Tuesday, May 31, 2011

Cote D’Ivoire: Oil and Gas discoveries and status of exploration activity in 2011 – 2012

The Cote D'Ivoire is a country in West Africa, economically dependent on agriculture and related activities, which engage roughly 68% of the population. Cote d'Ivoire is the world's largest producer and exporter of cocoa beans and a significant producer and exporter of coffee and palm oil. Events in recent years have included severe unrest caused by political developments. On 28 November 2010, Alassane Dramane Ouattara won the presidential election, defeating then President Laurent Gbagbo, who refused to hand over power, resulting in a 6-month stand-off. In April 2011, after widespread fighting, Gbagbo was formally forced from office by Ouattara supporters with the support of UN and French forces. Several sanctions were put on the country by the UN, AU (African Union) and the EU among others, to assist in removing Gbagbo from power. Several thousand UN troops and several hundred French remain in Cote d'Ivoire to support the transition process. Ouattara was sworn in as president in May 2011, and sanctions imposed on the country have slowly been lifted.

This post lists the discoveries in the Cote D'Ivoire and exploration plans of companies looking to strike it big in this year and the next. For a list of West African oil discoveries in 2010 - 2011 click here. For information on Angola (South West Africa), click here. For a list of recent discoveries and exploration plans in neighbouring Ghana, click here, and for a list of all discoveries in Ghana click here. All information has been sourced from Derrick Petroleum's extensive exploration and deals databases.

Location of Cote D'Ivoire shown by red polygon.

Oil and Gas Discoveries, Locations and Partners

o   Baobab:  150 – 200 mmboe (Block CI-40). The Baobab field, located offshore West Africa on Block CI-40 and approximately 16 miles (25 kilometers) offshore Cote d'Ivoire, has estimated reserves of 700 million and recoverable reserves of 200 million barrels of oil. The discovery Baobab 1X well was drilled in March 2001 and is estimated to produce roughly 6,700 barrels per day. It was drilled to a total depth of 3,074 m in a water depth of 1,484 m. In 2002, the Baobab 2X well was drilled to a total depth of 2,880 m in a water depth of 1,540 m.
§  Capacity – 52,000 bpd
o   CNR – 57.6% (operator)
o   Svenska – 27.4%
o   Petroci – 15%

o   Espoir: 120 mmboe (Block CI-26). Espoir lies in Ivory Coast Block CI-26, approximately 19km offshore south of Jacqueville, and around 60km southwest of Abidjan. It was discovered in 1982. The water depths range from 100m to 600m. The Espoir field has estimated recoverable reserves of 93 million barrels of oil and 180 billion cubic feet of natural gas.
§  Capacity – 28,000 bpd
o   CNR – 58.67% (operator)
o   Tullow – 21.30%
o   Petroci – 20%

o    Acajou: 25 mmboe (Block CI-26). The well on licence CI-26 was drilled on the Acajou South prospect approximately 24 km off the coast of Côte d'Ivoire in a water depth of 3,050ft. The well is located some 9km from the Espoir facilities. Well Acajou-1x was operated by Canadian Natural Resources ("CNR") using the Sovereign Explorer rig. It reached a total depth of 2,447 m and encountered a gross oil column of over 76.2 m. A 13.72 m interval of sands at the top of the oil column was tested at an average rate of 3,500 bopd oil. The oil was of good quality 33° API, similar to that found in the Espoir field. 
·         CNR – 58.67% (operator)
·         Tullow – 21.30%
·         Petroci – 20%

o    Lion: 45 mmboe (Block CI-11). Block CI-11 is located about 13 km offshore and 89 km from Abidjan in water depths ranging from 45 metres to 280 metres.  The producing Lion and Panthère fields were discovered by Phillips in the 1980’s.
§  Capacity – 1230 bpd
o   Afren 47.96% (operator)
o   Petroci – 20.14%
o   IFC – 18.94%
o   SK Energy – 12.96%

o    Panthere: 420 BCF (Block CI-11). Block CI-11 is located about 13 km offshore and 89 km from Abidjan in water depths ranging from 45 m to 280 m.  The producing Lion and Panthère fields were discovered by Phillips in the 1980’s

o   Foxtrot: 940 bcf (Block CI-27). Côte d'Ivoire’s largest producing natural gas field is the Foxtrot field in offshore Block CI-27.
·         Foxtrot International 24% (operator)
·         Petroci 40%
·         SECI 24%
·          Gaz de France 12%

o   Belier: 20 mmboe (Block CI-24). Exxon discovered the Belier Field in 1974. The Bélier field, developed by Exxon, did not begin producing oil until 1980 because of technical difficulties. Output reached 10,000 bpd in 1981 and then fell to 6,000 bpd by 1986 in spite of a US$50 million investment by Exxon on a water injection program to maintain output and prolong the field's life. It is not producing now.

o   Kudu: 207 bcf, Eland: 95 bcf , Ibex: 77 bcf (Block CI-01). These 3 discoveries lie in Block CI-01. Block CI-01 was awarded to United Meridian Corporation in 1994, and is located offshore in the easternmost part of Côte d’Ivoire, adjacent to the international border with Ghana.  It extends from near the shoreline to 1,900 m water depth and is located 52 km from Abidjan. 16 wells have been drilled on the block to date, throughout the late 1970’s and mid 1980’s by Esso and Agip, 10 of which have encountered oil and gas.
§ Afren – 65% (operator)
§ Petroci – 20%
§ SK Energy Co Ltd – 15%

Cote D’Ivoire Oil and Gas discoveries. Source: Rialto

        Fiscal Terms and Political Environment
o    Production Sharing Contract operating continually since the 1970’s 
o    Full lifecycle cost recovery of expenses includes CapEx and OpEx, unrecovered costs carried forward for future recovery
o   Production bonuses payable on milestones

Companies Drilling in 2011 – 2012

The information presented here is from the Derrick Petroleum Planned Exploration Wells Database which is the only database in the industry that tracks actual exploration drilling plans and not just license drilling commitments. The database will be useful to E&P companies for identifying farm-in opportunities and to oilfield services companies for identifying sales opportunities. It is also extremely useful as a research tool to keep track of exploratory drilling by region or company. 

Companies with plans to drill in Cote ‘d’ivoire. Source: Derrick Petroleum Planned Exploration Wells Database. [FM] = Force Majeure announced.

CI – 205
Block CI-205 is located in the Gulf of Guinea, offshore Cote d'Ivoire in the Tano Basin with proven oil and gas potential. It lies 15 km from the Baobab oil field, the largest in Cote d'Ivoire. The block covers an area of about 2,600 sq km. 4,900 km of 2D seismic and 2,400 sq km of 3D seismic surveys have been completed. The block is in its second phase of exploration which requires the consortium to drill one exploration well. The consortium planed to drill a well in 2010 using the Transocean drillship Deepwater Pathfinder. However on the 4th of April 2011, the operator, Lukoil Oil Company announced Force Majeure on operations on the block. It is likely that the well will be drilled in 2012 after normal operations resume. The partners are:
            * LUKOIL Group: 63% (operator)
            * PETROCI Holding: 10%
            * Oranto Petroleum: 27%

Map of Blocks and oil and gas fields. Source: Afren

CI – 105
This is an offshore concession off the Ivory Coast. The South Grand Lahou-1 wildcat was drilled to a total depth of 4,556 meters. However it failed to encounter any hydrocarbons. 2 more exploration wells are planned to be drilled in 2H 2011, with one being on the Lower Bandama Channel prospect in 2011. The upside resource potential of the prospect is estimated to be about 300 mmboe. However operations are suspended following announcement of Force Majeure over the block from Feb 2011. Partners in the block are:
Tullow Oil – 22.37%
                * Anadarko – 50% (operator)
                * Petroci Holdings – 15% (5% + 10% carried interest)
                * Al Thani Corporation Ltd – 12.63%         

In Block CI-103, acquisition of 600 sq km of new 3D completed at end 2007. 3D seismic has delineated several leads and prospects. The geophysical techniques which proved so successful in Ghana are currently being used to further evaluate the data. An exploration well is planned to be drilled on the Fan 4 West prospect in H2 2011. The upside resource potential of the prospect is estimated to be about 230 mmboe. However operations are suspended following announcement of Force Majeure over the block from Feb 2011. Partners in the block are:
Tullow Oil – 45% (operator)
                * Anadarko – 40%
                * Petroci Holdings – 15%

CI-401 & CI-101
Blocks CI-101 & CI-401 are located on the continental shelf of the Republic of Cote d'Ivoire, in the deep-water zone of the Gulf of Guinea. A total of 1,100 sq km of 3D seismic study has been completed on the blocks in 2007. In April 2010, the consortium drilled its first exploration well Orca-1x-bis on Block CI-401. Block CI-401 occupies an area of about 929 sq km. The well penetrated the targeted objectives and discovered thin sandstone reservoirs. The well is temporarily plugged and abandoned. A second exploration well on CI-401 is planned to be drilled in Q1 2012. The location for the next exploration well on Block CI-101 has been defined, with the well is planned to be drilled in 2011. Force Majeure over these blocks was declared on April 4th 2011. Partners in the block are:
                        * LUKOIL Group: 56.66% (operator)
                        * Petroci Holdings – 15%
                        * Vanco Energy – 28.34%

CI – 202
CI-202 covers an area of 675 km² and is located just 30km to the southeast of Abidjan, the primary commercial centre of Cote d’Ivoire, extending from the coastline to water depths of almost 1000m. The block is a highly prospective petroleum exploration licence that contains multiple pre-existing un-appraised oil and gas discoveries.  The block contains a significant database of 13 wells, two 3D seismic surveys and over 20 production tests which have produced gas up to 37mmscf/day and oil over 2200 bopd.  These discovery and appraisal wells are located in shallow water depths of 25m to 85m and represent a high value and low unit technical cost production opportunity. The consortium is planning to drill three to six exploration and appraisal wells on the block in 2011. Partners in the block are:
            * Rialto Energy – 85% (operator)
            * Petroci (15%)
            * ACC Holdings (21.25%)

CI-100 block is located about 100 kilometres south-east of Abidjan in water depths ranging from 1,500 to 3,100 metres and covers an area of about 2,000 sq km. An initial 3D seismic survey has already been carried out by Yam’s Petroleum. Exploration work will include a new 1,000 square-kilometre 3D seismic survey, which will complete coverage of the block, and a first drilling, in 2012 at the latest. CI-100 is located directly west of acreage held by Dana in Ghana where the company made an oil discovery in March 2000. Partners in the block are:
                 * Total – 60% (operator)
                 * Petroci - 15%
                 * Yams Petroleum – 25%

The area has been much derisked with substantial finds in the region and in neighbouring Ghana and Sierra Leone. There is a lot of excitement and anticipation about the results of drilling this year and the next. Although developments in Cote D’ivoire have pushed off exploratory drilling by a few months, the stage is now set for  companies to resume operations, as most sanctions against the country have been lifted. Force Majeure was declared on some blocks by companies due to unstable and violent conditions. However, it is a matter of time before operations resume. It seems more likely than not, that drilling is going to introduce the country to significant additional reserves, and propel the Cote D’Ivoire into a significant oil and gas exporting country.  

Monday, May 30, 2011

Expected Q2-2011 results- North America to lead the game and now stands at 44% of the total deal value. ~$4.4 billion worth of assets in North America expected to be sold by the end of Q2-2011.

Global upstream M&A activity in Q2-2011 has currently reached $18.4 billion in 81 transactions against the total Q1-2011 numbers of $52.4 billion in 174 transactions.

Highlights of Q2-2011
  • North America leads with $8.14 billion or 44% of the total global deal value
  • Europe is in second position totaling $3.17 billion
  • Followed by Asia ($2.15 billion) and Africa ($1.73 billion)
  • In North America. conventional deals are in majority unlike the Q1-2011 where unconventional deals were dominating
  • Oil weighted transactions accounted for 44% of the total global deal value.

Top ten transactions

Asset Vs Corporate transactions
The asset and corporate transactions are on par in Q2-2011. Of the total corporate transactions, 50% is complete takeovers and the other 50% is minority equity stakes.

Deals in play to be completed by Q2-2011
Atleast $4.4 billion worth of assets in North America are put up for sale and are expected to be sold by the end of June 30, 2011, according to Derrick Petroleum’s “Deals in Play” database.

Note: The results are extracted from Derrick Petroleum Services.

Friday, May 27, 2011

Santos Plans to spend over US$ 100 million for Sangu field in Bangladesh

Santos International is one of Australia’s leading gas producers, supplying Australian and Asian customers. The company is the largest producer of natural gas for the domestic Australian market, and has significant gas and oil operations across Australia and in Indonesia, Papua New Guinea, Vietnam, Bangladesh, India and the Kyrgyz Republic. The company has a strong base in Australia and Indonesia and pursuing focused growth in Asia, of which our activities in Bangladesh are a key part.

Santos in Bangladesh:

Santos acquired 3D seismic in 2010 over the Sangu and Magnama structures. This seismic has revealed some prospects of interest. Santos is planning to spend over $100 million on a three-well program in Block 16 beginning in the fourth quarter of 2011.  All wells are targeting new pools of gas not intersected by the existing Sangu field development. One of the wells, Sangu-11, will be drilled from the Sangu platform and, if successful, will be able to provide some immediate relief to the Chittagong gas situation. The other two wells are targeting prospects approximately five kilometers from the Sangu platform. A further exploration well may also be drilled on the Magnama prospect should time permit in the upcoming drilling season.

In November 2010, Santos acquired all of the interests of Cairn in Sangu gas field and Block 16 exploration acreage. As a result of this transaction, Santos holds 75% interest (operator) in Block 16 (Sangu) and will have a 100% interest in Block 16 (Exploration). The deal is depicted below:
Santos exploration portfolio for 2011:

Tullow acquires $730 million worth assets back to back in Ghana and Netherlands

Tullow Oil plc agreed to acquire the interests of EO Group Limited, consisting of its entire interests offshore Ghana, for a consideration of $305 million. This acquisition will increase Tullow's interest in the West Cape Three Points licence offshore Ghana by 3.5% to 26.4% and increase the Group's interest in the world-class Jubilee Oil field, which Tullow Operates, by 1.75% to 36.5%. The receipt of Tullow shares as part of the consideration gives EO the opportunity to retain an indirect interest in the upside potential of all of Tullow's Ghanaian assets.

Just a day back, Tullow Oil agreed to acquire Nuon Exploration and Production (Nuon E&P) for a cash consideration of €300 million ($425 million) from the Vattenfall Group. The acquisition of Nuon E&P will significantly enhance Tullow's North Sea business adding a portfolio of 25 licences that include over 30 producing fields, numerous development and exploration opportunities and ownership of key infrastructure.  This portfolio will increase the Group's North Sea gas production by 9,000 boepd to approximately 23,000 boepd and add reserves and resources of 28 mmboe. 

Overview of 2010 results of Tullow Oil

Thursday, May 26, 2011

Shell and Maersk Oil offer farm in opportunity on the Danish Continental Shelf.

Shell and Maersk Oil are jointly offering up to 60% interest in the Elly and Luke development project located near the existing Tyra gathering, treating and transportation infrastructure. The Partners are in the advanced stages of planning for the combined development of the Elly and Luke discoveries that will deliver hydrocarbons into the Danish and Dutch gas transmission systems. The Luke and Elly fields are expected to yield mean recoverable gas resources of 180 BCF, with upside estimated up to 430 BCF. In addition, exploration prospects in the licenses have potential gas resources estimated up to 422 BCF. 

The online data room will be open until the bid deadline of Tuesday the 7th of June 2011.


60% in the fields is expected to be offered and is valued between $54-$90 million based on $3-$5/ BOE of resource potential.

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Wednesday, May 25, 2011

Cenovus 2011 UBS Global Oil and Gas Conference

- $1.8 B committed capital
- $0.1 B one-time costs
- Ability to utilize balance sheet to fund additional opportunities
- $700 MM of additional opportunity capital includes:
    - 440 strat wells drilled in Q1
    - scalable conventional oil & natural gas programs
- expand drilling program at Pelican Lake
- future oil sands expansions
- $600 MM of 2011F capital contributes to 2011F production
- $300 – 500 MM of potential divestiture proceeds not included in budget


BASF 2011 Deutsche Bank German & Austrian Corporate Conference

- Increasing Brent oil price forecast from $90/bbl to $100/bbl
-ƒ Assuming oil production in Libya will not restart during 2011
- EBIT before special items from our Libyan oil production for the full year 2011 will be about €1 billion lower compared with 2010 (thereof about €700 million of non-compensable oil taxes)


Premier Oil 2011 AGM Presentation

- Grow near-term production to 75 kboepd from existing 2P reserves of 261 mmboe
- Deliver further growth by commercialising contingent resource base of 228 mmboe
- Add 200 mmboe through exploration by focusing on core geologies
- Make value-adding acquisitions in three core areas
- Maintain a conservative financing plan


Venoco 2011 Hart Energy DUO Conference Presentation

- >500 MMBOE resource potential
- Concentrated position with >95% operatorship
- Crude oil weighted with shallow declines
   - 50% of proved reserves
   - 42% of 2010 production
   - >65% of 2010 revenue
- Large acreage position in Monterey shale and Sacramento Basin


El Paso plans to sell 1,600 boe/d in Powder River Basin. Expected proceeds may be around $130-$160 million.

Scotia Waterous has been retained as the exclusive financial advisor by El Paso Corporation to divest its interests in the House Creek Field area of the Powder River Basin, Wyoming. The assets include oil-weighted production of approximately 1,600 boe/day from the Sussex and Parkman and significant undeveloped Niobrara acreage. The value of the assets put up for sale may be around $130-$160 million based on $80,000-$100,000/boe.

Bids due by late July, 2011.

For more information on the offering, follow up with these contacts -
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The following table shows Scotia Waterous-advised deals since the beginning of 2010.

Tuesday, May 24, 2011

Endeavour International posted 6.6% decline in O&G Production for Q1-2011; Poised for Significant Production Growth in the UK and the US

Endeavour is an independent oil and gas company and has operations in the North Sea and the United States. In May, 2009, the company completed the sale of its Norwegian subsidiary for US$150 million, and those proceeds combined with current cash flow will fund future growth initiatives. Endeavour is currently developing three field discoveries in the United Kingdom sector of the North Sea that will serve as the foundation for production growth over the next two years.
Source: Derrick Petroleum E&P Transactions Database

The company’s first quarter 2011 production was 3,001 boepd, down 6.6% over the same quarter last year. Though the company was not performed for the quarter, the pieces are in place for significant production growth and lower operating costs in the near future; the Bacchus UK oil development is moving forward and appears to be on schedule to start production in Q2-2011, with production expected to ramp-up to 4,000–5,000 bpd net to the company's interest. This more than doubles the company's current production rate. Meanwhile, the company continues to push forward many of its smaller, shorter cycle-time projects.

Poised for Significant Production Growth in the UK and US

Rapid Growth Expected Over Next Three Years:
Endeavour expanded into the US in 2010 with the purchase of lower-cost, shorter cycle time conventional and unconventional onshore reserves. As it brings its balanced portfolio of oil and gas properties on to full production, management expects to organically double annual production in each of the next three years.  END believes that its existing total reserves can produce 30,000 to 40,000 BOEPD by 2015. During 2011, capital expenditures of about $150 million will target its two key initiatives in the U.K. North Sea – Bacchus and Greater Rochelle and the remainder will be directed toward the Haynesville and Marcellus areas in the U.S. to bring on production.

Bringing North Sea Assets On-Line
In the Central North Sea, Endeavour has three primary development projects – Bacchus, Columbus and the Greater Rochelle area, which have the potential to significantly expand its production levels and total proved reserves over the next three years. The Company recently increased its working interested in Bacchus from 10% to 30%, giving it an even greater position in this near-term proven oil play.

Operating the Greater Rochelle Development toward First Production
 In February 2011, the company received final approval of its Field Development Plan for East Rochelle from the Department of Energy and Climate Change (DECC). This is an important next step in moving the field toward first production in late 2012. In the fall of 2010, END also achieved commercial drilling success at West Rochelle confirming a second excellent quality reservoir.

Significant Reserve Growth Driven by the Drill Bit
During 2010, Endeavour grew its 2P oil and gas reserves by 12.3% to 43.7 MMBOE from 38.9 MMBOE, representing a 419% replacement of 2010 production. Production volumes averaged about 4,100 BOEPD during the year. END expects to generate significant production growth from its definable projects in the second half of 2011, with an opportunity to double its production flow rates in each of the next three years from its existing assets.

West Africa's Ghana emerging from the dust! Oil discoveries in Ghana so far..

Ghana is emerging from decades of unsuccessful oil and gas exploration to becoming one of the global exploration hotspots. Despite a few discoveries prior to 2007, there wasn’t much to talk about. However, the game changer turned out to be the billion barrel Jubilee oil field discovery in 2007 by Kosmos Energy, drilled by the Mahogany-1 well. This, as it turned out, was also extremely fortuitous because Kosmos was drilling a stratigraphic trap (more subtle to map) and not the easily identifiable structural traps. Locating and mapping these stratigraphic traps can potentially lead to world class discoveries, as the Jubilee discovery has shown, and as the other companies are also now doing. With exploratory success coming in Ghana, and subsequently along the West African coast, increasing attention is being focussed in this region, and it is becoming increasingly likely that huge reserves of hydrocarbons lie under the offshore. Ghana has led the way so far, and I have listed out all the oil and gas discoveries in Ghana to date. This list is sure to grow as more exploration picks up in this country. For a list of oil companies with plans to drill in West Africa click here. For a list of recent discoveries and companies planning to drill in Ghana click here. For a discussion on Angola’s oil industry and companies planning to drill in Angola click here. For a list of discoveries in Cote D'Ivoire and exploration plans in 2011 - 2012 click here. All data is from Derrick Petroleum’s extensive exploration and deals databases and Derrick Petroleum analysts.
List of Discoveries in Ghana upto 2011

The following maps show the location of these discoveries
Source: Kosmos

Source: Tullow

Source: Kosmos

NOTE: On 6 June, 2011, Kosmos Energy announced that the Banda-1 probe, drilled to a total depth of 4580 metres on the Banda Deep prospect by Atwood Oceanics’ semi-submersible Atwood Hunter, found hydrocarbons over a gross interval of 300 metres in Cenomanian-aged reservoirs. The interval contained more than 100 metres of low-porosity sandstone and three metres of 40 degrees-API oil pay. On completion, the well will be suspended and the rig moved to complete drilling of the Makore-1 well, which is targeting Turonian age reservoirs in the south of the licence. The well was drilled in the West Cape Three Points Block. Kosmos (30.875%) is operator and partners are Anadarko (30.875%), Tullow (22.896%), EO Group (3.5%), Sabre Oil and Gas (1.854%) and GNPC (10% carried interest).


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