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  April 2014
Convention Season

PETEX 2012 Booth

Winter is over and the upstream industry is gearing up for the spring and summer conventions. This is one of our favorite times of year at StratoChem, because it gives us the chance to see old friends and clients, keep up-to-date on new developments in the industry, and meet new and interesting people from all over the world. We'll be exhibiting at the American Association of Petroleum Geologists's Annual Convention & Exhibition in Houston this April 6th-9th, sharing booth #2053 with our partners from Sirius Exploration Geochemistry. If you find yourself in Houston this month, stop by! We'd love to see you again!

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Oil & Gas Prices
Industry News
Egypt Flag FlatIPR Knocks Out Gulf of Suez Discovery
March 6th, 2014
(www.oilegypt.com)

US independent oil and gas company IPR hit hydrocarbons while drilling on the Southwest Gebel El Zeit concession in Egypt's Gulf of Suez. The well, SWGEZ-5, was drilled using the ADES's jack-up rig ADM-IV under the supervision of IPR's operational teams and the JV operating company PetroHurghada.

The well took a total of 43 days to drill, test, and complete to a total depth of 8,020 ft in the basement of the Pre-Cambrian age. The well encountered a total of 107 ft of net hydrocarbon pay in the Late Cretaceous-age Nubia and Matulla formations, as targeted prolific producers in the Gulf of Suez. SWGEZ-5 tested naturally flowing oil at rates of 3,611 bpd and 2.9 Mmcf/d, of oil and gas respectively.

The company has constructed a modern three-slot platform, a 9.5 km 8-1/2 inch pipeline from platform to shore, and state-of-the art surface facilities to receive future deliveries.

IPR's COO, Sam Dabbous, stated: "We are very pleased with the results of this new discovery and the great efforts of our technical teams. We look to replicate this successful effort in our ambitious expansion plans in 2014 to exceed internal expectations and contribute to the fulfillment of the country's mandate to increase production."

As part of this aggressive investment plan, IPR remains on-pace to invest in 57 wells to increase production and add new reserves in 2014 between its Western Desert and Gulf of Suez assets portfolio, having now drilled 11 wells in both hydrocarbon-producing provinces.

Libyan Flag Libya Sees Wildcat Hit
March 31st, 2014
(www.petroleumafrica.com)

Libya recently saw a discovery made in the Ghadames Basin. The discovery was made by NOC unit Arabian Gulf Oil Co.

 

On its website, NOC reported that the G1-NC4 new field wildcat well was drilled to a total depth of 10,600 ft, discovering oil in the Lower Akakus and gas/condensate in the Mamouniyat formations.

 

The G1-NC4 tested at rates for 1,226 bpd of oil in the Lower Akakus at an interval between 8,291 and 8,314 ft. The Mamouniyat formation tested gas at a rate of 3 Mmcf/d and 129 bpd of condensate from an interval between 10,207 and 10,230 ft.

 

Ksar Hadada CPR Released 
March 27th, 2014
(petroleumafrica.com)
 

Independent Resource released its third-party evaluation, or CPR, for the Ksar Hadada permit onshore Tunisia, prepared by Blackwatch Petroleum Services.  The report estimates 108 million boe of prospective resources.

 

Blackwatch's evaluation covers the Sidi Toui and Gazelle Prospects within the Ksar Hadada permit area. The report attributed a 38% chance of success to the Sidi Toui Prospect and a 19% chance of success to the Gazelle Prospect.

ETAP, with the support of the company, has made an application for Independent Resources to be the operator of the Ksar Hadada license with an interest of 86.345% in the PSC and an extension period of two years. Approval by the Consultative Commission on Hydrocarbons of Tunisia is expected next month.

 

Once the award of operatorship and the license extension are granted, Independent and its partners in the license expect to commence a work program including 200 sq km of 3D seismic, re-entry of one existing well, and drilling of one new well. Shooting of the seismic is expected to begin in the third quarter of this year with drilling beginning in Q1 2015.

 

In due course, IRG expects to bring in partners to fund a significant portion of the work program.

 

CEO Greg Coleman said "The Board expects that Tunisia will be one of the core areas for Independent as we implement our Mediterranean Basin exploration and production strategy over the coming months. The findings of the evaluation by Blackwatch clearly indicate the potential value of the Ksar Hadada opportunity. We look forward to formal announcement of the award of the two-year extension and the award of operatorship, which we currently expect next month and to progressing with the work program."

Palestinians Seek to Drill for Oil in West Bank
March 20th, 2014
(www.egyptoil-gas.com)

The Palestinian Authority on Tuesday announced plans to explore for oil in the West Bank, throwing a new element of uncertainty and confusion into troubled U.S.-backed peace efforts.

The Palestinians proclaimed the project, close to a small oil field in Israel, a key step toward their dream of developing the local economy and gaining independence in the West Bank. But Israel, which wields overall control of the area, gave no indication it has agreed to the plan, and far less ambitious attempts at economic development have repeatedly sputtered in large part because of Israeli restrictions.

Mohammed Mustafa, the Palestinians' deputy prime minister for economic affairs, said the Palestinians were seeking proposals from international firms to explore and develop oil in the northern West Bank.

He said the project was among a series of initiatives drawn up by Mideast envoy Tony Blair to help develop the Palestinian economy. "The Palestinian people have the right to use their resources," he told The Associated Press.

Blair has proposed a multiyear plan for developing the Palestinian economy - an effort that is meant to complement and bolster U.S.-led peace talks. But the former British prime minister has made little headway in carrying out the projects, which focus on eight areas of the economy, including agriculture, construction, tourism and energy.

Progress has been hindered because many of the projects are to take place in the 60 percent of the West Bank that was left under full Israeli control under interim peace deals two decades ago. The Palestinians say they cannot establish a viable state without being allowed to develop this area and say Israel routinely stifles attempts to do so.

According to a map released by the Palestinians, the exploration area covers more than 400 square kilometers (155 square miles) in a strip of land along the frontier with Israel. Most, if not all, of this land, remains under full Israeli control.

In a statement, Blair's office said "the energy sector is indeed one of the eight sectors" included in Blair's initiative. "Reliable energy supply is critical for the expansion and development of all sectors of the Palestinian economy." The statement made no reference to the project announced Tuesday and gave no details on where any West Bank oil projects might take place.

Israeli Prime Minister Benjamin Netanyahu's office had no comment, and Israel's energy ministry said it was not involved.

The Palestinian announcement appeared to lay the groundwork for a new area of protracted negotiations with Israel. International bodies, including the World Bank, have urged Israel to lift restrictions on Palestinian development in Israeli-controlled areas of the West Bank.

In his announcement, Mustafa, a U.S.-educated economist and former official at the World Bank, said initial studies have indicated the exploration area may hold oil reserves of 30 million to 186 million barrels. While not large in global terms, he said the project could generate proceeds of roughly $1 billion for the Palestinian government, including taxes and royalties. The government will accept bids from potential partners through June.

"The existence of oil in Palestine is a highly promising opportunity for the Palestinian economy," he said.

In contrast to their energy-rich neighbors, Israel and the Palestinian areas have historically had few natural resources to exploit. In recent years, Israel has developed natural gas fields off its Mediterranean coast. It also has begun pumping oil from a small field located near the boundary with the West Bank, close to the area the Palestinians hope to exploit.

Giora Eiland, acting chief executive of Israeli oil firm Givot Olam, declined to comment on the Palestinian plan, but said his company "absolutely" does not take any oil from the Palestinian side.

"We only have vertical drills, and all of them are located on the Israeli side," he said.
United States: Oil Rigs Extend Record as Texas Eagle Ford Drilling Rises
March 28th, 2014
(Lynn Doan & Richard Stubbe, www.bloomberg.com)

Rigs targeting oil in the U.S. jumped to a record as energy producers used the most in a year to drill for crude in Texas's Eagle Ford shale formation.

 

Oil rigs increased by 14 to 1,487, the highest level since Baker Hughes Inc. (BHI) split the oil and gas counts in 1987, data posted on the company's website today show. Rigs drilling for oil in the Eagle Ford of South Texas jumped by nine to 209, matching a record set in May 2013, according to the Houston-based field services company.

 

Hydraulic fracturing and horizontal drilling are helping producers extract record volumes from shale formations across the middle of the U.S., boosting domestic crude output to the highest in a quarter-century. The nation met 87 percent of its energy needs in 2013, the most since 1985, according to data from the Energy Information Administration.

 

"The Eagle Ford is doing well, reflecting higher oil prices and pipeline connections that are moving more of the light crude into refineries that can use it," James Williams, president of WTRG Economics in London, Arkansas, said by telephone. "This has all certainly helped" drive up drilling in the play.

 

Tight-oil production averaged 3.22 million barrels a day in the fourth quarter, enough to lift total U.S. output to 7.84 million barrels a day, accounting for more than 10 percent of world production, the EIA said in a report March 26. Last month, almost two-thirds of the tight-oil output came from the Eagle Ford and the Bakken shale in North Dakota and Montana.

 

Flow Reversal

 

Royal Dutch Shell Plc (RDSA) reversed the flow of its Ho-Ho pipeline in December to deliver crude to U.S. Gulf Coast refineries from inland oil plays in the Eagle Ford, Bakken and other shale regions. The company planned to increase capacity on the system this year.

 

Total U.S. oil output slipped 25,000 barrels a day, or 0.3 percent, in the week ended March 21 to 8.19 million, after climbing a week earlier to the highest level since 1988, data compiled by the EIA, the U.S. Energy Department's statistical arm, show. Crude stockpiles rose 6.62 million barrels, or 1.8 percent, to 382.5 million.

 

West Texas Intermediate crude for May delivery rose 39 cents, or 0.4 percent, to settle at $101.67 on the New York Mercantile Exchange, up 4.6 percent in the past year.

 

U.S. gas stockpiles dropped 57 billion cubic feet last week to 896 billion, the lowest since 2003, EIA data show. Supplies were a record 50.8 percent below the five-year average and 50.1 percent below year-earlier levels.

 

Natural gas for May delivery fell 5.3 cents, or 1.2 percent, to $4.485 per million British thermal units on the Nymex, up 11 percent in the past year.

 

The number of rigs drilling for gas this week declined by eight to 318, the lowest level since 1995, according to Baker Hughes. The total U.S. rig count climbed by six to 1,809.

In This Issue
Upcoming Events

4/6 - "AAPG American Conference & Exhibition" - Houston, Texas, USA

4/28 - "5th East African Oil, Gas-LNG, and Energy" - Nairobi, Kenya

4/30 - "SPE EOR Conference at Oil & Gas West Asia" - Muscat, Oman

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