Repsol hit with further delays offshore Namibia: Welwitschia

• Welwitschia prospect being drilled on PEL0010: Repsol (44%*), Tower (30%), Arcardia (26%)
• Welwitschia-1 spud last month
• Due to issues with wellhead housing, well was plugged and abandoned
• Decision made to drill Welwitschia-1A 50m away, which was spud 1 May 2014
• Welwitschia-1A now at 1,879m but problems with blowout preventer system has halted drilling
• Prospect estimated to have multi-billion bbl potential and is being drilled to test the Maastrichtian and Aptian-Albian reservoir sequences

Read More

Libya update: co-ordinated militia attacks against Islamists

• On 16 May, forces loyal to Colonel Haftar attacked the bases of two Islamist militias in the eastern Libyan city of Benghazi: Ansar al-Sharia and 17 February Martyrs Brigade
• Haftar commands the "national army"
• Aim of attack to remove Islamist militias from Benghazi
• Ansar al-Sharia aims to impose Sharia law in Libya
• Allied with 17 February Martyrs, who report to the Government
• In Western city of Tripoli, militias allied with the Zintan Brigade also moved in support of Haftar's actions and attached the General National Congress ("GNC")
• Colonel Obaidi, the chief of staff of the Libyan Army, has said the army will support the GNC and branded the move by Haftar as a coup attempt
• Increasing number of former Libyan Islamic Fighting Group ("LIFG") have taken up senior Government security positions
• LIFG as similar ideology to Ansar al-Sharia
• Two groups rumoured to be working with the Muslim Brotherhood to takeover the governance of Libya
• Haftar and his affiliates have called for further forces to support his cause, but us unlikely to have the funding and resources to oust the Islamist militants; in Western Libya, the Sintan Brigade is also unlikely to have the resources to capture Tripoli - most likely outcome is protracted fighting and stalemate

Read More

Lekoil acquires 40% WI in Otakikpo Marginal Field

• 20 May 2014: Lekoil announced acquisition of 40% participating and economic interest in Otakikpo, a Nigerian onshore Marginal Field; located within OML11
• Vendor: Green Energy
• Consideration: USD7m upfront, plus USD4m contingent on production and ministerial approval
• Lekoil will also fund work programme for re-entry of existing wells and all costs up to production (estimated c.USD67m); this is recoverable from enhanced share (88%) of production cash flow
• Lekoil expects to bring Otakikpo into production within 12-18 months
• Acquisition and work programme partly funded by placing; 70-80% of the work programme expected to be funded through RBL
• 2C estimate: 36mmbbl + 31 bcf (gross)
• Otakikpo has partial 2D and 3D coverage; 3 wells to date, with h/c encountered in multiple intervals; field is close to existing infrastructure
• Lekoil's other assets are:
• 30% economic interest in OPL310 (17.14% WI) which contains Ogo. Partners are Optimum (30% economic interest, 60% WI), Afren (40% economic interest, 22.86% WI)
• 1% in OPL241
• 77.5% in exploration Blocks 2514A and 2514B, Namibia

Read More

Oryx: Appraisal drilling update for Demir Dagh, Kurdistan

• Oryx holds 65% WI in Hawler licence (Operator), KNOC (15%), KRG (20%)
• On 19 May 2014, announced test results for Demir Dagh-3 ("DD-3") and Demir Dagh-5 ("DD-5") wells
• DD-3: all four tests flowed successfully; crude quality similar to that at DD-2 and -4
• Spudded in November 2013, 3km south-east of DD-2
• Will now be completed as producer with DD-2 and -4
• DD-5: Logging data and drilling fluid losses during drilling, only small amount of hydrocarbons recovered to surface
• First production from Demir Dagh Area expected Q2 2014
• DD-6 plus a further 4 appraisal/development wells to be drilled in 2014 to:
• further increase production capacity
• delineate reservoir
• DD-6 well now spudded
• Oryx also holds a 50% WI in Wasit, Kurdistan
• Wasit is close to the super-giant East Baghdad field
• 5 leads identified with 404mmbbl gross unrisked prospective resources
• Seismic has been planned on the licence in 2014

Read More

Petroceltic successfully completes USD100m placing

• Joint book-runners are Davy, HSBC and Mirabaud
• Proceeds will be used to "provide financial flexibility to pursue growth opportunities across Petroceltic's existing portfolio and also through new ventures"
• Dovenby Capital will be a new strategic shareholder, subscribing to USD50m of the placing
• Dovenby Captial is an investment company led by Dato' Ahmad Fuad, a Malaysian oil and gas industry specialist

Update on assets

• Algeria
• Ain Tsila / Isarene PSC - tender for FEED at end 2013, farm-out to Sonatrach (pre-empted) - post farm-out Petroceltic (38.25%), Sonatrach (43.375%), Enel (18.375%)
• Egypt
• Award of El Qa'a Plain, North Thekahm South Idku ratified
• Commenced drilling on South Dikimis in May 2014; gross mean unrisked prospective of 7.6mmboe
• Kurdistan
• Shakrok-1 TD reached in April 2014; four zones selected for testing - 2 flowed formation water and no hydrocarbons, remaining 2 zones still being tested
• On Dinarta licence, preparation for drilling Shireen-1 well, targeting gross mean unrisked prospective of 706mmbbl
• Petroceltic holds 16% WI in the above two licences, Hess (64%*), KRG (20%)
• Other assets in Bulgaria, Romania and Italy

Read More

Keystone kills bipartisan energy bill

• The Energy Savings and Industrial Competitiveness Act was proposed by Rob Portman, a Ohio Republican
• The bill had aimed to reduce energy needs and cut emissions by offering incentives for adopting energy-saving technology such as water heaters with smart meters
• More importantly, the bill had bipartisan support
• As the bill neared the vote, some Republicans tried to attach amendments to the bill to approve Keystone
• Harry Reid (Democrat), Senate Majority Leader, refused the amendment and the amendment's supporters retaliated by blocking the main bill
• TransCanada submitted plans for Keystone six years ago for the US to review
• The pipeline was proposed as a conduit connecting Alberta's oil sands with US Gulf Coast refiners
• TransCanada's Energy East project which would export the oil sands crude to the Atlantic Coast (New Brunswick) may be an easier option as US approval would not be required
• Proponents argue that exporting from the east coast is a valuable option with access to the growing Indian markets and the crude would also support Canadian jobs by supplying refineries in Eastern Canada
• It is also clear that the US no longer needs Canadian crude to help achieve energy independence, a big change since the Keystone plans were submitted

Read More

Statoil divests its 5% WI in 15/06 Angola to Sonangol

• Statoil announced on 12 May 2014 that it is divesting its 5% WI in Eni-operated Block 15/06 to Sonangol for USD200m
• Statoil's remaining licences in Angola are Blocks 17, 15, 31, 4/05, 22 (pre-salt), 25 (pre-salt) and  40 (pre-salt)
• Statoil is also operator of pre-salt Blocks 38 and 39
• In April 2014, Statoil also farmed down a 15% WI in Block 39 to WRG, a 50/50 JV between White Rose and Genel. Post transaction, interests will be Statoil (40%), Sonangol (30%), Total (15%) and WRG (15%)
• WRG also acquired, concomitantly, a 15% WI in Block 38 from China Sonangol. Post transaction, interests will be Statoil (55%), Sonangol (30%) and WRG (15%)
• Exploration on Blocks 38 and 39 will commence during 2014 with the first prospect
• Dilolo-1 is the first high-impact prospect that will be drilled on Block 39; this will be followed by the second commitment well on Block 38
• Angola is Statoil's largest contributor to production outside of Norway with 2013 production of c.200mboepd, c.28% of total international output

Read More