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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Gas Prices Fall $0.10

- Gas Prices Fall $0.10



Aug 12, 2011

Oil prices continued to fall during the week but gasoline prices are taking bit longer to catch up.

Some motorists saw some relief as the national average of self-serve regular gasoline fell today to $3.60 a gallon, down $0.10 from $3.70, according to AAA.

The prices of oil fell around $82 a barrel this week as anxiety increased over the European debt crisis and mounting evidence that the economy in the U.S. is slowing once again.

Many oil analysts claimed for months that oil prices were overpriced, based on market fundamentals.

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Total Earnings Fall on Weaker Production, Refining Margins

- Total Earnings Fall on Weaker Production, Refining Margins

Friday, July 29, 2011
Dow Jones Newswires
LONDON
by Alexis Flynn

French oil major Total Friday posted a 6% drop in second-quarter adjusted net profit as higher crude oil prices and the integration of Novatek's production failed to offset lower overall output and weaker refining margins.

The company reported EUR2.79 billion in the closely-watched adjusted net profit figure, somewhat short of the EUR2.84 billion projected by analysts. That was also lower than last year's result of EUR2.96 billion.

The French oil giant also became the latest European oil major to report weaker year-on-year oil and gas production, with seasonal maintenance and the loss of Libyan crude some of the common themes to affect the sector.

Total shares were off .47, or 1.23%, to EUR37.89 at 753GMT, slightly weaker than the French CAC 40 index.

Still, even as Total Chief Executive Christophe de Margerie acknowledged the impact of weak refining margins and Libyan oil outages, he expressed confidence in light of strong oil prices due to geopolitical tensions and strong energy demand. The company announced it will pay a second-quarter interim dividend for the first time of EUR0.57 a share.

"With a strong balance sheet and dynamic pace of execution in all of the group's segments, Total begins the second half of 2011 very confident in its outlook for profitable growth to benefit all of its stakeholders," de Margerie said.

Total said the European refinery margin indicator averaged $16.3 per metric ton in the second quarter, down 48% from $31.2/ton a year earlier, even though the group had said in the previous quarter that the margin should improve following the start-up of the new deep-conversion unit at its Port Arthur refinery in the U.S.

Unadjusted net profit came in 12% lower at EUR2.72 billion from EUR3.10 billion in the same quarter of 2010.

The group's hydrocarbon output over the period dropped 2% to 2.31 million barrels of oil equivalent per day from 2.36 million of boe/d a year earlier. Analysts expected production to drop 2.4% to 2.30 million barrels per day.

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

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Injuries, Spills in UK Offshore Oil Fall - HSE

- Injuries, Spills in UK Offshore Oil Fall - HSE

Tuesday, July 19, 2011
Dow Jones Newswires
LONDON
by James Herron & Alexis Flynn

There were less potentially hazardous oil and gas leaks from offshore installations operating in the U.K. North Sea than in the corresponding period a year earlier, although the industry has yet to improve on the record low number of incidents recorded two years ago, data from the Health and Safety Executive showed Tuesday.

There were 73 major or significant hydrocarbon releases offshore in 2010-2011, down from 85 the previous year, the HSE said in its annual statistical report. Few of these releases could be considered as oil spills, it said. However, this was still significantly more than the record low of 61 incidents in 2008-2009. There were only seven incidents where a quantity of hydrocarbon liquid was released to the sea, with the amounts ranging from minimal to 500 kilograms, it said.

No workers were killed and there were 42 major injuries reported in the period, down 16% from 50 reports the prior year, the HSE said. The combined fatal and major injury rate fell to 151.84 per 100,000 workers in 2010-2011 compared with 187.9 in 2009-2010, the third lowest rate over the last 10 years, it said.

There were 432 dangerous occurrences reported in 2010-2011, down 2.5% from 443 in the preceding year, the HSE said.

The backlog of maintenance work on safety critical systems continue to decline, according to data gathered by the industry, the HSE said.

"This year's statistics are a step in the right direction," said Steve Walker, HSE's head of offshore safety. "But there is still much work to be done. Hydrocarbon releases are a key indicator of how well the offshore industry is managing its major accident risks, and the industry still hasn't matched or exceeded the record lows of two years ago," he added.

Walker said companies need to pick up the pace of improvement and that he expects all operators to be drawing up and implementing plans to meet that end.

Robert Paterson, industry body Oil & Gas U.K.'s health and safety director, said the statistics reflect the "significant effort made in the last 12 months to get back on track after last year's disappointing performance."

Paterson said the maintenance of safety critical systems remains of paramount importance for all members of Oil & Gas U.K. but acknowledged "there were still areas for us to improve upon."

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

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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.