Panama Has an Estimated 900 Million Barrels of Oil in Two Basins

- Panama Has an Estimated 900 Million Barrels of Oil in Two Basins

Monday, September 05, 2011
OilPrice.com
by Joao Peixe

Panama’s National Energy Secretariat has announced that 900 million barrels of oil have been detected at two basins in eastern Panama, representing a potential contribution to the Panamanian Treasury of $15 billion dollars over the next two decades at current oil prices.

Panamanian Energy Secretary Juan Manuel Urriola said that the Venezuelan firm OTS conducted the geological survey and detected the oil reserves in Panama’s Garachine-Sambu and Bayano-Chucunaque-Atrato basins in Darien province, which borders Colombia.

While the quality of the deposits’ oil has yet to be determined Urriola estimated their “commercial potential” at roughly $15 billion in taxes and royalties, based on OTS projected estimate of a per-barrel price of 100 dollars over the next 20 years, MercoPress news agency reported.

OTS recommended that in the bidding process the exploratory areas in the Garachine-Sambu and Bayano-Chucunaque-Atrato basins be divided into four geographical blocks per basin.

Urriola added that a bidding process for exploration rights and for determining the deposits’ quality and volume would begin before the end of the year.

Panamanian President Ricardo Martinelli is promoting oil exploration because of Panama’s need to have its own indigenous energy resources in order to reduce the country’s dependence on oil imports, where recent high costs have caused local fuel prices to soar.

(Joao Peixe is a Deputy Editor OilPrice.com. The full article appears here.)

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Shell: 1,300 Barrels of Oil Spilled from North Sea Leak

- Shell: 1,300 Barrels of Oil Spilled from North Sea Leak

Monday, August 15, 2011
Dow Jones Newswires
LONDO
by Alexis Flynn

Around 1,300 barrels of oil are estimated to have spilled into the U.K. North Sea from a leaking pipeline at a Shell platform since last Wednesday, the Anglo-Dutch major said Monday.

"It isn't easy to quantify the total volume spilled but we estimate so far that it is around 216 tons [1,300 barrels]," said Glen Cayley, technical director of Shell's exploration and production activities in Europe.

The current rate of leaking is less than five barrels a day, Shell said.

Shell said the volume of oil at the sea surface is estimated at around one ton, or around six barrels. Wave action and high winds over the weekend have led to a "substantial" reduction in the size of the visible oil sheen, Cayley said.

"This is a significant spill in the context of annual amounts of oil spilled in the North Sea," said Cayley. "We care about the environment and we regret that the spill happened. We have taken it very seriously and responded promptly to it."

An undersea pipe at the Gannet Alpha platform has been leaking oil into the ocean since last Wednesday. Shell said the leak is "under control" and that the well that feeds the pipeline, shut in since Wednesday, remains closed.

The Department of Energy and Climate Change said that while the spill was small in comparison with BP's Gulf of Mexico accident last year, it was "substantial" in the context of the U.K. continental shelf. DECC said its environmental inspectors will continue to monitor the situation and are working closely with the company and counterparts from the Health and Safety Executive, Maritime and Coastguard Agency and Marine Scotland.

The size of the sea surface affected is estimated to be some 31 kilometers by 4.3 kilometers at its widest point. A sheen, estimated at 0.5 kilometers in size, is currently moving west from the field.

The platform is located 180 kilometers east of Aberdeen, Scotland. Shell operates the platform along with partner ExxonMobil's U.K. unit Esso.

Oil from the Gannet system is taken to Teesside, U.K., through the Fulmar pipeline as part of Ekofisk blend. Production at the facility is estimated to be around 6,000 barrels a day, according to a trader.

The platform had 10 leak incidents in 2009 and 2010, according to an HSE document showing voluntarily declared spills. Only one of the incidents was described as "significant" while the others were logged as "minor."

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

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Iran's Southern Regions Producing 3 Million Barrels of Oil Per Day

- Iran's Southern Regions Producing 3 Million Barrels of Oil Per Day

Thursday, July 21, 2011
OilPrice.com
by Charles Kennedy

Iran is currently the second largest oil exporter in the Organization of Petroleum Exporting Countries (OPEC), exceeded only by Saudi Arabia.

According to National Iranian South Oil Company executive director Hormoz Qalavand, "From the beginning of the current year (starting March 21, 2011, according to the Iranian calendar) until now, an average of about 3 million barrels per day of crude oil has been produced within the operational scope of the company, which is equivalent to 99.98 percent of the plan set by the National Iranian Oil Company," Donya-e Eqtesad newspaper reported.

Qalavand observed, "according to the plan, through the installation and operation of the pumps inside the wells and the drilling of the new wells, the groundwork and mechanisms for which have been prepared, we will be able to achieve a level of production beyond that in the plan projected through the end of the current year." Regarding increasing production from Masjed Soleyman oil field Qalavand noted, "Through the complete inauguration of the development project of this oil field, which is in the experimental launch phase, the oil production capacity in the oil-rich regions of the south will increase to 25,000 barrels per day. The production of oil from the reserves of this company is carried out based on the principle of protecting the reservoirs, and this matter is considered as the main strategy for the oil-rich regions."

(Charles Kennedy is Deputy Editor of OilPrice.com. The original article is here.)

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Commodity Corner: Oil Settles Higher on Bullish Stocks Data

- Commodity Corner: Oil Settles Higher on Bullish Stocks Data

Wednesday, July 20, 2011
Rigzone Staff
by Matthew V. Veazey

The price of light sweet crude oil gained 64 cents Wednesday to settle at $98.14 a barrel on news of a larger-than-expected drop in U.S. oil stocks. The Brent benchmark gained $1.09 to end the day at $118.15 a barrel.

The U.S. Energy Information Administration reported Wednesday that the country's commercial crude oil inventories fell nearly 1.1 percent last week to 351.7 million barrels. The 3.8 million-barrel draw was well above analysts' expectations. For instance, a Platts survey of analysts projected a draw of only 1.3 million barrels.

WTI futures fluctuated from $96.80 to $99.02 during Wednesday's session. The Brent contract peaked at $118.56 and bottomed out at $117.06.

Americans from the Upper Midwest to the South to the East Coast are seeking air-conditioned relief from high heat and humidity. Triple-digit heat indices are common throughout the eastern half of the country, and such conditions are expected to continue into next week. In spite of the sweltering heat, natural gas futures edged downward Wednesday to $4.50 per thousand cubic feet.

Front-month natural gas traded within a range from $4.43 to $4.60.

Gasoline futures ended the day higher at $3.15 a gallon—the intraday high. The intraday low for gasoline was $3.10.

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Baraka: Rig Headed to Georgina Basin

- Baraka: Rig Headed to Georgina Basin

Thursday, July 07, 2011
Baraka Energy and Resources Ltd.

Baraka and joint venture partner PetroFrontier announced that the long awaited Rig mobilization by Major Drilling has begun from Brisbane, Queensland to the Southern Georgina Basin in the Northern Territory, Australia.

Drilling Program Update

The rig will mobilize approximately 3,000 kilometers and is expected to arrive at the Baldwin-2 well site in approximately one week. Once the rig arrives on location and is rigged up, it will be subject to a final government audit prior to spud. PetroFrontier will provide a further update once a spud date has been confirmed.

Baldwin-2 is located in the southern part of EP 103 in the Southern Georgina Basin. Its primary target is the Basil Arthur Creek "hot" shale with a secondary target being the Hagen Member above the hot shale. Management believes that the Arthur Creek is analogous to the Bakken play found in Saskatchewan, Canada and North Dakota, USA. PetroFrontier has identified 13 older unconventional wells within the Arthur Creek "hot" shale zone on its lands.

PetroFrontier has a 100% working interest in EP 103 and is the operator.

After completion of drilling the Baldwin-2 well, the rig will then move to the MacIntyre-2 well site located in the northeastern corner of EP 127. MacIntyre-2 will be fracked and completed immediately after it is drilled and then the rig and frac crew will return to Baldwin-2 to conduct fracking and completion operations on that well.

According to a report prepared by Ryder Scott Company Canada (independent oil and natural gas reservoir engineers), dated November 1, 2010, the unrisked, undiscovered, prospective (recoverable) resource, based on a best (P50) scenario, for the unconventional Basil Arthur Creek shale zone in EP 103 and EP 127 may contain approximately 13.2 billion barrels and 2.7 billion barrels (gross) of oil respectively.

The Ryder Scott Resource Report on the resource potential of the Southern Georgina Basin describes the prospective (recoverable) portion of "Undiscovered Resources", as defined by the Canadian Oil and Gas Evaluation Handbook and does not represent an estimate of reserves. The Ryder Scott Resource Report is compliant with National Instrument 51-101 "Standards of Disclosure for Oil and Gas Activities" (NI 51-101). There is no certainty that any portion of the resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of the resources.

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Faroe Spins Bit at Fulla Well

- Faroe Spins Bit at Fulla Well

Thursday, July 07, 2011
Faroe Petroleum plc

Faroe announced that drilling operations have commenced on the Fulla exploration prospect (Faroe Petroleum 50%), located in the west of Shetland area of the Atlantic margin.

This west of Shetlands well, located to the north east of the producing Clair oil field, is targeting potentially oil-bearing Devonian Clair reservoir sands at a depth of 2,100 meters. Faroe is operator of the well which is being drilled by the WilPhoenix semisubmersible drilling rig under contract with Awilco Drilling in a water depth of 120 meters. Operations are expected to be completed well within the summer weather period.

UK License P.1161 contains both the Freya oil discovery and the nearby Fulla exploration prospect. The Freya discovery was drilled by Mobil in 1980 and encountered 140 meters of oil-bearing Devonian Clair reservoir sands. Similarly to a number of the Clair appraisal wells, a valid surface oil sample was not obtained in the Freya discovery well. Since Freya was drilled, horizontal well drilling on the Clair oil field has led to a very successful extended well test in 1997 which in turn led to development sanction. The BP operated Clair field is under phased development and has been on production since 2005, having to date produced in excess of 75 million barrels of oil with current rates at approximately 40,000 barrels per day.

The Fulla exploration prospect is located in the same Clair reservoir sands at a depth of approximately 2,100 meters and is situated along the same structural trend to the north east of both Clair and Freya, thereby de-risking the prospectivity of the target.

The objectives of the Fulla exploration well are to prove a significant column of oil-bearing Devonian Clair reservoir sands on the Fulla structure and, in that event, to obtain an oil sample using advanced wire-line technology. If these objectives are met, uncertainties related to a possible Freya and Fulla combined development project will be significantly reduced.

In December 2010 Faroe farmed out a 50% interest in License P.1161 to Canadian Overseas Petroleum Limited (COPL) on promoted terms, such that COPL will pay 60% of estimated well costs for the Fulla well.

Graham Stewart, Chief Executive of Faroe Petroleum plc, commented, "We are delighted to be drilling the Fulla prospect, as operator. Should the Fulla drilling operations be successful, this will present an excellent opportunity when combined with the already defined Freya discovery to prove up sufficient resources for a significant standalone field development.

"The next exploration wells scheduled after Fulla are all located on our Norwegian acreage and are the Butch well followed by the T-Rex and Kalvklumpen prospects, which are expected to spud in 3Q and 4Q. Faroe's ongoing multi-well exploration drilling program will carry on through 2011 and beyond as we push forward to test our substantial northern seas portfolio of over 40 significant licenses."

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Laredo Finalizes Broad Oak Acquisition

- Laredo Finalizes Broad Oak Acquisition

Wednesday, July 06, 2011
Laredo Petroleum Inc.

Laredo Petroleum has now completed the previously announced acquisition of Broad Oak.

The aggregate consideration paid was approximately $1 billion and consisted of approximately 2/3 of newly issued units of Laredo equity and 1/3 cash. The cash portion of the transaction was funded under Laredo's amended and restated $1 billion bank credit facility led by Wells Fargo Securities, LLC, BofA Merrill Lynch and J.P. Morgan Securities LLC, as joint lead arrangers. The amended and restated bank credit facility has an initial borrowing base of $650 million, of which $500 million was borrowed and outstanding following the closing of the acquisition.

This acquisition increases Laredo's size and positions it for continued growth in the oil-rich Permian Basin and the liquids-rich Granite Wash play. On a pro forma basis giving effect to the acquisition, Laredo has:

• total proved reserves of 840 Bcfe, consisting of 49 million barrels of crude oil and 547 Bcf of natural gas, as of March 31, 2011;
• average daily combined production of 130 MMcfe for the three months ended March 31, 2011, consisting of 40% crude oil and 60% natural gas plus associated natural gas liquids;
• a land position consisting of approximately 489,000 gross acres (338,000 net acres); and
• a total of 12 operated drilling rigs running, with eight drilling vertical wells and four drilling horizontal wells. Ten of these rigs are working in the Permian Basin and two in the Granite Wash play located in the Anadarko Basin.

The Broad Oak properties are concentrated on a contiguous land position located in the Permian Basin of West Texas primarily in Reagan County. This acreage is immediately south of, and on trend with Laredo's existing Permian Basin properties in Howard and Glasscock Counties. The combined acreage position in the Permian Basin consists of approximately 166,000 gross acres (126,000 net acres).

Randy Foutch, Laredo's Founder, Chairman and CEO said, "We welcome the Broad Oak employees to the Laredo team and intend to continue the active development and exploration of the combined company's attractive property base."

Tudor, Pickering, Holt & Co. Securities, Inc. served as financial advisor to Laredo. J.P. Morgan Securities LLC served as financial advisor to Broad Oak.

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Namibia Sees 11 Billion Barrels In Offshore Oil Reserves

- Namibia Sees 11 Billion Barrels In Offshore Oil Reserves

Wednesday, July 06, 2011
Dow Jones Newswires
WINDHOEK

An estimated 11 billion barrels in oil reserves have been found off Namibia's coast, with the first production planned within four years, mines and energy minister Isak Katali announced Wednesday.

The finding could put Namibia on par with neighboring Angola, whose reserves are estimated at around 13 billion barrels and whose production rivals Africa's top producer, Nigeria.

Katali said that Enigma Oil & Gas, owned by London-listed Chariot Oil & Gas, has identified 11 prospects along the southern coast.

"The largest of these, the Nimrod Prospect in 350 meters (1,150 feet) depth, and most likely reserves in the event of success are estimated to be greater than four billion barrels," he told parliament.

"Enigma expects to find oil rather than gas," Katali said, adding that first production could begin as early as 2015.

Enigma holds a 50% equity in the offshore Southern Block together with Brazil's Petrobras.

According to Katali, another Brazilian company, HRT Oil & Gas Ltd, has raised $1.3 billion on the Brazilian stock market, with $300 million earmarked for oil and gas exploration in Namibia.

He said that HRT has certified about 5.2 billion barrels of potential reserves.

"This finding could turn offshore Namibia into a great producer of oil and gas in a short time," Katali said.

In his statement to Parliament, Katali added that HRT would drill three to four wells in that area as early as next year.

Another find off Namibia's central coast called Delta Prospect contained recoverable resources of up to two billion barrels of oil, by Arcadia Expro Namibia and British firm Tower Resources, he said.

"We expect that six to eight wells to be drilled in Namibia's waters in the next 18 months, the highest number in Namibia's exploration history," he said.

Namibia has long been seen as a potential new source of oil, hampered by a lack of exploration to determine the extent of its reserves. Its offshore geology is similar to Brazil, which is seeing a boom in oil.

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

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Colombia Well Delivers for Ecopetrol

- Colombia Well Delivers for Ecopetrol

Wednesday, July 06, 2011
Ecopetrol S.A.

Ecopetrol has proven the presence of hydrocarbons in exploratory well Fauno-1, located in the Municipality of Puerto Gaitan, in the Meta province (Colombia).

This well, part of the exploratory campaign carried out by the Company in the Cano Sur block in the Llanos Orientales, is in addition to three other wells in the same block that were previously announced as successful (Mito-1, exploratory; Mago-1, stratigraphic; Draco-1, stratigraphic).

Ecopetrol S.A. is the operator and owner of all the rights to the Cano Sur Hydrocarbon Exploration and Operation Contract that was signed with the National Hydrocarbon Agency of Colombia (ANH), which covers an area of approximately 611,343 hectares.

The Fauno-1 well results confirm the potential of the Cano Sur block, where the company is continuing with an exploratory campaign, which includes the drilling of more than 20 exploratory and stratigraphic wells in 2011.

The Fauno-1 well, located in the eastern sector of the block, was drilled vertically to a depth of 3,256 feet. Technical data indicates that the well was completed with an artificial lifting system using a progressive cavity pump (or PCP), and that the hydrocarbon accumulation is located in the basal sands of the Carbonera formation.

Production tests carried out show production to date of 12.3 degrees API crude oil (heavy), with an average flow of 170 barrels per day, and a water and sediment of 22%, leaving an average daily rate of 132 barrels of crude oil. In initial tests the well produced 695 barrels.

Production conditions and yield for the deposit discovered in Fauno-1 will continue to be evaluated during the coming weeks.

The Company believes the results obtained from this block and from others in the area confirm the importance of the Llanos Orientales for Ecopetrol's growth strategy, and for achieving the goals proposed by the Company in the coming years, which include reaching one million barrels in equivalent production in 2015.

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N. Dakota Official: Floods Have Idled 5 Rigs, Shut Down 45 Wells

- N. Dakota Official: Floods Have Idled 5 Rigs, Shut Down 45 Wells

Tuesday, June 28, 2011
Dow Jones Newswires
HOUSTON
by Angel Gonzalez

Bad weather, flooding and road restrictions are disrupting oil production in North Dakota, shutting down the transportation by rail of 50,000 barrels a day of crude, a state official said.

"No one was prepared to deal with floods that are breaking records set 130 years ago," said Lynn D. Helms, director of the North Dakota Industrial Commission's Department of Mineral Resources said in an e-mail sent late Monday. Helms said the temporary shutdown of the rail transportation will last until it can be re-routed west, but didn't give an estimate as to when that might occur.

The weather has forced the shut in of 45 wells and idled five drilling rigs and is delaying the arrival of service crews to 500 wells waiting to be fractured, Helms said.

North Dakota sits atop the Bakken Shale, one of the richest deposits of oil in the U.S.--but one that requires intensive fracturing activity to yield crude. Last year, it produced an average of about 307,000 barrels of oil per day.

Michael Marino, an analyst with the investment bank Stephens, said moving drilling supplies in and crude out of the oil patch is the main problem in the Bakken.

"Overall the biggest impact has been on the (exploration and production companies)trying to get oil out of the region because service companies have been able to work around issues to some extent," he said.

Bad weather and flooding have affected not only energy production, but also the agricultural sector and have severely damaged several cities, including Minot, in the western part of the state, where many residents had to evacuate.

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

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Krafla West Delivers for Statoil

- Krafla West Delivers for Statoil

Tuesday, June 28, 2011
Statoil

Oil and condensate have been proven by Statoil and its partners, Det Norske Oljeselskap ASA and Svenska Petroleum Exploration AS, in the North Sea's Krafla West prospect.

Located about 26 kilometers south-west of Oseberg South, the discovery well found hydrocarbons in two columns with a total thickness of 300 meters.

Preliminary calculations indicate that the find contains some 12.6-37.7 million recoverable barrels of oil equivalent (boe).

"The North Sea still has a considerable exploration potential," observed Gro Gunleiksrud Haatvedt, senior vice president for the North Sea in the Exploration business area.

"Through the discoveries in Krafla and now Krafla West, we've proven reserves of 50-75 million boe. This must be considered a very substantial figure in a near-field context."

The two wells are the first drilled by Statoil in the license, she noted. "Discoveries with both wells indicate that we've understood how the hydrocarbon systems in this area function."

"The Krafla and Krafla West discoveries provide the basis for a robust fast-track project," added Tom Dreyer, head of exploration for the northern North Sea. "They show that growth opportunities still exist in this mature part of the North Sea."

A fast-track development of both discoveries through tie-backs to existing infrastructure in the Oseberg area will be considered.

Krafla and Krafla West lie in the same area as Stjerne, formerly Katla, which was proven in 2009 and is already covered by a plan for development and operation (PDO) from Statoil.

The Krafla/Krafla West wells were drilled from Ocean Vanguard, which is now moving to production license 569 at the southern end of Norway's North Sea sector to drill for Statoil on the Theta North-East prospect.

The licensees in the latest discovery are Statoil as operator with 50%, Det Norske Oljeselskap ASA with 25% and Svenska Petroleum Exploration AS with 25%.

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Russia Plans to Boost Investments in Iraq's Oil, Energy Sectors

Russia Plans to Boost Investments in Iraq's Oil, Energy Sectors

Tuesday, May 10, 2011
Knight Ridder/Tribune Business News
by Nehal El-Sherif, dpa, Berlin

The Russian government was working to increase its investments in Iraq, especially in the oil and energy sectors, Russian Foreign Minister Sergey Lavrov said Tuesday.

"Russia supports the Iraqi government in its efforts to restore security and develop the economy," Lavrov said at a joint press conference with his Iraqi counterpart Hoshyar Zebari in Baghdad.

"We are also working to increase cooperation and our investments here ... We are delighted that Russian companies are working in Iraq in the energy field," he said.

A consortium led by Russia's private oil company, Lukoil, secured the rights to develop an oilfield in 2009. Lukoil recently announced plans to quadruple its oil production from the massive West Qurna oilfield, to the west of Basra. It said initial production was scheduled for 2012 and full production should begin in 2017.

Iraq has held three international bidding rounds since late 2009 to attract investments in its oil and gas industry.

It relies heavily on oil exports for its revenue and aims to raise production from 2.5 million barrels to 12 million barrels per day within six years.

Lavrov said they also discussed the security situation in Iraq and cooperation in the defense sector. He also said Russia intends to open a consulate in the southern city of Basra, where some of the largest oilfields are located.

Copyright (c) 2011, dpa, Berlin. Distributed by McClatchy-Tribune Information Services.

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Platts Survey: OPEC Pumps 28.84 Million Barrels of Oil Per Day in April

Platts Survey: OPEC Pumps 28.84 Million Barrels of Oil Per Day in April

Tuesday, May 10, 2011
Platts

The 12-member Organization of the Petroleum Exporting Countries' (OPEC) pumped an average 28.84 million barrels per day (b/d) of crude oil in April, down from 29.17 million b/d in March, a Platts survey of OPEC and oil industry officials and analysts showed May 9.

Excluding Iraq, which does not participate in OPEC output agreements, the 11 members bound by quotas (OPEC-11) pumped an average 26.18 million b/d during the month. This is down 340,000 b/d from the March estimate of 26.52 million b/d.

Lower volumes from Saudi Arabia, Libya and Angola accounted for almost the entire drop.

"With oil prices taking center stage, many pundits have dismissed fundamental supply and demand as a factor in the recent increases," explains Platts Global Director of News John Kingston. "One need go no further than these latest statistics to see one reason as to why the price of crude has risen so sharply. It's nice to point to an easily-understood concept like excessive speculation, but losing one million barrels per day of supply over the last two months in a market where demand has been climbing is having the result economic supply/demand theory would suggest it should have."

Some participants in the survey revisited their March estimates for Saudi Arabia after oil minister Ali Naimi said last month that the kingdom had slashed production by some 700,000 b/d to 8.29 million b/d in March because the oil market was oversupplied.

But some industry sources wondered whether the minister's figure might not have been intended as an average for the month, noting that the kingdom had submitted a figure of 8.655 million b/d to the International Energy Forum's Joint Oil Data Initiative, or JODI, for March.

In early March, Naimi said Saudi Arabia had increased production to 9 million b/d to make up for the loss of Libyan output and had even created a special blend of crude similar in quality to the lighter, lower-sulfur content Libyan grades. Refiners have shown little appetite for the new Saudi concoction, however.

The survey showed Libyan output dropping further in April, to just 200,000 b/d from 460,000 b/d in March.

In the United Arab Emirates (UAE), the 200,000-barrel-per-day drop in production from the offshore Upper Zakum field does not appear to have had an impact on overall output for the month. Industry sources said Abu Dhabi kept supply steady by amending production levels at other fields and tapping into storage to meet export commitments.

Angolan production fell 100,000 b/d to 1.6 million b/d, as maintenance and repair work continued on Greater Plutonio.

Qatari production also dipped slightly due to the production shut down at a platform of Denmark's Maersk Oil at the offshore Al-Shaheen field following a fire on April 21.

The 470,000-barrel-per-day decreases more than offset the increases of 190,000 b/d. Higher Nigerian output accounted for the bulk of the increases, but volumes also rose in Ecuador, Iraq, and Kuwait.

The latest estimates leave the OPEC-11 overproducing its official target of 24.845 million b/d by 1.385 million b/d.

There had been a suggestion earlier this month that OPEC kingpin Saudi Arabia might want to see OPEC raise its official output target at the upcoming June 8 meeting to a level closer to actual production. Subsequent soundings would appear to rule out such a move, however.

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CAVU to Boost Production from Chisholm Wells

CAVU to Boost Production from Chisholm Wells

Tuesday, May 10, 2011
CAVU Resources, Inc.

CAVU Resources, Inc. announced Tuesday that the Company is utilizing new technology and introducing computer controlled directional drilling and enhanced dewatering processes to recomplete two wells on the Chisholm lease. CAVU plans on reentering two of its existing wells, utilizing chemical stimulation and dewatering processes after drilling four horizontal legs out from each well.

The two producing wells were originally drilled in the 1950s to the Bromide formation at about 3,000 feet. The wells will be deepened to the Oil Creek formation at about 3,800 feet with the horizontal legs to be drilled in zones with oil shows out 1,000' to 1,500' in four different directions. This allows for production in multiple zones without the cost of drilling four separate wells. Based on analyses from surrounding wells is estimated that the Bromide and Oil Creek zones can produce up to 200 barrels of oil per day, (BOPD) per well.

"After reviewing our recent production and well log analyses from the Chisholm Lease, we are very confident that we should hit our targets for the seven current wells we have reentered or plan to, which would put our combined production at between 10 to 200 BOPD per well. This is part of an old Marathon Oil water flood, where over 4 million of barrels of oil were recovered. We feel this field and surrounding acreage has the great potential, using the new technology we are introducing and drilling offset wells that could provide increased reserves and long term cash flow. We currently in negotiations for targeted lease opportunities in the surrounding area. These leases have producing wells that we will introduce a similar rework program as we have on the Chisholm lease. This along with potential new development and drilling programs could quickly duplicate our projected production," said William Robinson, President of CAVU Resources, Inc.

CAVU was formed with the goal of becoming a recognized regional player in the independent oil and natural gas industry by growing the company's oil and natural gas reserves. CAVU is a natural resource company engaged in the acquisition, exploration and development of oil and natural gas properties. The Company operates in the upstream segment of the oil and gas industry with planned activities including the drilling, completion and operation of oil and gas wells in Oklahoma, Kansas, Colorado, Montana and Texas. The Company also owns two pipelines in its area of operations, which will be used for gathering its gas and oil and the gas and oil production of other producers. The Company has acquired leases and is currently exploring additional opportunities in oil and gas leases. The company has acquired significant oil and gas equipment including rigs, trucks and completion equipment.

CAVU's 100% owned subsidiaries, CAVU Energy Services, LLC provides contract drilling, fracture stimulation and directional drilling services to oil, natural gas exploration and production companies. EnviroTek Fuel Systems, Inc., provides natural gas delivery and marketing thru its own pipelines and FILO quip Resources, LLC a licensed Oil and Gas Operating Company manages the company's properties and targeted leases in Oklahoma, Colorado and Montana.

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Petroamerica Confirms Significance of Balay-2 Well

Petroamerica Confirms Significance of Balay-2 Well

Monday, May 09, 2011
Petroamerica Oil Corp.

Petroamerica Oil Corp. is pleased to announce that the Balay-2 ST1 appraisal well flowed from two perforated intervals in the Upper Mirador, 2,620 barrels of 26 degree API oil per day with 9.3% bulk sediment and water ("BS&W") that is probably mainly completion fluid, under electro-submersible pump. The Balay-2 ST1 well also defined a deeper oil-down-to in the Upper Mirador reservoir. Additionally, 145 barrels of heavy oil (13 degree API, waiting on laboratory confirmation) and water (10-16% BS&W) was recovered from the Barco Formation. No hydrocarbons were recovered from tests carried out in the Une and Gacheta reservoirs.

Nelson Navarrete, President and CEO, commented on the Balay-2 ST1 drilling result, "this is significant in terms of proving up recoverable oil volumes in the Balay structure, and more importantly, moving the project one step closer towards a commercial development."

The Balay discovery was announced on March 11, 2010 and the Balay-1 discovery well has been on long-term production test since July 14, 2010, producing more than 285,000 barrels of 28 degree API oil from the Upper Mirador Formation, with no measurable water (0.22% BS&W). The forward plan is to put the Balay-2 ST1 well on long-term test together with the Balay-1 well. A third well, Balay-3, is planned for the fourth quarter 2011 to appraise the northern extent of the Balay discovery.

Petroamerica Oil Corp., through its wholly owned subsidiary, Petroamerica International Corp., holds a 15% participating interest in the Balay block for which it received its approval from the ANH (Colombian National Hydrocarbon Agency) earlier this year. Petrobras is the operator with a 45% participating interest and the other partners are CEPSA COLOMBIA S.A. and Sorgenia, each holding a 30% and 10% participating interest, respectively.

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Commodity Corner: Oil Edges Downward

Commodity Corner: Oil Edges Downward

Tuesday, April 26, 2011

Rigzone Staff

by Matthew V. Veazey

June crude oil fell slightly Tuesday as investors anticipated the outcome of the Federal Open Market Committee (FOMC) meeting, which concludes Wednesday.

Oil lost seven cents to end the day at $112.21 a barrel as the FOMC began its regular two-day meeting to decide on the Federal Reserve's monetary policy. Fed Chairman Ben Bernanke is expected to provide clues about any changes to existing policy Wednesday. The Fed's latest policy course has been to keep interest rates very low in an attempt to stimulate the economy. The policy has had the effect of weakening the U.S. dollar, which in turn has been bullish for oil.

Crude oil peaked at $112.64 and bottomed out at $111.12 Tuesday.

Gasoline for May delivery gained four cents Tuesday after a late-Monday power outage resulted in the temporary shut down of three Texas City, Texas, refineries. The BP, Valero, and Marathon refineries together can process 796,000 barrels of oil per day.

Gasoline futures settled at $3.36 a barrel Tuesday. U.S. gasoline inventories have trended downward over the past two months, prompting investors to pay particularly close attention to the Gulf Coast outages.

May gasoline traded within a range from $3.30 to $3.37 Tuesday.

Front-month natural gas ultimately remained flat at $4.39 per thousand cubic feet Tuesday after fluctuating from $4.34 to $4.41.

Statoil: Production Start Delayed at Njord Platform

Statoil: Production Start Delayed at Njord Platform

Tuesday, April 26, 2011
Statoil
by SubseaIQ

Production on the Njord platform was shut down on April 24 as a result of operational problems with gaskets in a gas export compressor. Later the same day, during work to resume production, a gas leak was discovered in one of the risers.

All production on Njord was immediately shut down and will remain shut down until the cause of the leak has been determined.

Production at the Njord field has been shut down since April 1 as a safety measure, while inspection of risers is carried out after earlier discoveries of internal damage to a particular type of flexible pipe.

The first instances of damage were discovered during a planned inspection last autumn, and an inspection program was initiated which is now being carried out. Riser inspection is also being carried out at the Visund field.

Risers are the pipes that convey oil and gas from the seabed to the installation, and consist of several layers of plastic and steel. Production at Njord and Visund is planned to be phased in again in due course as inspection of the risers confirms that they are in order, or after they have been repaired or replaced.

The Njord field resumed partial production on April 16, but was shut down again on April 24 when manual measurements during a work operation revealed a gas leak from one of the risers after an automatic shutdown. The well was contained when the leak occurred.

The riser in which the leak was discovered was quickly depressurised, and production and the other risers were shut down in a controlled manner.

The Norwegian Petroleum Safety Authority (PSA) has been informed of the incident.

Shutdown delays production from the field. The total field production for Njord is around 70,000 barrels of oil equivalents (oe).

Risers on all installations are subject to constant monitoring and routine inspections in accordance with applicable inspection programs.

Saudi Aramco plans $125 billion spending spree

Saudi Aramco plans $125 billion spending spree

Apr 26, 2011

Sangim Han

SEOUL // Saudi Aramco, the world's largest oil exporter, will spend about $125 billion (Dh459bn) on projects over the next five years as it seeks to increase refining capacity by 50 per cent, Chief Executive Officer Khalid al-Falih said.

The company wants to boost oil-processing capacity to 6 million barrels a day from the current 4m barrels, Mr al-Falih said in a speech in Seoul today. Aramco is building two plants in the kingdom and is considering a further four "grassroots" facilities, he said. That includes one refinery at Jaizan in Saudi Arabia and possible joint-venture projects in China, Vietnam and Indonesia, he said.

"Saudi Aramco isn't just about petroleum production," he said. "We are also one of the world's largest producers of natural gas, a major player in refining, and we are ramping up our petrochemical activities."

Aramco's domestic and international spending plans include oil exploration and production as well as natural gas, refining and petrochemical facilities, he said. Saudi Arabia plans capital expenditure of more than $450bn in the same period, according to Mr al-Falih.

All 12 members of the Organisation of Petroleum Exporting Countries including Saudi Arabia will need to provide a daily average of 29.8m barrels a day this year to satisfy global requirements, or about 600,000 a day more than they pumped in March, the International Energy Agency said April 12.

Aramco built the world's largest natural gas network about 30 years ago, and doubled its processing capacity.

The company plans to expand the network to exceed 14bn standard-cubic-feet per day of capacity in the next five years when the network will encompass seven world-scale gas plants.

For the expansion, the company continues to make natural gas discoveries in places including the Gulf, while beginning exploration in areas such as the Red Sea and the north-west region of the kingdom.

These activities are adding to the company's reserves of 275 trillion cubic feet, the world's fifth-largest proven holdings of gas, in addition to the world's biggest reserves of conventional crude oil, he estimated.

The company is also expanding its petrochemical capabilities in the kingdom, through a petrochemical project in Jubail with Dow Chemical and a planned expansion of Rabigh Refining & Petrochemicals, its joint venture with Sumitomo Chemical.

Mr Al-Falih said South Korea is now among Saudi Arabia's four largest trading partners.

The country accounts for about a fifth of Saudi Arabia's total petroleum exports, and Aramco supplies 30 per cent of South Korea's crude imports.

Aramco is holding its board meeting for the first time in South Korea this week, Mr al-Falih said.

"The Far East is the destination for two out of every three barrels of crude oil" that Aramco exports, he said.

Aramco owns 35 per cent of S-Oil, South Korea's third- largest refiner that's expanding its processing capacity in Ulsan to more than 650,000 barrels a day.

Export Import Bank of Korea and Korea Trade Insurance each signed a memorandum of understanding with Aramco on possible future project financing, according to the website of the oil and gas producer.

Beach Briefs Interruption at Tantanna Pipeline

Beach Briefs Interruption at Tantanna Pipeline

Tuesday, April 19, 2011
Beach Energy Ltd.

Beach has been informed by Santos that the pipeline between the Tantanna facility and the Gidgealpa facility has been interrupted due to integrity concerns and is currently being assessed.

The pipeline operated by Beach that feeds the Tantanna facility and transports all the crude oil from the PEL 92 Western Flank oil fields (Beach 75% and Operator, Cooper Energy 25%), remains fully operational. The current capacity of the Beach operated pipeline is approximately 6,000 barrels of oil per day (4,500 barrels of oil per day net to Beach).

Beach is considering all its options at this stage and has started to mobilize trucks to transport the oil from Tantanna to Moomba in the interim. Success to date at Parsons-3, Parsons-4 and Butlers-2 in PEL 92, underpins the Western Flank drilling campaign that is targeting a net increase in reserves to Beach of 6 million barrels of oil.

Heritage Highlights 2010 Activities

Heritage Highlights 2010 Activities

Tuesday, April 19, 2011
Heritage Oil plc

Heritage Oil announced its results for the twelve months ended December 31, 2010. All figures are in US dollars unless otherwise stated.

• 2010 Operational Highlights
  • Discovered the largest gas field in Iraq in the last 30 years
  • Highly productive Jurassic reservoir intervals tested in the Miran West-2 well at a restricted cumulative flow rate of over 75 million cubic feet per day ("MMscfd")
  • Estimated gross P90-P50 in-place volumes of 6.8-9.1 Trillion Cubic Feet ("TCF"), with a P10 upside of 12.3 TCF for Miran West
  • Management estimates Heritage has mean net risked contingent and prospective resources in Miran West and Miran East of 744 million barrels of oil equivalent ("MMboe"), based on a 75% working interest
  • Miran development options being considered with first export production targeted for 2015 using planned regional infrastructure
  • Achieved nearly a twelvefold increase in contingent resources from 53 MMbbls to 605 MMboe following the successful testing of hydrocarbons
  • Completed 3D seismic acquisition offshore Tanzania; data currently being processed
  • Further development work in Russia, production increased 65% in 2010
• 2010 Financial Highlights
  • Completed the disposal of interests in Block 3A and Block 1, Uganda, (the "Ugandan Assets") for which Tullow Uganda Limited ("Tullow") paid a cash consideration of $1.45 billion, including $100 million for a contractual settlement, and Heritage received and retained $1.045 billion
  • Cash at year end of $598 million
  • Special dividend of 100 pence per share paid in August 2010
• Outlook
  • Rig contract to drill Miran West-3 well signed in April, well scheduled to spud July 2011
  • Exploration drilling to commence on Miran East in Q4 2011
  • 3D seismic data being processed for Tanzania with a view to establishing a drilling location
  • Mali 2D seismic data currently being acquired with a well expected to be drilled in early 2012
  • Malta 2D seismic data to be acquired during summer 2011
  • Well in Pakistan planned for H2 2011
  • Development options being reviewed for Kurdistan which include a phased development for oil, condensate and gas
  • First horizontal well to be drilled in Q2, 2011, in the Zapadno Chumpasskoye Field, Russia, which should help to provide a material increase in production

Tony Buckingham, Chief Executive Officer, commented, "The sale of the Ugandan Assets in 2010 has provided Heritage with a strong balance sheet for activities within the current portfolio and the ability to appraise further opportunities to generate value for shareholders. We remain active across the portfolio with seismic programs and drilling planned for 2011, including a multi-well exploration and appraisal drilling program in Kurdistan commencing in July. In addition, we are progressing with discussions with the Kurdistan Regional Government for the fast-track development of the Miran Field."