San Leon to Begin Czaslaw-1 Stimulation, Test

San Leon Energy announced that its planned stimulation and test of the Czaslaw-1 well on the Company's Nowa Sol Concession in the Permian Basin of Poland will begin April 22 with the mobilization of coiled tubing, nitrogen lift equipment, and surface test equipment from Vechta, Germany. Recent measurements of the well have shown that the well is building pressure. After taking samples of the fluid in the wellbore the Company has recovered natural gas (including C1-C8) and light oil. Schlumberger has been contracted to complete this phase of the project. 

The Company estimates the following timeline:

April 25 - acid wash and clean out of the wellApril 26-30 - acid squeeze into the Main Dolomite reservoir; after soaking lift fluids in the well bore using nitrogen, followed by 3 day flow test up to 400 bbls of oilMay 1 - shut-in the well for 5 day build-up with downhole gaugesMay 6 - decision on a long term test and oil production, based upon results of the acid stimulation and test

The Czaslaw SL-1 well reached a total depth of 5,112 feet (1,558 meters) measured depth (4,032 feet or 1,229 meters TVD). The well penetrated 141 feet (43 meters) of the targeted Permian Main Dolomite reservoir. Petrophysical analysis shows moderate fracturing of the Main Dolomite within an estimated 95 feet (29 meters) of naturally fractured reservoir. Live oil shows were present on 90 percent of the core plug and detailed petrophysical and core analysis indicates moveable light oil in the Main Dolomite reservoir. The entire Main Dolomite interval shows high fluorescence suggesting both moveable and residual oil. Integrated petrophysical and rock-mechanical analyses suggest the well is a good candidate for artificial stimulation to enhance the natural fractures in the reservoir. There were no indications of water encountered during drilling. The well is the first well on the Czaslaw structure, with room for additional vertical and/or horizontal wells. Several similar structures have been identified in the Company's Nowa Sol 3D seismic survey which covers less than 15 percent of the Nowa Sol Concession area.

Executive Chairman, Oisin Fanning commented:

"The recent recovery of hydrocarbons and build-up of pressure in the Czaslaw-1 well is very exciting. We have been studying the Main Dolomite extensively over the past months with experts both in Europe and North America. We are now ready to stimulate and test the well and with success immediately move to production. There is a huge amount of oil in place in the Main Dolomite and we are committed to unlocking both the conventional and unconventional potential of the petroleum system."

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Petroceltic Awarded Two Egyptian Blocks

Junior explorer Petroceltic International announced Friday that it has been awarded two blocks in Egypt as part of a joint venture with Edison International.

The blocks, North Thekah and South Idku, were awarded in the Egyptian Natural Gas Holding Company 2012 International Bid Round.

North Thekah (Block 7) is located offshore the Nile Delta and potentially contains an extension of the Levantine Basin exploration play that has already yielded some giant discoveries. Petroceltic has a 50-percent, non-operated interest in the concession.

South Idku (Block 1) is located in Petroceltic’s core Egyptian operating area, onshore the Nile Delta. In this concession the company has a 75-percent operated interest.

Petroceltic expects the new licenses to be formally awarded in late 2013, following ratification and finalization of the production sharing contracts.

Petroceltic Chief Executive Brian O’Cathain commented in a statement:

"We are delighted to have been awarded both blocks which, together with last year's El Qa'a Plain award, onshore the Gulf of Suez, significantly enhance our Egyptian exploration portfolio. North Thekah is in an area of the Mediterranean which has seen several world class discoveries in recent years and South Idku will complement our existing onshore Nile Delta operations.

"Furthermore, the award of these blocks is consistent with our strategy of organic growth and opportunistic resource capture in territories where we have existing operations, knowledge and experience."

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Media shines a light on Colorado BLM leasing plans

News stories last week show that BLM Colorado State Director Helen Hankins is up to her old tricks. According to stories in E&E News’ Energywire, the Durango Herald, and the Denver Business Journal, Dir. Hankins is following her consistent pattern of offering to auction off controversial land for oil and gas, even after major public outcry. This time, Dir. Hankins’ plans to offer more than 10,000 acres near Mesa Verde National Park – worsening air pollution problems the park is already experiencing from existing nearby drilling operations and coal-fired power plants.

It’s worth noting that bringing these oil and gas proposals back puts Dir. Hankins in direct conflict with the balanced approach to public land use that Interior Sec. Sally Jewell spent her weekend endorsing to Western governors.

You may remember that in early 2013, Dir. Hankins deferred the Mesa Verde parcels after the National Park Service, landowners, and community groups protested the threat posed to the park from drilling pollution. Her reversal demonstrates why Sec. Jewell should rein in the Colorado BLM office and ensure that Dir. Hankins is using innovative 2010 oil and gas leasing reforms such as “Master Leasing Plans” which allow a more balanced approach to energy development and look at on-the-ground impacts, including threats to air quality and tourism and recreation. Instead, Dir. Hankins continues ignore the balanced approach Westerners want and plays her part as the oil and gas industry’s real estate agent.

In the Durango Herald, Emery Cowan reported that the La Plata County Commissioners sent a letter to Dir. Hankins asking her to implement the Obama administration’s oil and gas leasing reforms.

County asks for delay in gas and oil lease

“However, by making the decision to lease (the La Plata County parcels in November), the BLM appears to be shutting the door on a (master plan) and a smart approach to protect the treasures that are so important to our local community and economy,” the letter said.

Scott Streater, writing for E&E News, noted that former park rangers weighed in on the original lease sale with concerns of how oil and gas leasing would affect one of the nation’s most iconic parks, Mesa Verde National Park.

BLM to put deferred parcels near Colo. national park back on the block

Among those that protested against leasing the parcels was the Coalition of National Park Service Retirees, which wrote a letter in February to Salazar complaining that development of the eight parcels “could further impair the already degraded air quality at Mesa Verde, harm important scenic values within the surrounding landscape and negatively affect the local economy, which depends greatly on the national park’s protected status.”

Writing in the Denver Business Journal, Cathy Proctor noted that Mesa Verde attracts more than half a million visitors annually.

Denver Business Journal: Feds to re-offer oil and gas leases near Mesa Verde National Park

The federal Bureau of Land Management is moving forward with a controversial plan to offer about 12,000 acres of mineral rights in southwest Colorado for oil and gas drilling at its November auction — including parcels near the entrance to Mesa Verde National Park.

As public outcry continues to grow, we’ll be watching to see if Dir. Hankins is allowed to continue making the Administration’s reforms into a broken promise for Western communities.

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New World in Danish Farm-In Discussions

New World Oil & Gas reported Friday that discussions are ongoing with potential farm-in partners for its Danica Jutland project on license 1/09, onshore Denmark.

The firm said that interpretation of its 3D seismic acquisition program on the project's Jensen prospect is now complete. Independent consultant RPS Energy has assigned the Jensen prospect prospective resources of 48 million barrels of oil, and an updated competent person’s report will be released by the mid-2013.

On New World's Danica Resources project, a 2D seismic acquisition program has now been completed. This revealed high grading data on large Zechstein Zn-2, Zn-3 and Zn-4 leads that total 13,485 acres. Interpretation of the data is now underway with a view to deciding which leads are to undergo a 3D seismic acquisition program.

New World says that P50 volume estimates for the Als Prospect within the Danica Resources project remain at 97 million barrels of oil and 1.4 trillion cubic feet of gas.

New World has a 25-percent working interest in both projects, with an option to earn up to 80 percent in each of them.

New World CEO William Kelleher commented in a statement:

"Whilst drilling is underway in Belize, progress continues to be made across the Atlantic at our Danish assets. We have completed the initial interpretation of the 3D seismic data on our Jensen prospect on block 1/09, and RPS Energy are now compiling the data into an updated CPR which will be available before the end of the second quarter 2013.

"Meanwhile, our recent 2D program on block 1/08 has just been completed. We are eager to receive the results of this program as the data will reveal which of several large structures already identified we will further de-risk with a 3-D program."

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Statoil Proves New Resources on its Gullfaks License

Norway's Statoil reported Friday that it has proven significant additional resources within the Shetland Group/Lista Formation in its Gullfaks license in the Norwegian North Sea.

Statoil said that preliminary calculations indicate that the discovery contains between 40 million and 150 million recoverable barrels of oil equivalent. However, the company cautioned that this resource estimate involves a "high degree" of uncertainty and that data gathering and studies are currently ongoing to clarify the potential and further development of the resources.

Production well 34/10-A-8 on the Gullfaks A platform, where the well test is being carried out, is currently producing at a rate of 7,500 barrels per day, the firm added. The well has produced nearly one million barrels since December 2012.

"The discovery provides new volumes that can give high-value production in a short time as well as new and promising perspectives for the field and the installations," Øystein Michelsen, Statoil's executive vice president for Development and Production Norway, commented in a company statement.

"This is a result of Statoil's strategy for revitalization of the Norwegian continental shelf."

Located in the Tampen area in the northern North Sea, Gullfaks came on stream Dec. 22 1986. The field development consists of three permanent installations, which have produced more than 2.4 billion barrels of oil and more than 56 billion cubic meters of gas.

Statoil, the operator, holds a 70-percent interest in the Gullfaks field, while its partner Petoro holds 30 percent.

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Baker Hughes' Reports Lower Profits, Revenue for 1Q 2013

Oilfield services provider Baker Hughes Inc. reported lower profits and revenue for the first quarter amid higher activity levels in Canada and improved utilization in its pressure pumping business.

The company's net income fell to $267 million, or $.60 per share, from $379 million, or $.086 per share last year. Revenue for the first quarter of 2013 was $5.23 billion, down 2 percent compared to $5.33 billion for the fourth quarter of 2012 and down 2 percent compared to $5.36 billion for the first quarter of 2012.

"Our first quarter results reflect improvement in our North America segment," said Martin Craighead, Baker Hughes' president and chief executive officer, in a released statement. "The increased revenues and profit margins in North America are due to higher activity levels in Canada, along with improved utilization in our pressure pumping business despite a 3 percent decline in the U.S. onshore rig count since last quarter. Following five consecutive quarters of declines in the U.S. rig count, we are now forecasting a modest increase for the remainder of the year."

The company also reported that adjusted net income for the first quarter of this year excludes a foreign exchange loss of $23 million before and after-tax ($.05 per diluted share) on the devaluation of Venezuela's currency in February.

Baker Hughes' revenue decreased 9 percent in North America to $2.603 billion and slipped 4 percent in Europe/Africa/Russian Caspian to $854 million.

"We believe Baker Hughes' 1Q13 earnings release has positive implications for the stock," noted analyst James West in Barclays Earnings at a Glance analysis. "Results in North America improved sequentially with higher revenue and stronger operating margins and the company showed solid growth, especially for margins, in the Middle East/Asia Pacific region as well."

Baker Hughes' cash increased roughly 8 percent from last quarter to $1.1 billion and its capital expenditure for the quarter was $490 million, compared to $727 million in 4Q 2012, West reported. Additionally, Baker's debt increased from $176 million to more than $5 billion.

An area worth noting in the company's lineup is the Middle East/Asia Pacific region. Revenue for this segment, $894 million, improved 1 percent sequentially and was higher than Barclay's forecast of $864 million.

"Operating income of $116 million rose 45 percent from the previous quarter and far exceeded our $77 million estimate," West stated. "The margin at 13 percent expanded from 9 percent in the prior period and was well above our 8.9 percent forecast."

"Offset was impressive in the Middle East/Asia Pacific region, which suggests BHI is making progress in Iraq," Tudor Pickering Holt also noted in its daily Energy Thoughts analysis.   

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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Saudis, Iran Vie for Key OPEC Research Job

Saudi Arabia and Iran have both put forward candidates to replace the departed head of research at the Organization of the Petroleum Exporting Countries, Middle Eastern oil officials said Friday, as competition for influence in the group heats up between the two arch-rivals.

The two Middle East nations already have nominees to replace Abdalla Salem el-Badri as secretary general--the most important position at OPEC.

But the Middle East officials say a permanent replacement is being sought after the departure of Hasan Qabazard, the former director of OPEC research division. He has been replaced on a temporary basis by Oswaldo Tapia, the latest OPEC monthly report shows.

The position is important because it entails overseeing the monthly report, which spells out the group's views on oil markets and supply requirements.

Muhammad Ali Khatibi, Iran's OPEC governor, said "we have a candidate for the head of research and the secretary general," adding it had proposed one different person for each job. A Gulf delegate said Saudi Arabia has also put forward a "technocrat" for the job.

The competition for the job comes as OPEC members are facing a raft of new challenges, from mounting budget pressures fuelling higher oil-price needs and competition from non-conventional oil production in the U.S.

Copyright (c) 2013 Dow Jones & Company, Inc.

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Kea's Mauku Well to Be Plugged, Abandoned

Kea Petroleum plc, the oil and gas company focused on New Zealand, announced drilling results from the Mauku 1 well.

Mauku 1, located in PEP381204 onshore Taranaki, reached a total depth of 10,564 feet (3,220 meters) measured depth April 16. The well intersected over 1,049 feet (320 meters) of the target Mangehewa formation which contained over 459 feet (140 meters) of reservoir quality sandstone.

Log analysis indicated that the well failed to intersect any hydrocarbon pay and consequently it will be plugged and abandoned.

The presence of a high quality reservoir section, and the information gathered during drilling and logging the well, will be important in guiding future exploration in PEP381204 and on the Eastern margin of the Taranaki basin.

Mauku 1 was drilled as part of a farm out alliance whereby half the cost of the well was met by Kea.

Ian Gowrie-Smith, chairman of Kea Petroleum, commented: "Whilst this is not the drilling result we were looking for, the data we have collected will be very useful to the further exploration of the PEP381204 license area. We are close to commissioning the production facilities at Puka, where we have achieved encouraging oil flow rates, and look forward to receiving cashflows from Puka in the near future."

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Saudis, Iran Vie for Key OPEC Research Job

Saudi Arabia and Iran have both put forward candidates to replace the departed head of research at the Organization of the Petroleum Exporting Countries, Middle Eastern oil officials said Friday, as competition for influence in the group heats up between the two arch-rivals.

The two Middle East nations already have nominees to replace Abdalla Salem el-Badri as secretary general--the most important position at OPEC.

But the Middle East officials say a permanent replacement is being sought after the departure of Hasan Qabazard, the former director of OPEC research division. He has been replaced on a temporary basis by Oswaldo Tapia, the latest OPEC monthly report shows.

The position is important because it entails overseeing the monthly report, which spells out the group's views on oil markets and supply requirements.

Muhammad Ali Khatibi, Iran's OPEC governor, said "we have a candidate for the head of research and the secretary general," adding it had proposed one different person for each job. A Gulf delegate said Saudi Arabia has also put forward a "technocrat" for the job.

The competition for the job comes as OPEC members are facing a raft of new challenges, from mounting budget pressures fuelling higher oil-price needs and competition from non-conventional oil production in the U.S.

Copyright (c) 2013 Dow Jones & Company, Inc.

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Argentina to Create $2 Billion Oil, Gas Development Fund

BUENOS AIRES -

Argentina's government plans to put up to $2 billion into a new petroleum exploration-and-production fund as the South American nation struggles to become self sufficient in oil and natural gas.

The Argentine Hydrocarbon Fund is authorized to lend money, contribute capital and buy securities issued by oil companies in which the government has an equity stake, according to a resolution published Friday in the government-published Official Bulletin.

The government controls energy companies Enarsa and YPF SA.

It wasn't immediately clear how President Cristina Kirchner will capitalize the fund. Barclays said in a report it thinks the money will come from central bank's foreign currency reserves.

The 2013 budget earmarks almost $8 billion of reserves to pay creditors. But economic growth of just 1.9% last year means that Argentina won't have to pay several billion dollars to investors that own securities whose payouts are linked to the economy's performance.

"We expect, therefore, the treasury to tap reserves and issue a low-coupon hard-currency bond [most likely not marketable] to the central bank," Barclays economist Sebastian Vargas wrote.

A spokeswoman for the Economy Ministry didn't immediately reply to a phone call and email seeking comment.

The central bank, a virtual appendage of the Economy Ministry, is struggling to rebuild its reserves even as a bumper soybean harvest brings billions of export dollars into the country.

On Thursday, those reserves, which the government uses to pay its creditors and buy imported fuels like natural gas, slipped to a six-year low of $39.8 billion. Analysts blame the gradual erosion in reserves on the decline in the value of the bank's gold holdings and persistent capital outflows.

A fire last month that crippled YPF's largest refinery which supplies about 30% of Argentina's domestically produced fuel will force the state controlled company to import significantly more diesel and gasoline this year, putting even more pressure on reserves.

Mrs. Kirchner seized a controlling stake in Argentina's No. 1 oil and gas producer, YPF, from Spain's Repsol SA last year and has tasked the company with reversing years of declining production that have turned Argentina into a net energy importer.

Mrs. Kirchner accused Repsol of decapitalizing YPF through an overly generous dividend policy, which left the firm with scant resources to reinvest in its business. Repsol has denied those accusations and is suing her government for about $10.5 billion in compensation for its YPF shares.

YPF invested 16.48 billion pesos ($3.2 billion) in 2012, an increase of nearly 26% on the year.

The company is also seeking foreign investors to help it develop what are believed to be the world's third-largest shale gas deposits, which are mainly located in the Patagonian province of Neuquen.

Last year, YPF held talks with Norway's Statoil ASA, Russia's government-controlled gas company, Gazprom, and Chevron Corp., among others.

In December, YPF signed a preliminary agreement with Chevron to spend $1 billion to drill 100 wells in Neuquen, and in a separate deal it agreed to invest $1.5 billion with a company linked to Argentina's Bulgheroni family.

Copyright (c) 2013 Dow Jones & Company, Inc.

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