Tuesday, February 26, 2013

Asha Discovery Estimated to Hold 25-35 MMboe

Bridge Energy, a partner in Production License 457, announced in a press release the increased resource estimates for the 16/1 Asha oil discovery in the Norwegian sector of the North Sea. This follows the completion of well operations on 16/1-6 well and the sidetrack well 16/1-16A in January 2013 and further analysis carried out since then.

The Asha discovery encountered good quality oil in excellent reservoirs within the Middle Jurassic Hugin formation and Triassic Skagerrak formation. A preliminary estimate of the size of the Asha discovery is reported to be between 25 and 35 million barrels of oil equivalent (MMboe) recoverable resources within the license, which excluded potential additional volumes outside the license.

"I am very pleased to announce this positive development on the Asha oil discovery, which shows increased commercial resources situated close to the other significant developments in the area - the Ivar Aasen and Edvard Grieg fields. Asha will make a significant contribution to the total resources within the western Utsira High area," stated Tom Reynolds, CEO of Bridge Energy.

The operator has indicated that the Asha discovery is in direct communication with a large upside volume to the east of the main structure. Based on the updated mapping, it is estimated that the size of the discovery to be between 30 and 100 MMboe of recoverable resources within license PL 457. Bridge stated that these estimates exclude potential additional volumes in neighboring licenses - estimated to be of a similar order of magnitude.

Further appraisal of the discovery is being considered by the consortium.

With more than 10 years of journalism experience, Robin Dupre specializes in the offshore sector of the oil and gas industry. Email Robin at rdupre@rigzone.com.

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Lukoil Proved Reserves Stand at 17.3B Barrels

Russia's Lukoil announced Wednesday that an audit has shown its proved hydrocarbon reserves at the end of 2012 stood at 17.3 billion barrels of oil equivalent (boe), which included 13.4 billion barrels of oil and 23.5 trillion cubic feet of gas.

Lukoil said that its replacement of production by proved reserves during the year exceeded 100 percent. Proved reserves were increased due to exploration, production drilling and acquisitions that totaled 703 million boe. Detailed field appraisal in the Northern Caspian and Komi regions were responsible for the greater part of the proved reserves increment, the firm said.

Lukoil added that its probable reserves at the end of 2012 amounted to 7.7 billion boe and possible reserves stood at 4.3 billion boe.

The audit was carried out by US firm Miller and Lents.

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The Quest for Oil Continues in the Falklands

The Quest for Oil Continues in the Falklands

Around this time last year, there was much anticipation about a four-well drilling campaign offshore the Falkland Islands in the South Atlantic Ocean.

The particular focus was on the South Falkland Basin and many observers of Falkland explorers, not to mention investors in these companies, were hoping that similar success could be achieved to Rockhopper Exploration's discovery of up to 1.4 billion barrels of oil at its Sea Lion prospect in the North Falkland Basin in the spring of 2011.

As it turned out, none of the exploration wells drilled by Falkland Oil and Gas (FOGL) and Borders & Southern found commercial oil, although Borders' Darwin well did find an estimated 190 million barrels of condensate (with an API of between 46 and 49 degrees).

The condensate at Darwin "could be close to being commercial" and it has "the potential to act as the cornerstone for a hub development," analysts at investment bank Goldman Sachs said in a December research report. Since then, in late January, Borders announced it had upgraded its Darwin find to a mid-case of 210 million barrels of condensate.

Borders' Stebbing well – drilled in the summer – encountered very strong gas shows but was unable to reach its lower targets due to anomalous pressure conditions, and was plugged and abandoned.

Meanwhile, both of FOGL's wells, which were drilled late last year, found gas.

The Scotia exploration well – drilled to a depth of 18,225 feet in November – encountered what the company described as "strong gas shows", although Goldman Sachs described these results as "disappointing" and ascribed no value to Scotia as a consequence. However, FOGL previously scored a success with its Loligo well in September, finding multiple gas-bearing zones with more than 328 feet holding hydrocarbons.

"Obviously one of the things we have to do is evaluate the results of those two wells and see what they mean," FOGL Chief Executive Tim Bushell told Rigzone in a recent phone call.

"All four wells that were drilled last year found hydrocarbons, identified as gas or gas condensate, which – in market terms – I guess has raised a few questions about the South Basin in terms of whether there is any oil there."

"I think we continue to believe that the answer to that is a definite yes, but obviously we didn't find any in the four wells that were drilled last year. But that doesn't mean there's none there.

"So, one of the aims going forward... is going to be trying to target the more oily parts of that basin. But the full results from the wells are only just coming in now, so it will take another three or four months to understand exactly what they are telling us. But there's nothing in there that says there isn't oil in the basin and we were pleased with the results last year because they have basically proven there is a hydrocarbon system working the basin, which was pretty good considering it's a new area... a frontier area."

The firm's partner, U.S. company Noble Energy (which farmed in for a 35-percent stake in both FOGL's southern and northern area licenses in the South Falkland Basin), has also embarked on a 1,544-square mile (4,000-square kilometer) 3D seismic survey over the mid-Cretaceous Diomedia fan complex, which is located in the southern area licenses. A second 3D seismic survey, a joint survey with Borders and Southern, is expected to begin in February.

"We have some lookalike features to Darwin next door, so we're going to be shooting 3D over that," said Bushell.

"And then, because you can't shoot seismic through the southern hemisphere weather window, we will come back probably around October to do a third survey that will run into next year."

Goldman Sach's oil analysts stated that they continue to believe that FOGL's acreage offers "significant upside potential and that the upcoming 3D seismic campaign may be better suited than the existing 2D seismic data to pick sweet spots on the large stratigraphic traps that are a feature of the acreage".

But what are the options if FOGL and Noble fail to find any oil or condensate and perhaps just find more gas?

"One is to look at gas and the commercialization of gas and gas liquids, and there are a number of different ways you can do that in the Falklands. On one end of the spectrum... is simply to try and strip the liquids out, the condensates out, and then put the gas back in the ground. I know that's something they are looking at for Darwin. At the other end of the spectrum is taking all the gas and liquids that may exist now or in the future around the Falklands, and putting them through a land-based LNG plant on the Falklands," said Bushell.

According to Bushell, it is certainly possible to lay a pipeline from the Loligo discovery to the Falklands and build an LNG plant there, and he pointed out that similar projects have been achieved before. For example, the LNG facility that services the Snøhvit field, and two other gas fields, in the Barents Sea was built on a hollowed-out island in northern Norway with the LNG plant built in Spain and brought in by barge.

"That, as a concept, could easily be done in the Falklands," said Bushell, although he cautioned: "We recognize that a land-based LNG project is: a) very expensive and b) a long-term project. So, it's something we'll look at but our preference in the short-to-medium term would be to also find some oil."

Interest from Noble Energy in the South Falkland Basin is a huge vote of confidence in the view that oil does reside there, Bushell added.

"Noble [has] taken on a lot of the operatorship. And while they don't dismiss gas they are very focused on the oil potential of the basin," he said.

"This basin is the size of the North Sea and even now it's only got five wells in it. Up to the beginning of last year it had only one well in it. A lot of companies recognize the huge potential but obviously with that go some fairly big risks. And we believe the four wells drilled last year have significantly reduced a lot of the risk about the key things you look for in a basin."

Meanwhile, in the North Falkland Basin not much activity is expected in 2013, with the main focus being on development plans for the one commercial oil field found so far: Sea Lion.

After Rockhopper's discovery in 2011, independent firm Premier Oil paid an initial $231 million to farm into a 60-percent share of the Falklands-focused junior's license interests in the region last summer. Premier also gained operatorship of the Sea Lion project and is committed to spend $722 million funding Rockhopper's development expenditure as well as a further $48 million of the junior's share of three exploration wells planned for 2014 in the North Falkland Basin.

Premier now has a detailed pre-FEED (front end engineering design) work program for the Sea Lion development underway, with concept validation and pre-FEED studies expected to be completed by mid-2013. First oil from the field is targeted before the end of 2017.

A former engineer, Jon is an award-winning editor who has covered the technology, engineering and energy sectors since the mid-1990s. Email Jon at jmainwaring@rigzone.com.

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Technip Awarded Gannet EPIC Contract

French oilfield services firm Technip announced Wednesday that it has been awarded an EPIC (engineering, procurement, installation and construction) contract for the Gannet F Reinstatement project in the North Sea.

The contract – awarded by Shell UK – involves the replacement of the Gannet F flow line at the Gannet Alpha Platform, which is located approximately 110 miles east of Aberdeen, Scotland. It covers the fabrication and the laying of a 7.5-mile pipe-in-pipe, installation of a 4.5-inch gas lift pipeline and the trenching and installation of a 7.5-mile umbilical.

Technip said its operating center in Aberdeen, Scotland will execute the contract, which is scheduled to be completed in the second half of 2013. The company's spoolbase in Evanton, Scotland, will fabricate the pipe-in-pipe and DUCO, Technip's wholly-owned subsidiary in Newcastle, England, will manufacture the umbilical.

Technip's pipelay vessel, Apache II, will be used for the offshore campaign.

Technip UK Managing Director Bill Morrice commented in a company statement:

"We are delighted to have been awarded this contract which strengthens our relationship with Shell UK. Our vast experience in providing cost-effective and efficient pipe-in-pipe solutions for our clients will help us execute this project safely and effectively. We look forward to supporting Shell to maximize production from the Gannet field."

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Lukoil Proved Reserves Stand at 17.3B Barrels

Russia's Lukoil announced Wednesday that an audit has shown its proved hydrocarbon reserves at the end of 2012 stood at 17.3 billion barrels of oil equivalent (boe), which included 13.4 billion barrels of oil and 23.5 trillion cubic feet of gas.

Lukoil said that its replacement of production by proved reserves during the year exceeded 100 percent. Proved reserves were increased due to exploration, production drilling and acquisitions that totaled 703 million boe. Detailed field appraisal in the Northern Caspian and Komi regions were responsible for the greater part of the proved reserves increment, the firm said.

Lukoil added that its probable reserves at the end of 2012 amounted to 7.7 billion boe and possible reserves stood at 4.3 billion boe.

The audit was carried out by US firm Miller and Lents.

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Bibby Wins Contract to Manage BP Vessels in North Sea

BP has awarded UK firm Bibby Ship Management a $160 million contract to manage four Regional Support Vessels (RSV) and an additional two new-build Platform Supply Vessels (PSV) for operations in the North Sea.

Bibby described the award as a "key milestone" in its drive to build on its expertise in the management of offshore vessels. The contract will be managed from Aberdeen and will involve more than 200 crew and support staff.

The contract, which will run for a minimum of five years, includes the management of eight Autonomous Rescue and Recovery Craft sited onboard the four existing RSVs. Bibby will also provide management support for the new build and commissioning of the two new PSVs.

Mark Hardie, UK Logistics Infrastructure Manager for BP, commented in a statement:

"This award is a key component of BP's long term marine strategy and we look forward to working with Bibby Ship Management to ensure high levels of service to our offshore operations. The five-year contract involves managing the existing Caledonian vessels as well as the two new high specification supply vessels which will be joining the BP fleet from 2014. The award is good news for the 200 crew and support staff involved in this contract."

Bibby Line Group Managing Director Sir Michael Bibby added:

"We are absolutely delighted to work with BP in providing full technical management and logistics services for these vessels in the UK North Sea. The award of this contract reflects the benefit of our investment in Bibby Ship Management's systems and people to create a high quality ship management business with great safety awareness, which can deliver real value to our clients."

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CEA Welcomes Next Interior Secretary Nomination

The Obama administration announced Wednesday that Sally Jewell, the CEO of outdoor gear company REI, is the administration's choice to become the nation's 51st Secretary of the Interior. Jewell is a relative newcomer to political circles. Consumer Energy Alliance welcomes the opportunity to learn more about Ms. Jewell's priorities during the confirmation process.

Upon release of the announcement, Consumer Energy Alliance (CEA) President David Holt issued the following statement:

"As others have noted, the jurisdiction of the Department of the Interior is extremely broad and requires leadership that recognizes the multiple goals and the responsible use of our nation's federal lands and resources. CEA and our more than 200 affiliate members representing virtually every aspect of the U.S. economy look forward to learning about Ms. Jewell's thoughts on this matter and her priorities for the Department of the Interior during the forthcoming confirmation process."

"One of the most defining issues for the next Secretary of the Interior will be providing consistent and reasonable access to abundant energy resources located within the boundaries of our federal lands. The next Secretary of the Interior will preside over decisions that could dramatically change the trajectory of our energy future, namely the future of Outer Continental Shelf energy development and hydraulic fracturing on public lands. Developing these resources while protecting our environment is of the utmost importance, and one that could allow the U.S. to become energy self-sufficient in just a few years."

"Given these multiple goals, it's comforting to know that as the executive of a multi-billion dollar retail business, Jewell should understand well the impact that high energy costs can have on operational expenses for businesses and the price of manufactured goods, including REI's signature camping gear and other products. As such, CEA hopes Jewell will pursue efforts that thoughtfully expand domestic energy production – both traditional and renewable – in order to support American businesses and consumers."

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PA Resources Names New CFO

PA Resources AB has appointed Tomas Hedström as its new Chief Financial Officer (CFO). Tomas Hedström has broad international experience in accounting and finance from listed companies and will be a member of PA Resources' Group Management.

Tomas Hedström joins PA Resources from his position most recently as CFO of Rottneros AB. Prior to that, he served in several positions at SCA, with sales of more than SEK 100 billion and 50,000 employees, most recently as Senior Vice President Finance. Tomas has a long record of international experience both in accounting and finance as well as from operational positions in the UK, Belgium and the United States. He will assume his duties as CFO by Aug. 1, 2013 at the latest.

"I look forward to working with Tomas," commented Bo Askvik, President and CEO of PA Resources. "His broad international experience in financial reporting, control, finance, capital rationalization and mergers & acquisitions, combined with operational responsibility, make him a valuable addition to PA Resources' continued development. I am very pleased to welcome Tomas to PA Resources in connection with the Company's now completed recapitalization."

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Goodrich Petroleum to Spud Well in Tuscaloosa Marine Shale

Goodrich Petroleum Corporation (GDP) Wednesday announced the completion of its Crosby 12H-1 (50 percent working interest) well in Wilkinson County, Mississippi. The well is continuing to improve with a current production rate of 1,250 barrels of oil equivalent per day (boepd) and a 24 hour average rate of 1,130 boepd comprised of 1,050 barrels of oil and 469 million cubic feet (Mcf) of gas, on a 15/64" choke with 2,700 psi. The well, which has approximately 6,700 feet of usable lateral and was fracked with 25 stages, is in the early stage of flowback, with approximately 1 percent of the frac fluid recovered to date.

The Company is also participating in the Anderson 17H-2 well, which is currently drilling, with a 7 percent non-operated working interest. The Company plans to spud its next operated Tuscaloosa Marine Shale well, the Smith 5-29H-1, during the second quarter. The Ash 31H-1 and Ash 31H-2 wells, in which the Company has a 12 percent non-operated working interest, are currently expected to be completed in February.

The Company currently has approximately 135,000 net acres in the play, and now expects to spend the higher end of its previously announced 2013 capital expenditure budget in the TMS of approximately $50 million.

Encana and Contango Oil & Gas Company each own a 25 percent working interest in the Crosby 12H-1 well.

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Victoria Now Fully Funded to Develop Cameroon Field

West Africa-focused Victoria Oil & Gas announced Wednesday that it was fully funded to meet long-term corporate objective and to commercialize its Logbaba gas discovery in Cameroon after raising approximately $36 million with institutional investors.

Victoria said the funds, along with a $15 million lending facility, will be used to fund the build-out phase of Logbaba project as the company increases production and sales. The company believes that having found substantial gas, established a market and completed an initial pipeline to that market, the optimal use of its capital is to complete the second phase of its pipeline, purchase power generation units and pay off existing financial and trade debts.

At the end of January the company reported that it now had 15 contracted customers taking gas at rates of 2.8 million standard cubic feet per day and that there remain a further 10 contracted customers awaiting conversion of their facilities to take gas. The firm has also identified more than 60 prospects for gas and/or on-site gas-fired power demand along existing and planned pipeline routes.

Victoria Chairman Kevin Foo commented in a statement:

"The last three years have been extremely challenging but we have become the first onshore gas producing company in Cameroon. We have made a significant gas discovery and in this period we have delivered gas to a hungry market. Our gas and condensate field lies in the heart of a city of three million people that is the industrial hub of Central Africa, with a rapidly increasing demand for energy and power."

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