Canadian Natural Resources Resumes Ops in Alberta

- Canadian Natural Resources Resumes Ops in Alberta

Tuesday, August 23, 2011
Canadian Natural Resources Ltd.

Canadian Natural Resources announced that Synthetic Crude Oil ("SCO") sales have recommenced from its Horizon Oil Sands operation in Northern Alberta.

On August 16, 2011, Canadian Natural successfully and safely resumed production at Horizon from the fire that occurred in the coker unit on January 6th, 2011. Production for the past four days has consistently averaged approximately 75,000 bbl/d of SCO. Ramp up to full production capacity of 110,000 bbl/d of SCO is expected in the next week. First pipeline deliveries commenced on August 18, 2011.

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Canadian Quantum Acquires Interest in Indian O&G Canada Permit

- Canadian Quantum Acquires Interest in Indian O&G Canada Permit

Tuesday, July 26, 2011
Canadian Quantum Energy Corp.

Canadian Quantum has acquired a 50% interest in an Indian Oil and Gas Canada Permit with Sundance Energy Corporation acquiring the other 50%. The acquisition covers all available P+NG rights underlying the Alexander First Nations Reserve, located in Central Alberta. The Alexander First Nation Permit is comprised of 6,946.17 gross hectares (17,365 gross acres) or approximately 27 sections of land. Sundance, as operator, is in the process of configuring an extensive 3D seismic program that will be shot as soon as possible. The Alexander First Nation lands have the potential for multi-zone light oil and natural gas production at relatively shallow depths with existing infrastructure in the area.

Canadian Quantum's President and CEO, Douglas Brett stated "We are excited to have acquired such a large land position in an area where another oil and gas company has recently announced a discovery well from a zone that we have mapped as being potential on the Alexander First Nation lands."

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Despite Criticism, Canadian Oil Key to U.S. Demand

- Despite Criticism, Canadian Oil Key to U.S. Demand

Monday, July 25, 2011
Rigzone Staff
by Karen Boman

Despite criticism by environmental groups, U.S. imports of Canadian oil will continue to play a critical role in meeting U.S. energy needs, according to a recent report by the Calgary-based Fraser Institute, In America's National Interest-Canadian Oil.

In recent years, environmental groups have campaigned against the extraction of oil from Canada's tar sands. In advance of planned protests next month near the White House, U.S. actor Danny Glover and Canadian environmentalist David Suzuki are arguing that tar sands development has wrecked large sections of Alberta and disrupted the way of life of indigenous communities in the province.

In 2009, Greenpeace USA launched its "Stop the Tar Sands" campaign, which claimed that northern extraction of oil from Alberta's oil sands has "created a literal hell on earth" because land is visibly scarred by oil sands development, which takes place above ground. Amnesty International also has campaigned against oil sands development, wanting it to end until "no more development without human rights".

Environmental activists attempts to restrict U.S. imports of Canadian oil "ignore the reality of U.S. dependence on foreign oil and could force America to buy oil from repressive governments that restrict civil, political, and economic freedoms," according to the study by the public policy think-tank.

Canada now provides more oil to the U.S. than all the Persian Gulf countries combined, even though America imports 5.5 million more barrels of oil daily than it did in 1973. "Thus, the question is not whether or not the U.S. will import oil, but which country will supply that oil to American consumers, businesses and government," said study author and Fraser Institute director of Alberta policy Mark Milke.

Canada ranks sixth among the world's top oil producers at 3.3 million b/d. Unlike other countries that produce more oil such as Russia, Saudi Arabia, Iran and China, Canada scores well on measurements of civil, political and economic rights, as well as on proxy measures indicating quality of life, such as literacy rates, post-secondary education, and misogynist practices. With the exception of Norway, Canada is the only major oil-exporting country that scores highly on all measurements of civil, political and economic freedom.

Fraser cites the recent forecast by the International Energy Agency (IEA) that oil will remain "the dominant fuel in the primary energy mix to 2035," with global demand for crude oil reaching 99 million barrels daily by that time. IEA also forecasts that unconventional oil, such as oil extracted from Canada's oil sands, will play an increasingly important role in world oil supply through at least 2035, regardless of what government's do to curb demand.

Given that oil will remain a chief component of the global energy mix for the next several decades, America can either continue to embrace oil imports from Canada or resort to importing increasing amounts of oil from governments "that regularly violate human rights as a matter of policy, and in some cases, are state sponsors of terrorism," said Milke.

Milke noted that the perfectionism exhibited by Greenpeace and other environmental groups ignores the reality of actual energy needs and capabilities. "Long-lasting positive reforms are necessarily based upon how human beings actually live, behave, and work, and within the physical limitations they themselves face."

Canadian gas also provides an alternative supply as geo-political events, such as the Iranian Revolution of 1979 and the invasion of Kuwait by Iraq sharply curtailed oil imports on the world market, as well as insurance against disruption in OPEC supply. The study found that claims that oil sands crude does not lower prices because non-conventional oil is more expensive are mistaken, noting that the "final price of oil is determined not only by the initial cost of production but also by demand.

"Reduced supply on the international market from any source creates upward pressure on prices; in reverse, more oil on the market from any source acts to dampen upward pressure on prices. This is straightforward supply and demand."

The study does not recommend that governments restrict oil imports from jurisdictions based upon their relatively poor record for civil, political and economic freedoms. However, just as it is ill-advised for governments to restrict trade for matters unrelated to national security, "it is also ill-advised to allow misleading assertions from lobbyists about Canadian oil to go unchallenged," Milke said.

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ProSep Scores Contracts in GOM, Canadian Oil Sands

- ProSep Scores Contracts in GOM, Canadian Oil Sands

Tuesday, July 05, 2011
ProSep Inc.

ProSep was awarded $1.8 million in new contracts to supply a produced water treatment system for installation on a deepwater Gulf of Mexico facility and crude dehydration equipment for two oil sands facilities located in Alberta, Canada.

"The Gulf of Mexico and the Canadian Oil Sands represent new and promising territories for ProSep. With sustained high crude prices, increasing production challenges and regulation, demand for our process equipment continues to grow," said Jacques L. Drouin, President & CEO.

The produced water treatment system to be supplied to a deepwater GOM facility consists of hydrocyclones and induced gas flotation (IGF) equipment, designed to treat 40,000 BPD of produced water to less than 20 ppm oil in water. The equipment is expected to be delivered early 2012.

The crude dehydration systems consist of engineering services and internals for one free-water knock-out (FWKO) vessel and two thermal electrostatic treaters designed to dehydrate 15 API crude to 0.5% basic sediment and water (BS&W) outlet oil specification. The equipment is expected to be delivered by early 2012 to two oil sands facilities located in Alberta, Canada. This contract was awarded through a commercial alliance with Edmonton-based engineering and manufacturing company Thermo Design (TDE).

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Abraxas Updates U.S., Canadian Operations

- Abraxas Updates U.S., Canadian Operations

Thursday, June 30, 2011
Abraxas Petroleum Corporation

Abraxas Petroleum Corporation today provided an operational update.

Rocky Mountain – North Dakota / Montana

In McKenzie County, North Dakota, Abraxas drilled the Stenehjem 27-34 1H to a total measured depth of 16,504 feet, including a 5,965 foot lateral in the middle Bakken formation, and completed the well with a 17-stage fracture stimulation. The well was recently placed on production, including gas (and natural gas liquids) directly into the sales line, and is currently in the early stages of cleaning up and producing at rates in excess of 800 barrels of oil equivalent per day, which is comprised of approximately 600 barrels of oil, 100 barrels of natural gas liquids and 700 Mcf of residue gas. We anticipate providing initial rates (after recovery of frac fluid) when 30-day rates are also available. Abraxas owns an approximate 79% working interest in this well.

In various counties in North Dakota and Montana, fourteen non-operated horizontal wells, targeting the Bakken or Three Forks formation, in which Abraxas owns a working interest are currently in progress or recently placed on-line. Four gross (0.15 net) wells went on production in mid-June, three gross (0.15 net) wells have been fracture stimulated and are currently cleaning up, three gross (0.50 net) wells are waiting on completion and four gross (0.07 net) wells are waiting on a drilling rig. Since January 2010, Abraxas has elected to participate in 19 gross (1.02 net) non-operated wells in the Bakken / Three Forks play.

In McKenzie County, North Dakota, two gross (0.11 net) non-operated horizontal wells targeting the Mission Canyon have been drilled and completed and are currently waiting on production facilities.

Abraxas anticipates being in a position in the near future to discuss long-term service availability to allow a multi-year continuous development plan on its Bakken / Three Forks acreage.

Rocky Mountain - Wyoming

In Campbell and Niobrara Counties, Wyoming, a two well oil development program is scheduled to begin this fall. One of these horizontal wells will target the Niobrara formation and one will target the Turner formation. Abraxas owns a 100% working interest in each of these wells.

Rocky Mountain – Alberta Basin Bakken

Abraxas has been approached by a number of companies in the industry with respect to a joint venture or similar arrangement; however, Abraxas has elected to wait for more definitive results from wells drilled to-date in the play before planning a course of action. Abraxas’ leases have a primary term of 5-10 years providing plenty of time to evaluate the results of other operators in the play.

South Texas – Eagle Ford

Abraxas currently owns a 50% equity interest in Blue Eagle, which is a joint venture between Abraxas and Rock Oil Company, LLC.

In DeWitt County, Texas, Blue Eagle’s first well, the T-Bird 1H, continues to outperform expectations and is currently producing approximately 1,100 barrels of oil equivalent per day, which is comprised of approximately 200 barrels of condensate, 340 barrels of natural gas liquids and 3.2 MMcf of residue gas. The well has produced approximately 200,000 barrels of oil equivalent during its first 150 days on production. Blue Eagle owns a 100% working interest in this well.

In DeWitt County, Texas, Blue Eagle participated in a non-operated horizontal well with its 43.9% working interest. The well, the Matejek Gas Unit 1, was drilled to a total measured depth of approximately 17,865 feet, including a 3,600 foot lateral, and recently completed with a 14-stage fracture stimulation. The well flow tested at restricted rates in excess of 780 barrels of oil equivalent per day through a choke while recovering frac fluid. The well is currently shut-in waiting on pipeline hookup.

In Atascosa County, Texas, the Grass Farms 1H should spud this week as the rig is currently rigging up. This well is located in the oil window of the play and will be drilled to a total measured depth of approximately 12,500 feet, including a 5,000 foot lateral. A fracture stimulation date has been secured for this well in August. Blue Eagle owns a 100% working interest in this well.

South Texas – Portilla

In San Patricio County, Texas, seven wells have been drilled and completed to-date in the multi-well in-fill drilling program and one additional well was recently recompleted. Three of the new wells targeted the dual objectives of the 7,400 and 8,100 foot Frio sands and four targeted the 7,400 foot Frio sand. These wells have increased production in the field by 100% and have added approximately 300 barrels of oil equivalent per day, 82% of which is oil. This drilling program has met the Company’s economic expectations and six additional locations remain to be drilled, all of which are scheduled for later this year. Abraxas owns a 100% working interest in each of these wells.

West Texas

In Nolan County, Texas, the Spires 126 2H recently reached a total measured depth of approximately 9,000 feet, including a 2,000 foot lateral. Completion operations will commence on this well in the near future. Abraxas owns a 100% working interest in this well.

In Coke County, Texas, in the NE Millican Reef field, Abraxas anticipates drilling two vertical delineation wells targeting the Canyon Sand play which is located approximately 30 miles to the southwest of Spires Ranch in the near future. The rig that drilled the Spires Ranch well will move to drill one of these two wells, after which, the rig will return to Spires Ranch for a continual horizontal development program, and assuming favorable results on the first well, the rig will return to NE Millican when convenient to drill the second well. Abraxas owns a 100% working interest in these wells.

In Reeves County, Texas, Abraxas recently acquired 640 net acres, for a total of approximately 3,000 net acres, in the emerging Wolfbone play. Two wells directly adjacent to our acreage are being currently drilled by the industry.

Canada - Pekisko

In Alberta, Canada, production from the Twining 9-11 remains relatively stable at approximately 100 barrels of oil equivalent per day. Two wells offsetting the successful Twining well will be drilled back-to-back, the first of which spudded this week. The two wells will be drilled horizontally and will target the Pekisko formation. Canadian Abraxas owns a 100% working interest in each of these wells.

Comments

“With the expected performance of the Portilla and Twining wells and the recent new production in the Bakken / Three Forks play, we have more than offset production disruptions from wells shut-in in the Williston Basin due to unprecedented high water and flooding. With all of our drilling activity, we should be in a position to continue sequential quarterly production growth for the foreseeable future,” commented Bob Watson, Abraxas’ President and CEO.

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

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Canadian Spirit Resumes Completion Prog. at Montney Wells

- Canadian Spirit Resumes Completion Prog. at Montney Wells

Wednesday, June 22, 2011
Canadian Spirit Resources Inc.

Canadian Spirit (CSRI) announced that the spring road bans have been removed in the Farrell Creek area in northeastern B.C. enabling Canbriam Energy BC Partnership ("Canbriam"), operator of the Farrell Creek Montney joint venture, to begin preparations for additional drilling and development in the second half of 2011.

The capital program will resume with the fracture stimulation and testing of two previously drilled upper Montney horizontal wells at the c-45-I/94-B-1 and c-B18-I/94-B-1 locations on the western portion of the Farrell Creek joint venture lands. Upon completion, the two wells will be tied-into the Farrell Creek gas facility resulting in five Montney wells on production. One upper and two lower Montney horizontal wells are currently flowing gas into the facility. A short lateral to connect the c-45-I well to existing infrastructure has received regulatory approval with construction to begin shortly.

The joint venture is also moving a portion of its planned capital program to its east Farrell Creek lands to test the potential for natural gas liquids in this area. The program will begin with the drilling and testing of a vertical well during the third quarter of 2011. Other Montney operators in the area appear to have indications of natural gas liquids and one has announced that they will invest in the refrigeration equipment required for extraction of the liquids.

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Encana, Petrochina Call Off $5.43B Canadian Shale Deal

- Encana, Petrochina Call Off $5.43B Canadian Shale Deal

Tuesday, June 21, 2011
Encana Corp.

Encana and PetroChina have ended negotiations for a proposed joint venture concerning Encana's Cutbank Ridge business assets after the parties were unable to achieve substantial alignment with respect to key elements of the proposed transaction, including the joint operating agreement.

"After close to a year of exclusive negotiations with PetroChina, we were unable to reach alignment on the planned transaction. The disciplined and determined process we undertook on this one initiative in our multi-faceted and ongoing joint-venture strategy has gone a long way to demonstrate the tremendous value that we have created at Cutbank Ridge and it validates our plans to accelerate recognition of that value. As such, we have determined that the best way for us to advance our plans to unlock value from our Cutbank Ridge business assets is to offer up a variety of joint venture opportunities for portions of the undeveloped resources, and, separately, to examine a transaction with respect to our midstream pipeline and processing assets in the area. Each of these opportunities has the potential for strong long-term growth and value generation. We have an accomplished history of realizing significant value from our enormous resource potential through competitive processes that secure premium joint venture partners. We have retained RBC Capital Markets and Jefferies & Company, Inc. to conduct this process and we look forward to discussing these very attractive opportunities with an array of potential investors in the upcoming months," said Randy Eresman, Encana's President & Chief Executive Officer.

Horn River and Greater Sierra joint venture discussions well underway

In April 2011, Encana announced plans seeking investors in two joint ventures on Encana assets outside Cutbank Ridge in northeast British Columbia, one on undeveloped Horn River shale lands and one in the company's Greater Sierra resource play. Discussions are well underway on these potential transactions as well as a potential divestiture of producing assets in the northern portion of Greater Sierra. Encana expects that these transactions, plus other divestitures and joint venture pursuits that the company has initiated, will generate 2011 proceeds and joint venture investments of between US $1 billion and $2 billion, a level that exceeds Encana's net divestiture target for 2011 of $500 million to $1 billion. That estimate for higher 2011 divestiture and joint venture proceeds does not include any potential investments in Encana's Cutbank Ridge undeveloped resources and associated midstream assets. To reflect this increase, Encana has updated its 2011 guidance for net divestitures to between $1 billion and $2 billion. All other components of Encana's guidance remain unchanged.

Encana on track for 2011

"As we look ahead to the rest of this year, our strong operating performance in the first half of this year and our prudent risk management measures mean that we remain on track to achieve our 2011 production and financial guidance. We expect future natural gas prices to reflect the forward price curve, and, over time, to return to a long-term level of about $6 per thousand cubic feet (Mcf), which we believe reflects the cost of adding new supply. Across Encana, we are relentlessly focused on driving down supply costs, which this year we expect to average about $3.70 per Mcf. Over the next three to five years, we are targeting a supply cost of $3 per Mcf, based on 2011 cost structures. These low cost structures, combined with our continued emphasis on capital discipline and the high grading of our portfolio, help us maximize margins and maintain a healthy balance sheet through the lower end of the price cycle - a market condition that has persisted in North America during the past two years," Eresman said.

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French, US, Canadian Oil Ventures in Libya

French, US, Canadian Oil Ventures in Libya

Thursday, April 14, 2011
Deutsche Presse-Agentur (dpa)

Three Libyan oil ventures involving French, US and Canadian companies had their assets frozen by the European Union on Thursday, as it issued a fresh round of sanctions in a bid to increase pressure on the regime of Moammer Gaddafi.

Sanctions against a total of 11 Libyan energy firms came into force Thursday.

The three joint ventures are between Libya's National Oil Corporation and France-based Total, and the US-based Occidental Petroleum Corporation and Petro Canada.

The other companies targeted by the sanctions are all subsidiaries of the National Oil Corporation.

These sanctions add to the 16 energy companies already placed under sanctions, implementing a "de facto oil and gas embargo," said German Foreign Minister Guido Westerwelle on Tuesday while announcing the extra sanctions.

The EU also froze the assets of 15 other Libyan companies, including banks, investment firms and Libyan Arab Airlines, which is owned by the Libyan government.

Libya's ambassador to Chad and the governor of Libya's southern Ghat district were also hit with travel bans and asset freezes for recruiting mercenaries to support Gaddafi's regime.

Some two dozen people, including Gaddafi, his relatives and close associates, had earlier been targeted by EU sanctions.

One, however, had his travel ban and asset freeze lifted on Thursday, former foreign minister Musa Kusa, who had been defected on March 30, in Britain.

Centrica Increases Canadian Gas Assets with Wildcat Hills Acquisition

Centrica Increases Canadian Gas Assets with Wildcat Hills Acquisition

Friday, April 01, 2011
Centrica plc

Centrica announced that its North American subsidiary, Direct Energy, has acquired further natural gas assets located in the Wildcat Hills region of Alberta, from Shell Canada Energy for C$47m (£30m) in cash. The acquisition will give Direct Energy a 100% working interest in certain Wildcat Hills assets and gas processing facilities, which it has operated since October 2010.

It will provide Direct Energy with an additional 45 billion cubic feet equivalent (bcfe) of proven and probable natural gas reserves and an incremental 10 million cubic feet per day (mmcfe) of natural gas production. Following the transaction the company will be able to meet approximately 35% of its enlarged customer gas demand from its own resources and the transaction will lower overall production costs as no additional field or office staffing will be required.

The acquisition marks the latest stage in Direct Energy's strategy of creating a more integrated North American business, with leading positions in deregulated markets. In 2010, as well as acquiring an operated interest in the Wildcat Hills assets, the company established itself as a leading player in the North American home services market with the acquisition of Clockwork Home Services. In March 2011, Direct Energy agreed to buy the New York-based gas and power retailer Gateway Energy Services, adding another 275,000 customer accounts in the US Northeast.

Chris Weston, President and CEO of Direct Energy said, "We are very pleased to have acquired an enlarged interest in the Wildcat Hills region. Growing our upstream business is important in ensuring that we remain a stable, long-term partner to the millions of residential and business customers we serve across North America. We will continue to explore opportunities in both gas and power, to enhance the scale of the business and to support Direct Energy's expanding retail businesses."