CNOOC Sees 51% Increase in YOY Profit

- CNOOC Sees 51% Increase in YOY Profit

Wednesday, August 24, 2011
CNOOC Ltd.

CNOOC announced its interim results as of June 30, 2011.

The Company's total net oil and gas production amounted to 168.7 million barrels of oil equivalent (BOE), representing an increase of 12.9% year-on-year (YOY). This is mainly attributed to: firstly, the new oilfields and development wells which continued to introduce new momentum to the Company's production; secondly, production contributions from newly acquired projects since 2010; and thirdly, the composite decline rate of producing oil and gas fields which has remained low through comprehensive adjustment measures.

Meanwhile, international oil prices fluctuated sharply, although generally, it sustained at a high level. Having benefited from this, the Company's realized oil price reached US $108.16/barrel, 40.8% higher than that of the same period last year. The Company's realized gas price was US $4.92/mcf, increasing 15.5% YOY.

Due to stable oil and gas production growth, as well as higher realized prices, the Company's oil and gas sales revenue for the first half of the year surged 45.0% YOY to RMB97.03 billion. Despite escalating prices of oilfield services and raw materials, the Company's production cost has remained at a low level mainly due to cost savings and efficiency enhancement. The seasonality factor has also lowered the production cost. During the first half of 2011, our operating cost was down 3.8% from 2010 average of US $7.28 to US $7.00 per barrel. The Company recorded net profit of RMB39.34 billion ($5.06B), representing a significant increase of 51.4% YOY.

In the area of exploration, the Company made 6 new discoveries and 18 successful appraisal wells. The first commercial discovery of Wushi 17-2 was made in Wushi Sag in the Western South China Sea. In terms of rolling exploration, two new discoveries Qinhuangdao 33-2 and Qinhuangdao 33-3 were made following the discovery of Qinhuangdao 33-1 South last year in the Shijiutuo uplift area.

Since the beginning of the year, the Company has further expanded its investments in shale oil and gas play and oil sands of North America, through the acquisition of a 33.3% interest in Chesapeake's Niobrara project and the acquisition of OPTI Canada Inc. In addition, we successfully acquired a one-third interest held by Tullow Oil in each of Exploration Areas 1, 2 and 3A in Uganda.

The Company has kept a good track record on health, safety and environmental protection (HSE) since established more than a decade ago. However, the oil spill incident of Penglai 19-3, an oilfield operated under production sharing contract in Bohai Bay, posed HSE challenges to the Company. This incident has made certain impact on the marine environment. Being a responsible energy company, we will continue to urge and assist ConocoPhillips China Inc., the operator of the Penglai 19-3 oilfield, to complete the cleanup work in a timely manner and to minimize the impact on the marine environment.

In addition, due to the combination of the progress of acquisition project and the impact from the oil spill incident, we reset the Company's annual production target at 331-341 million BOE.

Mr. Wang Yilin, Chairman of the Company said, "The outstanding results for the first half of 2011 demonstrated our operating and management capabilities. At the same time, we faced a challenge posed by the oil spill incident occurred at Penglai 19-3 oilfield and we felt deeply sorry about it. The Company has already started performing inspection on the major facilities, equipments and production operations of all our oilfields, and reinforcing our risk management measures, to avoid similar incidents happening in the future."

Mr. Yang Hua, Chief Executive Officer of the Company commented, "Since the beginning of the year, the Company has increased its investments in unconventional energy through the acquisition of shale oil and gas and oil sands projects, building an important resource base for the future. Year 2011 is a year of steady growth for the Company. In the second half of the year, the Company will continue to progress steadily to lay a solid foundation for the Company's long term development."

In the first half of the year, the Company's basic earnings per share reached RMB0.88. In order to share our outstanding results with shareholders, the board has declared an interim dividend of HK $ 0.25 per share (tax inclusive).

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Record Output, Higher Prices Drive Devon's 2Q Profit to $2.7B

- Record Output, Higher Prices Drive Devon's 2Q Profit to $2.7B

Wednesday, August 03, 2011
Devon Energy Corp.

Devon reported net earnings of $2.7 billion for the quarter ended June 30, 2011, or $6.50 per common share ($6.48 per diluted share). This is a 288 percent increase compared with second-quarter 2010 net earnings of $706 million, or $1.59 per common share ($1.58 per diluted share).

For the six months ended June 30, 2011, Devon reported net earnings of $3.2 billion, or $7.44 per common share ($7.41 per diluted share). This compares with net earnings for the six months ended June 30, 2010, of $1.9 billion, or $4.26 per common share ($4.24 per diluted share).

Second-quarter 2011 financial results were impacted by certain items securities analysts typically exclude from their published estimates. The most significant of the adjusting items was a $2.5 billion gain on the sale of assets in Brazil. Excluding adjusting items, Devon earned $726 million or $1.71 per diluted common share in the second quarter. The adjusting items are discussed in more detail later in this news release.

Record Production and Higher Prices Drive Oil and Gas Sales

Sales of oil, natural gas, and natural gas liquids from continuing operations were $2.2 billion in the second quarter of 2011, a 23 percent increase over the second quarter of 2010. Both higher production and higher oil and natural gas liquids pricing contributed to the increase.

Devon's North American onshore production averaged the highest daily rate in the company's history at 660,000 oil-equivalent barrels (Boe) per day in the second quarter of 2011. This represents a production increase of more than six percent over the second-quarter 2010, driven by a 12 percent increase in oil and natural gas liquids production.

Devon's marketing and midstream operating profit totaled $148 million in the second-quarter 2011, a 19 percent increase over the second quarter of 2010. The improvement resulted from higher natural gas liquids production and prices as well as increased gas throughput.

Strategic Repositioning Completed; Share Repurchase Plan Remains on Schedule

In May, the company closed the $3.2 billion sale of its Brazilian operations. Devon has now substantially completed its International and Gulf of Mexico divestiture plan. In aggregate, sales proceeds from the combined divestitures exceeded $10 billion with after-tax proceeds expected to approximate $8 billion.

"The execution of Devon's strategic repositioning was excellent," said John Richels, president and chief executive officer. "Devon has emerged with a pristine balance sheet, a deep inventory of oil and liquids-rich growth opportunities and a highly competitive cost structure. As demonstrated by our second-quarter results, the repositioned Devon is delivering profitable growth per share."

In May 2010, Devon commenced a program to repurchase $3.5 billion of its common stock. As of June 30, 2011, the company had repurchased 33.5 million shares at a total cost of $2.5 billion. Devon expects to complete the stock repurchase program by the end of 2011.

Production Growth Leads Operating Highlights

• In the Permian Basin, Devon increased production 17 percent over the second quarter of 2010, to 49,000 oil-equivalent barrels per day. Oil and natural gas liquids accounted for 75 percent of the quarter's production.
• The company completed nine operated Bone Spring wells within the Permian Basin in the second quarter. Initial daily production from the nine wells averaged more than 700 Boe per day per well. Devon has an average working interest of 77 percent in these wells.
• In Canada, Devon commenced steam injection and achieved first production from its Jackfish 2 oil sands project in the second quarter. Production from the 100 percent-owned project is expected to ramp-up to 35,000 barrels per day before royalties over the next 18 months.
• Production from the company's Cana-Woodford Shale play averaged a record 189 million cubic feet of natural gas equivalent per day in the second quarter, including nearly 9,000 barrels per day of liquids. This represents an 80 percent increase in total production compared to the year-ago quarter.
• Devon's Barnett Shale production increased 13 percent over the second-quarter 2010 to a record 1.3 billion cubic feet of natural gas equivalent per day, including 46,000 barrels per day of liquids production.
• Devon brought eight operated Granite Wash wells online in the second quarter. Initial production from these wells averaged 2,010 barrels of oil-equivalent per day, including 200 barrels of oil and 730 barrels of natural gas liquids per day. The company has an average working interest of 71 percent in these wells.
• The company has assembled 1.1 million net acres targeting new oil and liquids-rich gas opportunities across multiple basins in the U.S. Devon plans to drill more than 30 wells this year targeting the Tuscaloosa Marine Shale, Niobrara Shale, Mississippian Lime, Ohio Utica Shale and the A1 Carbonate and Utica Shale in Michigan.

Cost Containment Efforts Offset Rising Industry Costs

Lease operating expenses (LOE) were $453 million in the second quarter of 2011, or $7.55 per Boe. This represents a one cent per Boe decrease from the second-quarter 2010. Effective cost management and higher production offset the effects of the strengthening Canadian dollar and rising service and supply costs.

Taxes other than income increased $28 million to $120 million in the second quarter of 2011. The year-over-year increase was driven by higher production taxes, resulting from the significant increase in oil and natural gas liquids revenues.

Second-quarter 2011 general and administrative expenses (G&A) totaled $135 million, or $2.26 per Boe. Compared to the second quarter of 2010, G&A per Boe increased approximately two percent. Efficiencies gained through the company's strategic repositioning helped mitigate the effects of the strengthening Canadian dollar and an increase in overall activity levels.

Depreciation, depletion and amortization expense (DD&A) of oil and gas properties increased to $485 million in the second quarter of 2011. Compared to the year-ago quarter, unit DD&A increased 11 percent to $8.08 per Boe.

Interest expense decreased 24 percent in the second quarter to $85 million. Second-quarter 2010 interest expense included a $19 million charge related to the early redemption of senior notes.

Second-quarter income tax expense from continuing operations totaled $1.2 billion, or 87 percent of pre-tax earnings. This unusually high tax rate resulted from a $744 million charge related to U.S. income taxes on foreign earnings assumed to be repatriated under current U.S. tax law. After adjusting for this and other items generally excluded by securities analysts, Devon's second quarter tax rate totaled 32 percent of pre-tax earnings from continuing operations.

Cash Flow and Divestiture Proceeds Total $4.8 Billion

Cash flow before balance sheet changes totaled $1.6 billion in the second quarter of 2011, a 115 percent increase over the year-ago quarter. In addition, Devon received $3.2 billion of pre-tax proceeds from the sale of its assets in Brazil.

As of June 30, 2011, the company's cash and short-term investments reached $6.7 billion and its net debt to adjusted capitalization ratio declined to five percent. Reconciliations of cash flow before balance sheet changes, net debt and adjusted capitalization, which are non-GAAP measures, are provided in this release.

Devon Adds To Natural Gas Hedges

Devon continued to bolster its natural gas hedge positions for 2011 and 2012. For the second half of 2011, the company now has approximately 980 million cubic feet per day protected utilizing swap and collar contracts with a weighted average floor price of $5.28 per Mcf. For 2012, Devon now has hedges covering 815 million cubic feet per day hedged at a weighted average floor price of $4.89 per Mcf. The company's natural gas hedges for both 2011 and 2012 are based on the Henry Hub benchmark index.

Divestitures Impact Reported Financial and Operational Results

In accordance with accounting standards, Devon has classified the assets, liabilities, and results of its international segment as discontinued operations for all accounting periods presented in this release. Included with this release is a table of revenues, expenses, production categories, and the amounts classified as discontinued operations for each period presented.

Items Excluded from Published Earnings Estimates

Devon's reported net earnings include items of income and expense that are typically excluded by securities analysts in their published estimates of the company's financial results. These items and their effects upon reported earnings for the second-quarter 2011 were as follows:

Items affecting continuing operations

• U.S. income taxes on foreign earnings assumed to be repatriated to the U.S. decreased second-quarter earnings by $744 million.
• A change in the fair value of oil, gas and NGL derivative instruments increased second-quarter earnings by $357 million pre-tax ($233 million after tax).
• A change in fair value of interest-rate and other financial instruments decreased second-quarter earnings by $30 million pre-tax ($20 million after tax).
• Restructuring costs decreased second-quarter earnings by $6 million pre-tax ($3 million after tax).

Items affecting discontinued operations

• Divestitures of assets in Brazil resulted in a second-quarter gain of $2.5 billion pre-tax ($2.5 billion after tax).
• Restructuring costs increased second-quarter earnings by $8 million pre-tax ($5 million after tax).

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Foster Wheeler's 2Q Profit Up 17%

- Foster Wheeler's 2Q Profit Up 17%

Tuesday, August 02, 2011
Foster Wheeler AG

Foster Wheeler reported net income for the second quarter of 2011 of $63.3 million, or $0.52 per diluted share, compared with $58.9 million, or $0.46 per diluted share, in the second quarter of 2010.

Net income in both quarterly periods was impacted by asbestos-related provisions as detailed in an attached table. Excluding such items from both quarterly periods, net income in the second quarter of 2011 was $65.3 million, or $0.53 per diluted share, compared with $61.2 million, or $0.48 per diluted share, in the year-ago quarter.

For the first six months of 2011, net income was $86.3 million, or $0.70 per diluted share, compared with $130.9 million, or $1.02 per diluted share, for the first six months of 2010.

Foster Wheeler's Interim Chief Executive Officer, Umberto della Sala, said, "The company reported a 17% increase in net income in the second quarter of 2011, relative to the average quarter of 2010. The results were attributable to the very strong performance of the company's Global Power Group, which reported sharp increases in scope revenue and scope EBITDA relative to the average quarter of 2010."

In addition, net income for the second quarter of 2011 was aided by the continued benefit of a favorable effective tax rate.

Global Engineering and Construction (E&C) Group

• EBITDA in the second quarter of 2011 was lower than the average quarter of 2010 due to a reduced volume of work executed, lower margins on scope revenues and costs associated with an unfavorable utilization rate. On a sequential-quarter basis, EBITDA and EBITDA margin on scope revenue improved from the first-quarter levels of $41.7 million and 11.6%, respectively, due in part to favorable timing and mix of work executed.
• Scope operating revenues in the second quarter of 2011 were below the average quarter of 2010, primarily due to a lower volume of work executed.
• New orders booked in Foster Wheeler scope in the second quarter of 2011 were below the level of the average quarter of 2010, reflecting the slippage of expected new awards.
• EBITDA in the second quarter of 2011 was 65% above the average quarter of 2010 due to higher scope revenues and margins. EBITDA during the quarter was aided by lower than expected costs on projects for which the company is providing on-site erection of boilers. Also contributing to EBITDA in the second quarter of 2011 was an increase in equity earnings from the company's interest in a power plant in Chile, which benefitted from high electric power rates during the quarter.
• Scope new orders in the second quarter reached a near-record level -- due mainly to the booking of a contract for what are expected to be the largest and most advanced supercritical CFB (circulating fluidized bed) boilers in the world.
• Scope operating revenues in the second quarter of 2011 were 62% above the average quarter of 2010, reflecting the increased volume of boiler work.

In commenting on the market outlook for the company's two business units, Mr. della Sala said, "Markets seem to be improving for both of our business groups, although the pace of that improvement is slightly better in the power sector. Even so, all of our end markets remain competitive."

He added, "We are raising our full-year EBITDA margin guidance for the Global Power Group (GPG) to 17%-19%. GPG is having a strong year, and we further expect the group's 2011 revenues to be sharply higher than 2010. We are closely tracking firm prospects in a number of regions. However, the timing of award decisions is uncertain, and some of these prospects could slip into 2012, which would likely result in scope backlog at the end of 2011 being roughly comparable with year-end 2010."

Mr. della Sala continued, "In our Global E&C Group, we are maintaining full-year EBITDA margin guidance of 13%-15%, but we still expect to see quarterly volatility, with the third-quarter margin likely lower than the second quarter. We expect scope revenues to trend upward in the second half of 2011, but we now believe that full-year scope revenues will likely be essentially flat as compared to full-year 2010. Based on the expected timing of awards, we expect scope backlog to show growth in 2011 from year-end 2010 levels."

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Husky Boosts Production, Profit in 2Q11

- Husky Boosts Production, Profit in 2Q11

Wednesday, July 27, 2011
Husky Energy Inc.

Husky continued to execute against its strategic plan in the second quarter of 2011, recording strong growth in earnings, cash flow and production compared to the same period a year earlier. Net earnings grew 274 percent compared to the second quarter of 2010, cash flow increased 104 percent, and production grew 10 percent.

"This marks a second consecutive quarter of strong results across key performance metrics," said Husky CEO Asim Ghosh. "Over the past 12 months we have made significant progress in implementing our strategic plan and executing a financing strategy to carry out our growth initiatives. The momentum we have built in growing production combined with a strong performance from our Midstream and Downstream segments, has enabled us to deliver solid improvements in results."

Production for the quarter averaged 311,600 barrels of oil equivalent per day (boe/day), compared to 283,900 boe/day in the second quarter of 2010. Production gains were achieved despite forest fire and pipeline disruptions in northern Alberta as the Company realizes the benefits from recent acquisitions of oil and gas properties in Western Canada and increased investment in organic growth opportunities.

"In addition, we continue to achieve key milestones in advancing our growth pillars," said Ghosh. "This quarter Husky and its partner in the Liwan Gas Project reached agreements on natural gas prices and have jointly approved the Overall Development Plan (ODP) for the first phase of the development. The submission of the ODP to Chinese government authorities will now take place. This will be a cornerstone development for Husky as we look to build a substantial oil and gas business in the region."

Highlights from the second quarter included the following:

• Net earnings of $669 million, or $0.71 per share (diluted). This compares to net earnings of $179 million or $0.19 per share in the second quarter of 2010.
• Cash flow from operations of $1,511 million, or $1.67 per share (diluted), compared to cash flow of $739 million or $0.87 per share in the second quarter of 2010.
• Drilling was completed on an additional producing well at the North Amethyst field in the Atlantic Region. North Amethyst achieved average gross production of 33,000 bbls/day (23,000 net to Husky) in the quarter.
• Executed an agreement for the sale of gas from the first phase of the Liwan Gas Project The gas price mechanism is in line with the anticipated Guangdong "city gate" market price and provides for an attractive rate of return on the project.
• Phase 1 of the Sunrise Energy Project continued to achieve its milestones, with the first 12 steam-assisted gravity drainage (SAGD) horizontal well pairs completed on schedule.
• Closed a $1.2 billion common share offering, providing the Company with enhanced financial flexibility to accelerate its growth strategy.

Production volumes in the second quarter were in line with annual guidance of 290,000 to 315,000 boe/day. Volumes were impacted by difficult operating conditions in the Slave Lake region where forest fires caused production interruptions, and by the outage of the Rainbow pipeline. The northern portion of the Rainbow pipeline was out of operation through May and June and impacted production by approximately 13,600 boe/day. The northern portion of the pipeline remains shut down, however, Husky has been able to reduce the impact of the outage to approximately 11,000 boe/day through a number of mitigating activities.

"Our thoughts and support are with the people of the Slave Lake region as they look to recover from this devastating event and begin the long process of rebuilding their homes and lives," said COO Rob Peabody. "We are grateful none of our workers were injured and our team in the region deserves a great deal of credit for the work they are doing to mitigate the effects of the disruptions."

Reduced volumes from the Slave Lake region were offset by recent acquisitions and strong performance from the North Amethyst field, which began producing in May 2010. A turnaround of the SeaRose Floating Production, Storage and Offloading (FPSO) vessel, originally scheduled for 16 days, was completed in two days in early July.

Second quarter earnings and cash flow growth were driven by higher production, higher realized crude oil and natural gas prices and strong throughput rates and margins within the Downstream segment. This was partially offset by a stronger Canadian dollar.

Average realized crude oil pricing in the quarter was $86.90 per barrel, compared to $64.75 in the same period of 2010. U.S. refining market crack spreads increased in the quarter, with the average Chicago 3:2:1 crack spread at U.S. $28.90 per barrel, compared to U.S. $11.33 in the same period of 2010.

KEY AREA SUMMARY AND GROWTH UPDATE: THE FOUNDATION BUSINESS

Western Canada - Unconventional and Conventional

The Company continues to maintain production levels in Western Canada and has accelerated development of its emerging oil and gas resource portfolio.

Oil Resource Plays

Husky has an extensive Western Canadian oil resource land base of approximately 500,000 acres and is advancing exploration and development of its highest-potential prospects.

In the second quarter, the Company acquired 11,500 acres in the Bakken formation in south central Saskatchewan, adjacent to its Oungre oil resource lands. Husky now holds 18,700 net acres in this light oil play. Current production from four producing wells is approximately 600 bbls/day and two additional wells have been drilled and will be completed once wet conditions recede. Given the positive results from the first Oungre Bakken wells, Husky has committed additional funds to accelerate the drilling and completion of 10 additional wells in the second half of 2011.

The Company continues to develop its opportunities in the Lower Shaunavon zone in southern Saskatchewan, the Viking zone in southwest Saskatchewan and central Alberta, and in the northern Cardium resource trend at Wapiti and Kakwa in west central Alberta. Spring break-up and extended wet conditions delayed drilling and completion plans in the second quarter, however, the Company expects to accelerate its activities in the second half of the year. The Company drilled two wells at its central Alberta Viking oil resource project in the second quarter, following a six well drilling program in the first quarter. A total of 11 Viking wells have been placed on production from this area along with another three from the southwestern Saskatchewan Viking oil resource project.

Gas Resource Plays

Husky continues to build its gas resource portfolio in Alberta and British Columbia, with approximately 16,000 acres of new land acquired in the quarter, adding to the Company's existing base of approximately 800,000 acres.

A key focus of activity has been the liquids-rich Cardium formation at Ansell in west central Alberta. In the first two quarters, Husky drilled 21 Cardium formation wells at Ansell and a further 12 Cardium and nine deeper multi-zone wells are planned in the second half. The Company is currently constructing additional offload capacity, which will increase total production capacity at Ansell to 56 mmcf/day and over 2,000 bbls/day liquids.

The Company took steps in the quarter to seek a joint venture partner to accelerate development of the Ansell assets. A preliminary development plan has been created which could potentially see up to 2,600 Cardium and deeper Manville formation wells drilled on the play, most of which would be horizontal.

Heavy Oil

To maintain current heavy oil production levels, the Company is accelerating thermal developments. The goal is to achieve an increasingly higher proportion of heavy oil production through thermal at finding and development (F&D) and operating costs comparable to current levels.

Construction of the 8,000 bbls/day South Pikes Peak thermal project was approximately 67 percent complete at the end of the second quarter, and is progressing on schedule and within original cost estimates. First production is expected in mid-2012.

The 3,000 bbls/day Paradise Hill thermal development is progressing on schedule and is approximately 28 percent complete. Paradise Hill will use existing Bolney infrastructure and is planned to become operational in the third quarter of 2012.

Exploration

Husky successfully acquired the exploration rights to two parcels of land in the Northwest Territories in a Call for Bids in the Central Mackenzie Valley. Each block contains approximately 215,000 acres with a five-year primary term and a term extension to nine years when a well is drilled. The lands complement the existing portfolio of resource plays and are close to existing pipeline infrastructure. Development of the properties will be considered in the context of Husky's full suite of opportunities.

The Company is presently evaluating the timing of preliminary work on the new concessions, including conducting 3D seismic and well drilling.

GROWTH PILLARS

Oil Sands

Phase 1 of the Sunrise Energy Project continues to progress on schedule towards planned first production in 2014. In the second quarter, drilling was completed on the first 12 SAGD horizontal well pairs, as part of 49 planned initial well pairs. SAGD drilling costs are trending on budget and on schedule, with the full drilling program forecast to be completed in the third quarter of 2012.

Engineering contractors achieved detailed engineering milestones during the quarter and purchases of major equipment and preparation for surface facility construction remain on schedule for the third quarter.

Conceptual development engineering for subsequent phases of the Sunrise Energy Project has been initiated and a full field development plan is expected to be completed by the end of 2011.

Progress continues at the Tucker Oil Sands Project as the Company enhances its understanding of how to develop the reservoir. Production averaged 6,400 bbls/day during the quarter and Tucker exited the quarter in excess of 7,000 bbls/day.

Atlantic Region

The North Amethyst satellite development continued to perform well through the second quarter, with average gross production of 33,000 bbls/day (23,000 bbls/day net to Husky). Drilling was completed on an additional producing well and a supporting water injection well is scheduled to be completed in the third quarter. The production well came on stream June 23 at a rate of 6,200 bbls/day.

Husky will participate in a partner-operated exploration well at Mizzen in the third quarter. The well will aid in evaluating the 2009 oil discovery on the prospect, located in the Flemish pass. Husky holds a 35 percent working interest in the field. An exploration well is also planned for the fourth quarter to test the partner-operated Fiddlehead prospect, located south of the Terra Nova field. Husky holds a 50 percent working interest in the well.

South East Asia

Development of the Liwan Gas Project offshore southeast China achieved a significant milestone, with the approval of the ODP for the Liwan 3-1 field by Husky and its joint partner, China National Offshore Oil Corporation (CNOOC). Submission of the ODP to Chinese government authorities will now take place.

The companies continue to advance the development towards planned first gas in late 2013 or early 2014.

In support of the ODP submission, a gas sale agreement has been executed with CNOOC Gas and Power Group, Guangdong Trade Branch, for the sale of gas from the Liwan 3-1 field. The gas will supply the Guangdong Province natural gas grid from an onshore gas plant on Gaolan Island, Zhuhai. The gas price mechanism is in line with the anticipated Guangdong "city gate" market price, establishing an attractive rate of return for the project.

The Liwan Gas Project is comprised of three significant gas discoveries the Company has made on Block 29/26: Liwan 3- 1, Liuhua 34-2 and Liuhua 29-1. A gas contract agreement and ODP filing for the Liuhua 34-2 field is expected later this year and similar milestones are anticipated for the Liuhua 29-1 field in 2012.

Production from the Liwan 3-1 field and the Liuhua 34-2 field is expected to ramp up through 2014 towards a rate above 300 mmcf/day (gross). In 2015, the Liuhua 29-1 field is expected to be placed on stream, increasing gross production to approximately 500 mmcf/day. Husky has a 49 percent ownership interest in production.

The Company's share of the estimated total overall integrated project cost of U.S.$6.5 billion will be approximately U.S.$3 billion.

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Ecopetrol 2Q Profit Climbs 89% to $1.93B

- Ecopetrol 2Q Profit Climbs 89% to $1.93B

Thursday, July 21, 2011
Dow Jones Newswires
BOGOTA
by Darcy Crowe

Colombia's state-controlled energy company Ecopetrol reported robust second-quarter net profits Thursday, fueled by higher oil prices and rising production.

Net profits last quarter were 3.4 trillion Colombian pesos ($1.93 billion), an 89% jump from COP1.8 trillion in the second quarter last year.

"In the first half of 2011 we had historically high financial and operating results," said Ecopetrol President Javier Gutierrez in a statement.

The company's earnings before interest, taxes, depreciation and amortization, or Ebitda, was COP7.57 trillion last quarter, a 111% jump from a year earlier, the statement said.

Ecopetrol's production, without its affiliates, rose to 674,400 barrels a day of oil equivalent in the second quarter, a 21% gain from that quarter of last year, it said.

Analysts attribute the increased oil output by Ecopetrol to higher recovery rates in mature fields and new projects coming into line.

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

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Nexen's 2Q Profit Up; Production Hit by Buzzard Maintenance

- Nexen's 2Q Profit Up; Production Hit by Buzzard Maintenance

Thursday, July 14, 2011
Nexen Inc.

Nexen reported second quarter 2011 operating and financial results, led by strong oil prices, high netbacks, and a portfolio weighted towards unhedged, Brent-priced oil. We generated cash flow from operations of $598 million ($1.13/share) and net income of $252 million ($0.48/share). Production of 204,000 barrels of oil equivalent per day (boe/d) reflects maintenance activities at our Buzzard platform in the UK North Sea which are expected to be completed in August. In light of our production in the first half of the year, we now expect company-wide production before royalties for the year to average between 210,000 and 230,000 boe/d.

During the quarter, we achieved several milestones. Our Usan project remains on track, with the floating production and storage offloading vessel (FPSO) enroute to site. The project is expected to achieve first oil in the first half of 2012. In our oil sands business, Long Lake production increased 9% over the first quarter and generated positive cash flow for the quarter. In June, we processed 45,000 barrels per day (bbls/d) of proprietary and third- party bitumen volumes (28,900 bbls/d and 16,100 bbls/day respectively) achieving approximately 65% of upgrader capacity. We continued to advance various initiatives for resource development to fill the upgrader. We also continued our industry-leading execution in our shale gas business with the drilling of a nine-well pad. We began fracking and completion activities during the quarter, and first production from this pad is expected in the fourth quarter. We also commenced drilling an 18-well pad.

Our exploration efforts advanced in the Gulf of Mexico. We received a drilling permit for our Kakuna exploration well and commenced drilling late in June. Our partner, Shell, received a drilling permit for an appraisal well to follow up our Appomattox discovery.

"While we are disappointed with the downtime at Buzzard, we are making steady progress in all areas of our business. We continue to focus on developing our attractive opportunity portfolio and are advancing our near-term and longer-term value contributors to our business," said Marvin Romanow, President and Chief Executive Officer.

"The Gulf of Mexico is a key component of our significant resource potential, and we are excited to be back to drilling," continued Mr. Romanow. "We've spent the past several years building an attractive prospect inventory in the Gulf, and the value of the opportunity in this area was highlighted by the Appomattox discovery last year. Along with the North Sea and West Africa, the Gulf is expected to be integral to growing our conventional business for many years to come."

Highlights

• Financial
  • Cash flow from operations of $598 million ($1.13/share) and net income of $252 million ($0.48/share).
  • Oil and gas operations generated a cash netback of $59.87/boe ($42.76/boe after tax).
  • Achieved our first quarterly positive cash flow at Long Lake.
  • Net debt decreased approximately 50% from a year ago. It is expected to increase in the second half of the year as our capital program is weighted more towards the latter half of the year as we increase our drilling activities.
• Production
  • Production of 204,000 boe/d (180,000 boe/d after royalties) was impacted by Buzzard's unscheduled maintenance and interruptions to a third-party operated natural gas export pipeline which constrain oil production to minimize gas flaring. We also had unscheduled downtime at Syncrude.
  • At Long Lake, production increased 9% over the prior quarter to 27,900 bbls/d gross (18,100 bbls/d net to Nexen).
• Project Advancements
  • Received drilling permits for the Appomattox appraisal well and Kakuna exploration well in the deepwater Gulf of Mexico. Commenced drilling the Kakuna well and brought in Statoil USA E&P Inc. as a partner on a promoted basis.
  • Continued industry-leading pace of drilling at our shale gas operations in the Horn River. We have strong interest in our joint venture process.
  • Advancing various projects to develop high quality resource to fill the Long Lake upgrader, including acceleration of development of a portion of the Kinosis lease.
  • Successfully ran the Long Lake upgrader at approximately 65% of capacity, with an on-stream factor of 96% during June.
  • Continued drilling on pads 12 and 13 at Long Lake, and converted several pad 11 wells from circulation to production.
  • Usan FPSO set sail for location offshore Nigeria, West Africa.

Our portfolio weighting towards unhedged, Brent-priced oil contributed to strong cash flow in the quarter. Brent averaged US$117.36 per barrel, a premium of US$14.80 per barrel over WTI. Our approach to hedging allows us to benefit when prices rise, while giving us some protection if prices decline below certain levels. Higher realized crude oil prices, which averaged $110.28 per barrel, partially offset lower production from temporary downtime at Buzzard and Syncrude and natural declines in Yemen. Also contributing to cash flow was our Long Lake operation, which generated its first positive quarterly cash flow of $6 million as compared to a loss of $19 million in the first quarter. Higher production, prices and upgrader throughput contributed to this positive cash flow.

Net income increased from the prior quarter. The first quarter included the impact of the UK tax rate change which resulted in an accrual for higher income taxes of $336 million. This was partially offset by a $299 million after-tax gain on the sale of Canexus.

Net debt has declined about 50% over the past year following our successful asset disposition program and a stronger Canadian dollar. This amount is expected to rise in the second half of the year due to the timing of our capital spending and working capital changes. Capital investment is expected to increase in the latter half of the year with the increased drilling in the Gulf of Mexico, the North Sea and for Canadian shale gas and oil sands.

The Buzzard field continues to be our largest producing asset and typically contributes 85,000 to 95,000 boe/d net to Nexen. Production in the quarter averaged 114,000 boe/d (49,000 boe/d net to Nexen). This reflects unscheduled maintenance to repair the cooling system and interruptions to a third-party operated natural gas export pipeline which constrain oil production to minimize gas flaring. While the repair work proceeded on schedule, production was lower than expected due to the gas export restrictions. Production is expected to be back to full rates in August.

We utilized Buzzard's downtime to bring forward maintenance work originally scheduled for September. Further maintenance work will be advanced to August when the third-party operated Forties pipeline system undergoes a one-week shutdown. As a result, the September shutdown will not be required.

Yemen production reflects natural field declines following the completion of development drilling activities as we near the end of the primary contract term in December of this year, and by the two-day shutdown during a labour strike. This was the longest disruption in our Yemen operations since production began in 1993. Following a successful restart, the facility quickly returned to normal production. We remain confident that we can continue to manage our operations during the current period of uncertainty in the country. Safety and security continue to be our primary focus.

Unscheduled maintenance on the LC Finer and the Vacuum Distillation Unit impacted Syncrude production. The repairs have been completed and production subsequently returned to full rates.

At Long Lake, bitumen production averaged 27,900 bbls/d gross (18,100 bbls/d net to Nexen), up 2,300 bbls/d from the first quarter. Production is increasing as a result of higher steam injection following the hot lime softener (HLS) scheduled maintenance, well optimizations and the continuing ramp-up of the new pad 11 wells. Production at the end of June was approximately 30,000 bbls/d and we expect production from Long Lake to continue to increase into the mid-30,000 bbls/d range by year-end.

Unit operating costs temporarily increased in the first half of this year due to planned and unplanned maintenance, along with initiatives to increase upgrader reliability and improve well performance. The first quarter included planned maintenance of the first HLS unit. The second quarter included planned maintenance on the second HLS unit and a cogeneration unit, as well as unplanned maintenance on the sulphur recovery units and gasifiers. The third HLS unit and second cogeneration unit are scheduled to undergo maintenance in August. Despite this increase in operating costs, the facility generated positive cash flow for the quarter due to higher production and prices, and increased upgrader throughput from Long Lake and third-party sourced bitumen.

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Honda Motor Projects 65% Drop in Profit For the Year

- Honda Motor Projects 65% Drop in Profit For the Year



Jun 14, 2011

Honda Motor Co. (NYSE:HMC) forecast a 65% drop in annual profit for its year ended March 2012 this morning, as vehicle production continues to be hampered due to the March 11th earthquake.

The company said it expects total production for the year to drop 6% to 3.3 million total vehicles for the year, down from 3.51 million in its year ended in March 2011.

Honda is projecting a profit of $2.4 billion, down sharply from the $6.6 billion recorded last year, and far lower than the post-quake consensus estimate for $5.0 billion. Revenues are projected to fall 7.1% to $104 billion.

The estimates are based on an average exchange rate of 80 yen to the dollar and 110 yen to the euro.

The company said it expects Japanese production to nearly normalize by later this month, while overseas production could take until August or September. That isn't very encouraging, considering the company manufactures over 70% of its cars outside of Japan.

Honda Motor has a potential upside of 27.9% based on a current price of $36.13 and an average consensus analyst price target of $46.2.

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Toyota Motor Estimates 31% Drop Full Year Net Profit

- Toyota Motor Estimates 31% Drop Full Year Net Profit



Jun 10, 2011

Toyota Motor (NYSE:TM) said today it expects its net profit to fall by almost a third this year, as production continues to be disrupted 3 months after the massive earthquake and tsunami that struck Japan on March 11th.

The company predicted its profit for the full year ending in March 2012 would decline 31% to $3.5 billion.

Analysts had been expecting a profit of $5.28 billion, and the company reported $5.1 billion in profit for the year ending March 2011.

The company expects full year sales to decline 2%, and said global production wouldn't recover completely until November.

Toyota Motor has a potential upside of 14.3% based on a current price of $80.84 and an average consensus analyst price target of $92.4.

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Lukoil Reports $3.5B in 1Q Profit

- Lukoil Reports $3.5B in 1Q Profit

Thursday, May 26, 2011
OAO Lukoil Holdings

LUKOIL has published consolidated US GAAP financial statements for the first quarter of 2011.

The Company's net income was $3.517 billion in the first quarter of 2011, which is 71.3% higher y-o-y. EBITDA was $5,343 million, which is 43.3% higher y-o-y. Sales revenues were $29.626 billion (+23.9% y-o-y). Positive dynamic of our financial results was mainly due to a sharp increase in hydrocarbon prices in the first quarter of 2011 compared to the respective period of 2010.

Capital expenditures including non-cash transactions in the first quarter of 2011 were $1.7 billion, which is 17.3% higher y-o-y. Free cash flow increased by 43.3% and reached $2.013 billion in the first quarter of 2011.

In the first quarter of 2011, lifting costs per boe of production were $4.52, which is 13.9% higher y-o-y. The growth was mainly due to the real ruble appreciation and increased expenses for power supply.

In the first quarter of 2011, LUKOIL Group total hydrocarbon production available for sale reached 2,186 th. boe per day, which is a 4.1% decrease y-o-y. Crude oil production of LUKOIL Group in the first quarter of 2011 totaled 22.84MM tonnes. Natural and petroleum gas output available for sale increased by 1.4%, to 4.79 bcm. Meanwhile, the production of gas on our major gas field - Nakhodkinskoe field amounted to 2.13 bcm in the first quarter of 2011 compared to 2.10 bcm for the respective period of 2010.

In the first quarter of 2011 throughputs at the Company's refineries (including its share in crude oil and petroleum product throughput at the ISAB and TRN refining complexes) decreased by 1.0% y-o-y and reached 15.19MM tonnes. Throughputs at the Company's refineries in Russia remained flat y-o-y, throughputs at the Company's international refineries decreased by 3.5% y-o-y due to the scheduled maintenance at ISAB Complex in the first quarter of 2011 and shutdown of operations at the Odessa Refinery due to unfavorable economic conditions.

Measures aimed at higher efficiency and cost control allow the Company to generate strong free cash flow and increase net income.

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Cairn India Reports Record Quarterly Profit

- Cairn India Reports Record Quarterly Profit

Wednesday, May 25, 2011
Cairn India Ltd.

The following commentary is provided in respect of the audited financial results and operational highlights of Cairn India Limited and its subsidiary companies (referred to as Cairn India) during the financial year 2010-11 (FY 2010-11). Please note that FY 2010-11 refers to the period April 2010 - March 2011.

• FINANCIAL HIGHLIGHTS
  • Revenue in Q4 FY 2010-11 at R 36,545 million (US $808 million); FY 2010-11 at R 102,779 million (US $2,255 million)
  • Profit after tax (PAT) in Q4 FY 2010-11 at R 24,578 million (US $543 million); FY 2010-11 at R 63,344 million (US $1,390 million)
  • Cash Flow from Operations in Q4 FY 2010-11 at R 26,110 million (US $577 million); FY 2010-11 at R 67,122 million (US $1,473 million)
  • Net Cash of R 29,070 million (US $651 million) as on 31 March, 2011
  • Gross cumulative Rajasthan development capital expenditure at US $2,995 million of which US $703 million was spent during FY 2010-11
• OPERATIONAL HIGHLIGHTS
  • Average Daily Sales (Working Interest) for Q4 FY 2010-11 at 96,417 barrels of oil equivalent (boe); FY 2010-11 at 81,254 boe
  • Average Daily Gross operated production for Q4 FY 2010-11 at 161,194 boe; FY 2010-11 at 149,103 boe
  • Maintained low cost operations; field direct opex at US $2.3 per barrel (bbl) for FY 2010-11
  • Gross crude oil production in excess of 13 million barrels (mmbbls) from operated assets in Q4FY 2010-11; contributing ~20% of India's current domestic crude production
  • Won the "Golden Peacock Award for Corporate Social Responsibility" for the year 2011
• Rajasthan
  • Mangala Field
    • Current production at 125,000 barrels of oil per day (bopd); cumulative crude sales in excess of 39 mmbbls to Indian refiners
    • Development drilling progresses as planned; 143 wells drilled to date, 85 completed and 62 producing

Fortune Magazine releases the Fortune 500 list with Wal-Mart Taking the Top Spot

Fortune Magazine releases the Fortune 500 list with Wal-Mart Taking the Top Spot



May 5, 2011

This morning, the year's Fortune 500 list was released by Fortune magazine. The list is compiled by the publication based on revenues of the previous year.

On top was Wal-Mart again for the second year in a row, with revenues over $421 million dollars. The retail giant has topped the list eight times in the last decade, and has stayed in the top ten since 1995. It beat out Exxon Mobil, the oil giant that held the top spot two years prior.

Coming in at number 3 and 4 are energy companies Chevron and ConocoPhillips, respectively. Both had a great year in profitability, with both companies making over 80% more than in 2009.

Fannie Mae came in at number 5, up from number 81 the previous year, mostly due to the new accounting rules the company put in place. Right behind it is General Electric even after the reactor problems the company had during the nuclear crisis in Japan. Their spot is due to the possibility of a $53 billion dollar plan for a high-speed rail project awaiting the approval of Congress.

And rounding out the top ten were Berkshire Hathaway, General Motors, Bank of America Corp., and Ford Motor.

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Statoil Posts Stronger Q1 Profit

Statoil Posts Stronger Q1 Profit

Wednesday, May 04, 2011
Deutsche Presse-Agentur (dpa)

Norwegian energy giant Statoil's first-quarter net income increased 44 percent driven by higher gas and oil prices, the group said Wednesday.

Net income for the quarter was 16.1 billion kroner (3 billion dollars) compared to 11.1 billion kroner in the corresponding business period 2010.

Revenues in the quarter were 151 billion kroner, up 17 percent year-on-year, the state-controlled group said.

Statoil said its average daily oil and gas output was some 1.9 million barrels of oil equivalent per day during the quarter, a 6 percent drop in production year-on-year but in line with its expectations.

The average first-quarter oil price measured in kroner was up 33 percent year-on-year, while the average natural gas price was 20 percent higher measured in the Norwegian currency, the group said.

For 2011, Statoil said it predicted production to be at the same level or slightly below the 2010 level.

The group said it had made important discoveries off Norway and in Brazil, and had received permits to drill two exploration wells in the Gulf of Mexico.

During the quarter the group drilled 10 exploration wells, including three outside the Norwegian continental shelf. Three of the wells resulted in discoveries, Statoil said.

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Chrysler Posts First Quarterly Profit In Nearly 5 Years

Chrysler Posts First Quarterly Profit In Nearly 5 Years



May 3, 2011

Chrysler Group reported its first quarterly profit since the second quarter of 2006 on Monday, posting earnings of $116 million in the first quarter of 2011, compared to a loss of $197 million in the year ago period.

Revenue surged 35% year-over-year to $13.1 billion, as both sales volume and pricing improved. The company sold 18% more vehicles globally in the quarter.

Chrysler is still a privately held company; the U.S. government owns 9%, Italian car company Fiat owns 30%, and the United Auto Workers trust fund ownsthe majority.

The company plans to offer shares to the public late in 2011 or early in 2012, with Fiat expecting to own a 51% share by then, as part of a structured plan for Chrysler to pay back government loans and get back on its feet.

Chrysler announced plans last week to repay $5.8 billion in loans to the U.S. Treasury Department and another $1.7 billion to the Canadian government, which also pitched in to help the company as part of the 2009 bailout.

Sergio Marchionne, Chief Executive Officer, Chrysler Group LLC said, "Chrysler Group's improved sales and financial performance in the first quarter show that our rejuvenated product lineup is gaining momentum in the marketplace and resonating with customers. These results are a testament to the hard work and dedication of our employees, suppliers and dealers, all of whom are helping Chrysler create a new corporate culture built on the quality of our products and processes, and simple, sound management principles."

Marchionne added that the company is on pace to hit its worldwide sales target of 2 million vehicles for 2011, including 1.4 million in the U.S., despite

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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.

Exxon Mobil 1Q Profit Soars 69% on Higher Oil Prices

Exxon Mobil 1Q Profit Soars 69% on Higher Oil Prices

Thursday, April 28, 2011

Dow Jones Newswires

by Tess Stynes

ExxonMobil's first-quarter earnings surged a bigger-than-expected 69% as the company benefited from high oil prices and stronger refining margins.

The world's largest publicly traded oil company by market value has reported stronger results in recent quarters due to rising oil profits and improved refining industry profitability. The growth was a reflection of a recovery from the recession for the broader energy sector, which appears poised for a return toward the boom days that preceded the financial collapse in 2008.

Exxon's $25 billion takeover of natural-gas producer XTO Energy Inc. acquisition last year boosted its production and reserves, though prices have remained soft. The move is anticipated to be highly profitable in the long term, on expectations that natural-gas consumption will grow.

Exxon Mobil reported a profit of $10.65 billion, or $2.14 a share, up from $6.3 billion, or $1.33 a share, a year earlier. Revenue climbed 26% to $114 billion after climbing 41% a year earlier.

Analysts polled by Thomson Reuters most recently forecast earnings of $2.07 on revenue of $114.85 billion.

Exploration and production earnings rose 49%. Exxon Mobil's production rose 10%, boosted by its acquisition last year of XTO Energy Inc., which boosted its natural gas production by 24%.

Refining and distribution business earnings soared amid stronger refining margins and sales of petroleum products.

Exxon Mobil said it spent $5.7 billion for stock repurchases, buying back 69 million shares. The total included $5 billion of buybacks to reduce shares outstanding.

Shares were down 0.5% at $87.32 in premarket trading. The stock through Thursday's close is up 27% in the past year.

Husky's 1Q Profit Leaps on Higher Output, Prices

Husky's 1Q Profit Leaps on Higher Output, Prices

Wednesday, April 27, 2011
Husky Energy Inc.

Husky achieved strong earnings and cash flow growth in the first quarter of 2011 compared to the same quarter of 2010. Performance was driven primarily by increased production volumes, higher realized crude oil prices for the Atlantic Region and South East Asia, and higher throughput rates and margins within the downstream segment.

"Our first quarter results are in accordance with our execution plan," said CEO Asim Ghosh. "Actions undertaken to grow near-term production have achieved the intended result during a period of strengthening prices. At the same time, our downstream refining segment posted strong performance, with higher throughput enabling us to capitalize on improving market conditions."

"In addition, we have made steady progress in advancing our mid and long-term growth initiatives. Steps taken in the quarter have enabled Husky to achieve important milestones towards progressing the Liwan Gas Project offshore China. This project will create shareholder value by tapping into the fast growing energy markets in Hong Kong and mainland China."


A summary of first quarter results, together with recent key highlights, follows:

• Net earnings of $626 million, or $0.70 per share (diluted), including an after-tax gain of $143 million on the sale of non-core assets, an increase of 70 percent from a year ago.
• Cash flow from operations of $1,164 million, or $1.30 per share (diluted), an increase of 36 percent from a year ago.
• Total production before royalties for the quarter averaged 310,400 boe/day, 5 percent above the same quarter of last year and 11 percent higher than the fourth quarter of 2010.
• Progressed the Liwan Gas Project as the Company expects to submit the Overall Development Plan for Liwan 3-1 to the Chinese authorities in the second quarter. The Liwan Gas Project includes several fields; Liwan 3-1, Liuhua 34-2 and Liuhua 29-1 with first gas anticipated from Liwan 3-1 and Liuhua 34-2 in late 2013, ramping up through 2014. Liuhua 29-1 production is anticipated late 2014. Husky's production share is 49 percent.
• Liwan gas is expected to be sold under a long-term contract at competitive prices in the Guangdong and Hong Kong markets.
• Phase I of the Sunrise Energy Project progressed on schedule as development drilling commenced in early 2011 with 12 horizontal wells spud and seven drilled in the quarter.
• In the Atlantic Region, the Company continued to ramp up North Amethyst volumes.
• The Lloydminster Upgrader resumed normal operations in April at which time repairs were completed.
• Closed the previously announced Western Canada asset acquisition on February 4th.
• Closed a $300 million preferred share financing to enhance our liquidity and financial flexibility.

First quarter production averaged 310,400 boe/day in line with guidance. Volumes compare positively with 280,500 boe/day in the fourth quarter of 2010 and 295,900 boe/day in first quarter of 2010. Production volumes were driven higher by the February closing of the Western Canada asset acquisition and good performance from White Rose and North Amethyst.

First quarter cash flow and earnings growth were driven by higher upstream production volumes, higher realized light crude oil prices for the Atlantic Region and South East Asia, and stronger throughput rates and margins within the downstream segment. These were partially offset by the impact on Western Canada realized crude oil pricing of higher discounts to WTI, the impact of a strong Canadian dollar, lower throughput at the Lloydminster Upgrader and weak natural gas prices.

Light crude oil prices averaged U.S. $104.97 per barrel for the quarter, 38 percent higher compared to same period of 2010. Of the Company's total production, approximately 20 percent is priced and sold relative to light crude prices (North Sea Brent). U.S. refining market crack spreads were stronger during the quarter with the average Chicago 3:2:1 crack spread at U.S. $16.58 per barrel, compared to U.S. $6.23 in the same period of 2010.

"We continue to prudently manage our financial position and exercise discipline in all aspects of our capital and operating expenditures," said Alister Cowan, CFO.

KEY AREA SUMMARY AND GROWTH UPDATE:

Western Canada - Unconventional and Conventional

The Company continues to maintain production levels from Western Canada and has accelerated development drilling.

Oil Resource Plays

Within the oil resource portfolio, the Company is focused on developing its opportunities in the Lower Shaunavon and Bakken zones in Southern Saskatchewan along with the Viking zone in Southwest Saskatchewan and central Alberta. Husky has approximately 500,000 net acres in its oil resource portfolio. Seventeen wells were drilled during the period with six placed on production.

Gas Resource Plays

Husky advanced development drilling of its liquids-rich gas assets in the Alberta Deep Basin. In the Ansell area, four rigs were active and a total of 20 Cardium formation wells were drilled during the quarter and an additional six exploration and development wells were drilled in Kakwa, Bivouac, the Horn River Basin and on the Cypress acreage.

Through a combination of crown land sales and private purchases, Husky increased its land holdings in its gas resource portfolio during the first quarter by 29,000 acres.

Heavy Oil

Husky is amongst the industry leaders in heavy oil production and has a significant land and resource portfolio along with a solid integrated infrastructure position. Within its heavy oil operations, the Company's strategy is focused on maintaining production levels, being a low cost producer and continuing to drive new enhanced recovery techniques to sustain production volumes.

Construction of the 8,000 bbl/day South Pikes Peak project was approximately 58 percent complete at the end of the first quarter with production expected in mid 2012. The project continues to progress as expected.

The 3,000 bbl/day Paradise Hill project activity commenced in the first quarter, and will utilize the existing Bolney infrastructure. Production is anticipated in late 2012.

Oil Sands

The Company advanced the recently sanctioned Phase I Sunrise Energy Project. Twelve horizontal wells were spud and seven drilled during the quarter. The Company made several significant equipment orders that included the steam generators, vessels, water treating plant and a camp to support the project.

Tucker contributed positive earnings in the quarter with an average production volume of 6,200 bbls/day. Further wells will be brought on production in the second quarter.

Atlantic Region

Through the first quarter, North Amethyst performed well with average production of 21,400 bbls/day net to Husky. In 2011, Husky expects to tie-in an additional producer and one more injector well.

The West White Rose satellite pilot development is progressing on schedule. These wells will provide additional information on the reservoir to refine understanding of the best development scheme for the full West White Rose field. First production from the pilot is anticipated in the third quarter of 2011.

Husky holds exploration rights to nineteen parcels of land in the area. In 2011, the Company plans to participate in the drilling of an appraisal well at the Mizzen discovery and an exploration well to the south of Terra Nova.

South East Asia

Development of the Liwan Gas Project is progressing in accordance with the Heads of Agreement signed with China National Offshore Oil Corporation (CNOOC) in December 2010. Under the Heads of Agreement, Husky will operate the deepwater portion of the project involving development drilling and completions, subsea equipment and controls, and subsea tie-backs to a shallow water platform. CNOOC will operate the shallow water portion of the project including a shallow water platform, approximately 270 km of subsea pipeline to shore, and the onshore gas processing plant.

Development of the Liwan Gas Project comprises three discoveries on Block 29/26; Liwan 3-1, Liuhua 34-2 and Liuhua 29-1, with first gas production expected in late 2013, ramping up through 2014. Official project sanction is expected later in 2011. It is anticipated the natural gas will be sold under a long-term contract at competitive prices in the Guangdong and Hong Kong markets.

The partnership has made considerable progress in advancing the Liwan Gas Project as the Overall Development Plan (ODP) for Liwan 3-1 has been prepared and is undergoing final reviews with submission to authorities scheduled in the second quarter. Development of the Liwan 3-1 and Liuhua 34-2 fields are proceeding in parallel and will share infrastructure. The ODP for the Liuhua 34-2 field is in preparation and planned for submission to authorities mid-2011. Liuhua 29-1 is expected to be fully delineated later this year with an ODP submission targeted before year end.

All nine development wells for the Liwan 3-1 field have been successfully drilled confirming the quality and extent of the reservoir. Fabrication and construction has begun, and long lead time items ordered in accordance with the schedule. Deepwater installation and pipe lay work are planned to take place in 2012 and 2013.

CNOOC is progressing with the development of the shallow water portion of the project. The infrastructure is designed to allow for the tie-in of incremental wells and fields. Gas from the Liuhua 29-1 field will be processed through the same shallow water platform and onshore gas plant as the other two fields and is expected to come on stream in late 2014.

In Indonesia, Husky and its partners continue to progress and plan for the development of the BD and MDA gas fields with first gas production expected in 2014. The long lead time items for the BD field, including the FPSO, are set to go to tender by mid-year. An appraisal well for the MDA field will be drilled later this year as well as a nearby low risk exploratory well targeting the same type of reservoir.

BP Profit, Output Still Weighted Down by GOM Effects

BP Profit, Output Still Weighted Down by GOM Effects

Wednesday, April 27, 2011

Dow Jones Newswires

by Alexis Flynn

BP Wednesday posted a 5% fall in adjusted profit for the first quarter, as the damage wrought by the Deepwater Horizon disaster last year continued to weigh down its earnings and petroleum production outlook despite high oil prices.

The oil giant's results narrowly missed expectations for "clean replacement cost of supplies," which strips out gains or losses from inventories and other non-operating items. Profits under this keenly-watched benchmark totaled $5.37 billion for the quarter, compared with $5.65 billion for the first quarter of 2010. Analysts had expected $5.71 billion.

On the positive side, BP's latest charge of $400 million in Gulf of Mexico cleanup costs was more modest than some analysts feared. But BP said year-on-year oil and gas output dropped 11% in the first quarter, and signaled continued weakness in the second quarter, partly the result of increased maintenance procedures instituted after the 2010 U.S. drilling disaster.

While BP shares "look attractive," the "risk remains high for now" due to the uncertain status of BP's efforts in Russia, said Evolution Securities analyst Richard Griffith.

Analysts and investors will be looking for guidance on the company's ongoing Russian travails when Chief Financial Officer Byron Grote discusses the first-quarter results this afternoon at 1300 GMT.

BP's $16 billion share-swap and exploration deal with Russian state-owned giant Rosneft was blocked by an arbitration court last month following objections from BP's partners in its TNK-BP joint venture, and the U.K. firm could be forced to pay substantial compensation for it to go ahead. TNK-BP is also scheduled to report earnings Wednesday.

BP said it booked an additional $400 million charge related to the Gulf of Mexico spill, citing higher cleanup costs. But analyst Jason Kenney of ING said investors were relieved the latest charge was not higher.

Total oil and gas production was 3.58 million barrels a day, a decline of 11% on the year. This drop was partly the result of asset sales to pay for the Gulf of Mexico cleanup and production effects from due to the ongoing drilling shutdown in the U.S. Gulf. But BP said its output was also weighed down by higher maintenance in the North Sea and Angola, and by an interruption in the Trans-Alaska oil pipeline.BP said its second-quarter oil and gas output would also reflect these impacts.

"The main impact by far on production is the Gulf Of Mexico moratorium," a BP spokesman said. "There's also higher turnaround activity that we've been doing as we go through the increased spending on safety, particularly in the North Sea."

In the year since the disaster, BP has re-emerged as a fundamentally different company: it is smaller than before, having already shorn some $22 billion of assets; and with a different strategic focus, looking to fresh opportunities abroad to underpin its future growth.

However, a key part of this new strategy already appears to be floundering, with the challenge to the Russian deal.

BP didn't receive a dividend from TNK-BP for the period, the first time it hasn't received a payout from its Russian joint venture since the first quarter of 2009.

A BP spokesman said the decision to withhold the dividend was made by TNK-BP's board. However its partners in the joint venture, the Alpha-Access Renova group, in April threatened to withhold dividend payments for the year. BP is currently engaged in a dispute with AAR over its proposed alliance with Rosneft.

Net profit for the quarter was up 17% at $7.12 billion, compared with $6.08 billion a year ago.

Adjusted profit from BP's downstream business improved substantially year on year, nearly trebling to $2.07 billion, although the company cautioned that this was due to a favorable refining environment and a good performance by its trading division, and was unlikely to be repeated in the second quarter.

Valero Energy Reports Mixed Q1, EPS Misses By $0.12, Revs Up 42% YoY

Valero Energy Reports Mixed Q1, EPS Misses By $0.12, Revs Up 42% YoY



Apr 26, 2011

Valero Energy (NYSE:VLO) reported Q1 EPS of $0.18, missing the consensus estimate for $0.30 per share. Revenues for the quarter were up 42% year-over-year to $26.31 billion, beating the consensus estimate for $22.29 billion.

"Clearly, the first quarter was a much better start to the year than last year," said Valero Chairman and CEO Bill Klesse. "Our refining system experienced strong margins and turned in solid results despite a heavy maintenance schedule and associated restart delays. We also announced the acquisition of Chevron's Pembroke refinery, marketing, and logistics assets in the United Kingdom and Ireland. These attractively priced assets will improve the competitiveness of our asset portfolio and should be immediately accretive to earnings upon closing in the third quarter."

Weatherford Swings to Profit in 1Q11

Weatherford Swings to Profit in 1Q11

Thursday, April 21, 2011
Weatherford International Ltd.

Weatherford reported first quarter 2011 income of $78 million, or $0.10 per diluted share, excluding an after-tax loss of $18 million. On a GAAP basis, our net income for the first quarter of 2011 was $59 million, or $0.08 per diluted share. The excluded after-tax loss is comprised of the following items:

• $9 million after-tax charge incurred in connection with the termination of a corporate consulting contract;
• $8 million in after-tax severance; and
• $1 million for investigation costs.

First quarter diluted earnings per share reflect an increase of $0.07 over the first quarter of 2010 diluted earnings per share of $0.03, before charges. Sequentially, the company's first quarter diluted earnings per share, before charges, were $0.06 lower than the fourth quarter of 2010.

First quarter revenues were $2,856 million, or 23 percent higher than the same period last year, and down two percent sequentially. North America revenues increased 53 percent compared to the first quarter of 2010 while international revenues were up four percent over the same period.

Segment operating income of $353 million improved 38 percent year-over-year but was down 17 percent sequentially. Margin performance was held back primarily due to political turmoil in the Middle East and North Africa, unfavorable weather conditions and an equity tax enacted in Colombia.

The company expects earnings per share before excluded items of approximately $0.15 to $0.17 in the second quarter of 2011.

North America

Revenue increased eight percent sequentially and 53 percent compared to the first quarter of 2010. Canadian activity was strong while colder winter temperatures subdued progress in the United States. Operating income of $284 million improved $22 million sequentially, and margins increased 20 basis points to 20.9 percent.

Middle East/North Africa/Asia

Revenue decreased $109 million sequentially, or 16 percent, as political disruptions in the Middle East and North Africa and challenging weather events in Australia and China took a heavy toll, accounting for approximately two-thirds of the drop. Operating income declined $38 million sequentially, on decrementals of 35 percent.

Europe/West Africa/FSU

Revenue declined $18 million, or three percent, sequentially but was up 12 percent compared to the first quarter of 2010. The winter effect in the North Sea, Russia and Caspian were primarily responsible for the decline. Operating income declined $27 million sequentially. Contributing to the severe decrementals were increased employee-related costs, as well as higher fuel and transportation costs in Russia.

Latin America

Revenue decreased eight percent, or $36 million, on a sequential basis and declined four percent, or $17 million, compared to the first quarter of 2010. Mexico and Venezuela led the declines. Operating income fell $32 million sequentially. Approximately $16 million of the decline was due to the charge for the Colombia equity tax. Adjusting for this effect, decrementals were approximately 44 percent.

Net Debt

Net debt for the quarter increased $547 million primarily as a result of an increase in working capital of $365 million. The increase in working capital was largely driven by North America and Latin America.

Noble 1Q Profit Dives on Drilling Restrictions

Noble 1Q Profit Dives on Drilling Restrictions

Thursday, April 21, 2011
Noble Corp.

Noble reported first quarter 2011 earnings of $54 million, or $0.21 per diluted share, versus $99 million, or $0.39 per diluted share, for the fourth quarter of 2010. First quarter 2011 results include a one-time after-tax net gain of $0.06 per diluted share related to the previously announced substitution of the drillship Noble Phoenix for the drillship Noble Muravlenko in Brazil. Contract drilling services revenues for the first quarter of 2011 were $543 million versus $614 million for the fourth quarter of 2010. Contract drilling margin for the first quarter of 2011 was approximately 44 percent, versus 46 percent in the prior quarter. Noble invested $614 million in capital projects during the quarter.

"Noble's first quarter results reflect the continuing impact of drilling restrictions in the U.S. Gulf of Mexico," said David W. Williams, Chairman, President and Chief Executive Officer. "However, improving utilization in the rest of the world coupled with our extensive contract backlog afforded us the financial flexibility to expand and extend our newbuild program, adding both high-spec ultra-deepwater and jackup units to the fleet. With several new contracts commencing this quarter and the possibility of increased permitting in the U.S. Gulf of Mexico, we expect contract drilling revenues to improve across the balance of the year."

In February 2011, Noble issued $1.1 billion aggregate principal amount of senior notes in three separate tranches with a weighted average coupon of 4.71 percent. A portion of the proceeds was used to repay our half of the $693 million of joint venture debt associated with the Noble Bully I and Noble BullyII drillships. Our joint venture partner, Shell, contributed the remaining half to retire the full balance of the debt. Debt as a percentage of total capitalization was 29 percent at March 31, 2011.

Operations Highlights

At the end of the first quarter of 2011, approximately 64 percent of the Company's available rig operating days were committed for the remainder of 2011 and approximately 33 percent were committed for 2012. The Company's total backlog at March 31, 2011 was approximately $13.1 billion.

In the first quarter, Noble continued its strategy of upgrading its fleet by adding rigs with the latest technology and capabilities. Noble announced a total of five newbuilds, including three ultra-deepwater drillships and two heavy duty, harsh environment (HDHE) jackups which are in addition to the two HDHE jackups announced in December 2010. Deliveries are expected to commence in the fourth quarter of 2012 when the first jackup is scheduled to be completed. Additionally, the first of the three drillships has been awarded a Letter of Intent for five and a half years with an expected commencement date in the second half of 2013 at a dayrate of $410,000. The unit is eligible for up to a 15 percent performance bonus. In the past five months, Noble has committed more than $2.7 billion to its fleet upgrade strategy. The Company has one remaining drillship option that expires August 31, 2011 and two remaining jackup options that expire January 1, 2012.

In the U.S. Gulf of Mexico, the Noble Jim Thompson returned to earning its full dayrate of $359,000-$361,000 at the beginning of April after being on standby for approximately nine months. The unit resumed drilling operations for our customer Shell after they received approval for an exploration permit. Noble has three other rigs on standby with Shell in the Gulf, the Noble Danny Adkins and Noble Jim Day, both at dayrates of $155,000-$157,000, and the Noble Driller at a dayrate of $84,000-$86,000. As previously announced during the quarter, Noble secured a one-year commitment on the Noble Jim Day which includes a period of standby between mid-February and July 31, 2011 and an agreement that the rig will receive a dayrate of $484,000-$486,000 from August 1, 2011 through January 31, 2012 regardless of whether or not the unit is drilling. When operating, the unit will be eligible for a performance bonus of up to 15 percent of the dayrate.

In Mexico, Noble was awarded contracts on seven jackups at dayrates ranging from the mid-$50,000's to approximately $100,000 for durations between 139 days and 624 days. The Company also secured extensions on two units, the Noble Carl Norberg and Noble Roy Butler.

In January, Noble announced a substitution of the Noble Phoenix for the Noble Muravlenko to operate in Brazil. In conjunction with the rig swap, Noble canceled a planned reliability upgrade on the Noble Muravlenko. Also in Brazil, the Noble Clyde Boudreaux commenced a one-year contract at a dayrate of $289,000-$291,000 in early April. The rig is eligible for up to a 15 percent performance bonus.

The Noble Homer Ferrington commenced a farmout in mid-March earning a full dayrate of $504,000-$506,000 while operating in Morocco.

Finally, the Noble Roger Lewis commenced its three-year contract in Saudi Arabia in early March at a dayrate of $131,000-$133,000. The Noble Scott Marks, scheduled to begin a three-year contract in Saudi Arabia in July, arrived in the Middle East to begin necessary upgrades.

"A number of anticipated catalysts have come to fruition and created value for our shareholders during the quarter, including a return to work of rigs in the U.S. Gulf, in Mexico, the Middle East, and the Mediterranean," said Williams. "With what is now eleven newbuilds, we have committed to a significant fleet upgrade program and are beginning to evaluate our existing assets to determine their ultimate future within our fleet. In the meantime, we continue to believe that there is additional upside to the Noble story, including the delivery of three ultra-deepwater drillships during 2011 and a return to normal drilling activity in the U.S. Gulf."