ConocoPhillips To Establish Bohai Bay Fund

- ConocoPhillips To Establish Bohai Bay Fund



Sep 7, 2011

ConocoPhillips (NYSE:COP) announced on Wednesday that it will establish a fund related to the incidents at the Peng Lai field in Bohai Bay, China.

This fund will be designed to address ConcoPhillips' responsibilities in accordance with relevant laws of China and to benefit the general environment in Boahi Bay.

ConocoPhillips (NYSE:COP) has a potential upside of 26% based on a current price of $65.7 and an average consensus analyst price target of $82.8.

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Norway Oil Fund Head Unruffled by US Downgrade

- Norway Oil Fund Head Unruffled by US Downgrade

Friday, August 12, 2011
Dow Jones Newswires
LONDON
by Polya Lesova

The U.S. credit rating downgrade by Standard & Poor's will have no impact on the large holdings of U.S. Treasury bonds by Norway's oil fund, the head of the agency that manages the fund told MarketWatch in an interview Friday.

"The downgrade will have no effect on our view of the situation in the U.S. nor on the valuation of U.S. Treasurys nor on our holdings in U.S. Treasurys. In a way, it's irrelevant," said Yngve Slyngstad, chief executive officer of Norges Bank Investment Management, which manages the oil fund officially known as Government Pension Fund Global.

Slyngstad's views are particularly noteworthy given the oil fund's long-term investment horizon, large size and significant holdings of U.S. Treasurys. The Norwegian fund returned 0.3% in the second quarter after gains on bond investments outweighed losses in its equities portfolio, according to data released on Friday.

The fund's market value rose to 3.11 trillion kroner (roughly $560 billion) at the end of the quarter, when it held 60.5% in equities, 39.4% in fixed-income securities and 0.1% in real estate.

S&P last Friday took the unprecedented step of cutting the U.S. rating to AA-plus from triple-A, a move that, combined with worries about global growth and the euro-zone debt crisis, triggered a week of turbulence in markets.

"It's clear that we, in line with the rest of the market, have gotten new macro numbers the last few weeks that seem to point in the direction that the speed in the economy will be less than anticipated," Slyngstad said.

"For us, it's less the macro picture and more than micro picture," he noted. "Earnings growth is slowing down in quite a few industries. There are some notable exceptions like the technology sector."

The oil fund's equity investments lost 0.7% in the second quarter, while fixed-income investments returned 1.8%, as measured in foreign currencies. In fixed income, the fund's biggest holdings were U.S. bonds, followed by U.K., German, French and Italian bonds.

The euro-zone sovereign-debt crisis, which started in Greece, spread to Portugal and Ireland and is now threatening to engulf Spain, Italy and even France, has been roiling markets.

"We have not been active neither on the buying nor the selling side in government debt in southern Europe for the last quarter and neither in this quarter," Slyngstad said. "Relative to neutral exposure, we have slightly less in debt of Southern Europe. We sold nearly half of our holdings already back in 2009. We have a cash flow every week of around a billion U.S. dollars. It does mean for practical purposes that we haven't been utilizing that cash flow to buy into those markets."

Slyngstad also said the fund is "comfortable" with its holdings of French bonds and that recent unsubstantiated rumors about a possible downgrade of France's credit rating haven't changed his views.

In equities, the fund's best-performing investment, in nominal terms, in the second quarter was Swiss food giant Nestle, followed by drug makers Sanofi and Roche Holding.

The worst-performing investment was banking group HSBC, followed by J.P. Morgan Chase & Co. and Denmark's Vestas Wind Systems.

The fund's biggest equity holdings, as of June 30, included oil giants Shell, ExxonMobil, BP as well as iPad and iPhone maker Apple.

The Norwegian government saves petroleum revenues in the pension fund, so that future generations can also benefit from the oil resources first discovered in the North Sea in 1969. Thanks to its oil wealth, Norway is one of the world's richest countries known for its generous welfare state.

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

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Gas Damage Recovery Fund Proposal Premature, Official Says

- Gas Damage Recovery Fund Proposal Premature, Official Says

Thursday, August 11, 2011
Rigzone Staff
by Karen Boman

A bill proposed by New York Comptroller Thomas P. DiNapoli to establish an energy industry-supported fund to cover damages caused by natural gas production seems premature since the Department of Environmental Conservation (DEC) has not completed work on the state's new permit requirements, said Brad Gill, executive director of the Independent Oil & Gas Association of New York.

"The proposal does not take into account existing permit requirements, which address bonding for site reclamation, and it does not acknowledge existing environmental, criminal and civil law, which holds businesses accountable on many levels," Gill said, noting that the state's new permit requirements would likely be the strictest in the nation.

"The industry's outstanding record of environmental protection in New York should give the public the assurance that we operate with the best interests of the environment in mind," said Gill. "There is simply no basis for such a fund at this time."

DiNapoli on Aug. 9 proposed Comptroller's Program Bill #20 to remediate contamination related to gas production; the proposed legislation would apply to current drilling operations as well as to proposed high-volume hydraulic fracturing.

"Preventing accidents and contamination should always be our first priority," said DiNapoli. "If an accident does occur, the State needs to be ready with a rapid response and a reliable mechanism to hold polluters responsible. New Yorkers should not have to bear the burden from contaminations that damage their air, water and property. Whatever final decisions are made regarding high-volume hydraulic fracturing, this program and new fund will provide the necessary resources to respond to any accidents."

DiNapoli's program is modeled after the New York State Environmental Protection and Spill Compensation Fund (Oil Spill Fund), which draws on the expertise and collaborative efforts of the DEC, the Office of the Attorney General and the Office of the State Comptroller.

Under the program, strict liability would be imposed on owners or operators of drilling sites that cause contamination. The DEC would be empowered to order immediate clean-up by owner or operator or take over sites for immediate clean-up, or would impose a surcharge on drilling permits to create the Natural Gas Damage Recovery Fund similar to structure to the existing Oil Spill Fund.

Oil and gas companies also would be required to post surety bonds to cover any shortfall between fund resources and remediation costs. Additionally, the program would create for the first time an online registry of all gas drilling related incidents in New York State.

The Natural Gas Damage Recovery Fund would pay for any remediation of contamination undertaken by DEC where a responsible party could not be identified, responsible parties refused or responsible parties were unable to pay for needed remediation, according to a statement from the comptroller's office.

The Office of the Attorney General would determine who is legally responsible for the contamination and, if necessary, commence civil damage-recovery litigation against responsible parties. Any recovered funds would be returned to the Natural Gas Damage Recovery Fund to cover cleanup of future contaminations.

DEC on July 1 released its revised recommendations on high-volume hydraulic fracturing, including the prohibition of high-volume fracturing in New York City and the Syracuse watersheds, including a buffer zone. DEC also is recommending the prohibition of drilling within primary aquifers and within 500 feet of their boundaries. Additionally, surface drilling also would be prohibited on state-owned land including parks, forest areas and wildlife management areas.

Previous recommendations had permitted drilling in the New York and Syracuse watersheds, as well as in primary aquifers and forest areas. DEC said the new recommendations would protect the state's environmentally sensitive areas while realizing the economic development and energy benefits of the state's gas resources, and that approximately 85 percent of the state's Marcellus shale resources would be accessible to gas extraction under these recommendations.

DEC plans to hold a 60-day public comment period on the recommendations beginning this month.

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Kodiak to Offer Shares to Fund Bakken Activity

- Kodiak to Offer Shares to Fund Bakken Activity

Monday, July 18, 2011
Kodiak Oil & Gas Corp.

Kodiak Oil & Gas Corp. today announced that it is commencing an offering of 20,000,000 shares of its common stock in an underwritten public offering. Kodiak expects to grant the underwriters a 30-day over allotment option to purchase up to an additional 3,000,000 shares of Kodiak's common stock.

Kodiak intends to use the net proceeds of the offering to repay debt outstanding under its revolving credit facility, to fund capital expenditures related to drilling, development and infrastructure, principally in the Bakken play located in North Dakota, and for general corporate purposes, including financing the potential acquisition of oil and gas properties in certain core areas, such as the Bakken play.

In connection with the offering, Credit Suisse Securities (USA) LLC, KeyBanc Capital Markets Inc. and Wells Fargo Securities, LLC are acting as joint book-running managers. Copies of the preliminary prospectus supplement and the accompanying prospectus may be obtained by contacting: Credit Suisse Securities (USA) LLC, Prospectus Department, One Madison Avenue, New York, NY 10010, 1-800-221-1037.

The offering is being made pursuant to an effective shelf registration statement filed with the U.S. Securities & Exchange Commission (SEC). A prospectus supplement and accompanying prospectus describing the terms of the offering will be filed with the SEC and available on its website at http://www.sec.gov.

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New IMF Leader Christine LaGarde Receives $550,000 Pay

- New IMF Leader Christine LaGarde Receives $550,000 Pay



Jul 5, 2011

According to the International Monetary Fund, newly elected IMF Leader Christine LaGarde will be paid $550,000 yearly along with an annual allowance $83,760 for living expenses.

LaGarde is the first woman to head the IMF and will start her 5-year term as managing director on Tuesday. As claimed to the terms of qualification the IMF said Lagarde is "expected to observe the highest standards of ethical conduct, consistent with the values of integrity, impartiality and discretion."

Her take over is a pivotal period for the IMF, which is working closely with the European Union and the European Central Bank to provide troubled European economies and financial support for Greece.

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Merchant Marine Fund OKs Financing to OSX Shipbuilding Unit

- Merchant Marine Fund OKs Financing to OSX Shipbuilding Unit

Thursday, June 23, 2011
OSX Brasil S.A.

Merchant Marine Fund (Fundo da Marinha Mercante ­ FMM) has approved the prioritization of financial support for the Açu Shipbuilding Unit ("UCN Açu") project of OSX Construção Naval S.A., pursuant to the resolution published today in the Federal Official Gazzete (Diário Oficial da União).

According to the news published by the media in general, OSX estimates that the credit line could reach R$ 2.7 billion to implement the largest shipyard in the Americas within the Açu Superport Industrial Complex, which is located in the São João da Barra Industrial District created by the Rio de Janeiro State Government and implemented by the Rio de Janeiro State Developing Company (Companhia de Desenvolvimento do Estado do Rio de Janeiro - CODIN).

"This decision from the FMM is a confirmation of the national interest in the realization of the OSX Shipbuilding Unit, which is a decisive instrument so that we, Brazilians, may enjoy the benefits arising from the oil and gas that we have discovered in the offshore basins of our country," stated Eike Batista, Chairman of the Company's Board of Directors.

The Açu Shipbuilding Unit is a result of a partnership between OSX Construção Naval S.A. and its partner Hyundai Heavy Industries. "In addition to the technological endorsement provided by Hyundai, our project receives with pride and responsibility the most important credit line available to the Brazilian naval industry from the FMM's Board," affirmed Luiz Eduardo Carneiro, OSX's CEO.

The main characteristics of the shipyard are:

• 5th generation shipyard leveraging the Korean technology of Hyundai
• Largest shipyard of the Americas, creating more than 10,000 direct jobs during the operational phase
• Located in the Açu Superport Industrial Complex, with excellence in logistics and strategic location, at approximately 150 km from Campos Basin, responsible for 85% of Brazil's crude oil output
• Proximity to steel plants, enabling operation with steel plates of 18m x 4m, generating up to a 56% cost reduction in welding
• Near to energy plants, guaranteeing its supply and up to 30% cost reduction
• Quay of 2,400m, expandable to 3,525m, enabling the integration of up to 11 FPSOs

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State Lawmakers Consider Tax Trust Fund

- State Lawmakers Consider Tax Trust Fund

Tuesday, June 14, 2011
Knight Ridder/Tribune Business News
by David Beard, The Dominion Post, Morgantown, W.Va.

Could a severance tax trust fund build a hefty savings account for West Virginia as it has for Alaska, Wyoming and a handful of other states?

Jill Kriesky, an economist with the West Virginia Center on Budget and Policy, thinks it could and brought the idea before the Legislature's Joint Commission on Economic Development, on Monday morning -- the first day of the June interim meetings.

Kriesky's proposal projects that a 1 percent severance tax hike on coal, oil and gas extraction and production could raise $100 million in its first year. A "Severance Tax Permanent Fund" could have a principal balance of $612 million by 2015, $1.18 billion by 2020 and $3.77 billon by 2035.

The state's entire general fund is just over $4 billion now.

The current severance tax is 5 percent and raised $400.5 million in fiscal year 2010, according to Revenue Department figures.

Kriesky told the joint House-Senate commission that six states and the Navajo Nation have such trust funds. They're all western states with relatively undiversified economies heavily dependent on nonrenewable natural resources.

They use the money for such things as boosting their general funds, inflation-proofing, enhanc- ing education, infrastructure and distribution to the public.

Alaska's fund was created in 1976 and has a balance of $40.3 billion. Wyoming's 1974 fund has $4.5 billion. North Dakota has three funds. Its newest, the 2010 Legacy Fund, already has $619 million.

Two unsuccessful Democratic gubernatorial candidates raised similar ideas in their primary election campaigns. Both proposals were more limited -- focused on increased revenues from Marcellus shale gas extraction.

Secretary of State Natalie Tennant proposed the Innovation 2020 Fund to benefit education, local economic development and several other areas.

Acting Senate President Jeff Kessler proposed the West Virginia Future Fund, using 25 percent of the severance tax collected from natural gas extraction and production. The fund would go untouched for 20 years, and would then be used for tax relief, education and economic diversification.

Kriesky noted several advantages to a severance tax trust fund: Nonrenewable resources can produce sustainable wealth. It can stabilize boomand-bust economic turbulence. It can build assets to pay off unfunded liabilities -- such as the OPEB debt.

Kriesky's presentation, which she didn't get to complete Monday, also touched on jobs. She noted that 87 percent of coal produced in West Virginia is exported -- so out-of-state interests would be paying the tax with little effect on in-state jobs.

Sen. Richard Browning, DWyoming and commission co-chair, had questions about that. "How many jobs would it kill?" he asked. Kriesky didn't know. Browning suggested the commission have her back later to complete her presentation and answer questions.

Referring just to coal, Delegate Kevin Craig, D-Cabell, said mining in West Virginia is already more costly than in surrounding states. "If we layer another burden on mining we won't be nearly as competitive as we need to be."

Kessler also was skeptical about Kriesky's more expansive proposal, partly because it raises taxes.

"When you talk about raising a tax," he said, "that's going to make everyone scream. If you take an existing tax and reapportion it, it's going to make everyone scream."

His Future Fund does neither, he said. It uses a new pool of money derived from anticipated expanded Marcellus production.

"No one actually owns it at this point," he said, so the Legislature could set a portion aside to save for future generations.

Copyright (c) 2011, The Dominion Post, Morgantown, W.Va.

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Dominique Strauss-Kahn Pleads Not Guilty in Manhattan Court

- Dominique Strauss-Kahn Pleads Not Guilty in Manhattan Court



Jun 6, 2011

Ex-IMF Chief, Dominique Strauss-Kahn pleaded not guilty Monday morning on charges of attempted rape and sexual assault at a New York Supreme Court.

He was charged on May 15th on seven counts, including attempted rape, criminal sexual assault, unlawful imprisonment, sex abuse and forcible touching.

After his arrest last May, Strass-Kahn stepped down as IMF leader and has been under house arrest in a downtown Manhattan apartment and currently in a deluxe townhouse.

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Petsec to Sell Chinese Interests to Fund U.S. Shale Oil Development

- Petsec to Sell Chinese Interests to Fund U.S. Shale Oil
Development

Wednesday, May 18, 2011
Rigzone Staff
by Karen Boman

Australia-based Petsec Energy will sell its interests in China's Beibu Gulf in order to fund its exploration efforts for unconventional shale oil on the U.S. Gulf Coast.

Petsec Chairman Terrence N. Fern said the company's board has determined that the US $37 million of funding required to develop the Mmbbl net to Petsec in the 6.12/12.8W oil fields would most likely deliver superior and earlier returns if applied to shale oil operations in the U.S. Fern anticipates the process and completion of a sale could take four months. The 6.12/12/8W oil fields are located in Block 22/12.

The company has developed a number of potentially large conventional oil subsalt plays in the Gulf Coast and near onshore areas which the company hopes to test later in 2012. However, Fern said during a presentation Wednesday that the company believes the quickest and least risky acquisition of sizable oil reserve additions is through shale oil onshore Louisiana and Texas.

"The advanced of horizontal drilling, fraccing and completion technologies which has given us a glut of gas, has in recent years allowed the investigation of profitable extraction of oil from shales."

The company has formed a joint venture with an experienced Eagle Ford shale player and has been conducting a regional review over the past nine months to identify areas of shale oil potential which are not being actively explored. In the past two years, the Eagle Ford has developed into a viable oil play, indicating reserves of 250,000 to 400,000 bbl/well for each 120 acre spacing. The play also has had highly repeatable success, $20/bbl finding and development costs, and operating cost of less than $3/bbl.

"Our strategy is to be an 'early mover' in areas where the shale source rocks are liquid rich and to acquire high quality acreage before it becomes extremely competitive and costly to lease," Fern said. "Initial leasing in a trend may take place at rate of $100/acre (more or less), but once a play has been proven and competition becomes heated, rates can climb to $10,000/acre (or more)."

The global financial downturn, weak U.S. gas prices, and the impacts of Hurricane Ike and the Macondo oil spill has prompted Petsec to refocus its business plan from the Gulf of Mexico and towards a exploration and production focus onshore Louisiana and Texas, and to pursue unconventional shale oil plays. As part of this strategy, Petsec has also repaid its debt, increased its exploration targets size, and increased its exposure to oil.

As part of its 2011-2013 business plan for the U.S., the company will target conventional oil and gas/condensate prospects with net reserve additions of more than 100 Bcfe, and has 10 prospects of 20 Bcfe to 200 Bcfe each on which to focus. The mapped potential of these 10 prospects ranges from 400 to 750 Bcfe, which Petsec plans to test over the next three years.

For unconventional shale oil, Petsec will target prospects with net reserve additions of over 35 MMbbl and will focus on lease acquisition and drilling activity in the second half of 2011.

The company will participate in three to five conventional wells in 2011 in the Gulf Coast and on the Gulf of Mexico shelf, with most activity to take place in this year's fourth quarter. One to two wells will be drilled on the Marathon gas/condensate discovery made in October 2010, and at least one high impact Gulf of Mexico well will be drilled as well.

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SmarTrend Market Close Wrap-up -- April 11, 2011

SmarTrend Market Close Wrap-up -- April 11, 2011



The major U.S. equity indices closed mixed Monday ahead of first-quarter corporate-earnings season and after the IMF said that higher gas prices could slow the pace of the U.S. economy.

The IMF lowered its outlook for U.S. economic growth to 2.8% in 2011. It had previously forecast 3% growth for the U.S.

In corporate news, Alcoa (NYSE:AA) reported Q1 EPS of $0.28, ex-items, ahead of consensus estimates of $0.27 per share. Revenues for the quarter rose 22% year-over-year to $6.0 billion, missing consensus estimates of $6.07 billion.

The Dow Jones Industrial Average (DJI) closed 0.01% higher at 12,381.11, the S&P500 (INX) closed 0.28% lower at 1,324.46, and the Nasdaq Composite (IXIC) closed 0.32% lower at 2,771.51.