Anadarko to divest Indonesian assets

Anadarko Petroleum Corporation has planned to sell its assets in Indonesia (primarily deepwater exploration acreage offshore East Kalimantan). Anadarko has participating interests in approximately 4.5 million exploration acres through a combination of several operated and non-operated Production Sharing Contracts (PSC). Continue reading here..

Can multiple bidders increase the premium on Rockhopper?

Recent media reports have been speculating on a possible takeover or majority acquisition in Rockhopper Exploration Plc by Anadarko Petroleum. According to Sunday Times, several other Texan oil firms, including Noble Energy, Hess Corp and Murphy Oil are interested, as are British oil firms Cairn Energy and Premier. Continue reading here..

Mozambique: Oil & Gas Exploration in 2011 – 2012

Mozambique is a country in East Africa present between Tanzania on the north and South Africa in the south. A string of significant gas discoveries in the off shore north-east has substantially increased the prospectivity in the country and exploration activity looks set to pick up.

The country has two main sedimentary basins; the Rovuma Basin in the north east, where most of the discoveries have occurred, and the Mozambique basin further south. The Rovuma Basin is located close to the border between Tanzania and Mozambique, at the Rovuma delta, and measures 400 km in length and about 160 km in breadth. The area towards the south follows the Ibo horst trend and towards the north, it is featured as a tertiary Rovuma delta.

The Pande gas field, discovered by Gulf Oil, was the first field to be discovered in Mozambique, in 1961. This was followed by the Búzi (1962) and Temane (1967) gas fields. Exploration activity on the Pande/ Temane block by Sasol later led to the discovery of the Inhassoro gas field.

The consortium exploring the Offshore Area 1, led by Anadarko, has been the most successful so far with 4 significant gas discoveries. These are listed below:

Discovery Name	Net Pay (ft)	Gross Pay (ft)	Oil/ Gas	Total Depth	Date	Reservoir rock	Future Work
Windjammer	555	> 1200	Gas	16,930	Mar-2010	Oligocene + Paleocene	Coring program completed (part of appraisal work)
Collier		-	-	10,500	Apr-2010	-	Plugged and suspended following pore pressure issues. Did not evaluate the desired section.
Ironclad	124		Oil	17,402	Aug-2010	Cretaceous	Plugged and abandoned as sands had low porosity and permeability
Barquentine	416		Gas	16,880	Oct-2010	Oligocene + Paleocene	Appraisal
Lagosta	550		Gas	16,307	Nov-2010	Oligocene + Eocene	Coring program completed (part of appraisal work)
Tubarao	110		Gas	13,900	Feb-2011	Eocene	Appraisal

Table 1: Windjammer, Barquentine, Lagosta and Tubarao encountered substantial gas. The Ironclad well is significant because it encountered an oil column (although non-commercial), which was the first time oil was discovered in offshore Mozambique or in the deep offshore off East Africa.Source, Derrick Petroleum Services.

Source: Wentworth Resources

An overview of exploration activity planned in the country is provided in the table below, along with an account of recent exploration from Derrick Petroleum’s “Exploration Database” is provided below.

Block/ License Name	Operator	Onshore/Offshore	Hydrocarbon	Wells planned in 2011	Wells planned in 2012+
Offshore Area 1	Anadarko	Deep Offshore	Gas	1	6
Onshore Rovuma Block	Anadarko	Onshore	Not mentioned		1
Buzi Block	Energi Mega Persada	Onshore	Gas	1
Inhaminga	DNO International ASA (DNO)	Onshore	Not mentioned	1
Blocks 2 & 5	StatoilHydro	Deep Offshore	Not mentioned
Area 4	ENI	Deep Offshore		1

Table 1: Operators planning to drill exploration wells in Mozambique in 2011 and 2012+. Source, Derrick Petroleum ‘Planned Wells Exploration Database’

Offshore Area 1:
Anadarko is the operator of the 2.6-million-acre Offshore Area 1 with a 36.5% working interest. Co-owners in the area are Mitsui E&P (20 %), BPRL (10 %), Videocon Mozambique Rovuma 1 (10 %) and Cove Energy Mozambique Rovuma Offshore (8.5 %). Empresa Nacional de Hidrocarbonetos, E.P.'s 15- interest is carried through the exploration phase. An overview of the recent exploration activity in this area is given in Table 1, and the 4 discoveries can be seen in Map 1.

The consortium is planning to acquire 3D seismic over the Black Pearl prospect in Q1-Q2 2011, following which exploratory drilling would occur. In 2012, the consortium plans to drill the Atum-1, Golfinho-1, Linguado, Badejo-1, Camarao and Black Pearl prospects.

Onshore Rovuma Block:
Anadarko (37.5%) operates this block and the partners are Maurel & Prom (24%), Wentworth Resources Ltd (15.3%), Cove Energy Plc (10%) and ENH (15%). On October 11, 2009 the first exploration well on the block, Mecupa-1,was spudded. It had minor gas shows and was plugged and abandoned.

At present (July 2011), the partners have agreed to enter a 2nd exploration phase beginning in 2011. The work programme is expected to include additional seismic acquisition and at least one exploration well.

Buzi Block:
This onshore block is operated by Energi Mega Persada (75% WI) and partner is ENH (25%). The Buzi block is located onshore within the central part of the Mozambique Basin and covers approximately 10,300 km2 and lies immediately to the North of the Pande, Temane and Inhassoro Gas fields. The undeveloped Buzi gas discovery within the block, is only 27 km to the southwest of Beira. Initial plans included two exploration wells and possibly two appraisal probes, should gas be discovered. This is yet to be done.

The consortium was planning to spud its first well on the block in 2011 as announced in 2009. However, as on 30 June, 2011, no information about drilling has been released by either of the partners.

Inhaminga Block:
The Inhaminga Block lies onshore Mozambique. DNO International (34% WI) operates the block and partners are New Age Ltd (41%), Harmattan Uruguay S.A., and the Mozambique government (20%). DNO International has planned to carry out 2D seismic program on the block in H2 2009. The first prospect Chite was drilled on 19 November, 2010. However, the well was dry and was plugged and abandoned. The second well Inhaminga High-1 well was spudded in Feb 2011, and was also dry.

DNO says in its 2010 annual report that it plans to drill a well here in 2011. However, media reports mention that DNO will close down its operations in Mozambique after drilling unsuccessful wells.

Blocks 2&5:
Blocks 2 & 5 are located in the Rovuma basin offshore northern Mozambique, and operated by Statoil (90% WI) with partner ENH (10%). A 1,300 sq km 3D seismic survey was carried out between March & June 2010 and interpretation is ongoing as of March 2011. The decision to extend the license and commit to drilling an exploration well was supposed to have been made by 1 June 2011, but as on 1 July, this decision is still forthcoming. 

Area 4:
ENI operates the block with a 70% WI. Other partners are Galp Energia (10%), ENH (10%) and KOGAS (10%). Area 4 is located in deep water up to a depth of 2,600 metres in the Rovuma Basin and covers an area of 17,646 sq kms in a previously unexplored geological basin, and this operation is part of Eni's strategy to identify new areas with a high exploration potential.

The consortium is planning to drill a well in September 2011. 

$2 - $3 Billion Worth of Eagle Ford Shale Assets Up For Sale as of July 2011

Derrick Petroleum's "Deals in Play' database has recorded $2 - $3 billion worth of Eagle Ford Shale assets for sale as on July 2011. The Eagle Ford Shale is becoming prized property for oil and gas companies in 2011. The shale play area starts at the Texas-Mexico border in Webb and Maverick counties and extends 400 miles toward East Texas. The play is 50 miles wide, an average of 250 feet thick at a depth between 4000 and 12,000 feet, and has high carbonate content making it easier to fracture than other shales. In addition, it is also more liquid rich than other shales. The $/acre of the shale has been increasing rapidly over the last few years due to increasing successes of companies exploring this play. The high present $/acre relative to previous years is also bringing capital to firms who want to sell non-core Eagle Ford assets to focus on their core assets.

The following table from Derrick Petroleum’s ‘Deals in Play’ database shows opportunities available with respect to Eagle Ford assets as on 4 July 2011.

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Table 1: Is an interactive chart/ table showing data recorded from Derrick Petroleum's 'Deals in Play' database. Only deals above $10 million are shown. Net undeveloped acres have been sorted from highest (up) to lowest (down). Subscribers can click on the relevant bar to view detailed information from the database. 

The following table shows recent transactions involving the Eagle Ford Shale for insight into its recent $/Acre.

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Table 2: X axis shows Buyer-Seller. Y axis is deal value. $/acre is given above the bar's in the chart. Data is sorted by month and quarter. Only deals above $100 million in Q1 and Q2 2011 have been shown. Click on the bars for more detail on individual deals.

Analyst Comments
1. Total deal value involving Eagle Ford shales has been among the highest relative to the other US shales.
2. Number of deals involving Eagle Ford shale have been the highest so far in 2011 as compared to other shales (~25 deals), as recorded in Derrick's Deals database.
3. Eagle Ford shale looks set to dominate the deals market for unconventionals in 2011. 

US O&G Majors' Presentations in May - June 2011

BP:
China's Energy Future

ConocoPhillips:
Investor Update - June 2011
UBS Energy Conference

Chevron:
Australasia Overview - June 2011

Anadarko:
2011 Energy Capital Markets Energy & Power Conference

Devon Energy:
Annual Meeting - June 2011

Shell:

Credit Suisse European Oil & Gas Conference

Chesapeake:
June 2011 Investor Presentation

2011 Annual Meeting of Shareholders

Occidental Petroleum:
2011 UBS Global Oil & Gas Conference

Liberia on course to prove oil riches in 2011. Companies that stand to gain..

Liberia  is a country on the west coast of Africa, bordered by Sierra Leone on the West,Guinea on the north, Côte d'Ivoire on the east, and the Atlantic Ocean on the south. The potential for significant oil and gas discoveries in Liberia is huge, given some recent exploratory success in the region, especially Anadarko’s Mercury and Venus discoveries in neighbouring Sierra Leone’s waters. No commercial deposits have so far been found in Liberia and therefore there is no production or field development. However, this might soon change, as companies are looking to drill different plays than the old conventional structural traps. Here are the companies active in Liberia and looking to drill in 2011 and 2012. 


Material has been sourced from Derrick Petroleum's exhaustive data on exploration and deals. The Derrick Petroleum Planned Exploration Wells Database is an extremely useful research tool to keep track of exploratory drilling of companies by region, year, etc. It will also be useful to E&P companies for identifying farm-in opportunities and to oil field services companies for identifying sales opportunities.

Table showing companies looking to drill in Liberia. Source: Derrick Petroleum Planned Exploration Wells Database.

Anadarko operates blocks LB 15, LB 16 and 17 which cover an area of 3400, 3225, and 3150 sq km respectively. In 2008, Anadarko acquired a 4700-sq kms of 3D-seismic survey on these blocks. The 3D was used to develop deepwater Cretaceous fan prospects. A key target called Montserrado (Cobalt) in Block 15 is planned to be drilled in H2 2011. The prospective resources for the Cobalt prospect is estimated to be about 1.2 bbls. Anadarko holds 57.5% interest along with Tullow Oil (25%) and Repsol YPF (17.5%)

Map showing location of Liberian Blocks along with their operators. Source: Modified from Simba Energy.

Simba Energy has a 100% interest in the onshore NR-001 licence which covers an area of 1,366 square kilometers within the Roberts and Bassa Basins of south coastal Liberia. An Application to convert its current Hydrocarbon Reconnaissance Licence NR-001 into a Production Sharing Agreement (PSA) has been submitted to the Liberian government. The company carried out an oil seep survey on its property in 2010 using a team of 25 geology students. Reportedly, oil seeps were found on all their traverses. Evaluation of the oil associated with the seeps indicates it is economically desirable ‘mature oil.’

Chevron operates blocks LB-11, LB-12 & LB-14 which together cover an area of ~9,600 sq km. Two wells are scheduled to be drilled on these blocks in 2011 and 1 in 2012. Cheveron has a 70% interest in the blocks while Oranto Petroleum has 30%.

African Petroleum Corporation Ltd (APCL) has a 100% interest in 2 blocks: LB-8 and LB-9. The company has completed the acquisition and interpretation of about 5,100 sq km of 3D seismic over these blocks. About 40 leads and prospects have been identified s in the Upper Cretaceous section, some of which have been said to be similar Anadarko’s recent discoveries at Mercury and Venus, immediately to the north west. The Company has contracted the ultra deepwater semisubmersible, Maersk Deliverer to drill two exploration wells over the blocks with the first well in June 2011 as part of a two-well programme. 

In all 5 wells are scheduled to be drilled in 2011. The potential is enormous!

For more information of discoveries and exploration plans for the following West African countries, click on the following links. Cote D’ivoire; Ghana discoveries; Ghana Exploration in 2011, Exploration in Mauritania, Benin & Togo; Angola; Sierra Leone; Sengal; List of West African discoveries in 2010 – 2011.

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Oil exploration in Sierra Leone in 2011..Maybe a new frontier

          Oil and gas exploration has had a very short history in Sierra Leone. Although some seismic and G&G studies were carried out in in the past, there was not much potential seen for oil and gas deposits. All this changed with Anadarko’s Venus discovery in the deep waters offshore Sierra Leone in August 2009. Although this discovery was relatively thin (50 ft of net hydrocarbon pay), in water depth of 1800m, the discovery generated a lot of interest and opened up the potential for a multi-billion barrel oil frontier in West Africa. Linking the Venus discovery to the previous Jubilee find in Ghana which was discovered by Anadarko’s partner in that block, Kosmos Energy, gives a new interpretation of the petroleum geology in the region. The new Transform Margin (a place where 2 tectonic plates slide past each other) play was generating a lot of interest as it could potentially lead to a string of discoveries along its length. Although Venus was a significant discovery, it has still not been deemed to be commercial.

Figure 2: Map  showing the location of the Venus and Mercury discoveries. Blocks SL-06 and SL-07 have now been merged and are now together called Block SL-07B-10. Source: Anadarko

On the 15^th of November 2010, Anadarko announced that it had struck oil with its Mercury-1 well which encountered approx. 135 net feet of oil pay in two Cretaceous-age fan systems. The well was drilled to a total depth of approx. 15,950 feet in about 5,250 feet of water. In the primary objective, the Mercury well encountered approx. 114 net feet of light sweet crude oil with a gravity of between 34 and 42 degrees API, with no water contact. An additional 21 net feet of 24-degree API crude was encountered in a shallower secondary objective. This discovery is almost certain to be declared commercial, although it has not yet been announced. Both, Venus and Mercury, discoveries were in Block SL-07B-10. A third exploration well on the Jupiter prospect is planned to be drilled in Q4, 2011. Anadarko (55%) operates the block and the partners are Repsol YPF (25%), Tullow Oil (10%) and Mitsubishi (10%).

African Petroleum Corporation Ltd., has a 100% interest in Block SL-03. The block covers an area of 3,135 km and is located ~ 150 km from the Mercury-1 discovery and 85 km from the Venus discovery. The company is planning an extensive 3D seismic survey over the block in 2011 to firm up exploration prospects. It is understood that drilling would occur in 2012, after processing and interpretation of the seismic data. 

                              

Background
Sierra Leone has had a long history of strife, turmoil and civil war. It is bordered by Guinea to the east Liberia to the southeast, and the Atlantic ocean to the west. After more than a century of colonial rule, the country gained independence in 1961. Its history since independence has been marked by widespread corruption and economic, social and educational deterioration. It culminated with the beginning of a 10 year long civil war in 1991 that is estimated to have cost the lives of 50,000 people, besides displacing 2 million more and causing  civilian populations to endure violence at the hands of opposing factions. In 2001, with the help of United Nations forces, rebel forces of the Revolutionary United Front (RUF) were disarmed, and president Kabbah was re-elected to power, and he declared the civil war officially over. The current president is Ernest Bai Karoma, who was elected in the 2007 elections for a period of 5 years.

Figure 1: Map showing location of Sierra Leone (Red Polygon)

Economy
Sierra Leone is an extremely poor country and ranks 163 in its GDP compared to other countries in the world. 70% of the population is estimated to be below the poverty line (CIA). According to the CIA world factbook, its GDP in 2010 was $4.72 billion, a marginal increase from $4.498 billion in 2009 and $4.358billion in 2008. The biggest threat to its economic development is disruption of domestic peace and isolation from foreign aid. Economic and social infrastructure development has been severely stymied due to the long history of civilian unrest. However, relative peace since the end of the civil war in 2002, has offered the promise for economic rejuvenation and development of the country. GDP growth rate since 2002 has been between 4% and 7%. The country is endowed with rich mineral resources and the economy is overly dependant on mineral exploitation. Although agriculture employs most of the population, it accounts for only 42% of national income. The mineral extraction and exploitation industry generates most of the income although it has been managed poorly, with most of the income escaping formal channels, and used to fund rebel activities in the region. Diamond exports account for almost half of Sierra Leone’s exports, and remains the biggest source of earnings. A number of significant offshore oil discoveries in 2009 and 2010, could herald a new period of growth, although development of these reserves is still many years away.

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