U.S. Consumer Spending Stalled In June

- U.S. Consumer Spending Stalled In June



Aug 2, 2011

U.S. consumer spending stalled in June as a drop in hiring caused households to cut back, according to the Commerce Department in a report on Tuesday.

In June purchases June rose 0.1% after not much change, while personal incomes likely increased 0.2% in June, the smallest gain in seven months.

Because of the lack of jobs in combination with wage gains have failed to keep pace with inflation, it raises the risk of further cut backs on consumer spending that accounts for 70% of the world's largest economy.

The Gross domestic product increased to a 1.3% annually rate from April in the course of June after a 0.4% gain in the previous quarter that was less than what was earlier expected. Household spending increased 0.1%, the weakest performance since the Q2 of 2009, the end of the last recession.

Federal Reserve Chairman Ben S. Bernanke said in semi-annual testimony to Congress on July 13, "Wages are very stagnant and that's affecting consumer spending and consumer confidence. There is also ongoing uncertainty about the durability of the recovery."

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Platts: OPEC Pumps 29.57 MMbpd in June

- Platts: OPEC Pumps 29.57 MMbpd in June

Friday, July 08, 2011
Platts

The Organization of the Petroleum Exporting Countries' (OPEC) pumped an average 29.57 million barrels per day (bpd) of crude oil in June, an increase of 530,000 barrels per day as Saudi Arabia, Kuwait and the United Arab Emirates (UAE) boosted production, a Platts survey of OPEC and oil industry officials and analysts showed July 8. In May, OPEC production was 29.04 million bpd.

Despite the sizable month-on-month increase, however, the June volume was lower than the 29.8 million bpd estimated for February, when the escalating unrest sweeping across North Africa and the Middle East was beginning to affect Libyan production. Increases totaling 760,000 bpd were partly offset by combined reductions of 230,000 bpd.

"These numbers show that OPEC still has a lot of work to do, because the world's economy is going into a period where demand rises, and the loss of Libyan output makes meeting that demand problematic," said John Kingston, director of news for Platts, a leading global energy, petrochemicals and metals information provider and publisher of this monthly survey report.

"What isn't certain is just how much of that hole will be filled by the release of oil from strategic stocks ordered by the International Energy Agency, and how much of the burden of supplying the market will be lifted from OPEC because of that action," Kingston said.

Saudi Arabia boosted output by 450,000 bpd to 9.5 million bpd in June, accounting for the biggest single volume increase. But participants in the survey said that not all of the increment would be exported because of higher demand from the domestic power generation sector.

Saudi production has been climbing in recent months in an attempt to compensate for lost volumes from Libya. The Saudis even created two "special" crude blends aimed at replicating the higher quality Libyan grades, although these failed to attract refiners.

At OPEC's June 8 meeting, Saudi Arabia pushed for a 1.5 million bpd output increase on top of estimated actual production of 28.8 million bpd. But Iran, which currently holds the OPEC presidency, Algeria, Angola, Ecuador, Libya and Venezuela opposed an increase and the talks broke up in disarray, leaving OPEC to issue a statement saying that "no formal decision was reached on a production agreement" and that the group would next meet on December 14 in Vienna.

The failure to reach a deal on production levels effectively renders the previous agreement, in place since January 2009 and which set a target of 24.845 million bpd for the 11 members bound by quotas, redundant.

Leaving the meeting, Saudi oil minister Ali Naimi said the kingdom and its Gulf neighbors would unilaterally boost production to ensure that markets were not left short of oil.

OPEC's own economists had forecast a big jump in demand for OPEC crude in the second half of the year, the Vienna secretariat's monthly oil market report for May projecting that the call on OPEC would rise by as much as two million bpd between the second and third quarters.

Two days after OPEC's acrimonious June 8 meeting, the secretariat published a new market report forecasting the call on OPEC crude at 30.9 million bpd in the third quarter--2.1 million bpd more than the second quarter call--and 30.5 million bpd in the fourth. This would leave a "sizable gap" between estimated production from OPEC and projected demand for its crude, the report said.

The International Energy Agency's (IEA) June 23 decision to release 60 million barrels of emergency oil stocks, however, has prompted some speculation as to whether Saudi Arabia will increase production to the extent that might have been anticipated immediately after the OPEC meeting.

The IEA said the effect of the disruption of Libyan crude exports had become more pronounced and that the normal seasonal increase in refiner demand over the summer would further exacerbate the shortfall.

The IEA said greater tightness in the oil market could undermine global economic growth, and that it would review the impact of the stock release within 30 days of June 23 to determine if a further release was necessary.

Global crude futures prices initially fell sharply after the IEA announced its stock release, but have since recovered all of that price ground.

Some participants in the survey, meanwhile, have revised their estimates of Venezuelan production following the International Energy Agency's re-evaluation of its Venezuelan supply methodology last month. This has resulted in the Platts survey's Venezuelan estimate rising to 2.35 million bpd in June from 2.23 million bpd in May.

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Kea to Spud Surat Basin Well End of June

- Kea to Spud Surat Basin Well End of June

Wednesday, June 15, 2011
Kea Petroleum plc

Kea announced that the Hoadleys-1 well in the recently acquired ATP837P license area of Australia's onshore Surat Basin is scheduled to spud by the end of June. On that basis, it is anticipated that the well will be drilled to a target depth of approximately 2200m by late July.

Hoadleys-1 Australia

Hoadleys-1 is a test of Lower Evergreen and Precipice Sands, which are established producer formations at the Moonie oil field, approximately 20km to the south of the ATP837P license area. It is situated on a discovery trend, with the Cabawin gas field approx. 20km to the north and the Bennett oil field and Leichhardt gas field approximately 20km further north again. Hoadleys-1 is the first well on this discovery trend outside of Moonie to be located on 3D seismic. Elsewhere in the basin, a number of discoveries in recent years have demonstrated that 3D seismic is essential to identification of the low relief structures which form the oil and gas traps. In the event of discovery, the company's internal estimated gross median resource potential is approximately one million barrels, with upside of several million barrels. In the event of discovery, it may be decided to drill deviated producers from the Hoadleys-1 site to fully develop the field. Kea is operator of ATP837P and holds 50% of the permit, with 25% of the permit each being held by Energetica and Rawson Resources respectively.

Wingrove-2 New Zealand

At the Wingrove-2 site, electrical certification of downhole heating equipment to conform with New Zealand Standards has delayed start-up. Commissioning of the plant and commencement of flow testing is now scheduled to take place at the end of the current week. Although first oil into tank is expected to follow quickly upon commencement of testing giving an indication of initial flow rates, it is likely to be several weeks before a reasonable understanding of the stable, long term production rate is likely to be achieved, due to the requirement to optimize flow from the several isolated pay zones in the production interval between 1150m and 1300m depth. In the event that long term flow in excess of 100 barrels per day is achieved, several more wells are planned to fully develop the field, which is mapped over an area of several square kilometres. This drilling program is expected to start later this year. Kea has also identified several other similar shallow oil targets which may be included in the proposed drilling program.

Commenting on the developments CEO Dave Bennett said, "Our onshore Australia drilling program is continuing on schedule. The commissioning of Wingrove-2 production equipment has involved several technologies new to New Zealand. While it has been frustrating that this commissioning has caused some delays ,we believe that these delays are now behind us."

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Sentry to Begin Drilling Drilling Shale Gas Appraisal in June

- Sentry to Begin Drilling Drilling Shale Gas Appraisal in June

Thursday, May 26, 2011
Sentry Petroleum Ltd.

Sentry will commence drilling on the coal seam and shale gas appraisal program in Queensland on June 13, 2011. Following site visits last week, the final step during field preparation, the Company filed the necessary notices with Queensland government agencies and with the landowners.

In the first well, the Talundilly-CSG1, the primary target for Depco Rig 22 is the Winton coal and carbonaceous shale formation at approximately 600 to 1,500 feet. Coal and carbonaceous shale core samples will be retrieved and analyzed for gas content, coal quality, and methane storage capacity.

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Texon to Begin Drilling Eagle Ford Well by June

- Texon to Begin Drilling Eagle Ford Well by June

Wednesday, May 25, 2011
Global Petroleum Ltd.

Texon has advised that Tyler Ranch EFS #2H, the second Eagle Ford horizontal well in which Global Petroleum has an interest, is now due to commence drilling by mid June, due to the late arrival of the rig from another operator.

Tyler Ranch EFS #2H is located immediately north of the first Eagle Ford well ("Tyler Ranch EFS #1H"). Global has a 7.939% working interest (5.95% NRI) in Tyler Ranch EFS #1H and Tyler Ranch EFS #2H. A successful Eagle Ford well will be able to use the tanks and other production facilities already in place for the first Eagle Ford well.

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Beach to Commence Shale Flow Stimulation in June

- Beach to Commence Shale Flow Stimulation in June

Thursday, May 19, 2011
Beach Energy Ltd.

Beach will commence flow stimulation of its Holdfast-1 shale well in early June, which will be followed immediately by the flow stimulation of the Encounter-1 shale well.

In preparation for flow stimulation, the Holdfast-1 well has been successfully completed with Encounter-1 completion expected to be finalized within the next week.

The flow stimulation process may take up to two weeks for each well, after which they will be flow tested in preparation for a resource booking in July/August 2011.

Both Holdfast-1 and Encounter-1 are data gathering wells and as such are not designed to flow at levels expected of a production well.
The design of pilot production wells will be based on information gathered from the flow stimulation of, and earlier core samples retrieved from, Holdfast-1 and Encounter-1. The timing of these pilot production wells will be primarily driven by equipment availability, and as such, it is anticipated that the pilot production program will now commence early in 2012.

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