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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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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Legacy Reserves Enters Equity Distribution Agreement for Up to $60 Million In Units

- Legacy Reserves Enters Equity Distribution Agreement for Up to $60 Million In Units



Aug 25, 2011

Legacy Reserves (NASDAQ:LGCY) entered into an Equity Distribution Agreement with Knight Capital Americas. Pursuant to the terms of the Agreement, the Partnership may sell from time to time through Knight, as the Partnership's sales agent, the Partnership's common units representing limited partner interests having an aggregate offering of up to $60 million.

Sales of the units, if any, will be made by means of ordinary brokers' transactions on the Nasdaq Global Select Market at market prices, in block transactions or as otherwise agreed by the Partnership and Knight.

Legacy Reserves (NASDAQ:LGCY) has a potential upside of 27.5% based on a current price of $26.68 and an average consensus analyst price target of $34.

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Exxon Mobil Estimates Oil spill in Yellowstone River will Cost Over $42 Million

- Exxon Mobil Estimates Oil spill in Yellowstone River will Cost Over $42 Million



Aug 22, 2011

Exxon Mobil (NYSE:XOM) Pipeline told federal regulators that its oil pipeline spill into Montana's Yellowstone River will cost an estimated $42.6 million.

The July 1 pipeline break near Laurel spilled about 42,000 gallons, or 1,000 barrels, of crude oil into the scenic waterway.

Exxon Mobil's cost estimate includes $40 million for emergency response work and $2.5 million for damage to public and private property. The company valued the lost oil at $100,000.

The company announced last week that the clean up might continue for several more months.

Exxon Mobil (NYSE:XOM) has a potential upside of 30.6% based on a current price of $70.78 and an average consensus analyst price target of $92.46.

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Honda To Invest $800 Million In New Automobile Plant In Mexico

- Honda To Invest $800 Million In New Automobile Plant In Mexico



Aug 12, 2011

Honda de Mexico (NYSE:HMC), Honda's production and sales company in Mexico, announced that it will build an automobile plant for production of fuel-efficient subcompact vehicles for the Mexican and North American markets.

Honda will invest approximately $800 million to build the plant, which is scheduled to begin operation in 2014. The company is expected to hire 3,200 associates at its full annual capacity of 200,000 units; the plant will boost Honda's capital investment in its North American operations to nearly $21 billion.

Honda Motor (NYSE:HMC) has a potential upside of 37.5% based on a current price of $33.59 and an average consensus analyst price target of $46.2.

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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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Endeavour to Offer Up to $110 Million in Notes

- Endeavour to Offer Up to $110 Million in Notes

Monday, July 18, 2011
Endeavour International Corporation

Endeavour International Corporation today announced that it intends to offer, subject to market and other conditions, up to $110 million aggregate principal amount of its convertible senior notes due 2016 in a private placement to eligible purchasers. Endeavour also intends to grant to the initial purchasers of the notes an option to purchase up to an additional $15 million of notes to cover over-allotments, if any.

Endeavour intends to use substantially all of the net proceeds of this offering to fund its pending acquisition of acreage and related midstream assets in the Marcellus shale play. The remainder, if any, will be used for general corporate purposes, including funding a portion of Endeavour's 2011 capital program.

This press release is neither an offer to sell nor the solicitation of an offer to buy the notes or any other securities. The notes will be offered in the United States only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933 (the "Securities Act"). The notes have not been registered under the Securities Act and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements. This announcement is being issued pursuant to Rule 135c under the Securities Act and shall not constitute an offer to sell or the solicitation of an offer to buy any securities.

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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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Alaska To Offer Nearly 15 Million Acres for Oil, Gas Drilling Leases

- Alaska To Offer Nearly 15 Million Acres for Oil, Gas Drilling Leases

Thursday, June 30, 2011
Dow Jones Newswires
WASHINGTON
by Tennille Tracy

The state of Alaska plans to offer nearly 15 million acres of state-owned land and waters for oil-drilling leases, saying the areas contain billions of barrels of oil.

The lease sale will be held Oct. 26, 2011, the state said Thursday.

The sale will involve 2 million acres in the Beaufort Sea, 5.1 million acres on the North Slope and 7.6 million acres in the North Slope foothills.

Roughly 3 billion to 6 billion barrels of undiscovered oil exists in the state- and Alaska Native-owned lands between the National Petroleum Reserve and Arctic National Wildlife Refuge, the state said.

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

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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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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."

Commodity Corner: Crude Tumbles on S&P Debt Outlook

Commodity Corner: Crude Tumbles on S&P Debt Outlook

Monday, April 18, 2011

Rigzone Staff

by Saaniya Bangee

Front-month crude futures plummeted Monday after Standard & Poor (S&P) changed its outlook for U.S. debt from stable to negative. The shift in outlook has increased concerns of the U.S. economy's stability and cuts in government spending.

Oil prices fell by $2.54 Monday, settling at $107.12 a barrel on the New York Mercantile Exchange (NYMEX). Prices fluctuated between $106.54 and $109.44. The S&P move came on the possibility that policymakers may not reach an agreement on how to address long-term fiscal pressures.

Over the weekend, China's central bank announced it would increase bank reserve requirements. In its fourth attempt this year, China hopes to control inflation and curb energy demand. Following the U.S., China is the world's second largest energy consumer.

Additionally, Saudi Arabia's Oil Minister Ali al-Naimi said Sunday that the kingdom has reduced oil production by 800,000 barrels due to lack of demand. Crude output was 8.3 million barrels a day last month, compared to February's 9.1 million barrels a day. Naimi anticipates an increase in April production.

On Monday, the greenback rose against the euro and other currencies further pressuring prices. The euro fell on concerns that Greece will have to restructure its debt. A stronger dollar makes oil more expensive, less attractive to foreign buyers.

May natural gas prices fell for a second day Monday, settling nearly seven cents lower at $4.14 per thousand cubic feet. Analysts do not foresee any near-term pressure increasing prices due to near-average storage and below-average prices. The intraday range for natural gas was $4.087 to $4.27 per thousand cubic feet.

Likewise, gasoline futures fell 1.1 percent, peaking at $3.29 before bottoming out at $3.23. Gasoline priced ended Monday's trading session at $3.25 a gallon.

Lukoil Buys 25.1% Stake in Trebs, Titov Project

Lukoil Buys 25.1% Stake in Trebs, Titov Project

Friday, April 15, 2011
Dow Jones Newswires
by Jacob Gronholt-Pederson

Lukoil has agreed to buy a 25.1% stake in the Trebs and Titov exploration project in northwest Russia from mid-sized oil company Bashneft.

Lukoil paid RUB4.7 billion ($166.7 million) for the stake in the project, which needs investment of $6 billion, Lukoil's Chief Executive Vagit Alekperov said.

Lukoil expects first oil from Trebs and Titov in the fourth quarter 2013 or the first quarter 2014, he said.

Bashneft, which is majority-owned by conglomerate AFK Sistema, last year won the right to develop the Trebs and Titov oil fields ahead of bigger rivals such as Lukoil and TNK-BP Ltd.

Last year's auction for the Trebs and Titov fields, which combined hold 1.5 billion barrels of oil, was mired in controversy after bidders were told by authorities they couldn't bid because of incorrectly-filed applications.

Commodity Corner: Crude Advances on A Weaker Dollar

Commodity Corner: Crude Advances on A Weaker Dollar

Thursday, April 14, 2011
Rigzone Staff
by Saaniya Bangee

Front-month crude futures gained a dollar Thursday after reversing earlier losses on a weaker greenback. Light sweet crude settled at $108.11 a barrel, up 0.9 percent.

Prior to the dollar's decline, the oil futures price fell to $105.77 during floor trading. The dollar fell against the euro on the U.S. Government's hovering budget battle and reports indicating an increase in jobless claims last week. According to the Department of Labor, applications for initial unemployment benefits soared to their highest level in two months. The Thursday report showed that 412,000 people had applied for claims, reflecting an increase of 27,000 from the previous week.

A weaker dollar increases the appeal of commodities, making it cheaper to purchase with other currencies. The dollar index, which compares the greenback to a basket of foreign currencies, also traded lower at 74.698 Thursday.

Meanwhile, political turmoil continues in the Middle East. Analysts believe Libya's structural problems will not be resolved in the near future but will continue to halt the country's previous exports of 1.5 million barrels a day.

Government reports of an increase in U.S. stockpiles pressured natural gas prices to rise by more than 2 percent Thursday. Prices settled at $4.212 per thousand cubic feet.

The Energy Information Administration (EIA) reported that U.S. gas inventories increased by 28 billion cubic feet last week. As of April 8, stockpiles were 0.6 percent above the five-year average at 1.607 trillion cubic feet.

The intraday range for natural gas was $4.06 to $4.26 per thousand cubic feet.

Gasoline prices lost 0.2 percent, settling at $3.23 a gallon. Thursday's gasoline futures peaked at $3.268, before bottoming out at $3.21.

Statoil Strikes Oil Offshore Brazil

Statoil Strikes Oil Offshore Brazil

Thursday, April 14, 2011
Statoil

A new oil find has been made by Statoil immediately adjacent the Peregrino field in the Campos Basin offshore Brazil.

An exploration well drilled in the Peregrino South structure a few kilometers south of Peregrino has encountered oil in sandstones of the Carapebus geological formation.

A significant gross oil column of 130 meters has been proven in the well and further work will be performed to confirm the volumes.

The drilling operation is still ongoing to penetrate deeper reservoir units and explore additional upside potential below the main reservoir unit.
Significant upside

"The results confirm the significant potential in the Peregrino area and underline the beliefs we have had in the upside,” said Tim Dodson, executive vice president for Exploration in Statoil.

"The well verifies the upside potential and will together with the Peregrino Southwest discovery from 2007 play an important role in further development of the Peregrino area."

"The results will indeed be implemented into our plans for further development of the field," said Kjetil Hove, head of Statoil's Brazil activities and vice president in the company's Development and Production International business area.

Following the completion of the Peregrino South well, one additional appraisal well in the Peregrino Southwest structure will be drilled to conclude the overall size of the new development.
Peregrino start-up

Oil production from the Peregrino field started last week and will gradually ramp up to a plateau of 100,000 barrels of oil equivalent per day, making Statoil an important long-term operator and partner in Brazil's growing oil and gas industry.

The initial development of the field is estimated to contain 300 to 600 recoverable million barrels of oil equivalents, and the new discovery will add additional volumes going forward.

Drilling of the well is being carried out by the Blackford Dolphin rig at a water depth of 120 meters.

Operated by Statoil, the Peregrino field is 85 kilometers off the Brazilian coast from Rio de Janeiro. In May 2010 Statoil sold a 40% stake of the Peregrino field to the Sinochem Group. Statoil holds 60% ownership and the operatorship of the field and Sinochem the remaining 40%. The closing of the transaction is pending governmental approvals.