Sound Oil Passes Test at Marciano Well

- Sound Oil Passes Test at Marciano Well

Tuesday, June 28, 2011
Sound Oil plc

Sound Oil announced the following news concerning its Italian assets.

Testing operations at the Marciano-1ST well have produced gas at rates up to 98,000 scmd (~ 3.5 MMscfd) from one of the two perforated zones before the well had to be restrained due to site flare restrictions. The test will continue to determine a stabilized flow rate and information from the test flow will be used to determine the scope for early commercialization of the well.

Sound Oil has a 100% operated interest in the Marciano project located on the Fonte San Damiano Concession.

Commenting on these announcements Gerry Orbell, Sound Oil's Chairman and Chief Executive Officer, said, "This is a very encouraging result from Marciano where the upper sand has tested gas at very good rates. The next step is to re-certify the production equipment on site and then to generate revenue. Altogether today is a very good day for the Company."

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Krafla West Delivers for Statoil

- Krafla West Delivers for Statoil

Tuesday, June 28, 2011
Statoil

Oil and condensate have been proven by Statoil and its partners, Det Norske Oljeselskap ASA and Svenska Petroleum Exploration AS, in the North Sea's Krafla West prospect.

Located about 26 kilometers south-west of Oseberg South, the discovery well found hydrocarbons in two columns with a total thickness of 300 meters.

Preliminary calculations indicate that the find contains some 12.6-37.7 million recoverable barrels of oil equivalent (boe).

"The North Sea still has a considerable exploration potential," observed Gro Gunleiksrud Haatvedt, senior vice president for the North Sea in the Exploration business area.

"Through the discoveries in Krafla and now Krafla West, we've proven reserves of 50-75 million boe. This must be considered a very substantial figure in a near-field context."

The two wells are the first drilled by Statoil in the license, she noted. "Discoveries with both wells indicate that we've understood how the hydrocarbon systems in this area function."

"The Krafla and Krafla West discoveries provide the basis for a robust fast-track project," added Tom Dreyer, head of exploration for the northern North Sea. "They show that growth opportunities still exist in this mature part of the North Sea."

A fast-track development of both discoveries through tie-backs to existing infrastructure in the Oseberg area will be considered.

Krafla and Krafla West lie in the same area as Stjerne, formerly Katla, which was proven in 2009 and is already covered by a plan for development and operation (PDO) from Statoil.

The Krafla/Krafla West wells were drilled from Ocean Vanguard, which is now moving to production license 569 at the southern end of Norway's North Sea sector to drill for Statoil on the Theta North-East prospect.

The licensees in the latest discovery are Statoil as operator with 50%, Det Norske Oljeselskap ASA with 25% and Svenska Petroleum Exploration AS with 25%.

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Repsol, Partners Make Discovery Offshore Brazil

- Repsol, Partners Make Discovery Offshore Brazil

Tuesday, June 28, 2011
Repsol YPF

Repsol Sinopec and its partners Statoil and Petrobras have made a discovery of good quality oil in the 1-REPF-11A-RJS well, informally known as Gávea. The find in Gávea is the most significant made in the pre-salt area of the Campos Basin.

The well, located 190 kilometers off the coast of Rio de Janeiro, was drilled with the latest-generation Stena DrillMAX drillship in a water depth of 2,708 meters (8,885 feet), reaching a final depth of 6,851 meters (22,477 feet).

The consortium is currently analyzing the results of the well before continuing with exploration and evaluation work in the area.

Repsol Sinopec, with a 35% stake, is the operator of the exploration consortium, in partnership with Statoil (35%) and Petrobras (30%).

Repsol Sinopec and the consortium informed the Brazilian authorities of the existence of traces of hydrocarbons in the Gávea exploratory well in March 2011 for the first level and April for the second one.

Repsol Sinopec is the largest foreign owner of exploration rights in the Santos, Campos and Espírito Santo basins, participating in 16 blocks of which it operates 6.

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China Ministry Held First Shale Gas Block Auction Monday -Official

- China Ministry Held First Shale Gas Block Auction Monday -Official

Tuesday, June 28, 2011
Dow Jones Newswires
SHANGHAI
by Jing Yang

China's Ministry of Land and Resources held its first shale gas block auction Monday, a ministry official said Tuesday, marking a move to exploit on a large scale the new source of the cleaner-burning fuel.

There are serious concerns about contamination of ground water during hydraulic fracturing--known as fracking, the process by which shale gas is extracted from wells drilled deep into relatively impermeable rock beds--but the country's massive estimated reserves could help to slow its increasing reliance on imported energy.

The auction results will likely be announced in mid-July, and the firms that win blocks will be allowed to work with foreign companies, said the official, who didn't wish to be named.

PetroChina, China Petroleum & Chemical Corp., CNOOC, Shaanxi Yanchang Petroleum Group, China United Coal Bed Methane Co. and Henan Provincial Coal Seam Gas Development and Utilization Co. participated in the auction, the official told Dow Jones Newswires.

The auction covered four blocks in southwestern Guizhou province and Chongqing city, covering an area of 11,000 square kilometers, the state-controlled Xinhua News Agency said.

The ministry is expected to hold at least one more auction later this year, which could allow more companies, such as China Sinochem Group Corp. and China Zhenhua Oil Co., to participate.

Technical advances allowing the development of shale gas have transformed the U.S. energy sector in recent years, prompting a wave of merger-and-acquisition activity and sharply reducing reliance on gas imports.

Earlier this year, CNOOC Ltd. bought into several shale oil and gas leases in the U.S. owned by Chesapeake for $570 million in cash, following a similar deal in October.

The U.S. Energy Information Administration estimated in a report that China holds 1,275 trillion cubic feet of technically recoverable shale gas reserves, the largest in the world.

Beijing has invited U.S. and European companies into its tightly controlled onshore gas acreage in order to gain technical know-how.

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

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