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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Xcite Reports on 'Excellent Year'

UK-focused junior Xcite Energy reported Tuesday results for an "excellent year", in which it successfully completed the pre-production well test on the Bentley field in the North Sea, producing and selling more than 149,000 barrels of oil (the firm's first revenue).

Xcite said that the Bentley field is now substantially de-risked and development-ready. Meanwhile, the firm confirmed that it had signed a $155 million reserves-based lending facility that will form the substantial part of the funding requirement for its Phase 1B development of the Bentley field.

Xcite also successfully completed a new equity capital financing for GBP 63.4 million ($96.4 million) as well as new debt financing of $60 million during 2012. The firm's cash balance at year end was GBP 25.4 million ($38.6 million).

The company highlighted its success in the UK's 27th Licence Round, which provided new acreage to its portfolio. Blocks 9/4a, 9/8b and 9/9h add four identified prospects to future exploration and appraisal programs in the wider Bentley area, it said.

Xcite CEO Rupert Cole commented in a company statement:

"2012 has been an excellent year for Xcite, with the successful, and, most importantly, safe, conclusion of a US$250 million project in the North Sea, on time and on budget, which is a testament to the skill and experience of our team. This is an immense achievement by any standards.

"The entire team has worked tirelessly during the well test and in the time since its conclusion in September last year, to re-engineer the reservoir model in order to deliver an updated field development plan based on the excellent data and results from the test.

"The success of last year's project has provided us not only the information but also the confidence needed to be able to deliver our plans to commence the first phase development on Bentley, which will be largely based on scaling up the 2012 pre-production work programme."

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Sinopec Reaches $3 Billion Asset Deal

China Petroleum & Chemical Corp. agreed to form a joint venture that will acquire $3 billion in oil and gas assets held by its state-owned parent in countries including Kazakhstan, Colombia and Russia.

The joint venture between Sinopec Corp., as China's largest oil refiner is known, and parent China Petrochemical Corp. will be called Sinopec International Petroleum E&P Hongkong Overseas Ltd.

Sinopec also reported a 13% decline in profit for last year.

China Petrochemical holds a 73.86% stake in Sinopec. Since 2010, the parent has invested $34 billion in oil and gas deals in the U.K, the U.S., Canada, Brazil, Argentina and Australia, according to data provider Dealogic.

Two people familiar with the talks said in January that $8 billion in assets would be acquired by Sinopec in April. It wasn't clear Sunday whether further purchases will follow the announcement of the $3 billion deal.

The acquisitions are aimed at putting Sinopec on par with integrated global energy companies such as Exxon Mobil Corp., Chevron Corp. and Royal Dutch Shell by helping it build up its relatively small reserves to complement its network of refineries.

"The transactions will facilitate Sinopec Corp.'s strategic objective of becoming a more internationalized oil company with significant oil and gas assets," the company said Sunday.

After the transaction, Sinopec's overseas proven reserves will rise more than fourfold to 330.2 million barrels of oil equivalent. Its overseas production will more than double to 58.7 million barrels of oil equivalent. Sinopec's only current overseas asset is a stake in an oil field off Angola's shore.

The arrangement has been spearheaded by Sinopec Chairman Fu Chengyu. Mr. Fu said last year that Sinopec planned to acquire its parent's overseas exploration and production assets, partly to limit the damage on earnings posed by China's caps on domestic fuel prices.

Sinopec primarily is a refining company so is more vulnerable than its rivals to the gap between global prices for crude oil and domestic prices for refined products.

When Mr. Fu ran Cnooc Ltd., the company developed the greatest international reach of China's top-three state-owned oil companies, acquiring assets from North America to Nigeria to Iraq. He left Cnooc for Sinopec in 2011.

Sinopec reported on Sunday that net profit fell to 63.88 billion yuan ($10.28 billion) last year from 73.23 billion yuan in 2011, hurt by higher crude-oil costs and caps on retail prices.

Analysts had projected net profit of 62.6 billion yuan for last year, according to Thomson Reuters.

Operating losses from Sinopec's refining business narrowed to 11.4 billion yuan from 35.8 billion yuan.

The company plans to refine 238 million metric tons of crude oil this year, up from 221 million tons last year.

State-run PetroChina Co., the country's largest oil company by capacity, on Thursday reported a 13% decline in net profit.

Cnooc, China's third-largest oil producer, recently reported a 9.3% decline in 2012 net profit. Cnooc, which is digesting its $15 billion purchase of Canada's Nexen Inc., has few refining assets.

Analysts have forecast that earnings for PetroChina and Sinopec will improve this year, assuming the implementation of planned changes by the National Development and Reform Commissionin the system for pricing refined products and natural gas.

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

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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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CGG Names New VP for Latin America

CGG has appointed a new VP, Regional Geomarket Director for Latin America as part of a global reorganization following its recent acquisition of Fugro Division on Jan. 31, 2013.

The new global reorganization is being implemented in order to offer our customers a broad geographic presence and a full spectrum of business lines in Geoscience. Business Development at CGG is structured into nine Regional Geomarkets, including the newly created Regional Geomarket for Latin America.

In this context, Luiz Braga was recently appointed VP, Latin America Regional Geomarket Director for CGG.

Active in the oil industry for over three decades, Luiz Braga holds a PhD. in Geophysics from Oregon State University, USA. He worked as a researcher at the National Observatory and held various technical and managerial positions with Petrobras, CGG and Fugro. Dr. Braga is a founding member of SBGf and has international experience in technical management and commercial activities in Integrated Geosciences.

Based in Rio de Janeiro, Luiz Braga will replace Patrick Postal as Geomarket Director for Brazil and Key Account Manager for Petrobras.

After four years in Brazil, Patrick Postal will take on new responsibilities at corporate level with CGG in France. In the coming months Luiz Braga and Patrick Postal will work closely together to ensure business continuity.

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Petrobras, SBM Shake Hands on Lula FPSO $3.5B Conversion Deal

Petrobras awarded a Letter of Intent (LOI) to SBM Offshore for the 20-year charter and operation of two floating production storage and offloading vessels (FPSOs) from BM-S-11 subsidiary Tupi BV. The contract value is estimated at $3.5 billion.

"We are delighted to have been selected by Petrobras for this significant project and look forward to starting work on the FPSOs, which are amongst the largest ever built by SBM Offshore," said Bruno Chabas, CEO of SBM Offshore, in a released statement. “Jointly, the two FPSOs represent the biggest contract ever awarded to us, underlining our unparalleled expertise and leading position in the market for large-scale tanker conversions to FPSOs."

The scope of work includes the conversion of two double hull sister vessels into FPSOs to be moored in about 7,546 feet of water with a storage capacity of 1.6 million barrels each. The topside facilities of each vessel will come in at around 22,000 tons and will be able to produce 150,000 barrels per day of well fluids with the capability to treat associated gas.

A joint venture company owned by SBM Offshore and partner, Queiroz Galvão Óleo e Gás S.A. will own and operate the FPSOs, which will be deployed at the Lula field in the pre-salt province offshore Brazil. The vessels are planned for delivery by the end of 2015 and early 2016.

Lula, formerly Tupi, considered the largest hydrocarbon find in the world, is undergoing several development stages to fully exploit the reserves. The pre-salt field is located about 186 miles offshore Rio de Janeiro and is operated by Petrobras.

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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ExxonMobil to Boost Output at Iraq West Qurna-1 by Mid 2013

U.S. energy giant Exxon Mobil Corp. and its partners are planning to increase crude oil production from West Qurna-1 oil field in southern Iraq to 530,000 barrels a day by July, from 495,000 barrels a day now, a senior Iraqi oil official said Monday.

Mahdi Abdul Razzaq al-Maliki, head of the field's joint management committee, said the consortium, which also includes Royal Dutch Shell PLC and Iraq, is planning to raise output from West Qurna-1 to 600,000 barrels a day by the end of 2013.

"According to this year's plan which has been approved by the oil ministry, the consortium will invest some $1.65 billion compared with $1 billion invested last year," Mr. al-Maliki told Dow Jones Newswires.

Iraq, a member of the Organization of the Petroleum Exporting Countries, is targeting a total output of 4.5 million barrels a day next year from 3.3 million barrels a day now, the Iraqi prime minister's top energy advisor, Thamir Ghadhban, said.

New oil fields, being developed by some of the world's largest oil companies will come on stream this year such as Majnoon, which is being developed by Shell, West Qurna-2 being developed by OAO Lukoil Holdings and Garraf oil field, which is being upgraded by a consortium led by Malaysia's Petronas and Japan Petroleum Exploration Co., or Japex.

Exxon is in a row with the Iraqi government over deals it signed with the semi-autonomous region of Kurdistan in northern Iraq. The Baghdad government says that Exxon should choose between its southern oil field and its deal in the north. Baghdad and Kurdistan are at logger heads over who should control oil resources in the Kurdish region.

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

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