AWE Reports Net Loss

- AWE Reports Net Loss

Monday, August 29, 2011
AWE Ltd.

AWE Limited has announced a statutory net loss of $117.6 million for the 12 months to June 2011. After adjustment for significant one-off, the underlying loss was $16.1 million.

The Company's production assets performed strongly with production of 6.1 million BOE. This delivered a 61% increase in after tax net cash flow from operating activities of $140 million, which included exploration expense of $21 million.

Investment in growth activities continued during the year, with $32 million invested in the completion of the Adelphi takeover, $69 million in exploration activities and a further $80 million in project developments (primarily BassGas MLE and Sugarloaf drilling).

The Adelphi Energy takeover, completed during the year, provides AWE with access to an exciting gas and liquids development project in the US, which is delivering strong initial production performance. Reserve reporting to date at Sugarloaf has highlighted the growth potential of the asset, with 2P reserves increasing to 8.5 million BOE at June, 2011.

The Company reported a cash position of $117 million, at June 30, 2011 with an undrawn $150 million loan facility.

Commenting on the result, AWE's Managing Director Bruce Clement said, "The Company's core business continues to perform well as evidenced by the increased operating cashflow of $140 million for the year, reflecting the strength and diversity of AWE's portfolio of production assets.

"The statutory loss of $118 million was impacted by a number of significant one-off factors, primarily asset impairments and the derecognition of previously booked tax losses.

"The second half of 2010/11 has been a period of consolidation for AWE following an extended period of major exploration activity.

"The Company's focus has been on delivering its core production operations, exploiting its existing asset base and establishing its tight gas and shale gas business through the Sugarloaf acquisition and the Perth Basin exploration initiatives. The Company has also completed a comprehensive review of its core assets.

"Looking forward, AWE has a strong balance sheet, robust future cash flow from its 66 million BOE 2P reserve base and significant potential in its Perth Basin gas exploration assets with access to premium domestic markets.

"The Company's near term plans will focus on continuing the strong performance of the base business, exploiting its tight gas and shale gas projects and pursuing selective growth opportunities.

"The Board and Management of AWE are confident about the Company's future. AWE is well positioned to build on its existing assets and to take advantage of opportunities in the current volatile business environment."

Finance

Operating cashflow was strong for the year, rising 61% to $140 million. The reported cashflow included exploration expense of $21 million and significant Tui and Cliff Head workover costs of $29 million.

The year-end financial position of the Company was strong, with cash of $117 million and no debt (and with a $150 million undrawn corporate debt facility available if required).

AWE's sales revenue fell 14% to $305 million for the year, with net field contributions also lower at $172 million. Total oil and gas sales volumes were in line with the prior year, although oil production was down by 36%, offset by increased gas and associated gas liquids sales over the period. Average received oil prices improved to approximately $91 per barrel, as a result in the stronger international prices partially offset by the stronger A$.

In accordance with AWE's successful efforts accounting policy, $63 million of exploration costs were expensed during the year. These costs were largely related to unsuccessful drilling activity in New Zealand, Yemen and Australia.

A net exploration impairment charge of $61 million (post tax) impacted the statutory results. This impairment included the write down of the Yemen and Bass Basin exploration assets acquired as part of the ARC Energy merger in 2008. In addition, a post-tax net oil and gas asset impairment of $15 million was also recorded (largely related to the Cliff Head project).

Subsequent to the end of the year, AWE sold its shareholding in Buru Energy Limited for a cash consideration of $17 million. These funds were received after year end and are not included in the reported results.

Exploration

Exploration expenditure for the year was primarily incurred on the conventional oil and gas exploration opportunities in Australia, New Zealand and Yemen.

In the latter part of year, AWE accelerated activities in tight gas and shale gas exploration in the onshore Perth Basin, where drilling of the Arrowsmith-2 well has been completed and hydraulic stimulations are being planned. Timing of the hydraulic stimulation activity is subject to the receipt of all regulatory approvals.

AWE continues to pursue further conventional and unconventional exploration opportunities, applying an added degree of financial and technical discipline.

Development

The Adelphi takeover was completed during the year, and development drilling activity in its USA operations has accelerated since the acquisition was finalised. An independent reserve statement was released in March 2011, which reported a 37% improvement (to 8.6 million BOE net to AWE) in existing 2P reserves in the Sugarloaf AMI. Further drilling activity is expected to see added conversion of possible reserves into the 2P reserves category during 2011/12.

The $346 million gross budget for first phase of the Yolla MLE project was approved during the year and significant progress has been made with the onshore fabrication of gas compression and accommodation modules and preparations for offshore installation at the end of 2011. An extended production shutdown is planned during the offshore installation activities (December to April).

The second phase of the development will incorporate the drilling of at least two additional development wells on the Yolla field and remains on schedule for late 2012/early 2013. Engineering planning, including the evaluation of additional upside potential in the field, is continuing with budget commitment expected by end 2011. Total expenditure to June 30, 2011 on the MLE project was $107 million.

Production well workovers were successfully completed on the Pateke and Cliff Head projects, with the Cliff Head-12 well workover increasing production from the Cliff Head field by over 1,500 bopd after coming on stream in August 2011.

2011-2012 guidance

Production guidance for the current financial year has been set at 5.0 to 5.5 million BOE, substantially impacted by the planned extended shutdown of the Yolla field for the offshore installation activities associated with the MLE project. Based on a A$100 per
barrel Brent oil price for the year, AWE expects oil and gas sales revenue to reach a range of $270 to $300 million. Planned exploration expenditure for the year is estimated at $50 million, with development expenditure planned to reach $150 million, the majority of which will be incurred on the BassGas MLE project.

With a net cash position of $117 million AWE is well positioned to further exploit those assets within the Company's existing portfolio and take advantage of opportunities to add to its asset base.

Oil & Gas Post

Promote Your Page Too
LINK

OGX Intensifies Appraisal Campaign; Posts 2Q Loss

- OGX Intensifies Appraisal Campaign; Posts 2Q Loss

Thursday, August 11, 2011
OGX S.A.

OGX announced its results for the second quarter of 2011. The financial and operating data is presented on a consolidated basis in accordance with the international financial reporting standards (IFRS) issued by the International Accounting Standards Board (IASB), and in Reais, except where otherwise indicated.

"We remain focused on executing our business plan, which has advanced significantly as we have intensified our appraisal campaign and performed additional drill-stem tests, all of which are essential in converting our resources into reserves. With the recent bond issuance as well as the significant progress made in the past three months, we are not only technically but financially prepared to proceed towards production," commented Mr. Paulo Mendonça, General Executive Officer and Exploration Officer for OGX.

From the perspective of our drilling campaign, highlights of the second quarter include the drilling of 11 appraisal wells in the Campos Basin and 2 in the Parnaíba Basin, two successful drill-stem tests performed in horizontal wells in the Campos Basin and the declaration of commerciality for two fields in the Parnaíba basin, confirming our projections and attesting to the excellent execution of our business plan. In addition, we drilled wildcat wells that continue to demonstrate the great potential of our portfolio.

With respect to the commencement of production, important steps have been achieved in the past three months including the arrival of the newly built vessel Aker Wayfarer which will be used throughout the system installation, as well as the final stage of commissioning for the FPSO OSX -1. In addition, the construction of the turret, a disconnectable buoy which is part of the OSX-1 mooring system, has been completed and is already in the mobilization process to Brazil.

Second Quarter Highlights and Subsequent Events:

• Intensification of the appraisal campaign in Waimea (OGX-50D, OGX-53D and OGX-55HP), Waikiki (OGX-41D, OGX-44HP and OGX-45D), Pipeline (OGX-39HP, OGX-40D, OGX-42D and OGX-48D), Illimani (OGX-43D) and Fuji (OGX-54D and OGX-56D) accumulations located in the Campos Basin;
• Declaration of commerciality for the California and Fazenda São José accumulations in the Parnaíba Basin, for which the newly designations are Gavião Azul and Gavião Real Fields;
• Performance of drill-stem test for the first horizontal well (OGX-44HP) in the Waikiki accumulation, with excellent results;
• Important discoveries in the Parnaíba basin through the drilling of wells OGX-38 and OGX-46D;
• Significant discoveries in the Santos basin through the drilling of wells OGX-30 and OGX-47;
• Performance of a drill-stem test for the first horizontal well (OGX-39HP) in the Pipeline accumulation with very good results;
• Initiated drilling of well OGX-55HP, the second horizontal well in the Waimea accumulation;
• Raised US $2.563 billion through a bond issuance; and
• Announcement of the Company's business plan for discoveries in the Campos and Parnaíba Basins.

Campos Basin

Among the activities performed in the second quarter of 2011 in Campos Basin we can highlight the intensification of the successful appraisal campaign, the results of drill-stem tests in Waikiki and Pipeline accumulations, the drilling of wildcat wells, and the arrival and preparation of equipment for the start-up of production. On June 6, we formally announced our business plan relating to discoveries made in the basin.

During the quarter we intensified our appraisal campaign in the Waimea, Waikiki, Pipeline, Illimani and Fuji accumulations. In Waimea, we concluded the drilling of well OGX-50D encountering a hydrocarbon zone with 52 meters of net pay in the Albian section. In addition, we initiated the drilling of wells OGX-53D and OGX-55HP, which are still ongoing. In the Waikiki accumulation, we have concluded the OGX-41D, OGX-44HP and OGX-45D wells. The directional well OGX-41D found a net pay of 92 meters in the Albian section and was the pilot well for OGX-44HP, which was horizontally drilled for more than 1,000 meters in Albian-Cenomanian reservoirs. The well OGX-45D, which was intended to test the limits of the Waikiki accumulation, discovered hydrocarbons only in the Maastrichtian section, indicating an additional potential in sandstone reservoirs which extend towards the Ingá-Peró Complex. In the Pipeline accumulation, wells OGX-39HP, OGX-40D, OGX-42D and OGX-48 were drilled, identifying the presence of hydrocarbons in the Albian section with net pays of more than 1,000 (horizontal column), 107, 82 and 12 meters, respectively. In the Illimani accumulation, we have concluded well OGX-43D which confirmed the extent of the reservoirs in the Albian section and identified a net pay of 50 meters. Finally, we began the drilling of wells OGX-54D and OGX-56D in the Fuji accumulation, both of which are still in progress.

Additionally, we obtained the results of the drill-stem tests in horizontal wells OGX-39HP and OGX-44HP in the Pipeline and Waikiki accumulations, respectively. The test in well OGX-39HP, which is the first horizontal well in the Pipeline accumulation, indicated good reservoir conditions, implying a production capacity of around 10,000 barrels per day and oil of approximately 19° API. The test in well OGX-44HP identified oil of approximately 23° API and a production potential of 40,000 barrels per day, which will be limited to a flow rate of 15,000 to 20,000 barrels per day per well to optimize oil recovery from the reservoir.

Continuing with our wildcat drilling campaign, well OGX-33 was drilled in the Chimborazo accumulation and identified a net pay of 42 meters in the Albian section. We have also drilled well OGX-52 in the Tambora accumulation, which has identified a net pay of 96 meters in the Albian section and we have initiated OGX-58DP well also in this accumulation that is still ongoing.

The commencement of OGX's production is scheduled for October/November this year in the Campos Basin. The first project in the Waimea Complex will take place through an Extended Well Test (EWT) and will have an anticipated production of up to 20,000 barrels per day from well OGX-26HP.

All of the critical equipment for the start-up of production has been secured. The wet christmas tree and the electric submersible pumping system are already installed and other equipment such as flexible lines, moorings and piles (which are part of the FPSO mooring system) and the installation vessel have already been delivered. The FPSO OSX-1 is ready in the shipyard in Singapore and the turret (a buoy, part of the mooring system) is in the mobilization process to Brazil.

Parnaíba Basin

During this quarter, we made important discoveries in this basin and presented to the ANP declarations of commerciality for the Gavião Azul and Gavião Real fields. The development plans for these fields have already been submitted by OGX, who are still in the process of analyzing them.

We concluded the drilling of four wells, including two wildcat wells, OGX-34 and OGX-46D, and two appraisal wells, OGX-38 and OGX-51DP, which identified net pays of 23, 15, 43 and 8 meters, respectively, in the Devonian section. We also started the drilling of wildcat well, OGX-49, and appraisal well, OGX-57, which are still in progress.

Following the seismic campaign in this basin, we engaged a second seismic team during the quarter to focus on the southern blocks, while the first team remains focused on seismic in the northern blocks.

The Gavião Azul and Gavião Real fields will be the first natural gas fields developed by OGX. We expect that gas production in this basin will start in the second half of 2012, as announced in our business plan for the discoveries made in this basin. We estimate that these fields will reach a production level of 5.7 million m3/day in 2013, which corresponds to total production of 1.1 Tcf of gas. Natural gas produced in the region is expected to be the supply source for thermoelectric power plants to be built by MPX Energia SA, an EBX Group company, in association with Petra Energia SA, both of which are partners with OGX in this basin.

MPX has entered into a term sheet with Bertin Energia e Participações to acquire two projects, which are still awaiting ANEEL's approval, that have the authorization for the construction of thermoelectric power plants with a total capacity of 660 MW. MPX intends to transfer these licenses acquired in the A-5 auction in 2008 to the Parnaíba Thermoelectric Complex, where it already has a prior installation license to implement 3,722 MW. This acquisition represents an important step in the integration of natural gas production provided by OGX Maranhão, to power generation in the Parnaíba Basin.

We have recently approved the leasing agreement of two additional onshore drilling rigs for the production development plan in Parnaíba Basin.

Santos Basin

In the second quarter of 2011, we continued our exploratory campaign and achieved important results testing classic targets and new geological models. We have concluded the drilling of well OGX-30, which confirmed a new play in fractured carbonates in the Albian age, showing a significant gas column and a large structured area. This discovery enabled us to confirm this new geological model for the region so that we can begin the appraisal campaign.

The recent discovery in sandstones in the Santonian age in well OGX-47, in the Maceió accumulation, contributed significantly to the development of our assets in this region and, when combined with the discoveries already made in the basin, will generate greater economies of scale and cost-effectiveness. We intend to focus on the appraisal campaign and proceed with the development of the production model for the region.

OGX currently has nine rigs at its disposal, including six semi-submersible rigs, two onshore rigs and one jack-up for drilling in the Campos, Santos, Parnaíba and Pará-Maranhão basins. Eight rigs are in operation and one is currently being mobilized.

Oil & Gas Post

Promote Your Page Too
LINK

Atwood Mourns Loss of Board Member

- Atwood Mourns Loss of Board Member

Tuesday, June 21, 2011
Atwood Oceanics Inc.

Atwood Oceanics announced the untimely death of its Board member Mr. Robert W. "Bob" Burgess, who passed away this past weekend in Massachusetts at the age of 69. Bob joined Atwood's Board of Directors in 1990 and has served as Chairman of the Audit Committee since 2008. Bob was the former Chief Financial Officer (Senior Vice President) of CIGNA Investment Division, CIGNA Companies, a diversified financial services company with major businesses in insurance, health care, pensions and investments.

Mr. George S. Dotson, Chairman of the Atwood Board of Directors, commented, "for over twenty years, the Board relied on Bob's experience and incisive mind in financial matters. He was a great friend to all on the Board, and we will miss his counsel and presence going forward."

Atwood's President and Chief Executive Officer Mr. Robert J. Saltiel added, "we have lost a valuable member of our Board who made many contributions to Atwood's success throughout his years of dedicated service. On behalf of all Atwood employees, I extend my deepest sympathies to Bob's family and many friends."

Oil & Gas Post

Promote Your Page Too

Cobalt Posts Smaller Loss for Q1

Cobalt Posts Smaller Loss for Q1

Tuesday, May 03, 2011
Cobalt International Energy, Inc.

Cobalt International Energy, Inc. on Tuesday announced a net loss of $16.1 million, or $0.05 per basic and diluted share for the first quarter of 2011, compared to a net loss of $29.7 million, or $0.09 per basic and diluted share, for the first quarter of 2010.

Cash expenditures (excluding changes in working capital) for the quarter ended March 31, 2011 were approximately $11 million compared to guidance of $20 25 million. For the full year 2011, expected cash expenditures (excluding changes in working capital) including the cash expenditures associated with Block 20 offshore Angola are $325 to 400 million. The range depends principally on when Cobalt recommences Gulf of Mexico drilling activities in the second half of 2011, and the testing and appraisal expenditures associated with any discoveries offshore Angola.

Cash, cash equivalents and investments at the end of the first quarter were approximately $843 million. This excludes approximately $349 million designated for future operations held in escrow and collateralizing letters of credit, as well as approximately $196 million in the TOTAL drilling fund for the Gulf of Mexico. In addition to these balances, Cobalt closed a common stock offering on April 15, 2011, which resulted in total gross proceeds to Cobalt before underwriting discounts and offering expenses of $499.1 million. Cobalt has no short or long-term debt. Including the proceeds from the offering, Cobalt holds cash, cash equivalents and investments of over $1.67 billion which Cobalt expects will be sufficient to fund its planned exploration and appraisal program, including expenditures relating to Block 20 offshore Angola, through the end of 2013.
Cobalt is an independent oil exploration and production company focusing on the deepwater U.S. Gulf of Mexico and offshore Angola and Gabon. Cobalt was formed in 2005 and is headquartered in Houston, Texas.