Bowood to Resume Production at Armada Well

- Bowood to Resume Production at Armada Well

Tuesday, July 26, 2011
Bowood Energy Inc.

Bowood announced that the Energy Resources Conservation Board ("ERCB") has approved Bowood's application for Good Production Practice ("GPP") for a previously announced oil well at Armada (2-01-17-19w4). The well was shut in on April 19, 2011 after reaching the end of its new oil well production period ("NOWPP") in which ERCB regulations allowed it to produce approximately 15,000 bbls of oil from January 2011 through April 2011. With the GPP approval now in place, the well is able to resume production without regulatory restriction. Prior to being shut in, the well was flowing at a rate of 170 bbls of oil per day (60 bopd net). The Company's working interest in the well is 35%.


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Statoil to Resume N. Sea Project Following Tax Decision

- Statoil to Resume N. Sea Project Following Tax Decision

Tuesday, July 05, 2011
Dow Jones Newswires
LONDON
by Alexis Flynn

Statoil said it will resume development of the Mariner and Bressay field projects in the U.K. North Sea after the Treasury announced it would increase a tax allowance to companies investing in marginal fields.

"We welcome and are encouraged by the positive steps made by this announcement. The negative impact from the tax increase announced in March has been neutralized for the Mariner investment and the project is back on track," said Statoil spokesman Bard Glad Pedersen.

He added that the company is "working diligently with both the Mariner and Bressay projects toward a final investment decision. But it is with Mariner we expect the final investment decision by the end of 2012."

The U.K. government Tuesday offered a concession to the oil and gas industry by raising one tax allowance that applies to North Sea fields. The Ring Fence Expenditure Supplement will rise to 10%, from 6% previously, allowing companies to offset a greater amount of their expenses against their taxes and, "support investment in marginal fields," the U.K. Treasury said in a statement.

Statoil, Norway's largest oil producer, in March postponed development of the projects following the government's decision to raise to 32% from 20% the supplementary charge levied in addition to corporation tax on profits from U.K. oil and gas production.

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

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Drillings Ops Resume at Harvest Natural's Budong-Budong Block

- Drillings Ops Resume at Harvest Natural's Budong-Budong Block

Wednesday, June 22, 2011
Harvest Natural Resources Inc.

Harvest Natural announced that drilling operations have resumed in its Budong-Budong Block. The KD-1 well spud on June 20, 2011, is the second of two planned exploration wells located in the Budong-Budong Block, onshore West Sulawesi, Indonesia.

The KD-1 well will be drilled to test a thrusted surface anticline with stacked Miocene and Eocene targets to a planned total measured depth of approximately 10,800 feet. Drilling is anticipated to require approximately 43 days. In the event of success, additional time may be required to test and evaluate the well.

Harvest owns a 64.4 percent non-operated working interest in the Budong-Budong Block PSC.

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Cairn to Resume Drilling Ops Offshore Greenland

- Cairn to Resume Drilling Ops Offshore Greenland

Tuesday, May 24, 2011
Cairn Energy

Following Cairn's three-well drilling operations in 2010; the Company's exploration campaign is to continue in 2011 with the drilling of up to four further exploration wells. The Government of Greenland has recently approved the location of seven exploration drill sites which allows some flexibility in program planning and possible options for follow up appraisal wells in the event of a discovery.

The main elements of the primary 2011 exploration program are:

• The drilling of up to four exploration wells, with one in each of the Atammik and Lady Franklin blocks offshore to the west of the capital Nuuk, and one in each of the Napariaq and Eqqua blocks in the southern Baffin Bay west Disko area;
• The acquisition of up to three 3D seismic surveys (combined total ~ 4,500km2), one in the north of Baffin Bay, one in the south of Greenland and one contingent location to be decided dependent on operational results.
• The four well campaign will test prospects with different structural styles and play types and is targeting a gross unrisked mean prospective resource potential of 3.2 billion barrels of oil equivalent at target subsurface depths between 2,500 and 4,750 meters.
• In each case the principal target is oil but evidence of both oil and gas generation is found regionally. In view of the frontier nature of the exploration and paucity of offset well information the individual prospects are estimated to have chances of success ranging from around 10% to 20%. The wells will be drilled in water depths ranging between 288 meters and 1,530 meters.

As was the case in 2010, the program will be carried out with a focus on safety, including the deployment of two drilling vessels.

The total cost of the drilling campaign is estimated to be in the region of $600MM, in line with previous guidance.

Atammik and Lady Franklin Blocks

Cairn increased its equity and acquired the operatorship of these blocks with effect from 1 January 2011.

The final selection of prospects for the 2011 exploration campaign is the LF-7 prospect in the Lady Franklin block and the AT-7 prospect in the Atammik block. Both prospects contain multiple structural targets in the Tertiary and Cretaceous sections, with expected mean prospective resources of 480 and 350 mmbbls respectively, with the probability of success estimated to range from around 10% to 20% dependent on the individual target horizons. The planned TD of the AT-7 prospect well is 3600m and 4,500 meters for the LF-7 prospect well.

Follow-up prospects are present in both blocks with an estimated combined gross mean in-place resource of more than eight billion barrels or 14 Tcf.

Napariaq

This block was awarded to Cairn in the Baffin Bay Bid round the results of which were announced by the Government of Greenland in December 2010.

The exploration well in this block will target the Delta prospect, which is a large structural culmination in the Cretaceous section where the overlying Tertiary volcanics are prognosed to be thin or possibly even absent. The Delta Prospect has an expected mean prospective resource of 530 mmbbls and probability of success estimated at around 10%. The potential for stacked pay could add further volumes to these estimates. The well is scheduled to be drilled to a depth of 4,750 meters and targets the potential reservoirs of Cretaceous age not reached in the Alpha-S1 well drilled in 2010. The Alpha-S1 well encountered oil shows in the thick (>1 km) Tertiary volcanic section. Geochemical analysis of the oil samples confirm three types of oil one of which comes from a pre-Tertiary source rock which is presumed Cretaceous in age as it has similarities with known Cretaceous oil seeps seen onshore in the Disko area. The Delta well is important for understanding the potential of a regional Cretaceous play in the offshore Disko area.

Eqqua

The Eqqua block lies to the south of the Sigguk block where the 2010 activities were focused and it was acquired by Cairn in the Disko West license round in late 2007.

The Gamma prospect in the Eqqua block is a combination structural-stratigraphic trap in an interpreted Tertiary basin floor fan at 2,500 meters overlying a deeper Mesozoic structural culmination at around 4,500 meters. The fan targets potentially thicker reservoir sands 100 km from the T-8 well but at the same stratigraphic level as the gas seen in thin sands in the T-8 well drilled in 2010. The Tertiary Gamma Prospect has a mean prospective resources of 1,840 mmbbls or 7 Tcf and probability of success of around 10%. The planned Gamma well is not designed to drill to the deeper Mesozoic target this year as this prospect will require proof of offshore Cretaceous reservoirs from the Napariaq Delta prospect well.

Pitu and Southern Greenland blocks

The Pitu block was acquired in the December 2010 Baffin Bay Bid round, the southern Greenland blocks were acquired in 2008.

Two 1,500km2 3D seismic surveys are planned to be acquired in each of these areas over structural complexes where leads and prospects with material potential have been identified.

The location of a third and contingent 3D seismic survey is yet to be decided and is dependent on operational results.

Mike Watts, Deputy Chief Executive, Cairn Energy, said, "The Group's strong financial position and entrepreneurial exploration focus has allowed it to build a strategic and leading early entry position in the frontier offshore basins of Greenland, which Cairn believes has the necessary geological ingredients for exploration success."

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BP Expects to Resume GOM Drilling by Summer

BP Expects to Resume GOM Drilling by Summer

Wednesday, April 27, 2011
The Wall Street Journal
by Guy Chazan

BP says it expects to resume drilling in the Gulf of Mexico by the summer, less than 18 months after a rig it had leased there exploded, killing 11 workers and triggering a catastrophic oil spill.

Company officials spoke as BP reported results that showed the repercussions of the Deepwater Horizon disaster continue to weigh on its balance sheet.

Fergus MacLeod, BP's head of investor relations, told analysts that BP is working toward a "phased resumption of activities [in the Gulf] in the middle of the year," subject to regulatory approvals. He said BP would only restart if it could meet or exceed new safety standards, such as tough requirements on oil-spill response capabilities and equipment such as blowout preventers.

A return to the Gulf would mark a big symbolic success for BP chief executive Bob Dudley and his efforts to rebuild a company still badly tarnished by last year's oil spill. BP is the largest producer in the deepwater Gulf of Mexico, one of its main heartlands, and it still owns more acreage there than any other company. But output from its Gulf fields has fallen sharply in the aftermath of the oil spill.

BP's replacement cost profit for the first quarter was $5.5 billion, down 2% from $5.6 billion a year ago and lower than most analysts' forecasts. The metric, which strips out changes in the value of crude inventories, is more closely watched by investors than the net profit figure, which was $7.1 billion in the first quarter, up 17% from $6.1 billion on a year ago.

BP also said it had taken an additional $400 million pretax charge for spill-related costs, bringing its total provision for the spill to $41.3 billion. Last week BP and its contractors on the blownout well, Transocean and Cameron, sued each other over the disaster.

BP's lower replacement cost profit--and the steep 11% drop in its oil and gas production--reflected the continuing impact of Deepwater Horizon. The company has had to sell billions of dollars worth of producing oil fields to cover the costs of the spill. And like other oil companies, its output was badly hit by the drilling moratorium which was imposed by the Obama administration in the wake of the Deepwater Horizon explosion and only lifted last October.

Company officials say its Gulf of Mexico production had declined by 100,000 barrels a day from 433,000 barrels a day last year--a 23% fall. BP's costs have risen, too--partly because of the huge expense of keeping its drilling rigs on standby in the Gulf waiting for the moratorium to be lifted.

Resuming operations in the Gulf has been difficult for all oil companies, not just BP. The new U.S. regulator, the Bureau of Ocean Energy Management, Regulation and Enforcement, BOEMRE, has imposed tough new safety and environmental standards on all operators, which now have to demonstrate how they would contain a subsea blowout.

Since February, BOEMRE has issued permits for the drilling of only ten wells. But allowing BP, which still faces a range of criminal and civil investigations over the Gulf spill, to resume drilling there could prove controversial. The company says it has asked regulators for permission to drill 10 development wells that were underway when the moratorium was imposed.

BHP First To Resume Drilling GOM Deep-Water Well

BHP First To Resume Drilling GOM Deep-Water Well

Wednesday, March 30, 2011
Dow Jones Newswires

by  Ryan Dezember

BHP Billiton began late Monday drilling a deep-water well in the Gulf of Mexico, the first such work to take place since the U.S. government banned deep-water drilling in response to last year's oil spill, reported the head of the conglomerate's oil and gas business.

Speaking to investors during the Howard Weil Energy Conference here, J. Michael Yeager said that a rig had moved onto its Shenzi prospect and resumed drilling a well there.

"We're back there drilling and we're delighted to be doing that but we're a long way from the five rigs we had when the moratorium hit," Yeager said.

The U.S. government instituted a six-month ban on deep-water drilling after Transocean's Deepwater Horizon, which was being leased by BP, exploded, killing 11 and unleashing the largest offshore oil spill in U.S. history. Even after the government's official ban was lifted in October, no drilling permits were issued by regulators until Feb. 28.

BHP, the third largest producer in the Gulf, was given permission March 11 to resume drilling its well, work that was stalled by the moratorium. The Anglo-Australian conglomerate's permit is one of six U.S. regulators have issued in recent weeks.

Yeager said that the drilling ban stalled work on 11 Gulf of Mexico wells, trimming BHP's expected 2011 output of the equivalent of 165 million barrels of oil per day by 12 million barrels, Yeager said.

"It's been quite devastating but we're very glad to be out there," Yeager said.

Yeager also said that separate U.S. regulators on Tuesday approved BHP's $4.75 billion purchase of Chesapeake's Fayetteville Shale natural gas fields in Arkansas. The largest ever shale asset deal in U.S. history, encompassing 480,000 acres and pipelines, should close on Thursday, Yeager said.

BHP plans to spend between $800 million to $1 billion annually over the next decade to develop the Arkansas fields in an effort to triple production from the equivalent 65,000 barrels of oil per day seen now, Yeager said.

The move into North America, where the gas that is produced is sold domestically in the world's largest natural gas market, helps BHP expand its market, which is currently weighted toward selling to China, Yeager said.

"We have 60% of our assets in Australia sold to China," he said. "That's a risk that we'd like to diversify away from."

Commodity Corner: Crude Climbs on Equities, Mideast

Commodity Corner: Crude Climbs on Equities, Mideast

Tuesday, March 29, 2011
Rigzone Staff
by  Saaniya Bangee

Crude futures advanced 0.8 percent Tuesday on stronger equities and doubts on whether Libyan rebels can resume crude exports within a week.

Tuesday's stock market rally helped oil prices snap out of a 3-day slump, settling at $104.79 a barrel. The 81-cent gain came in anticipation of increased oil demand in the U.S. As the first quarter for 2011 nears close, the Dow Jones Industrial Average and the Standard & Poor's 500 Index both gained 0.7 percent in afternoon trading.

Earlier Tuesday, prices fell to $102.70 a barrel on Libyan rebels' promise to swiftly return crude exports to markets. Traders remain weary as to how quickly and capable Libya will be in resuming exports, along with the remaining uncertainty in the Middle East.

Meanwhile, natural gas futures for April delivery fell by 3.1 percent to settle at $4.24 per thousand cubic feet. The April contract expired at Tuesday's settlement, which traders seized as an opportunity to cash out previous profits.

The Energy Information Administration reported 66.67 billion cubic feet a day, 0.5 percent lower, for U.S. natural gas production in the lower 48 states. The drop was still 6.8 percent higher from year-earlier levels.

Natural gas prices fluctuated between $4.195 and $4.37 Tuesday.
Front-month gasoline ended up Tuesday, settling at a session high of $3.05 a gallon. The session bottomed out at $3.01 a gallon.