Falklands : Hydrocarbons Daily Record Thursday, 14 August 2008
Submitted by Falkland Islands News Network (Juanita Brock) 15.08.2008 (Article Archived on 29.08.2008)
Concerns about demand and the strength of the US dollar caused crude prices to decline today. Some analysts are saying that crude price declines will cease but it is the opinion of HDR that demand will not recover if prices rise too soon.
HYDROCARBONS DAILY RECORD THURSDAY, 14 AUGUST 2008
By J. Brock (FINN)
At 1930hrs LMT on Thursday, 14 August 2008 Light Sweet Crude was trading at $115.01 down 99 Cents on the New York Mercantile Exchange. Brent Crude was trading at $112.64 down 83 Cents on London’s ICE Futures Market.
ANALYSIS:
Concerns about demand and the strength of the US dollar caused crude prices to decline today. Some analysts are saying that crude price declines will cease but it is the opinion of HDR that demand will not recover if prices rise too soon.
With nations saying they are entering into recession and the jobless rate increasing, news of rising crude prices is not welcome. Price crude too high for people to buy the end products then they will stay in storage until prices are cut to a level where they can afford to buy them.
There is no need to hit the panic button over declining crude prices. Economies will benefit from lower prices and demand will increase. The costs of travel and food production will also decline and people will actually be able to afford winter heating fuel as well as food.
Analysts that say we are running out of crude resources also can cause panic if their research is not properly carried out. There are vast areas that could be developed but the availability of supplies we already have means the newer provinces are down on the priority list for further exploration and exploitation.
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Note: This item requires subscription
http://www.upi.com/Energy_Resources/2008/08/14/Low_oil_prices_temporary_officials_say/UPI-79151218741012/
SHARE PRICES ON THE ALTERNATIVE INVESTMENT MARKET: Thursday, 14 August 2008.
TLW: 708.00 up 12.00, DES: 83.50 up 8.50, FOGL: 116.50 up 6.50 RKH: 66.75 up 7.25, BOR: 58.75 unchanged PRE: 12.00 unchanged GBP: 7.13 unchanged, GPK: 419.00 unchanged, BLT 1582.00 up 70.00, RDSA: 1838.00 up 30.00, RDSB: 1803.00 up 38.00
New York Stock Exchange:
XOM: 77.45 down 0.72 (Trading in USD)
THE MARKETS (14/08/08)
FTSE100: 5,497.40 up 48.77 FTSE250: 9,134.40 up 24.94 SmallCap: 2,817.40 up 3.65
DJI: 11,615.93 up 82.97 NASDAQ: 2,453.67 up 25.05 S&P500: 1,292.93 up 7.10
US DEPARTMENT OF ENERGY ADMINISTRATION INVENTORY REPORT FOR WEEK ENDING 08/08/08
http://tonto.eia.doe.gov/oog/info/twip/twip.asp
INTERNATIONAL DEVELOPMENTS:
(North Sea Oil)
-- Atlantic Petroleum P/F, the only oil company on the Faeroe Islands, rose the most in almost five months in Copenhagen trading after it found oil in a U.K. North Sea exploration well.
http://www.bloomberg.com/apps/news?pid=20601085&sid=aNT5udecQ3FM&refer=europe
The North Sea energy industry was under fire last night for failing to cut the number of oil and gas leaks – despite the potential to spark another Piper Alpha-style disaster.
http://www.pressandjournal.co.uk/Article.aspx/787268?UserKey=0
BG (BG.L: Quote, Profile, Research) has made an oil discovery in the North Sea off Norway, Norwegian energy officials and a partner company said on Monday.
http://uk.reuters.com/article/businessNews/idUKOSL00143920080811
REGIONAL DEVELOPMENTS:
(Brazil)
Brazil's federal energy company Petrobras does not plan to conduct further well drillings in the Santos basin's Tupi area this year, BNamericas reports.
http://www.energycurrent.com/index.php?id=2&storyid=12458
The Tupi field discovered by Petrobras in November has an estimated recoverable reserve of between 5 billion and 8 billion barrels
http://www.reuters.com/article/GCA-Oil/idUSN1447268320080814
(Ecuador)
Bolivia and Ecuador risk facing stagnant oil and gas production by relying on Venezuelan President Hugo Chavez to provide billions of dollars in investments that are unlikely to ever materialize.
http://www.guardian.co.uk/business/feedarticle/7724808
(Venezuela)
Petroleos de Venezuela, S.A. ("PDVSA") today announced that it commenced a cash tender offer for any and all of the outstanding 7.63% bonds due 2009 (CUSIP Nos. 71676QAA4/DD0109197; ISIN No. USG70415AA51) (the "2009 Bonds"), 8.22% bonds due 2017 (CUSIP Nos. 71676QAC0/DD0110062; ISIN No. USG70415AB35) (the "2017 Bonds") and 8.37% bonds due 2022 (CUSIP Nos. 71676QAE6/DD0110070; ISIN No. USG70415AC18) (the "2022 Bonds" and, together with the 2017 Bonds and the 2009 Bonds, collectively, the "Bonds") issued by Petrozuata Finance Inc. in connection with the Petrozuata extra-heavy crude oil project in the Orinoco Belt region.
http://www.marketwatch.com/news/story/pdvsa-announces-tender-offer-consent/story.aspx?guid=%7BF18A5B18-DA19-4651-B725-543409DFE37F%7D&dist=hppr
LOCAL DEVELOPMENTS:
(Desire Petroleum)
Shares in Desire Petroleum advanced after the Falkland Islands government gave it the green light to widen its drilling activities around the territory.
http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=2277867
London-listed oil prospector Desire Petroleum (DES) has today announced details of what it sees as an "exciting new gas play" in the Falkland Islands.
http://www.iii.co.uk/articles/articledisplay.jsp?section=Markets&article_id=9941206
UK small caps open firmer; Protherics surge on bid approaches
UK small caps were firmer in early trade, supported by a rally in the
http://www.hemscott.com/news/static/tfn/item.do?newsId=66179004652472
DESIRE ANNOUNCES FARM-IN AGREEMENT AND NEW ACREAGE
By J. Brock (FINN)
Desire Petroleum Plc has finally named the farm-in partner it alluded to in its 25 February 2008 announcement. That announcement indicated that Desire had accepted the terms of a conditional farm-in offer which needed the approval of the Falkland Islands Government prior to any announcement regarding the name of the Company. That farm-in partner is Arcadia Petroleum Limited (Arcadia).
Arcadia is a U.K., private, integrated, upstream and downstream, international, energy business which is a member of a significant group of related companies involved in the oil industry. Arcadia is in the process of building a world-wide portfolio of high-quality, de-risked, exploration and production assets in frontier and semi-frontier areas.
Further to this the Falkland Islands Government has granted Desire and Arcadia new acreage adjacent to Desire's existing acreage in Tranche I, in the North Falkland Basin.
According to a press release posted on the London Stock Exchange website, the terms of the farm-out arrangements are as follows:
Tranche C
Arcadia will drill and test the Ann prospect paying 85% of the costs to earn a 35% interest in a sub-area of Tranche C covering the Ann and Orca South prospects.
Rockhopper Exploration plc, as part of a larger transaction, is responsible for paying the remaining 15% of the Ann well costs to earn a 7.5% interest in Tranches C and D. Accordingly, the net result to Desire will be a 57.5% interest in the Ann prospect for which the Desire mid-estimate of potential recoverable reserves is 202 million barrels of oil. Following AVO studies in 2007 Desire now estimates the chance of success on this prospect at 50%, which is the chance of the prospect containing hydrocarbons.
Tranche I
Arcadia will drill and test a major new prospect named Alpha, paying 100% of the costs to earn 50% in Block 25/10 and part of Block 25/15. This prospect also extends into the newly awarded Blocks 25/8, 25/9 and 25/14b where Arcadia has an 80% interest and Desire 20%. Based on the current mapping, Desire estimates that it has an approximately 30% interest in the total Alpha prospect.
Alpha is a large, well-defined, structural closure, covering an area of over 300 square kilometres. It is associated with a very strong AVO anomaly which in addition to significantly de-risking the prospect, suggests that the reservoir is gas charged.
Desire's mid-estimate for the potential recoverable reserves for Alpha is 7.8 trillion cubic feet (Tcf) with 15 Tcf in the upside case. These volumes are considered more than adequate for a commercial gas development in the event of a discovery. This prospect represents an exciting new major exploration play in the North Falkland Basin.
Arcadia will also pay the mobilisation and demobilisation costs associated with the two wells.
In addition to the two wells to be drilled by Arcadia, Desire has undertaken to drill two wells for its own account including the mobilisation and demobilisation costs associated with these two wells. Desire will remain as operator on all the acreage Arcadia has joined them in.
Mr Stephen Phipps, Chairman of Desire, "The Board of Desire very much welcomes the opportunity to work with Arcadia, whose exploration philosophy fits extremely well with our own. We look forward to a long and successful partnership with Arcadia.
The majority of the prospects in the Desire inventory are still held 100% by Desire and with the funds currently available and at current rig rates we are able to drill two of these for our own account.
With our new partner on board we are now in a far stronger position to pursue actively all available rig opportunities for drilling our prospects.
We are excited about the new exploration gas play and the large potential of the Alpha prospect."
http://www.londonstockexchange.com/LSECWS/IFSPages/MarketNewsPopup.aspx?id=1929372&source=RNS
LOCAL LINKS:
http://www.fogl.com
http://www.desireplc.co.uk
http://www.bordersandsouthern.com
http://www.rockhopperexploration.co.uk.
IMPORTANT LINK:
http://www.onegeology.org/
DISCLAIMER: The sources for related articles come from a variety of websites so that readers can get as wide a selection of views as possible. HDR does not necessarily align itself with any of the views expressed.
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