Pioneer Eagle Ford
shale gas production averaging
85 MMcfd
OGJ.com 12/27/08
Pioneer Natural Resources Inc., Dallas, is drilling the horizontal leg
in Cretaceous Eagle Ford shale in an exploratory well in DeWitt County,
Tex. This is about 90 miles east-northeast of where Petrohawk
Energy Corp., Houston, gauged an Eagle Ford gas-condensate discovery in
LaSalle County (OGJ Online, Oct. 21, 2008).
Petrohawk is completing its second well in LaSalle and is drilling in
McMullen County, Pioneer said.
Pioneer has logs through Eagle Ford from the more than 150 wells it has
drilled in the Cretaceous Edwards Trend along its 310,000-acre spread
from LaSalle to Lavaca counties and chose to horizontally drill the
Eagle Ford where it saw the best porosity Permeability is the question,
the company said Dec. 2.
Eagle Ford shale is the source rock for the Cretaceous Austin chalk and
Edwards formations, Pioneer noted.
Meanwhile, the company’s Edwards gas production is averaging 85 MMcfd.
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BP to delay Prudhoe
Bay gas
processing project
19-11-08
Source: http://www.platts.com
BP has indefinitely suspended work on a $ 120 mm natural gas
processing project in the western Prudhoe Bay field on the Alaska North
Slope, BP Alaska President Doug Suttles said.
The project was intended to process gas to enable BP to produce more
conventional and heavy crude in that part of the oil field, the US's
largest.
Speaking to a business conference in Anchorage, Suttles blamed a
deteriorating business environment, including declining oil prices and
rising costs, citing 15 %-20 % increases on the North Slope over the
past two years.
BP announced the gas project in 2007 and had planned to have it in
production by 2012.
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Turkey joins
natural gas exploration in Iraq
Source: http://news.xinhuanet.com 20-11-08
Turkey will explore natural gas in Iraq together with a multinational
energy company in the near future.
Turkey's Petroleum Corporation (TPAO), the Petroleum Pipeline
Corporation of Turkey (BOTAS) and Shell Energy Europe signed a
preliminary contract to explore, manage, transport and market natural
gas in Iraq, said the report. The agreement enables transportation of
natural gas to Turkey and Europe after meeting the domestic demand in
Iraq, it said.
The agreement also envisages the companies to carry out infrastructure
work including construction of pipelines, underground depots and
interconnection lines.
"The cooperation of these three companies would contribute to world
energy supply safety as well as regional peace and stability," said
Turkish Energy and Natural Resources Minister Hilmi Guler during the
signature ceremony. The minister said TPAO, founded in 1954, is a
company that knows well about Iraq's geology, and it has been invited
to tenders to explore and manage eight giant oil fields in Iraq.
In addition, he said that TPAO and Shell could also cooperate in
exploring and managing oil in Iraq and TPAO is deliberating with the
Iraqi government to drill natural gas near Iraqi border with Syria.
Shell Energy Europe is the dynamic, pan-European gas marketing business
of Royal Dutch Shell.
Turkey signed a memorandum of understanding with Iran to improve
cooperation in natural gas, and reached a cooperation deal with US
ExxonMobil company to explore natural gas and oil in the Black Sea.
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Nord Stream pipeline
project construction start Ap 2010
18-11-08
Source: http://www.platts.com
The Nord Stream pipeline project remains track, with the
start
of construction set for April 2010, a senior official with the project
consortium said.
The project is currently going through permitting procedures with the
countries involved and the formal process has already begun in Sweden,
said Paul Corcoran, Nord Stream's financial director.
The permission process will begin for Denmark, Finland, Germany and
Russia in December, Corcoran told a gas forum in Moscow. Nord Stream
wants to get permissions from all five countries by the end of 2009,
"in order to start construction in April 2010," he said.
Corcoran also said that consultations with Estonia, Latvia, Lithuania
and Poland are expected to be complete "in the next few weeks."
The Nord Stream consortium, led by Gazprom, has to gain approval for
the project from Denmark, Finland, Germany, Russia and Sweden, as the
pipeline is to run through their economic zones in the Baltic Sea. Some
Baltic states without a say in the project have criticized the pipeline
project as environmentally unsafe.
Nord Stream is on track to start gas deliveries at 27.5 bn cmpy in the
fourth quarter of 2011, Corcoran reiterated. The project is designed to
export Russian gas from Russia's Vyborg to Germany's Greifswald across
the Baltic, bypassing neighbouring countries.
The project's shareholders -- Gazprom (51 %), German companies
BASF/Wintershall (20 %) and E.ON (20 %) and Dutch Gasunie (9 %) -- are
to finance 30 % of the costs according to their shares, while borrowed
funds will cover the remaining 70 %. The external financing of the EUR
7.4 bn project will be broken down into two phases, Corcoran said.
The phase-one financing will be closed in July 2009, with "the phase
two expected 12 months later," he said.
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US gas production
Unconventional to
soon dominate
Source: http://www.platts.com 17-11-08
Higher gas prices and significant technological advances have led to a
dramatic increase in production of unconventional gas resources in
recent years, and that trend is expected to continue unabated,
according to a study to be released in the US.
By 2020, 69 % of US gas production and 43 % of Canadian gas will come
from unconventional plays, said the report prepared by energy
consultant ICF International.
To support the production forecast, roughly 300,000 unconventional
wells will have to be drilled, representing an outlay of $ 560 bn for
unconventional gas drilling and related capital costs.
Previewing the report to the INGAA Foundation, or Interstate Natural
Gas Association of America Foundation, at its annual meeting in Palm
Coast, Florida, ICF analyst Harry Vidas pronounced it "good news for
customers and policy makers," asserting that the findings "show how
well the natural gas industry in the US and Canada has done in recent
years stemming the decline" of conventional gas production.
The outlook is "very optimistic," he continued. And with the tremendous
gains in production from tight gas, coalbed methane and, most
significantly, shale gas, this energy supply "is poised to be a very
important part of North America's energy future."
IFC noted that research and investment into unconventional gas has
increased significantly in recent years due to the higher price
environment. In many cases, the technologies for economic production
had already been developed, while in other cases resources were still
in the research stages.
Unconventional gas had been a significant component of US production
for many years, but "its contribution has grown rapidly in recent
years," the report said, pointing to notable growth in production from
tight gas reservoirs in the Rockies and East Texas, coalbed methane in
Wyoming and New Mexico, and shale gas in North Texas and the
Mid-Continent.
While tight gas figures to remain the dominant category of
unconventional gas through the study period of 2007-2020, the "most
significant" trend, said ICF, is the "rapid rise" of gas production
from shale formations.
"It appears certain that shale gas production will expand in coming
decades, and production will emerge in new regions in the US and
Canada."
ICF is forecasting growth in overall North American gas production from
last year's 25 tcf to 29 tcf by 2020. That gain will be "driven by
onshore unconventional gas," which is expected to grow from 42 % of
total production in 2007 to 64 % in 2020 and 72 % in 2030, Vidas told
the INGAA Foundation audience.
Total gas resources in North America exceed 2,300 tcf, said the report,
adding that shale gas accounts for roughly 500 tcf of recoverable
resources within that total. For the Lower-48 states, IFC put tight gas
at 174 tcf, coalbed methane at 65 tcf and shale gas at 385 tcf. The
consultant sees production from gas shales in the US growing from 1.4
tcf last year to 4.8 tcf in 2020, and tight gas production jumping from
5.8 tcf to 9.2 tcf over the same span.
ICF said its forecast "may prove to be conservative, especially for gas
shales." It noted that the size of the recoverable resource base "is
large enough to support higher levels of annual production over the
long term if such production is demanded by the market." What's more,
"it is likely that our forecast of Western Canada is conservative,
given the limited available information on shale plays in British
Columbia."
Also, several emerging shale plays, such as those in the Southeast US
and Rockies, are not included in the report due to scarce data.
The financial crisis and the recent decline in oil and gas prices may
stunt drilling programs, and some producers already have announced
significant cutbacks.
"However, the longer-term need for energy in the US and Canada should
be strong enough to support the future levels of gas production
presented here, albeit on a possibly slower pace," said ICF.
The report also cautioned that environmental and regulatory issues may
dampen unconventional gas production efforts.
"These include well and environmental permitting and related costs,
land access, water use and disposal and surface disturbance."
Water use and disposal for fracturing of shale wells has already
emerged as a significant issue, ICF observed, "although, to date, water
use has not significantly restricted development in most shale areas."
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 Cameroon BowLeven Entinde option small scale LNG solution
BowLeven December 24, 2008
BowLeven announced it has signed a production sharing contract as
planned covering the entire Entinde permit, offshore Cameroon.
The PSC, which includes a further three year extension phase commencing
from the date of signature, was signed in Yaounde, Cameroon today.
Bowleven has announced its preliminary results for the year ended June
30, 2008.
GAS MONETIZATION
The options for monetising the gas on the Etinde Permit have been
significantly expanded and enhanced by our exploration success in
adding potential development synergies following the IF oil discovery.
Positive steps have also been made towards monetising the substantial
undeveloped gas resource within Cameroon. Several options are being
examined, including gas export to Equatorial Guinea and indigenous
smaller scale LNG solutions. Whatever the final outcome, we are
confident that Bowleven's substantial gas resource base will provide a
significant proportion of the required feed stock.
Kevin Hart, Chief Executive, said, "In terms of exploration and
portfolio development, Bowleven has had a highly successful year. As a
result, despite unprecedented turmoil and collapsing values in capital
and commodity markets, Bowleven's asset base has never looked better.
The key to realizing value from our portfolio is access to capital.
Even given the extreme environment, we remain confident that we will be
able to obtain the capital required to make substantial progress and
create value for shareholders."
Bowleven has achieved considerable operational success during the year,
against a backdrop of looming global slowdown, tumbling oil prices and
unprecedented capital market conditions. Despite the current market
environment, the Group's portfolio has never looked so promising.
The significant milestones which the Group has achieved over the last
year include:
* Completion of a successful three well drilling
campaign on Etinde Permit in 2007.
* IF oil discovery in 2008, the first oil discovery
on the Etinde Permit.
* IE/ID development plans progressed.
* Agreement reached on Etinde PSC terms including
further exploration phase.
* Expanded and enhanced resources and exploration
portfolio.
* Securing an option over EOV FPSO.
* Bomono PSC signed.
Our next step is to build on this success, and this will need more
financial resources. Despite the difficult environment we are confident
that we will be able to secure the capital to support further
development of the significant potential of our acreage. Key to the
process of adding value for shareholders is the commercial exploitation
of our existing resource base and the discovery of new fields.
RESOURCE TO RESERVES
The Group's combined P50 resource base has increased to approximately
203 mmboe (2007: 167 mmboe) following the IF oil discovery, the upgrade
of the resource estimate for the IE field and the completion of the EOV
subsurface review and dynamic modelling.
Work is underway to bring the Group's liquid hydrocarbon resource to
project sanction and ultimately production. In particular, we have a
high degree of confidence that both the IE/ID gas/condensate
discoveries and the recent IF oil discovery in block MLHP-7 on the
Etinde Permit in Cameroon, will provide attractive commercial
developments. Likewise in Gabon we have secured an option to utilise an
FPSO for the EOV field development. Advancing these projects towards
sanction is a key objective for Bowleven over the next year.
In addition the Group has a mean unrisked in place exploration prospect
inventory comprising over 2.4 billion boe (2007: 1.8 billion boe). This
has been significantly enhanced through the work undertaken by the
Bowleven technical team to further mature the prospect inventory across
the Etinde Permit.
EXPLORATION AND OPERATIONAL OVERVIEW
OVERVIEW
2008 was another extremely successful year for Bowleven.
In Cameroon we made a significant oil discovery with the drilling of
the IF-1r well in block MLHP-7. This is the first oil discovery in the
Rio del Rey basin since 2004 and is a highly significant event both for
Bowleven, and for the country, as the understanding of the distribution
of oil and gas across Cameroon's sedimentary basins has been changed
significantly.
Following our successful 2007 and 2008 drilling on the Etinde Permit,
we have completed a full interpretation of the 3D seismic datasets
acquired earlier on the Permit. This review has revealed a significant
number of prospects and leads and the Permit is now recognised to have
potential for both gas/condensate and oil.
During the year the Group also secured an 18 month extension of the
exploration period for the Etinde Permit (to September 2009), and in
late October 2008 Bowleven reached agreement in principle on the key
fiscal terms for the Etinde Permit PSC, incorporating a further three
year extension to the exploration phase commencing on the date of
signature of the contract. The PSC is subject to final approval by the
relevant government ministries. It is anticipated that the PSC will be
signed before the end of 2008.
In December 2007 we also signed a PSC for two onshore blocks,
collectively known as the Bomono Permit, and we have already commenced
field survey work on this acreage with the objective of undertaking a
seismic campaign in 2009.
In Gabon we have continued with development planning for the EOV field
in the EOV Permit and in addition to completing subsurface studies, we
have also agreed an option for the lease of the Knock Taggart FPSO
operated by Fred Olsen Production. This option is exercisable up to 15
December 2008. Assuming the development receives project sanction by
the end of 2008, the EOV field is expected to be on stream by early Q2
2010.
Also in Gabon, seismic and airborne geophysical operations commenced in
the Epaemeno Permit and we expect to commence the exploration drilling
campaign, together with the operator, Addax, in 2009.
HEALTH, SAFETY, SECURITY & ENVIRONMENT
Over the past 12 months we have maintained our record of operating free
of lost time injurious incidents. The planning and diligence of our
staff drilling team in Cameroon is a key reason for this achievement,
together with the safety culture of our main contractors. As we extend
our operations into seismic surveying (in Bomono and Epaemeno) and
probable development activity (in EOV and in due course Etinde), the
effort of all those who work in the Group and with the Group will
remain crucial to providing a safe working environment. All incidents
are avoidable and we will continue to plan all our operations in such a
way as to make safety the priority.
We are progressing the Environmental Impact Assessment (EIA) for our
onshore Bomono Permit in Cameroon and we will also be submitting an
updated EIA for the EOV Permit development to the authorities in Gabon.
CAMEROON
Etinde Permit - MLHP-5, MLHP-6 and MLHP-7 (Bowleven group 100% -
operator)
Exploration - MLHP-7
The Trident IV jack-up rig operated by Transocean's subsidiary
GlobalSantaFe was contracted to drill the IF-1r well in the MLHP-7
block of the Etinde Permit during Q2 and Q3 2008. This well was a
re-drill of the original IF-1 well drilled in 2007, which had to be
abandoned following a high pressure kick of hydrocarbons in the
uppermost Isongo formation, the primary objective. The IF prospect is
located on the same structural trend and is 7 km south and structurally
up dip of the IE gas/condensate field which we successfully appraised
in 2007.
The IF-1r well encountered hydrocarbon shows over a gross interval of
approximately 800 ft from 5750 ft MD to an oil water contact (OWC),
defined by pressure data, at 6548ft MD in the uppermost Isongo
formation. Pressure data recorded in the well confirmed an oil column
of at least 200 ft above the OWC and beneath the equivalent kick zone
in the original IF-1 well.
On test, the well produced an average rate of 3,371 bopd through a half
inch choke with peak rates in excess of 4,000 bopd and with a gas oil
ratio (GOR) of about 1200 scf/bbl. Unfortunately the test had to be
curtailed prematurely as a failed cement job allowed cross flow from
adjacent formations causing an influx of water into the test zone from
the aquifer below the OWC.
Nevertheless, the well proved excellent deliverability from the
encountered thin bed reservoir section in the uppermost Isongo
formation. Initial analysis of the well results indicates a mean in
place volume of discovered hydrocarbons of 137 million barrels of oil.
The structure continues to the south of the IF-1r well location and the
initial estimate of the mean STOIIP for this untested southern
compartment is 142 million barrels.
Drilling in 2008 successfully built upon the 2007 programme,
significantly enhancing the value of the Etinde Permit with the
discovery of an oil field alongside the cluster of gas and condensate
fields already discovered on the MLHP-7 block. This has completely
transformed the traditional perception and understanding of Cameroon's
petroleum systems, which ascribed oil potential only to the northern
part of the Rio del Rey basin with all acreage south of this
historically considered to be gas and gas/condensate prone.
Furthermore, the recognition of highly productive thin bed pay in the
IF-1r well will lead to a review and expected upgrade of the resource
potential of the other MLHP-7 Isongo discoveries. Considerable
undrilled exploration potential is also recognised in other structures
in MLHP-7 mapped on the 3D seismic.
We have now completed a full integrated review of MLHP-7 based on the
3D seismic volume and have identified a number of prospects and leads
within the Isongo formation predominantly adjacent to the existing
discoveries. Mean unrisked in place volumes for the prospect inventory
of MLHP-7 are estimated at 142 million barrels of oil and 1.6 tcf of
gas with 73 million barrels of associated condensate.
Exploration - MLHP-5 and MLHP-6
The discovery of oil in offshore acreage in the Douala basin adjacent
to our MLHP-5 block of the Etinde Permit has also significantly changed
the historical perception that this area is predominantly gas prone.
Together with multiple onshore oil seeps and oil shows in historical
wells, our emphasis has been on re-evaluating MLHP-5 to identify high
grade oil prone prospects for priority drilling. We have now completed
this work and have mapped a number of prospects and leads with multiple
stratigraphic objectives within the Miocene, Eocene and Cretaceous aged
sections. Mean unrisked in place volumes for the prospect inventory for
MLHP-5 are estimated at 727 million barrels of oil and 4.5 tcf of gas
with 251 million barrels of associated condensate.
Exploitation/commercialisation - Etinde Permit
Conceptual development planning has continued through the year for the
MLHP-7 discoveries. We stated last year that the development of our
existing gas/condensate discoveries (initially the IE and ID fields)
was likely to be based on a gas recycling scheme to maximise liquids
recovery and, in fact, this concept also fits well with the development
of the high GOR IF oil discovery. It could also incorporate a gas
depletion commercialisation scheme in later years.
Early appraisal of the IF discovery is important in order to anchor the
development of the fields in MLHP-7 and we will be seeking to drill
appraisal wells in 2009.
Contingent resources for the Etinde Permit totals now include LPGs in
the IE and ID fields not previously included in the liquids volumes, as
well as the oil and gas volumes attributable to the IF discovery.
As announced yesterday, agreement in principle has now been reached
with SNH on the key terms of a PSC for the Etinde Permit. This will
contain the fiscal terms attaching to the acreage and also envisages a
further 3 year extension to the exploration phase commencing from the
date of signature of the contract. The award of the PSC is subject to
final approval by the relevant government ministries, with signing
anticipated by the end 2008. This PSC will provide the framework for
Bowleven and the Government of Cameroon to move forward quickly with
further exploration, appraisal and development of the Etinde Permit for
the benefit of all stakeholders.
Bomono Permit (Bowleven group 100% - operator)
On December 12, 2007 we signed a PSC for the new 2,328 km2 Bomono
Permit, which comprises blocks OLHP-1 and OLHP-2 onshore Cameroon. The
Permit covers the onshore extension of the highly prospective Douala
basin, which is characterised by numerous surface oil seeps but is
virtually unexplored by modern exploration methods. Previous
exploration in the area was conducted predominantly in the 1950s when
11 wells were drilled, most with hydrocarbon shows. The area was
licensed again in the 1970s and the 1980s when some regional 2D seismic
was acquired but no further drilling took place and there has been an
exploration hiatus until the present day. The Permit has an initial
term of five years, with minimum work obligations including an airborne
gravity and magnetics survey, 500km of 2D seismic and one well. We are
currently preparing to initiate the airborne survey and conduct surface
field work.
PROGRAM FOR 2009
On the Etinde Permit we are currently working up potential appraisal
locations for the IF discovery in Cameroon and we expect to drill at
least one of these wells in H1 2009. In addition we also plan to drill
further exploration and appraisal wells in both MLHP-5 and MLHP-7
during 2009. It is also likely that further 3D seismic data will be
acquired over an area of MLHP-6 adjacent to MLHP-7 and possibly over
part of MLHP-5. We will continue with development planning for both oil
and gas/condensate development in MLHP-7, with the objective of
sanctioning our first Cameroonian development by early 2010.
On the Bomono Permit, once we have completed fieldwork, we intend to
acquire airborne magnetic and gravity surveys and 2D seismic data
during 2009.
In Gabon, it is our hope to sanction the EOV field development by the
end of 2008 with the target of the production of first oil by early Q2
2010. Financing and partnership options are under review and these,
alongside the overall macro-economic environment that we are currently
experiencing, remain integral considerations to project sanction
decision timing.
On the Epaemeno Permit, following the completion of seismic acquisition
it is intended to commence exploration drilling in the second half of
2009.
Our portfolio now has an exciting range of assets with operations
ranging from early exploration activities to appraisal drilling and
development. We look forward to making substantial progress on all
these fronts in the coming year.
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