JSC КаzМunaiGas Exploration Production (KMG EP) reported 2010 annual results; Production up 16% over 2009; Plan to invest $709 million in 2011

KMG EP’s 2010 production was 270 kbopd of crude oil including the Company’s stakes in LLP Kazgermunai JV (KGM), JSC Karazhanbasmunai (CCEL) and PetroKazakhstan Inc. (PKI). The consolidated production for the year is 16% higher than for the same period of 2009 mainly due to the acquisition of a 33% stake in PKI in December 2009. In 2010 the Company produced 177kbopd of oil at Uzenmunaigas and Embamunaigas production facilities, which is 2% less than for the same period of last year.

KeyPoints:

-- Production (Including share in JV’s) – 270 kbopd, 16% higher YoY

-- KMG EP’s proved plus probable (2P) reserves excluding the stakes in JV’s were 1,707 mmboe. The reserves replacement ratio at Uzen and Emba fields in 2010 was 73%, while in 2009 this figure was 25%.

-- Plan to invest $709 millon in 2011, up 10% over 2010

Tullow acquires interest in Kenyan L8 block. East Africa- a hot spot and attracts big players like Apache and Anadarko!!

Pancontinental Oil & Gas signed an agreement with Tullow Oil plc for Tullow to farmin to a 10% interest in the licence over offshore Kenya Block L8 that contains the giant Mbawa Prospect. Tullow will earn a 10% interest in the Block L8 plus an option on a further 5% by paying US$1 million to Pancontinental for reimbursement of past costs, subject to audit, and also by funding the future work program on its own behalf and up to an expenditure “cap” of US$9 million attributable to Pancontinental’s retained 15%. The option to earn a further 5% interest from Pancontinental is subject to Tullow funding any second well to a second agreed “cap” of US$6 million in respect of Pancontinental’s share of well costs. If Tullow does not exercise the option, each of the two parties will fund its own direct share of the second well.

This Tullow farmin follows the recent farmout by the licence operator Origin Energy to Apache pertaining to the Block L8. After the first stage of Tullow’s farmin and subject to approvals and other conditions, the interests in L8 will be: Apache (50%), Origin Energy (25%), Pancontinental Oil & Gas (15%) and Tullow (10%).

Mbawa Prospect overview:

Block L8 holds several substantial exploration objectives. The largest of these is the Mbawa Prospect, a complex anticlinal structure verified by recent 3D seismic data, with potential for both oil and gas at inferred Tertiary/Cretaceous and Jurassic reservoir levels. Based on older 2D seismic data, the shallower Tertiary/Cretaceous reservoir level in Mbawa has potential to easily contain more than one billion barrels of recoverable oil, or several trillion cubic feet of natural gas, or some combination of these two. New 3D mapping will refine these volumetric estimates and these may increase or decrease depending on a number of factors. The potential at the deeper Jurassic level is still being calculated.

Mbawa coincides with interpreted natural oil slicks derived from sea floor “pockmarks” on the flank of the structure. Mbawa also shows “flat spots” or “DHI’s” on both 2D and 3D seismic data. Mr Barry Rushworth, CEO and Director of Pancontinental commented, “Initial planning has already commenced for Mbawa drilling, with the availability and timing of a suitable deep- water rig being a prime consideration”.

East Africa- a new industry hot spot:

The vast area offshore East Africa is a new industry “hot spot”, with a recent oil discovery and major new gas discoveries made by Anadarko and other operators offshore Tanzania and Mozambique. Additional drilling rigs are being brought to the region and drilling is steadily proving-up very large new reserves in these areas south of Kenya. Many geological characteristics are similar over the length of the East African margin.

Shell Australia to sell down its remaining 24.27% stake in Woodside Petroleum worth approximately $8 billion; Is Shell losing interest because it is unable to acquire Woodside completely???

SHELL Australia chairwoman Ann Pickard says “We hoped Woodside would be the vehicle (to develop projects in Australia)  but when it became clear Woodside couldn’t be the vehicle we decided to develop our own projects”.  

Woodside holds interests in oil and gas assets in Australia, the Gulf of Mexico, Korea, and Brazil. Woodside’s principal assets in Australia include: Pluto LNG, Browse LNG, Sunrise LNG, North Rankin Redevelopment and North West Shelf Oil FPSO Replacement Project. 

The key highlights of Woodside include:

-- Woodside’s share of production for the quarter ended 31 Dec 2010: 17.688 MMBOE (Oil 41%)
-- 2010 year end reserves: Proved - 1.308 MMBOE, Proved plus Probable (2P) - 1.680 MMBOE (Gas-84%) and contingent resources - 1.814 MMBOE
-- 99% of 2P Reserves are in Australia and remaining 1% in GoM and other international areas.

Independent companies that have made recent discoveries and that are beginning to increase their output,” are the “best targets” for Chinese/Asian NOC’s - Is Maurel and Prom the next prey?

Maurel & Prom, a French oil producer with a market value of about 1.65 billion euros ($2.28 billion), is weighing a sale. The company is working with banks including Citigroup Inc. to explore options and has drawn interest from potential bidders, including Chinese companies. While Maurel & Prom has discussed a sale process with its advisers, a deal isn’t imminent and a buyer for the company may not emerge.

Independent companies that have made recent discoveries and that are beginning to increase their output,” are the “best targets” for Chinese, Indian and South Korean oil companies.  As the national oil companies such as China Petrochemical Corp., Oil & Natural Gas Corp. and Korea National Oil Corp. are under pressure to raise output and reserves as quickly as possible.

MOL Hungarian Oil and Gas Plc (MOL) reported 2010 annual results; Production up 33% over 2009; Plan to focus on field development in Syria, Pakistan, Russia, Hungary and Croatia for 2011-2013

In FY 2010, MOL’s average total hydrocarbon production was 143,500 boepd, Crude oil production up 13%, gas production up 49% over 2009. This is due to result of recent years’ major developments turning into production in Syria, Pakistan and the Adriatic offshore area while keeping onshore production at a stable level with enhanced and intensified oil and gas recovery technologies.

Keypoints:

--Production activities in 7 countries

-- Exploration activities in 12 countries

-- $1.7 billion CAPEX for 2011 

Chesapeake acquires Eagle Ford acreage for $10,434/acre and goes for gas to liquids transition!!

Escondido Resources II LLC sold 11,050 net acres in the Eagle Ford Shale to Chesapeake Energy and EnCap Investments for a total consideration of $115.3 million. The properties consist of three distinct blocks of acreage located primarily in La Salle County in South Texas. Escondido II was advised on the sales transactions by Griffis & Associates LLC and Simmons & Company International.

“This sale is very strategic for Escondido Resources,” said William E. Deupree, President and CEO of Escondido Resources II, LLC. “It allows us to focus on our ‘bread and butter’ Escondido and Olmos reservoirs, which are very economic even in today’s low gas price environment, while still having a substantial position in the gas-prone portion of the Eagle Ford Shale.

Chesapeake shifts from gas to liquids!!

Chesapeake, in Oct 2010, signed a $2 billion Eagle Ford JV with CNOOC. Chesapeake is utilizing 10-12 operated rigs to develop its Eagle Ford leasehold and with the additional capital from CNOOC anticipates increasing its drilling activity to approximately 31 rigs by year-end 2011 and approximately 40 rigs by year-end 2012. Approximately 900 wells are expected to be drilled by year-end 2012.

Chesapeake is ramping up development quickly in the Eagle Ford Shale as the company seeks to shift from ~90% gas to a more balanced oil/gas production mix of 75/25% in 2012.

Click here to see more publications on Eagle Ford Shale: http://docsearch.derrickpetroleum.com/research/q/%22eagle%20ford%22.html

The Bold and the Beautiful; Total to plough about $2.1 billion into exploration in 2011!

Total plans to pursue a bolder exploration strategy for coming years to maintain and increase its reserves replacement ratio. About $2.1 billion will be invested into exploration activities-and about the same in 2012; 75 exploration wells to be drilled in 2011 with a focus more on the frontier areas.

• Chief Executive Christophe de Margerie , during the Company’s 2010 financial results, said that the Company will increasingly focus on the upstream business, though “not at the expense” of its downstream unit, which is not performing well.
• Few key wells would be drilled in French Guiana, Bolivia and Brazil in Latin America, in Libya, Nigeria and Angola in Africa and off Norway and the UK in Europe.

• The Zaedyus wildcat in the Guyane Maritime, off French Guiana and Absheron probe in the Azerbaijaini sector of the Caspain Sea, which are currently being drilled, are the probes to be watched.

• In the North Sea, five exploration wells will be drilled around the Alwyn complex in 2011 and one exploration on the Corfe prospect in Block 29/3b close to the Elgin-Franklin complex in 2012.
• On  unconventional shale gas, De Margerie commented that Total’s focus would be more on the plays in the US, Eastern Europe and China. In France, where it has Montelimar license, it has no immediate plans to carry out drilling activities.
• Through exploration and asset deals, Total aims to maintain a reserve replacement ratio of 124%-which it achieved in 2010-with a nominal 50% of this to come from exploring and remainder from acquisitions , possibly in the North Sea.

For information on Total, please click here:

http://docsearch.derrickpetroleum.com/research/q/Total.html