Rey Resources to Acquire Backreef’s 50% Interest in WA’s Derby Block

Rey Resources Ltd. (Rey or the Company) announced Friday that its subsidiary company Rey Lennard Shelf Pty Ltd. (RLS) has entered into an agreement with Backreef Oil Pty Ltd. (Backreef) to acquire a 50 percent interest in petroleum exploration license EP487, the “Derby Block”, located in the Canning Basin of Western Australia (the Agreement) subject to certain terms and conditions.

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The Derby Block is a large exploration license of approximately 1,930 square miles (5,000 square kilometers) that was recently granted to Backreef (50 percent) and Oil Basins Ltd. (50 percent). It occurs to the north of Rey’s existing interests in petroleum exploration licenses in the Canning Basin.

The Company considers EP487 to be prospective for hydrocarbons and look forward to working with Oil Basins to develop the Derby Block.

Backreef and Oil Basins are currently in dispute over Backreef’s interest in the Derby Block and certain unpaid cash calls that have occurred between the parties since 2012.

Key Terms of the Agreement

Under the Agreement, RLS will acquire Backreef’s 50 percent interest in the Derby Block (for either at RLS’s election):

  • $1.7 million (AUD 2 million), to be paid on the grant of a Production License in respect of EP487; or
  • a 2 percent royalty on future production

The Agreement is subject to certain conditions precedent, including:

  • conditions to RLS’s satisfaction, of ongoing hearings in the State Administrative Tribunal (SAT) of Western Australia where Oil Basins is currently seeking to have Backreef’s grant of title in EP487 by the WA government overturned. This is expected to conclude in January 2015
  • termination or expiration of existing agreements to sell the Derby Block to third parties; and
  • FIRB approval

RLS will also assume the conduct of, and bear the cost of, the SAT proceedings and outstanding legal claims on Backreef by Oil Basins in the WA District Court and Magistrates Court in connection with the expenses incurred on the management of the Derby Block to date. RLS will have the ability to terminate the Agreement and be relieved from any obligation to conduct and bear the costs of these proceedings at any time on the giving of 14 days’ notice to Backreef.

It is expected that, on completion of the acquisition, RLS and Oil Basins will form a joint venture to develop the Derby Block.

PGS Commences 3D Seismic Program in South Australia’s Ceduna Sub-Basin

Norway’s seismic surveyor Petroleum Geo-Services announced Monday the successful commencement of the Springboard MC3D program in the Ceduna sub-Basin offshore South Australia. The Springboard MC3D has significant industry support and is being acquired by the Ramform Sovereign, a PGS state-of-the-art seismic vessel that utilizes PGS’ GeoStreamer technology.

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The proven capabilities of GeoStreamer, PGS’ leading-edge towed streamer acquisition technology will enhance hydrocarbon exploration efforts by giving greater confidence in subsurface imaging, improved prospect definition and identification as well as better geological modelling with less reliance on sparse well data. The program will see some 3,088 square miles (8,000 square kilometers) of industry leading GeoStreamer data acquired in this frontier area.

About the Ceduna Sub-Basin

The Ceduna area has become a hotspot for exploration activity following recent gazettal round awards to major E&P companies and represents a significantly under-explored frontier area with the Springboard survey area presently lacking any 3D seismic data. It is widely expected that drilling will commence in this deep water area in 2016/2017 and, as such, all companies will be seeking to improve confidence in their leads and prospects with the new high quality Springboard 3D seismic data.

Eco Orient Energy Drills WBEXT-3F Well in Thailand’s Blocks L44/43, L33/43

Australia’s Carnarvon Petroleum Limited (Carnarvon) reported Tuesday that drilling has been completed on the WBEXT-10B well and has commenced in the WBEXT-3F well in the L44/43 and L33/43 Concessions in Thailand, in which Carnarvon holds a 20 percent interest.

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The WBEXT-10B well, drilled down dip in the WBEXT-3C/3D/3D fault block, was completed as a production well after encountering an oil column in the igneous reservoir, and after a week of testing is flowing at rates of between 400 and 450 barrels of oil per day (bopd) with 2-3 percent water cut.

The WBEXT-3F appraisal well is being drilled to determine the extent of the oil column in the WBEXT-3ST1 fault block.

During initial testing of the WBEXT-10B well the Thailand Concessions are flowing over 4,500 bopd (gross) with discussions ongoing with the Operator to determine the ultimate flow rates in line with previous decisions to reduce the rates of new wells in order to increase ultimate recovery per well.

Equity holders in the L33/43 and L44/43 Concessions are:

  • Carnarvon Petroleum – 20 percent
  • Eco Orient Energy (Operator) – 60 percent
  • Loyz Energy – 20 percent

BMT Lands ExxonMobil’s Contract for Angola’s Offshore Kizomba Project

BMT Scientific Marine Services (BMT), a subsidiary of the BMT Group, the leading international maritime design, engineering and risk management consultancy, announced Tuesday that it has been selected by Esso Angola to provide maintenance services for systems installed on the two Kizomba Tension Leg Platforms (TLP) offshore Angola.

BMT previously installed integrated marine monitoring systems (IMMS) on the TLP and Floating Production Storage Offloading (FPSO) facilities on both developments, as well as subsea riser tension monitoring systems. This contract allows BMT to provide servicing and maintenance on system instrumentation exposed to offshore conditions and ensure continued function and accurate data.

BMT’s Client Support Services plan will include twice-yearly service visits with calibration checks, software maintenance and updates, and remote technical support.

BMT provides innovative IMMS for a wide range of floating offshore oil facilities including the associated subsea risers and mooring systems. It delivers custom-engineered products from design through procurement, assembly, installation and operational support service. In addition, BMT deploys temporary monitoring systems for performance assessment, acceptance trials and forensic investigations. In combination with its extensive monitoring system experience, BMT provides data management and technical analysis of data acquired by the various permanent and temporary integrated marine and structural integrity systems.

BMT has an excellent track record in supplying 75 plus major Platform Integrity Monitoring Systems to operators in the Gulf of Mexico, offshore West Africa, Brazil, Malaysia and West of Shetland.

Strike Energy Updates on Southern Cooper Basin Gas Project in SA

Strike Energy Limited (Strike) provided Monday an update on production testing and drilling operations at the Southern Cooper Basin Gas Project in South Australia. Operations in PEL 96 are continuing to schedule with production testing operations at Klebb 1 and Le Chiffre 1 underway.

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Klebb Multi-Well Production Test
Pumping operations at Klebb 1 commenced on Friday, Oct.31 with water production rates of up to 600 barrels of water per day being achieved during initial commissioning. Water flow rates have steadily declined with approximately 3,000 barrels of water produced to date. Reduction in reservoir pressure has also been observed with increasing gas shows noted at surface.

As at 6:00am Nov. 10, Klebb 2 had reached total depth of 6,938 feet (2,115 meters) and production casing has been run and cemented. The well will now be completed for production testing.

Le Chiffre 1 Single Well Production Test
Pumping operations at Le Chiffre 1 commenced on Saturday, Nov. 8 with commissioning ongoing. Gas shows have already been observed at surface.

Testing Program – Forward Program
Production testing will continue with water and gas flow rates and pressures observed. Flow rates and pressure drawdown will continue to be conservatively managed to minimise potential for reservoir damage and ensure steady progress towards sustained gas flow at surface.

Managing Director’s Comment
“We are pleased to have successfully commenced testing operations at Le Chiffre 1 and Klebb 1 as planned. The early results are very encouraging as we have experienced lower volumes of formation water than anticipated and have already observed good gas shows at surface. Our next objective is to demonstrate sustained gas flows at  surface over coming months.”

Tap Oil Regains Producer Status as Thailand’s Manora Field Flows First Oil

Tap Oil Limited announced Wednesday that production has commenced at its flagship Manora Oil Development in the Northern Gulf of Thailand (Tap 30 percent interest) Nov. 11. The commencement of production has returned the Company to producer status following a two-year hiatus.

Tap Managing Director/CEO Troy Hayden said:

“The return to production constitutes a watershed event for Tap. It repositions the company as a mid-tier producer, it is expected to generate significant cash flow and to broaden the company’s investor appeal.

This forecast transformation in the company’s cash flow opens up a range of options which are being actively considered, including capital management (particularly utilizing the large franking credit balance) and reinvestment opportunities. All opportunities are assessed with a strict commercial and financial return focus.

Peak production at Manora is expected during 1Q 2015, with a possible material reclassification of 2C resources into 2P reserves over the course of 2015.

With the recent increased deal flow in the mid-cap oil and gas sector, it is apparent that long life production assets with substantial 2P reserves, such as Manora, are highly sought after and valued. The conclusion of the Manora development is a key milestone for Tap in realizing value.”

Production has commenced from two wells. As at 4:00pm AWST yesterday the Operator, Mubadala Petroleum, reported that flow has been brought online from the two wells, and is being progressively ramped-up from an initial combined rate of 2,200 barrels per day (gross). Start-up went safely and without incident. Flow will commence to the FSO (floating storage offloading) once production passes 5,000 barrels per day (gross). It is anticipated the platform will ramp up to peak production of 15,000 barrels per day (4,500 barrels per day net to Tap) during the first quarter of 2015.

Encana’s Operating Profit Nearly Doubles On Higher Oil Production

CALGARY, Alberta, Nov 12 (Reuters) – Encana Corp, Canada’s largest natural-gas producer, said on Wednesday its quarterly operating profit jumped 87 percent due to higher production of oil and natural gas liquids.

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The company also said net earnings skyrocketed to $2.81 billion from $188 million and reiterated its planned acquisition of Athlon Energy Inc will close on Thursday.

Encana agreed to buy Athlon in September to gain access toW a premier oil position in the Permian Basin, Texas. The $5.93 billion deal put Encana on track to achieve 75 percent of operating cash flow from liquids in 2015.

The company’s operating profit, excluding most one-time items, rose roughly in line with expectations to $281 million, or 38 cents per share, in the quarter from $150 million, or 20 cents per share, a year earlier.

Under chief executive Doug Suttles, the company has been focusing on boosting production of oil and natural gas liquids (NGLs) after years of weak profits caused by its reliance on natural gas production.

Encana is paying for its oil acquisitions by selling gas fields as it concentrates its operations on seven oil and NGL-rich regions, including Eagle Ford in Texas and Duvernay in Alberta.

Suttles said the company was likely to scale back on acquisition and divestitures in 2015, after exiting 11 plays since it first rolled out the strategy of boosting oil production in 2013.

“The portfolio feels to be in a great place, we have a great mix of oil and natural gas opportunities,” he said on a conference call on the third-quarter results. “I’d be surprised if we had the same level of portfolio change next year that we had this year. It would be hard to keep the pace up.”

Oil and NGL production jumped 79 percent to average 104,000 barrels per day in the third quarter ended Sept. 30, helped by volumes from recently acquired properties in the booming Eagle Ford shale field.

Natural gas production fell 19 percent to 2.2 billion cubic feet per day. Encana has extended planned maintenance at the Deep Panuke natural gas field, offshore Nova Scotia, with production is expected to restart by early December.

Encana’s cash flow, a key indicator of its ability to pay for new projects and drilling, rose 22 percent to $807 million, or $1.09 per share.

EnQuest Production Rises on Ramped Up New Assets

Nov 12 (Reuters) – Britain’s EnQuest Plc reported a 19.2 percent rise in oil production in the first 10 months of the year, helped by new assets in Malaysia and Tunisia – its first producing oil fields outside the North Sea.

Shares in the company rose as much as 7.7 percent to 75.30 pence in early trade on the London Stock Exchange.

Production during January-October rose to 27,567 barrels of oil equivalent per day (boepd).

EnQuest, which specialises in maximizing oil output from old fields, kept its production target for the year at between 25,000-30,000 boepd.

The company said it expected capital expenditure in the UK of $700 million to $800 million for 2015, weighted towards the second half of the year.

EnQuest shares were up 1.5 percent at 71 pence at 0916 GMT.

HHI Inks $1.94B EPCIC Deal with ADMA-OPCO for UAE’s Nasr Field Project

South Korea’s Hyundai Heavy Industries Co., Ltd. (HHI) signed a $1.94 billion contract with Abu Dhabi Marine Operating Company (ADMA-OPCO) for the second package of the Nasr Full Field Development Project in the United Arab Emirates (UAE), the company announced Wednesday.

Under the contract, HHI will provide engineering, procurement, construction, installation and commissioning work for the super complex comprising a gas treatment platform, a separation platform and an accommodation platform, HHI said in a press release.

The South Korean contractor, which received a Letter of Award for the project from ADMA-OPCO July 7, will also lay 89.4 miles (144 kilommeters) subsea power and 34.1 miles (55 kilometers) infield cables as well as modify an existing manifold tower and two wellhead towers in Nasr oil field, which is located 81.4 miles (131 kilometers) northwest of Abu Dhabi, UAE and work for Power Distribution Facilities from existing DAS Island to super complex.

Work is scheduled for completion within the first half of 2019 and the facilities – to be installed 81.4 miles (131 kilometers) northwest off Abu Dhabi City – will increase the daily oil production capacity of the offshore field to 65,000 barrels from the current 22,000 barrels.

Interra Ups CHK 1180 Well Production in Myanmar’s Chauk Oil Field

Interra Resources Limited (the Company or Interra) reported Tuesday that its jointly controlled entity, Goldpetrol Joint Operating Company Inc. (Goldpetrol), has achieved a significant production gain at CHK 1180 in the Chauk oil field in Myanmar.

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Interra has a 60 percent interest in the Improved Petroleum Recovery Contract of the Chauk field and also owns 60 percent of Goldpetrol which is the operator of the field. The additional work done on CHK 1180 was performed by Goldpetrol’s well servicing rig.

CHK 1180 was completed as an oil producer in February at 165 barrels of oil per day (bopd), but with natural decline, production had fallen to 75 bopd. Shallower zones were recognized as having considerable potential based on wireline logs and it was decided casing perforation of an additional 30 feet covering three reservoirs would be performed.

The new oil from these reservoirs has been commingled with the existing reservoirs, and following production testing, the combined rate has increased to 185 bopd – a gain of 110 bopd.

The CHK 1180 production gain marks the second well to realize a significant increase by employing additional perforations within the last two weeks. This is a continuation of an effort to maximize production in existing wells.