about $100 million.

"Consistent with our strategy, we continue to build our Exploration portfolio of high-impact drillable prospects and expand our positions in world-class shale opportunities," added Mulva.

During the quarter, significant exploration activities included the acquisition of two Norwegian blocks in the Barents Sea, the spudding of the Peking Duck wildcat well in the North Sea and the acquisition of 33,000 net acres in the emerging Wolfcamp shale play in North America. In the Lower 48 shale plays of Eagle Ford, North Barnett and Bakken, exploration and development continues with 20 operated rigs currently drilling. Results from these programs continue to meet or exceed expectations.

"While we had significant improvement in earnings from our downstream business, we did not capture all the market opportunities available to us due to downtime at several refineries," said Mulva.

Refining & Marketing's (R&M) first-quarter 2011 earnings were higher than the corresponding period of 2010, primarily due to improved global refining margins. Improved market crack spreads were partially offset by weaker crude differentials and lower secondary product margins. The U.S. refining crude oil capacity utilization rate was 87 percent and the international rate was 96 percent in the quarter.

"For the quarter, earnings would have been about $50 million higher if we had operated our U.S. downstream at planned levels," said Mulva.

During the quarter, R&M's working capital increased $2.0 billion, adversely impacting cash from operations. The increase was primarily related to management of the company's discretionary inventory position. An earnings benefit of about $50 million was recognized this quarter related to trading around these inventory positions. Later this year, ConocoPhillips expects to recognize an additional $50 million of earnings from inventory positions taken in the first quarter of 2011.

The Chemicals segment posted record earnings of $193 million in the first quarter. The strong earnings were due to higher margins, mostly in olefins and polyolefins, as well as lower costs. The Midstream segment's results for the first quarter of 2011 were in line with the first quarter of 2010.

Corporate expenses for the quarter of $304 million after-tax were improved slightly compared with the first quarter of 2010. Although interest expense decreased due to reduced debt levels, higher benefit-related expenses and taxes nearly offset the improvement.

Controllable costs were flat for the quarter compared with a year ago. However, variable compensation expense related to prior-year performance negatively impacted earnings for the quarter by approximately $50 million after-tax.

The company completed the sale of its OAO LUKOIL shares in the first quarter. In addition, ConocoPhillips repurchased 21 million of its own shares for $1.6 billion and increased the quarterly dividend rate by 20 percent to 66 cents per share.

Also during the quarter, the company announced plans to sell an additional $5 billion to $10 billion of noncore assets over the next two years. Proceeds from the increased asset sales are expected to be used primarily to fund the company's recently announced $10 billion share repurchase program and for capital investment opportunities.

"We remain focused on delivering value through improving returns, increasing shareholder distributions and growing production and reserves per share," said Mulva.

First-Quarter Financial Highlights

For the first quarter of 2011, ConocoPhillips reported earnings of $3.0 billion, or $2.09 per share, compared with earnings of $2.1 billion, or $1.40 per share, for the same period in 2010. First-quarter 2011 earnings included $394 million in gains from North American asset sales and LUKOIL share dispositions.

First-quarter 2011 adjusted earnings were $2.6 billion, or $1.82 per share, compared with adjusted earnings of $2.2 billion, or $1.47 per share, for the same period in 2010. Adjusted earnings for the quarter increased versus the prior year, primarily due to the impact of higher commodity prices and global refining margins. This increase was partially offset by lower production volumes, the absence of equity earnings from LUKOIL and higher taxes.

During the first quarter of 2011, ConocoPhillips generated $4.0 billion in cash from operations excluding working capital increases of $2.1 billion, resulting in cash from operations of $1.9 billion. In addition, the company received $1.8 billion in proceeds from asset dispositions. These proceeds plus available cash were used to fund a $3.1 billion capital program, repurchase $1.6 billion of ConocoPhillips common stock, pay $0.9 billion in dividends and reduce debt by $0.4 billion. At March 31, 2011, the company's cash and short-term investments were $8.4 billion, including cash and cash equivalents of $6.2 billion. The company ended the quarter with debt of $23.2 billion and a debt-to-capital ratio of 25 percent.

Baker Hughes Boosts 1Q Revenue by 78% in 2011

Baker Hughes Boosts 1Q Revenue by 78% in 2011

Wednesday, April 27, 2011

Baker Hughes Inc.

Baker Hughes announced net income attributable to Baker Hughes for the first quarter 2011 of $381 million or $0.87 per diluted share compared to $129 million or $0.41 per diluted share for the first quarter 2010 and $335 million or $0.77 per diluted share for the fourth quarter 2010.

Revenue for the first quarter 2011 was $4.53 billion, up 78% compared to $2.54 billion for the first quarter 2010 and up 2% compared to $4.42 billion for the fourth quarter 2010.

Results for the first quarter 2010 do not include the results of BJ Services, acquired at the end of April 2010.

Chad C. Deaton, Baker Hughes chairman and chief executive officer, said, "International margins continued to improve in the first quarter, despite weather and geopolitical disruptions, as we made steady progress towards our goal of exiting 2011 with international operating margins in the mid-teens. The foundation of our improvement plan has been managing costs and improving efficiency, which have driven the increase in profitability we have seen to date. As we move towards the second half of 2011, activity growth becomes a more important driver of future improvement.

"Geopolitical supply disruptions have focused attention on the limits of spare oil production capacity and have driven oil prices higher. High oil prices have spurred both international oil companies and national oil companies to accelerate their spending plans. Assuming oil prices do not increase to levels high enough to destroy demand, we expect oil-driven spending growth to be sustained for multiple years. Recent announcements by the Kingdom of Saudi Arabia and Abu Dhabi regarding increased rig activity in the Middle East, and steady increases in spending by Petrobras and other companies to develop fields offshore Brazil give us confidence that the volume growth supporting our margin plans will occur.

"The impact of higher oil prices has not been isolated to the international markets. In North America, on land, overall spending levels have increased as incremental spending on oil and liquids-rich natural gas plays has more than offset weakness in dry gas plays. The rig count in Canada is already dominated by oil-directed drilling and as of last week, for the first time since 1995, the US has more rigs drilling for oil than natural gas. Service intensity in the unconventional shales continues to increase as we drill longer horizontal wells requiring more frac stages and complex completions.

"Our pressure pumping is sold out in North America. We expect to accelerate the deployment of new hydraulic fracturing fleets in the second half of 2011; however, we do not expect that supply will match higher demand for fracturing this year. Although weather improved in March, utilization of equipment was high and we were unable to catch up on work we missed due to colder weather earlier in the quarter.

"Offshore markets will benefit from the resumption of deepwater activity in the Gulf of Mexico. We are encouraged by the recent permitting activity. However, we also recognize that the ten deepwater wells recently permitted to be drilled will only be a fraction of the activity levels we saw before the drilling moratorium was announced. This level of activity is insufficient to offset the 380,000 barrel per day or 23% drop in Gulf of Mexico oil production forecast by the EIA for 2012 compared to 2010. We have continued to invest in our training, safety, and competency assurance programs during the last year, and we are well positioned in the Gulf of Mexico, with our suite of advanced technology and services and experienced personnel, for a resumption of deepwater drilling activity.

"We expect demand for hydrocarbons to continue to increase as the global economy grows. Following the tragic earthquake and tsunami in Japan, we expect oil and LNG to experience higher incremental demand, supporting high oil prices. With shrinking spare capacity, we believe that exploration, development and production spending will increase, raising our confidence that the second half of 2011 will set the stage for a strong 2012."

Debt decreased by $44 million to $3.84 billion and cash and short-term investments decreased by $311 million to $1.40 billion compared to the fourth quarter 2010. Capital expenditures were $429 million, depreciation and amortization expense was $315 million, and dividend payments were $65 million in the first quarter 2011.

FMC Technologies Reports $1.1B for 1Q Revenue

FMC Technologies Reports $1.1B for 1Q Revenue

Tuesday, April 26, 2011

FMC Technologies Inc.

FMC Technologies reported first quarter 2011 revenue of $1.1 billion and diluted earnings per share from continuing operations of $0.35. The diluted earnings per share included a tax benefit of $0.03 per diluted share.

Total inbound orders of $1.4 billion were up 11 percent from the first quarter of 2010 and included $940 million in subsea systems orders. Backlog for the Company reached $4.6 billion including subsea systems backlog of $3.9 billion. Subsea systems recorded its fifth consecutive quarterly backlog increase.

"The outlook for the subsea market in general, and our subsea business in particular, is strong," said John Gremp, President and Chief Executive Officer. "We are also encouraged by the continued strength of the North American land activity and its impact on our fluid control and surface wellhead businesses. We are reiterating our estimate for 2011 diluted split-adjusted earnings per share of $1.60 to $1.70."

Review of Operations – First Quarter 2011 

Energy Production Systems

Energy Production Systems' first quarter revenue was $856.4 million, including subsea systems revenue of $683 million. Surface wellhead revenue was up 5 percent from the first quarter of 2010 with stronger North American activity partially offset by weakness in some of our international markets.

Energy Production Systems' operating profit of $82.2 million decreased 48 percent from the prior-year quarter, due to expected lower margins in subsea systems combined with increased costs in surface wellhead.

Energy Production Systems' inbound orders for the first quarter were $1.1 billion, including subsea systems orders of $940 million. Backlog for Energy Production Systems was $4.2 billion, including $3.9 billion in subsea systems at the end of the first quarter.

Energy Processing Systems

Energy Processing Systems' first quarter revenue of $226.1 million was 35 percent higher than the prior-year quarter. The increase came mainly from fluid control, with record revenue in the quarter.

Energy Processing Systems had record operating profit of $43.7 million in the first quarter, up 86 percent from the prior-year quarter. The increase was driven by higher volume in fluid control resulting from strong North American pressure pumping activity.

Energy Processing Systems' inbound orders were a record $267.1 million in the first quarter led by strong orders in fluid control. Backlog for the segment finished the quarter at $342.1 million.

Corporate Items

Corporate expense in the first quarter was $8.4 million, a decrease of $0.6 million from the prior-year quarter. Other expense, net, was $8.2 million, a decrease of $12.6 million from the prior-year quarter.

The Company ended the quarter with net debt of $45.2 million. Net interest expense was $1.5 million in the quarter.

Depreciation and amortization for the first quarter was $25.4 million, down $3.2 million from the prior-year quarter. Capital expenditures for the first quarter totaled $41.0 million.

The Company's effective tax rate was 20.9 percent for the first quarter and included a $7.3 million credit for a foreign tax holiday.

Helix 1Q Earnings Increase on Oil Prices

Helix 1Q Earnings Increase on Oil Prices

Tuesday, April 26, 2011

Helix Energy Solutions Group Inc.

Helix reported net income of $25.9 million, or $0.24 per diluted share, for the first quarter of 2011 compared with a net loss of $17.9 million, or $(0.17) per diluted share, for the same period in 2010, and a net loss of $49.8 million, or $(0.48) per diluted share, in the fourth quarter of 2010.

Owen Kratz, President and Chief Executive Officer of Helix, stated, "While weakness in the subsea construction market in the Gulf of Mexico remains a challenge for our Contracting Services business, increased oil production combined with higher oil prices resulted in increased earnings and cash flow for Helix. Consistent with our higher earnings and cash flow, our liquidity position increased to $837 million at March 31, 2011 from $787 million at December 31, 2010. Separately, efforts to make our containment system, the Helix Fast Response System, available to producers in the Gulf of Mexico have begun to pay off in the permitting process. Six deepwater drilling permits referencing our containment system have been approved since late February, and we are optimistic that permitting activity will continue to increase. Consistent with improving activity levels for our Contracting Services business as well as the higher commodity price environment, we are upgrading our earnings outlook for 2011."

First quarter 2010 results included the following items:

• A $17.5 million ($11.5 million after-tax) settlement of litigation related to a terminated 2007 international construction contract.
• A net reduction of $5.2 million ($3.2 million after-tax) in the carrying values of certain oil and gas properties due primarily to the deterioration of field economics resulting from a significant decrease in natural gas prices.

The net impact of these items in the first quarter of 2010, after income taxes, was $(0.14) per diluted share.

Fourth quarter 2010 results included the following items:

• Non-cash impairment charge of $16.7 million to write-off the carrying value of goodwill and a $7.1 million deferred tax asset valuation allowance attributable to our Southeast Asia well operations subsidiary (total of $23.9 million after-tax).
• Impairment charges totaling $9.2 million primarily associated with a reduction in carrying values of certain oil and gas properties and $6.4 million related to expiring offshore leases ($10.2 million after-tax).
• Loss associated with the Lufeng project offshore China of $21.4 million ($22.4 million after-tax) related to weather, downhole and mechanical issues.

The net impact of these items in the fourth quarter of 2010, after income taxes, was $(0.54) per diluted share.

Contracting Services

• Subsea Construction and Robotics revenues decreased in the first quarter of 2011 compared to the fourth quarter of 2010 attributable to a weak subsea construction market in the Gulf of Mexico. Overall, our utilization rate for our owned and chartered construction vessels decreased to 44% in the first quarter of 2011 from 84% in the fourth quarter of 2010. Further, global Robotics utilization declined to 49% in the first quarter of 2011 from 60% in the fourth quarter of 2010.
• Well Operations revenues decreased in the first quarter of 2011 compared to the fourth quarter of 2010 due primarily to lower overall utilization (77% compared to 90%). The Seawell incurred 17 days of repair and maintenance downtime and the Well Enhancer incurred 40 days of maintenance downtime during the first quarter of 2011.
• Gross profit margins for our Contracting Services business were 8% in the first quarter of 2011 compared to 1% in the fourth quarter of 2010. Gross profit margins in the first quarter of 2011 were negatively impacted by low utilization in Subsea Construction and Robotics. Gross profit margins in the fourth quarter of 2010 were negatively impacted by the loss on the Lufeng project offshore China.

Production Facilities

• The HP I produced the Phoenix field throughout the first quarter of 2011.

Oil and Gas

• Oil and Gas revenues increased in the first quarter of 2011 compared to the fourth quarter of 2010 due primarily to increased oil production and higher oil prices. Production in the first quarter of 2011 totaled 14.4 Bcfe compared to 13.7 Bcfe in the fourth quarter of 2010.
• The average price realized for oil, including the effects of settled oil hedge contracts, totaled $90.49 per barrel in the first quarter of 2011 compared to $80.11 per barrel in the fourth quarter of 2010. For natural gas, including the effect of settled gas hedge contracts, we realized $5.77 per thousand cubic feet of gas (Mcf) in the first quarter of 2011 compared to $6.11 per Mcf in the fourth quarter of 2010.
• Our April 2011 oil and gas production rate has averaged approximately 140 million cubic feet of natural gas equivalent per day (MMcfe/d) through April 22, 2011, compared to an average of 160 MMcfe/d in the first quarter of 2011 and an average of 149 MMcfe/d in the fourth quarter of 2010.
• We currently have oil and gas hedge contracts in place totaling 19.9 Bcfe (2.1 million barrels of oil and 7.4 Bcf of gas) for the remainder of 2011 (April through December) and 7.6 Bcfe (0.6 million barrels of oil and 4.0 Bcf of gas) in 2012.

Other Expenses

• Selling, general and administrative expenses were 8.6% of revenue in the first quarter of 2011, 9.9% in the fourth quarter of 2010 and 11.4% in the first quarter of 2010 (excluding the $17.5 million pre-tax charge related to a payment to settle litigation related to a terminated 2007 international construction contract).
• Net interest expense and other increased to $22.3 million in the first quarter of 2011 compared with $21.5 million in the fourth quarter of 2010. Net interest expense increased to $24.2 million in the first quarter of 2011 compared with $23.7 million in the fourth quarter of 2010, primarily reflecting lower interest income on our invested cash due to lower interest rates.

Financial Condition and Liquidity

• Consolidated net debt at March 31, 2011 decreased to $916 million from $967 million at December 31, 2010. At March 31, 2011, we had no outstanding borrowings under our revolver. Our total liquidity at March 31, 2011 was approximately $837 million, consisting of cash on hand of $441 million and revolver availability of $396 million. Net debt to book capitalization as of March 31, 2011 was 41%. (Net debt to book capitalization is a non-GAAP measure. See reconciliation attached hereto.)
• As of March 31, 2011, we were in compliance with all covenants and restrictions under our various loan agreements.
• We incurred capital expenditures (including capitalized interest) totaling $44 million in the first quarter of 2011, compared to $33 million in the fourth quarter of 2010 and $75 million in the first quarter of 2010.

Diamond Offshore Briefs Net Income for 1Q 2011

Diamond Offshore Briefs Net Income for 1Q 2011

Thursday, April 21, 2011
Diamond Offshore Inc.

Diamond Offshore reported net income for the first quarter of 2011 of $250.6 million, or $1.80 per share on a diluted basis, compared with net income of $290.9 million, or $2.09 per share on a diluted basis, in the same period a year earlier. Revenues in the first quarter of 2011 were $806.4 million, compared with revenues of $859.7 million for the first quarter of 2010.

Noble 1Q Profit Dives on Drilling Restrictions

Noble 1Q Profit Dives on Drilling Restrictions

Thursday, April 21, 2011
Noble Corp.

Noble reported first quarter 2011 earnings of $54 million, or $0.21 per diluted share, versus $99 million, or $0.39 per diluted share, for the fourth quarter of 2010. First quarter 2011 results include a one-time after-tax net gain of $0.06 per diluted share related to the previously announced substitution of the drillship Noble Phoenix for the drillship Noble Muravlenko in Brazil. Contract drilling services revenues for the first quarter of 2011 were $543 million versus $614 million for the fourth quarter of 2010. Contract drilling margin for the first quarter of 2011 was approximately 44 percent, versus 46 percent in the prior quarter. Noble invested $614 million in capital projects during the quarter.

"Noble's first quarter results reflect the continuing impact of drilling restrictions in the U.S. Gulf of Mexico," said David W. Williams, Chairman, President and Chief Executive Officer. "However, improving utilization in the rest of the world coupled with our extensive contract backlog afforded us the financial flexibility to expand and extend our newbuild program, adding both high-spec ultra-deepwater and jackup units to the fleet. With several new contracts commencing this quarter and the possibility of increased permitting in the U.S. Gulf of Mexico, we expect contract drilling revenues to improve across the balance of the year."

In February 2011, Noble issued $1.1 billion aggregate principal amount of senior notes in three separate tranches with a weighted average coupon of 4.71 percent. A portion of the proceeds was used to repay our half of the $693 million of joint venture debt associated with the Noble Bully I and Noble BullyII drillships. Our joint venture partner, Shell, contributed the remaining half to retire the full balance of the debt. Debt as a percentage of total capitalization was 29 percent at March 31, 2011.

Operations Highlights

At the end of the first quarter of 2011, approximately 64 percent of the Company's available rig operating days were committed for the remainder of 2011 and approximately 33 percent were committed for 2012. The Company's total backlog at March 31, 2011 was approximately $13.1 billion.

In the first quarter, Noble continued its strategy of upgrading its fleet by adding rigs with the latest technology and capabilities. Noble announced a total of five newbuilds, including three ultra-deepwater drillships and two heavy duty, harsh environment (HDHE) jackups which are in addition to the two HDHE jackups announced in December 2010. Deliveries are expected to commence in the fourth quarter of 2012 when the first jackup is scheduled to be completed. Additionally, the first of the three drillships has been awarded a Letter of Intent for five and a half years with an expected commencement date in the second half of 2013 at a dayrate of $410,000. The unit is eligible for up to a 15 percent performance bonus. In the past five months, Noble has committed more than $2.7 billion to its fleet upgrade strategy. The Company has one remaining drillship option that expires August 31, 2011 and two remaining jackup options that expire January 1, 2012.

In the U.S. Gulf of Mexico, the Noble Jim Thompson returned to earning its full dayrate of $359,000-$361,000 at the beginning of April after being on standby for approximately nine months. The unit resumed drilling operations for our customer Shell after they received approval for an exploration permit. Noble has three other rigs on standby with Shell in the Gulf, the Noble Danny Adkins and Noble Jim Day, both at dayrates of $155,000-$157,000, and the Noble Driller at a dayrate of $84,000-$86,000. As previously announced during the quarter, Noble secured a one-year commitment on the Noble Jim Day which includes a period of standby between mid-February and July 31, 2011 and an agreement that the rig will receive a dayrate of $484,000-$486,000 from August 1, 2011 through January 31, 2012 regardless of whether or not the unit is drilling. When operating, the unit will be eligible for a performance bonus of up to 15 percent of the dayrate.

In Mexico, Noble was awarded contracts on seven jackups at dayrates ranging from the mid-$50,000's to approximately $100,000 for durations between 139 days and 624 days. The Company also secured extensions on two units, the Noble Carl Norberg and Noble Roy Butler.

In January, Noble announced a substitution of the Noble Phoenix for the Noble Muravlenko to operate in Brazil. In conjunction with the rig swap, Noble canceled a planned reliability upgrade on the Noble Muravlenko. Also in Brazil, the Noble Clyde Boudreaux commenced a one-year contract at a dayrate of $289,000-$291,000 in early April. The rig is eligible for up to a 15 percent performance bonus.

The Noble Homer Ferrington commenced a farmout in mid-March earning a full dayrate of $504,000-$506,000 while operating in Morocco.

Finally, the Noble Roger Lewis commenced its three-year contract in Saudi Arabia in early March at a dayrate of $131,000-$133,000. The Noble Scott Marks, scheduled to begin a three-year contract in Saudi Arabia in July, arrived in the Middle East to begin necessary upgrades.

"A number of anticipated catalysts have come to fruition and created value for our shareholders during the quarter, including a return to work of rigs in the U.S. Gulf, in Mexico, the Middle East, and the Mediterranean," said Williams. "With what is now eleven newbuilds, we have committed to a significant fleet upgrade program and are beginning to evaluate our existing assets to determine their ultimate future within our fleet. In the meantime, we continue to believe that there is additional upside to the Noble story, including the delivery of three ultra-deepwater drillships during 2011 and a return to normal drilling activity in the U.S. Gulf."

Range Boosts Production in 1Q 2011

Range Boosts Production in 1Q 2011

Tuesday, April 19, 2011
Range Resources Corp.

Range provided an operations update. First quarter production volumes averaged 545.5 Mmcfe net per day, a 17% increase over the prior-year period and 1% higher than fourth quarter 2010. The record production marked the Company's 33rd consecutive quarter of sequential production growth. Production was 79% natural gas, 16% natural gas liquids (NGLs) and 5% crude oil. Targeted drilling to the liquids-rich portion of the Marcellus Shale play in Pennsylvania and the Midcontinent regions drove the production growth. First quarter 2011 production was 16% NGLs versus 12% for first quarter of 2010.

The Company also announced that its preliminary first quarter 2011 commodity price realizations (including the impact of cash-settled hedges and derivative settlements which would correspond to analysts' estimates) averaged $5.46 per mcfe. This represents a 2% decrease from the prior-year period, but a 2% increase as compared to the fourth quarter 2010. Preliminary first quarter production and realized prices by each commodity are: natural gas – 429.9 Mmcfe per day ($4.40), natural gas liquids – 14,338 barrels per day ($47.96) and crude oil – 4,924 barrels per day ($81.35).

Commenting on the announcement, John Pinkerton, Range's Chairman and CEO, said, "Despite the unusually cold weather conditions we incurred in the first quarter, we were able to reach the mid-point of our production guidance. Adjusting for the weather related downtime, we would have exceeded the high end of our guidance. Our operating teams did an outstanding job battling some of the most brutal weather conditions we have experienced in many years. Looking ahead, due to the terrific drilling results so far this year, combined with the progress of the infrastructure projects, we are well on track to reach our production growth target for the year. In addition, the Barnett sale is on schedule to close at the end of the month."

Marcellus Shale Division

We exited the first quarter at approximately 260 Mmcfe per day net from the Marcellus Shale, up from approximately 200 Mmcfe per day at year-end 2010. During the first quarter, the Marcellus Division brought online 26 horizontal wells in southwest Pennsylvania, 15 of which were located in the liquids-rich area of the play. The initial production rates of the 15 new wells averaged 7.4 (6.3 net) Mmcf per day of natural gas and 452 (384 net) barrels of NGLs and condensate per day or 10.1 (8.6 net) Mmcfe per day. An additional 16 wells were completed in southwest Pennsylvania during the first quarter that are awaiting connection to the gathering system. In northeast Pennsylvania, Range brought on its first five wells in Lycoming County at a combined initial production rate of 45 (39 net) Mmcf per day in mid-February.

Due to the outstanding performance of its existing wells combined with the initial performance of the newly connected wells, Range's Marcellus production has temporarily outgrown the existing infrastructure. In southwestern Pennsylvania, the third expansion of the gas processing facilities has been completed and is in the testing phase. This 200 Mmcf per day of additional processing capacity is expected to commence operation in May. With this expansion, Range's total processing capacity will expand to 350 Mmcf per day. Later in the third quarter, Range's processing capacity is scheduled to increase again to 390 Mmcf per day. In northeast Pennsylvania, the next expansion of the Lycoming County gathering system is scheduled to be completed late in the third quarter which will tie in an additional 20 wells.

Range has entered into two memorandums of understanding exploring options to sell ethane from the liquids-rich area in southwest Pennsylvania. Range plans to complete firm ethane sales agreements in the next 12 months covering a significant portion of its projected ethane production.

Midcontinent Division

First quarter activity for the Midcontinent Division focused on drilling operations in several key areas. One rig remains active in the Texas Panhandle, where two Granite Wash wells and one vertical St. Louis exploratory well are undergoing completion. Range's original horizontal St. Louis Lime well continues to perform above expectations. After 12 weeks of production, the well has produced more than 1.0 Bcfe with current rates still at 13.0 Mmcf of natural gas and over 900 barrels of liquids per day or 18.4 (5.6 net) Mmcfe per day. Activity in the Ardmore Basin Woodford play continues with four wells in various stages of completion. Production from these liquids-rich completions is expected to reach sales by the end of the second quarter. One operated rig is currently running in the play, along with additional non-operated activity. Drilling also continues in the Mississippian Lime play of northern Oklahoma with one operated rig and one non-operated rig in the Woodford "Cana" Shale play of the Anadarko Basin.

Appalachian Division

During the first quarter of 2011, the Appalachian Division continued to focus on tight gas sand and coal bed methane (CBM) drilling projects on its 350,000 (235,000 net) acres in Virginia. All of this acreage is either owned or held by production allowing for discretionary drilling with no lease expiration issues. In 2011, Range plans 50 tight gas sand wells, 15 CBM wells and 15 horizontal wells targeting the Huron Shale, Berea and Big Lime formations in Virginia. For the first quarter, the division drilled 5 (4.5 net) vertical tight gas sand wells and one CBM well in the Nora field. Also in the quarter, Range performed 8 recompletions of behind-pipe pays to continue to maximize production on existing wells.

Southwest Division

In the first quarter the Southwest Division drilled its first Penn Shale well in the Conger Field of West Texas where Range has approximately 91,000 net acres. The well has a lateral length of 4,000 feet and will be completed with a multi-stage fracture treatment later in the second quarter.

Chevron Expects 1Q Earnings to Rise, Helped by Higher Prices

Chevron Expects 1Q Earnings to Rise, Helped by Higher Prices

Tuesday, April 12, 2011
Dow Jones Newswires
by Isabel Ordonez & Ben Lefebvre

Chevron said it expects first-quarter earnings to rise from the prior quarter, helped by higher oil prices and slightly offset by lower profits from its refining and marketing arm.

The outlook from the second-largest U.S. oil company by market value after Exxon Mobil Corp. signals that major oil companies will report a surge in quarterly earnings for the period ended March 31, boosted by climbing oil prices, which appreciated in average almost $20 a barrel compared with the same quarter a year ago, says Fadel Gheit, an analyst at Oppenheimer & Co.

Chevron said an interim earnings update released Monday afternoon that its exploration and production earnings for the first quarter will be higher than fourth quarter, but added that profits will be hurt by less production received due to the negative effect of production-sharing contracts signed with foreign governments. These type of contracts lower the reserves the company can book when oil prices rise.

Chevron said that, during the first two months of the quarter, the company received $88.23 a barrel for crude oil from its U.S. fields, up 11% from the prior quarter and up 20% from a year earlier. Natural-gas prices rose 14% from the prior quarter but fell 22% from the year-earlier period to $4.15 per thousand cubic feet.

San Ramon, Calf.-based Chevron said its U.S. production in the first two months of the quarter was 686,000 barrels of oil equivalent per day. For the full first quarter of 2010, production was 734,000 barrels of oil equivalent a day. International output was 2.07 million barrels of oil equivalent per day in January through February. For the entire quarter a year earlier, daily international production reached 2.05 million barrels of oil equivalent.

Shares rose 1.8% to $109.76 in after-hours action. As of the close, the stock had risen 36% in the past year.

Chevron said it expects its downstream quarterly earnings to sink as it processed less fuel to sell than during the same period of the year before. The company said its U.S. plants processed 870 million barrels of oil a day into gasoline, diesel and other fuels through February 2011, compared to 889 barrels a day for the first full quarter of 2010.

Despite the lower sales volumes, Chevron realized a higher profit margin for the fuel it sold during the quarter. Refining margins at its U.S. plants averaged $21.08 through March, 40% higher than in the full quarter of 2010.

The oil giant also said its refining and marketing earnings in the first quarter are expected to be negatively impacted by the adjustment in the accounting of the fair value of some assets tied to oil prices. Oppenheimer's Gheit said this is likely to mean the company's downstream earnings will be affected by the difference between the price the company paid for oil and what it was worth by the time it was delivered to the company's refineries.

Chevron also noted that it expects to post between $250 million and $350 million of after-tax charges for the quarter. It said it expects the total charges to be at the high end of the guidance range.

The company has reported better results of late, helped by higher prices. In January, Chevron said its fourth-quarter earnings jumped 72%.

Chevron is slated to report first-quarter earnings on April 29.