Norway to Open First New Oil, Gas Acreage Since 1994

OSLO - The Norwegian government will propose this week to open the southeastern Barents Sea for oil activity, the Ministry of Petroleum and Energy said Monday, the first new oil acreage in nearly two decades.

The government will present a proposal to the parliament Friday to open the previously disputed Barents Sea area near the Russian border, the ministry said. The three-party coalition government has a parliamentary majority.

"For the first time since 1994, we can now open a new area for petroleum activity and search for oil and gas in new, promising areas," said Minister of Petroleum and Energy Ola Borten Moe, calling it a "historical moment" for Norway.

According to the ministry, the opening process has been ongoing since the spring of 2011. Following 40 years of dispute, Norway and Russia agreed on a delineation deal in 2010. The areas that will be opened for drilling are in the southern part of the previously disputed area.

"The petroleum activity becomes more and more important for northern Norway. There is huge optimism in that part of the country," said Mr. Moe.

In February, the Norwegian Petroleum Directorate presented the results of seismic data gathering in the southeastern Barents Sea. The directorate said the Norwegian part of the area likely held 1.9 billion barrels of oil equivalent, most of it gas and about 15% crude oil. This equals slightly more than a year of Norway's total oil and gas output.

The ministry said those resources equaled about eight fields, which is the size of the Eni SpA operated Goliat oil field currently under development in the Barents Sea.

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

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PEDEVCO Finalizes Acreage in Mississippian Lime

PEDEVCO Corp. (dba Pacific Energy Development), an energy company focusing on shale oil and gas development and production in the United States and Pacific Rim countries, announced the closing of its acquisition of a 97 percent operated working interest in 7,006 gross (6,763 net) acres in a shale oil asset (the Mississippian asset) located in the Mississippian Lime formation in Comanche, Harper, Barber and Kiowa Counties, Kansas. The Company operates the asset and plans to commence drilling operations in the second quarter of 2013.

Commenting on the transaction, President and CEO Frank Ingriselli noted, "This newly acquired strategic acreage in the Mississippian formation establishes our presence in one of the most significant resources plays in America and triples our existing net acreage position. We look forward to commencing our drilling program on our Mississippian asset which we anticipate will provide a further platform for our organic growth."

Pacific Energy Development also recently announced the results of initial production from its second and third wells, the Logan 2H and Waves 1H, from its Niobrara asset located in Weld County, Colorado.

Riviera-Ensley Energy Advisors served as the principal advisor for this Mississippian asset transaction.

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ZaZa to Sell Texas Acreage

ZaZa Energy, LLC, a wholly-owned subsidiary of ZaZa Energy Corporation, announced that it has entered into a purchase and sale agreement to sell approximately 10,000 net acres of the Company's properties located in Fayette, Gonzalez and Lavaca Counties, Texas, which the Company refers to as its Moulton properties. This transaction includes all of the Company's interest in seven producing wells located in Moulton. The total cash purchase price for the approximately 10,000 net acres and associated production is approximately $43.3 million. The closing of the sale is expected to occur during the second quarter of 2013 and net proceeds from the sale, after customary closing purchase price adjustments and expenses, are expected to be ~$42 million. The closing is subject to normal closing conditions and the amendment of ZaZa's securities purchase agreement for its senior secured notes.

The Company also announced that it has executed a purchase and sale agreement to sell the remaining acreage in its Moulton properties for approximately $9.2 million. This transaction is also expected to close during the second quarter of 2013 and is subject to normal closing conditions.

Commenting on the announcement, Todd A. Brooks, president and CEO of ZaZa stated, "As part of the Hess division of assets in 2012, we received cash and a significant amount of acreage in the Eagle Ford play. We are in the process of monetizing select assets in order to improve our balance sheet and high grade our resource base with a focus on the Eaglebine. We believe these independent transactions are a testament to the strength of our technical and land teams, as we originally evaluated and leased this acreage in a short period of time for the benefit of our Eagle Ford joint venture."

ZaZa intends to use the net proceeds from both transactions to fund a portion of capital expenditures for exploration on its other properties and further reduce the principal amount of its senior secured notes.

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Groups Praise Revenue Sharing Bill, Call for More Access to US Acreage

The American Petroleum Institute (API) and National Ocean Industries Association welcomed an offshore revenue sharing bill proposed by Sen. Lisa Murkowski (R-Alaska) and Sen. Mary Landrieu (D-La.) Wednesday.

The senators this week introduced Fixing America's Inequality with Revenues (FAIR) Act, which is designed to ensure all energy-producing states receive a full share of the revenues they help produce while also encouraging investments in clean energy and conservation.

"The federal treasury benefits from the royalties and taxes on production in federally owned waters off Alaska's coast," said Murkowski in a statement Tuesday. "Providing a portion of that money to Alaska would help the state strengthen its emergency response capabilities and build critical infrastructure, such as airfields, deepwater ports, and docks that will help safely open the Arctic, which will further increase federal revenues."

The FAIR Act would provide up to 37.5 percent of all revenues from offshore development to coastal states, including revenues from oil and gas and the development of alternative and renewable energy resources.

Under the bill, states would automatically receive 27.5 percent of these revenues, 25 percent of which would go to the coastal communities most impacted by offshore development. States are eligible for an additional 10 percent if they establish funds to support projects relating to clean energy or conservation.

The bill also would expand revenue sharing onshore to include renewable energy production on federal lands at the same 50-percent share currently given for oil and gas production. The bulk of revenues from offshore development, 62.5 percent, would still flow to the federal government.

The legislation marks an important step towards an all-of-the-above energy policy for the United States, said API Director of Upstream & Industry Operations Erik Milito in a statement Wednesday.

"As today's successful lease sale in the Central Gulf of Mexico demonstrates, the industry is investing billions in American energy development but could do more if additional areas are opened for business," Milito commented. "Expanding access could create one million new jobs, generate $127 billion in government revenue in under a decade, and dramatically increase domestic energy production."

Allowing all U.S. coastal states to share in prospective future revenue from both traditional and renewable offshore energy activities is sound public policy, NOIA President Randall Luthi commented in a Wednesday statement. The group has long supported revenue sharing as fair and equitable treatment for coastal states supporting responsible offshore oil and gas exploration and development.

"However, steps must be taken to ensure that lease sales are actually conducted in new areas where they're currently prohibited or else the revenue is merely theoretical."

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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Groups Praise Revenue Sharing Bill, Call for More Access to US Acreage

The American Petroleum Institute (API) and National Ocean Industries Association welcomed an offshore revenue sharing bill proposed by Sen. Lisa Murkowski (R-Alaska) and Sen. Mary Landrieu (D-La.) Wednesday.

The senators this week introduced Fixing America's Inequality with Revenues (FAIR) Act, which is designed to ensure all energy-producing states receive a full share of the revenues they help produce while also encouraging investments in clean energy and conservation.

"The federal treasury benefits from the royalties and taxes on production in federally owned waters off Alaska's coast," said Murkowski in a statement Tuesday. "Providing a portion of that money to Alaska would help the state strengthen its emergency response capabilities and build critical infrastructure, such as airfields, deepwater ports, and docks that will help safely open the Arctic, which will further increase federal revenues."

The FAIR Act would provide up to 37.5 percent of all revenues from offshore development to coastal states, including revenues from oil and gas and the development of alternative and renewable energy resources.

Under the bill, states would automatically receive 27.5 percent of these revenues, 25 percent of which would go to the coastal communities most impacted by offshore development. States are eligible for an additional 10 percent if they establish funds to support projects relating to clean energy or conservation.

The bill also would expand revenue sharing onshore to include renewable energy production on federal lands at the same 50-percent share currently given for oil and gas production. The bulk of revenues from offshore development, 62.5 percent, would still flow to the federal government.

The legislation marks an important step towards an all-of-the-above energy policy for the United States, said API Director of Upstream & Industry Operations Erik Milito in a statement Wednesday.

"As today's successful lease sale in the Central Gulf of Mexico demonstrates, the industry is investing billions in American energy development but could do more if additional areas are opened for business," Milito commented. "Expanding access could create one million new jobs, generate $127 billion in government revenue in under a decade, and dramatically increase domestic energy production."

Allowing all U.S. coastal states to share in prospective future revenue from both traditional and renewable offshore energy activities is sound public policy, NOIA President Randall Luthi commented in a Wednesday statement. The group has long supported revenue sharing as fair and equitable treatment for coastal states supporting responsible offshore oil and gas exploration and development.

"However, steps must be taken to ensure that lease sales are actually conducted in new areas where they're currently prohibited or else the revenue is merely theoretical."

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

Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.

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Groups Praise Revenue Sharing Bill, Call for More Access to US Acreage

The American Petroleum Institute (API) and National Ocean Industries Association welcomed an offshore revenue sharing bill proposed by Sen. Lisa Murkowski (R-Alaska) and Sen. Mary Landrieu (D-La.) Wednesday.

The senators this week introduced Fixing America's Inequality with Revenues (FAIR) Act, which is designed to ensure all energy-producing states receive a full share of the revenues they help produce while also encouraging investments in clean energy and conservation.

"The federal treasury benefits from the royalties and taxes on production in federally owned waters off Alaska's coast," said Murkowski in a statement Tuesday. "Providing a portion of that money to Alaska would help the state strengthen its emergency response capabilities and build critical infrastructure, such as airfields, deepwater ports, and docks that will help safely open the Arctic, which will further increase federal revenues."

The FAIR Act would provide up to 37.5 percent of all revenues from offshore development to coastal states, including revenues from oil and gas and the development of alternative and renewable energy resources.

Under the bill, states would automatically receive 27.5 percent of these revenues, 25 percent of which would go to the coastal communities most impacted by offshore development. States are eligible for an additional 10 percent if they establish funds to support projects relating to clean energy or conservation.

The bill also would expand revenue sharing onshore to include renewable energy production on federal lands at the same 50-percent share currently given for oil and gas production. The bulk of revenues from offshore development, 62.5 percent, would still flow to the federal government.

The legislation marks an important step towards an all-of-the-above energy policy for the United States, said API Director of Upstream & Industry Operations Erik Milito in a statement Wednesday.

"As today's successful lease sale in the Central Gulf of Mexico demonstrates, the industry is investing billions in American energy development but could do more if additional areas are opened for business," Milito commented. "Expanding access could create one million new jobs, generate $127 billion in government revenue in under a decade, and dramatically increase domestic energy production."

Allowing all U.S. coastal states to share in prospective future revenue from both traditional and renewable offshore energy activities is sound public policy, NOIA President Randall Luthi commented in a Wednesday statement. The group has long supported revenue sharing as fair and equitable treatment for coastal states supporting responsible offshore oil and gas exploration and development.

"However, steps must be taken to ensure that lease sales are actually conducted in new areas where they're currently prohibited or else the revenue is merely theoretical."

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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Contact Exploration Announces Participation in New Acreage and Well

Contact Exploration said Wednesday that it will be participating in a new non-operated Montney well, immediately adjacent to its existing 25 percent working interest Kakwa acreage. The operator advises that drilling of this well is expected to start in mid-February. Contact is to pay 23.75 percent of the costs of drilling and casing this well to earn an average 23.75 percent working interest in the Montney Formation in 2.25 gross sections of lands contiguous to Contact's existing Kakwa acreage position, subject to a 5 percent non-convertible gross overriding royalty on the production from the well. Once earned, Contact will hold 27 gross (12.75 net) sections of Montney acreage at Kakwa.

The first Contact-operated horizontal Montney well has been on production since Dec.1, 2012. Various capacity bottlenecks associated with downstream processing restricted December 2012 production from this well. Upon introducing additional condensate handling equipment at the well site on Jan. 4, 2013, Contact has maintained stable gross production averaging 3.8 million cubic feet per day (mmcfd) and 575 barrels per day (bbld) well head condensate. Contact has a 37.5 percent working interest in the 13-17 well, before payout. 

Contact's second operated Montney well has been successfully tied into downstream processing facilities. In January 2013, the 14-30 well was flowed for only a brief period, due to the third party gas plant not having capacity for the extremely high levels of free flowing condensate from the well.

Contact's third operated Montney well is being drilled from the same surface location as the 14-30 well, with drilling scheduled to be finished in mid-February 2013, and completion operations anticipated to be finished by mid-March 2013. Once completion operations on the 3-19 well are finished, Contact will equip the 14-30 and 3-19 wells in a similar fashion to the 13-17 well, such that condensate can be separated at location, allowing for flow of natural gas from these wells to the third party facility and for condensate to be trucked directly to the sales point. Contact has a 25 percent interest in both the 14-30 and 3-19 Wells. 

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