Venezuela Oil Reserves Surpassed Saudis In 2010 - OPEC

- Venezuela Oil Reserves Surpassed Saudis In 2010 - OPEC

Monday, July 18, 2011
Dow Jones Newswires
LONDON
by Benoit Faucon

Venezuela's crude proven reserves surpassed those of Saudi Arabia in 2010, making it the world's largest oil reserves holder, the Organization of Petroleum Exporting Countries said in its annual statistical bulletin.

Venezuela's proven crude oil reserves reached 296.5 billion barrels in 2010, up 40.4% on the year and higher than Saudi Arabia's 264.5 billion barrels, OPEC said.

In the long run the boost in reserves, which comes alongside increases from Iran and Iraq, may empower members of OPEC who favor a defense of high prices. However, there are doubts over whether all of Venezuela's heavy oil discoveries are economically viable.

The data broadly confirm Venezuela's statements that it had reached this level of reserves in January. OPEC normally relies on its members' assessments for statistical data.

Iraq's and Iran's proven reserves were also respectively upgraded by 24.4% to 143.1 billion barrels and by 10.3% to 151.2 billion barrels respectively, roughly in line with the countries' earlier disclosures.

Venezuela, Iran and Iraq were part of a group that refused to endorse a Saudi-led push to hike output at an acrimonious OPEC meeting June 8.

Analysts have questioned how economic Venezuelan reserves additions could be, as most come from the heavy and extra-heavy oil in the Orinoco Belt, which is difficult and expensive to extract.

Venezuela's statistics have long been a controversial topic in oil circles, though disagreements on the matter have recently eased. The International Energy Agency last month said it revised the method used to calculate the country's oil-production figures, bringing its estimates closer to those of Caracas.

The set of statistics may also vindicate Iran's claims that sanctions aren't crippling the development of its oil and gas industry. For instance, crude oil exports from the Islamic Republic to Europe in 2010 rose 34.5% to 764,000 barrels a day on average.

Overall, Iranian oil exports rose by 0.7% as exports to Asia and the Pacific fell by 11%. Iranian natural gas reserves and exports rose by 11.8% and 48.7% respectively.

Last year, the European Union implemented stringent sanctions on Iran which, without banning crude purchases, complicate them by putting restrictions on insurance, financial services and energy sectors.

The numbers also underscore the recovery of the Nigerian oil industry with 17 more rigs active in the West African nation and 437 additional producing wells, following a successful amnesty for militants in 2009.

Overall, the numbers show OPEC members strongly benefited from higher oil prices in 2010, with the total value of their petroleum exports up 27.2% at $745.1 billion and their overall gross domestic product rising 11.2% to $2,325 billion.

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

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Mid-year Well Permitting Set to Surpass 2010 Numbers in N. Colo. County

- Mid-year Well Permitting Set to Surpass 2010 Numbers in N. Colo. County

Monday, July 18, 2011
Greely Tribune, Colorado
by Sharon Dunn, Greeley Tribune, Colo.

Weld County oil and gas drilling permits are already taking over last year's pace, but that's just part of the picture.

Oil and gas drilling activity is at one of the highest levels in years, not only when it comes to drilling permits, which are good for two years, but actual activity.

Though evidence is apparent in the many oil and gas trucks burning a path along U.S. 85, it's also just as busy in the county recording office as it was last year.

Gaye Florio, the manager of the recording department at the Weld Clerk and Recorder's Office in north Greeley, said landmen still line up daily to research land titles on the office's computer systems. It's been the same story since early 2010, shortly after a well named "Jake" in northern Weld County spewed its riches, and subsequently touched off the fury to get the most out of the Niobrara shale formation.

"It hasn't changed. We've got people waiting now," Florio said Thursday morning. "We get new people all the time anymore. There for a while, we had the same (people) over and over, and now it's different all the time."

As of July 12, halfway through the year, the number of drilling permits issued in Weld County hit 1,195 -- a 32 percent increase in the last month -- easily topping the number of drilling permits throughout the state. The permit numbers are on track to surpass last year's 2,152 permits issued in Weld.

Though permitting is not the whole story, when it comes to activity, it is a good measure, said Thom Kerr, permitting manager with the Colorado Oil and Gas Conservation Commission, which evaluates permit requests and issues them.

"It is a good barometer, because it shows (oil companies') interest. If they're not interested, they're not going to file permits. At any time, we could have a huge flurry of permits, which we have," Kerr said. "We've been receiving over 100 permits a week for the last month."

The more interesting item for Kerr halfway through this year is the number of active drilling permits that have yet to do be acted upon. Permits are good for two years. As of June 16, the number of active permits was at roughly 5,000.

"That's 5,000 that have not been consummated or haven't expired, or haven't been drilled," Kerr said. "Those will keep them busy for a little while."

By the first week of July, Weld County had 33 rigs operating, almost half the state's 75 active total active rigs.

"You're seeing a lot of that," Kerr said. "That's why the permit activity probably isn't really reflective of the current level of drilling activity."

Since "Jake" spewed in late 2009, oil companies have flocked to the area to buy up leases and try their luck at the tight shale 7,000 feet below the surface.

The well also heralded a new wave of horizontal drilling activity, which is already setting records, and now sits at 26 percent of all drilling activity in the state, with the majority of horizontal wells in Weld.

Of the 378 horizontal drilling projects permitted so far this year, 309 are in Weld County. Last year, there were 462 horizontal wells permitted, 321 of which were in Weld. But only 151 of those wells were completed, meaning more is to come.

"Clearly it will be a record year for horizontal drilling," Kerr said. "No doubt, it's very high activity. If you look, 26.1 percent of all permits are horizontal. That's just so impressive. It had not been envisioned until the Niobrara touched that off. To get that resource, you need to drill it horizontal. It's the way to do it."

And because of the renewed interest in the Niobrara, Weld County numbers surpassed Garfield County for the second year after consistently coming in No. 2 in the state for years.

The activity has even prompted the Weld Clerk and Recorder to seek a part-time employee to make copies for the flocking land researchers.

"We have 10 machines, and we have nine to 10 where we've let them bring in their own computers," Florio said. "They're here all the time."

Copyright (c) 2011, Greeley Tribune, Colo. Distributed by McClatchy-Tribune Information Services.

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Ascent Reports 2010 Results

- Ascent Reports 2010 Results

Thursday, June 02, 2011
Ascent Resources plc

Ascent announced its final results for the year ended December 31, 2010.

Overview

• Progressed and refined portfolio of low cost, onshore oil and gas assets with near-term upside potential across Europe - Hungary, Slovenia, Switzerland, Italy, and the Netherlands
• Advanced the Petišovci/Lovászi/Ujfalu tight gas project in Slovenia/Hungary towards production - P50 gas in place estimates of 412 Bcf. (11.7 Bm3; 68.7 MMboe)
• Confirmed gas in all of the six Middle Miocene Badenian reservoirs and flow tested gas from the Lower Miocene Karpatian reservoir at Petišovci project - potential to increase gas in place estimate by in excess of 100 Bcf, with preliminary results of Pg-11A expected to be released shortly
• Established active development program at Frosinone/Strangolagalli project in Italy
• Sold 90% interest in Hermrigen/Essertines/Linden project in Switzerland to eCORP Europe International Ltd. for €8 million cash - retained various back-in options on specific potentially successful discoveries
• Strengthened balance sheet post year end with a £17 million placing to institutional investors at 5 pence per share
• Continued production at 48.8% held Penészlek project in Hungary, currently generating gross gas sales of approximately €300,000 per month
• Made changes on a corporate level including appointment of new Nominated Adviser and Broker and strengthened Board

CHAIRMAN'S STATEMENT

I am pleased to report that 2010 was a year of solid progress for Ascent both operationally and in terms of positioning the Company for steady near- and long-term growth in shareholder value.

Our strategy remains to combine lower risk field redevelopment projects in areas with existing infrastructure with selected higher risk exploration projects all designed to provide a balanced risk/reward profile with good potential upside. To this end, we have a diversified portfolio of principally onshore, hydrocarbon exploration, redevelopment and appraisal interests across five European countries: Hungary, Slovenia, Switzerland, Italy, and the Netherlands. We are initiating relatively simple development models to advance these projects, utilizing the latest technology and working with local organizations in each jurisdiction to increase efficiency. As a result of the work undertaken during 2010 and 2011, we anticipate ramping up production towards the end of 2011 and beyond.

Our primary near-term objective is to advance the Petišovci/Lovászi/Ujfalu tight gas project in Slovenia/Hungary. We now hold a 75% interest in the Petišovci asset, having acquired a further 48.75% from EnQuest PLC post year end in return for a 22.5% equity stake in Ascent and a nil cost option of 150,903,958 additional shares, and a 50% interest in the Lovászi and Ujfalu assets. During the year we had independently verified P50 gas in place estimates for the entire project of 412 Bcf. (11.7 Bm3; 68.7 MMboe) and for that reason we consider it relatively low-risk. The challenge for us in 2011 is not so much finding the gas, which we know is there, but how to unlock this gas in a commercial manner given it is largely a tight gas asset.

Phase 1 of the project's development program included the drilling of Pg-11 well in December 2010 to define the main project parameters. On completion of drilling in February 2011, we were able to confirm gas in all of the six Middle Miocene Badenian reservoirs as well as, most excitingly and unexpectedly, the Lower Miocene Karpatian reservoir, which we hope will increase the gas in place estimate by in excess of 100 Bcf. The data collected, in conjunction with the full 3-D seismic which we acquired during the year across the whole project area, has led us to believe that we can extract the gas using modern drilling techniques, either by drilling horizontally or by fracking. In order to determine the right method to use, Phase 2 of the program is currently underway with a deeper horizontal sidetrack to enable us to fully delineate the Lower Miocene Karpatian reservoir and depending on these results we may follow this up with a sidetrack well in the Middle Miocene. Subsequently, in the late summer of 2011, we plan to drill another well, Pg-10. Following this, if successful, it is hoped that production can commence before the end of the year. To achieve this target, a simple pipeline connection and a carbon dioxide ('CO2') reduction plant is required to connect any producing wells in the project to the national pipeline network.

Going forward, our development plan envisages 10-15 more wells being drilled over a three- to four-year period. It is estimated that if production from the wells is in line with current projections, that net operating cash flow from the first well brought on stream during 2011 could be €3 million in 2011 rising to €10 million in 2012 and €24 million for the period 2013-2015, based on €7 Mscf. gas pricing. The project's net CapEx however is not inconsiderable requiring in excess of €150m to develop the entire field.

We are also focused on two other core projects: Hermrigen/Essertines/Linden in Switzerland and Frosinone/Strangolagalli in Italy. The Swiss project is another known oil and gas discovery, which was unexploited due to the low price of gas in 1982 and lack of pipeline infrastructure at that time. We consider that this is also a low risk project as Ascent sold its 90% interest to eCORP European International Ltd ('eCORP') in April 2010 for €8 million, while retaining a 45% back-in right on any success for three conventional appraisal prospects and a 22.5% back-in right for a further three secondary conventional prospects for apportioned cost. eCORP anticipates drilling the Hermrigen well early in the summer of 2011 once the permit is received.

Finally, the Frosinone/Strangolagalli oil exploration and redevelopment project in Italy has also been making headway. New seismic was shot last year in the Strangolagalli Concession and this year a latest generation satellite reconnaissance survey was commissioned, enabling us to plan a new three-well drilling program for 2011/2012. Further seismic has been commissioned at the Frosinone Exploration License to identify drilling locations. We are currently exploring our options in terms of financing an exploration program but as all the drilling would be targeting reservoirs about 1,000 meters deep, costs should be relatively low, yet the upside could be significant for a Company of our size.

Also on the theme of finance, production continues at our 48.8% held Penészlek project in Hungary, where we are currently generating gross gas sales of approximately €300,000 per month. The strong European gas market conditions have been working in our favor; with over 50% of European gas imported and forecast to rise to circa 75% in line with the declining North Sea production, we anticipate these favorable pricing conditions to continue. Production at Penészlek is expected to continue for about another 12 months with another sidetrack well, PEN-105, targeted for the summer of 2011 prior to the field being fully depleted.

The self-financing Penészlek project is useful as it provides the Company with cashflow for overheads, however post the year end in March 2011, it was necessary to raise additional funds by way of a placing in order to progress our core Petišovci/Lovászi/Ujfalu project. We were therefore very pleased to raise £17 million, before expenses, primarily with high quality institutional investors. This has provided the capital to significantly advance our Petišovci/Lovászi/Ujfalu project and we believe that if successful the money could be enough to get us to production/cash flow generation before the year end.

On a corporate level, we have made a number of changes. In September 2010 we appointed finnCap Ltd as the Company's Nominated Adviser and Broker to strengthen our profile within the fund and wealth management arena. Earlier in the same month we also made changes to our Board with the appointment of Dr. Cameron Davies as a Non-executive Director. Cameron is an international energy sector specialist and the former Chief Executive of Alkane Energy plc. He has an excellent track record of exploration success and growing profits in a quoted energy company. He brings with him the technical skills and broad network of international energy industry contacts which will be invaluable in progressing Ascent's extensive portfolio of European oil and gas development and exploration assets.

At the same time, both Legal Director Malcolm Groom and Non-executive Director Jonathan Legg, who had been with the Company since 2005, stepped down from the Board to focus on other commitments. At the end of 2010, Simon Cunningham, our Finance Director, also stepped down from the Board to re-locate to Australia. I would like to take this opportunity to thank them all for their work during their long association with Ascent.

Simon was replaced by Scott Richardson Brown as Executive Finance Director, who had been appointed in November 2010 as a Non-executive Director. Scott is a qualified Chartered Accountant and subsequent to his experience as an auditor, he spent over 10 years working with AIM, FTSE 250 and FTSE 100 companies, both in a corporate finance advisory role and, recently, as Corporate Finance and Investor Relations Director of CSR.

Additionally, post the year end, as part of the agreement with EnQuest PLC, Graham Cooper was nominated to join our Board as a Non-executive Director in February 2011. Graham brings with him a wealth of experience which will be very valuable to the Company. EnQuest will also provide technical support to Ascent for the Petišovci Project, as well as for the evaluation of future European business development opportunities.

With a strong team in place as well as a solid investor base, a healthy balance sheet and an exciting portfolio of diversified assets, the outlook for 2011 and beyond is highly encouraging. Having proved up our core portfolio we are now focused on extracting value from it and in line with this, aggressive work programs are underway. The Petišovci/Lovászi/Ujfalu tight gas project is particularly promising, which in tandem with our other projects, will, I am confident, create real and lasting value for our shareholders.

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Chevron CEO Highlights 2010 Performance, Future Growth

- Chevron CEO Highlights 2010 Performance, Future Growth

Wednesday, May 25, 2011
Chevron Corp.

Chevron highlighted the company's 2010 performance and discussed the company's future growth at the 2011 Annual Meeting of Stockholders.

"A combination of safe, reliable operations and superior execution helped make 2010 an outstanding year both operationally and financially," said John Watson, chairman and CEO. "As we look ahead to the next decade, we remain committed to safety and delivering profitable growth."

Watson discussed Chevron's strong 2010 financial and operational performance, which produced earnings of $19 billion. The company
increased the quarterly dividend by 5.9 percent in 2010, marking 23 consecutive years of annual dividend increases. During this period,
dividends grew at an average annual rate of 7 percent. Chevron announced another quarterly dividend increase in April 2011. Watson said that Chevron led its peers in total stockholder return over the past five years, besting the S&P 500 by more than 14 percentage points. The company maintained its leading position in total stockholder return through the first quarter of 2011.

Watson reinforced Chevron's long-standing commitment to safe, reliable operations. Chevron is an industry leader in safety and in 2010 achieved the best safety performance in the company's history. He also discussed the partnerships Chevron has formed to address health, education and economic development issues in the communities where the company operates. Over the past four years, Chevron's social investments around the world have more than doubled.

George Kirkland, Chevron vice chairman and executive vice president for Global Upstream and Gas, discussed Chevron's world-class queue of projects to meet the world's future energy needs. Chevron plans on investing $26 billion in 2011, with 87 percent of that amount expected to fund upstream activities.

Kirkland noted that since late 2009, Chevron has added 14 million acres to its portfolio, including the acquisition of Atlas Energy in the
northeast United States, and deepwater opportunities in Liberia and China. Kirkland also discussed Chevron's queue of major capital
projects, including Gorgon and Wheatstone in Australia. Over the next three years, 25 projects with a Chevron share of more than $250 million each are scheduled to start production, nine of which have a net Chevron share that exceeds $1 billion. Chevron has four major capital projects planned to start up in 2011. Additionally, over the next three years, the company expects to make final investment decisions on 13 more projects, each with a Chevron share in excess of $1 billion. Construction on the Gorgon project is nearly 25 percent complete, with startup expected in 2014, and Chevron remains on schedule to reach a final investment decision this year on the Wheatstone project, with startup planned for 2016.

Kirkland also discussed Chevron's Downstream and Chemicals business, which delivered improved earnings and competitive performance in 2010. After completing a restructuring, Downstream and Chemicals has a lower cost structure and a portfolio focused on core markets, including North America and Asia. Last year, Chevron had three key downstream project startups at plants in South Korea, in Qatar, and in Pascagoula, Mississippi. Kirkland also discussed Chevron's investments in projects that improve energy efficiency, flexibility and product diversity, including the 25,000-barrel-per-day base-oil plant in Pascagoula. When complete in 2013, Chevron will be one of the world's leading suppliers of premium base oil. In addition, Chevron plans to deliver $700 million in improvements to its refinery system by the end of 2012, through a combination of improved efficiency, and controllable margin and yield
improvement.

Stockholders voted on 11 proposals and supported the board's recommendation on each of the proposals. As of May 25, 2011, the
preliminary report of the Inspector of Election was as follows:

• Item 1: More than 1.2 billion shares, or approximately 90 percent of the votes cast, were voted for each of the 13 nominees for election to the board of directors.
• Item 2: More than 1.6 billion shares, or approximately 99 percent of the votes cast, were voted to ratify the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm.
• Item 3: Approximately 98 percent of the votes cast were voted to approve, on an advisory basis, the compensation for the company's executive officers.
• Item 4: Approximately 84 percent of the votes cast were voted to hold advisory votes on named executive officer compensation every year.
• Item 5: Approximately 25 percent of the votes cast were voted for the stockholder proposal regarding the appointment of an independent director with environmental expertise.
• Item 6: Approximately 3 percent of the outstanding shares of Chevron common stock were voted for the stockholder proposal to amend Chevron's bylaws regarding a human rights committee of the board.
• Item 7: Approximately 6 percent of the votes cast were voted for the stockholder proposal regarding a sustainability metric for executive compensation.
• Item 8: Approximately 24 percent of the votes cast were voted for the stockholder proposal regarding guidelines for country selection.
• Item 9: Approximately 8 percent of the votes cast were voted for the stockholder proposal regarding financial risks from climate change.
• Item 10: Approximately 41 percent of the votes cast were voted for the stockholder proposal regarding hydraulic fracturing.
• Item 11: Approximately 9 percent of the votes cast were voted for the stockholder proposal regarding offshore oil wells.

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Cove Reports Final Results for 2010

- Cove Reports Final Results for 2010

Monday, May 23, 2011
Cove Energy plc

Cove announced its final results for the 12 month period ended December 31, 2010.

2010 Highlights

• Mozambique Rovuma Offshore Area 1
  • Drilling success - Three major gas discoveries, oil encountered:
    • Windjammer (555 ft net gas pay)
    • Barquentine (416 ft of net gas pay)
    • Lagosta (550 ft of net gas pay).
    • Ironclad well encounters oil
    • Validation of seismic model
• Commercialization/Contingent Gas Resources
  • Combined gas resources sufficient to support monetization through Liquefied Natural Gas ("LNG") development.
  • Contingent Gas Resources for combined Windjammer/Barquentine/Lagosta ("Palma Gas Area") discoveries estimated to be 12 TCF (Pmean).
• New Ventures
  • Acquired 15% interest in 5 contiguous deepwater blocks offshore Kenya
• Corporate
  • Successful equity funding combined with significant capital appreciation
  • £136 million ($210 million) raised in new equity
• 2011 - Year to Date - Highlights
  • Tubarao Gas Discovery (110 feet net gas pay) - Contingent Gas Resources in excess of 1 TCF (Pmean).
  • Cove recognize the potential for substantial additional upside resource potential to the Palma Gas Area and Tubarao discoveries based on new interpretation of existing seismic and well data
  • Circa 4,000 sq km new 3 D seismic program underway in Rovuma Offshore
  • Commitment to 2 deepwater rigs for Q4 2011 for exploration, appraisal and testing in Rovuma Offshore
  • Appraisal program of Palma Gas Area of Rovuma Offshore commenced. Extensive coring program at Windjammer discovery completed, rig now at Lagosta wellsite.
  • LNG Development planning underway
  • Interest acquired in 2 further blocks offshore Kenya

Outlook

Cove has established a unique, highly valued and coherent asset portfolio offshore East Africa that offers shareholders numerous material and exciting drilling opportunities in years to come.

Mozambique Rovuma Offshore Area 1

• Pursue Mozambique LNG project whilst exploring appropriate monetization opportunities to capture the underlying value of the LNG project and exploration potential.
• Aggressive oil and gas exploration and appraisal program planned to continue to 2014 with the availability of the new 3 D seismic data coinciding with the introduction of a second deep water rig in Q4 2011.
• In recent months there has been a marked increase from potential gas buyers (including some of the offshore partners) to commence dialogue to acquire future LNG.

Mnazi Bay - Tanzania

• The partnership is continuing negotiations to secure gas sales agreements with potential customers including cement manufacturing and power plant operators. Pending successful outcome of these negotiations the partnership will develop an appropriate exploration and appraisal program in the license area.

Kenya

• More than 3,500 sq kms of new 3 D seismic will be acquired during 2011 in the 5 contiguous deep water blocks operated by Anadarko.
• Exploration operations to commence on the recently obtained L10A and L10B offshore blocks.

New Ventures

• Management focused on securing new ventures opportunities with dynamic work programs to continue to drive the Company's strategy

Working Capital

• Current portfolio expenditure commitments funded into 2012

Michael Blaha, Chairman of Cove commented, "2010 was a remarkable second year for Cove in which the company transformed the assets that we acquired in 2009 from Artumas with world class exploration successes that added significant contingent gas resources that is to form the basis for a significant LNG project. In addition Cove has expanded its portfolio with some strategic exploration positions in 7 deep and shallow water blocks in Kenya. In our strategy we remain focused on geology in emerging basins with intensive exploration and appraisal programs executed by competent operators. We have established ourselves as a reliable company that is focused on creating shareholder value on the basis of a very clear strategy.

Cove's participation in the Rovuma Offshore Area 1 gas discoveries has positioned the Company in a leading LNG project. The Rovuma Offshore Area 1 partnership has commenced an aggressive appraisal, development and commercialization program; which aims for investment sanction of the LNG project in Q3 - 2013. We continue the exploration program on the numerous high priority oil and gas targets which will be supported by the additional 4,000 sq km 3D seismic that will be integrated with the existing 3,000 sq km 3D seismic. We aim to search for additional gas resources to support an ever expanding LNG project and we are hopeful of discovering an oil resources in the south following the oil encountered in Ironclad well during 2010.

I and the Cove Board are confident that the combined exploration and appraisal programs, currently underway on our East Africa portfolio, will achieve continuing significant growth for shareholders in what promises to be an exciting future.

"Finally I am grateful for all the support that was given to us by our consultants, advisors and my colleague directors. This group of people has formed a nimble "fit-for-purpose" and professional team. Without this team we could not have achieved today's tremendous position in a period of under two years since the company was initiated.

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Oxy Reviews 2010 Progress at Annual Meeting

Oxy Reviews 2010 Progress at Annual Meeting

Friday, May 06, 2011
Occidental Petroleum Corp.

Occidental Petroleum Corp. Executive Chairman Ray R. Irani and Oxy President and Chief Executive Officer Stephen I. Chazen reported the company's 2010 operational, financial and long-term achievements at the company's annual stockholders' meeting Friday in Santa Monica, California.

"Today marks a noteworthy moment for the future of the company. As announced last October, consistent with the Board's long-established succession plan, Steve Chazen was elected as President and Chief Executive Officer. I will continue as full-time Executive Chairman. The Board believes that Occidental will benefit from the continuation of our long and successful partnership," said Irani.

"For 17 years I have had the pleasure of working with Steve. He is widely recognized as one of the best financial minds in the industry. Steve has served in a number of important posts at Oxy, from head of business development, to Chief Financial Officer, to President and Chief Operating Officer."

Chazen noted, "Ray and I have worked side by side during these years. Oxy's achievements have been impressive: record profits, record market capitalization, recurring increases in production, significant reserve replacement, high credit ratings, and a very strong performance in total shareholder return. Oxy's cumulative stockholder return was 914 percent over the past 10 years. It has been a challenging and successful past and we now look forward to a challenging and even more successful future."

In reviewing Oxy's 2010 performance, Irani said, "Oxy delivered record production, a strengthened asset base and solid profitability in 2010, building value for our stockholders while positioning the company for continued growth and top-tier performance."

Oxy increased worldwide production by 5 percent in 2010 to a company-record of 753,000 barrels of oil equivalent (BOE) per day. In addition, the company replaced 150 percent of its production in 2010, adding a total of 409 million BOE in proved reserves.

Oxy ended 2010 with

Pa. Revenue Agency: Q1 Tax Payments Already Beat 2010 Totals

Pa. Revenue Agency: Q1 Tax Payments Already Beat 2010 Totals

Tuesday, May 03, 2011
Pennsylvania Department of Revenue

At the direction of Governor Tom Corbett, the Department of Revenue on Monday released an analysis showing that companies engaged in and related to natural gas drilling activities in Pennsylvania have paid more than $1.1 billion in state taxes since 2006.

Those taxes came on top of the billions of dollars of infrastructure investments, royalty payments and permit fees paid by the industry.

The Revenue Department's analysis, which breaks out tax payments from oil and gas companies and their affiliates through April 2011, indicates that 857 of these companies have already paid $238.4 million in capital stock/foreign franchise tax, corporate net income tax, sales/use tax and employer withholding to the state in 2011.

These figures from the first quarter of this year already exceed by nearly $20 million the total tax payments made in all of 2010.

The department's analysis also identified $214.2 million in personal income taxes paid since 2006 attributable to Marcellus Shale lease payments to individuals, royalty income and sales of assets.

A comprehensive analysis of personal income tax paid on Marcellus Shale business profits is not feasible because the department cannot conclusively determine what profits from Marcellus Shale partnerships, S corporations and LLCs were passed through to individuals as opposed to C corporations, which are taxed at 3.07 percent and 9.99 percent, respectively.

However, the department can determine that these oil and gas companies, and their affiliates, include 1,096 pass-through businesses. These businesses reported $675.4 million in 2008 income.

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Musings: Natural Gas Is So 2010; Now It's All About Liquids-rich Shale

Musings: Natural Gas Is So 2010; Now It's All About Liquids-rich Shale

Tuesday, April 26, 2011

Parks Paton Hoepfl & Brown

by G. Allen Brooks

Last week the Baker Hughes U.S. active drilling rig count hit 1,800, up 1.6% from the prior week and up 21.5% over the past year. These were notable achievements. The increases reflect the exploration and development fever that is gripping oil and gas companies. This should be good news for the country's oilfield service industry, but maybe even better news for consumers as the increased drilling should lead to higher oil and gas production, and maybe lower fuel prices. More production means the nation's economy need not import as much oil and gas from abroad, which could have a significant impact on our balance of trade and payments, and the value of the dollar.

The most notable bit of data about last week's rig count was that for the first time in nearly 16 years, the oil and gas industry is employing more rigs targeting crude oil prospects (913 rigs) than drilling for natural gas wells (878 rigs). Analysts and investors, keen to see higher natural gas prices, have seized on this switch in drilling focus as a signal that future gas production will soon stop climbing. Assuming that the nation's natural gas consumption continues to rise, the drilling switch portends a shrinking of the oversupply of natural gas. That should mean higher natural gas prices – the only question is when.

Those E&P companies that are leading the charge into the gas shale plays around the country will be happy to see higher natural gas prices. They continue to claim that they can be profitable drilling these gas shale plays at natural gas prices in the $4.00 to $5.00 per thousand cubic feet (Mcf) of gas. Their financial results suggest something different. They still proclaim the success of the gas shale revolution, a movement that is beginning to spread globally.

Slightly over two weeks ago, the Energy Information Administration (EIA) released an analysis of gas shale resources around the world. It was clear from the report that the EIA believes the domestic gas shale revolution will be embraced globally. The EIA report estimates that 32 countries with known gas shale resources have added 5,760 trillion cubic feet (Tcf) of technically recoverable natural gas to the world's resources. With the addition of the U.S. gas shale resources, the global total would swell to 6,622Tcf. For comparison purposes, the world's proven natural gas reserves as of January 1, 2010, were 6,609Tcf. The world's total technically recoverable gas resources were 16,000Tcf as of the beginning of 2010, so with the new gas shale resources added in, the world now has over 22,000Tcf of gas resources.

The 32 countries with gas shale resources span the world and are likely to become energy-headline locations before long. Most people are familiar with the gas shale drilling underway in Poland and China, but those are only two of the 32 countries that span the globe. China leads the world with an estimated 1,275Tcf of gas shale resources. In Europe, Poland is in first place with an estimated 1,867Tcf of potential reserves, followed closely by France with 180Tcf. Interestingly, France has announced it is considering banning the drilling of gas shale wells until a study of possible water pollution problems associated with hydraulic fracturing are investigated and proven false. Equally surprisingly is that Norway has nearly half the gas shale resources of Poland and France.

Exhibit 1.  Gas Shales Located Around The World

Source:  EIA

In South America, Argentina is highly prospective with nearly 90% of the total gas shale resources estimated to be in the United States. Brazil has about a third of the resources of Argentina with most of the potential resources located in the area close to some of the key manufacturing sites in the country. Surprisingly, Mexico has a huge potential with almost 80% of the estimated United States gas shale resources.

In Africa, the greatest potential source of natural gas from shales lies in South Africa, which has an estimated 485Tcf of resources. Libya, the site of the current civil war involving the country's crude oil reserves and production, has an estimated 290Tcf of gas shale resources. Algeria follows with nearly 80% of Libya's estimate.

While the world has lots of gas shale resource potential, it is in North America, and primarily the United States, where the gas shale revolution is in high gear producing substantial volumes of new gas production. According to the EIA, 2010's 4.87Tcf of gas shale production represents about 23% of total U.S. output, but it is projected to account for 45% of the nation's gas supply by 2035. The huge potential of gas shales in this country was first highlighted by the 2009 report of the Potential Gas Committee (PGC) at the Colorado School of Mines. In that report, the PGC estimated that there was about 616Tcf of gas shale resource, or about a third of the country's total resource potential.

Recently, Ken Medlock, a professor at Rice University, delivered a presentation about the gas shale industry at the American Association of Petroleum Geologists (AAPG) annual meeting. In his presentation he listed a timeline of potential gas shale resource estimates beginning with the 2003 National Petroleum Council estimate of 38Tcf. Two years later the estimate was raised to 140 Tcf and then in 2008 Navigant, a consulting company, estimated there was 520Tcf of potential reserves. The next year came the PGC estimate of 616Tcf and last year, consultant ARI estimated gas shale resources of more than 1,000Tcf. Mr. Medlock said there is a Department of Energy study underway with a May release date that will contain an estimate greater than ARI's estimate, likely putting it close to China's estimated 1,275Tcf of potential reserves.

All this potential gas has led politicians, investment professionals and E&P company executives to announce that the United States has in excess of 100 years of natural gas supply. In his presentation at the AARP, Art Berman showed that by reading the PGC report it becomes clear that gas shale reserves will likely only supply about 20 years of demand at the current 23Tcf of annual consumption.

Mr. Berman's pricking of the gas shale 100-year supply bubble should be having a greater impact, but instead the air is barely slipping out of the balloon. In fact, President Barack Obama has endorsed the huge potential gas supply mantra. In a recent presentation about the nation's energy situation, President Obama said, "We have a lot of natural gas here in this county." In doing so, however, he touched on the key issue now swirling around the gas shale revolution, which is the use of hydraulic fracturing to release the trapped gas from the formation President Obama's observation was, "The problem is…extracting it [shale gas] from the ground. The technologies aren't as developed as we'd like and so there are some concerns that it might create pollution in our groundwater, for

Exhibit 2.  Gas Shale Reserves Less Than 100 Years

Source:  Art Berman

Heritage Highlights 2010 Activities

Heritage Highlights 2010 Activities

Tuesday, April 19, 2011
Heritage Oil plc

Heritage Oil announced its results for the twelve months ended December 31, 2010. All figures are in US dollars unless otherwise stated.

• 2010 Operational Highlights
  • Discovered the largest gas field in Iraq in the last 30 years
  • Highly productive Jurassic reservoir intervals tested in the Miran West-2 well at a restricted cumulative flow rate of over 75 million cubic feet per day ("MMscfd")
  • Estimated gross P90-P50 in-place volumes of 6.8-9.1 Trillion Cubic Feet ("TCF"), with a P10 upside of 12.3 TCF for Miran West
  • Management estimates Heritage has mean net risked contingent and prospective resources in Miran West and Miran East of 744 million barrels of oil equivalent ("MMboe"), based on a 75% working interest
  • Miran development options being considered with first export production targeted for 2015 using planned regional infrastructure
  • Achieved nearly a twelvefold increase in contingent resources from 53 MMbbls to 605 MMboe following the successful testing of hydrocarbons
  • Completed 3D seismic acquisition offshore Tanzania; data currently being processed
  • Further development work in Russia, production increased 65% in 2010
• 2010 Financial Highlights
  • Completed the disposal of interests in Block 3A and Block 1, Uganda, (the "Ugandan Assets") for which Tullow Uganda Limited ("Tullow") paid a cash consideration of $1.45 billion, including $100 million for a contractual settlement, and Heritage received and retained $1.045 billion
  • Cash at year end of $598 million
  • Special dividend of 100 pence per share paid in August 2010
• Outlook
  • Rig contract to drill Miran West-3 well signed in April, well scheduled to spud July 2011
  • Exploration drilling to commence on Miran East in Q4 2011
  • 3D seismic data being processed for Tanzania with a view to establishing a drilling location
  • Mali 2D seismic data currently being acquired with a well expected to be drilled in early 2012
  • Malta 2D seismic data to be acquired during summer 2011
  • Well in Pakistan planned for H2 2011
  • Development options being reviewed for Kurdistan which include a phased development for oil, condensate and gas
  • First horizontal well to be drilled in Q2, 2011, in the Zapadno Chumpasskoye Field, Russia, which should help to provide a material increase in production

Tony Buckingham, Chief Executive Officer, commented, "The sale of the Ugandan Assets in 2010 has provided Heritage with a strong balance sheet for activities within the current portfolio and the ability to appraise further opportunities to generate value for shareholders. We remain active across the portfolio with seismic programs and drilling planned for 2011, including a multi-well exploration and appraisal drilling program in Kurdistan commencing in July. In addition, we are progressing with discussions with the Kurdistan Regional Government for the fast-track development of the Miran Field."

Pan Orient Highlights Operating Results for 2010 Year-End

Pan Orient Highlights Operating Results for 2010 Year-End

Thursday, April 14, 2011
Pan Orient Energy Corp.

Pan Orient provided highlights of its 2010 year end and fourth quarter consolidated financial and operating results, and provided an outlook for 2011. Please note that all amounts are in Canadian dollars unless otherwise stated and BOPD refers to barrels of oil per day net to Pan Orient.

 

2010 HIGHLIGHTS

• Funds flow from operations of $59.0 million ($1.22 per share) and net income attributable to common shareholders of $20.6 million ($0.43 per share) for 2010.
• Total 2010 capital programs in Thailand, Indonesia and Canada of $61.3 million were financed 96% by after tax funds flow from operations and 4% from working capital.
• Capital expenditures were $43.4 million in Thailand, $17.0 million in Indonesia and $0.9 million in Canada.
• Average 2010 oil sales in Thailand of 3,884 BOPD with 4,056 BOPD for the fourth quarter of 2010.
• Strong generation of after tax funds flow from Thailand operations with $17.7 million for the fourth quarter of 2010 ($47.46 per barrel) and $58.2 million for 2010 ($41.05 per barrel).
• Drilling of 25 exploration and appraisal wells in Thailand during 2010 with 10 wells at the Wichian Buri Extension Field ("WBEXT"), five wells at Bo Rang, seven wells at Na Sanun East, two wells at Concession L33, and one well at Concession L53.
• Discovery of the WBEXT field in Concession L44 (Pan Orient operator and 60% ownership) resulted in a new 12.45 square kilometer production license, 382,051 barrels of oil sales in the second half of 2010, and 8.2 million barrels of proven plus probable reserves were assigned at year-end.
• Drilling of two exploration wells in Concession L33 (Pan Orient operator and 60% ownership) resulted in the first discovery of hydrocarbons at commercial rates in Concession L33, a new 11.94 square kilometer production license, oil sales of 25,039 barrels commencing in November 2010, and 2.8 million barrels of proven plus probable reserves were assigned at year-end.
• At Concession L53 (Pan Orient operator and 100% ownership) a production license of 2 square kilometers was granted to Pan Orient, first oil sales from Concession L53 commenced in August 2010, and 1.4 million barrels of proven plus probable reserves were assigned at year-end.
• Thailand proved plus probable reserves of 31.9 million barrels at December 31, 2010 with 12.4 million barrels of new oil field discoveries in 2010 offset by a 15.7 million barrel downward revision of previously assigned reserves mainly at the Na Sanun Central and NSE-F1 fields in Concession L44/43. The net present value of proved and probable reserves after tax (using forecast prices and discounted at 10%) of Cdn$509 million, representing $9.00 per Pan Orient share based on the current 56.5 million Pan Orient shares outstanding.
• At December 31, 2010 Pan Orient had $31.4 million of working capital and long-term deposits, and no long-term debt.
• Subsequent to the year-end, Pan Orient closed a bought deal financing on March 8, 2011 with the issuance of 7,557,264 shares at a price of $6.55 per share for proceeds of $46.7 million net of expenses.

 

2010 OPERATING RESULTS

• Total 2010 capital programs in Thailand, Indonesia and Canada of $61.3 million were financed 96% by the $59.0 million in after tax funds flow from operations and 4% from working capital. Capital expenditures were $43.4 million in Thailand, $17.0 million in Indonesia and $0.9 million in Canada.
• Active 2010 drilling program in Thailand with the drilling of 25 wells (15.4 net wells) focused on exploration and appraisal wells to add new reserves and new development drilling opportunities for 2011. Six wells (4.0 net) were drilled in the fourth quarter of 2010, with five appraisal or exploration wells at the WBEXT field in Concession L44, and the L53-C well in Concession L53 (which spudded on December 30, 2010). Total capital expenditures in Thailand were $11.7 million in the fourth quarter of 2010 and a total of $43.4 million in 2010.
• Pan Orient drilled 22 wells in Concession L44 (Pan Orient operator and 60% ownership) during 2010 resulting in 12 producing wells and 5 wells which are waiting for workovers or sidetracking operations to evaluate different potential reservoirs.
• The WBEXT field was discovered in the third quarter of 2010 and a total of 10 exploration or appraisal wells were drilling during the year with capital expenditures for drilling of $14.7 million, and resulted in 382,051 barrels of oil sales. A production license of 12.45 square kilometers was granted for the portion of the field in Concession L44 by the Thailand Department of Mineral Fuels in February 2011. Proved and probable oil reserves assigned at December 31, 2010 were 8.2 million barrels from volcanic and sandstone reservoirs (with 5.3 million barrels assigned to reserves in Concession L44 and 2.9 million barrels assigned to reserves in Concession L33).
• Five wells were drilled at the Bo Rang fields during the first half of 2010 with capital expenditures for drilling of $5.8 million to further appraise and develop this field which was discovered in 2009. Oil sales in 2010 from the four producing wells resulting from this drilling program were 226,504 barrels.
• Seven wells were drilled at Na Sanun East in the Central and NSE-F1 fields during the first half of 2010 to continue appraisal of these fields and to evaluate further exploration potential. The program resulted in three producing wells, the NSE-G3 well which will be sidetracked to test a deeper volcanic objective, the NSE-F4 well which is being evaluated for a potential workover, and two wells not capable of production. Capital expenditures related to this drilling program were $10.7 million and oil sales in 2010 were 69,952 barrels.
• The two exploration wells drilled in Concession L33 (Pan Orient operator and 60% ownership) during the third quarter of 2010 resulted in the first discovery of hydrocarbons at commercial rates in Concession L33. Oil sales commenced in November 2010 with a production license of 11.94 square kilometers for the L33 field being granted by the Thailand Department of Mineral Fuels. Total capital expenditures during 2010 for drilling were $1.9 million and resulted in 25,039 barrels of oil sales and proved and probable oil reserves assigned at December 31, 2010 of 2.8 million barrels.
• Production in Concession L53 (100% ownership by Pan Orient) commenced in August 2010 with the L53-A well being placed back on-stream after Pan Orient received formal approval by the Thailand Department of Mineral Fuels for the 2.0 square kilometers L53-A Production License around the L53-A exploration well. Oil sales were 28,676 barrels in 2010, with 8,097 barrels (88 BOPD) in the fourth quarter of 2010. This new core area of operations west of Bangkok began production during 2010 and revenue from oil sales was used to fund the start-up of operations. This area has active operations in 2011 with a workover of the L53-A well to produce from additional sandstone zones, and drilling of new wells at L53-C (spudded December 30, 2010), L53-B and L53-A1. Proved and probable oil reserves assigned at December 31, 2010 were 1.4 million barrels from sandstone reservoirs.
• The independent reserves evaluation conducted by Gaffney, Cline & Associates (Consultants) Pte. Ltd. of Singapore ("Gaffney Cline") for the Thailand assets at December 31, 2010 assigned proved plus probable reserves of 31.9 million barrels at December 31, 2010, a 13% decrease from 36.7 million barrels at December 31, 2009. Proved plus probable reserves at December 31, 2010 include 12.4 million barrels of new oil field discoveries in 2010 at the Wichian Buri Extension field ("WBEXT") in Concessions L44/43 & L33/43, the L33 field in Concession L33/43, and the L53A field in Concession L53/48 offset by a 15.7 million barrel downward revision of previously assigned reserves mainly at the Na Sanun Central and NSE-F1 fields in Concession L44/43.
• The net present value of proved and probable reserves after tax for the four concessions in Thailand, using forecast prices and discounted at 10%, is Cdn$509 million, an increase of 11% over the prior year and representing $9.00 per Pan Orient share, based on the current 56.5 million Pan Orient shares outstanding.
• Average Thailand oil sales in 2010 were 3,884 BOPD and 4,056 BOPD for the fourth quarter of 2010. Pan Orient continued to experience significant fluctuations in production levels in 2010 from volcanic reservoirs which can be initially very prolific before they achieve a stabilized production level and water cut.
• Oil sales averaged 2,246 BOPD in the first quarter of 2011 reflecting the temporary shut-in of WBEXT-1, WBEXT-1A and WBEXT-1B wells starting in December 2010 at the expiry of their respective 90 day production test periods, and reduced oil production of the WBEXT-1C well as a result of water incursion as outlined in the press releases of January 6th and February 9th, 2011. The WBEXT production license was granted on February 24, 2011 and the three temporarily shut-in wells were brought on-stream at reduced rates to minimize the water cut.
• The oil sands project at Sawn Lake, Alberta operated by Andora Energy Corporation (which is owned 53.4% by Pan Orient) as at December 31, 2010 was evaluated by Sproule Associates Ltd. ("Sproule"). The contingent resource volumes estimated in the Sproule report are considered contingent until such time as commercial recovery has been demonstrated, regulatory approvals have been obtained and the company has committed to proceed with commercial development. Contingent Resources are further classified as "High", "Best" and "Low" in accordance with the level of certainty.

The report assigned Sawn Lake "Best Case" contingent resources of 114.4 million barrels attributed to the 53.4% ownership interest of Pan Orient in Andora. The net present value of the "Best Case" (discounted at 10% before income tax using forecast prices) attributed to Sawn Lake contingent resources is $222 million to the 53.4% ownership interest of Pan Orient in Andora. The Net present value of the "Best Case" (discounted at 10% after income tax using forecast prices) attributed to Sawn Lake contingent resources is $136 million to the 53.4% ownership interest of Pan Orient in Andora.

• Capital expenditures in Indonesia were $1.6 million for the fourth quarter and a total of $17.0 million for 2010.

At the Batu Gajah PSC in 2010 (onshore Sumatra - POE 97% working interest and operator) there was completion of the 500 line kilometre 2D seismic program, the associated seismic data processing and mapping, permitting and initial field work related to the 2011 three well exploration program. The Tuba Obi Utara-1 well started drilling in March 2011 and will be followed immediately by the SE Tiung-1 and Betano-1 wells. Capital expenditures in 2010 related to the Batu Gajah PSC were $8.3 million.
At the Citarum PSC in 2010 (onshore Java - Pan Orient 77% working interest and operator) there was completion of the 2D seismic program and the associated seismic data processing and mapping. Targets have been selected for a three well exploration program that is scheduled for commencement of drilling late in the third quarter or early in the fourth quarter of 2011. Capital expenditures in 2010 related to the Citarum PSC were $8.3 million.