Monthly Archives: February 2015

Faroe Petroleum Expects To Raise Exploration Capex In 2015

Jan 22 (Reuters) – Faroe Petroleum Plc said it expected its pretax exploration and appraisal capital expenditure to increase in 2015 as the oil and gas explorer leverages its cash flow and debt facilities.

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Average production in 2015 is expected at 8,000 to 10,000 barrels of oil equivalent per day (boepd).

Total average economic production for 2014 was about 9,100 boepd, the London-listed company said in a statement.

Faroe expects pretax exploration and appraisal capital expenditure of about 95 million pounds (about $144 million), more than the about 85 million pounds it spent in 2014.

Indonesia Plans to Offer 8 Oil, Gas Exploration Blocks in 2015

Indonesia intends to offer eight oil and gas exploration blocks this year as the government hopes to increase petroleum reserves and production, Acting Director General of Oil and Gas in the Ministry of Energy and Mineral Resources I Gusti Nyoman Wiratmadja said Tuesday in a written submission to Commission VII of the House of Representative.

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Four blocks will be offered through direct negotiations, while the remaining four will be via a regular tender, the official revealed, as indicated in a news release by Indonesia’s Ministry of Energy and Mineral Resources.

Tullow ‘Encouraged’ by Results at Epir-1 Well

Africa-focused independent producer Tullow Oil said Thursday that it was encouraged by the results at its Epir-1 exploration well, onshore Kenya, in spite of it not being a discovery.

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Tullow said the well encountered oil and wet gas shows over a 330-foot interval of non-reservoir quality rocks, demonstrating a working petroleum system in the North Kerio Basin. The well will be plugged and abandoned, following which the Weatherford 804 rig will move to the Ekales-2 location in the South Lokichar Basin – where the rig will conduct an appraisal of the discovery made by the Ekales-1 well.

Tullow reported that its Engomo-1 exploration well has commenced drilling. This is the first test of the prospective North Turkana Basin in Kenya Block 10BA and a result is expected during early March.

The firm also confirmed that it recently completed the drilling of the Ngamia-5, Ngamia-6 and Amosing-3 appraisal wells – with both Ngamia wells encountering several hundred feet of net oil pay. The Amosign-3 well on Block 10BB encountered approximately 350 feet of net oil pay in good-quality reservoir sands.

Meanwhile, Tullow has completed the acquisition of an approximately 350-square mile 3D seismic survey over several oil discoveries in the western basin-bounding fault play of the South Lokichar Basin. Fast-track processed data from this survey is already being used in the south of the basin.

Tullow Exploration Director Angus McCoss commented in a company statement:

“The Epir-1 wildcat well proved the existence of a working oil system in the North Kerio Basin, encouraging us to consider further exploration activities. The Ekales-2 exploratory appraisal well is a bold step-out away from the South Lokichar Basin bounding fault with follow up potential. Continued success in the appraisal of the Ngamia and Amosing oil fields is highly encouraging as we continue with development studies for the South Lokichar Basin.”

Taipan Provides Drilling Update on Badada-1 Well in Kenya’s Block 2B

Taipan Resources Inc. (Taipan, the Company), through its Kenya-based subsidiary Lion Petroleum (Lion), provided Wednesday the following update on drilling operations for the Badada-1 well, Block-2B, onshore Kenya.

The Badada-1 well commenced drilling operations at 14:00 GMT Jan. 7 and has been drilled to a total depth of 3,011 feet (918 meters) MDBRT (Measured Depth Below the Rotary Table) intersecting a Neogene sequence. A 20-inch casing has been set at 977 feet (298 meters) MDBRT and the well is currently drilling ahead with the 17.5-inch section to the next casing point. The plan is to drill the well to a total depth of between 9,842 and 13,123 feet (3,000 and 4,000 meters) in order to test primary targets in Tertiary age reservoirs. Lion, the operator on Block-2B, expects the well to take up to 70 days to complete.

The Company will provide further operational updates as the Badada-1 well progresses. A comprehensive update will also be provided once operations on the Badada-1 well have been fully completed and analyzed.”

Taipan estimates gross mean unrisked recoverable resources of 251 million barrels of oil equivalent (Source: Sproule International Limited, February 2014) for Badada.

Caribbean Rex Finds Commercial Oil in Trinidad & Tobago’s South Erin Block

Rex International Holding Limited (Rex International Holding or the Company, and together with its subsidiaries, the Group), one of the largest companies listed on the Catalist of the Singapore Exchange Securities Trading Limited, announced Wednesday that its 98.4 percent-owned license-holding company Caribbean Rex Limited (Caribbean Rex), has completed the drilling of three wells in the South Erin Block in Trinidad & Tobago. The wells were drilled as part of a three-well drilling program that Caribbean Rex started in the South Erin license in May 2014. Oil-bearing sands were encountered in all wells, two of which are deemed to be commercial with substantial net pay sands. Caribbean Rex will consider putting the wells on production as soon as testing has been completed and approvals have been granted.

Drilling activities in another of the Group’s concession in Trinidad & Tobago – the Cory Moruga block – constituting two wells, will be reported separately once concluded before the end of the second quarter in 2015.

The CH6 well in South Erin was drilled to 4,113 feet to the target formation of Lower Forest A and B sands while the CG8 well in South Erin was drilled to 5,900 feet to the target formation of Lower Forest A2, B2 and Cruse. Good quality oil-bearing sands were encountered in both these wells. The Cassava #1 well in South Erin was drilled to a total depth of about 6,000 feet to explore for extensions of productive Cruse and Lower Forest reservoirs outside of the main producing area. Although there were gas and oil shows, they were not in commercial quantities.

Kristofer Skantze, chief operating officer of Rex International Holding, said, “We are pleased with our strike rate of 67 per cent (two out of three wells drilled) in the South Erin Block, achieved with the assistance of Rex Virtual Drilling. The information that we have gathered from the wells will be used to further deepen our understanding of the sand trends in the Cruse and Lower Forest reservoirs within the concession. We were able to get drilling costing down to below $1 million per well, which was about 40 percent below budgeted costing, as a result of our cost management measures and taking advantage of the lower cost of oil drilling services over the past months, arising from the global fall in oil prices.”

Mans Lidgren, CEO of Rex International Holding, said, “Rex Virtual Drilling (RVD) has been incorporated together with conventional geological and geophysical studies in our work process to identify the locations of wells to drill. The drilling campaign in Trinidad holds important lessons for the refinement of RVD, especially for enhancing the technology’s use on onshore seismic data. The Rex Technology Management team will continue to work closely with the geological team to further improve the de-risking of the asset.”

Caribbean Rex holds a 100 percent working interest in South Erin Block and a 20 percent farm-in interest in Cory Moruga. In December 2014, Caribbean Rex divested its 100 percent interest in the subsidiary that holds the IPSC for the Inniss-Trinity concession, for an additional 34.19 percent stake in Caribbean Rex.

Origin to Assess Development Options for Speculant-1 Well in Otway Basin

Origin Energy Limited announced Wednesday that the Speculant-1 exploration well in permit VIC/L1(v) permit in Otway Basin, offshore Victoria, Australia, which was spud at 04.00 hours EST Sept. 23, 2014, had reached total depth of 16,132 feet (4,917 meters) MDRT (Measured Depth Below Rotary Table).

As announced Dec. 9, 2014, the Speculant-1 exploration well had encountered potentially commercial quantities of gas in primary target Waarre Formation reservoirs in the Otway Basin, offshore Victoria.

Preparations are being made to suspend the Speculant-1 exploration well while development options for the resource are assessed.

Well Type and Location

The Speculant-1 exploration well is situated approximately 1.86 miles (3 kilometers) off the southern Victorian coastline, about 18.64 miles (30 kilometers) south east of Warrnambool. Extended reach drilling technology is being employed to access offshore gas reservoirs. The well was drilled using the rig Ensign 931 in conjunction with the development drilling of the Halladale field. Origin has 100 percent ownership of the Speculant-1 well permit.

Thailand to Proceed with Exploration Block Bidding Round Despite Opposition

Thailand will proceed with its 21st petroleum exploration and production bidding round despite the National Reform Council (NRC) – an advisory institution established under the interim constitution set up after the military junta seized power last year – voting against it earlier this week, Energy Minister Narongchai Akrasanee said, as quoted in local daily The Nation Friday.

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The Thai government is sticking to its plan for the bidding round, launched by the Energy Ministry last October, as a failure to do so would undermine its international credibility, Narongchai commented.

The Ministry Fuels Department will close bidding for 23 onshore blocks and 6 six offshore blocks Feb. 18.

Activists have lobbied NRC members to scrap the latest bidding round and pressured the Thai Energy Ministry to replace the current petroleum concession system with a production sharing contract (PSC) model. Such a model would require the successful bidder to assume the entire cost of investment and production, while net profit would be mostly shared with the government as the company takes a lesser cut, another local daily Bangkok Post said Friday.

“I would like to reaffirm that this concessionaire system is suitable for Thailand, which has little resources, which means risk … Under this system, the find of a small petroleum field will be worthwhile for investment. But if a large field is found, it is even better,” Narongchai revealed.

As for the concessions of Chevron Corp., which will expire in 2022, and Thailand’s PTT Exploration and Production Public Company. Ltd. (PTTEP), which will lapse in 2023, Narongchai said the matter was under consideration by the Energy Ministry and a decision would be announced later this year.

Consultancy firm Wood MacKenzie commented last October that Thailand is moving “in the right direction by progressing the delayed 21st licensing round to ensure further acreage is fully explored and offer clarity on extensions of the expiring concessions. If clear guidelines are offered on the future of expiring licenses, the country could stimulate new investment in mature fields, potentially increasing recovery of their remaining resources.”

Egypt Signs Six New Oil And Gas Exploration Deals

CAIRO, Jan 9 (Reuters) – Egypt has signed six new oil and gas exploration contracts worth hundreds of millions of dollars with foreign and Egyptian companies, the oil ministry said on Friday.

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The agreements provide for the drilling of some 41 discovery wells in the western desert and Gulf of Suez, the ministry said in a statement via the official news agency.

Among the major companies selected are Shell, ENI , BP and Canada’s TransGlobe Energy.

Egypt has been struggling with soaring energy bills caused by the high subsidies it provides on fuel for its population of 87 million. The subsidies have turned the country from a net energy exporter into a net importer over the last few years.

The government is keen to develop untapped finds to reduce its reliance on imports but has struggled to persuade companies to invest in the biggest finds, which are offshore, because the amount it pays them barely covers the investment costs.

Economic turmoil has also caused the government to fall into arrears to existing producers. The oil ministry said last month Egypt had repaid $2.1 billion of its debt to foreign energy firms as it seeks to restore confidence and encourage investment. It still owes $3.1 billion.

Strike Updates on Southern Cooper Basin Gas Project in SA’s PEL 96

Strike Energy Limited (Strike) provided Tuesday an update on its continuing production testing program at its Southern Cooper Basin Gas Project in PEL 96 (Strike 66.7 percent and Operator, Energy World Corporation 33.3 percent) in South Australia.

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Production Update

Production testing operations have continued to progress over the Christmas and New Year period with steady increases in gas production observed.

The principal objectives of this program have been achieved, with sustained gas flows to surface at both locations and gas flows from Le Chiffre 1 being sufficient to flare.

In particular, analysis of Le Chiffre 1 downhole pressure, gas production and gas sample data has confirmed that gas saturation is in excess of 90 percent at this location.

Klebb Wells

To date, 45 days of cumulative testing has been completed at Klebb 1 with 12,000 barrels of water produced with sustained gas flow to surface established over this period.

Klebb 2 was commissioned just prior to year end with limited production time achieved before being shut in. Final commissioning of Klebb 3 has been delayed and will be completed upon recommencement of operations.

Le Chiffre 1

To date, 31 days of cumulative production data has been obtained from Le Chiffre 1 with 32,500 barrels of water produced. Sustained gas flows to surface have been established with gas flowing to the flare stack.

Petrobras and Indian Partners Find More Oil in Brazil

SAO PAULO, Jan 8 (Reuters) – Brazil’s state-run oil company Petroleo Brasileiro SA and its Indian partners have found more light crude oil in the Sergipe Basin off Brazil’s Northeast coast, according to a securities filing on Thursday.

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The discovery in the BM-SEAL-11 exploration block is one of several in recent years in an area believed to hold more than 1 billion barrels of recoverable oil, or enough to supply all needs in the United States for nearly 2 months.

Petrobras owns 60 percent of BM-SEAL-11 and is the operator. IBV Brasil SA owns the rest. IBV is a 50-50 joint venture between India’s Videocon Industries Ltd and Bharat Petroleum Corp.

The securities filing said drilling in the 9-BRSA-1280D-SES well on the Farfan prospect found a new 28-meter column of oil. It also confirmed the presence of light crude at density of 37 to 40 degrees on the American Petroleum Institute Scale first announced in 2013.

The discoveries also include natural gas. Farfan is located 107 kilometers (66 miles) east of Aracaju, the capital of Brazil’s Sergipe state, the filing said.

The BM-SEAL-11 exploration block is the biggest new oil offshore frontier in Brazil since giant discoveries in the Santos Basin south of Rio de Janeiro were announced in 2007.

Petrobras has said it plans to start producing oil in the area in 2018. The company, though, said in December that many of its plans may be revised as a giant corruption scandal delays release of its third-quarter results, puts it at risk of breaking debt covenants and shuts it out of capital markets.

While Petrobras says the BM-SEAL-11 discovery is large, the company has refused to release a resource size estimate.

The 9-BRSA-1280D-SES well was drilled by the Deepsea Metro II, a dynamic-positioned drill-ship owned by Greece’s Metrostar Management Corp. and Bermuda-based Norwegian drillers Odfjell Drilling Ltd, the filing said.