Providence: 311M Barrels of Recoverable Oil at Barryroe

Irish explorer Providence Resources released Friday a technical update concerning its Barryroe discovery in the Celtic Sea south of Ireland, in which the firm stated that gross 2C recoverable resources at the field amount to 346 million barrels of oil equivalent (MMboe).

These resources are comprised of 311 million barrels of oil and 207 billion cubic feet of gas. London-based investment bank Cenkos Securities said the figures were an increase on its previous estimate of 280 million barrels of oil and 196 bcf of gas.

A recent third-part audit by Netherland Sewell & Associates commissioned by Providence found that the Basal Wealden oil reservoir has recoverable resources of 266 million barrels of oil and 187 bcf of associated gas. In 2011, a third-party audit by RPS Energy of the Middle Wealden reported technically recoverable resources of 45 million barrels of oil and 21 bcf of associated gas.

Providence Technical Director John O'Sullivan commented in a company statement:

"This is another very positive step for Barryroe. This third party resource audit by Netherland Sewell & Associates further validates the significant volumetric and recoverable resources of the Basal Wealden oil reservoir in the Barryroe Field, which Providence first reported on last summer. In addition, the audit has demonstrated that there are significant volumes of associated gas in solution.

"Having now completed this audit, and having finalised Phase 2 development planning with Mott MacDonald, we will now proceed with our planned farm out discussions, where we have already received significant international industry interest. Finally, Providence will continue to work on the material resource potential associated with the Lower Wealden and Purbeckian logged hydrocarbon bearing reservoir intervals, which were encountered by previous wells drilled on the field."

Cenkos noted that Barryroe studies outlined to date suggest that a development concept involving horizontal wells has the potential to deliver production peaking at more than 100,000 bopd per platform.

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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Crude-Oil Futures Slide on US Jobs Data, Rising Inventories

Crude-oil futures prices slid for a second day Thursday, hit by rising U.S. oil supplies and new worries about economic recovery in the world's biggest oil consumer.

After a steep 2.8% drop Wednesday after news that U.S. crude-oil stocks climbed to their highest end-March level since 1931, crude prices shed a further 1.3% after U.S. initial claims for jobless benefits rose by more than expected last week, reaching their highest level since November.

The setback in the jobs picture presents further worries about the potential for the already slim growth expected in U.S. oil demand this year. The Energy Information Administration sees U.S. oil use up a fractional 0.2% this year, following last year's drop to a 16-year low.

Light, sweet crude oil for May delivery on the New York Mercantile Exchange fell $1.19 to settle at $93.26 a barrel, a two-week low. Crude fell intraday to a low of $92.12 a barrel, down $5.68, or 5.8%, from the session high of $97.80 hit Monday. The U.S. benchmark shed $3.93, or 4%, over the past two trading days.

ICE North Sea Brent crude oil settled 77 cents lower, at $106.34 a barrel, the lowest price since early November. Brent shed $4.74, or 4.3%, a barrel in the past two days, stung by increased output and greater competition between rising domestic U.S. oil supplies and imports in the key U.S. Gulf refining hub.

The sharp reversal in prices comes as money managers are stepping away from heavy bets on rising prices as supplies are increasing and economic worries threaten demand growth.

"The primary driver is the economic outlook, and how that's going to play out is a tough question to answer," said Gene McGillian, broker and analyst at Tradition Energy. "Until we see signs of economic improvement we're like to be between $90-$95" a barrel, he said.

U.S. crude oil prices could drop to five-month low of $85 a barrel in coming weeks, if money managers cut heavy bets on higher prices, said Citi Futures analyst Tim Evans, who also sees potential for Brent to fall to a nine-month low near $100 a barrel.

"We have seen a lot of speculative froth come into the market recently," said Kyle Cooper, analyst at IAF Advisors. Money managers lifted their net long position in Nymex crude futures and options by 16% last week, helping drive prices to the seven-week intraday high of $97.80 a barrel hit Monday.

U.S. crude oil stocks rose by 2.7 million barrels, nearly twice the expected level, last week to 388.6 million barrels, according to the federal Energy Information Administration. EIA data show stocks are the most at the end of March since 1931 and are the highest in any week since July 1990.

Early data show refiners boosted crude oil processing to its highest March level in six years, meaning inventories of refined products such as gasoline and diesel fuel are expected to be ample as the spring-summer driving season approaches.

By lifting crude oil runs to the highest level since early January, refiners are erasing earlier worries about potential tight supplies and sending prices lower.

When refinery operating rates dropped to two-year lows in early March, reformulated gasoline futures climbed to a six-month high near $3.27/gallon. With crude runs up by 7% from a month ago, RBOB futures prices have tumbled by 12%, or 40 cents a gallon, in the past four weeks.

May-delivery reformulated gasoline settled 1.53 cents lower, at $2.8987 a gallon Thursday, the lowest price since Feb. 27. The contract has dropped 6.8%, or 21.2 cents, in the past five sessions.

May heating oil settled 3.84 cents, or 1.3%, lower at $2.9636 a gallon Thursday and has fallen 12.4 cents, or 4%, in the past two sessions.

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

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Dresser-Rand Welcomes New CFO

Dresser-Rand Group Inc. announced Wednesday that Jan Kees van Gaalen will become executive vice president and chief financial officer of Dresser-Rand, effective May 1. Mr. van Gaalen succeeds Mark Baldwin, whose impending retirement was previously announced.

Mr. van Gaalen joins Dresser-Rand from Baker Hughes Inc., a public company and leading provider of drilling, formation evaluation, completion and production products and services to the oil and gas industry, where he served as Vice President and Treasurer. Before joining Baker Hughes, he was the Chief Financial Officer and Vice President Finance for PT Inco Tbk based in Jakarta, Indonesia, the publicly traded Indonesian subsidiary of Vale Inco Ltd. Prior to this he held a variety of finance positions with Anglo American plc, Carlton Communications plc and Schlumberger Ltd. in France, the United Kingdom, Venezuela, Brazil and South Africa.

Mr. van Gaalen is fluent in English, German, Dutch, Portuguese, French, and Spanish. He received his bachelor's degree in economics from the Erasmus University in Rotterdam, Netherlands and his MBA from the HEC Management School in France.

Vincent R. Volpe, Jr., Dresser-Rand's President and CEO, said, "We are delighted to welcome Jan Kees as a member of our leadership team. Jan Kees' knowledge of our industry, along with his strong financial and operational pedigree and vast international experience provides him a solid platform for the role of Chief Financial Officer of Dresser-Rand. We look forward to Jan Kees' contributions as a member of the Executive Staff, and to our continued progress in developing a world-class financial team."

"I want to again recognize Mark Baldwin for his service to Dresser-Rand and thank him for the fine job he has done over the past five and one-half years building a strong finance team. During Mark's tenure, we substantially strengthened our internal governance processes, created a culture of discipline, completed successful acquisitions, and developed our public company relationship with an independent Board of Directors and the community of investment analysts. I am also pleased that Mark will be available to assist the Company during the transition period with Jan Kees, said Volpe."

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Penn Virginia Acquires Magnum Hunter's Assets in Eagle Ford Play

Penn Virginia Corp. has offered $400 million to Magnum Hunter Resources Corp. to acquire the company’s producing properties and undeveloped leasehold interests in the Eagle Ford Shale play in Texas.

Under the deal, Penn Virginia will acquire about 19,000 net mineral acres in Gonzales and Lavaca Counties, Texas which are located adjacent to the company’s current position in both counties. As a result, Penn will own roughly 83,000 gross acres of the Eagle Ford Shale and will increase their drilling inventory by 345 locations, for a total of 640 drilling locations, the company noted in a press release.

"The announcement of the sale of this property today is 'bitter sweet' for our management and board,” commented Gary C. Evans, chairman of the board and CEO of Magnum Hunter Resources. "Our company's entry into the Eagle Ford Shale initially began when we acquired Sharon Resources, Inc. back in September 2009. It has always been our belief that as the various shale plays mature, building scale is extremely important for achieving long term economic value and that is what is being accomplished today. We wish Penn Virginia success in this transaction."

The assets include 46 producing wells which will increase its count to 117 wells. Seven wells are in the process of being completed or awaiting completion and four wells are being drilled on the acquired acreage. The company stated it plans to drill up to 62 Eagle Ford Shale wells during 2013.

The total consideration for this transaction will be paid approximately 90 percent or $361 million in cash and, at the option of Penn Virginia, the remaining 10 percent or $40 million either in cash or Penn Virginia shares valued at $4 per share, said Magnum Hunter in a released statement.

Upon closing, Magnum Hunter will use the proceeds from the transaction to reduce debt. Penn Virginia expects for the transaction to close in early to mid-May 2013, subject to regulatory approval.

"This is a transformational acquisition which will add significantly to our leasehold and drilling inventory in the Eagle Ford Shale play and is highly complementary to our existing operating areas where we and MHR have had very successful drilling results," said H. Baird Whitehead, president and CEO of Penn Virginia, in a release statement.

Estimated net oil and gas production for the acquired assets was roughly 3,200 barrels of oil equivalent per day in February 2013, Penn Virginia stated in a press release. Additionally, based on a third-party reserve engineering review of the acquired assets, proved reserves as of year-end were about 12 million barrels of oil equivalent, 96 percent of which were crude oil and natural gas liquids and 37 percent of which were proved developed.

Penn Virginia is engaged primarily in the development, exploration and production of oil and natural gas in onshore regions in Texas, Oklahoma, Mississippi and Pennsylvania.

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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Noble Ups Tamar Estimates to 10 Tcf

Noble Energy, Inc. announced that the Tamar natural gas field offshore Israel has been successfully brought online with all five of the subsea wells now producing at stable rates totaling approximately 300 million cubic feet per day (MMcf/d). When combined with existing Mari-B volumes, the total current sales are nearly 500 MMcf/d and are expected to average 700 MMcf/d through the remainder of the year. Initial sales commenced March 31 as natural gas flowed from the field to the Tamar platform and then to the Ashdod Onshore Terminal.

The development is designed to deliver natural gas rates up to 1 billion cubic feet per day (Bcf/d). Volumes will likely reach this maximum capacity during the peak summer demand in the third quarter this year.

Charles D. Davidson, Noble Energy's chairman and CEO, commented, "In just over four years from discovery, the Tamar project is fully operational and delivering significant volumes of natural gas to Israel. The project is a technological and commercial milestone for Noble Energy and our partners. This is the third major global project we have brought online in the last 18 months and it will make a significant contribution to our continuing production growth. Building on this success, we are working with the government and our partners to sanction the next phase of development at Tamar and the domestic phase of Leviathan."

The gross resource estimate of Tamar has been increased to 10 trillion cubic feet (Tcf), up from 9 Tcf, as a result of development drilling and continued reservoir analysis and modeling. An independent assessment conducted by Netherland, Sewell & Associates, Inc. supports the new resource estimate.

The Tamar development includes five subsea wells capable of flowing 250 MMcf/d of natural gas each. Natural gas flows from the field through the longest subsea tieback in the world for more than 90 miles to a platform near the existing Mari-B structure. The Tamar platform is tied into the existing pipeline that delivers natural gas to the Ashdod onshore receiving terminal.

Noble Energy operates Tamar with a 36 percent working interest. Other interest owners are Isramco Negev 2 with 28.75 percent, Delek Drilling with 15.625 percent, Avner Oil Exploration with 15.625 percent and Dor Gas Exploration with the remaining 4 percent.

The Company is also the operator of Mari-B with a 47.059 percent working interest. Delek Drilling has a 25.5 percent interest, Avner Oil Exploration holds 23 percent and Delek Investment has 4.441 percent.

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Noble Ups Tamar Estimates to 10 Tcf

Noble Energy, Inc. announced that the Tamar natural gas field offshore Israel has been successfully brought online with all five of the subsea wells now producing at stable rates totaling approximately 300 million cubic feet per day (MMcf/d). When combined with existing Mari-B volumes, the total current sales are nearly 500 MMcf/d and are expected to average 700 MMcf/d through the remainder of the year. Initial sales commenced March 31 as natural gas flowed from the field to the Tamar platform and then to the Ashdod Onshore Terminal.

The development is designed to deliver natural gas rates up to 1 billion cubic feet per day (Bcf/d). Volumes will likely reach this maximum capacity during the peak summer demand in the third quarter this year.

Charles D. Davidson, Noble Energy's chairman and CEO, commented, "In just over four years from discovery, the Tamar project is fully operational and delivering significant volumes of natural gas to Israel. The project is a technological and commercial milestone for Noble Energy and our partners. This is the third major global project we have brought online in the last 18 months and it will make a significant contribution to our continuing production growth. Building on this success, we are working with the government and our partners to sanction the next phase of development at Tamar and the domestic phase of Leviathan."

The gross resource estimate of Tamar has been increased to 10 trillion cubic feet (Tcf), up from 9 Tcf, as a result of development drilling and continued reservoir analysis and modeling. An independent assessment conducted by Netherland, Sewell & Associates, Inc. supports the new resource estimate.

The Tamar development includes five subsea wells capable of flowing 250 MMcf/d of natural gas each. Natural gas flows from the field through the longest subsea tieback in the world for more than 90 miles to a platform near the existing Mari-B structure. The Tamar platform is tied into the existing pipeline that delivers natural gas to the Ashdod onshore receiving terminal.

Noble Energy operates Tamar with a 36 percent working interest. Other interest owners are Isramco Negev 2 with 28.75 percent, Delek Drilling with 15.625 percent, Avner Oil Exploration with 15.625 percent and Dor Gas Exploration with the remaining 4 percent.

The Company is also the operator of Mari-B with a 47.059 percent working interest. Delek Drilling has a 25.5 percent interest, Avner Oil Exploration holds 23 percent and Delek Investment has 4.441 percent.

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Standard Exploration Names New CFO

Standard Exploration Ltd. announced that effective April 1, 2013, Vince Ghazar has been appointed as the new Chief Financial Officer and Vice President of Finance for the Corporation.

Mr. Ghazar is a professional accountant with over 17 years of domestic and international experience in the oil & gas industry. He has held executive and management positions with Exchange listed issuers which have been involved in growth, mergers, acquisitions and divestitures. Concurrently, Mr. Ghazar is Controller for Saccharum Energy Corp., a public oil and gas company. Mr. Ghazar's previous executive involvement has included Primera Energy Resources Ltd., PanWestern Energy Inc., Longford Energy Inc. and BrazAlta Resources Corp.

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New survey proves Westerners want conservation on equal ground with drilling

Today, the Center for American Progress (CAP) announced new public opinion research that illustrates the stark gap between Washington’s public land use priorities – heavily weighted toward pro-development policies – and what Westerners believe is an appropriate balance between oil and gas drilling and protecting treasured landscapes for future generations.

This new research clearly shows a bipartisan majority of Western voters are more interested in preserving land for recreation and the enjoyment of future generations than in using it for oil and gas drilling. From CAP’s press release:

“When it comes to public lands, oil and gas drilling is not popular (30%); instead, Western voters across party lines are most concerned with preserving access to recreation opportunities (63%) and permanently protecting wilderness, parks, and open spaces for future generations (65%).”

As CAP points out, this research confirms a severe lack of citizen accountability from our government.

On one hand, we have the Obama administration, which has leased more than 6.3 million acres of public land to oil and gas companies for drilling –  more than two and a half times as much as it has permanently protected for future generations;And on the other, a Congress that was the first since World War II to not protect a single new acre of public land as wilderness, national park, monument, or wildlife refuge – despite the opposing sentiments of their own constituents.

Read the full report.

The launch of the “Equal Ground” campaign also makes good sense in that it will push Congress and the Obama Administration to align their priorities for how we use public lands with the obvious expectations of communities across the West that rely on national parks, wildlife refuges and other open spaces to attract high-paying businesses, entrepreneurs and visitors to come to enjoy world-class recreation resources just as much as they rely on energy development – done responsibly, in appropriate places.

One way the Obama administration could start achieving the balance Westerners expect from federal policymakers is to implement its own 2010 leasing reform directives, meant to drive our local economies with a real balance between protecting public lands to support and attract high-wage businesses in the West, and using them to produce energy. These reforms give federal officials crucial tools to look at the landscape before the leasing phase, and plan out the right places to drill and the right areas to leave alone because they bring major economic benefits to the community.

But in Colorado, federal bureaucrats have failed to implement these new directives – turning the President’s balanced reforms into a broken promise for Western communities.

As John Podesta rightfully said today:

“This is a case where Washington’s policies and rhetoric are still locked in a drilling-first mindset, but Westerners want the protection of public lands to be put on equal ground. Voters do not see conservation and development of public lands as an either-or choice; instead, they want to see expanded protections for public lands—including new parks, wilderness, and monuments—as part of a responsible and comprehensive energy strategy.”

The Equal Ground campaign is supported by a variety of individuals and organizations, including The Center for American Progress, Conservation Lands Foundation, The Wilderness Society, and The Center for Western Priorities.

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Sasol Considers Selling PNG Assets

SYDNEY - South Africa's Sasol Ltd. is mulling the sale of its natural gas exploration assets in Papua New Guinea, nearly five years after it began a hunt for reserves to support a project turning the gas into liquid fuels. 

Sasol owns stakes in two licenses in the forelands region of Papua New Guinea, close to where other international energy companies have made several natural gas discoveries. However, an exploration well drilled in one of the licenses by Sasol in mid-2011 failed to find commercial quantities of natural gas. 

"Sasol is considering divesting from Papua New Guinea," Alex Anderson, a company spokesman, told The Wall Street Journal by email. "We are currently engaging interested parties." 

Sasol--the world's biggest producer of motor fuels from coal--owns 41% of an exploration block known as PPL 426, with the remaining interest held by Canada's Talisman Energy Inc. and Japan's Mitsui & Co. 

It also has a majority stake in the adjacent PPL 287 block, which it has been exploring with Talisman.

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

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KBR Selected for Chevron Lianzi Project

KBR announced that it was selected by Subsea 7 to perform the topsides design for the Chevron Lianzi development project in a unitized offshore zone between the Republic of Congo and the Republic of Angola.

KBR will provide laser scanning of the entire Benguela Belize Lobito Tomboco topsides, FEED verification, detailed engineering and procurement services. The topsides design will include multiple equipment packages. In addition, KBR will provide the necessary assistance during fabrication, installation, pre-commissioning and commissioning phases of the project. This project will be managed from KBR's Houston operating center and its Luanda, Angola office.

"This award reflects KBR's longstanding commitment to executing projects in Africa and provides KBR with a unique opportunity to build a relationship with Subsea 7 as a new client for years to come," said Roy Oelking, Group President, KBR Hydrocarbons. "I am confident through our experience, capabilities and team that we will deliver a successful project to our client."

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Caza Confirms Multiple Pay Zones in New Mexico

Caza Oil & Gas, Inc. provided an operational update on the Company's Bone Spring drilling activities in Southeast New Mexico.

Lennox Property, Lea County, New Mexico.  The Lennox State Unit 32 No. 2H horizontal well reached the intended total vertical depth of approximately 11,850 feet subsurface on March 12, 2013, and log data was obtained.  There were good mud log shows for oil and natural gas throughout the Bone Spring formation while drilling the vertical section, notably in the 1st, 2nd and 3rd Bone Spring Sand intervals.  Based on analysis of the log data, Caza and its partners have drilled the lateral section of the well through the primary objective 3rd Bone Spring Sand to a total measured depth of approximately 15,914 feet.  Caza plans to fracture stimulate ("frac") the lateral section of the well in multiple stages.  Once completed, the well will be flowed back to establish initial production rates, and the market will be updated accordingly.

Notwithstanding certain operational issues during drilling, including a mechanical failure on the rig requiring a replacement drilling rig to complete the hole, all issues were resolved and the resultant increase in drill time and well cost are not considered material to the economics of the well.

Caza has a 40.00% working interest before payout (31.88% net revenue interest) and a 50.00% working interest after payout (39.85% net revenue interest) in the Lennox State Unit 32 No. 2H well.

Roja Property, Lea County, New Mexico.  Caza has elected to participate in a proposal from Occidental Petroleum (OXY), as operator, to drill a horizontal Delaware well on the Roja property.  The well is called the Madera 17 Federal #1H and is currently scheduled for June 2013.  Caza has a 20% working interest (16% net revenue interest) in the Roja property.

Gateway Property, Lea County, New Mexico.  The Company completed a trade on March 25, 2013 with The Blanco Company to acquire a 318 acre lease to be called the Gateway Property.  Gateway will target the Bone Spring formation and is a nice addition to Caza's Bone Spring property inventory.  Caza has a 100% working interest (77% net revenue interest) in the Gateway property.

Quail Ridge Property, Lea County, New Mexico.  The Quail "16" State No. 4H horizontal well, operated by Fasken Oil and Ranch, Ltd. ("Fasken") reached total measured depth of approximately 15,605 feet on January 26, 2013, and was successfully fracture stimulated and completed in the 3rd Bone Spring Sand on February 15, 2013.  The average daily production rate over the first thirty days was approximately 828 bbls/d of oil and 947 Mcf/d of natural gas, which equates to 986 Boe/d.  This is the second well completed on this property to date and is another very good result.  The Quail Ridge wells offset Caza's Lynch property and have helped to further de-risk the Company's acreage position while providing valuable information for future drilling at Lynch.  Caza has a 0.25% working interest (0.1875% net revenue interest) in the Quail "16" State No. 4H well.

Company Bone Spring Prospects, Lea and Eddy Counties, New Mexico.  The Bone Spring play in Lea and Eddy Counties, New Mexico, contains multiple potential pay zones for oil and liquids-rich natural gas, which include but are not limited to: Delaware, Lower Brushy Canyon, Avalon Shale, 1st, 2nd and 3rd Bone Spring Sands and Wolfcamp.  Caza's current prospects and properties in the horizontal Bone Spring play are: Lynch, Forehand Ranch, Forehand Ranch South, Lennox, Copperline, Mad River, Azotea Mesa, Bradley 29, Two Mesas, Quail Ridge, Chaparral 33, Rover, West Rover, West Copperline, Madera, Roja,and Gateway.  The Company has acquired approximately 4,100 net acres in the play to date.  Leasing and drilling activity continues to be competitive in the play, and initial producing well rates continue to improve with technological advances in drilling and frac designs.  The Company is well positioned in the play, and continues to exploit opportunities to build on its current acreage position.

W. Michael Ford, Chief Executive Officer commented:

"We are pleased to provide this operational update after announcing the Company's positive year-end results last week.  We made significant progress in 2012, and after laying the groundwork for continued success in the Bone Spring play, we look forward to advancing the Company's prospects and properties during the course of 2013, including the successful completion of the Lennox well."

"The log results from the Lennox well are in-line with predrill expectations and have confirmed the presence of multiple potential pay zones containing oil and liquids-rich natural gas.  After difficulties with the original rig, we are happy to have reached our intended total measured depth in the 3rd Bone Spring Sand interval.  We look forward to scheduling the frac and completing the well in order to bring it online in the near future.  Given success, this well will help establish a substantial development program, as the Lennox Unit contains 1,920 acres."

"We are also very pleased to have acquired the lease at Gateway.  No reserves were assigned to this property at year-end, because it is too new.  However, the Company believes the lease has good reserve potential and expects to drill a test well at Gateway during 2013."

"Finally, we are looking forward to participating in the Roja well with OXY.  The Delaware is another formation being successfully exploited for oil and liquids-rich natural gas as part of the broader horizontal Bone Spring play.  Multiple potential pay zones are what make this play such an exciting investment proposition."

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