East Texas, Haynesville Production Stable Despite Wildfires

- East Texas, Haynesville Production Stable Despite Wildfires

Friday, September 09, 2011
Rigzone Staff
by Karen Boman

The wildfires plaguing East Texas have not impacted natural gas production volumes in the region, including Haynesville shale play production, but evacuations and fire-related damage have negatively impacted demand, BENTEK Energy reports.

Over the last three days, evacuations and fire-related damage in Texas have led to a near 1.0 Bcf total demand loss. BENTEK expects demand recovery to be gradual, though some demand should return due to rising temperatures. The Texas gas demand forecast, based on temperatures, shows power burn increasing by nearly 1.0 Bcf in the coming week, BENTEK said.

The Haynesville shale, one of the largest gas shale plays in the U.S., straddles the Texas and Louisiana border. Haynesville shale production from both states totals just above 5.0 Bcf/d, with about half of that production coming from the Texas side, BENTEK reports.

“BENTEK’s sample of production receipts from East Texas and Haynesville has not yet shown a distinct decline in production receipts that could be directly attributable to the fires,” BENTEK said in a report today. However, some of the fires have erupted around the perimeter of Haynesville shale counties, raising concerns about safety and disruptions in the fields.

Wildfires have burned acres in Harrison County, Texas, a core Haynesville production area in the state, and four non-core Haynesville production counties in Texas, Gregg, Marion, Nacogdoches and Rusk.

“If fires were to erupt in more developed areas of the shale, operations would undoubtedly have to be shut in, restricting production,” BENTEK said. “Even without a fire, downed power lines or disruptions in power transmission could also impact operations of pump jacks and compressor stations.”

To date, 26 large fires have burned nearly 114,000 acres in Texas, and are threatening oil and gas operations in the East Texas region as well as Louisiana and Oklahoma. An estimated 1,700 homes were either evacuated or lost, and more are threatened by fires.

“Much of East Texas is experiencing the highest level of drought conditions, and the fire danger in the East Texas Basin remains high to very high,” BENTEK said. Tropical Storm Nate will likely spare Texas from high winds but also withhold chances for rain.

Louisiana’s Department of Natural Resources (DNR) on Sept. 6 issued an advisory calling on oil and gas operators to monitor conditions closely and take necessary steps in case of fire, including shutting in wells, production facilities and pipelines if necessary.

“As drought conditions persist in many areas of our state, so does the risk of wildfire and the potential for wildfires to grow quickly out of control once they start,” said DNR’s Commissioner of Conservation Jim Welsh. He reminded operators that state regulations require combustible vegetation, trash and debris should always be kept at least 100 feet away from wellheads, production equipment, storage tanks and other exploration and production site structures.

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ONGC Videsh Seeks Producing Assets In Politically Stable Countries

- ONGC Videsh Seeks Producing Assets In Politically Stable Countries

Tuesday, August 30, 2011
Dow Jones Newswires
NEW DELHI
by Rakesh Sharma

Oil & Natural Gas Corp. (500312.BY) is seeking producing assets in politically stable countries as it seeks to cut its geographical risks, the head of the Indian explorer's overseas investment unit said Tuesday.

"We have investments in many risky countries. We would be diversifying to more stable countries like North America," Joeman Thomas, managing director of ONGC Videsh Ltd., told reporters on the sidelines of a news conference.

The social and political upheaval in the Middle East and North Africa has drastically raised the risk profile of some prolific international basins that hold substantial hydrocarbon reserves, impacting investment plans of global oil and gas explorers, ONGC said in its annual report earlier this month.

OVL holds stakes in exploration blocks in places like Libya, Syria and Sudan, which have been hit by political unrest.

Thomas said the decision on re-adjusting the portfolio was taken about two years ago. He added that the company aims to acquire producing properties over the next two to three years as it has a mandate to source 20 million tons, or 400,000 barrels a day, of crude from overseas assets by 2020.

OVL expects its share of output from overseas assets at 8.75 million tons in the current financial year through March 2012, he said.

In March this year, India's top auditor had criticized OVL over its investments and joint ventures overseas saying that the explorer wasn't able to mitigate risks and leverage the benefits from the financial strength and expertise of the joint venture partners. The auditor said that OVL needed to improve its core competence in the evaluation of investment opportunities.

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

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Transocean: Rig Off Ghana Remains Stable after Taking On Water

- Transocean: Rig Off Ghana Remains Stable after Taking On Water

Friday, July 08, 2011
Dow Jones Newswires
HOUSTON
by Ryan Dezember

Transocean said Thursday that the deep-water drilling rig off Ghana that was evacuated Wednesday after it took on water remains stable.

The company is working on unmooring the Transocean Marianas, which is anchored some 46 miles offshore, and plans to tow it to sheltered water to inspect damage, spokesman Guy Cantwell said.

It will likely be at least a week before a full damage assessment can be made, Cantwell said.

There have been no injuries and a skeleton crew remain aboard the vessel, Cantwell said. And because the rig was not drilling when it began taking on water, there is no risk of an oil spill.

Transocean owned the Deepwater Horizon, which exploded last year while drilling a well for BP in the Gulf of Mexico, killing 11 and touching off the worst offshore oil spill in U.S. history. Since then Transocean has faced scrutiny over its safety procedures and maintenance of the world's largest offshore drilling fleet.

More than 100 workers were evacuated from the Marianas on Wednesday when it was discovered to have taken on water. A semisubmersible rig, the Marianas floats on large ballast tanks, or pontoons, which are filled with water for stability during drilling and emptied to ease transport. It was built in 1976 and upgraded to drill in depths up to 7,000 feet in 1998.

The rig had been drilling for ENI and was in the process of being moved to drill an exploration well for Kosmos Energy and partners that include Anadarko, Tullow Oil and Ghana's national oil company.

The Marianas was expected to arrive on site next week and Kosmos on Thursday asked Ghana for more time to begin drilling the prospect while it searches for a new rig.

The loss of income from the Marianas, which earned $450,000 a day on its contract with ENI, will likely trim Transocean's earnings by 15 cents per share this year, analysts with Tudor, Pickering, Holt & Co. said in a client note.

"As of now we are assuming rig does not work for rest of 2011," the Houston-based analysts said.

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

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S&P Lifts BP Outlook To Stable; Sees Less Downside Risk

- S&P Lifts BP Outlook To Stable; Sees Less Downside Risk

Wednesday, July 06, 2011
Dow Jones Newswires
by Melodie Warner

Standard & Poor's Ratings Services revised its credit outlook on BP to stable from negative, saying it sees less downside risk to the oil company's credit quality and little evidence of further erosion to its business standing.

The ratings company also affirmed BP's long-term corporate credit rating of A, which is five steps below the coveted AAA.

"The stable outlook reflects our view that BP is well positioned to meet potentially substantial additional fines and other payments related to the Gulf of Mexico disaster," the firm said. For its analysis, S&P assumes that all Gulf of Mexico-related payments will total less than $55 billion and will be spread over several years.

The ratings firm noted BP's first-quarter average realized oil price was 19.2% higher than the fourth quarter, and rose 31% from a year earlier. BP's refining margins also expanded in 2011, while its underlying downstream operating profit increased to $2.1 billion in the first quarter, from a quarterly average of $1.2 billion in 2010, despite a 6% decline in refining throughput, S&P said.

But, a sustained decline in oil prices below $70 a barrel alongside underlying operating cash flow of less than $25 billion could put downward pressure on the ratings, S&P said. Any upside rating potential is limited until there is more clarity on the penalties BP could face in the U.S. for the Gulf of Mexico oil spill.

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

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S&P's Ratings Services Affirmed Credit Ratings For US, Revised Its Outlook To Negative

S&P's Ratings Services Affirmed Credit Ratings For US, Revised Its Outlook To Negative



Apr 18, 2011

Standard & Poor's Ratings Services affirmed its 'AAA' long-term and 'A-1+' short-term sovereign credit ratings on the U.S., according to a Bloomberg report.

It also revised its outlook on the long-term rating to negative from stable.

The revised outlook reflects the U.S.'s "very large budget deficits and rising government indebtedness" relative to its triple-A peers.