Chesapeake reported 2010 full year results; Production averages 2.84 bcfe/d, up 14% to 2009, setting record for 21st consecutive year

Chesapeake's average daily production for the 2010 full year of 2.836 bcfe consisted of 2.534 bcf (89% on a natural gas equivalent basis) and 50,397 bbls (11% on a natural gas equivalent basis). Chesapeake anticipates delivering a production growth rate of 25% over the next two years, net of property divestitures pursuant to its 25/25 plan.
Keypoints:

-  2010 average daily production of 2.84 bcfe/d, up 14% after asset sales. Oil and natural gas liquids production of 18.4 mmbbls; up 56% YOY to 11% of total production.

- Acquired $4.7 billion (net of leasehold sales) of primarily liquids-focused leasehold.

  - 15.2 tcfe of proved reserves. 269 tcfe unrisked unproved resources (~138 tcf from natural gas shale plays, ~15 billion boe from liquids-rich plays, ~38 tcfe from other conventional and unconventional plays)

    

- Aggressively shifting capital to liquid rich plays, as part of 25/25 plan. Production from liquids anticipated to be 20-25% of total in 2012.

SM Energy considers options for Eagle Ford acreage

SM Energy Company is initiating a marketing process to sell down or joint venture a portion of its total position in the Eagle Ford shale play. The company currently estimates that it will sell roughly 20% to 30% of its total acreage position and that as a result the net spending for 2011 will be approximately $500 million after adjusting for capital expenditures associated with divested properties and possible drilling carries. Bank of America Merrill Lynch has been engaged to market these assets.

SM Energy's operated Eagle Ford acreage overview:
-- ~165,000 net acres; Largely 100% WI
-- Gross operated production currently at 59 MMcf/d and 2,000 Bbl/d; As of Q3-2010, the net production to the company was 38.3 MMcfe/d (Gas 79%)
-- Currently two operated drilling rigs running in play
-- Nine wells commenced drilling during Q3-10; Total of 40 gross wells planned for 2010.

SM Energy's non-operated Eagle Ford acreage overview:
-- ~84,500 net acres; Roughly 25% WI
-- Net production as of Q3-2010 was 13.8 MMcfe/d (Gas 51%)
-- Six rigs currently running; 29 wells were spud during Q3-10
-- SM plans on participating in the midstream and downstream arrangements.

BP intends to sell Southern North Sea assets to fuel growth

After tying up a $7.2 billion alliance with Reliance, BP announced today the intention of selling its interests in a number of operated oil and gas fields in the UK. The assets involved are the Wytch Farm onshore oilfield in Dorset and all of BP’s operated gas fields in the Southern North Sea, including associated pipeline infrastructure and the Dimlington terminal.

These divestments will allow BP to focus resources and investment on its diverse central North Sea, northern North Sea, West of Shetland and Norway assets and on successful delivery of its new major projects.

Trevor Garlick, Regional President, BP North Sea said: “The North Sea is a significant business for BP and we are currently investing here at the highest level for more than ten years, with four major new field development projects underway in the UK and two in Norway. The assets we intend to divest are of high value but find it difficult to compete for capital and resource within our North Sea portfolio. We believe they will attract earlier investment and be of greater value to a new buyer.

BP aims to complete the divestments around the end of 2011, subject to receipt of suitable offers and regulatory and third party approvals.

The equity being offered for sale by BP is as follows: 

Wytch Farm
All of BP’s equity which is:

• 67.81% operated interest in the Wytch Farm oil field (covering the Frome, Bridport and Sherwood reservoirs)
• 67.5% operated interest in the Beacon discovery
• 67.5% operated interest in the Wareham oil field
• 100% operated interest in the Kimmeridge oil field Southern North Sea 
• BP’s interest in the Cleeton stream fields

• BP’s interest in the West Sole stream fields
• BP’s interest in the Amethyst field and
• BP’s interest in the related infrastructure, including the Cleeton Field, the Southern North Sea Pipeline System (SNSPS) and the Dimlington terminal

BG and Ophir to drill ahead in Tanzania deepwaters after their third victory at Chaza-1

BG group and Ophir Energy are planning to continue with their exploration activities off Tanzania after their third consecutive success with Chaza-1 in Block 1. The earlier two wells, Pweza-1 and Chewa-1, both in Block 4, discovered significant quantities of gas in them.


Background: 

• The JV comprising of Ophir Energy and BG Group are carrying out Tanzania’s first deepwater drilling campaign consisting of Blocks 1, 3 and 4. 
• The blocks cover an area of about 28,050km2 area of the Mafia Deep Offshore Basin and northern portion of the Ruvuma Basin.

Exploration History:

• Infill 2D seismic surveys were acquired in Block 1 in 2005 and Blocks 3 and 4 in 2006.  Further 2D and 3,500km2 of 3D seismic data across all three blocks were acquired in 2008 to mature a number of prospects to a drillable status.

• First well, Pweza-1 on Block 4 discovered gas in 60m Eocene section
• The next well Chewa-1 hit gas in a Palaeocene reservoir
• Chaza-1 drilled on Block 1 hit gas in a secondary objective

Forward Plan:

• The Joint Venture has contracted the semi-submersible rig Deepsea Stavanger to drill two to three wells during 2H 2010.  Following completion of the first drilling campaign a further 4,000km2 of 3D seismic data will be acquired during 1H 2011.
• There are tentative plans to drill a second well in Block 1 targeting the Jodari prospect later this year.

Montenegro plans to explore the Adriatc Sea – 15 international companies express interest

On December 24, 2010 Montenegro invited international oil and gas companies to take part in its oil and gas exploration activity. About 15 international companies have expressed interest in searching for hydrocarbons offshore Montenegro where it hopes to cover its oil and gas needs from its own resources.

Highlights:

•  Montenegro currently has no oil production
• A two-year exploration concession is offered along with a 30-year license that would cover research as well as possible production from several locations thought to hold commercial deposits off its southern Adriatic coast.
• The area to be included in the first exploration phase covers 4000 square kilometers.
• The concession deal would include all phases of exploration, verification, development and exploitation of the deposits with a possibility to extend the concession duration.
• The 15 international companies which have expressed interest are as follows: Novatek-Russia; NIS- Gazprom NEFT – Serbia, HESS Corporation –USA; Trajan Oil&Gas-Energian Oil&Gas Great Britain – Greece; Edison SpA – Itally; Geopartners Limited – Great Britain; TDE Services – Hungary; HELLENIC Petroleum – Greece Sterlin Energy PLC – Great Britain; ENI – Italy; Northern Petroleum PLC – Great Britain; Total – France; INA – Croatia; Statoil ASA – Norway I Premieroil – Great Britain.

• The existence of basic preconditions for oil and gas in the Adriatic geological basin has been proven.

PA Resources reported 2010 results – production down 4.5%; 2010 Capex in-line with five-year forecast

PA Resources reported a production of 10,700 boepd in 2010, 4.5% lower to 2009. This is due to lower production recorded in company’s main producing Azurite field. The company did not reach the 2010 production target of 15,000 – 20,000 boepd as per the five-year plan. Revenue in 2010 up 5.4% from 2009.


Summary:

Production down 4.5%

-          Total revenue for the Group during the fourth quarter amounted to SEK 697.7 million ($108.66 million). EBITDA for the quarter totalled SEK 437.7 million ($68.2 million).

2010 Capex in-line with forecast, five year plans entails investments of approx. $1,000 million

Development Capex:

-          Azurite completion in Q2 2011

-          Didon North tie-back

-          Aseng field development

-          Progress Zarat field

Exploration Capex:

-          Drilling onshore Jelma in Tunisia and offshore Denmark on licence 12/06

-          Seismic study evaluation in the United Kingdom and the Netherlands.

-Net entitlement reflects West Africa production sharing contract and the impact of tax and royalty in Tunisia.

Marcellus, Eagle Ford and Permian Basin - The top three regions for Oil and Gas M&A in US

The top three regions - Marcellus, Permian and Eagle Ford, accounted for $37.5bn in transactions or 50% of the total reported for US in 2010. The year included significant conventional transactions along with higher profile unconventional sales. Strong crude prices, new reservoir plays and technological applications stimulated Permian Basin deal flow.The Barnett and Haynesville shale areas saw reduced acreage transactions. The Barnett numbers included Chesapeake’s VPP and EnerVest’s surprising acquisition of Talon. Overall, shale plays generally see more deal flow as plays advance (Eagle Ford & Marcellus) and less deal flow (Haynesville & Barnett) as plays mature.

New plays like the Niobrara and Avalon Shale should see additional deal flow in 2011.