API Disappointed by DOE Fracking Committee Recommendations

- API Disappointed by DOE Fracking Committee Recommendations

Friday, August 12, 2011
API

API President and CEO Jack Gerard welcomed the shale gas subcommittee's acknowledgement of the economic and energy security benefits of natural gas development, but said the specific recommendations were disappointing and confusing.

"The committee's recommendations are deficient in large part because the committee failed to adequately acknowledge existing programs and rules. It called for new air emission standards when comprehensive EPA rules already are in place or are being revised. It recommended reduction in use of diesel engines, oblivious or dismissive of the practical and economic considerations that require their use. And it ignored consideration of the potential benefits and costs of new rules, an omission that could cause harm to consumers, jobs and the economy. The shortcomings may in part be due to the fact that none of its members are from the industry or have direct experience in natural gas drilling and hydraulic fracturing operations.

"The industry is committed to appropriate environmental protections and industry best practices, but is concerned that the subcommittee's recommendations could end up frustrating the many benefits that will come from further development of America's vast supply of natural gas, including the creation of hundreds of thousands of new jobs and increasing our nation's energy security. We urge the committee to revise its recommendations to better reflect the facts on hydraulic fracturing, the extensive regulations under which the industry operates, and the industry's new best practices."

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Kea Disappointed by AU Drilling Results

- Kea Disappointed by AU Drilling Results

Monday, July 11, 2011
Kea Petroleum plc

Kea Petroleum expects to terminate the initial flow test program on Wingrove-2 in the coming week.

Several intervals of thin sands within the Upper Miocene Urenui Formation at depths of 1100 to 1300 m were simultaneously tested, and flowed oil and gas at low rates, together with considerable amounts of water It is considered that economically viable oil flow rates will not be achieved in this well.

The Mount Messenger Sands, typically several hundred meters deeper than the Urenui Sands, were not flow tested, as earlier log analysis had indicated they are water bearing in Wingrove-2. However, these remain as prime exploration targets in this area, as they are typically thicker and better reservoir quality. They will be the target of further drilling later this year.

Surat Basin, Australia

The Hoadleys-1 exploration well has been terminated at a depth of 2149m, after intersecting the target Precipice Sands, which were water bearing with no oil shows. The well is now being cased and suspended, in order that consideration can be given to drilling the deeper South Cabawin target with a heavier duty rig at a future date. A rig is presently being assessed for the drilling of Nangwarry-1 in the Otway Basin in South Australia, and may be suitable for South Cabawin also.

South Cabawin is defined on 3D seismic as a similar structure to the Cabawin Field, 20 km north along trend where the discovery well averaged 120 barrels of oil and one million cubic feet of gas per day in a 22 day flow test. The present rig is not considered capable of drilling to beyond 3000m to test the Permian coal measures in which the Cabawin discovery was made. Another rig is presently being assessed for this drilling operation.

David Bennet, Chief Executive, said, "It is disappointing that the secondary target Urenui Sands in Wingrove-2 have not produced oil at economically viable rates in this test. The primary target of Mt Messenger sands are proving to be very commercial oil producers elsewhere in this same basin; and our forward drilling program will be targeting Mt Messenger sands on our other prospects.

"Hoadleys was a relatively inexpensive exploration well with all the incumbent risks associated therein. The deeper South Cabawin target remains an attractive target yet to be drilled."

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Penn Virginia Disappointed by Initial Marcellus Production Rates

- Penn Virginia Disappointed by Initial Marcellus Production Rates

Tuesday, June 28, 2011
Penn Virginia Corp.

Penn Virginia updated its activities in the Marcellus Shale.

Peak 24-hour production rates from our first three Marcellus horizontal wells, the Risser #A-1H, Risser #A-2H and Dunn #A-1H, were approximately 3.1, 2.8 and 4.0 million cubic feet (MMcf) per day, with an average rate over a 72-hour test period of 2.1, 1.7 and 2.7 MMcf per day, respectively. These three test wells are located in the central portion of our approximately 35,000 net acre position in Potter and Tioga Counties, Pennsylvania. Pipeline construction is in progress with sales expected to begin by early August. One additional well in the western portion of our acreage is currently waiting on completion. During the second half of 2011, we plan to test, initially with vertical wells, the eastern portion of our acreage, comprised of approximately 20,000 net acres.

H. Baird Whitehead, President and Chief Executive Officer, stated, "The Marcellus Shale test wells had initial production rates which fell short of our expectations. We will monitor longer term production once these wells are turned into the pipeline and determine if the reserves can support a development program in this immediate area. As important, we will begin testing our eastern acreage position during the second half of the year."

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Sterling Disappointed with Sangaw North Results

- Sterling Disappointed with Sangaw North Results

Monday, June 13, 2011
Sterling Energy plc

Sterling provided the following update for the Sterling operated Sangaw North block in Kurdistan (53.33% working interest).

A flow test has been completed across the open hole section of the Sangaw North-1 well between 3,338 meters and 4,190 meters. This interval contains target horizons in the Jurassic Mus and Butmah formations and the Triassic Kurra Chine formation.

The well flowed at a stabilized rate of approximately 4.6 million standard cubic feet of gas and 7,280 barrels of formation water per day during a 12 hour flow period through a 1.5 inch choke with a wellhead pressure of 470 pounds per square inch.

Approximately 74 percent of the produced gas was hydrocarbon gas with the remainder comprising 24 percent hydrogen sulphide and 2 percent carbon dioxide.

A wireline logging operation was attempted to identify the contribution from individual zones within the open hole section but was unsuccessful due to mechanical restrictions within the flow testing equipment.

No further flow testing is planned in the open hole section of the well and this section is being isolated with cement plugs.

The joint venture partnership has elected, based on gas shows while drilling, to conduct two cased hole flow tests; the first across a 100 meter interval within the Jurassic aged Sargelu formation and the second across a 100 meter interval within the Cretaceous aged Kometan formation. Each flow test, including preparatory operations, is expected to take approximately three weeks to complete.

Angus MacAskill, Sterling's Chief Executive said, "We are disappointed that the open hole flow test has not demonstrated commercial hydrocarbon flow rates within the deeper horizons of the Sangaw North-1 well. The data acquired during this test will be integrated with all the other data acquired in well operations to determine the potential of these horizons. We look forward to the outcome of the two cased hole flow tests to be conducted in shallower formations."

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O&G UK Disappointed after UK Tax Talks

O&G UK Disappointed after UK Tax Talks

Tuesday, April 19, 2011
Dow Jones Newswires
by Alexis Flynn

The group representing major U.K. oil and gas producers said Thursday it was disappointed following talks with Chancellor of the Exchequer George Osborne on the impact a large tax increase on North Sea production would have on the industry.

Oil & Gas UK Chief Executive Malcolm Webb said, "Notwithstanding the Chancellor's requirement to raise money, [we] explained why both the unexpected nature and the scale of the increase to between 62% and 81% tax has damaged investor confidence and will hamper investment, maximum recovery of the U.K.'s oil and gas and job creation. Disappointingly, the Chancellor has a different view."

However, Webb said the Treasury requested further talks on how a mooted price floor mechanism, which would see the tax lowered in the event that prices dropped substantially, would work in practice. He said that it also wanted to discuss new and further field allowances, as well as continued dialogue on issues around decommissioning, to be concluded by Budget 2012.

A Treasury spokesperson told Dow Jones Newswires, "Today's meeting was constructive and while the Chancellor was clear that there would be no change in policy, he agreed to work closely with industry on the three areas for discussion set out in the Budget; setting the trigger price, stability in decommissioning and field allowances to support further investment."

Rosneft Ready to Defend its BP Deal

Rosneft Ready to Defend its BP Deal

Friday, March 25, 2011
by  William Mauldin

Dow Jones Newswires

 

Rosneft Chairman Igor Sechin said the company is ready to defend its $16 billion tie-up with BP, after an arbitration tribunal extended a ban on the deal following complaints from BP's existing Russian partners, Russian newswires reported Friday.

State-controlled Rosneft is already suffering losses because the panel extended an injunction blocking the deal at the behest of BP's partner in TNK-BP, Sechin said, according to an Interfax report.

Sechin, who is also Russia's powerful deputy prime minister overseeing energy, said the final arbitration ruling will come out of Stockholm only on April 7. Rosneft is "not in negotiations" with AAR, BP's partner in TNK-BP, nor has it received proposal from AAR, Sechin said, according to the reports.

BP said late Thursday that the arbitration tribunal ruled that a temporary court injunction against BP's deal with Rosneft "should continue." In a statement, BP said it was "disappointed" that the agreements "cannot for now go ahead in the form intended."

Besides BP and Rosneft, the panel's ruling is seen as a setback for Sechin, who has sought to attract billions of dollars of foreign investment into Russia's oil sector.

Shares of Rosneft sank 1.2% to RUB266.10 on the Micex Stock Exchange at 1220 GMT, compared with only a slight decline for the broader index.