InterOil Finalizes PNG Farm-In Deal with Pacific Rubiales

InterOil Corporation announced that it has completed the farm-in transaction with Pacific Rubiales Energy Corp. relating to its acquisition of a 10% net (12.9% gross) participating interest in Petroleum Prospecting License 237 (PPL 237) onshore Papua New Guinea, including the Triceratops structure and exploration acreage located within that license. This announcement is made to confirm completion of the Farm-In Agreement with PRE announced July 30, 2012.

On March 23, 2013, PRE funded the final payment of approximately $55 million under the Farm-In Agreement. Together with previous payments PRE has funded the full $116 million cash payment due under the Farm-in Agreement. Additional payments of PRE's drilling costs for the Triceratops-2 well are scheduled to be paid in the coming months.

"InterOil is pleased to have completed the Farm-In Transaction with Pacific Rubiales, a company with a track record of successful exploration and production development," stated Phil Mulacek, Chief Executive Officer of InterOil. "We look forward to appraisal and development of the Triceratops gas and condensate field with our partners."

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MWCC, Wood Group Form Offshore Response Team

Marine Well Containment Company (MWCC) and Wood Group PSN on Tuesday announced the formation of an offshore reserve response team. Made up of 100 select reserve operations personnel, the team will be activated should MWCC’s modular capture vessels (MCVs) be called upon to respond to a well control incident in the deepwater U.S. Gulf of Mexico.

The team would be deployed to a deepwater well control incident to operate the processing equipment on the MCVs should MWCC’s expanded containment system (ECS) be required to cap and flow a well. In this situation, the system redirects the flow of fluids from the deepwater well to the MCVs through flexible pipes and risers. Using modular, adaptable process equipment installed on the capture vessel, the system is designed to separate liquids from gas, flare the gas and safely store the liquids until transferred to a shuttle tanker and taken to shore.

The selection and training of the reserve response team is an important step in the progress of the ECS. Primarily based in southern Louisiana, the reserve response team members will be hand-selected by Wood Group PSN and trained to operate and maintain equipment onboard the MCVs during a response. The team will meet regularly for ongoing training and remain ready to respond to a deepwater well control incident in the U.S. Gulf of Mexico.

"We look forward to working with Wood Group PSN to identify a team of exceptional operations personnel to operate the processing equipment on the MCVs during a response,” said Marty Massey, chief executive officer of Marine Well Containment Company. “We are pleased to be able to tap into the skilled and industry-experienced workforce of Louisiana and other Gulf States to achieve our mission to be continuously ready to respond with the expanded containment system."

Derek Blackwood, Wood Group PSN Americas president, added, "This latest initiative underlines the ongoing advancements in safer deepwater exploration and we are proud to be working with MWCC to develop a team of experienced oilfield operations personnel capable of responding to a potential deepwater well control incident in the U.S. Gulf of Mexico. Wood Group PSN employs approximately 6,000 people in the U.S. and has access to a network of more than 3,000 experienced operations personnel in the Gulf of Mexico. We will be responsible for identifying and selecting the response team, delivering ongoing training, and mobilizing the team as and when required."

The ECS, which will be made available by MWCC this year, is designed to be able to cap and flow wells in up to 10,000 feet of water. It will also be able to contain up to 100,000 barrels of liquid per day.

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BLM Colorado: Public Has No Need to Know About Public Lands, Public Monies, Public Employees

Cross-posted from ColoradoPols

In a show of arrogance that has become too typical of the Colorado State Office of the U.S. Bureau of Land Management, the agency is ignoring a Federal judge, media requests, stakeholders, and the public in denying public information about public activities on the public lands, according to the Durango Herald:

“This isn’t a widespread issue of public concern. It is primarily press that are concerned about oil and gas leasing and activists that are opposed to oil and gas leasing.”

The state ‘Communications Director’, one might assume, has the job as a public employee working on public lands issues and spending public monies, of informing the public and managing media relations.  The ‘press’ and public are–this common-sense assumption goes–the PRIMARY purpose of his receiving a Federal salary as a taxpayer-funded public employee.

But apparently not for BLM Colorado–where public information is no such thing, and the public and media are merely distractions from what ever other self-determined more important things, like defending illegal agency actions perhaps, or intentionally seeking to divide communities.

Colorado’s North Fork Standing Up

This particular matter has its roots in the BLM Colorado State Office’s reckless oil and gas leasing policy that willfully ignores local communities, other federal agencies, state wildlife officials, local businesses and the public, to lease whatever public lands secret industry representatives nominate.  This is despite Colorado having the oldest land use plans in the Mountain West, many dating back to the 1980s–like that that governs the public lands in the North Fork–most of which fail completely to properly account for, describe, consider or protect the resources and uses that exist or depend upon these lands today.

Citizens for a Healthy Community–a Delta County based conservation group–partnered with the Western Environmental Law Center to file lawsuit seeking the names of the nominators who put forward the contentious leases in that valley.  They won that suit.

Here is what the judge wrote:

“Competition in bidding advances the purpose of getting a fair price for a lease of publicly owned minerals,” Matsch wrote. “Moreover, the identity of the submitter may be relevant to the plaintiff and others who may raise concerns about the stewardship records of that potential owner, a factor relevant to the environmental impact of the proposed sale.”

So, a Federal judge acknowledges that sharing information on public lands and public minerals is in the public interest and orders the public employees at a public agency to release that (public) information.

And the senior staff at BLM Colorado Office responds, to paraphrase: Make us (again).

Following the judge’s decision and the BLM Colorado’s clear loss in court, others–including the Durango Herald–have now sought identical information regarding contentious leases in their communities.  Such as those surrounding Mesa Verde National Park opposed by the BLM’s own sister agency in the Department of Interior, the National Park Service.

Now, the Colorado State Office of the BLM, our public employees spending our public monies to manage our public lands and minerals, is refusing to release that information. Again.  Because, apparently its Communications Director has better things to do than communicate.

Maybe like spending more time in court defending the indefensible, losing more lawsuits, and greasing the skids for oil and gas in violation of what the Federal courts have found to be in the public’s interest.

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Aker Awarded Moho Nord Contract Offshore Congo

Norwegian oilfield services firm Aker Solutions has won an $850 million contract from Total to deliver a subsea production system for the Moho Nord project in the Republic of Congo, the company reported Monday.

The Moho Nord project, which is located approximately 47 miles off the coast of Congo, consists of two developments: Moho Nord and Moho Bilondo 1bis. Aker and Total will run both developments as a single, integrated project.

Aker said the scope of the work included the delivery of 28 vertical subsea trees, including wellhead systems, two installation and workover control systems, seven manifold structures, subsea control and tie-in systems. The project will use Aker's new vertical tree technology, the firm added.

Management, engineering and procurement will mainly be performed at Aker's headquarters in Fornebu, Norway. The subsea trees and worker systems will be manufactured at the Tranby manufacturing center outside Oslo, while the production of manifolds will be carried out at the firm's facility in Egersund, Norway, and Aker's Aberdeen facility will deliver the control systems and the wellheads.

Alan Brunnen, head of Aker's subsea business area, commented in a statement:

"This is a major contract award for Aker Solutions. We are investing and growing internationally and Aker Solutions is committed to developing the oil and gas industry in the Republic of the Congo through knowledge sharing and local content."

Moho Nord and Moho Bilondo 1bis are part of the Moho-Bilondo oil field which was commissioned in April 2008 for commercial production. It is the first deepwater offshore field of the Republic of the Congo at water depths ranging between 1,970 and 3,445 feet.

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Hess Cites Potential Governance Issues in Dissident Holder's Plan

Hess Corp. (HES) again urged shareholders to support its slate of board candidates as the exploration-and-production company continued its criticism of dissident investor Elliot Management Corp.'s efforts to elect five board members and directly pay them bonuses based on how Hess shares perform.

In a letter to shareholders Tuesday, Chairman and Chief Executive John Hess outlined support for Hess's multiyear plan to transform into a pure-play exploration and production company as well as the company's board nominees. The letter provided a list of quotes from Wall Street analysts in recent weeks and also touted the company nominees' qualifications in the key areas such as restructurings and alternative shale drilling.

In the letter to shareholders, Mr. Hess stated, "We find the prospect of Paul Singer, a shareholder, potentially paying directors millions of dollars in contingency fees for pre-determined outcomes to be highly troublesome from a governance perspective, and have concerns about the Singer directors' ability to act as fiduciaries on behalf of all Hess shareholders."

Elliott, a hedge-fund manager that controls 4.4% of Hess' shares, wants to split Hess into two companies in a bid to boost the stock, which has lost 47% of its value since peaking in 2008.

Hess reiterated that Elliott's plan to pay bonuses to its board nominees--in addition to the regular compensation they would receive as directors from Hess-- means they wouldn't be truly independent from the hedge-fund manager, a claim Elliott has disputed.

The outcome of the contest is being closely watched in the energy industry amid a rise in shareholder activism that has forced changes in recent months at natural-gas producers Chesapeake Energy Corp. (CHK) and SandRidge Energy Inc. (SD). The meeting is set for May 16.

Hess shares closed Monday at $70.44 and were inactive in recent premarket trading.

Copyright (c) 2012 Dow Jones & Company, Inc.

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Gov. Hickenlooper a bad example on oil-and-gas issues

**Cross-posted from The Hill**

By Ellynne Bannon

The cozy relationship between politicians and big business has been a fact of life in America since the days of the robber barons. Today, this affiliation is especially strong between certain governors and the oil and gas industry. And, the consequences could include drastic impacts on the health and safety of their constituents. Nowhere is this more apparent than in the case of Colorado’s Gov.  John Hickenlooper.

Given that Colorado is the epicenter of both the gas boom and the controversy over its impacts, the governor has become a leading national figure on oil and gas. Earlier this year, Hickenlooper appeared in front of the U.S. Senate Energy and Natural Resources Committee during a hearing and stated that he drank fracking fluid, implying that it’s safe. Shortly after, he was forced to clarify that what he drank isn’t actually used commercially, stating that: “I don’t think there’s any frack fluid right now that I’m aware of that people are using commercially that you want to drink.”

It turns out that this wasn’t the last time that the governor would go to bat for the oil-and-gas industry. In fact, Hickenlooper has mastered the rhetoric of a concerned elected official, while at the same time working to help his billion-dollar oil-and-gas industry boosters cheat the rules that protect public health and water.

While Hickenlooper has claimed he would increase fines and hold industry polluters accountable, behind closed doors he helped weaken and kill legislation aimed at doing just that.

Case in point: the governor recently announced, with great pomp and circumstance, an initiative to make Colorado the “the healthiest state,” and created a safe drinking water week. Days later, and with far less fanfare, he successfully gutted legislation to hold oil-and-gas companies accountable when they pollute Colorado communities and water.

That’s just the tip of the iceberg. In January, Hickenlooper’s oil-and-gas commission put forth water testing rules criticized as weakest in the nation, which included the Anadarko-Noble loophole, a huge carve-out for two of the biggest oil-and-gas operators in Colorado.

The Anadarko-Noble loophole makes it easier for  billion-dollar oil-and-gas companies to pollute water in northern Colorado, an  area that’s home to some of the state’s most intense drilling and more than 25  percent of Colorado’s oil-and-gas wells. It’s also home to more than half of the most recent reported spills.

Hickenlooper’s lobbyists also worked to weaken fines for oil-and-gas companies guilty of polluting. They did this, despite the fact that Colorado already has lowest-in-the-nation fines and a well-documented problem with spills and water contamination.

In 2012, industry reported 402 spills in Colorado, 20 percent of which resulted in water contamination. Just six companies were responsible for more than 85 percent of all spills that contaminated water. Now, thanks to Hickenlooper’s efforts, these companies have even less incentive to stop polluting Colorado communities and water.

Hickenlooper has also rejected funding to increase the number of state oil-and-gas well inspectors. His Department of Natural Resources agency joined with the oil-and-gas industry to oppose additional resources to increase the number of inspectors – from 16 to 24 – for the state’s more than 52,000 wells.

The Hickenlooper administration also opposed reform efforts to increase transparency on the Colorado oil-and-gas commission. Oil-and-gas companies currently serve on the commission, which regulates their activities, posing serious concerns about conflicts of interest.

Finally, the Hickenlooper administration worked to block a public health study to see if fracking is making Coloradoans sick. Hickenlooper’s chief of public health and the environment, Dr. Chris Urbina, testified against the need for the study – which was supported by local residents and medical professionals.

Hickenlooper is, unfortunately, only one example of a state chief executive who seems to value his oil-and-gas donors over all others. New York’s Gov. Andrew Cuomo, Pennsylvania’s Gov. Tom Corbett and Utah’s Gov. Gary Herbert have all displayed similar tendencies. These elected officials need to be held accountable for their actions; they need to put the health and safety of their constituents ahead of the profits of the billion-dollar oil-and-gas industry.

Bannon is Western Lands and Energy Program Manager for the Checks and Balances Project.

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Drilling Report, March 24

The drilling report was produced with data from the Texas Railroad Commission, from March 10 to 16. The following counties were searched: Anderson, Angelina, Camp, Cass, Cherokee, Dallas, Ellis, Freestone, Gregg, Harrison, Henderson, Houston, Kaufman, Leon, Limestone, Marion, Nacogdoches, Navarro, Panola, Rains, Robertson, Rusk, San Augustine, Shelby, Smith, Upshur, Van Zandt and Wood.
For information contact Business Editor Casey Murphy at cmurphy@tylerpaper.com or 903-596-6289.

Click HERE to read a PDF of the March 24, 2013 Tyler Morning Telegraph Drilling Report

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