Sefton Makes Headway in California, Kansas

- Sefton Makes Headway in California, Kansas

Thursday, September 08, 2011
Sefton Resources Inc.

Sefton Resources announced an operational update on its most recent activities.

Highlights 

• Oil in California
  • Oil production rises to approximately 135 barrels per day during August.
  • Steam flooding pilot project sees oil production from Hartje #18 well boosted by 60% with increased reservoir pressure recorded at neighboring Yule #5 well.
  • Four wells planned for drilling during November at Tapia Canyon oil field.
  • A subsidiary of Occidental, the fourth largest US oil exploration company, has begun drilling the adjacent Wayside Canyon Oilfield, less than a mile away from Tapia Canyon. (Their field represents a virtual mirror image of Sefton's Tapia Canyon oil field only separated by a series of small faults).
• Gas in Kansas
  • Letter of intent signed to acquire a fourth gas pipeline plus adjacent wells and leases.
  • Agreement with Southern Star expected to be signed in late September to connect Sefton's pipelines from Leavenworth County to their interstate pipeline.
  • Significant progress with repairing the LAGGS pipeline system.
  • On going discussions with an exploration and production company which has significant acreage along the Vanguard pipeline for transportation of their gas through the Sefton pipeline system.
  • On going acreage acquisition program being developed based on the company's residual trend surface mapping techniques.

Commenting Thursday, Jim Ellerton, Executive Chairman said, "We are making good progress both in California and Kansas and now have in place a strong operational base, strong balance sheet and good cash flows from which to grow the business.

In California, oil production is rising on the back of steaming and we are looking forward to the publication of Dr Ali Farouq's report in October which will give us a clear indication of the potential and value of our interests in California as well as how to fully develop them.

In Kansas, 40-50% of Sefton's target areas for development in Leavenworth County and those in the surrounding areas remain underexplored due to a lack of activity over the past ten years. We believe this presents a significant opportunity for us."

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Ivanhoe Makes Headway in Heavy Oil, Conventional O&G Projects

- Ivanhoe Makes Headway in Heavy Oil, Conventional O&G Project

Wednesday, August 10, 2011
Ivanhoe Energy Inc.

Ivanhoe reported financial results and operating highlights for the second quarter of 2011. Ivanhoe Energy has filed its quarterly financial report on Form 10-Q with the United States Securities and Exchange Commission and its Interim Financial Statements with the Canadian Securities Administrators for the period ended June 30, 2011.

Highlights

• In June the Company obtained broader and more extensive patent protection for its HTLTM intellectual property in Canada. This patent builds on and complements other issued and/or filed patents related to the core HTLTM technology and its petroleum applications. The portfolio includes the core patent, issued in the first quarter of 2011 related to the underlying HTLTM technology, which expires in 2028.
• The Company announced that heavy crude oil extracted from its IP-5B well in the Pungarayacu field in Block 20 in Ecuador was successfully upgraded to local pipeline specifications using the Company's proprietary HTL upgrading process.
• The Company issued Cdn$73.3 million of convertible unsecured subordinated debentures, maturing on June 30, 2016. A portion of the proceeds were used to repay a promissory note due to Talisman Energy Canada. The remaining balance of the funds raised will be used for ongoing capital and operating expenditures.
• Revenues were $9.5 million in the second quarter of 2011 compared to $6.1 million in the second quarter of 2010 due to a combination of stronger realized commodity prices and increased production. Higher volumes were allocated to Ivanhoe Energy for reimbursement of capital expenditures incurred at Dagang.
• In the second quarter of 2011, $6.5 million in cash flow was used in operations, consistent with $6.3 million of cash flow used in operations during the second quarter of 2010.
• The net loss for the second quarter of 2011 was $4.1 million compared to net income of $9.3 million for the second quarter of 2010, as a result of higher operating and general administrative expenses as well as lower non-cash foreign currency exchange and derivative instrument gains.
• General and administrative expenses were $11.7 million in the second quarter of 2011 compared with $9.1 million in the second quarter of 2010. The year-over-year increase stemmed from higher staff numbers associated with the Quito office build-out and our drilling operations in Sunwing, contract engineering work related to Ivanhoe's HTL technology and financing fees incurred in the recent Convertible Debentures issuance.
• The Company's cash and cash equivalents balance at June 30, 2011 was $133.3 million, which will be used to continue advancing Ivanhoe's ongoing projects in Canada, Ecuador, China and Mongolia.

"During the quarter we continued to prudently position Ivanhoe Energy to advance our heavy oil and conventional oil and gas projects," said President and Chief Operating Officer, David Dyck.

"In particular, the Company enhanced the intrinsic value of our heavy-to-light (HTL) upgrading technology by successfully testing it on Ecuadorian heavy crude and by securing patent protection to 2028 in key jurisdictions. We also put in place attractive new convertible debt financing to underwrite our operations and business development efforts."

Subsequent events

Zitong Block

Ivanhoe's wholly-owned subsidiary, Sunwing Energy, submitted the Provisional Overall Development Plan to the Joint Management Committee and PetroChina on June 30, 2011. As communicated in Ivanhoe's press release on June 15, 2011, this plan includes the acquisition of 3D seismic and the drilling of horizontal wells on the Block that will include multistage fracture stimulation. The Company is currently in discussions with PetroChina on final details of the Plan. This plan is to be conducted over the next 24 months.

Both the Yixin 2 and Zitong 1 wells have completed their respective long term built up tests and the down hole recorders have been recovered and the wells shut-in and secured. Data collected from these recorders has been delivered to contracted third-party tight gas experts to conduct detailed analysis and modeling of reservoir parameters and potential completion and stimulation techniques to assist the Company in developing exploitation programs on the Zitong Block.

Mongolia Block XVI

Sunwing is currently mobilizing the drilling equipment and supplies to N16-1E, its first exploratory drill site on Nyalga block XVI, which will be drilled on a structure approximately 32 sq km in size and to an approximate depth of 2500m. As of this date, the drilling rig is more than 75 percent assembled. Remaining minor drilling preparations will continue over the next few weeks, followed by the spud of Sunwing's first exploration well in Mongolia. Drilling of the well will take approximately 30 days, with completion and testing to be carried out as required. The Company intends to drill two wells initially, with the option to drill up to three additional wells, and remains optimistic of the potential to find oil resources in Mongolia.

Ecuador Seismic Program

As communicated in Ivanhoe's June 15, 2011 news release, Ivanhoe's wholly-owned Ecuadorian subsidiary commissioned a seismic program over the southern part of the Pungarayacu Block. The first phase of this program is now complete and analysis is still underway. Early interpretation is encouraging as it indicates deeper faulting, with the potential to trap lighter oil resources which could prove beneficial for blending purposes and overall project economics. Additionally, initial internal interpretations may also suggest an extension of the field beyond what was originally estimated.

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Endeavour Makes Headway in US, UK in 2Q11

- Endeavour Makes Headway in US, UK in 2Q11

Wednesday, August 03, 2011
Endeavour International Corp.

Endeavour reported adjusted EBITDA for the second quarter of 2011 was $7.6 million compared to $13.1 million in the second quarter of 2010 and $4.1 million in the first quarter of 2011. On a GAAP basis, net loss was $15.6 million for the second quarter of 2011 as compared to net income of $0.6 million for the same quarter in 2010.

Business Highlights:

• North Sea:
  • Commenced drilling operations at Bacchus
  • Agreement of commercial terms for the processing and transportation of the Greater Rochelle production on the Scott Platform
  • Contracts awarded for the pipeline and umbilical's for the development of Greater Rochelle area
• U.S. Onshore:
  • Announced the acquisition of 50,000 net acres in Marcellus Shale with existing production and pipeline infrastructure
  • 8 gross wells brought on production through July in Louisiana and East Texas
  • 4 additional gross wells completing or drilling in Louisiana
• Financial:
  • Increased available capital in July resulting in cash on hand of approximately $245 million

"During the second quarter financial results were as expected, while we made substantive progress on our U.K. development projects and our U.S. Haynesville unconventional gas play. Adding to this progress, our announced strategic acquisition of acreage and infrastructure gives us exposure to 1.0 to 1.3 trillion cubic feet of gross recoverable natural gas resource potential in the Marcellus area. We are confident that the balanced portfolio can deliver significant growth in both oil and natural gas production in the near-term," said William L. Transier, chairman, chief executive officer and president. "During July, the Company enhanced its flexibility and growth potential by adding approximately $100 million in available liquidity in addition to funding the $110 million needed for the Marcellus acquisition. The additional capital provides the resources to take advantage of opportunities for growth from existing and emerging parts of our portfolios, while also providing liquidity in case of any unforeseen events."

Operational Update

North Sea

The drilling of the three planned development wells is underway in the Bacchus field in Block 22/06a in the Central North Sea. Production from the development is expected to begin in the fourth quarter. The Company has a 30% working interest in the field.

In the Greater Rochelle area, the Company awarded two contracts for the design and fabrication of components for the subsea development that will link production for processing and transport to the nearby Scott platform. The contract for the drilling rig for the development will be finalized during the third quarter. Endeavour is operator and holds a 44% ownership interest in the Greater Rochelle development which is now comprised of Blocks 15/26b, 15/26c and 15/27.

U.S. Onshore

Endeavour will assume operated interests in leasehold, producing wells, pipeline and related facilities held by SM Energy Company and its minority partners in McKean and Potter Counties. The transaction increases Endeavour's leasehold interest in the Marcellus shale to approximately 93,000 gross (68,000 net) acres with more than 300 identified drilling locations in McKean and Cameron counties alone. The purchase will strengthen the Company's position in one of the most active and low-cost U.S. shale plays and provides significant production and reserve potential. The transaction is expected to close in the fourth quarter. In the Company's existing Marcellus acreage in Cameron County, two horizontal wells are waiting on completion, while the existing Daniel Field gathering infrastructure is being expanded.

During the quarter, Endeavour brought six gross wells on production in its Haynesville and Cotton Valley plays in Louisiana and East Texas, respectively. In July, production commenced from two additional gross wells with four other wells currently completing or drilling.

In the Montana Heath shale oil play, the Company and its partners expect to launch drilling operations on four vertical wells in the third quarter. In the Alabama Devonian shale gas play, Endeavour has successfully drilled and cased a horizontal re-entry of a previously drilled vertical pilot well. This well is anticipated to be completed and tested by the fourth quarter.

Financing Update

During the second quarter, the Company completed the redemption of all of its outstanding $81.25 million of 6% Senior Notes due 2012. The Notes were exchanged at 100% of principal amount plus accrued and unpaid interest.

In July, Endeavour closed on its private placement of $135 million aggregate principal amount of 5.5% convertible senior notes due 2016, including the full exercise by the initial purchasers of their option to purchase an additional $15 million principal amount of the offering. The Company intends to use the net proceeds of the offering primarily to fund its announced acquisition of operated interest in the Pennsylvania Marcellus shale play. Endeavour also expanded its credit facility by $75 million under the terms of its Senior Term Loan.

In addition, the Company entered into a letter of credit facility agreement with Commonwealth Bank of Australia in the amount of pounds Sterling 20,600,000 (approximately $33 million). Associated with the letters of credit was the release of the restrictions on approximately $33 million of cash.

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Rocksource Makes Headway in 2011 Drilling Program

- Rocksource Makes Headway in 2011 Drilling Program

Wednesday, July 27, 2011
Rocksource ASA

Rocksource has now announced the drilling results from three of its five, 2011 exploration wells. Initial results show one discovery (Norvarg) and two dry holes at wells drilled to test unproven petroleum systems (Breiflabb and Kora). Wells four and five in the 2011 program are expected to spud in September.

Norvarg

In June Rocksource announced a gas discovery in the Norvarg prospect in the Barents Sea license PL 535, operated by Total E&P Norge AS. On Norvarg Rocksource's Electromagnetic (EM) technology successfully identified the stacked hydrocarbon reservoirs present within the structure. It is too early to conclude on flow rate characteristics; hence the partnership has decided to perform a production test to gather information about reservoir production properties. Well operations are still ongoing with the planned well test to commence shortly.The test results are expected in early August.

Breiflabb

Earlier in July Rocksource announced a dry well on the Breiflabb prospect in license PL 416 in the Norwegian part of the North Sea. The Breiflabb prospect was characterized by a weak EM anomaly and was estimated to have a pre drill chance of success of 44 percent. The false positive response (EM anomaly not associated with hydrocarbon) is believed to have come from deeper levels that were not penetrated by the well.

Kora

The Kora-1 well in offshore Senegal and Guinea Bissau was on July 27 announced as unsuccessful. The Kora prospect had an EM anomaly interpreted by Rocksource to be associated with hydrocarbons with an approximate 50 percent chance of success. The prospect was found dry and the strong EM anomaly is believed to have been caused by a combination of lithologies (rock types) which have combined to produce unusually high resistivity. Although these lithologies were not specifically predicted pre-drill, given the lack of well control in this frontier area it was accounted for in Rocksource's prospect risking. Rocksource recently farmed down half of its interest in AGC Profond receiving as an initial consideration, USD 28 million in promoted contribution towards past expenditure and the costs of the Kora-1 well.

Commenting on the drilling results so far Chief Technology Officer John Howell said, "The average chance of success in our 2011 drilling campaign is approximately 50 percent. When you drill five wells with 50 percent chance of success, you should expect two to three discoveries and two to three dry holes. Although we would have liked more discoveries early, we believe we can still deliver a successful drilling campaign and we are looking forward to the results from the two remaining wells this year, and to test the further potential in our extensive exploration portfolio in 2012 and beyond."



The final two wells in 2011, will test the Heilo (PL 530) and Phoenix (PL559) prospects on the NCS. Both are expected to spud in September. Both wells are within proven petroleum systems and are on trend with earlier oil discoveries.

Heilo

PL 530 which includes the Heilo prospect is located in the Barents Sea on trend with the Goliat discovery to the west and the Nucula discovery to the southeast. The license which is operated by GDF Suez was reported to be the most sought after block in the Norwegian 20th Licensing Round. Rocksource carries a mean volume estimate of 200 mill boe and a chance of success of approximately 50% for the Heilo prospect. A success in the initial target will trigger a sidetrack to allow further efficient appraisal of the structure.

Phoenix

PL 559 which includes the Phoenix prospect was Rocksource's highest priority application in the Norwegian APA 2009 license round and is located on the Nordland Ridge, immediately to the east of the Norne, Urd, Falk and Linerle fields. Prospectivity within the license consists of three main prospects and several leads. All three prospects have encouraging EM responses. Rocksource carries a mean volume estimate of 160 mill boe for the Phoenix prospect and a chance of success of approximately 50%.

In parallel with the ongoing drilling operations Rocksource is continuing to mature EM positive prospects towards drilling decisions, and expect to firm up wells for drilling in 2012 and beyond throughout the remainder of the year.

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HWCG Makes Headway in Expanding Deepwater Capabilities

- HWCG Makes Headway in Expanding Deepwater Capabilities

Wednesday, June 29, 2011
Helix Well Containment Group

The Helix Well Containment Group (HWCG) announced that it is now capable to respond to a subsea well containment incident in water depths of up to 10,000 feet.

The consortium previously announced its intention to achieve this milestone by mid-summer, and has achieved this ahead of schedule. Previously, it had capabilities to operate in water depths of up to 8,000 feet.

HWCG is a consortium of 24 deepwater operators in the Gulf of Mexico that have come together with the common goal of expanding capabilities to quickly and comprehensively respond to subsea well incidents to protect employees, communities and the environment.

"Combining ultra-deep water depth capability with a 15,000 pounds per square inch-gauge (psig) intervention capping stack, the HWCG consortium has the technology, expertise and resources of a diverse group of companies to respond immediately in the unlikely event that a deepwater well's blowout preventer fails to operate as designed," said David Coatney, HWCG's Managing Director.

Coatney was recently named HWCG Managing Director in May. He has more than 35 years of experience in the oil and gas industry, both in the United States and overseas. In previous roles, Coatney has served as an international upstream oil and gas asset consultant, Vice President of Production for Swift Energy and in various management and engineering capacities for Marathon Oil Company, where he worked for 29 years.

Coatney has been integrally involved in emergency preparedness and response for more than 20 years. He has acted as an Incident Commander—both domestically and abroad—and has led many successful responses in operational, natural disaster, well control and civil unrest incidents.

"Dave's combined expertise in drilling, production, offshore operations and incident response will be a strong asset to HWCG," said John Weust, HWCG's Steering Committee Chair. "I am confident he will play a significant and positive role in the ongoing operations of HWCG, in addition to enhancing the group's position in responding to the future needs of the industry."

Coatney holds a Bachelor of Science degree in Petroleum Engineering from Louisiana State University. He is a member of the Society of Petroleum Engineers, the American Petroleum Institute and the Association of International Petroleum Negotiators.

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Aurelian Makes Headway in Europe

Aurelian Makes Headway in Europe

Thursday, April 21, 2011
Aurelian O&G plc

Aurelian provided the following operational update.

Highlights

• Previously announced mechanical issues at Trzek-2, Siekierki Multi Fracced Horizontal Well ("MFHW"), restricts production to 3mmscf/d in 15 day stabilized flow rate test
  • Result as expected after mechanical issues restrict flow in six of the ten well bore sleeves.
  • Trzek-2 to be sidetracked and fracced in Q4 2011 at a cost of €6 million to achieve target stabilized flow rate of 8 mmscf/d and accelerate recovery of 16-28 bcf.
  • A change in the completion methodology, to cemented liner and frac for the Trzek-2 sidetrack, removes the risk of similar mechanical issues recurring.
  • Sidetrack already funded and potential of project unchanged at 346 bcf (net to Aurelian) recoverable.
• Second MFHW, Trzek-3, encounters 140 meter gas column in Rotliegendes reservoir
  • Top reservoir encountered. Logs confirming good gas readings.
  • Core taken from estimated 140 metre gas column representing a 40% increase compared with Trzek-2.
• Gas Processing Facility progressing well, first gas targeted H2 2012
  • Contract to allow tie-in to national gas transmission system signed.
  • Environmental and Planning approvals received.
  • Construction approval expected H2 2011 with first gas targeted H2 2012.
• Krzesinki conventional exploration well to spud in Greater Siekierki Area Q3 2011
  • Constructing site for well targeting 45-465 bcf (gross) prospective resources.
  • Vertical well costing up to €10 million (gross) spudding Q3 2011.
• First Bieszczady well produces gas and condensate from potentially commercial zone above primary targets
  • Short term drill stem test of 42 meter zone, flows indicates potentially commercial rates of condensate and gas. Flow from third test confirms zone's prospectivity.
  • Current depth circa 3,850 meters. Primary targets between 4,000 and 4,800 meters.
  •  Processing and interpretation of second 300 km 2D seismic survey underway to support second well early 2012.
• Significant growth initiatives launched in both Carpathian and Tight Gas Core Areas
  • Award of 100% of Poreba concession, resulting in the launch of a new 2,562 km2 operated, low cost Carpathian conventional gas business targeting 500-750 bcf (gross) of gas.
  • Program commences with work over well in H2 2011 targeting resources of up to 20 bcf (gross). Up to 2mmscf/d initial production and cash flow targeted H2 2012.
  • 2012 exploration well targeting prospect with resources of between 40-60 bcf .
  • Tight Gas joint commercialization MOU signed with PGNiG targeting new tight gas blocks providing further growth opportunities outside of Siekierki.
  • MOU signed with PGNiG and FX Energy to work together sharing data to enhance understanding of Rotliegendes tight gas blocks in Central Poland.

Rowen Bainbridge, Chief Executive commented, "We are making progress to understand the Siekierki reservoir and to develop production and cash-flow by the second half of 2012. Our Trzek-2 well has shown that horizontal wells can produce from tight sands such as Siekierki, and we now need to optimize the completion, frac design and execution to crystallize the potential of this project. In the Greater Siekierki area we are looking forward to the spudding of our Krzesinki, vertical well in H2 2011.

The first well in the Bieszczady concession in our Carpathian drilling program continues to look encouraging and we look forward to providing further updates on this in the coming months.

We are also pleased to have been awarded a 100% interest and operatorship in the Poreba concession, which together with our existing West Karpaty operated concession, enables us to launch our Carpathian conventional gas business targeting first gas and cash flow in H2 2012. The MOU's/alliances that we have signed with PGNiG and FX Energy are also an important step in helping us further grow our tight gas business outside of Siekierki."

Norway Makes Headway in Barents Sea Exploration

Norway Makes Headway in Barents Sea Exploration

Friday, April 15, 2011
Norwegian Petroleum Directorate

The Ministry of Petroleum and Energy has awarded new production licenses in the 21st licensing round on the Norwegian shelf. 29 companies were offered participation in 24 new production licenses.

Twelve of the licenses are in the Norwegian Sea and twelve in the Barents Sea. Four of these are additional acreage associated with existing production licenses.

Exploration director Sissel Eriksen of the Norwegian Petroleum Directorate (NPD) said this was the most comprehensive announcement ever in the Barents Sea, and that it also includes areas located further north than before.

"In this licensing round, we are moving further north/northwest than in existing production licenses. Therefore, this is an important step on the road towards exploring the Barents Sea," she said.

Eriksen emphasizes that the NPD is satisfied with the round, which was one of the most comprehensive ever. The interest from the companies has been significant, and it is clear that the players still believe in the Norwegian shelf.

The preparations for the round started on November 5, 2009, when the Ministry of Petroleum and Energy invited the oil companies to nominate blocks they believed should be part of the announcement. The round was announced on 23 June last year, with an application deadline of November 3.