Hess, Elliott Management Reach Agreement to End Proxy Contest

HOUSTON - Hess Corp. (HES) settled a months-long proxy fight hours before a shareholder vote Thursday morning, agreeing to name three directors backed by dissident hedge fund Elliott Management Corp.

Elliott, which owns about 4.5% of Hess's shares, is withdrawing its slate of five nominees and will support the Hess-backed directors at the company's annual meeting here.

The settlement represents a remarkable shakeup of the international oil company's 14-member board, which will now have eight new directors. It is the latest board overhaul stemming from shareholder pressure amid a rise in activism throughout the energy patch.

John Hess, the company's chief executive, said in a statement that the settlement is in the best interests of company's shareholders. He added that the new board "will provide effective oversight to ensure that we continue to create meaningful long-term value for all Hess shareholders."

John Pike, a senior portfolio manager at Elliott, said the hedge fund is "pleased to welcome a highly qualified and refreshed board at Hess."

The settlement was hashed out overnight before being finalized Thursday morning, according to a person with knowledge of the negotiations. It followed months of sparring between Hess and Elliott over strategy and governance. Elliott said Hess's management had destroyed shareholder value by engaging in costly and ineffective tactics. Hess argued that it was successfully transitioning into becoming a more focused and profitable company, and Elliott's plans for an overhaul would derail its progress.

The directors backed by Elliott that will join the board include Harvey Golub, former chairman and chief executive of American Express Co.; Rodney Chase, former deputy chief executive of BP Plc; and David McManus, a longtime energy executive who recently served at Pioneer Resources Co.

The new directors Hess recruited include John Krenicki Jr., former CEO of GE Energy; Frederic Reynolds, former chief financial officer of CBS Corporation; William Schrader, former Chief Operating Officer at TNK-BP; Kevin Meyers, a former BP PLC and ConocoPhillips executive; and Mark Williams, a former Royal Dutch Shell PLC executive. With the exception of Mr. Reynolds, all of these directors have energy backgrounds, a bid by Hess to address criticism that its board lacked oil and gas experience.

Hess said last week that Mr. Hess, the CEO, would give up its chairman role, and Mr. Krenicki would become the company's new independent chairman if all of its five nominees were elected to the board. But on Thursday the company said that Mr. Williams, the former Shell executive, would be the new chairman. In a statement released by Hess, Mr. Krenicki said that Mr. Williams "is the perfect choice for non-executive Chairman. I fully support the choice and look forward to working closely with him and the rest of the board."

All directors, including Mr. Hess, will stand for election next year after shareholders approved a resolution eliminating the three-year, staggered terms for board members.

Mr. Hess, the company's long-time CEO and its founder's son, tightly ran Hess without much challenge until this year, when Elliott launched its "reassess Hess" campaign seeking to redress stock underperformance. The company has made many changes, including the sale of its Russia assets and a move to sell its refining and marketing assets, and more recently, the splitting of its CEO and chairman roles. Analysts with investment bank Tudor, Pickering, Holt & Co. say that Hess shares have outperformed peers by 20% since the campaign started, but that it's "tough to say whether these changes would have occurred without Elliott catalyst."

It isn't clear whether the board's new composition will lead to further strategic changes. Elliott in January proposed splitting Hess into two companies, spinning off its oil and gas properties in shale-rock formations in the U.S. from its international operators. Hess rejected the idea, and Elliott's nominees had said they wouldn't necessarily adopt the hedge fund's recommendation.

After Thursday's shareholder meeting at the Hess Tower in Houston, Elliott representatives said the new board should consider the spin-off it had proposed or even a sale of the company, if such actions would benefit shareholders.

"We think the board should look at all options," said Quentin Koffey, associate portfolio manager for Elliott, adding that he thinks the company's shares are undervalued.

Shares were down 2.15% at $69.08.

Angel Gonzalez contributed to this article.

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BSEE, Coast Guard Enter Agreement to Improve Offshore Oversight

Bureau of Safety and Environmental Enforcement (BSEE) Director James Watson and U.S. Coast Guard Rear Admiral Joseph Servidio announced Thursday at the Offshore Technology Conference in Houston, Texas a new Memorandum of Agreement (MOA) that will strengthen the working relationship between their two agencies on the management of safety and environmental protection responsibilities on the Outer Continental Shelf (OCS).

"Both BSEE and the Coast Guard have specialized expertise in the management of safety and environmental protection programs offshore," said Director Watson. "This agreement with the Coast Guard will bring together resources and expertise from both agencies as we work to ensure both orderly resource development and protection of the human, marine and coastal environments."

"The Coast Guard and BSEE share the goal of keeping our oceans clean and offshore workers safe," said Rear Admiral Servidio. "This agreement solidifies the commitment of each regulatory agency to work across agency boundaries in order to develop a coordinated regulatory approach that promotes safety through the use of safety management systems."

Under the current regulatory regime, both the U.S. Coast Guard and BSEE have shared responsibilities for the regulation of safety management systems on the OCS. This MOA ensures a comprehensive, joint approach to safety and environmental management. Together, BSEE and the Coast Guard will use this agreement to establish a process for the identification of offshore safety and environmental management requirements within the jurisdiction of both agencies and to spur the development of joint policies and guidance. The agreement also provides a mechanism to ensure that all future regulations, policies and guidance are enforced consistently by both agencies.

The MOA is implemented in accordance with an overarching Memorandum of Understanding (MOU) between BSEE and the Coast Guard signed November 27, 2012. The MOU outlined the efforts of the two agencies to closely coordinate responsibilities for regulation and enforcement on the OCS and for the establishment of future focused agreements such as the one announced today. It was the first MOU between the two agencies since BSEE became a bureau in 2011.

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BSEE, Coast Guard Enter Agreement to Improve Offshore Oversight

Bureau of Safety and Environmental Enforcement (BSEE) Director James Watson and U.S. Coast Guard Rear Admiral Joseph Servidio announced Thursday at the Offshore Technology Conference in Houston, Texas a new Memorandum of Agreement (MOA) that will strengthen the working relationship between their two agencies on the management of safety and environmental protection responsibilities on the Outer Continental Shelf (OCS).

"Both BSEE and the Coast Guard have specialized expertise in the management of safety and environmental protection programs offshore," said Director Watson. "This agreement with the Coast Guard will bring together resources and expertise from both agencies as we work to ensure both orderly resource development and protection of the human, marine and coastal environments."

"The Coast Guard and BSEE share the goal of keeping our oceans clean and offshore workers safe," said Rear Admiral Servidio. "This agreement solidifies the commitment of each regulatory agency to work across agency boundaries in order to develop a coordinated regulatory approach that promotes safety through the use of safety management systems."

Under the current regulatory regime, both the U.S. Coast Guard and BSEE have shared responsibilities for the regulation of safety management systems on the OCS. This MOA ensures a comprehensive, joint approach to safety and environmental management. Together, BSEE and the Coast Guard will use this agreement to establish a process for the identification of offshore safety and environmental management requirements within the jurisdiction of both agencies and to spur the development of joint policies and guidance. The agreement also provides a mechanism to ensure that all future regulations, policies and guidance are enforced consistently by both agencies.

The MOA is implemented in accordance with an overarching Memorandum of Understanding (MOU) between BSEE and the Coast Guard signed November 27, 2012. The MOU outlined the efforts of the two agencies to closely coordinate responsibilities for regulation and enforcement on the OCS and for the establishment of future focused agreements such as the one announced today. It was the first MOU between the two agencies since BSEE became a bureau in 2011.

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Contango, Crimson Exploration Pen Merger Agreement

Contango Oil & Gas Company and Crimson Exploration Inc. jointly announced Wednesday that they have signed a merger agreement for an all-stock transaction pursuant to which Crimson would become a wholly owned subsidiary of Contango. Upon consummation of the merger, each share of Crimson stock will be converted into 0.08288 shares of Contango stock resulting in Crimson stockholders owning 20.3 percent of the post-merger Contango.

Following the merger, the combined company will be a premier Houston-based independent oil and gas company with a balanced offshore Gulf of Mexico (GOM) and onshore Texas production profile and a deep inventory of high-impact GOM prospects complemented by Crimson's onshore oil and natural gas liquids-focused, lower-risk unconventional resource positions in several prolific plays. Pro forma for the merger, Contango's net daily production for the quarter ending March 31, 2013 would be approximately 101 Mmcfe (31 percent oil and natural gas liquids) and the proforma combined company's total proved reserves are estimated to be approximately 312 Bcfe (31 percent oil and natural gas liquids), based on SEC pricing at March 31, 2013. Pro forma PV-10 of the estimated proved reserves of the combined company would be approximately $932.5 million. The enhanced size and scale of the combined company and its conservatively capitalized balance sheet will position it to implement an accelerated oil and natural gas liquids-focused drilling program. This transaction is expected to be immediately accretive to cash flow per share for Contango.

Joseph Romano, President, Chief Executive Officer and Chairman of Contango said, "We are excited about the complementary nature of this combination and the numerous benefits make it a win-win for the stockholders of each company. We also are very pleased to welcome Allan Keel and his Crimson team to Contango. We all see a great opportunity to accelerate and optimize the development of Crimson's significant resource potential in parallel with continuing Contango's GOM exploration focus. Contango will look to optimize capital allocation across the combined portfolio and we currently expect to continue to drill two to four exploration prospects per year in the GOM while operating two to four onshore rigs focused on unconventional resource development. This transaction is consistent with Contango's strategy of increasing stockholder value through the drill-bit and it helps us achieve a number of our long-term strategic objectives."

Allan D. Keel, Crimson's president and chief executive officer said, "We look forward to joining Contango and assuming responsibility for a portfolio of top tier offshore assets and combine them with Crimson's extensive inventory of onshore opportunities. The combination with Contango provides substantial offshore cash flow generation that can be used to accelerate our drilling program in our oil and natural gas liquids-rich acreage targeting the Woodbine, Buda, Eagle Ford, James Lime and Liberty County prospects. This accelerated development should result in meaningful reserve, production and cash flow growth for the combined company. Furthermore, the merger will allow Crimson to de-lever our balance sheet and increase our trading float. We believe this merger is a great combination of two complimentary companies and a great opportunity to unlock value more quickly for Crimson's stockholders."

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Shell, Gazprom to Sign Arctic Agreement

MOSCOW - Royal Dutch Shell PLC will sign a framework agreement Monday to partner Russia's OAO Gazprom Neft on projects on Russia's Arctic shelf, a person familiar with the matter said Friday, becoming the latest international major to seek access to potentially vast but hard-to-recover resources in the region. 

The deal will be signed Monday during a visit to the Netherlands by Russian President Vladimir Putin, the person said, without giving further details. 

Shell is already a partner of Gazprom Neft's parent company, OAO Gazprom, on the Pacific Sakhalin-2 project, and is also working with Gazprom Neft on developing oil resources onshore. 

Gazprom and OAO Rosneft, which are both state-controlled, are the only firms allowed to lead projects on Russia's Arctic shelf. Rosneft is partnering with Exxon Mobil Corp., Italy's Eni SpA and Norway's Statoil ASA. 

Shell's attempts to explore the U.S. Arctic have been marred by problems. 

A spokeswoman for Shell didn't immediately respond to a request for comment.

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Shell, Gazprom to Sign Arctic Agreement

MOSCOW - Royal Dutch Shell PLC will sign a framework agreement Monday to partner Russia's OAO Gazprom Neft on projects on Russia's Arctic shelf, a person familiar with the matter said Friday, becoming the latest international major to seek access to potentially vast but hard-to-recover resources in the region. 

The deal will be signed Monday during a visit to the Netherlands by Russian President Vladimir Putin, the person said, without giving further details. 

Shell is already a partner of Gazprom Neft's parent company, OAO Gazprom, on the Pacific Sakhalin-2 project, and is also working with Gazprom Neft on developing oil resources onshore. 

Gazprom and OAO Rosneft, which are both state-controlled, are the only firms allowed to lead projects on Russia's Arctic shelf. Rosneft is partnering with Exxon Mobil Corp., Italy's Eni SpA and Norway's Statoil ASA. 

Shell's attempts to explore the U.S. Arctic have been marred by problems. 

A spokeswoman for Shell didn't immediately respond to a request for comment.

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Lucas Energy, Nordic Oil Terminate $22 Million Agreement

Lucas Energy Inc. and Nordic Oil USA 1, LLP have entered into a settlement and release agreement to terminate their $22 million purchase and sale agreement made Oct. 13, 2011.

The company defaulted in the repayment of the $22 million note payable to Nordic that was due in November 2012.

"This amicable settlement with Nordic resolves the single largest legacy issue the board faced last December," commented Lucas Energy Chairman of the Board of Directors Ryan Morris, in a released statement.

Lucas Energy will pay $1.1 million and transfer several assets after it failed to repay a promissory note on a deal with Nordic Oil that included a set of properties in Gonzales, Karnes and Wilson counties in Texas. The transferred assets to Nordic represent less than 18 percent of Lucas' total proved reserves and less than 5 percent of its current production, Reuters reported.

In December 2012, the Houston-based company underwent board and management changes after Nordic Oil filed the lawsuit over non-payment on the deal earlier that month. William A. Sawyer, former co-founder, CEO and director of Lucas Energy resigned from his positions in December 2012 to "pursue other endeavors", the company stated. Lucas then appointed Anthony C. Schnur, an oil and gas finance veteran, as CEO of the company.

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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Sonde Resources, Viking Energy Enter Agreement for Farm-Out Extension

Sonde Resources Corp. announced it has entered into an agreement with Viking Energy North Africa Limited to extend the deadline for meeting the conditions precedent under the Farm-Out Agreement that includes obtaining the consent of Joint Oil to the transfer of a 66.67 percent interest in the Joint Oil Block pursuant to the previously announced farm-out agreement to June 7. To date, the Company and Viking have held a series of discussions and exchanged correspondence with Joint Oil regarding the proposed farm-out and the conditions upon which Joint Oil would be prepared to provide its approval.

As previously disclosed, some of the conditions imposed by Joint Oil are acceptable to the Company and Viking, while others are not. The Company does not believe that the outstanding conditions are supportable under the terms and conditions of the Exploration Production Sharing Agreement and the parties are continuing to seek an acceptable resolution of these issues. While the Company believes that the farm-out should be approved on its merits, no assurance can be given that Joint Oil will approve it or that the farm-out will close. Additionally, there can be no assurance that Viking will agree to a further extension of time if the approval of Joint Oil is not forthcoming prior to June 7.

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FMC Renews Subsea Agreement with Statoil

FMC Technologies announced Tuesday that it has signed a renewed Framework Agreement with Statoil to provide subsea operations services for its developments on the Norwegian Continental Shelf. The duration of the agreement is five years with options for three additional three-year extensions.

Under the terms of the agreement, previously announced by Statoil, FMC Technologies will continue to provide installation services, asset management, equipment intervention and well access services.

"FMC Technologies has supported Statoil's subsea development efforts for more than two decades," said Tore Halvorsen, FMC Technologies' Senior Vice President, Subsea Technologies. "This agreement will provide continued life-of-field support for many of Statoil's developments."

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FMC Renews Subsea Agreement with Statoil

FMC Technologies announced Tuesday that it has signed a renewed Framework Agreement with Statoil to provide subsea operations services for its developments on the Norwegian Continental Shelf. The duration of the agreement is five years with options for three additional three-year extensions.

Under the terms of the agreement, previously announced by Statoil, FMC Technologies will continue to provide installation services, asset management, equipment intervention and well access services.

"FMC Technologies has supported Statoil's subsea development efforts for more than two decades," said Tore Halvorsen, FMC Technologies' Senior Vice President, Subsea Technologies. "This agreement will provide continued life-of-field support for many of Statoil's developments."

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Aker Solutions Pens Frame Agreement with Petrobras

Aker Solutions has entered a frame agreement with Petrobras to provide subsea equipment for the oil company's deepwater pre-salt field developments in Brazil. The contract value is approximately $800 million (NOK 4.6 billion).

The scope of work is for 60 well-sets with vertical subsea trees, subsea control systems, tools and spares within the 2014-2018 period.

"Aker Solutions is honoured to work with one of the world's leading deepwater operators. This long-term agreement confirms our partnership with Petrobras and reflects our dedication to the Brazilian market," said Øyvind Eriksen, executive chairman of Aker Solutions.

Petrobras will deploy the 60 well-sets in the pre-salt field developments located 186 miles (300 kilometers) off the São Paulo coast in the Santos Basin.

"We are committed to developing the subsea industry in Brazil by growing our Brazilian expertise supported by our international competence network," said Luis Araujo, president and country manager of Aker Solutions in Brazil.

Aker Solutions has decided to further invest and expand in Brazil due to the $800 million-frame agreement with Petrobras and market forecasts for the Brazilian oil and gas industry.

A new subsea manufacturing facility will be established in Curitiba in the state of Parana, 497 miles (800 kilometers) south of Rio de Janeiro. This new technology center will replace the current plant by 2015 and will employ approximately 1,100 people.

Only the first few well-sets within the new frame agreement will be manufactured at the existing plant, while the remaining well-sets will be assembled and tested at the new facility.

"We are continuing our efforts to establish large scale manufacturing capabilities based on the technologies developed for Petrobras during our first pre-salt projects. Our proven pre-salt technology gives Aker Solutions a strong position in this market, and this will be used to further enhance local content, such as subsea control systems. Aker Solutions has continuously invested in developing the know-how and expertise of its employees in Brazil," said Araujo.

Aker Solutions is also investing within other parts of the Brazilian offshore industry. Last year, the company announced that it will build a new multi-purpose service site for its drilling equipment business in Macaé, 112 miles (180 kilometers) northeast of Rio de Janeiro, significantly expanding its capacity to serve the country's fast-growing drilling market. This site will be Aker Solutions' fourth facility in Brazil, in addition to sites in Rio das Ostras, Curitiba and Rio de Janeiro.

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Aker Solutions Pens Frame Agreement with Petrobras

Aker Solutions has entered a frame agreement with Petrobras to provide subsea equipment for the oil company's deepwater pre-salt field developments in Brazil. The contract value is approximately $800 million (NOK 4.6 billion).

The scope of work is for 60 well-sets with vertical subsea trees, subsea control systems, tools and spares within the 2014-2018 period.

"Aker Solutions is honoured to work with one of the world's leading deepwater operators. This long-term agreement confirms our partnership with Petrobras and reflects our dedication to the Brazilian market," said Øyvind Eriksen, executive chairman of Aker Solutions.

Petrobras will deploy the 60 well-sets in the pre-salt field developments located 186 miles (300 kilometers) off the São Paulo coast in the Santos Basin.

"We are committed to developing the subsea industry in Brazil by growing our Brazilian expertise supported by our international competence network," said Luis Araujo, president and country manager of Aker Solutions in Brazil.

Aker Solutions has decided to further invest and expand in Brazil due to the $800 million-frame agreement with Petrobras and market forecasts for the Brazilian oil and gas industry.

A new subsea manufacturing facility will be established in Curitiba in the state of Parana, 497 miles (800 kilometers) south of Rio de Janeiro. This new technology center will replace the current plant by 2015 and will employ approximately 1,100 people.

Only the first few well-sets within the new frame agreement will be manufactured at the existing plant, while the remaining well-sets will be assembled and tested at the new facility.

"We are continuing our efforts to establish large scale manufacturing capabilities based on the technologies developed for Petrobras during our first pre-salt projects. Our proven pre-salt technology gives Aker Solutions a strong position in this market, and this will be used to further enhance local content, such as subsea control systems. Aker Solutions has continuously invested in developing the know-how and expertise of its employees in Brazil," said Araujo.

Aker Solutions is also investing within other parts of the Brazilian offshore industry. Last year, the company announced that it will build a new multi-purpose service site for its drilling equipment business in Macaé, 112 miles (180 kilometers) northeast of Rio de Janeiro, significantly expanding its capacity to serve the country's fast-growing drilling market. This site will be Aker Solutions' fourth facility in Brazil, in addition to sites in Rio das Ostras, Curitiba and Rio de Janeiro.

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Centrica Inks Agreement for Sabine Pass LNG

Centrica plc has entered into an agreement with Cheniere Energy Partners, L.P, to purchase 91,250,000 mmbtu (89 billion cubic feet) of annual liquefied natural gas (LNG) volumes for export from the Sabine Pass liquefaction plant in Louisiana in the United States. This amounts to approximately 1.75 million metric tonnes per annum (mmtpa), and is the equivalent of the annual gas demand of around 1.8 million UK homes. The contract is for an initial 20 year period, with the option for a 10 year extension, and the target date for first commercial delivery is September 2018.

Under the terms of the agreement, Centrica will purchase LNG on a ‘Free on Board’ (FOB) basis, giving it destination rights for the cargoes, for a purchase price indexed to the Henry Hub natural gas price plus a fixed component. Centrica will export gas from the fifth LNG train at Sabine Pass, on which preliminary engineering work has already begun. The contract is subject to a number of conditions precedent, including Cheniere receiving the necessary regulatory approvals, securing finance, making a final investment decision and issuing a notice to proceed with the fifth LNG train.

Sam Laidlaw, chief executive of Centrica, said, "In an increasingly global gas market, this landmark agreement represents a significant step forward in our strategy, enabling Centrica to strengthen its position along the gas value chain and helping to ensure the UK’s future energy security. We are therefore very pleased to have signed this agreement and look forward to working with Cheniere."

UK Prime Minister David Cameron said, "I warmly welcome this commercial agreement between Centrica and Cheniere. Future gas supplies from the US will help diversify our energy mix and provide British consumers with a new long-term, secure and affordable source of fuel."

UK Secretary of State for Energy and Climate Change Ed Davey said, "Security of UK energy supply lies in diversity so I am pleased that Centrica has announced today that it has secured a long-term North American liquefied natural gas export contract with Cheniere Energy Partners. The UK already receives gas from a range of countries and we can now add the US to Norway, the Netherlands and Qatar as sources of supply."

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LiqTech, FMC Enter Exclusive Agreement

LiqTech International, Inc. a clean technology company that manufactures and markets highly specialized filtration technologies, announced it has entered into an agreement with a global leader in oilfield equipment and services, FMC Technologies, Inc., for the use of its state-of-the-art disruptive silicon carbide membrane technology for oil and gas applications. The exclusive agreement will bring LiqTech International's silicon carbide membrane technology into the highly attractive unconventional shale oil and gas sector and will allow for the development of new water treatment systems. The agreement includes a multi-year, multi-million dollar commitment towards LiqTech technology in order for FMC Technologies to maintain exclusivity.

The use of horizontal drilling and hydraulic fracturing technology is one of the most significant advancements in hydrocarbon recovery in decades, driving a resurgence of onshore oil and gas activity in North America. The hydraulic fracturing process involves injecting large amounts of water and sand into a well to increase the cracks in dense formations, thereby enhancing flow characteristics. Following the process, a significant amount of water returns to the surface and must be treated or injected into deep underground disposal wells. LiqTech's silicon carbide membrane, and its greatly enhanced filtration capabilities, is a potential enabling technology for the treatment and reuse of this produced water.

Lasse Andreassen, LiqTech's CEO, stated:

"This agreement is a major breakthrough for LiqTech and is the validation of our technology that we have been working on for the last six years. We have more than one hundred customers that use our membranes, but FMC Technologies will bring LiqTech a very important platform in the attractive unconventional shale oil and gas area. We have granted FMC Technologies exclusive use of our membranes in the unconventional shale oil and gas industry, because of its commitment to our technology and the resources it commits to bringing our membranes into systems that we believe will grow our business significantly."

"FMC Technologies has studied and tested LiqTech's Silicon Carbide Membrane Technology and found it well suited for the further development of our product and service offerings in unconventional shale oil and gas," said Johan Pfeiffer, FMC Technologies' vice president of Surface Technologies. "We chose LiqTech as our partner because its product has great promise and its organization can meet the high quality standards that FMC Technologies requires. We look forward to developing new products together and see great prospects in this partnership."

"This agreement is a great accomplishment for LiqTech and our talented staff and will strengthen our business potential in the very important unconventional shale oil and gas area," LiqTech's Chairman Aldo Petersen concluded.

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LiqTech, FMC Enter Exclusive Agreement

LiqTech International, Inc. a clean technology company that manufactures and markets highly specialized filtration technologies, announced it has entered into an agreement with a global leader in oilfield equipment and services, FMC Technologies, Inc., for the use of its state-of-the-art disruptive silicon carbide membrane technology for oil and gas applications. The exclusive agreement will bring LiqTech International's silicon carbide membrane technology into the highly attractive unconventional shale oil and gas sector and will allow for the development of new water treatment systems. The agreement includes a multi-year, multi-million dollar commitment towards LiqTech technology in order for FMC Technologies to maintain exclusivity.

The use of horizontal drilling and hydraulic fracturing technology is one of the most significant advancements in hydrocarbon recovery in decades, driving a resurgence of onshore oil and gas activity in North America. The hydraulic fracturing process involves injecting large amounts of water and sand into a well to increase the cracks in dense formations, thereby enhancing flow characteristics. Following the process, a significant amount of water returns to the surface and must be treated or injected into deep underground disposal wells. LiqTech's silicon carbide membrane, and its greatly enhanced filtration capabilities, is a potential enabling technology for the treatment and reuse of this produced water.

Lasse Andreassen, LiqTech's CEO, stated:

"This agreement is a major breakthrough for LiqTech and is the validation of our technology that we have been working on for the last six years. We have more than one hundred customers that use our membranes, but FMC Technologies will bring LiqTech a very important platform in the attractive unconventional shale oil and gas area. We have granted FMC Technologies exclusive use of our membranes in the unconventional shale oil and gas industry, because of its commitment to our technology and the resources it commits to bringing our membranes into systems that we believe will grow our business significantly."

"FMC Technologies has studied and tested LiqTech's Silicon Carbide Membrane Technology and found it well suited for the further development of our product and service offerings in unconventional shale oil and gas," said Johan Pfeiffer, FMC Technologies' vice president of Surface Technologies. "We chose LiqTech as our partner because its product has great promise and its organization can meet the high quality standards that FMC Technologies requires. We look forward to developing new products together and see great prospects in this partnership."

"This agreement is a great accomplishment for LiqTech and our talented staff and will strengthen our business potential in the very important unconventional shale oil and gas area," LiqTech's Chairman Aldo Petersen concluded.

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Centrica Inks Agreement for Sabine Pass LNG

Centrica plc has entered into an agreement with Cheniere Energy Partners, L.P, to purchase 91,250,000 mmbtu (89 billion cubic feet) of annual liquefied natural gas (LNG) volumes for export from the Sabine Pass liquefaction plant in Louisiana in the United States. This amounts to approximately 1.75 million metric tonnes per annum (mmtpa), and is the equivalent of the annual gas demand of around 1.8 million UK homes. The contract is for an initial 20 year period, with the option for a 10 year extension, and the target date for first commercial delivery is September 2018.

Under the terms of the agreement, Centrica will purchase LNG on a ‘Free on Board’ (FOB) basis, giving it destination rights for the cargoes, for a purchase price indexed to the Henry Hub natural gas price plus a fixed component. Centrica will export gas from the fifth LNG train at Sabine Pass, on which preliminary engineering work has already begun. The contract is subject to a number of conditions precedent, including Cheniere receiving the necessary regulatory approvals, securing finance, making a final investment decision and issuing a notice to proceed with the fifth LNG train.

Sam Laidlaw, chief executive of Centrica, said, "In an increasingly global gas market, this landmark agreement represents a significant step forward in our strategy, enabling Centrica to strengthen its position along the gas value chain and helping to ensure the UK’s future energy security. We are therefore very pleased to have signed this agreement and look forward to working with Cheniere."

UK Prime Minister David Cameron said, "I warmly welcome this commercial agreement between Centrica and Cheniere. Future gas supplies from the US will help diversify our energy mix and provide British consumers with a new long-term, secure and affordable source of fuel."

UK Secretary of State for Energy and Climate Change Ed Davey said, "Security of UK energy supply lies in diversity so I am pleased that Centrica has announced today that it has secured a long-term North American liquefied natural gas export contract with Cheniere Energy Partners. The UK already receives gas from a range of countries and we can now add the US to Norway, the Netherlands and Qatar as sources of supply."

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Raisama Withdraws from Farm-In Agreement Offshore New Zealand

New Zealand Oil & Gas (NZOG) revealed Wednesday that Raisama Energy is withdrawing from its farm-in agreement to participate in drilling the Kakapo structure in PEP 51311, offshore Taranaki Basin.

NZOG noted in its statement that Raisama acquired the opportunity to earn a ten percent interest in the prospect by paying 20 percent of drilling costs up to $3.1 million (AUD 3 million) and 10 percent after that.

"As the well has not yet been drilled, Raisama's withdrawal means it will not incur these costs," NZOG said in its disclosure.

NZOG is at present, seeking further farm-in partners and a drilling rig on suitable terms.

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TAG Oil, Apache Conclude Farmout Agreement for NZ Permits

TAG Oil Ltd. announced that the Company's 100-percent owned New Zealand subsidiaries have concluded an agreement with Apache New Zealand Corporation LDC, which results in an early termination of the Farmout Agreement dated Sept. 1, 2011. This agreement relates to exploration in Petroleum Exploration Permits 38348, 38349 and 50940 located in the East Coast Basin of New Zealand.

Main Highlights of the Agreement:

Apache has paid TAG Oil a lump sum payment to satisfy its obligations related to funding Phase 1 operations under the Farmout Agreement.TAG Oil will retain all assets developed under the Agreement, including all seismic and technical work completed by the Joint Venture.TAG retains its 100% interest in the subject East Coast Basin permits, including the Waitangi Hill shallow oil discovery.

TAG Oil CEO Garth Johnson commented, "Although we are disappointed that Apache's shift in corporate strategy resulted in a refocusing of their international holdings, we do understand that tough decisions sometimes need to be made. TAG remains highly enthusiastic about the future of these prospects: All the work completed to date as a result of our JV Phase 1 activities strengthens our beliefs in the potential of TAG Oil's East Coast Basin holdings. We're also pleased to have full control back over the project with funding in place."

TAG intends to utilize the lump sum payment received by Apache to fund the drilling of up to four East Coast Basin wells as planned in the Apache-agreed Phase 1 work program. These wells will test several high-impact play objectives including the Waipawa and Whangai source rocks that have independently been confirmed to be generating 50 degree API oil. Additionally, these naturally fractured, high-quality source rocks are believed to be widespread across TAG's acreage. Independent assessments have concluded that there are approximately 14 billion barrels of undiscovered original oil in place potential, within less than a fifth of TAG's total land holdings on the East Coast.

Drilling of the first East Coast wells is expected to commence in late March/ April 2013, subject to receipt of the necessary consents from regional government. TAG will utilize conventional vertical drilling techniques similar to those used by TAG Oil over many years in its successful Taranaki Basin operations.

Mr. Johnson concluded: "It was a pleasure to have had the opportunity to work closely with Apache. Our work together provided important geotechnical and operational related work, which has confirmed our belief in the major potential of this project, and advanced it to drill-ready status. Furthermore, TAG's cash flow and assets have grown dramatically since we first signed the agreement with Apache. So the Company can now fund further drilling operations and exploration activities from a place of strength and greater flexibility."

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Vanoil Extends Agreement with Rwanda

Vanoil Energy announced Tuesday it has executed a two month extension to its Technical Evaluation Agreement with the Rwandan Ministry of Natural Resources.

The agreement provides Vanoil with the exclusive right to negotiate a Production Sharing Contract (PSC) covering approximately 629 square miles (1,631 square kilometers) of the East Kivu Graben, located beneath Lake Kivu, Rwanda.

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