New Well Spud on Kharsang Field

India-focused Jubilant Energy announced Tuesday the spudding of well KPL-3E-7, the first of a six-well development drilling campaign in the oil-producing Kharsang field in the state of Arunachal Pradesh.

The Phase-III-Extension campaign was approved by the management committee for the Kharsang field in January after the conclusion of what Jubilant described as a successful seven-well Phase-III drilling campaign between July 2011 and August 2012. Six of the seven wells in the Phase-III campaign have been put into production and currently produce around 700 barrels of oil per day.

KPL-3E-7, which is located in the northwestern area of the field, is being drilled as an infill development well, with the H-00 reservoir sand layer as its primary objective and G-00 and D-00 sand layers as secondary objectives. The well is expected to take approximately three weeks to drill, said Jubilant.

Jubliant holds a 25-percent interest in the Kharsang field.

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Europa Makes Steady Progress

Europa Oil & Gas reported Tuesday that its UK production for the first six months of its financial year was in line with management expectations at an average volume of 177 barrels of oil equivalent per day (boepd) .

Europa currently has three producing assets onshore in the East Midlands region of the UK. It has a 100-percent working interest in the West Firsby and Crosby Warren fields as well as a 65-percent working interest in the Whisby 4 well. During the period workovers were successfully completed on two West Firsby wells, and both wells are now back on production, said the firm.

Europa added that the company is on target to deliver its full-year average production target of 180 boepd.

Europa CEO Hugh Mackay commented in a statement:

"I am highly encouraged by the continuing good performance of our producing UK assets which has generated revenues of GBP 2.2 million ($3.4 million) in the first half of this year. The back to back workovers on the two West Firsby wells were potentially disruptive and I commend our operations team for their efforts, dedication and professionalism in completing the work efficiently."

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ExxonMobil Adds Reserves, Increases Proven Reserves Modestly

Exxon Mobil Corp. said Tuesday that in 2012 it added in reserves slightly more oil and gas than it produced, with the majority of the new reserves coming from oil-rich assets in North America.

The world's largest publicly-traded oil company said it added proven reserves totaling 1.8 billion oil-equivalent barrels, of which 1.4 billion barrels consisted of petroleum and other liquids, a sign that Exxon has been emphasizing oil exploration at the expense of its less profitable natural gas business.

Also, Exxon said it added more than 750 million oil equivalent barrels from the oil-rich Woodford and Bakken shale areas in North Dakota, which are among the fastest-growing oilfields in the world. About 600 million barrels of oil equivalent came from additions in Alberta and in offshore Canada.

The fact that most of the newfound energy padding the company's reserves comes from unconventional assets in North America underscores how the technological unleashing of massive resources from U.S. shale to Canada's oilsands has prompted global giants to shift their attention away from riskier overseas prospects.

Exxon has been criticized about its 2010 purchase of XTO Energy Inc., which made it the largest natural gas producer in the U.S. at a time when prices for the commodity plummeted amid a market glut.

At the end of last year, the majority of Exxon's reserves shifted to liquids--at 51%--up two percentage points. Natural gas, as a percentage of the company's reserves, was down two points at 49%, as Exxon replaced less natural gas than it produced.

Exxon added back in new reserves about 115% of the oil and gas it produced; the company said it's the 19th year in a row that it replaced the totality of its production. Excluding the impact of asset sales, reserve additions last year replaced 124% of output. Exxon's reserves at the end of 2012 totaled 25.2 billion barrels of oil equivalent, up from 24.9 billion at year-end 2011.

Adding new reserves in sufficient quantity is a major challenge for the biggest oil companies, which produce prodigious amounts of energy and need to find rare prospects that are big enough to make a difference in their portfolio. Exxon's reserve replacement was the best among its peers, followed by Chevron Corp. with 112% and by Total SA with 93%, say analysts with UBS.

Copyright (c) 2012 Dow Jones & Company, Inc.

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Bualuang Field Trumps Expectations

Four wells of the current 16-well development program on the Bualuang oil field in the Gulf of Thailand are now in production and have been performing ahead of pre-drill expectations, reported the operator Salamander Energy.

All the wells have been drilled horizontally into the T4 Miocene sandstone reservoir encountering between 1,624 feet to 1,739 feet (495 meters to 530 meters of pay), with excellent reservoir properties. The Atwood Mako (400' ILC) is drilling the development wells.

Year-to-date production for the Bualuang field averaged 10,531 barrels of oil per day (bopd), with average daily production in 2012 rated at 7,200 bopd. The operator is forecasting that the field will produce between 11,000 and 14,000 bopd, representing a minimum of a 50 percent increase in production year on year.

Salamander has contracted the jackup for a two-year period until September 2014.

Located offshore Thailand in the Western Basin's Block B8/38, the Bualuang oil field is estimated to hold reserves of 20 million barrels of oil. Salamander Energy serves as the operator of Bualuang with a 100 percent interest in the field.

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Brazil's ANP to Hold Oil Bid Rounds for Small, Medium Producers

RIO DE JANEIRO - Brazil's National Petroleum Agency, or ANP, plans to target small and medium-size oil producers with annual auctions of marginal oil and natural-gas concessions, the regulator said Monday.

ANP said that the auctions will feature concession blocks in mature basins that have been widely explored, as well as inactive fields containing "marginal accumulations" of oil and natural gas. The ANP, which didn't give a preliminary date for when the auctions would start, said that it would establish criteria to determine which companies could participate.

The auction is another step forward for oil and natural-gas exploration in Brazil after it halted the sale of concession auctions amid an overhaul of local regulations.

The ANP is scheduled to hold its 11th-round auction, the first since December 2008, on May 14-15. The fresh rounds of bidding are expected to generate a surge in activity across Brazil's oil industry, which was running out of areas to explore in the absence of concession auctions. Oil companies had warned that exploration could dry up as soon as 2015 without new sales of exploration acreage.

Brazil's first auction of subsalt exploration acreage under new production-sharing agreements has been preliminarily set for Nov. 28-29. Billions of barrels of oil have been discovered in the subsalt region, where oil and natural gas were found trapped deep beneath the ocean floor under a thick layer of salt.

The subsalt bid round would be followed by the sale of unconventional oil and natural-gas concessions, the same type of shale and tight-gas acreage that sparked an oil-industry revolution in the U.S., on Dec. 11-12. The unconventional concessions wouldn't be included in the auctions for small and medium producers, the ANP said.

Copyright (c) 2012 Dow Jones & Company, Inc.

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ExxonMobil Adds Reserves, Increases Proven Reserves Modestly

Exxon Mobil Corp. said Tuesday that in 2012 it added in reserves slightly more oil and gas than it produced, with the majority of the new reserves coming from oil-rich assets in North America.

The world's largest publicly-traded oil company said it added proven reserves totaling 1.8 billion oil-equivalent barrels, of which 1.4 billion barrels consisted of petroleum and other liquids, a sign that Exxon has been emphasizing oil exploration at the expense of its less profitable natural gas business.

Also, Exxon said it added more than 750 million oil equivalent barrels from the oil-rich Woodford and Bakken shale areas in North Dakota, which are among the fastest-growing oilfields in the world. About 600 million barrels of oil equivalent came from additions in Alberta and in offshore Canada.

The fact that most of the newfound energy padding the company's reserves comes from unconventional assets in North America underscores how the technological unleashing of massive resources from U.S. shale to Canada's oilsands has prompted global giants to shift their attention away from riskier overseas prospects.

Exxon has been criticized about its 2010 purchase of XTO Energy Inc., which made it the largest natural gas producer in the U.S. at a time when prices for the commodity plummeted amid a market glut.

At the end of last year, the majority of Exxon's reserves shifted to liquids--at 51%--up two percentage points. Natural gas, as a percentage of the company's reserves, was down two points at 49%, as Exxon replaced less natural gas than it produced.

Exxon added back in new reserves about 115% of the oil and gas it produced; the company said it's the 19th year in a row that it replaced the totality of its production. Excluding the impact of asset sales, reserve additions last year replaced 124% of output. Exxon's reserves at the end of 2012 totaled 25.2 billion barrels of oil equivalent, up from 24.9 billion at year-end 2011.

Adding new reserves in sufficient quantity is a major challenge for the biggest oil companies, which produce prodigious amounts of energy and need to find rare prospects that are big enough to make a difference in their portfolio. Exxon's reserve replacement was the best among its peers, followed by Chevron Corp. with 112% and by Total SA with 93%, say analysts with UBS.

Copyright (c) 2012 Dow Jones & Company, Inc.

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SandRidge Shareholder Questions Related-Party Transactions

WCT Resources, a company owned and controlled by trusts established by SandRidge Energy CEO Tom Ward to benefit his children, controls approximately 475,000 acres adjacent to SandRidge in the Mississippi Lime play, TPG-Axon Capital reported Tuesday.

Investment firm TPG-Axon, which owns 7 percent of SandRidge's outstanding shares and is seeking to replace the company's current board of directors and change the company's bylaws, made the finding in a review conducted of 22 counties in Oklahoma and Kansas, saying in a Feb. 19 presentation that it had found an "undeniable pattern" of conflicted related-party transactions of large proportions with entities related to Ward and his family.

WCT's acreage position in the Mississippi Lime would make WCT the fifth largest exploration and production company in the Mississippian play, behind only SandRidge, Chesapeake Energy, Royal Dutch Shell plc and Devon Energy Corp., a direct competitor of SandRidge, TPG-Axon said in a statement.

"TPG-Axon is concerned not only by the scale of WCT Resources' involvement in the Mississippian, but by the suspicious timing of the company's purchases," TPG-Axon commented, noting that it had discovered that, in many instances, WCT and SandRidge actively acquired acreage within weeks and months of each other.

"Contrary to SandRidge's claims, based on the data TPG-Axon has reviewed, this pattern of activity is not rare; it is now clear that the degree of overlap and competition is truly massive," TPG-Axon noted.

TPG-Axon has previously stated it believes SandRidge stockholders may have been disadvantaged by the actions of entities related to Ward or his immediate family members. The company is asking shareholders to vote in favor of amending SandRidge's bylaws and replacing its entire board of directors.

SandRidge's current management received a vote of confidence from independent proxy advisory firm Egan-Jones Proxy Services, which recommended shareholders back the company's current board in connection with TPG-Axon's current proxy fight.

"We believe that voting to revoke consents to the TPG-Axon's consent solicitation is merited and in the best interest of the company and its shareholders," Egan-Jones said in a statement.

The firm reached its decision to back SandRidge's current board based in part on its belief that TPG-Axon has provided no specific plans and no substantive new ideas or valid reasons to change the company's strategic direction that will enhance the company's stockholder value.

Egan-Jones also does not believe TPG-Axon's proposed board of directors would work to the benefit of shareholders, the firm said in a statement.

SandRidge officials praised Egan-Jones recommendation.

"Our highly qualified and independent board has taken decisive steps over the last few years to transition SandRidge to an oil focused producer with a leading position in the Mississippian play," the company said in a statement.

While SandRidge believes its current board has the right skills, experience and expertise to oversee continued execution of its strategic plan, TPG-Axon's nominees are not familiar with the company's operations, and SandRidge officials believe they do not have the needed qualifications to serve on the SandRidge board.

TPG-Axon's nominees for SandRidge's board include Stephen C. Beasley, who previously served as president of El Paso Corporation's Eastern Pipeline Group. Beasley is the founder and CEO of Houston-based executive leadership and strategic investment firm Eaton Group.

Other nominees include Edward W. Moneypenny, who retired as senior vice president of finance and chief financial officer from 7-Eleven in 2006 and was chief financial officer of Florida Progress Corporation, now Duke Energy Corporation, and Oryx Energy Corporation.

Fredric G. Reynolds, who served as executive vice president and chief financial officer of CBS Corporation from January 2006 through August 2009 and as president and chief executive officer of Viacom Television Stations Group, is also among TPG-Axon's nominees.

Karen Boman has more than 10 years of experience covering the upstream oil and gas sector. Email Karen at kboman@rigzone.com.

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Bering Exploration Concludes Initial Production Test at North Edna Prospect

Bering Exploration, Inc. announced Wednesday that it has completed the initial production test conducted at the conclusion of the re-completion performed on one of its wells on its North Edna prospect. The initial test report showed that the well flowed at 400 million cubic feet per day on a #6 choke at a 2914 pressure rate with a recovery rate of 4.33 barrels per day of condensate and no water from a virgin zone in this formation. This 348 acre prospect is located in Jefferson Parish, Louisiana and has potential gross reserves of the equivalent of 1 million barrels which, based upon current prices, equates to a gross value of more than $95 million dollars.

"We are very pleased to get a positive test result," stated Steven Plumb, VP of Finance of Bering. "We are now taking bids to complete the well and establish a gas pipeline tie-in."

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Juniors Strike Georgian Gas Deal

Energy juniors Range Resources, Red Emperor Resources and Strait Oil and Gas UK have reached an agreement with Georgian Industrial Group for the joint development of a coal-bed methane (CBM) project in the Republic of Georgia.

A development company is to be set up, in which GIG will hold a 50-percent interest, which will begin feasibility and technical studies that will be followed by a three-to-four well pilot project around the Tkibuli-Shaori Coal Field. It is expected that six CBM wells per annum, each producing up to 500,000 cubic feet of gas per day, could be drilled on the coal field – which contains contingent resources of approximately 400 billion cubic feet of gas.

GIG has agreed a 'take-or-pay' arrangement for all the gas produced by the development company.

Range Resources Executive Director Peter Landau commented in a statement Monday:

"This is a major opportunity for the company and the significance of the project should not be understated. The partnership with the Georgian Industrial Group, the largest industrial and holding company within Georgia, is a milestone towards establishing itself in a country that still remains almost entirely dependent on imports of foreign natural gas."

Energy analysts at London-based FoxDavies Capital commented that the deal with GIG is a major step forward for both Range Resources and Red Emperor since it "(i) alleviates one of the key issues regarding [their] portfolio; (ii) provides the prospect for near-term cash flow; and (iii) means that neither company [has] to continue to pay for the acreage as the partner will take it forward."

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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