Thursday, April 21, 2011

Adverse weather conditions affected Santos Q1 2011 Operational results; Revised 2011 Production Guidance to 47-50 mmboe

Santos reports oil and natural gas production of 11 mmboe for first quarter 2011, down 11% than the corresponding period. This is due to adverse weather in Central and Western Australia. Due to this, Santos revised production guidance for the year 2011 from 48-52 mmboe to 47-50 mmboe.
Operational update during the Quarter:

Sales gas production of 2.4 PJ (412.65 kboe)was 50% lower than Q1 2010 due to Santos’ interest in GLNG reducing from 60% in Q1 2010 to 30% in Q1 2011 following the sale of interests in the project to Total and KOGAS.
Gas production from the John Brookes field of 10.3 PJ (1771 kboe) was 17% lower than Q1 2010 due to cyclone activity and lower customer nominations. Mutineer-Exeter production of 0.05 mmbbl was 67% lower than the previous quarter due to unplanned FPSO repairs in January and February 2011. Stag production of 0.35 mmbbl was 46% higher when compared to Q4 2010 due to the completion of two new development wells following a drilling campaign during Q4 2010.
Bayu-Undan / Darwin LNG

Gross Bayu-Undan gas production of 50.9 PJ (8,752 kboe) was 16% higher than Q1 2010.  Santos’ net entitlement production of 3.7 PJ (636 kboe)was marginally higher than Q1 2010.
Indonesia sales gas production of 10 PJ (1,719 kboe) was 3% higher than Q1 2010 due to temporary high gas demand from Maleo. Crude oil production of 0.11 mmbbl, down 8% lower over  Q4 2010 mainly due to Oyong oil field natural decline.

Key Exploration Activities:

Canadian assets worth $7 billion on the market, contributes 15% to global deals in play

Canadian oil sands reported $12.8bn in asset sales, corporate acquisitions and joint ventures for 2010. The Montney (BC & Alberta)  recorded $2.3bn in trades or 5x times 2009 total and twice 2008 deals less Shell-Duverney. The number of oil sands deals went up, but the average deal value decreased significantly due to the 2009 Petro-Canada Suncor $18bn merger. Bakken & Saskatchewan plays totalled $2.6bn. The Montney and Bakken unconventional plays made up ~10% of the Canadian transactional market place.

Canadian assets worth $7billion on the market in Q1 2011

$7bn of assets on the market, corporate acquisitions and development assets worth $5.46 bn in Q1 2011. 

Key assets on the market

Source: Derrick Petroleum E&P Transactions Database

Parex acquires remaining interests in four Colombian blocks from Remora Energy for $255M

Parex Resources Inc has entered into a definitive agreement to acquire Columbus Energy Sucursal’s (a wholly owned subsidiary of Remora Energy) 50% share in four Llanos Basin blocks for total consideration of $255 million, subject to customary adjustments. Parex already holds the remaining 50% interest in the blocks. The acquisition is effective January 1, 2011 and is expected to close no later than June 29, 2011.

Acquisition Highlights :
-- Increases working interest from 50% to 100% in each of the four Llanos basin blocks namely, LLA-16, LLA-20, LLA-29 and LLA-30.
-- Block LLA-16: This block covers an area of 78,772 net acres and holds Kona multizone light oil discovery (35 degree API oil). In 2011, Parex expects to drill six appraisal/development wells on Block LLA-16 at the Kona discovery, of which two wells have been drilled and cased to date. Effective, March 31, 2011, it holds Proved Reserves of 1.066 MMbbl, 2P Reserves of 5.2 MMbbl and 3P Reserves of 9.6 MMbbl. Current production from the discovery is 1,160 BO/d. The block also holds few exploration prospects - Java, Sulawesi, Moragogi and Merida.
-- Exploartion activities are on going in Block LLA-20, LLA-29 and Block LLA-30.
-- The GLJ Report, effective March 31, 2011, included future development capital of $24.2 million for 2P reserves and $34.6 million for 3P reserves.
-- Acquisition metrics (excluding future development capital): 2P Reserves - $49.42/BOE and 3P Reserves - $26.48/BOE.
-- As of December 31, 2010, NPV-10 of 3P Reserves - $239.105 million and NPV-10 of 2P Reserves - $149.321


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