CAMAC: Data Acquisition Completed at Kenya Blocks

CAMAC Energy Inc. announced that Sander Geophysics Limited has completed shooting airborne gravity and magnetic geophysical surveys on the Company's Kenya onshore Lamu Basin Blocks L1B and L16. The data acquisition covers essentially the entire 4,683 square miles (12,129 square kilometers) in Block L1B and the entire 1,395 square miles (3,613 square kilometers) in Block L16 and satisfies the gravity and magnetic survey requirements for each Block under the relevant Production Sharing Agreements.

The Company expects to receive initial results of the shoot in the third quarter of 2013. Results will be used to optimize the placement of 2-D seismic lines by identifying faults, basement structures and intra-sedimentary volcanic layers and/or intrusions.

"I am pleased that we completed the acquisition of the airborne gravity and magnetic geophysical surveys in Kenya safely, on time, and under budget," said Senior Vice President of Exploration and Production Segun Omidele. "Our geophysical team will now work with SGL to interpret the data and delineate optimal areas for 2-D seismic acquisition."

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ConocoPhillips: No New Timeline for Arctic Drilling Program

ConocoPhillips executives didn't give a new timeline for the company's Arctic drilling program during a conference call Thursday, after the company said earlier this month it wouldn't go forward this summer as it had planned.

Chief Financial Officer Jeff Sheets said the company will need more time to understand the regulatory framework before beginning work in the Chukchi Sea, off the coast of Alaska. He said drilling in 2015 is possible but not a sure thing.

The company didn't feel confident enough that it would be able to get the permits it needed to proceed with commitments for rigs and equipment, said Matt Fox, executive vice president for exploration and production.

"We just felt there wasn't enough stability in way the regulatory framework was shaping up for us to do that with confidence," Mr. Fox said.

ConocoPhillips will have to pay an $18 million cancellation fee to Noble Corp. to get out of its contract for a new jackup rig equipped to work in the Arctic, Noble said in a fleet update earlier this month.

The company didn't provide a timeline for a long-discussed sale of an interest in its Canadian oil-sands assets. Mr. Fox said there has been a lot of interest, but the company is still considering all its options. Mr. Sheets said it isn't likely a transaction will be completed this year.

A recent rise in natural gas prices isn't enough for ConocoPhillips to consider redirecting work toward drilling for natural gas rather than oil, the executives said. For that to happen, he said prices need to be "significantly north" of where they are now, and need to stay that way.

Planned turnarounds will have a significant impact on the company's production worldwide this year.

"This really is a big year for planned shutdowns," Mr. Fox said.

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TAQA Gets Approval for Cladhan Development

TAQA Bratani reported late Wednesday that it has received approval from the UK government for its development plan for the Cladhan field in the North Sea.

The initial phase of development of the field – which is located on Blocks 210/29a and 210/30a in the northern North Sea – will consist of two producer wells and one injection well.  Cladhan is expected to produce over 17,000 barrels of oil equivalent per day initially with first oil expected in the first quarter of 2015. Production will be tied back to TAQA's Tern Alpha platform which lies some 11 miles northeast of the Cladhan field.

TAQA Bratani Managing Director Leo Koot commented in a company statement:

"The Cladhan development is the third field that TAQA has developed and the largest project to date. Developing Cladhan as a tie back to Tern supports TAQA's strategy to invest in our infrastructure as we recognise the crucial part it plays in allowing us to maximise recovery from the northern North Sea."

TAQA current has a 40.1-percent stake in the Cladhan field but an agreement to acquire further equity in the field from Sterling Resources could see its interest increase to 52.7 percent.

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Sinopec Posts 1Q Earnings Rise, Outperforming PetroChina

HONG KONG - China Petroleum & Chemical Corp., or Sinopec, Thursday posted a 25% increase in first-quarter net profit, outperforming larger rival PetroChina Co.

Strong domestic fuel consumption in China boosted profits at Beijing-based Sinopec, the largest refiner in Asia by capacity. Sinopec's extensive gasoline station network gives it an edge over PetroChina, which ranks second in Chinese service stations. Lower fuel costs also help Sinopec outrun PetroChina in terms of earnings, although part of the benefit is offset by lower contribution from exploration and production.

Sinopec's net profit for the three months ended March 31 rose to 16.7 billion yuan ($2.7 billion) from 13.4 billion yuan a year earlier. PetroChina, the largest listed Chinese oil company by capacity, reported a 8% decline in net profit to 36.0 billion yuan from 39.2 billion yuan for the period.

In the first three months this year, Sinopec refined 58.7 million metric tons, or 5.9% more than a year earlier. PetroChina processed 253.5 million barrels of oil, which was 1.4% decline than a year earlier.

Analysts said lower oil prices, coupled with a recent adjustment in refined product mechanism, will benefit Sinopec and PetroChina in the second quarter, even though the Chinese government is maintaining tight control over domestic fuel prices.

China cut domestic gasoline and diesel prices Thursday, the first time it has adjusted prices since reforming its fuel price system in March. Under China's new oil product pricing system, domestic fuel prices may be adjusted when the moving average of a basket of international crude oils over a period of 10 working days reflects a change of more than CNY50 a ton for diesel and gasoline prices.

"We continue to believe that the new refining mechanism reduces the regulatory risk of Sinopec's refining business and thus should lead to higher valuations for Sinopec over time," Citigroup analyst Graham Cunningham said Thursday.

Last month, Sinopec agreed to buy $1.5 billion of its parent's approximately $40 billion of overseas oil and gas assets as part of a plan to increase its global exploration and production.

The new assets--including projects in Kazakhstan, Colombia and Russia--would increase Sinopec's overseas proved reserves by 359% to 330.2 million barrels of oil equivalent from 72.0 million BOE as the end of last year. Its overseas production will increase by 171% to 58.7 million BOE in 2012 from 21.7 million BOE.

The acquisitions are aimed at putting Sinopec on par with integrated global energy majors such as Exxon Mobil Corp., Chevron Corp. and Royal Dutch Shell PLC.

To fund its acquisition of parent assets, Sinopec last week issued a $3.5 billion U.S. dollar bond--the largest dollar-denominated bond out of Asia excluding Japan in a decade. The bond issue came weeks after it raised $3.1 billion in February through a private placement, Asia's largest placement this year.

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Seven Winners in UK Safety Awards

The UK Oil and Gas Industry Safety Awards saw seven awards given out to energy sector firms and professionals this year.

The awards ceremony, held in Aberdeen Wednesday,  saw the first-ever Award for Workforce Engagement go to the Brent Delta Decommissioning Team in recognition of its actively embracing worker engagement on safety matters as it embarked on the decommissioning of Royal Dutch Shell's Brent complex in the North Sea.

Petrofac's Control of Work Team won the Ideas in Safety prize, while Stork Technical Services and Banff and Buchan College shared the Award for Innovation in Safety.

Several individuals who work in the oil and gas sector also won prizes recognizing their achievements in health and safety. Kent Lanier, rig manager at Rowan Drilling UK, won the Award for Safety Leadership. Marc Brankin, a scaffold chargehand on the Brent Decommissioning Project, won the Award for Most Promising Individual.

Scott MacDonald, offshore electrician with Archer, won the Award for Preventative Safety Action. And Nicky Elphinstone, a steward with Aramark, won the Award for Safety Representative of the Year.

Oil & Gas UK Health and Safety Director Robert Paterson commented in a statement:

"The UK Oil and Gas Industry Safety Awards has once again brought to the fore an inspirational group of people and organisations. The winners, and indeed everyone nominated, are actively doing great work to keep the safety of our people at the forefront of our industry.

"The importance of celebrating these great achievers cannot be understated. This year the safety awards have been the biggest and best yet with a record number of entries and a record number of people attending the ceremony itself."

Les Linklater, a team leader for Step Change in Safety, which helped to organize the awards with Oil & Gas UK, added:

"“The safety awards are growing every year and this year we expanded the awards to include a new category which recognises effective workforce engagement, while we continue to tap into the workforce’s creativity with the Ideas in Safety Prize."

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ExxonMobil 1Q Up on Slightly Improved Margins

First quarter earnings for Exxon Mobil Corp. rose 1 percent earning $9.5 billion, while earnings per share increased 6 percent and capital and exploration expenditures were up 33 percent, compared to a year earlier.  

Quarterly profit increased due to higher earnings in its chemical business but oil and gas production decreased, the company said in a conference call with reporters Thursday. On an all oil-equivalent basis, production fell 3.5 percent from the first quarter of 2012; and excluding the impacts of entitlement volumes, Organization of Petroleum Exporting Countries  quote effects and divestments, production decreased 1.2 percent, the company added.

ExxonMobil's total production in the quarter averaged 4.4 million barrels of oil equivalent per day, declining 3.5 percent from the same quarter a year ago.

"ExxonMobil achieved strong results during the first quarter of 2013, while investing significantly to develop new energy supplies," commented ExxonMobil's Chairman Rex W. Tillerson in a press release. "ExxonMobil's financial performance enables continued investment to deliver the energy needed to help meet growing demand, support economic growth, and raise living standards around the world."

The company boosted its quarterly dividend by 11 percent to $.63/share, but trimmed 2Q 2013 share repurchase to $4 billion, analysts at Oppenheimer noted.

"As the largest publicly traded oil and gas company, [ExxonMobil] has long been a core holding for investors seeking a defensive investment with continued dividend growth," added Oppenheimer. "Low volatility, financial strength, capital discipline, operating efficiency and strong management are its most attractive characteristics, in our view. Barring an unlikely major acquisition, we don't see any catalyst in the next 12 months that could lift share performance above the S&P 500." 

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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ConocoPhillips First-Quarter Profit Off 27% on Spinoff, Divestitures

ConocoPhillips' first-quarter earnings fell 27% after the exploration and production company reported lower revenue amid the spinoff of its refining and marketing arm in 2012 and as the year-earlier period benefited from $950 million in asset sale gains.

ConocoPhillips reported a profit of $2.14 billion, or $1.73 a share, down from $2.94 billion, or $2.27 a share, a year earlier. The year-earlier period included a $712 million income contribution from ConocoPhillips former refining and marketing arm, which was spun off as Phillips 66 nearly a year ago as part of the multiyear revamp aimed at improving the company's finances.

Excluding asset write-downs, asset-sale gains, spinoff-related expenses and other items, adjusted earnings from continuing operations were up at $1.42 from $1.38. Revenue decreased 8.9% to $14.65 billion.

Analysts polled by Thomson Reuters had most recently projected earnings of $1.41 on revenue of $13.57 billion.

The newly independent exploration and production company is in the midst of a three-year repositioning in which the oil major has shed billions of dollars in assets and is planning to divest itself of more operations as it seeks to focus on fast-growing shale plays in the U.S.

Average daily production fell 1.6% amid the asset sales and the company warned that it will likely fall further in the second quarter.

ConocoPhillips executives had said at the end of the 2012 fourth quarter that 2013 would be a low point for the company's production, as it aims to refocus its efforts on North America while shedding other international assets.

But the company reported that in the Eagle Ford, Bakken and Permian basins, unconventional U.S. reservoirs that ConocoPhillips expects to be drivers of its future growth, combined production climbed 42%.

Simmons and Co. analysts said the ConocoPhillips exceeded expectations with low corporate charges and "well-behaved" productions.

"Overall, results were better than we had expected, and in-line to better than the street had expected as well," they wrote.

Chairman and Chief Executive Ryan Lance said the company is on track to grow production and improve margins this year, pointing to discoveries in the Gulf of Mexico last quarter.

"Our base business is operating to plan, our development programs and major projects are performing as expected and we are on track to deliver production and margin improvements this year," he said.

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