ISIS: Sectarian furies unleashed again

The recent events in Iraq is a continuation of a rift between Sunni and Shias that began over a thousand years ago Shias believed Ali, the son-in-law of the Prophet Muhammad should take over the leadership upon his death Sunnis believed the Muslim community should determine the new leadership by consensus Ali became the new leader, but upon his assassination in 661, war broke out between the two groups Islamic terrorism once seemed to wear...

Read More

Ivar Aasen crib sheet

Contains 4 fields: Ivar Aasen, West Cable, Hanz, Asha PDO approved in March 2013 Development costs relatively high Discovery of Asha in December 2012, and inclusion of Asha in development improves economics Edvard Greig and Johan Sverdrup could push cost of services market higher Ivar Aasen expected to receive transitional terms , whereas other fields will be taxed under new terms Participation Ivar Aasen Area contains...

Read More

Eagle Ford Shale

Intro and historyPlay in South Texas stretching into Louisiana; contributes c.10% towards US productionThree “windows” to the play – oil, gas-condensate, dry gas; focus has been on development of the liquids sectionEagle Ford formation not singled out until 2008 although routinely tested before thenInitial production was gas/condensates by Petrohawk with Apache testing oil around the same timeBig change in 2010: EOG acquired acreage in oil window, changing Eagle Ford into a liquids focused playWell economicsProduction and reservoir...

Read More

Bakken

Intro and historySpans western North Dakota, eastern Montana in US and parts of Saskatchewan and Manitoba in CanadaNamed after Montana farmland owner Henry BakkenRecoverable estimates continue to increase as more about the play is understoodFirst production in 1951, after which, formation began to be mappedIn mid-90s, Elm Coulee field discovered with significant oil accumulation in the middle Bakken memberIn mid-2000s, EOG drilled the Nelson Farms 1-24H well; demonstrated H-wells with fracture stimulation could produce high IPsIn...

Read More

The state of the UK North Sea

Tax incentives have encouraged capex spend...but this has led to an overheated OFS marketand rising costs have caused some marginal projects to be postponed or even cancelled (Bressay (Statoil) and Rosebank (Chevron) being well known examples)Production decline continued in 2013...Increase in planned and unplanned shutdownsAgeing infrastructure...compounded by few large field start-ups and poor exploration successWM estimates UKNS average discovery size in 2013 to be c.11.3mmbbl, which struggle to meet commercial thresholds in current high cost...

Read More

Thoughts around using a high discount rate

Higher discount rates may be used to reflect the greater risk averseness adopted by a company/project manager. This may also be used as a screening tool, with lower NPV projects rejected. In O&G, and other fields, higher discount rates should be used in conjunction with other tools to evaluate projects.At the planning level, the use of higher discount rates has its own limitations due to conflicting interests between the project team (e.g. staying in the job) and management.Encourages projects with near term and/or higher levels of early production Implication:...

Read More

Global upstream review - 2014

Transaction activity declined sharply in 2013Record M&A in 2010-12, companies switched focus to developing acquired acreageCorporate activity weak – NOCs faced hurdles in NAM, public companies weary of overreaching with strict capital discipline and own paper cheapIn NAM, prime acreage now leased up; valuations mixed as drilling results and understanding of plays have progressedAsian NOCs bidding aggressively on global assets as large corporate opportunities limited or more difficult to transact – have seen spending from this group of buyers...

Read More