Ukraine, Shell Sign Shale Gas Exploration Deal

- Ukraine, Shell Sign Shale Gas Exploration Deal

Thursday, September 01, 2011
Dow Jones Newswires
KIEV

Ukraine Thursday awarded its first shale gas exploration contract to the Anglo-Dutch giant Shell in a deal worth up to $800 million, Ukraine's state gas exploration company said.

"In case of successful exploration work and the start of intense project development, Shell's total investment under the agreement may come to $800 million," Ukrgazvydobuvannya said in a statement issued after the signing.

Ukraine is widely believed to be one of Europe's largest holders of the new energy resource, with estimated reserves up to 1.5 trillion cubic meters, according to industry analysts.

No official estimate has been made and there is no confirmed figure of how much shale gas might be hidden in the six blocks awarded to Shell near northeastern city of Kharkiv.

Ukraine lacks the advanced technology necessary to produce the hard-to-recover resource and is also holding negotiations with such Western majors as the U.S. firms Chevron and ExxonMobil.

The former Soviet republic has few other natural resources and relies on Russia for most of its gas imports.

But it has been trying to lower its energy dependence on its neighbor since a price dispute temporarily cut Russian gas flows in January 2009 and is now focusing on other sources of energy that include coal.

"The agreement with Shell will be one of the first examples of Ukraine's successful cooperation in hydrocarbons development with an international energy company," Ukrgazvydobuvannya chief Yuriy Borysov said.

Ukrgazvydobuvannya said Shell would be operating in Ukraine through a joint venture but offered no other immediate details.

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

Oil & Gas Post

Promote Your Page Too
LINK

Kulczyk Oil Spuds Ukraine Olgovskoye Well

- Kulczyk Oil Spuds Ukraine Olgovskoye Well

Thursday, August 04, 2011
Kulczyk Oil Ventures Inc.

Kulczyk Oil Ventures announced that the O-12 well on the Olgovskoye License in Ukraine commenced drilling on August 3, 2011.

O-12 Exploration Well

The O-12 well is located approximately 1.4 kilometers to the northwest of the recently tested O-9 well. The O-12 well will be drilled to a depth of 2,650 meters and is designed to test gas-bearing reservoirs in the Muscovian and Bashkirian sections and to further develop the gas production capability of the Olgovskoye Field. The drilling of the O-12 well is expected to take approximately 40 days.

The well, identified after interpretation of 2D seismic data by the KOV/KUB-Gas technical team, is on trend with the main Olgovskoye producing area and is intended to extend the known boundaries of the Olgovskoye Field. A successful well will increase gas production and lead to additional drilling locations along this trend.

Olgovskoye License

The O-12 well is the fourth new well drilled in the Olgovskoye Field since the Company acquired its interest in KUB-Gas in June 2010. It is part of a larger development program on the KUB-Gas assets through 2011 and 2012 which has involved the drilling of new wells at O-8, O-9 and O-14. The Olgovskoye Field currently produces from 4 wells (O-3, O-4, O-5 and O-7) with each well producing from a separate horizon.

The first of new wells was drilled at the Olgovskoye-8 location and reached a total depth ("TD") of 2,780 meters in early January. Production testing of the O-8 well will begin in August.

The second of the new wells drilled on the Olgovskoye license, the O-9 well, finished drilling at a depth of 2,638 meters in mid-April and was cased to TD as a potential multi-zone gas well. The O-9 was production tested in June and July of this year and the well is expected to begin commercial production at a gross rate of approximately 1.5 million cubic feet per day ("MMcf/d") prior to the end of the third quarter as disclosed in the news release of KOV dated August 1, 2011.

The third of the new wells, Olgovskoye-14 ("O-14"), was drilled to a TD of 2,800 meters and cased to TD after encountering up to eight potential gas-bearing zones in the Middle and Lower Bashkirian sections of the well as disclosed in the news release of KOV dated 18 July 2011. A service rig will be moved to the O-14 location to production test the well after the production testing of the O-8 well is finished.

KUB-Gas LLC ("KUB-Gas") owns a 100% interest in the Olgovskoye license and in four other licenses in the Lugansk area of Ukraine. KOV owns an effective 70% interest in KUB-Gas.

Oil & Gas Post

Promote Your Page Too
LINK

Drilling Preparations Underway at Cadogan's Ukraine Well

- Drilling Preparations Underway at Cadogan's Ukraine Well

Tuesday, August 02, 2011
Cadogan Petroleum plc

Cadogan reported that rig acceptance and preparations for drilling of the Pokrovskoe 1 well on the Pokrosvskoe license in eastern Ukraine commenced on July 24, 2011. As previously advised the well had been suspended in December 2010 at 5450 meters pending the sourcing of a suitable alternative all weather drilling rig. The Company recently awarded a drilling services contract to Saipem. Target depth is 5800 meters and the Company expects the drilling and preliminary testing of the well to take approximately 60 days.

Operations have also commenced on the work-over of the Zagoryanska 1 well on the Zagoryanska license also in eastern Ukraine. A work-over drilling unit will be mobilized to the location during the first week of August 2011 to undertake perforation and testing operations, which are expected to be completed by end of 3Q 2011.

Oil & Gas Post

Promote Your Page Too

Kulczyk Oil Highlights Testing Ops at Ukraine Well

- Kulczyk Oil Highlights Testing Ops at Ukraine Well

Monday, August 01, 2011
Kulczyk Oil Ventures Inc.

Kulczyk Oil has published in Canada, through SEDAR system, the news release concerning gas tested from second zone at Olgovskoye-9 well in Ukraine and O-8 well update.

The O-9 well is located approximately 1.2 kilometers to the northwest of the O-8 well. O-9 well commenced drilling on March 5th, 2011 and reached a total depth ("TD") of 2,638 meters on April 4th, 2011. The well was primarily designed to test gas-bearing reservoirs in the Middle Bashkirian and further develop the gas production capability of the Olgovskoye Field.

The testing of the O-9 well began in June when a 5.5 meter thick reservoir unit in the Lower Bashkirian at a depth of approximately 2,560 meters (the R37 unit) was perforated. A two-meter section of the R37 unit was perforated and tested over two periods of time. The first test flowed gas at a rate of 1.2 MMcf/d (840 Mcf/d net to KOV) through a 6 mm choke. The second test flowed gas at a stabilized rate of 762 Mcf/d (533 Mcf/d net to KOV) through a 5 mm choke. This new discovery of gas in the Lower Bashkirian was disclosed in the KOV news release dated June 28, 2011 (current report No 35/2011).

The testing of the Middle Bashkirian sandstones, which are the primary target of the O-9 well, commenced on July 22nd, 2011 when two 3 meter zones of one of the potential gas zones in the Middle Bashkirian were perforated from measured depths of 2,304 to 2,307 meters and from 2,309 to 2,312 meters, respectively. These perforated intervals flowed gas at rates ranging between 1.7 MMcf/d (on a 5 mm choke) to 4.4 MMcf/d (on a 9 mm choke) i.e. between 1.19 to 3.08 MMcf/d net to KOV. with a stabilized flow rate of 2.9 MMcf/d on a 7 mm choke (2.03 MMcf/d net to KOV). The tested zone, which is only one of several potential gas producing zones seen in the Middle Bashkirian section in the O-9 well, is expected to commence commercial production at a gross rate of approximately 1.5 MMcf/d (1.1 Mmcf/d net to KOV) prior to the end of the third quarter.

Initially, this well will produce only from the tested Middle Bashkirian zone and gas reserves indicated by the testing of the Lower Bashkirian gas zone described in the June 28, 2011 news release will be available to produce at a later date. O-9 was the second new well drilled in the Olgovskoye field since the Company acquired its interest in KUB-Gas in June 2010 and it is part of a larger development program on the KUB-Gas assets which will continue through 2011 and 2012.

The service rig is now being moved to the Olgovskoye-8 well which was the first new well drilled on KUB-Gas Ukraine licenses since the acquisition by KOV in June 2010. The O-8 well reached a TD of 2,780 meters in early January and encountered multiple potential gas zones. Testing of the O-8 well will commence in a few weeks once the service rig move is completed.

Oil & Gas Post

Promote Your Page Too
LINK

Tie-In Boosts Kulczyk Oil's Ukraine Gas Production

- Tie-In Boosts Kulczyk Oil's Ukraine Gas Production

Tuesday, July 26, 2011
Kulczyk Oil Ventures Inc.

Kulczyk Oil announced that total gas production on its properties in Ukraine has increased by 70% to more than 10 million cubic feet per day ("MMcf/d") (more than 7 MMcf/d net to KOV), as a result of the tie-in of the M-19 discovery well in the Makeevskoye Field.

Highlights

• M-19 well initial average gas production rate in excess of 5.5 MMcf/d (3.85 MMcf/d net to KOV) since tie-in;
• Projected production rate for the remainder of 2011 from the M-19 well is a minimum of 4 MMcf/d (2.8 MMcf/d net to KOV);
• The tie-in of the M-19 well has increased the gas production by almost 70% from an average of approximately 6 MMcf/d (4.2 MMcf/d net to KOV) for the first six months of 2011 to the current rate of more than 10 MMcf/d (more than 7 MMcf/d net to KOV).

Timothy M. Elliott, the President and Chief Executive Officer of KOV, stated that "we have substantially increased production from our Ukraine assets since closing the acquisition in June 2010 and are very pleased that KUB-Gas is already producing more than 10 MMcf/d before the end of July. We are confident that we will meet or exceed our target of exiting 2011 with a production rate for KUB-Gas of 12 MMcf/d (8.4 MMcf/d net to KOV). KOV will continue with its active development program in the Ukraine during the coming year and we expect to have a number of new locations defined once the 3D seismic surveys recently completed at Makeevskoye and Olgovskoye are processed and interpreted. The successful start-up of gas production from the newly discovered zone in the M-19 well has confirmed the effectiveness of modern seismic interpretation techniques in the identification of new exploration targets".

The M-19 well

The M-19 exploration well was drilled in the second half of 2010 to a total depth of 2,060 metres and tested gas at a rate of approximately 5 MMcf/d in January 2011 before being suspended pending completion of a pipeline to tie the well to the production facilities of KUB-Gas LLC ("KUB-Gas"). The pipeline was completed and all regulatory approvals required for the commercial production of the well were obtained prior to the start of production on July 11, 2011.

Average gas production from the M-19 well was 5.52 MMcf/d (3.86 MMcf/d net to KOV) since the first full day of production on July 11, 2011. It is presently anticipated that production rates from the well will stabilize at a lower rate and average about 4.0 MMcf/d for the remainder of 2011. The successful tie-in of the M-19 well to production facilities has increased total KUB-Gas production from its four producing gas licenses in Ukraine to an average of 10.73 MMcf/d (7.51 MMcf/d net KOV) during the 10 producing days ended July 24th.

The estimated selling price per thousand cubic feet ("Mcf") in the second quarter of 2011 was approximately US $9.00 per Mcf with as estimated netback of US $5.80. The netback during the first quarter of 2011 was US $4.77 per Mcf. The final financial information with respect to the second quarter will be released in mid-August.

The M-19 well was the first well operated by KUB-Gas logged with western logging tools. By comparing the Ukrainian and western logging data over the same formations, the Company is developing a methodology to better understand and analyze existing Ukrainian log data with a view to more effectively evaluating the potential of the area.

Oil & Gas Post

Promote Your Page Too
LINK

TNK-BP to Invest $1.8B in Ukraine Shale Gas by 2017-18

- TNK-BP to Invest $1.8B in Ukraine Shale Gas by 2017-18

Friday, June 24, 2011
Dow Jones Newswires
MOSCOW
by Jacob Gronholt-Pedersen

BP's Russian joint venture TNK-BP Ltd. plans to invest $1.8 billion in unconventional gas projects in Ukraine over the next six to seven years, the company's vice president for gas and power supply Mikhail Slobodin said.

Investing $1.8 billion into six Ukrainian shale deposits until 2017 or 2018 will allow TNK-BP to produce up to 3 billion cubic meters of gas a year, with initial production lower than that, Slobodin told Dow Jones Newswires.

Unconventional gas sources such as shale gas, which has shaken up the U.S. gas market in the past two years, have caught the interest of major players on the European market. U.S. oil major Chevron has recently acquired shale gas acreage in Poland and Romania.

"Even though they had success with shale gas in the United States, it doesn't mean we will have the same success in Ukraine or Poland," Slobodin said. "No-one really knows."

Ukraine's eastern Donetsk region may hold considerable shale deposits, an unconventional source of natural gas produced by a method known as hydraulic fracturing.

TNK-BP, a joint venture between U.K. oil major BP and a group of Soviet-born billionaire investors, is targeting six licenses containing unconventional tight gas in Ukraine.

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

Oil & Gas Post

Promote Your Page Too

Kulczyk Oil Commences Drilling at Ukraine Well

- Kulczyk Oil Commences Drilling at Ukraine Well

Monday, May 30, 2011
Kulczyk Oil Ventures Inc.

Kulczyk Oil announced that the O-14 well in the Olgovskoye Field commenced drilling.

O-14 Exploration Well

The O-14 well is located approximately 4 kilometers to the southeast of the O-8 well. The O-14 well will be drilled to a depth of 2,800 metres and is designed to test gas-bearing reservoirs in the Muscovian and Lower Bashkirian and to further develop the gas production capability of the Olgovskoye Field. The drilling of the O-14 well is expected to take approximately 35 days.

The well, which will target a previously untested fault block identified after interpretation of 2D seismic data by the KOV/KUB-Gas technical team, is on trend with the main Olgovskoye producing area. A successful well in this fault block has the potential to substantially increase the current reserves base of the Company in Ukraine. RPS, the Company's independent engineering consulting firm, has assigned Contingent Resources to the 70% effective interest of KOV of 3.2 billion cubic feet ("Bcf") (Low Estimate), 12.3 Bcf (Best Estimate) and 29.1 Bcf (High Estimate) of natural gas to the untested fault block.

The O-14 well is the third new well drilled in the Olgovskoye field since the Company acquired its interest in KUB-Gas in June 2010. It is part of a larger development programon the KUB-Gas assets through 2011 and 2012.

Oil & Gas Post

Promote Your Page Too

Transeuro: Testing Ops Underway at Ukraine Well

Transeuro: Testing Ops Underway at Ukraine Well

Tuesday, April 19, 2011
Transeuro Energy Corp.

Transeuro updatde on its Ukraine operations as follows:

Operations are now underway for 'Test 2' of the four test program to fully appraise the 400m of reservoir drilled in the Karl-101 well. This second test will assess the C14 interval, with 40 meters of perforations over the interval from 3,333 to 3,396 meters, representing around 20% of the reservoir thickness. This interval is known to contain numerous 'reservoir sections' and 'fracture zones' and is therefore expected to flow strongly after perforating, similar to Test 1. For this reason the Company is not planning to acidize during the testing phase, but will defer the acidizing until the well is put on production. The test will involve a 24 hour flow period, followed by a 48 hour shut in to record down hole pressure data. Samples of gas and condensate will be collected during the flow period for analysis.

After completing 'Test 1' extended operations were required to recover the packer and perforating guns from the wellbore, however this was finally achieved and established that all the guns fired as planned. In order to proceed with 'Test 2' the perforation intervals of 'Test 1' have been temporarily suspended below a drillable bridge plug so that the interval can be accessed later for production. Samples of gas and condensate were collected and have been sent for analysis. The down hole pressure recorders were recovered and confirm that a stable flow was achieved during 'Test 1' of 0.5 mmcf/d (14,000 m3/d) equivalent to 108 boepd with condensate. 'Test 1' represented approximately 15% of the reservoir thickness.

Eni Inks MoU for Ukraine Upstream Cooperation

Eni Inks MoU for Ukraine Upstream Cooperation

Monday, March 28, 2011
Eni S.p.A

The Minister of Ecology and Natural Resources Mykola Zlochevskiy of Ukraine and Eni CEO Paolo Scaroni signed in Kiev a Memorandum of Understanding defining the framework for possible cooperation initiatives in exploration and production of hydrocarbons in Ukraine.

The parties agreed to collaborate on the study of initiatives in conventional and unconventional oil and gas on the basis of a mutual sharing of data, competencies and technology. They also arranged to set up a joint working team that will begin the evaluation of such opportunities.

During his visit to Kiev, Eni CEO Paolo Scaroni also had the opportunity to meet with the Minister of Energy and Coal Industry Yuriy Boyko to discuss possible cooperation in Ukrainian upstream sector.