Circle Oil makes gas discovery in Morocco

Circle Oil announced that the ADD-1 exploration well has been drilled, logged and successfully tested in the Sebou Permit, Rharb Basin, Morocco.

The Company confirms a gas discovery in both the Main Hoot target and the secondary Guebbas target. The well first tested gas at a sustained rate of 3.57 mmscf/d on a 24/64" choke from the Main Hoot. The perforated Main Hoot zone of 4.4 meters at 969.6-974 meters MD has a calculated net gas pay of 4 meters. The Guebbas zone was then perforated and flowed gas at a sustained rate of 1.89 mmscf/d on a 16/64" choke. The perforated Guebbas zone of 2.1 meters at 889.4-891.5 meters MD has a calculated net gas pay of 1.5 meters.

The well is being completed as a potential producer.

A full technical evaluation of all the results of the well is underway. This will allow for forward planning as a precursor to further assessment of the resource, including conducting an extended well test to give a more complete estimation of the reserves.

The drilling rig is now moving to commence testing DRJ-6, being the untested well from the previous drilling campaign, with a calculated 4 meters of net gas pay in the Guebbas.

Following this, the exploration well KSR-11, the fifth and final well in the current campaign will be drilled.

The re-entering or re-drilling of the KAB-1 well (the first well of the current campaign, drilled in September 2010, and which encountered drilling problems), will be postponed to a later date pending third party evaluation and recommendation of a suitable drilling fluid to enable the well to be successfully drilled, logged and completed. This is required to counter a problem with swelling clay experienced on first drilling.

The Sebou permit lies to the north-east of Rabat in the Rharb Basin in Morocco. The Rharb Basin is a foredeep basin located in the external zone of the Rif Folded belt. The concession agreement, in which Circle has a 75% share and ONHYM, the Moroccan State oil company, has a 25% share, includes the right of conversion to a production license of 25 years, plus extensions in the event of commercial discoveries.

Prof. Chris Green, CEO, said, "I am obviously pleased to be able to report that we are continuing with our drilling success in Morocco's Rharb Basin. Three out of four wells in this campaign have been successful and the other remains as a target for future study. The ADD-1 well has been completed and, when required, will be available for future production."

Pride International adds new deepwater drillship to fleet

Pride International, Inc, announced that the company has dedicated and accepted delivery of the Deep Ocean Mendocino, the third new deepwater drillship to be added to the Pride International fleet, during a ceremony at the Samsung Heavy Industries Ltd. (SHI) shipyard in South Korea. The Mendocino is expected to mobilize to the U.S. Gulf of Mexico and commence a five-year contract with a subsidiary of Petroleo Brasileiro (Petrobras) during the second quarter of 2011, following the completion of integrated testing and acceptance by the client.

Louis A. Raspino, President and Chief Executive Officer of Pride International, Inc., commented, "The addition of the Deep Ocean Mendocino is the latest example of our successful deepwater expansion program with SHI and increases our deepwater fleet to 11 units. Also, the Mendocino provides for an expansion of our long-standing relationship with Petrobras, representing our initial opportunity to operate for them outside of Brazil."

The Mendocino is one of five new drillships in Pride's deepwater drillship expansion program with SHI. The first two drillships, the Deep Ocean Ascension and the Deep Ocean Clarion, were delivered by SHI in 2010. Both rigs are preparing to commence five-year contracts with BP, with the Ascension expected to mobilize to the Mediterranean Sea, while the Clarion, currently in the U.S. Gulf of Mexico, is preparing for final testing and commissioning. The fourth drillship, the Deep Ocean Molokai, is scheduled to complete construction in December 2011. In December 2010, Pride announced that it had reached an agreement with SHI for the construction of a fifth deepwater drillship with an expected delivery in mid-2013. The agreement includes an option for a sixth unit which could be exercised during the first quarter of 2011.

Each of the company's new deepwater drillships are equipped with the industry's latest technology for constructing deepwater wells with increased safety and efficiency. In addition to being designed with numerous parallel features intended to reduce the amount of time to construct a well in up to 12,000 feet of water, the Mendocino is equipped with dynamic positioning in compliance with DPS-3 certification, a 6,000-barrel active fluid storage and handling system, significant storage and deck space and accommodations for up to 200 personnel.

Venezuela surpasses Saudi Arabia with world’s largest oil reserves

Oil Minister Rafael Ramirez announced that Venezuela now has the world’s largest proven crude oil reserves, surpassing Saudi Arabia.

"At the end of 2010 we had a level of 217 billion barrels of oil, and right now at the start of this year we can certify 297 billion barrels," the minister said at a press conference.

OPEC member Venezuela produces over 2.22 million barrels of oil a day and has had a series of heavy oil discoveries in the Orinoco Belt.

In addition to crude oil reserves, Venezuela also holds some of the largest gas reserves. In 2009, Repsol YPF SA made a giant gas discovery in shallow waters of the Gulf of Venezuela. The Perla field is on the Cardon IV block in the Gulf of Venezuela and has potential reserves of more than 6 Tcf. Perla is the largest gas discovery in Venezuela and may be one of the world's largest natural gas discoveries

ONGC begins drilling third well offshore India as negotiations continue with Rocksource

Block operator, the Oil and Natural Gas Company of India Ltd (ONGC), has informed Rocksource ASA (Rocksource) that drilling of a third well on the block CY-DWN-2001/1 will commence within the next week. As with the first two wells, this third well will not test the prospect associated with the primary positive electromagnetic (CSEM) anomaly, as interpreted by Rocksource. Block CY-DWN-2001/1 is located offshore southeast India in the Cauvery Basin.

In its last update on its India operations (stock exchange announcement from 19th April 2010), Rocksource announced that ONGC and Rocksource were in negotiations related to the Farm-out Agreement (FOA) between the two companies and that, amongst other issues, these negotiations include the extent of Rocksource’s liability for costs relating to the first two exploration wells on the Block. These negotiations continue, and both Rocksource and ONGC wish to find a mutually agreeable way forward in order to utilize Rocksource’s integrated EM/Seismic technology in ONGC’s operations on the Indian Continental Shelf.

The process for assignment of a 10% Participating Interest under the FOA is not completed and Rocksource has not signed the Production Sharing Contract (PSC). It is Rocksource’s considered position that, unless there is a successful outcome from the ongoing negotiations, Rocksource will not be liable for any costs on the block.

Rocksource will continue to update the market as negotiations progress.

Norwest signs drilling contract for Red Hill South

Norwest Energy NL through its wholly owned subsidiary Westranch Holdings Pty Limited have executed a contract with Hunt Energy & Mineral Co Australia Pty Ltd (Hunt) to drill the Red Hill South 01 Well with Rig 2. In addition advice was also received today that the Western Australian Department of Mines and Energy had approved and registered the transfer of equity in each of TP15 (50% ) and EP413 ( 27.803%) to Bharat PetroResources Limited.

Peter Munachen, Norwest’s CEO commented “This is very significant for Norwest and sets the stage for drilling to commence on the target date of 14 February 2011 and as well with the registration of the BPRL interest was the final condition to be met for BPRL to contribute $3m towards the Red Hill South estimated drilling cost of $5 million.”

The Red Hill South prospect is estimated to have potential recoverable oil of 9MMbbl. The target reservoir is at a depth of 1,580 metres (TD is at 1,910 metres) and is approximately 100 metres offshore. The well will be drilled from an onshore location about 200 metres inland and approximately 3km south of Port Dennison. It is anticipated that target reservoir depth will be reached towards the end of February 2011.

In September Norwest entered into an Agreement to farm-out a 50% interest in TP15 to BharatPetro Resources Limited (BPRL). Under the agreement BPRL will contribute $3m to the dry hole cost of the Red Hill South well and Norwest $2m. The parties will contribute equally to the cost of testing the well. BPRL is also required to re-imburse $500,000 to Norwest for past costs.

BP awarded four Australian deepwater exploration blocks

BP announced that it has been awarded four deepwater offshore blocks in the Ceduna Sub Basin within the Great Australian Bight, off the coast of South Australia.

BP said that it will explore Exploration Permit for Petroleum (EPP) areas EPP 37, EPP 38, EPP 39 and EPP 40 covering an area of 24,000 km2 for oil and gas reserves, with the right to develop any commercially viable discoveries.

"This is a material and early move into an unexplored deepwater basin," said Mike Daly, Executive Vice President of Exploration for BP.

"The Ceduna Sub Basin is a very exciting new exploration area for BP. Our experience tells us that the geology has a high potential for containing hydrocarbons," added Dr Phil Home, Managing Director of BP's Australian upstream oil and gas business.

BP said that the proposed exploration activity would be phased over 6 years and, as part of the regulatory approval process, would be subject to detailed environmental assessment.

Total, YPF partner in Argentina licenses to explore shale gas potential

Total announced that it has acquired interests in four exploration licenses in Argentina in partnership with YPF in order to appraise their shale gas potential. Located in the Neuquén Basin, the licenses were awarded by the provincial authorities for a six-year period. The four new blocks are the latest addition to the Group’s portfolio of assets in Argentina, which includes significant holdings in shale gas play.

More specifically, Total has acquired:
- A 42.5% interest in both the Aguada de Castro and Pampa las Yeguas II licenses, which Total will operate.
- A 40% interest in the Cerro Las Minas license and a 45% interest in the Cerro Partido license which will be operated by YPF.

Commenting on the transactions, Yves-Louis Darricarrère, President of Total Exploration & Production, said: “These new interests in acreage that is potentially rich in shale gas further strengthen Total’s presence in unconventional gas, a domain in which Total has the ambition to grow significantly.”

The latest transactions follow on from the acquisition of 85% stakes in the La Escalonada and Rincón La Ceniza blocks in the same shale gas play in early 2010. As operator, Total is currently conducting geological, seismic and petrophysical studies in these blocks.

In 2010, the Group carried out similar studies on two other long-held blocks that it operates: Aguada Pichana (27.3%) and San Roque (24.7%). Total is planning to drill exploration wells in 2011 to evaluate the play’s potential. The entire shale gas zone held by Total represents a combined area of 1,548 square kilometres (approximately 380,000 acres) in Total’s net share.

Present in Argentina since 1978, Total, through its subsidiary Total Austral, operates 28% of the country’s gas production. The Group’s equity share of production averaged 82,700 barrels of oil equivalent per day in 2010.

Its main assets in the Neuquén Basin are Aguada Pichana and San Roque, which account for around 56% of the Group’s operated production in Argentina. Its other main production hub is Tierra del Fuego, where

Total operates the onshore Ara and Cañadon Alfa fields and the offshore Hidra, Kaus, Argo, Carina and Aries fields, which together account for 44% of Total’s operated production.