Falklands : Hydrocarbons Weekend Record 10 to 11 February 2007
Submitted by Falkland Islands News Network (Juanita Brock) 11.02.2007 (Article Archived on 25.02.2007)
Geopolitics and weather played an important role in crude price rises last week.
HYDROCARBONS WEEKEND RECORD: 10 AND 11 FEBRUARY 2007
By J. Brock (FINN)
Pakistan’s state run energy hydrocarbons company, Oil and Gas Development Co Ltd (OGDCL) announced on Friday that Brazilian Petrobras Oil and Gas BV has joined them to explore for oil and gas off Pakistan’s coast. The announcement went on to say that Petrobras had acquired 50 per cent of OGDCL’s working interest in block 2265-1 offshore Indus G, a deep-water exploration licence in the Indus basin of Arabian Sea and that the execution of the agreement with Petrobras forms an integral part of the government’s drive to attract foreign investment in the oil and gas sector. Not included in the announcement was the amount OGDCL and Petrobras would invest to explore the 7,466 sq km (2,883 sq mile) block.
LAST WEEK’S RELEVANT CRUDE PRICES
Friday, 09 February: Light Sweet Crude gained 18 Cents to stand at $59.89 on the New York Mercantile Exchange and Brent Crude gained 6 Cents to stand at $58.97 on London’s ICE Futures Market.
Thursday, 08 February: Light Sweet Crude gained $2.00 Cents to settle at $59.71 on the New York Mercantile Exchange and Brent Crude added $1.83 Cents to settle at $59.06 on London’s ICE Futures Market.
Wednesday, 07 February: Light Sweet Crude fell $1.17 Cents to settle at $57.71 on the New York Mercantile Exchange and Brent Crude decreased by $1.15 Cents to settle at $57.23 on London’s ICE Futures Market.
Tuesday, 06 February: Light Sweet Crude gained 14 Cents to settle at $58.88 on the New York Mercantile Exchange and Brent Crude added 23 Cents to settle at $58.33 on London’s ICE Futures Market.
Monday, 05 February: Light Sweet Crude lost 28 Cents to settle at $58.74 on the New York Mercantile Exchange and Brent Crude decreased 31 Cents to settle at $58.10 on London’s ICE Futures Market.
LAST WEEK’S TRENDS
Friday, 09: Heightened tensions in the Mid East and in Nigeria as well as the US cold snap and relevant draw down of supplies helped to increase the price of crude today.
Thursday, 08: The lengthy cold snap in the US as well as continuing rebel activities in the Niger Delta and nervousness about talks in Mecca helped to increase the price of crude today.
Wednesday, 07: Crude prices declined today regardless of a minor reduction in supplies. The cold snap in the United States seems to be continuing and putting demand on heating oil. Profit taking also figures into why crude prices dropped today.
Tuesday, 06: A jump in demand due to the extremely cold weather in the North-east United States caused the price of crude to increase today. It is hoped that the supplies bought were at a lower rather than a higher price.
Monday, 05: A cold snap – reported to be the coldest in 10 years - in the US and demand on supply – said to be good - kept crude prices hovering around $59.00 but it was the aversion of an industry strike in Nigeria that lowered crude prices today.
LAST WEEK’S REGIONAL DEVELOPMENTS:
On Monday Bolivia’s government began developing a new hydrocarbons industry sector strategy including necessary reforms as well as participation of Norwegian, Dutch, and Canadian technical staff. When the industry was nationalised in May 2006 work began on the strategy. Forty-four agreements with foreign companies operating in Bolivia have been signed thus far. The program helped to revamp Bolivia’s state run Oil Company (YFPB) as well as instituting an intensive industrialisation process in the hydrocarbons sector. Today the plans are being analyzed in an international conference that will announce its conclusions on nationalisation as a State policy and the Ministry of Hydrocarbons responsibilities in putting it into effect.
Petrobras is expanding its drilling aspirations in provinces like Venezuela, Turkey, Iran, Angola, as well as the US Gulf of Mexico.
Petrobras hopes to balance its assets out into some world regions where oil is more abundant than in Brazil. BP data indicates that South and Central America hold 8.6% of world liquids reserves, the Mid-east holds 61.9%, Europe/Eurasia 11.7% and Africa 9.5% Partnerships with Petrobras have been in high demand for joint-ventures in deepwater projects throughout the world, and this is an indicator of Petrobras’s drilling expertise perfected at the Campos basin.
(Tristan da Cunha)
On the 3rd February, the Fishery Patrol Boat Wave Dancer and the Police Rib Atlantic Dawn with a team of observers and the island Administrator went to Tripot Bay to watch the 1st attempt to refloat the oil rig.
Over the past few weeks the salvage team had been busy cutting and removing as much material from the rig as possible to try and make her lighter for the tow, approximately 600mt had been removed and dumped in deep water.
It was an excellent day, and although the rig had good buoyancy on the port side, the tides were not sufficient to lift the starboard side, which had become damage during the early part of the attempt.
It is the intention, if all goes to plan, to try the main re-float in the next week or two. In the meantime the salvage team will be putting more air bags in the columns to achieve as much buoyancy as possible.
Falkland Oil and Gas Limited
Falkland Islands survey programme update
Falkland Oil and Gas Limited (“FOGL” or “The Company”) is pleased to provide the
following update on its Falkland Islands exploration programme:
On 3rd February 2007 Offshore Hydrocarbon Mapping plc (“OHM”) commenced a
controlled source electromagnetic (“CSEM”) survey over prospects within FOGL’s 2004 licences. Over the next 3 months OHM will use their survey vessel, the CS Teneo, to acquire a series of CSEM lines over FOGL’s top 20 prospects and leads. CSEM, which has had high success rates, defines resistive anomalies in the subsurface and can be used as a direct hydrocarbon indicator. The interpretation of these data, when constrained by high quality seismic, can substantially reduce the drilling risk on an
2D seismic infill survey:
On 19 December 2006 The Wavefield InSeis AS vessel the Bergen Surveyor commenced a 2D programme of approximately 10,000 line kilometres over FOGL’s 2002 and 2004 licences. Over 3,000 kilometres of data have been acquired to date. These data are aimed at providing more detailed definition of our top 20 prospects and leads, as identified by the Company’s previous seismic surveys. Results from the CSEM survey will also, be used to assist in the planning of the later stages of the 2D seismic survey. It is intended that a close spaced, one kilometre by one kilometre seismic grid will be acquired over the most promising prospects, as identified by CSEM, in order to define the best drilling locations. The seismic survey is expected to take approximately 5 months to complete.
The processing and interpretation of both the 2D and CSEM surveys is expected to take up to 6 months to complete. Further announcements of the results of these surveys will be made as appropriate.
Tim Bushell, Chief Executive of FOGL commented:
“I am pleased to report that our work programme is progressing well, with both the CSEM and infill 2D Seismic surveys now underway. The results of these surveys will provide better definition of our top 20 prospects and leads and enable us to identify the best prospects and locations for drilling.”
5 February 2007
Tim Bushell 020 7563 1260
Rockhopper Exploration plc
PRESS RELEASE: 5 February 2007: 2D Interpretation Update
• Ernest contains multiple zones of interest - target size increased by 30%
• Newly mapped Lead K closure co-incident with CSEM response
• 20 additional structural leads identified
Interpretation of the 920km 2D seismic data collected in early 2006 is completeand Rockhopper Exploration is pleased to provide the following exploration update.
The 2D seismic data, when combined with the controlled-source electromagnetic survey (CSEM) data gathered in late 2005, gives the Company increased confidence in prospect Ernest such that the potential recoverable P50 reserve estimate has been increased by 30% to 130 mmbbls. In addition, on Lead K, a closure has been confirmed coincident with that identified by CSEM and could contain 60 mmbbls recoverable.
A further twenty structural leads have been identified which warrant further investigation. It is estimated that nine of these could be sufficiently large to each contain over 100 mmbbls recoverable and of those seven could each contain over 200 mmbbls recoverable.
The data was collected over two areas, firstly over Ernest, secondly over the southernmost areas of licences PL023 and PL024. The data over Ernest has been interpreted in conjunction with the CSEM data collected at the same time.
As a result, Ernest can now be mapped at multiple levels, with at least two zones of interest on the new seismic data from c.980m depth to c.2000m depth. The new 2D has also allowed us to further refine our estimates of the potential size of the prospect.
The CSEM data over Ernest shows a single discreet resistor on Line 1 (East / West) at a level of approximately 1500m. This is coincident with the deeper closure mapped on the seismic.
Additionally, the CSEM data over Ernest shows two discreet resistors on Line 2 (North / South); one appears to be at the deeper level and is coincident with the resistor described above. The second appears to be at a shallower level and appears to be coincident with a separate closure, still part of Ernest, at a level of approximately 1100m. We have also observed an amplitude versus offset (AVO) anomaly on the flank of Ernest at this shallower level which is coincident with the CSEM response.
When the CSEM is combined with the new 2D, Ernest now appears to have multiple zones of interest with at least two possible targets confirmed by both the CSEM and seismic data.
We now believe that Ernest could possibly contain more than the 100 mmbbls of recoverable oil and have therefore revised our estimates upward to a P50 of 130 mmbbls and a P10 of over 250 mmbbls recoverable.
In the southern area we collected a wider grid of data over a number of leads including Lead K over which CSEM was also collected. Lead K exhibits a positive CSEM response, but this was not coincident with the original target. However, a separate closure, coincident with the CSEM response, is now evident on the new seismic. The area of Lead K which is coincident with the CSEM response could contain 60 mmbbls of recoverable oil. Lead K was not specifically included in the EMV calculation carried out by Scott Pickford at the time of the Company's admission to AIM.
Twenty additional structural leads
We have also identified 20 additional structural leads which merit further investigation. These range in size up to over 13,000 acres and the shallow water depth and proximity to the Falkland Islands would lead to strong economics, were a discovery to be made. A number of those leads are associated with bright amplitudes, providing further encouragement. Some of the leads are large in size and all are defined by structural closure.
Finally, a large area of bright amplitudes has been observed in the very shallow water area near the Falklands in licence PL024. This could possibly indicate a significant stratigraphic lead which also merits further investigation. Rockhopper Exploration's Managing Director, Sam Moody, said:
'The information provided by the interpreted seismic is highly encouraging. The two areas covered by CSEM have been further defined with the new seismic data and we have a significant number of leads to examine in licences PL023 and PL024.
As previously announced, we have just completed the acquisition of 3D seismic in our northern licences PL032 and PL033 and are on course to developing a number of drillable prospects by the third quarter of 2007. During the last 12 months we have successfully acquired 2D, 3D and CSEM data and have significantly progressed our exploration portfolio as a result.'
NB: This statement has been approved by the Company's geological staff who include David Bodecott (Exploration Director), who is a Member of Petroleum Exploration Society of Great Britain (PESGB) and the American Association of Petroleum Geologists (AAPG) with over 30 years of experience in petroleum exploration and management, for the purpose of the Guidance Note for Mining, Oil and Gas Companies issued by the London Stock Exchange in respect of AIM companies, which outline standards of disclosure for mineral projects.
This interpretation has been undertaken by the Company's technical staff and reflects their best professional judgement. The accuracy and completeness of the information contained herein has not been independently verified.
For further information, please contact:
Rockhopper Exploration plc www.rockhopperexploration.co.uk
Sam Moody - Managing Director 01722 414 419
Aquila Financial Ltd www.aquila-financial.com
Peter Reilly 020 7202 2601
Relevant Share Prices for Friday, 09 February 2007:
Tullow Oil Up 5.00 to stand at 411.00, Desire Petroleum up 0.50 to stand at 32.25, FOGL Unchanged at 92.00, Rockhopper Exploration unchanged at 45.00, Borders & Southern down -0.50 to settle at 34.50
Relevant Share Prices for Thursday, 08 February 2007:
Tullow Oil down -5.25 to stand at 406.00, Desire Petroleum down -0.25 at 31.75, FOGL down -2.00 to stand at 92.00, Rockhopper Exploration up +1.00 to stand at 45.00, Borders & Southern unchanged at 35.00
Relevant Share Prices for Wednesday, 07 February 2007:
Tullow Oil down -4.50 to stand at 411.25, Desire Petroleum down -0.25 at 32.00, FOGL down -1.00 to stand at 94.00, Rockhopper Exploration unchanged to stand at 44.00, Borders & Southern up +0.50 at 34.50
Relevant Share Prices for Tuesday, 06 February 2007:
Tullow Oil up +7.50 to stand at 415.75, Desire Petroleum up +0.50 at 32.25, FOGL Unchanged to stand at 95.00, Rockhopper Exploration unchanged to stand at 44.00, Borders & Southern unchanged at 34.50
Relevant Share Prices for Monday, 05 February 2007:
Tullow Oil up 3.25 to stand at 408.25, Desire Petroleum down -1.00 at 31.75, FOGL Unchanged to stand at 95.00, Rockhopper Exploration up +1.75 to stand at 44.00, Borders & Southern up +1.50 to 35.50