Goldman Sees US As Top Oil Producer In 2017 - Report

- Goldman Sees US As Top Oil Producer In 2017 - Report

Monday, September 12, 2011
Dow Jones Newswires
LONDON
by London Bureau

The U.S. will soon become the world's top oil producer, The Sunday Times reported Goldman Sachs as forecasting.

U.S. oil production should reach 10.9 million barrels a day by 2017, a third higher than 8.3 million barrels currently, the newspaper reported the investment bank as saying.

Russia, now the top oil producer, should see production increase only 100,000 barrels in the same period, for an output of 10.7 million barrels a day, the report said.

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

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Commodity Corner: Oil Falls as Euro Weakens

- Commodity Corner: Oil Falls as Euro Weakens

Friday, September 09, 2011
Rigzone Staff
by Matthew V. Veazey

Light sweet crude oil for October delivery fell below $86.00 a barrel Friday as the U.S. dollar strengthened against the euro.

The WTI bottomed out at $85.64 a barrel before settling at $87.24, still reflecting a day-on-day loss. It peaked at $89.50. The Brent contract price also ended the day lower, settling at $112.77 after trading within a range from $111.09 to $113.89.

A weaker greenback is bullish for crude oil—priced in dollars—because it becomes a better buy for investors holding other currencies. In the case of the euro Friday, the currency weakened amid mounting fears that Greece will default on its debt. The departure of a high-level German official from the European Central Bank Friday contributed to speculation that euro-zone countries will fail to resolve lingering policy disputes that have hindered efforts to resolve debt crises throughout the region.

Equities fell as the euro-zone uncertainty grew, chilling expectations about global demand for oil. The Dow Jones Industrial Average and S&P 500 each lost approximately 2.7 percent while the Nasdaq lost a relatively modest 2.4 percent. President Obama's latest plan to spur job creation in the U.S., presented Thursday night to a joint session of Congress, failed to brighten the demand outlook.

October natural gas also ended the day lower, falling to $3.915 per thousand cubic feet. Gas futures fluctuated from $3.885 to $3.99 during Friday's floor trading.

Front-month gasoline settled at $2.77 a gallon, slightly higher than the $2.76 intraday low. October gasoline peaked at $2.89 Friday.

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API: Policy Shift Could Create 1.4 Million New Jobs

- API: Policy Shift Could Create 1.4 Million New Jobs

Wednesday, September 07, 2011
American Petroleum Institute

U.S. oil and natural gas policy changes could generate more than 1.4 million new jobs, $800 billion in additional government revenue, and 10 million barrels worth of added daily oil and natural gas production by 2030, according to a study by Wood Mackenzie released Wednesday by API. New jobs could be added in every state.

"Our industry has kept more than 9 million Americans employed through some of the toughest economic times in America's history, and we created thousands of jobs just last month," said API President and CEO Jack Gerard. "The study shows we could provide another 1.4 million jobs, with as many as one million created in just the next 7 years, and thousands of shovel-ready jobs available next year. It's time our national energy policy let America take advantage of this opportunity."

"The creation of these jobs is within the president's control," Gerard added. "The policy changes involve actions he can take unilaterally. They do not require a super committee of Congress, and they do not require new legislation."

The policy changes include opening non-park federal onshore and offshore areas to development where now prohibited, returning permitting in the Gulf of Mexico to historical levels, approving the Keystone XL and other pipelines, and establishing a regulatory environment that permits full development of the nation's oil and gas resources, including those locked in shale formations.

U.S. oil and natural gas consumption would not necessarily increase as a result, according to API. The changes would allow America to produce at home a much larger percentage of the oil and natural gas it consumes, reducing imports. "If the full potential of domestic oil and gas production could be achieved while also increasing imports of Canadian oil, all of America's liquid fuels could come from secure North American sources within 15 years," Gerard said.

Wood Mackenzie is a Scotland-headquartered consulting firm with extensive experience analyzing oil and natural gas industry issues. API sponsored the study.

API represents more than 480 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America's energy, supports 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers more than $86 million a day in revenue to our government, and, since 2000, has invested more than $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.

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US Lawmaker Pushes For Drilling In Alaska Refuge

- US Lawmaker Pushes For Drilling In Alaska Refuge

Wednesday, September 07, 2011
Dow Jones Newswires
WASHINGTON
by Ryan Tracy

The top lawmaker on the U.S. House Natural Resources Committee Wednesday said opening the Arctic National Wildlife Refuge in Alaska to drilling should be part of a plan to reduce the federal debt.

The comments from Rep. Doc Hastings (R., Wash.) came as a separate committee of 12 lawmakers begins work to find more than $1 trillion in budget savings before a November deadline. The oil and gas industry is also pushing more drilling as a way to boost economic growth.

Proposals to drill in the Alaska refuge have failed in Congress before and are sure to draw opposition from conservation advocates. It is far from clear that the deficit committee, which is already facing a tight deadline to reach a compromise, would consider allowing exploration there as part of a plan to increase revenues.

"We must remember that it's not just about cutting spending," Hastings said. "There's no question that Washington D.C. has a spending problem, but we must also look for new ways to generate revenue without raising taxes."

"For the Joint Committee [of lawmakers working on deficit reduction], which is looking at a 10-year window, this could generate several billions of dollars in new revenue to help meet their goal," Hastings said.

The deficit committee is also expected to consider other ways to increase revenue, perhaps including a plan from Democrats to reduce tax breaks for oil companies. The chairman and chief executive of Chevron, who spoke after Hastings at a public event here, said he opposed oil companies being "singled out" as part of a deficit deal. "If you impose punitive measures on my industry, we will invest less. It's simply the way we go through our decision making process," John Watson said.

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

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Commodity Corner: Oil Edges Lower on Econ Woes

- Commodity Corner: Oil Edges Lower on Econ Woes

Tuesday, September 06, 2011
Rigzone Staff
by Saaniya Bangee

Light, sweet oil edged lower Tuesday on lingering concerns about the global economy.

Oil futures traded 43 cents lower at $86.02 a barrel on the New York Mercantile Exchange.

Concerns that the European debt crisis might worsen pushed prices and equities lower Tuesday. Traders worry that the economic plague could spread to neighboring countries.

Prices fell as low as $83.20 a barrel in intraday trading as U.S. stock indexes plummeted for a third consecutive session. They peaked at $86.50. Earlier today, the Dow Jones Industrial Average fell 308 points but rebounded after the Greek government indicated swifter economic reforms.

Traders are waiting to take cues from President Obama and the Federal Reserve's speech later this week.

Brent crude, which is used to price many international oil varieties, gained $2.81 Tuesday to settle at $112.89 a barrel. Brent took its cues from production problems in the North Sea and a continued absence of Libyan oil in the market.

Likewise, natural gas for October delivery added 6.6 cents to settle at $3.94 per thousand cubic feet. Prices fluctuated between $3.85 and $3.95 Tuesday.

The U.S. National Hurricane Center reported that a new weather system west-southwest of the Cape Verde Islands had a 90 percent chance of becoming a cyclone in the next 48 hours.

After trading between $2.77 and $2.84, front-month gasoline lost 1.7 cents to settle down at $2.82 a gallon.

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Activities Underway at Strike's US Projects

- Activities Underway at Strike's US Projects

Tuesday, September 06, 2011
Strike Energy Ltd.

Following Strike's successful $16.8 million capital raising the Company is well positioned to accelerate our USA exploration program.

Activities are now underway on two of the Company's key projects. In the event of success, each has the potential to significantly increase the value of Strike's USA business.

WILCOX SLOPE, St Landry Canyon Project, onshore Louisiana

Strike has a 10% working interest in the St Landry Canyon Project, onshore Louisiana. The 37,000 acre project area contains a number of prospects and is onshore and on trend from McMoRan's Davy Jones discovery, which is estimated to contain up to 6.7 Tcfe of gas and liquids.

The first target to be tested is the West Plumb Bob Prospect which is estimated to have a resource potential of 360 Bcfe including 15 million barrels of condensate (P50 case) and up to 680 Bcfe (P10 case).

The AD Kennison #1 well on the West Plumb Bob Prospect spudded on August 31 and has a planned total depth of 18,100 feet (5,517 meters). Drilling is expected to take 100 to 120 days. Strike has already funded its share of the well's dry hole cost.

EAGLE FORD SHALE, Eagle Landing Joint Venture, Texas

Strike has a 27.5% working interest in Eagle Landing Joint Venture, which has been building a lease hold position within the Eagle Ford Shale trend in Texas. The Eagle Ford Shale has rapidly emerged as one of the USA's most sought after unconventional gas and liquids plays.

The Joint Venture has now increased its lease position to 22,764 acres (6,260 acres net to Strike). Recently reported production rates from Eagle Ford Shale wells adjacent to Strike's acreage have confirmed the extension of the Eagle Ford productive trend. The Joint Venture is planning to further evaluate the acreage through a drilling program over the next six months.

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Commodity Corner: Oil Falls Amid Softer Demand Outlook

- Commodity Corner: Oil Falls Amid Softer Demand Outlook

Friday, September 02, 2011
Rigzone Staff
by Matthew V. Veazey

Light sweet crude oil for October delivery lost nearly three percent Friday after the U.S. Department of Labor announced that the U.S. economy added zero jobs last month.

The WTI settled at $86.45 a barrel, a $2.48 day-on-day decline, after the Labor Department reported that the loss of 17,000 government jobs in August offset the addition of the same number of private-sector jobs during the period. According to media outlet MSNBC, the government last reported zero job growth 66 years ago. The Labor Department also announced that the unemployment rate held steady at 9.1 percent.

The unimpressive employment figures support the view that the U.S. economy is experiencing a double-dip recession, lowering expectations for oil demand.

Brent futures also ended the day lower, losing 1.7 percent to settle at $112.33 a barrel. The benchmark traded within a range from $111.57 to $113.51. The WTI peaked at $88.99 and bottomed out at $85.42.

By noon Friday, one-third of Gulf of Mexico natural gas production had been shut-in as Tropical Storm Lee ambled toward the Louisiana coastline. That was not enough to counter the aforementioned dismal economic prospects, however; October natural gas lost more than four percent Friday to settle at $3.87 per thousand cubic feet.

Front-month natural gas fluctuated from $3.85 to $4.065 during floor trading. Reformulated gasoline for October delivery lost a nickel to end the day at $2.84 a gallon after trading within a range from $2.795 to $2.90.

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Ford, Zipcar Announce New 2 Year Strategic Alliance for U.S. University Members

- Ford, Zipcar Announce New 2 Year Strategic Alliance for U.S. University Members



Aug 31, 2011

Ford (NYSE:F) and Zipcar (NASDAQ:ZIP) announced a new a strategic alliance establishing Ford as Zipcar's largest university vehicle partner, reaching students at more than 250 campuses.

The first of its kind, two-year tie up introduces a new generation of drivers to Ford vehicles with the highly-fuel efficient Focus and Escape now part of Zipcar's existing fleet of environmentally friendly, reliable and fun vehicles.

Zipcar will offer $10 off the $35 annual membership fee for the first 100,000 new University members who sign up for Zipcar, plus $1 off the hourly rate for the first 1 million hours of use on any of the new Ford vehicles at select colleges and universities

New Ford vehicles start arriving on campuses this week. The program, which could generate 2 million hours behind the wheel of Ford vehicles for college-age drivers, also helps reduce parking demand, congestion and emissions.

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PwC Names Niloufar Molavi as Firm's U.S. Energy Leader

- PwC Names Niloufar Molavi as Firm's U.S. Energy Leader

Tuesday, August 30, 2011
PwC

PwC US today announced that Niloufar Molavi has been appointed as the firm's U.S. Energy Leader and new Market Managing Partner (MMP) for Greater Houston. In her new role, Molavi leads a practice comprised of 920 professionals serving U.S. energy clients in the oil and gas industry and is responsible for all client services – assurance, advisory and tax – for the geographic markets of Houston, Tulsa and New Orleans.

"Having spent my entire career in Houston, I've had many opportunities to grow, to gain new experiences, and to make a difference here at PwC – and I've been fortunate to work with so many talented and dedicated individuals along the way to help serve our energy clients in the U.S. and abroad," said Molavi. "I'm excited to continue to build our robust energy practice, and as I take on this new role, I'm eager to give back to the market that has helped me gain so many great experiences."

She previously served as energy leader within PwC's Tax practice and as the firm's U.S. Chief Diversity Officer, overseeing the firm's diversity strategy and all of its related programs and initiatives. With over 20 years experience with PwC, Molavi has served a wide range of energy companies both in the U.S. and abroad, advising clients on international and U.S. tax structuring, mergers, acquisitions and potential public offerings. She began her career with PwC in 1991 and was promoted to partner in 2001. She joined the firm's U.S. Leadership team in 2009.

Molavi earned her degree in Accounting as well as a Masters in Professional Accounting with a concentration in Taxation from the University of Texas at Austin. She currently serves on the Advisory Board of the McCombs School of Business at the University of Texas and also serves on the non-profit board of Dress for Success Houston. She is a licensed CPA in Texas.

PwC has also appointed two new partners in the Greater Houston Assurance practice, focusing on Energy – Craig Friou and Jade Walle.

As a newly appointed Assurance partner, Craig Friou brings over 15 years of experience to clients in Houston and New Orleans. Friou has worked on audits of private and public companies, internal audit outsourcing projects and accounting advisory services in Houston, Dallas, Aberdeen (U.K.), and New Orleans. His clients have included multinational integrated oil and gas companies, independent exploration and production companies and oilfield services companies. Friou graduated from the University of Texas where he earned a BBA and a MPA degree in accounting. He is a licensed CPA in Texas and a member of the planning committee for the AICPA/PDI National Oil and Gas Conference, the Texas Society of CPAs and Rotary International.

Based in Tulsa, newly-appointed Assurance partner Jade Walle has worked on audits of both public and privately held energy companies in the natural gas industry, specializing in capital raising activities including initial public offerings (IPOs), public and private debt offerings, mergers and acquisitions (M&A) and carve-outs. Walle joined PwC in 1996 and previously worked in the Houston and London offices. While in London, he provided consulting services assisting foreign private issuers in accessing the U.S. capital markets and in their recurring US GAAP filing requirements. He graduated from Oklahoma State University with an M.S. in accounting and a B.S. in business administration, with a major in accounting and a minor in international business. Walle is a member of the AICPA, the Texas Society of CPAs, and the Oklahoma Society of CPAs. He also serves on the Oklahoma State University School of Accounting Advisory Board. Walle is a licensed CPA in both Texas and Oklahoma.

Additionally, Chris Gilbert and Frank Saputo have also joined PwC and will be based in the Houston, TX office.

Chris Gilbert has joined PwC US as a partner in PwC's International Tax practice, based in Houston. Gilbert, who brings more than ten years of industry experience to PwC, has focused on international tax for manufacturing and industrial product companies, as well as for the financial services industry. In his new role, he will serve both the oil and gas industry sector and the financial services industry in the Greater Houston market. Gilbert spent the last five years as the tax director, first for GE Commercial Finance and then GE Capital Asia Pacific, based in Tokyo. Previously he was a senior director of International Tax for the Pepsi Bottling Group in New York and prior to that a tax attorney for Koch Industries in Wichita, Kansas. Gilbert has a JD/MBA from Washburn University and an LL.M. in Taxation from the University of Missouri in Kansas City.

Frank Saputo has joined PwC US as a managing director in PwC's risk assurance practice. Based in Houston, Saputo brings more than 25 years of experience in the healthcare industry to PwC. In his new role, he will serve health industries clients in the Greater Houston market. Saputo spent the last 11 years as an executive at US Oncology, the last 3 of which he served as the chief administrative officer, responsible for Internal Audit, Regulatory Compliance and Risk Management activities. He graduated from California State University at Fullerton with a B.A. in business administration finance. Saputo is a member of the Institute of Internal Auditors, the Health Care Compliance Association, the Association of Internal Auditors, and the Risk Insurance Management Association. He is a Certified Internal Auditor and a Certified Fraud Examiner.

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IHS: Consolidation of Small E&P Cos Could Increase

- IHS: Consolidation of Small E&P Cos Could Increase

Monday, August 29, 2011
IHS CERA

The uncertainty of future oil prices, combined with falling share prices on both London's Alternative Investment Market (AIM) Index and the Standard and Poor's (S&P) Index in the U.S., has made close to 100 small exploration and production (E&P) companies in the U.K. and two dozen large U.S. producers, prime targets for consolidation in order to achieve future funding, reports IHS in its IHS Herold Oil and Gas Perspectives Report.

"There are nearly 100 E&P companies listed on London's AIM, and while a number of these are small companies, numerous others have participated in apparently significant discoveries around the world that may turn into important oil and gas fields," said Robert Gillon, director of energy company research at IHS, and author of the weekly IHS Herold Oil and Gas Perspectives. "However, almost none of these AIM-listed E&Ps have reached the production stage, which means they are not yet generating revenue. Without revenue, they are dependent on future funding to continue operations. That funding can be accomplished either through additional share sales or a farm-out of an interest in their exploration licenses."

In addition to the AIM-listed companies, Gillon said there are about two dozen large (market cap $0.5 billion to $3.0 billion) U.S. oil and gas producers that could be ripe for consolidation as well. "Some of these U.S. companies are also reliant on external financing to fund their capital budgets, but all of them have developed reserves that could be sold in the very liquid transaction market."

Gillon said it is probably "not a coincidence" that the AIM-listed stocks peaked at about the same time as the Greek financial crisis, while the U.S. companies started to slide after oil prices topped out in April. On August 4, both indices took a serious hit, with the London group down 9.6 percent, while the S&P index shed 7.8 percent, and both have suffered further losses since then.

The AIM index is now down by 40 percent from its recent peak, which means the average company would need to sell almost 70 percent more new shares to raise the same amount of money as it did a few months ago. Meanwhile, optimism about future oil prices is more subdued, and the potential farm-in partners recognize that. As a result, they will demand more favorable terms on the deal. But commitments to the host government must be honored to hold the license.

"We believe there could be a wave of consolidation in the exploration sector," said Gillon. "Selling out will become the most attractive alternative."

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API Expands Fracking Remarks to U.S. Energy Dept.

- API Expands Fracking Remarks to U.S. Energy Dept.

Monday, August 22, 2011
Rigzone Staff
by Barbara Saunders

The federal government should not tell states how to regulate natural gas operations within their borders, the American Petroleum Institute (API) told a U.S. Department of Energy (DOE) panel in formal remarks on the panel's preliminary findings.

"While the industry and states are constantly striving to improve operations, it is important to recognize the strong foundation for shale gas operations that currently exists through robust state regulatory programs in most parts of the country," API said. "Rather than deferring on the proper role of state governments, we recommend the Subcommittee acknowledge the success that has been demonstrated through state-level programs. Regulation of oil and natural gas has been led by states since the inception of the industry and has demonstrated a high degree of capability and flexibility in adapting to changes such as those seen with unconventional gas development. States have created systems that effectively protected the environment, including ground water and drinking water sources."

Other remarks by the industry group included:

• "API supports a strong state regulatory framework for natural gas and the dedication of appropriate resources and staff to carry out the regulatory functions. The Subcommittee should defer to the states on the question of how to generate the necessary funding for regulatory programs, rather than making this determination for the states.
• "..[W]e are concerned that the Subcommittee did not engage in a gap analysis to determine whether, and to what extent, the items included in its recommendations have been or are being addressed by state and federal regulators, academia, industry or third parties. . . . A benefit-cost analysis is critical to balanced decisions related to the regulation of commercial activity.
• "API agrees that the protection of water resources is a top priority for all industry operations including hydraulic fracturing. However, water is a highly regulated commodity subject to the federal Clean Water Act as administered by the federal government and the states. A systems approach is already occurring in most local, state, and interstate jurisdictions due to the many requirements associated with water allocation and management processes. In addition, in most states, there already exists a reasonable manifest system for tracking wastes to their point of disposal. We see little additional value from requiring a manifest for the transportation of fresh water hauls since most water management agencies require reporting of these volumes already. This type of requirement should be reserved for those elements posing the greatest risks."

Among other things, API also protested the DOE panel's proposal to regulate air quality emissions from fracking operations separately. "Shale gas operations are already subject to a myriad of federal (Clean Air Act) and state air emissions regulations that have been in place for many years and continue to evolve," API said. "States must often obtain primacy by having programs as or more stringent than the federal requirements in meeting human health and environmental goals."

API supported the panel's recognition that shale gas provides important energy and economic contributions to the U.S.

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Suncor Reviewing New U.S. Sanctions Against Syria

- Suncor Reviewing New U.S. Sanctions Against Syria



Aug 19, 2011

Suncor Energy (NYSE:SU) is reviewing new U.S. sanctions imposed on the Syrian government and a company spokesman said they would adhere to any that affect its otperations.

Suncor operates the $1.21 billion Ebla project there, which supplies natural gas to the domestic market.

Suncor Energy (NYSE:SU) has a potential upside of 71% based on a current price of $30.06 and an average consensus analyst price target of $51.39.

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Sheen Seen Emanating from BP Thunderhorse Platform in US Gulf

- Sheen Seen Emanating from BP Thunderhorse Platform in US Gulf

Wednesday, August 17, 2011
Dow Jones Newswires
HOUSTON
by Ryan Dezember

A band of silvery sheen was spotted emanating from BP's Thunderhorse platform Tuesday in the U.S. Gulf of Mexico, though the company said that it has taken action to prevent further discharges, according to a government filing.

A two-foot-wide band of sheen stretching 30 feet from the platform, which is located in deep water south of the Mississippi-Alabama state line, was reported to the National Response Center on Tuesday.

BP told federal pollution regulators that the unspecified substance came from a discharge pipe and that it was adjusting waste treatment chemicals on the platform to remediate the problem, according to the filing.

A BP spokesman did not immediately respond to a request for comment.

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

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Swift Energy to Sell Stakes in Six U.S. Fields

- Swift Energy to Sell Stakes in Six U.S. Fields

Wednesday, August 17, 2011
Swift Energy Co.

Swift Energy has signed a purchase and sales agreement with a private oil and gas company to sell Swift Energy's interests in six fields in South Louisiana, two in Texas and one in Alabama for approximately $53.5 million. Swift Energy will use net proceeds from this transaction to fund a portion of its 2011 capital expenditures.

Production attributable to the fields being sold averaged 10.6 million cubic feet of gas equivalent per day during the first quarter of 2011 with aggregate proved reserves of 92.2 billion cubic feet equivalent (19% proved developed producing and 65% natural gas) at year-end 2010. This sale is expected to close within the next 60 days, with an effective date of August 1, 2011. The total acquisition sale price is subject to post-closing adjustments.

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Judge Strikes Down US Policy on O&G Permits

- Judge Strikes Down US Policy on O&G Permits

Monday, August 15, 2011
Dow Jones Newswires
WASHINGTON
by Ryan Tracy

A federal judge has struck down an Obama administration policy related to drilling permits on public lands, leading oil and gas companies to hope more permits in the western U.S. will be forthcoming.

But it wasn't clear Monday how the Interior Department, which processes the permits, would respond. The ruling, issued Friday by the U.S. District Court in Wyoming, rejected a policy that had required more extensive environmental review of some drilling permits.

Interior "had no authority" to adopt the policy last year "without public notice and an opportunity for comment," Judge Nancy D. Freudenthal wrote. She ruled in favor of an industry group and vacated the policy nationwide.

An Interior Department spokesman said the agency was reviewing the ruling and declined to comment further.

The ruling "holds the promise of new jobs and economic growth," said Kathleen Sgamma, director of government and public affairs for the Western Energy Alliance, which filed the suit and represents Devon and Anadarko, among others.

Permitting on U.S. land quickened under the Bush administration and hit a peak during the 2007 fiscal year, when Interior approved 7,124 permits to drill for oil and gas on federal lands. The Obama administration, by contrast, approved 4,487 such permits in 2009 and 4,090 in 2010, according to data from Interior's Bureau of Land Management, or BLM.

Some of that drop can be attributed to lower demand as a result of the economic downturn, but the industry says permits are also taking longer to obtain.

For its part, BLM has argued that its new permitting policies are more efficient because a stronger up-front review will lead to fewer lawsuits and delays down the road.

At issue in Friday's court ruling was a provision in the 2005 Energy Policy Act that allowed oil and gas companies to skip federal environmental reviews under certain circumstances -- for example, if a well was being drilled from an existing site where drilling had occurred within the previous five years.

In May 2010, Interior instructed its staff to allow such exceptions under "extraordinary circumstances." Freudenthal said that decision amounted to an "about-face" from past practice, so the agency must formally propose the change and solicit public input.

Sgamma said she hoped Interior would rescind the current policy for now. The department might also keep it in place and appeal the ruling.

"It's not like we'll start to get permits quicker here on out in the short term," Sgamma said. "We'll have to wait to see what the government does."

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

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Exxon Mobil Back On Top As U.S.'s Valuable Company

- Exxon Mobil Back On Top As U.S.'s Valuable Company



Aug 12, 2011

After being surpassed by Apple (NASDAQ:AAPL) on Tuesday, Exxon Mobil Corp. (XOM) shares are again benefiting from a rise in the price of oil. They're up 2% Friday to $73.04, although still down for the week.

Exxon Mobil (NYSE:XOM) has a potential upside of 28% based on a current price of $72.57 and an average consensus analyst price target of $92.88.

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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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Shale Plays, Foreign Investments Drive U.S. Oil & Gas M&A Value

- Shale Plays, Foreign Investments Drive U.S. Oil & Gas M&A Value

Thursday, August 11, 2011
PwC

Ongoing interest in shale acreage, deals for midstream assets and increased investments from foreign buyers in the U.S. oil and gas industry helped drive U.S. oil and gas mergers and acquisitions (M&A) value to $39 billion in the second quarter of 2011, according to PwC US.

In the second quarter of 2011, there were 51 deals with values greater than $50 million, compared to 61 announced deals totaling $41 billion in the same period last year. While the volume and value of transactions dipped slightly in the second quarter of 2011 when compared to the same period last year, average deal value for deals over $50 million jumped to $765 million in the second quarter 2011, a 14 percent increase over the same period last year when average deal value was $672 million.

"There continues to be steady M&A activity in the oil and gas sector with strong competition for prized assets, which has maintained the deal momentum throughout the first half of the year. The second half of the year has already kicked off with one mega deal announced, and we expect that deal momentum to continue," said Rick Roberge, principal in PwC's energy M&A practice. "Foreign and private equity interest in North American oil and gas assets remains very high and will likely be a driver of ongoing activity."

Foreign buyers announced 18 deals valued at over $50 million or more in the second quarter of 2011, which contributed $36.2 billion or 72 percent of total deal value, versus 27 deals valued at $24.2 billion in the same period last year.

For deals valued at over $50 million, there were 11 midstream deals that accounted for $19.9 billion, or 51 percent of total deal value, compared to six deals worth $3.4 billion in the same period last year. Transactions in the upstream space led all oil and gas subsectors with 26 deals, or 51 percent of volume in the second quarter.

According to PwC, seven of the top 10 deals by value in the second quarter of 2011 were related to shale plays, including four upstream deals and three transactions in the midstream and oil field services space. For all deals greater than $50 million, there were 10 shale-related transactions totaling $7.5 billion, or 19 percent of total deal value, including two deals involving the Marcellus Shale totaling $2.3 billion.

"Shale-gas assets continue to be very attractive acquisition targets as multinationals look to gain technical know-how and exploit the long-term value and opportunities from rising energy needs," said Steve Haffner, a Pittsburgh-based partner with PwC's energy practice. "At the same time, there is tremendous activity developing around natural gas infrastructure, which is necessary to move the extracted gas to market. The U.S. 'shale gale' continues to attract the attention of global companies."

There were five financial sponsor-backed transactions over $50 million, representing $6.1 billion, or 16 percent of total deal value, compared to 10 financial sponsor deals contributing $6.2 billion during the same period last year. During the first six months of 2011, there were 16 financial sponsor deals contributing $20.6 billion, a whopping 129 percent increase in deal value, compared to the first half of 2010 when there were 15 financial sponsor-backed deals, valued at $9.0 billion.

"With oil prices hovering at $100, private equity funds continue to make a very strong push in the oil and gas sector," added Roberge. "The private equity deal makers, who used to largely play in the midstream space, are now heavily involved in exploration and production (E&P), shale plays, and oil field services and equipment sector. However, along with the great opportunities and rewards of investing in oil and gas, there is still risk in this space – and new entrants need to understand the pitfalls before trying to exploit these possible opportunities."

For deals with values greater than $50 million, there were 18 corporate transactions totaling $26.8 billion or 69 percent of total second quarter deal value, compared to 22 deals that accounted for $25.9 billion in deal value in the same period last year. Thirty-three asset deals for a combined total of $12.2 billion were announced in the second quarter of 2011, versus 39 deals totaling $15.1 billion in the same period last year. However, when comparing the first six months of 2011 to the first half of 2010, the number of corporate transactions increased by three deals to 35 transactions, while total corporate deal value jumped 26 percent to $59.7 billion in 2011 from $47.6 billion in 2010.

Another potential driver for M&A activity is the desire from some oil companies to sell assets and break apart key lines of business, according to PwC.

"We believe that another factor to keep a close eye on throughout the year, which may add to the already robust M&A activity we're seeing, is the trend of integrated oil companies looking at the various options to unlock shareholder value through separating their E&P businesses," said Roberge. "While this trend could be a very positive driver of M&A activity, these are highly complex transactions with potential consequences around tax considerations, valuations and financial reporting. Companies should consider the risk with these types of transactions as every potential scenario needs to be thoroughly and diligently evaluated to succeed."

PwC's Oil & Gas M&A analysis is a quarterly report of announced U.S. transactions with value greater than $50 million analyzed by PwC using transaction data from John S. Herold, Inc.

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U.S. Faces Increased Energy Security Risk, Report Shows

- U.S. Faces Increased Energy Security Risk, Report Shows

Tuesday, August 09, 2011
Rigzone Staff
by Barbara Saunders

The U.S. faces heightened threats to its energy security, according to a new report by the U.S Chamber of Commerce that measures risk in four areas—geopolitical, economic, reliability and environmental.

For 2010, the energy security risk index score was 98.0—the fourth highest since 1970 and a 6.5 point increase from the 2009 score of 91.5.

"These are the worst risks we've seen in recent history," said Karen Harbert, president of the Chamber's Institute for 21st Century Energy. "They approach what we saw following the Iranian hostage crisis. . . . Unless we take dramatic action to change the trajectory, America is headed toward an unprecedented level of sustained risk."

The index, updated annually, tracks changes in energy security risk beginning in 1970 and projects future risk through 2035. The 2011 edition of the index incorporates the most current energy data from the U.S. Energy Information Administration (EIA) and other federal agencies.

Of the 37 metrics weighed, 20 showed increased risk in 2010, 11 showed improvement, and six were unchanged. Eight of the top 10 metric with the largest score changes related to energy prices, price volatility and expenditures, the Chamber said, adding that the index projects a sustained period of high risk all the way through 2035. "These risks would be even higher if not for improvements made in energy efficiency, and the potential for shale gas to improve the security of natural gas supplies and lower energy costs," the Chamber added.

"We must maximize all of our domestic energy resources, make clean energy technologies more affordable, and eliminate regulatory barriers that are stalling urgently needed energy projects," Harbert said. "Only by taking these actions will we reduce our energy risks and make the nation and economy more secure."

The 2011 edition includes some adjustments to the index's formula based on feedback from last year's inaugural report. Adjustments also were made to some previous year's scores based on updated data from government sources. Most significantly, the 2009 score was adjusted from 83.7 to 91.5, largely because revised data that showed resurgence in high energy prices occurring more rapidly than originally estimated.

Highlights of the report included:

• Geopolitical energy security risks rose to 97, 13.5 points above the 30-year average of 83.5. Most of the increase in risks seen in this sub-index since the early 2000s is linked to higher crude oil prices and volatility and greater import expenditures. The metrics measuring security of global fossil fuel reserves and production were essentially unchanged from 2009.
• Economic energy security risks increased by 9.3 points in 2010 to 94.0, offsetting a large portion of the 17.1 point drop experienced in 2009. "This level of risk is well above the 30-year average of 73.7 for this sub-index and has been exceeded only in 1980, 1981, and 2008," the Chamber noted.
• Reliability energy security risks increased 5.4 points to 111.0 in 2010, the highest recorded for this sub-index, with crude oil price volatility being responsible for much of the increase. The score for this sub-index has hit 100 points or more every year since 2005, and projections indicate that levels of risk above 95 will be maintained through 2035, even after assuming that crude oil energy price volatility will return to historical averages.

In one bright spot, the Chamber noted that the "potential of shale gas to improve the security of natural gas supplies and lower energy costs and expenditures is beginning to emerge. Recent estimates double the volume of recoverable shale gas resources assumed in past estimates, leading to greater domestic and global supplies and lower gas imports. Increasing shale gas supplies and further improvements in natural gas extraction technologies will further delink the prices of crude oil and natural gas."

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Commodity Corner: WTI, Brent Futures Plummet

- Commodity Corner: WTI, Brent Futures Plummet

Monday, August 08, 2011
Rigzone Staff
by Matthew V. Veazey

On the first trading day after Standard & Poor's downgraded the United States' long-term credit rating from AAA to AA+, the WTI settled at its lowest point in nearly nine months.

Light sweet crude oil lost $5.57 to end the day at $81.31 a barrel—just six cents higher than the Nov. 23, 2010, settlement price. Concerns that the U.S. is slipping into a double-dip recession have dampened expectations about oil demand. Equity markets also sustained significant losses Monday. The Dow Jones Industrial Average fell 5.55 percent while the S&P 500 declined nearly 6.7 percent.

The Brent futures price also plunged Monday but to a somewhat more modest degree than the WTI. It ended the day at $103.47, marking a $5.63 decline from Friday.

The WTI peaked at $85.73 and bottomed out at $80.17 while the Brent traded within a range from $102.88 to $106.92.

Also reflecting fears about slumping demand was the price of gasoline for September delivery, which lost 4.1 percent to end the day at $2.69 a gallon. Front-month gasoline traded within a range from $2.80 to $2.67 Monday.

September natural gas remained relatively steady Monday, losing less than one cent to settle at $3.935 per thousand cubic feet. Natural gas peaked at $3.97 and bottomed out at $3.855.

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