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From: CommanderCricket5/16/2012 8:28:17 AM
1 Recommendation   of 185502
 

Eric,

Didn't you tell us BC would never let a LNG facility be built? Looks like she's excited to me - LOL. Wish our governor in Florida was this cute.

BC Premier Applauds Progress on Canada LNG Project Posted on May 16th, 2012 .




BC Premier Christy Clark applauded the continued progress of the liquefied natural gas (LNG) export facility near Kitimat, LNG Canada.

Shell Canada Limited, Korea Gas Corporation (KOGAS), Mitsubishi Corporation and PetroChina Company Limited announced that they are jointly developing LNG Canada. Two LNG processing units near Kitimat are proposed, each with the capacity to produce six million tonnes of LNG annually.

While B.C. is lucky to be blessed with abundant natural resources, it’s also our government’s smart investments in infrastructure and skills training that make us a desirable, safe harbour for investment, as we see here today with this announcement,” said Premier Clark. “This brings us one step closer to having three LNG facilities up and running by 2020, a key target set out in the BC Jobs Plan.”

Shell Canada Limited will hold a 40-per-cent interest in LNG Canada, with KOGAS, Mitsubishi Corporation and PetroChina Company Limited each holding 20-per-cent interests. LNG Canada would include the design, construction and operation of a gas liquification plant and facilities for the storage and export of LNG, including marine off-loading facilities and shipping.

The proposed LNG Canada project will need thousands of jobs during construction and hundreds of full-time, permanent jobs during operations,” said Lorraine Mitchelmore, president of Shell Canada Limited. “The community would also experience the near- and long-term economic development opportunities that accompany an energy infrastructure project, as well as open up new export markets for Canada’s natural gas supply.”

As part of Canada Starts Here: The BC Jobs Plan, government has pledged to have at least one LNG pipeline and terminal online by 2015 and have three in operation by 2020. The government has made a commitment to help the sector grow, diversify, and establish access to new markets for B.C.’s natural gas.

The growth and diversification of the natural gas sector is a major focus of work to build on the foundation of the BC Jobs Plan to increase economic opportunities across the province.

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From: CommanderCricket5/16/2012 8:40:47 AM
2 Recommendations   of 185502
 
Oil Search, OSH gets attractive bids for Gulf of Papua stakes
By Ross Kelly and David Winning
Of DOW JONES NEWSWIRES

ADELAIDE, Australia (Dow Jones)– Oil Search Ltd. (OSH.AU) has received several attractive bids for a share of some of its exploration acreage in natural gas- rich Papua New Guinea and expects to conclude a deal by the end of July, Chief Executive Peter Botten said.

Mr. Botten said early bids to acquire stakes in the natural gas blocks in the Gulf of Papua have come from new entrants to Papua New Guinea as well as companies with an existing footprint in the impoverished nation.

The Australian company wants to sell down its interest in the blocks to secure an experienced operator in developing natural gas reserves for export. Oil Search is already investing billions of dollars in the ExxonMobil Corp. (XOM)- led PNG LNG project, which aims to ship liquefied natural gas to Asia from 2014.

“Some of the bids we’ve got today, they’re pretty attractive,” Mr. Botten told Dow Jones Newswires on the sidelines of a conference. “And there are still some more to come,” he said.

Oil Search holds stakes of about 70%-80% in the licenses and would be willing to sell about half of its interest, Mr. Botten said.

“Our fighting weight in the medium and long-term is always about the 30%-35% range,” he said.
A deal could be done by late June or July ahead of a drilling campaign due to begin in December, Mr. Botten added.

Papua New Guinea has an estimated 22.6 trillion cubic feet of natural gas reserves, according to U.K. -based consultancy Wood Mackenzie, making it an attractive target for international energy companies seeking to develop projects that can export gas to booming Asian economies such as China or traditional LNG users such as Japan and South Korea .

That likely underestimates its true potential as Papua New Guinea has only been lightly explored for oil and gas up to now. According to Canada’s Talisman Energy Inc. (TLM), only a few thousand kilometers of seismic data has been acquired throughout the country since its independence in 1975.

In February, Japan’s Mitsubishi Corp. (8058.TO) agreed a US$280 million deal to buy stakes in several natural gas discoveries and prospects in the forelands area of western Papua New Guinea from Talisman.
Oil Search owns 29% of the PNG LNG project and along with partners Exxon and Santos Ltd. (STO.AU) wants to expand the US$15.7 billion development to three LNG production units, or trains, from the two under construction.

The company recently discovered gas that could help underpin an expansion of PNG LNG at the P’nyang prospect in the country’s highlands. Mr. Botten said the next well, Trapia-1, is expected to commence drilling in about a week, while drilling at the Hides prospect remains on track to start mid-year.

Oil Search’s acreage in the Gulf of Papua is relatively untested and contains offshore and onshore prospects. Oil Search has said any gas found in the area could either support construction of a standalone LNG development or supplement an expansion of PNG LNG.

In recent presentations to investors, however, the company has put more emphasis on the asset’s potential as the source of a new LNG export hub that could support a two-train LNG project.

-By Ross Kelly and David Winning of Dow Jones Newswires; 612-8272-4692; ross.kelly@dowjones.com

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To: CommanderCricket who wrote (168565)5/16/2012 8:42:29 AM
From: Eric
   of 185502
 
CC

Not in Washington State!

I didn't say anything about B.C.

Eric

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To: Bearcatbob who wrote (168556)5/16/2012 8:46:05 AM
From: Eric
1 Recommendation   of 185502
 
Goes to show just how far North slope production has dropped since the 1980's peak in excess of 2 million bbls per day.

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From: CommanderCricket5/16/2012 8:57:34 AM
1 Recommendation   of 185502
 
Letter to Shareholders from SD.

Worth reading if you have a SD position. One comment - I wasn't aware SD is 96% oil. I thought they were more like 70%/30%. With the recent sell off, I have established a substantial position in shares and short puts. This will allow me to play bearcat's bob SD game on monthly income.

Fellow Shareholders, Upon completing our transformation from natural gas to oil in 2010, we took additional bold measures in 2011 to further ensure our ability to deliver increased shareholder value in 2012 and beyond. We have purchased $400 million of leases in the Mississippian Oil Play, which stretches from northern Oklahoma to western Kansas, securing two million acres(1) in an area we believe generates the highest rate of return for horizontal drilling in the U.S. today and will be the primary driver of growth for the company going forward. We are also the most active operator in the play, drilling nearly half of all wells drilled to date. Our drilling success has been transformative for our company and will be an ongoing source of growth for the future.

Every action we take, including our pending acquisition of inexpensive oil and cash flow through the purchase of Dynamic Offshore Resources, LLC (DOR), is meant to improve our ability to develop our Mississippian holdings and to fulfill our three-year growth strategy. By the end of 2014, we expect to increase our annual EBITDA(2) to more than $2 billion, while also providing annual double-digit production growth, lowering our total debt to EBITDA ratio and funding our capital expenditures within our cash flows. Through the DOR acquisition, the offering of two royalty trusts (with a third pending), two joint ventures with international partners and the sale of non-core assets, we have established the groundwork necessary to reach our goals. Our achievements over the past 12 months have positioned our company in such a way that I am more energized about the future of SandRidge than ever before.

Believing oil prices would rebound more quickly than natural gas and ultimately provide a more stable revenue stream for the company over the long-term, we made the decision in late 2008 to change our focus to oil. Our decision to move quickly in this direction enabled us to acquire a tremendous base of oil assets at prices significantly lower than would be possible in today’s market. Moreover, our focus on low-cost, shallow, carbonate formations enables us to achieve some of the highest rates of return in the industry. Wells drilled into shallow carbonates require lower horsepower equipment for drilling and low pressure pumping equipment during the completion process—both of which are plentiful and readily available. SandRidge also owns 31 drilling rigs, which help keep our costs low and our rates of return high.

We currently have more than 7,000 net potential horizontal drilling locations identified on our Mississippian acreage, targeting vertical depths of 4,000 to 7,000 feet. An average horizontal well costs $3.2 million(3) to drill, produces 456 thousand barrels of oil equivalent (Mboe) and provides an internal rate of return of approximately 98 percent(4). We drilled 167 horizontal wells in the Mississippian in 2011 and expect to drill 380 horizontal wells this year, using an average of 26 active rigs.

Because of its exceptional economics, our Mississippian acreage has been a remarkable source of value creation for the company. We acquired two million acres of leasehold for a total investment of $400 million or roughly $200 per acre. In 2011, we monetized approximately 500,000 acres through three separate transactions—two joint ventures and one royalty trust—for a total of $1.83 billion. A second royalty trust is expected to raise another $500 million. Together these transactions will have raised $2.33 billion in non-debt capital, giving an implied value of $4,236 per acre to these properties. With nearly 1.5 million acres remaining under our control, we have the potential to sell an additional 250,000 acres and still retain a portfolio of locations large enough to support a robust 12 to 15 year drilling program.

Our second core area, the Texas Permian Basin, also provides access to shallow, permeable carbonate reservoirs that can be reached quickly and at a low cost. The company owns 225,000(5) acres of leasehold in the Permian Basin, where approximately 7,600 potential future drilling locations have been identified across the Central Basin Platform. Targeting multiple formations, these wells are drilled to depths between 4,500 and 9,000 feet, cost an average of $643,000 to drill, produce an average of 58 Mboe and provide an internal rate of return of approximately 80 percent(4). SandRidge drilled 803 vertical wells in the Permian Basin last year and we expect to drill more than 750 wells in 2012.

Non-Debt Capital Raises
Through the aforementioned joint ventures and royalty trusts and the planned sale of non-core assets, we have raised $3.2 billion(6) in non-debt capital, enabling SandRidge to begin 2012 with approximately $1 billion in liquidity. In September, we completed a $500 million joint venture with an affiliate of Atinum Partners Co., Ltd, one of the Republic of Korea’s top investment firms. Atinum received non-operated working interests in approximately 113,000 net acres in the Mississippian for which SandRidge received $250 million in cash and will receive an additional $250 million in the form of a drilling carry.

We followed the Atinum JV with a $1 billion joint venture in December with a subsidiary of Repsol YPF, S.A., a leading energy company headquartered in Madrid, Spain. At the closing of the transaction, Repsol received non-operated working interests in approximately 364,000 net acres in the Mississippian for $250 million in cash and an additional $750 million in the form of a drilling carry. Combined, these joint ventures raised $1.5 billion in non-debt capital for the company, essentially all of which will be used to develop our Mississippian acreage.

We closed two Royalty Trusts in 2011—the SandRidge Mississippian Trust I (NYSE: SDT) and the SandRidge Permian Trust (NYSE: PER). These entities are business trusts formed to own royalty interests in producing wells and in development wells to be drilled within areas of mutual interest. The Trusts were conveyed royalty interests by SandRidge, which entitles them to receive a percentage of the wells’ net revenues without being burdened by drilling or operating expenses. Monetizing these interests enables us to accelerate the development of our oil properties and, in turn, increase the company’s value.

We launched SDT in April to a very positive reception, enabling us to increase the size of the offering, which priced at the top end of the expected price range. SandRidge Mississippian Trust I owns royalty interests that entitle it to a percentage of the proceeds from production on wells drilled in the Mississippian formation on approximately 42,000 net acres. SandRidge received net proceeds of $337 million from the offering (before offering expenses) and currently has a 32.7 percent beneficial ownership in the trust(7).

The initial public offering of PER successfully launched in August. SandRidge Permian Trust owns royalty interests that entitle it to a percentage of the proceeds from production on wells drilled on approximately 15,900 net acres in the Permian Basin. SandRidge received net proceeds of $581 million from the offering (before offering expenses) and currently has a 30.5 percent beneficial ownership in the trust(7).

We have also divested several non-core assets through planned sales totaling $696 million. These properties included the Bone Spring and Avalon reservoirs and the Wolfberry assets in the Permian Basin, 23,000 net acres in Lea and Eddy counties in New Mexico and over 23,000 net acres across several counties in East Texas.

We have several options remaining to raise additional capital in the future, as needed. Our nearly 1.5 million acres in the Mississippian give us an inventory of drilling locations that would take more than 15 years to complete. Selling an additional 250,000 acres through joint ventures could provide additional capital, while reducing our drilling inventory to a more manageable 12-15 years. In addition, we can divest other non-core assets as well as our remaining common units in the royalty trusts.

Opportunistic Acquisitions
Our ability to transform into a company that now derives approximately 96 percent of its revenue from oil wells has been greatly enhanced through our acquisition of producing properties inexpensively in areas that have fallen out of favor with the rest of the industry. In late 2009 and 2010, for example, as others were moving quickly toward shale plays, we were able to acquire 149 million barrels of oil equivalent (MMboe) of proved reserves and 16,100 barrels of oil equivalent per day (Boepd) of production at significantly reduced prices.

Similarly, as companies have retreated from the Gulf of Mexico, the purchase price of assets in this area has become more attractive, enabling SandRidge to acquire 25 Mboepd of production and 62.5 MMboe of proved reserves for less than $1.3 billion in cash and stock through the acquisition of Dynamic Offshore Resources, LLC (DOR). Approximately 50 percent of both production and proved reserves consist of oil and are located primarily in water depths of less than 300 feet. The acquisition will be immediately accretive to our earnings and should contribute significant free cash flow in excess of the annual drilling and recompletion capital budget. The valuation at which we are able to acquire these properties is consistent with our plan to triple EBITDA and double oil production while lowering our debt to EBITDA ratio.

Oil-Focused Operations(8)
2011 was an extremely successful year operationally for SandRidge as we increased proved reserves, adjusted for asset sales, by 11 percent to 471 MMboe. The increase reflects the divestment of 123 MMboe and represents a reserve replacement ratio of 303 percent. Oil reserves, adjusted for asset sales, increased 17 percent to 245 MMBbls. Oil production grew 60 percent in 2011, adding to a 16 percent increase in overall production to 23.4 MMboe.

Throughout our transition to oil, SandRidge has made bold, decisive moves that have provided stability and growth during a time of worldwide economic uncertainty. We are now well positioned to achieve our three-year objectives of annual EBITDA greater than $2 billion, annual double-digit production growth, reducing our total debt to EBITDA ratio and becoming a company that can continue to grow while living within cash flow. Moreover, our demonstrated ability to achieve high rates of return through our drilling program, capture value on our oil and natural gas assets and opportunistically acquire production and proved reserves at below market prices enable us to generate higher revenues and deliver increased value to our shareholders.

I would like to thank our board of directors for their expertise and counsel, our talented employees for their superior performance and our shareholders for your belief in the future of our company. SandRidge Energy is stronger than it has ever been, with greater prospects for the future than at any other point in our history.

Tom L. Ward
Chairman and Chief Executive Officer

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From: Eric5/16/2012 9:07:34 AM
   of 185502
 
Total gas leak operation begins at Elgin North Sea platform

The energy company has started pumping mud into the well in an attempt to stop the leak

guardian.co.uk, Tuesday 15 May 2012 07.04 EDT





Total's Elgin oil and gas platform. Photograph: Total/AP

The oil company Total started pumping heavy mud down its leaking well in the North Sea on Tuesday in an attempt to stop an escape of gas that has lasted nearly eight weeks and could deprive Britain of nearly 6% of its supply this summer.

"The well intervention operation got underway at 8:20am with the pumping of heavy mud into the well from the main support vessel," the oil and gas major said in a statement.

The work, at the Elgin platform, 240 km off the coast of Scotland, is expected to last several days before engineers can determine whether the leak has been stopped, Total said.

The leak is costing the company around £1.8m a day in relief operations and lost net income.

The Department of Energy and Climate Change, which gave the go-ahead for the "well kill" work earlier this month, said it was monitoring the situation closely.

The company said last week the amount of gas leaking from the platform had shrunk to a quarter of the original quantity and that parallel work to drill a relief well continued.

In the meanwhile, a nearby gas field run by Royal Dutch Shell has had to be closed, initially as a precaution and now for maintenance. Other operations on smaller fields have also been affected.

The total loss in gas production from Elgin and nearby fields could cut British gas production by as much as 6% this summer, Britain's energy network operator has warned.

Environmental impact from the leak appears to have been small, according to the Scottish government, with fish and water samples from just outside a two-mile exclusion zone around the platform have not shown any signs of hydrocarbon contamination.

Total has said it saw a possibility for production at Elgin to gradually restart later this year.

guardian.co.uk

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To: CommanderCricket who wrote (168569)5/16/2012 9:11:22 AM
From: Ed Ajootian
6 Recommendations   of 185502
 
CC, SandRidge (SD) -- be careful with the spin there buddy. Although its probably not a lie to say that the company derives "96% of their revenue from oil wells", many of those "oil wells" produce about equal amounts of oil and gas on a btu-equivalent basis.

As indicated in another part of that piece, at year-end their reserves were 245/472 or 52% oil, adjusted for asset sales.

If you're looking for exposure to the Miss. play but want a higher oil mix you should take a look at Osage Exploration (OEDV.OB). They are not nearly as well established as SD but neither are they so levered up.

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To: Ed Ajootian who wrote (168571)5/16/2012 9:23:20 AM
From: CommanderCricket
   of 185502
 
Ed,

I missed that and didn't mean to mislead anyone. Re-read and your right, it is a spin. Still, like the opportunity to set up options channel between $6 - $8, shorting puts and calls as the share price bounces around.

Noticed CS upgraded from sell to hold this morning - LOL

Any idea when Osage will be listed on the Amex?

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To: dvdw© who wrote (168096)5/16/2012 9:49:28 AM
From: Brasco One
1 Recommendation   of 185502
 
ANF-----pay day!!!!

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To: kollmhn who wrote (167228)5/16/2012 10:08:56 AM
From: profile_14
   of 185502
 
One month later....

stockcharts.com

And it seems that WPX held up reasonably well. Time to buy WPX? Not sure but I nibbled this morning.

stockcharts.com

I also picked up some more ERF, TC, and CJES, all at the open.

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