Petroceltic's AT-5 Well Falls Short of Expectations

- Petroceltic's AT-5 Well Falls Short of Expectations

Tuesday, August 02, 2011
Petroceltic International Inc.

Petroceltic in association with its partner Sonatrach issued an update on operations at the Ain Tsila field on its Isarene permit (Blocks 228 & 229a) in south eastern Algeria.

• AT-5 tests gas at a maximum flow rate of 3.50mmscfd
• AT-7 and AT-8 wells spudded
• AT-9 well approved for drilling
• Delineation program on schedule for year end completion

AT-5 Well Test

The AT-5 well was drilled with a 376m of horizontal section through a "pop-up" feature in the Ordovician reservoir at a location about 4km to the east of the AT-1 discovery well. A multistage open hole packer completion with four zone isolation ports was successfully run before the well was suspended for rigless testing. All four zones were then fracture stimulated ("fracked") and a maximum flow rate of 3.50mmscf/d on a 64/64" choke with 60 bbl/d of condensate and 190 bbl/d of water was achieved. While the flow rate is lower than pre-test expectations, this is the third of four wells tested in the Ain Tsila discovery to flow at rates that are likely to be deemed commercial.

Upon completion of the operations at the AT-5 site, the rigless testing unit will be mobilized to the AT-6 location to commence testing operations there. The testing program at AT-6 is expected to be completed in the first half of September.

Appraisal Drilling Update

Well AT-7, which is being drilled by the Dalma rig and is located in the south west of the field outside the 3D seismic survey approximately 10km south of the AT-3 well, commenced drilling on 26th July. It is designed as a vertical well to test the south westerly extension of the field and will be the 4th well in the current campaign.

Well AT-8 which is being drilled by the KCA Deutag rig started drilling on 19th July. This well is being drilled as a vertical well into a "pop-up" feature in the north of the field. The objective of the well is to further delineate the northern part of the field and test a potential fracture zone associated with a seismically mapped fault which may facilitate enhanced productivity rates. It will be the 5th well in the current campaign.

The Algerian Authorities have also recently approved the drilling of the 6th well, AT-9. This well will be the second well with the KCA Deutag rig following completion of drilling operations at AT-8. It is located in the center of the field between wells AT-1 and AT-2 and will be drilled as a horizontal well designed to test a structurally different style of "pop-up" with seismically interpreted fractures and faults.

With the addition of the second rig, the current six well delineation program will be completed by year end to allow for the preparation of the Final Discovery Report for submittal to the Algerian authorities by the end of Q1 2012.

Petroceltic operates the permit with a 56.625 % interest, Sonatrach holds a 25% interest, and Enel holds 18.375% interest, pending final Government of Algeria ratification.

Brian O'Cathain, Chief Executive of Petroceltic commented, "While we are disappointed that the AT-5 flow rates did not meet our pre-test expectations, the well has achieved a commercial flow and provided important operational data in respect of the future design, drilling and testing of appraisal and development wells in the AinTsila Field. This is the third of the four wells tested to date to flow commercial rates of gas and further demonstrates the extent and scale of the discovery.

"Operational activity is now at a peak with two rigs and a rigless testing unit currently active in the field and we await with interest the results of the remaining wells in this current campaign."

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BP Shares Drop after Earnings Miss Expectations

- BP Shares Drop after Earnings Miss Expectations

Tuesday, July 26, 2011
Dow Jones Newswires
LONDON
by Alexis Flynn

BP faced fresh scrutiny from investors Tuesday after quarterly earnings beat last year's level but came in below expectations following a big drop in oil and gas production.

BP posted a 12% rise in adjusted profit for the second quarter as it benefited from higher crude prices and better refining margins. But oil and gas production fell a whopping 11% compared with the 2010 quarter due in part to anemic output in the Gulf of Mexico and unexpected maintenance in the North Sea and Angola.

BP shares were down 11 pence to 464p at 803 GMT, the biggest drop Tuesday morning in the FTSE 100. Analysts also had pointed questions on the slow resumption of BP activities in the Gulf of Mexico, its growth strategy after the demise of a major proposed deal in Russia and the effectiveness of much-touted safety upgrades following a recent fire in the North Sea that has further crimped output.

The U.K.-based energy giant said its clean replacement cost of supplies, a keenly-watched figure that strips out gains or losses from inventories and other non-operating items, for the three months ended June 30 totaled $5.60 billion, compared with $4.98 billion for the second quarter of 2010.

This was below expectations of $6.04 billion in a Dow Jones Newswires poll of 11 analysts. BP said this was due to the loss of production from high-margin areas, such as Angola and the North Sea.

BP Chief Executive Robert Dudley said the company is "making rapid progress" and that the results are in line with expectations that 2011 would be a "year of consolidation" after the travails of recent years.

Total oil and gas production was 3.43 million barrels a day, a decline of almost 11% on the year. BP said that after adjusting for acquisitions and divestitures and entitlement impacts from production agreements, the output decrease was 7% compared with the same period of 2010.

"BP appears to be running a business as usual strategy and we are not convinced that the market will put up with this for much longer," said analyst Dougie Youngson from Arbuthnot Securities. "BP has been significantly under-performing the peer group for some time and this looks set to continue."

Royal Bank of Canada analyst Peter Hutton said investors are anxious about BP's difficulty controlling costs compared with peer companies. A complicating factor is the slow progress in resuming operations in the U.S. Gulf, Hutton added. "Other operators are getting things through and BP has a sum total of zero approvals," Hutton said. "When you rank BP against the others, it is quite stark."

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

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Buccaneer's Kenai Loop Reserves Exceed Expectations

- Buccaneer's Kenai Loop Reserves Exceed Expectations

Wednesday, July 20, 2011
Buccaneer Energy Ltd.

Buccaneer announced an initial Proven and Probable Reserve of 38.3 BCF (4.8 MMBOE) at 100% owned Kenai Loop. These booked Reserves substantially exceed the Company's pre drill assessment of approximately 5.0 – 10.0 BCF.

Ralph E. Davis completed an independent reserve assessment of the Kenai Loop project. Ralph E. Davis is a respected consulting firm providing independent reservoir engineering, geological, technical and financial services to the domestic and international energy industry since 1924.

	Proven (1P)	Proven & Probable (2P)	Proven & Probable & Possible (3P)
Gas - BCF	31.5	38.3	51.6
Oil Equivalent- MMBOE	3.9	4.8	6.5

The above Reserves were calculated using subsurface mapping, pressure and flow rates data attained from KL #1 well. The current Reserves include only two sand packages at 9,700 feet and 10,000 feet. An average drainage area of 340 acres was used to calculate the Reserves and the Company expects that a second well will be required to drain the entire 340 acres. The Company's mapping indicates the two sand packages have a total closure area of 1,600-2,000 acres.

The Proven Reserves have a Future Net Income of US $127.9 million and a Net Present Value (NPV) of US $73.6 million. Assumptions used in the NPV calculation include:

• Two wells producing at 5.0 mmcfd;
• A gas price of US $5.71 / mcf;
• A pipeline tariff of $0.21 / mcf;
• Operating Costs of US $15,000 per month; and
• A discount rate of 10%.

The KL # 1 well was drilled to a depth of 10,680 feet and intersected 26 separate gas zones totaling 645 feet of gross pay. The Company elected to perforate and test only the 9,700 and 10,000 feet sands (which totaled 87 feet of gross pay) due to rig availability constraints. The remaining 24 zones totaling 558 feet of gross pay are yet to be tested and do not form part of the Reserves assessment.

Kenai Loop is 100% owned by Buccaneer with total acreage under lease of 8,988 acres.

Near Term Work Plan

The Company expects to spud the second well at Kenai Loop this quarter. The second well will be drilled from the same location as KL # 1 and will have two primary objectives:

• a step out well to test and possibly extend the known aerial extent of both the 9,700 and 10,000 feet sands. If successful this will effect an increase in the current Proven and Probable Reserves; and
• to test the sands below 10,000 feet and specifically those at approximately 10,600 feet intersected in KL # 1. These sands appear similar to the 9,700 and 10,000 sands. If this or other objectives are successful then it is expected Proven and Probable Reserves will be increased.

Further details on the commencement date of this well will be made once rig contracts have been executed.

Commentary

Director of Buccaneer Energy, Dean Gallegos said, "This is a very significant result. We expect that further drilling at Kenai Loop will yield additional increases to booked Reserves. These increases would be based on both the current two pay zones and zones below10,000 feet.

"Clearly, there is substantial upside from the remaining 24 zones (totaling 558 feet of gross pay), which are yet to be tested.”

"As part of the Buccaneer's 3 prong strategy, the Company has planned an aggressively drilling program for the development of the Kenai Loop field and expects to drill additional wells in the next 12 months.

"We anticipate placing the Kenai Loop field into production by the end of 2011."

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Commodity Corner: QE3 Expectations Boost Oil

- Commodity Corner: QE3 Expectations Boost Oil

Friday, July 15, 2011
Rigzone Staff
by Matthew V. Veazey

Light sweet crude oil for August delivery rallied Friday on expectations that a third attempt by the Federal Reserve to stimulate the economy would be bullish for commodities.

After reaching $97.74 and bottoming out at $95.21, the WTI gained $1.55 for the day to settle at $97.24 a barrel. The September Brent contract traded within a range from $115.25 to $117.65 before ending the day at $117.26, representing a $1.00 gain from Thursday. The August Brent contract, which expired Thursday, had settled at $118.32.

Testifying before a congressional panel this week, Fed Chairman Ben Bernanke roused markets Wednesday by suggesting that the Federal Reserve may launch a third round of quantitative easing. The "QE3" strategy would aim to improve liquidity in the U.S. economy by printing more money to buy Treasury bonds, encouraging banks to pursue riskier investments by boosting lending to businesses and consumers. Because more money would be available to banks, the value of the U.S. dollar against other currencies would diminish. Hence crude oil would be a better buy for investors using currencies other than the greenback.

On Thursday, the dollar gained strength and oil futures plunged after Bernanke stressed that the Fed had no immediate plans to set QE3 in motion. Investors on Friday, however, appeared to assume that such a policy decision would eventually be implemented.

With temperatures expected to approach or perhaps exceed the triple digits from the Upper Midwest to the East Coast, demand for electricity to power air conditioners and fans is set to be high well into next week. As a result, August natural gas surged well over four percent before ending the day at $4.55 per thousand cubic feet.

The front-month contract price for gas traded from $4.38 to $4.56 Friday.

Gasoline for August delivery edged upward by one cent to settle at $3.13 a gallon. The intraday high and low prices for gasoline were $3.15 and $3.10, respectively.

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Rosneft Net Profit Up 58% at $3.94B, Beats Expectations

Rosneft Net Profit Up 58% at $3.94B, Beats Expectations

Friday, April 29, 2011
Dow Jones Newswires
by Jacob Gronholt-Pedersen

Rosneft said first-quarter net profit rose 58% from last year on higher oil prices and crude output as well as tax breaks on its Vankor field.

London-listed Rosneft said net profit under U.S. Generally Accepted Accounting Principles rose to $3.94 billion from $2.49 billion in the first quarter of 2010, above a forecast of $3.72 billion in a Dow Jones Newswires survey of eight analysts.

Revenue increased 36% to $20.12 billion from $14.76 billion a year earlier, boosted by a surge in global crude prices as well as higher output, helped by a ramp-up of production at the huge East Siberian Vankor field. Analysts had expected revenue of $20.3 billion.

Earnings before interest, taxes, depreciation and amortization, or Ebitda, rose 50% to $6.65 billion from $4.44 billion and were above analysts' expectation of $6.42 billion.

Rosneft said it produced 2.564 million barrels of oil equivalent per day during the quarter, and lowered net debt by 19% in the three months to $11.1 billion.

Beach Discovers Oil at Butlers Well

Beach Discovers Oil at Butlers Well

Wednesday, April 13, 2011
Beach Energy Ltd.

Beach had its third success from as many wells in its 16 well operated program in the Western Flank of the Cooper Basin with the Butlers-2 well encountering a five meter oil column. The Butlers-2 well is located 950 meters NE of the Butlers-1 discovery well.

The Butlers-2 oil column was encountered in the Namur Sandstone reservoir and was consistent with pre-drill expectations. The large step-out will result in an upgrade of recoverable oil reserves from the Butlers Field of approximately 1.5 million barrels (gross), subject to remapping and a detailed review of the well data. Beach will announce a firmer reserve assessment as appropriate data becomes available.

Butlers-2 is is expected to be on-line around mid-July after completion of the new Butlers oil facility. Oil from the Butlers Field is transported from the Western Flank by flowline to Moomba. The success at Butlers-2 is likely to lead to additional development drilling in the Butlers Field. The Ensign#30 rig will now be moved to the Butlers-3 development well location which is located about 320 meters to the NW of Butlers-1.

Participants in PEL 92 are:

* Beach 75% (Operator)
* Cooper Energy Limited 25%

Cooper Confirms Oil Column at Parsons Well

Cooper Confirms Oil Column at Parsons Well

Friday, April 01, 2011

Cooper Energy

Cooper announced that Parsons-4, the second well in the 2011 PEL92 area drilling campaign, was drilled to a total depth of 1,413 meters and wireline logs have confirmed that it has intersected a 5.5 meter oil column in excellent quality Namur sandstone, which is in line with pre-drill expectations.

Preparations are currently underway to case and suspend the well. The well will be tied-back to the Parsons production facilities at a later date and will provide an additional drainage point for the Namur oil reservoir to the south of the Parsons-1 discovery well.

The impact on production rates and reserves will be assessed once the full results of the current Parsons appraisal/development drilling program have been evaluated and production rates from the new development wells have been established.

The next well in the eleven well drilling program is Butlers-2, an appraisal/development well located about 1 km to the northeast of the Butlers-1 discovery well. The details pertaining to Butlers-2 will be announced when the well spuds.