EnCana and NW Natural form Jonah field JV

Northwest Natural Gas Company (NW Natural) and Encana signed an agreement for NW Natural to invest in a joint venture to develop gas reserves that will provide long-term supplies for NW Natural’s Oregon utility customers over a 30-year period.

During the first 10 years of the joint venture, NW Natural expects the volume of gas produced to provide approximately 8-10 percent of the company’s average annual requirements for its utility customers. These gas reserves come from the Jonah Field in Wyoming, located north of Rock Springs.

Under terms of the agreement, NW Natural will pay approximately $45-55 million a year, for a five-year period, for a total investment of about $250 million, which will cover expected drilling costs in exchange for working interests in certain sections of the Jonah Field. The sections include both future and currently producing wells.

NW Natural estimates the gas reserves will save Oregon customers more than $50 million on a net present value basis over the life of the agreement. The Jonah Gas Field is considered to be one of the 10-largest gas fields in the U.S. with over 2 Trillion cubic feet equivalent (Tcfe) of proved reserves. 

About Jonah

Located south of Pinedale, Wyoming, the Jonah Field is one of our key resource plays. The life of the Jonah Field is estimated to be from 40 to 60 years.

Plains Exploration & Production (PXP) reported 2010 results; Production up 7% over 2009; Plan to invest $1.2 billion in 2011

PXP reported 2010 daily sales volume of 88,500 BOE up 7% over 2009. The company reported full-year revenues of $1.5 billion and net income of $103.3 million, compared to revenues of $1.2 billion and net income of $136.3 million, for the full-year 2009. PXP plan to increase its production and reserves rate from 15% to 20% per year over the next 3 years.

Keypoints:

-- Average daily sales volumes of 88,500 BOE up 7% over 2009. Operating cash flow of $976.7 million up 4% over 2009.

-- Proved reserves of 416.1 million BOE up 16%  over 2009.

--- $1.2 billion capital allocated for 2011.

HRT O&G to sell interest in two oil blocks offshore Namibia

HRT O&G Exploracao e Producao de Petroleo Ltd (a wholly owned subsidiary of HRT Participacoes em Petroleo SA) has announced that it may sell up to 50% of a pair of oil Blocks 2112A and 2212B in the Walvis Basin, offshore Namibia. HRT holds a 100% participating interest in the two blocks. The blocks are contiguous and span an area of 11,592 sq km (equal to 1,159,200 hectares, or 2,864,446 acres) with water depths ranging between 300 and 1,400 m. In January 2011, HRT has signed 3D seismic contract for 5,278 sq km over the blocks.

Top 20 US deals driven by shales, major oils and dramatic asset moves

• 14 of the top 20 US deals in 2010 were motivated by shale objectives with some of the largest deals (East, Atlas, Exco, Consol, Reliance) in the Marcellus.
• Apache’s purchase of BP’ Permian assets and SandRidge’s corporate acquisition of Arena were not driven by unconventional assets. While Concho’s acquisition of Marbob has some Avalon Shale hope.
• Energy XXI’s and Apache’s purchase of offshore assets from Exxon and Devon were somewhat driven by shales including Devon’s refocus and Exxon’s XTO commitment.
• Apache’s acquisition of Mariner’s deepwater assets was dramatic.
• The top 20 deals totaled $44.6bn or 59% of the total market. The 14 clearly shale deals totaled $32.6bn or 43% of the US total.

Namibia – The Next Oil Frontier!! Brazilian HRT snaps up Namibian explorer UNX Energy for C$730 million.

Brazilian company, HRT Participacoes em Petroleo SA agreed to acquire UNX Energy Corp operating in Namibia for approximately C$730 million. In combining the two companies, the resulting entity forms a South Atlantic Margin powerhouse controlling impressive exploration and development concessions in both Namibia and Brazil. BMO Capital Markets and Credit Suisse are acting as exclusive financial advisors to UNX and HRT, respectively.

Asset portfolio of UNX in Namibia

The asset base of UNX consists of approximately 51,000 sq km (approximately 32,000 net) of offshore acreage, strategically located along the prolific South Atlantic Margin, offshore Namibia. Of the four hydrocarbon basins that have been identified offshore Namibia, the Orange Basin provides the greatest exploration potential. UNX’s land holdings in the Orange Basin include 90% working interest in Blocks 2713A, 2713B, 2815, 2816, 2915; and 40% working interest in Blocks 2813A, 2814B and 2914A.

UNX’s PEL 2713 has gross unrisked recoverable prospective resources of 10.5 billion barrels of oil equivalent and gross risked recoverable prospective resources of 3.2 billion barrels of oil equivalent. The resources are comprised of approximately 72% oil, 6% condensate, 3% associated gas and 19% non-associated gas.

West Africa Vs Brazil

Through the deal, HRT wants to expand its exploration and production areas in West Africa, where it sees potential for similar deposits to Brazil's vast, new offshore oil fields. All the wells drilled offshore Namibia had oil shows, confirmed by biomarker and diamondoid studies. The analysis further confirms the identical age and rock type of Brazil.

Recently, the Brazilian giant Petrobras also acquired a stake in Benin block and the company’s geologists disclosed that West Africa holds similarities to Brazil's pre-salt discoveries. Are these West African countries lining up to compete with the Brazilian pre-salt resources?

In addition to this deal, HRT is planning to sell up to 50% of a pair of oil blocks in Namibia’s Walvis Basin.

Click here to see the publications of the companies operating in Namibia: http://docsearch.derrickpetroleum.com/research/q/namibia.html

Centrica plc reported 2010 preliminary results; production up 43% compared to 2009; plan to invest £1.5 billion ($2.42 billion) in 2011

Centrica reported 2010 gas and liquids production volumes increased by 43%, with gas volumes up 48% at 2,520 bcf (2009: 1,699 bcf), and oil and condensate volumes up 26% to 11.1mmboe (2009: 8.8mmboe), reflecting the acquisition of Venture in 2009, good asset performance and higher volumes from Morecambe, which was shut in for parts of 2009.

Delivering value from enlarged upstream business:

- Upstream gas and oil production volume up 43% due to strong Morecambe performance and a full year's contribution from Venture

- 163% production replacement ratio in UK upstream gas and oil 

- Centrica invested £1.7 billion ($2.75 billion) in 2010; £1.5 billion ($2.42 billion) organic investment program for 2011. £450 million ($720.4 million) investment approved to develop York and Ensign gas fields in the UK North Sea

CNPC and KazMunaiGaz boost strategic partnership. Urikhtau field to provide additional gas supply for Kazakhstan-China pipeline.

CNPC and KazMunaiGaz have signed co-operation agreement to jointly develop the Urikhtau natural gas field located near Kenkiyak in the Aktyubinsk region of western Kazakhstan. CNPC and KazMunaiGaz will hold 50:50 interest in a joint venture to explore and develop the Urikhtau gas field which was tapped during the Soviet era, but has not been developed since Kazakh independence. According to earlier estimates by KazMunaiGaz, Urikhtau's reserves are estimated at ~40 billion cubic meters (1,413 Bcf), and the field has an estimated potential to produce 1.5-2 Bcm/year (52-71 Bcf/year).

The field's gas output is expected to be one of the sources for Kazakhstan's Beineu-Shymkent pipeline, which is a 1,500 km pipeline linking several existing trunk lines in Central Asia, including the Center, Bukhara-Ural, BGR-TBA and Kazakhstan-China pipelines. Construction of the pipeline started in late December and is expected to be completed by 2012.

The 10 Bcm/year pipeline is the second phase of the Kazakhstan-China gas pipeline and will go from near the Caspian Sea to a linkup with the first phase of the pipeline in south-central Kazakhstan. The first phase, which brings gas from Turkmenistan to China via Kazakhstan, was launched in December 2010 with a capacity of 30 Bcm/year and may be increased to 40 Bcm/year.

With the completion of the pipeline construction and development of the Urikhtau gas field, additional gas volumes will be available to export along the Kazakhstan-China gas pipeline. Also, China is seeking greater access to natural resources in Central Asia to fuel its fast-growing economy. This Kazakh co-operation will help China meet the growing demand to an extent.