World of oil and gas

Vol. 234 No. 12

Shell encouraged by positive well test results in Albania

Shell and Petromanas Energy have announced positive test results from the Shpirag-2 well in Block 2-3, which covers a 3,450-sq-km area onshore south-central Albania. The well was drilled by the operator, Petromanas, to a TD of 5,553 m. Based on the previously drilled Shpirag-1 and test results from Shpirag-2, Petromanas and Shell believe they have identified an oil column in excess of 800 m, in fractured carbonate reservoirs, providing early validation of the block’s light oil potential. During a three-day extended test period, the well flowed at rates of 800 to 1,300 bopd of 35° to 37° API oil. A 450-km, 2D seismic program for Block 2-3 is in progress, and is expected to conclude before the end of the year. The first appraisal well is planned after completion of a second exploration well, which is currently drilling. Petromanas has a 25% working interest in Block 2-3 and is the operator, with Shell holding the remaining 75% working interest. The JV was established in February 2012. Photo courtesy of Petromanas Energy.

World record set for real-time wireless recording of seismic data

Wireless Seismic, Gazprom Neft and Asian Oilfield Services Limited (ASIAN), have set a world record for the number of live seismic channels recorded, in real time, by a cable-free seismic recording system. ASIAN has been acquiring a 270-sq-km, 3D seismic survey in Kurdistan. Data have now been acquired, with a spread of more than 6,200 live channels, with real-time transmission, setting a new standard for real-time, cable-free seismic acquisition. Photo courtesy of Wireless Seismic.

Noble Energy announces drilling results offshore Nicaragua

Noble Energy has announced results from the Paraiso-1 exploration well, in the Tyra Bank concession area offshore Nicaragua.  The well, which had hydrocarbon shows and found high-quality Tertiary-age carbonate reservoirs, did not encounter an accumulation of hydrocarbons.  Drilled in a water depth of 1,220 ft, the well reached a TD of 10,415 ft. Following completion of permanent plugging and abandonment operations at Paraiso-1, the drilling rig will be released.  Noble operates the well, with a 70% working interest, subject to final government approvals for the assignment of the remaining interest to other parties. The company’s fourth-quarter 2013 exploration expense is estimated to range from $225 million to $265 million, in total, including seismic acquisition and processing, unsuccessful well costs, and various other geologic and geophysical expenditures.

Wood Group has agreed to acquire Elkhorn Holdings, a Wyoming-based provider of construction services for midstream oil and gas facilities in the U.S. shale market. Elkhorn provides infrastructure-related services, such as pipeline and facility maintenance, instrumentation, and electrical, civil and mechanical construction, and fabrication.  Elkhorn, which generated sales of about $250 million in 2012, is headquartered in Evanston, Wyo., and has approximately 2,200 personnel.  Elkhorn operates from 11 locations across the Niobrara, Permian, Marcellus and Utica shale plays. Elkhorn will operate within Wood Group PSN, and will continue to be led by its existing management team under CEO Sean Sullivan.

Canada’s Talisman Energy has agreed to sell part of its Montney acreage to Petronas for $1.4 billion. Covering approximately 127,000 net acres, the transaction represents 75% of Talisman’s Montney shale holdings in British Columbia’s Farrell Creek and Cypress areas. It includes approximately $770 million in drilling costs. With this transaction, Talisman has moved closer to its target of $2 billion to $3 billion in divestitures by mid-2014, as the company aims to reduce debt and cut costs. Progress Energy Canada, which Petronas purchased last year for nearly $5 billion, is making the acquisition. Additionally, Petronas is in the process of deciding on a proposed LNG export terminal on Canada’s western coast, at a projected cost of roughly $8.6 billion to $10.5 billion. Shell and Chevron are also in the race to establish export capabilities in the country.

GDF SUEZ has signed an Asset Purchase Agreement (APA) with Vale, one of the largest metals and mining companies in the world, to acquire a 20% participating interest in two gas exploration blocks in the Parnaiba onshore basin, in northeastern Brazil. The signing of the APA marks the first entry of GDF SUEZ into E&P activities in Brazil. Blocks 2 and 3 cover an area of 3,067 sq km and 3,065 sq km, respectively, in a region relatively under-explored, with a high potential for natural gas. These licenses were awarded in March 2008, as part of the ninth exploration bidding round, to Vale (20%), BP (40%, operator of Block 2) and Petrobras (40%, operator of Block 3). One exploration well in each of these two blocks is scheduled by March 2014.

PetroChina announced plans to buy Petrobras’ assets in Peru for $2.6 billion, expanding its portfolio in the region. In a statement to the Hong Kong stock exchange, the Beijing-based company said it will take over three blocks in Peruvian oil and gas fields from Petrobras. Petrobras owns two blocks entirely, and has a 46% stake in the third, according to the statement. Petrobras has been selling assets to help finance projects in deepwater Brazil. China National Petroleum Corp., PetroChina’s parent company, already owns oil and gas assets in Peru, as well as in Venezuela. Last month, Petrobras agreed to sell oil blocks and pipelines in Colombia to Perenco UK for $380 million.

Black Elk Energy Offshore Operations, an independent headquartered in Houston, has announced two conventional pay discoveries onshore South Texas. The first discovery tested in excess of 8,000 boed, while the second tested in excess of 3,000 boed, which was primarily oil. The company expects the new wells to produce, initially, at a well allowable rate of 1,000 boed, and decline to 100 boed after six months, with total estimated ultimate recoveries of 300,000 bbl.  Black Elk is in the process of acquiring a substantial land position to further exploit the success of these discoveries. A third exploration well began drilling Nov. 15, 2013.

After giving conditional authorization for Dominion’s proposed Cove Point facility (pictured) in September 2013, the U.S. Department of Energy has conditionally authorized Freeport LNG Expansion and FLNG Liquefaction to export additional volumes of domestically-produced LNG to countries that do not have a Free Trade Agreement (FTA) with the U.S. Freeport previously received approval to export 1.4 Bcfd of LNG from this facility to non-FTA countries on May 17, 2013, from its terminal at Quintana Island, Texas. Subject to environmental review and final regulatory approval, the facility is conditionally authorized to export an additional 0.4 Bcfd, for a total rate of up to 1.8 Bcfd, for a period of 20 years. Photo courtesy of Dominion Resources.

Investors demonstrated significant, continuing interest in obtaining new, state-owned oil and gas leases for exploration on the North Slope during last month’s annual Alaskan lease sales, said state officials. Preliminary results show that Alaska’s Division of Oil and Gas received 90 bids from eight bidding groups on 89 tracts in the North Slope Areawide sale, and two bids from one bidding group on two tracts in the Beaufort Sea Areawide sale. No bids were received for the North Slope Foothills Areawide sale. Preliminary results show that winning bonus bids totaled approximately $5.6 million for the North Slope and Beaufort sales, combined.

Canadian leader defends Keystone pipeline

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