Canadian Oil

[sumisu]

Who’s Got Liquids? plus Further to the Bakken

by Ron Patterson Posted on August 29, 2014

http://peakoilbarrel.com/whos-got-liquids-plus-bakken/

[NYBob]

Oil companies like Shell think they can buy anything, including
influence with politicians, the right to pollute and destroy
our water and air, and to threaten people’s traditional way
of life.



http://www.greenpeace.org/international/en/getinvolved/no-to-arctic-drilling/?ref=thingstodo

The next power grab is about to happen at the Arctic Council (an international body representing all Arctic nations), where oil companies hope to sway these Northern countries towards dangerous Arctic oil drilling.

Shell is adamant on going back to the Arctic to drill for oil, despite their disastrous attempts in 2012. These companies are risking oil spills in fragile Northern waters. Think of Deepwater Horizon, but add remote, dangerous, stormy seas to the mix - the consequences are too horrible to imagine.

The Arctic Council’s new Chair, Canada, has a choice - they can either uphold the Arctic Council’s environmental agenda and protect the region from oil spills, overfishing and further climate change devastation, or they can allow oil companies to drill and spill in these remote, fragile waters that people and polar bears call home.

Tell Canada to stand up for people and the planet.

Together we are going to hold Canada accountable, make sure that it steps up to do the right thing and protect the Arctic from oil companies like Shell.

It’s up to you to add your voice and let Canada know that people all over the world are watching. Tell Canada, instead of choosing dirty oil polluters, choose people, animals and the environment.

Make your voice heard, and sign the petition - you’ll be among the thousands of people around the world calling on Canada to do the right thing.

http://www.greenpeace.org/international/en/getinvolved/no-to-arctic-drilling/?ref=thingstodo

people have emailed Harper. Our target is 200,000!
Send the letter!

When sending this petition you are also joining our campaign to protect the Arctic from offshore drilling and industrial fishing. Click here for more info.

http://www.greenpeace.org/international/en/getinvolved/no-to-arctic-drilling/?ref=thingstodo
God Bless

[sumisu]

NOVUS ENERGY INC. ANNOUNCES YEAR END 2010 FINANCIAL AND OPERATIONAL RESULTS

Press Release Source: Novus Energy Inc. On Thursday April 14, 2011, 8:00 am EDT

http://finance.yahoo.com/news/NOVUS-ENERGY-INC-ANNOUNCES-cnw-2698266350.html?x=0&.v=1

[Dr. King Schultz]

All have a close look at Energulf, ENGFF.
http://www.energulf.com/

This TSX company has a stock board here, but nearly no posts.

They are about to drill a second hole offshore Namibia.
The first one in the smaller "Kunene" prospect showed an active hydrocarbon system.
Maybe now they drill the much larger prospect "Hartmann"?

Their second project is onshore the Democratic Republic of Congo, the "Lothsi" project.
Seismic completed, to be drilled in the near future.

[sumisu]

Chart for Cobra Venture Corp.

[sumisu]

Chart for Novus Energy

[sumisu]

Novus Energy to acquire Dodsland land

2010-05-06 14:38 ET - News Release

Mr. Hugh Ross reports

http://www.stockwatch.com/newsit/newsit_newsit.aspx?bid=Z-C:NVS-1717660&symbol=NVS&news_region=C

NOVUS ENERGY INC. ANNOUNCES STRATEGIC FARM-IN AGREEMENT IN ITS CORE AREA OF DODSLAND SASKATCHEWAN

Novus Energy Inc. has entered into a farm-in agreement with a private oil and gas company to earn certain key lands within its Dodsland, Sask., core operational area.

The agreement will provide Novus with rights to farm-in on an estimated 10,400 acres or approximately 16.25 sections of lands with petroleum and natural gas rights in the Viking formation. With this agreement, and pending the successful closing of the proposed acquisitions previously announced in Stockwatch on April 27, 2010, Novus will control nearly 70 net sections of land in the Dodsland area.

Under the terms of the farm-in agreement, which has an earning term of four years, Novus will pay 100 per cent of all of the farmor's drilling costs to earn all of the farmor's working interest, while the farmor will maintain an industry-standard royalty interest in any production.

Novus has agreed to drill 13 development wells prior to April 30, 2011. The agreement provides for a rolling option to earn the remainder of the farm-in lands.

In addition to the farm-in, Novus has recently purchased a key section of land in close proximity to the farm-in acreage for a cash purchase price of $300,000.

Novus expects to commence drilling on the farm-in lands in the next 60 days, which will allow the company to expedite the earning process.

Hugh Ross, president and chief executive officer of Novus, commented: "Dodsland has become the company's core asset, these new lands significantly enhance our presence in the Dodsland area and provide an excellent fit with the company's overall strategy of delivering sustainable growth focused on long-term oil reserves. Based on the size of the company's land position in the area, Novus anticipates unrestricted drilling opportunities for the next five years."

We seek Safe Harbor

[sumisu]

The Other Oil Play You Simply Can't Ignore

by Marin Katusa, Senior Energy Strategist of Casey Energy Report

January 27, 2010

http://www.financialsense.com/editorials/casey/2010/0127.html

[sumisu]

China's spending spree likely to include Canadian companies

By Duncan Mavin, Financial Post

March 5, 2009

http://www.canada.com/story_print.html?id=1352443&sponsor=


Labourers work at a pump jack in the PetroChina's Karamay oil field in northwestern China's Xinjiang Uigur Autonomous Region. Chinese resource spending spree is expected to accelerate throughout the next 12 months, with Canadian mining and energy companies likely on the shopping list.
Photograph by: Reuters, Reuters

HONG KONG — Asia’s dealmakers say a Chinese resource spending spree will accelerate throughout the next 12 months, with Canadian mining and energy companies likely on the shopping list.

Chinese buyers have already scooped up US$70-billion worth of global resource assets so far this year, as Beijing looks to secure its energy and resource future by spending some of its US$2-trillion in foreign exchange reserves.

The overseas buying trend will pick up steam in the months ahead, according to China and Hong Kong-based corporate dealmakers, investment bankers and private equity players surveyed by Royal Bank of Scotland and Mergermarket.

The report comes as expectations soar Beijing will deliver another stimulus package on Wednesday to add to the 4-trilion yuan (US$586-billion) in spending announced late last year. Further stimulus measures will be announced at the National People’s Congress — the climax of the country’s political calendar that features 3,000 delegates from across the country — according to government officials quoted in Chinese state media. Reuters reported, citing an unidentified official at the country’s top economic planning agency, that China will spend more on infrastructure and to boost manufacturing in addition to the stimulus package announced in November.

Details of Beijing’s previously announced spending plans are still sketchy although much of it is directed toward resource-intensive infrastructure projects in the transport and energy sectors.

With the backing of Beijing, cash-rich Chinese investors have spent the past several weeks working on a spate of overseas resource deals. Buoyed by a relatively strong yuan exchange rate, Chinese buyers have taken advantage of depressed commodity prices to pursue overseas assets with vigour. The deals announced so far include a US$19.5-billion bid by state-owned metals company Aluminium Corp of China for a 18% stake in Australia’s Rio Tinto Group, a U$25-billion loan to Russian oil company Rosneft, and a US$10-billion loan to Petrobras of Brazil. Chinese investors have also agreed to plough billions more into Australian and Mongolian iron ore mining companies, gas and pipeline deals in Turkmenistan, and Kazhakstan’s copper and lead mining industry. Late last month China National Petroleum Corp launched a friendly $443-million offer for Calgary-based Verenex Energy Inc. to give the state-owned oil company a stake in a promising Libyan oil concession.

The buying spree will pick up pace this year and reach into more countries, including Canada, said Richard Griffiths, a managing director with Royal Bank of Scotland’s M&A team in Hong Kong.“There is a longer term highly positive trend supporting outbound China M&A in that China has the cash, needs to gain more reliable access to resources and diversify its economy,” Mr. Griffiths said.

So far, a large portion of China’s spending has been direct toward Australia, whose government has shown “an open attitude” to Chinese investment, said the RBS banker. But, as the number of available Australian targets shrinks, “low valuations elsewhere will likely move the focus to North America, particularly resource-rich Canada,” he added.

Almost 40% of the dealmakers surveyed by RBS said the Chinese will target North American assets this year. Deals valued at under US$500-million will likely make up the bulk of China’s overseas investments, the survey respondents said.

Canadian resource companies that have taken on very high debt at the peak of the market and which now are struggling are candidates to receive funds from China, said Ken Courtis, an Asia-based investment banker and analyst. “The recent spate of resource deals is a way for China to diversify very quietly some of its foreign exchange reserves,” he added.

[sumisu]

Alan Knowles, Haywood Securities: Finding that Elusive Bottom

Source: The Energy Report

12/29/2008

[My Note: Specific companies mentioned in last part of this post]

#msg-34545699

[sumisu]

The Top 10 Peak-Oil-Related Stories of 2008

Tom Whipple, Editor
Steve Andrews, Publisher

January 5, 2009

ASPO - USA

1. The Global Recession

The impact that declining world oil production will have during the coming year, and possibly longer, is now inextricably intertwined with the course of the economic recession that is sweeping the world. During 2008 the world’s stock markets lost some $30 trillion in investor equity. Nearly every major government was forced to begin massive bailouts of financial institutions and many have started to support failing businesses. The end is not in sight.

While many peak oil observers long anticipated that faltering world oil production would lead to much higher oil prices and eventually to an associated economic meltdown, the setbacks of the last year have complicated the situation. While it is clear that worldwide demand for oil has stopped growing and has started to decline in the last six months, it is not yet clear just how fast demand is falling. The sudden drop in oil prices has further complicated the situation by setting off a race between falling prices and slowing economic activity.

Nearly all observers are forecasting that the economic situation will get worse for at least the next six months as foreclosures increase, real estate values continue falling, retail downsizes, and unemployment grows. From there on opinions vary. Some believe that the trillions in financial and business bailouts and massive government stimulus spending will stabilize the US and world economy, eventually leading to economic growth. Others believe that spending so much borrowed money will only exacerbate the current situation and that far worse times are ahead.

Some peak oil pragmatists look at the US airlines and auto industries as the canaries in the recession’s coal mine. Hit last spring with oil prices too high to work with their business model, plus a recession, the airlines blinked. Virtually all announced major schedule cutbacks. The recession has pushed the Detroit Big Three to near bankruptcy. This year will likely determine their future.

2. Price Volatility: Who Knew?

In a case of extreme dissonance, oil and gas prices first rocketed and then crashed in unprecedented fashion during 2008, setting records and trashing forecasts in all camps. Oil: from $90 to $147 to $34? Natural gas prices doubled, then dove. Some coal tripled, then retreated too.

Why the enormous swings? With hindsight, the drivers to the upside seemed to be a mix of the fundamentals and speculation. First and foremost, it was obvious but too often overlooked that flat oil supply and increasing demand is a recipe for a price surge. Then too, stockpiles were well below norms during the spring price run-up. A growing mismatch between marginal supply (e.g., Iran’s heavy oil) and available refining capacity to process that oil didn’t help. Shrinking exports from Russia, Mexico and 13 other leading exporters—down 2.5% from 2006—sent a price signal.

On the investment front, the sinking dollar and hammered equities drove investors towards the full suite of commodities, not just oil. Goldman Sach’s report in early May forecast $150-$200 oil within 6-24 months—one of several analyses that probably stimulated some late-cycle gambling. And any geopolitical moves in the oil patch—violence in Nigeria, nuclear chatter from Iran, explosions on the BTC pipeline in Turkey, etc.—were bullish factors pushing up prices and driving fisherman, farmers and truckers to strike and protest the financial pain.

And then came the crash, a 75% price drop over just 5 months that stunned producers. While the crash handed staggering American consumers what is now a billion-dollar-a-day unscheduled bailout, remember that the oil price run-up—a primary trigger in most of the major recessions since 1973—was a leading-edge factor in our deepening recession.

An almost tragic byproduct of 2008’s violent oil price swings is that it sends confusing signals about our long-term oil supply constraints to decision makers at all levels. For example, low gasoline prices are helping lure some car-buyers back to near-dead SUV showroom floors…

3. Falling Investment = Building the Big Boomerang

During the first half of 2008, spiraling costs in the oil sector led to the periodic announcement, especially from oil exporting countries, that a few production or refinery projects were being delayed, decisions put on hold. It didn’t help that the industry—from fully-booked drilling rigs and tankerage to an over-booked and aging engineering corps—appeared stretched thin. The International Energy Agency sounded warnings of under-investment by the oil industry.

Then came the crash. During the fourth quarter, when demand declined and oil prices dropped to four-year lows that few industry players had anticipated, a daily drumbeat of project delay and cancellation notices flowed from the industry. Among the earliest casualties were the Alberta tar sands processing projects which require massive amounts of capital for every barrel of production capacity; one company even announced a 50-percent cutback at their existing tar sands operations because $40 oil does not cover current costs to excavate and separate bitumen from sand. Additionally, some proposed deepwater projects don’t work with oil prices under $60 a barrel.

Tighter credit is also taking its toll. While major international oil companies may have financing in place or can self-finance projects, smaller companies delayed or cancelled plans due to lack of liquidity. That same liquidity issue also battered prospects for front-loaded renewable energy financing as well as funding for extremely expensive “clean-coal” and coal-to-liquids projects. While national oil companies made massive profits through September, the October-December price drop hammered those producing countries where the bulk of their oil revenues are diverted to run government programs; they will soon be in no position to invest in new production developments.

While worldwide demand for oil is falling, it isn’t dropping as fast as investment in new production. Bottom line: the slowdown in new oil production projects will obviously have a major effect on future oil production rates. It may be several years before cancelled or delayed projects fully impact the world’s capacity to replace declining production, let alone grow that production again. If the economy should stabilize during the next year or two, and demand for oil snaps back, expect prices to boomerang back above $150. Investment uncertainty guarantees higher price volatility just a few years out.

4. The IEA Changes its Stance (will U.S. EIA, CERA and Exxon-Mobil follow?)

During July 2007, the International Energy Agency announced its intention to conduct a bottom-up study of worldwide oil field production in order to better inform their OECD member about prospects for future supply growth. They more than hinted at accelerating supply and price troubles to come. That warning was echoed again in July 2008 when the IEA cut its supply forecast for the next five years. Realism seemed to be settling in at the Paris-based energy office.

On November 12th, the IEA released its World Energy Outlook 2008, a forecast that broke with their past tradition of projecting demand and then assuming supply would rise up to meet it. The report was a curious mix of unreality (liquid fuel supplies can grow steadily between now and 2030) and unprecedented warning of an energy crisis to come. Breakthrough findings included:
•
“Current global trends in energy supply and consumption are patently unsustainable.”
•
Half the world’s oil comes from the 110 largest fields; many of those are post-peak and aging.
•
The natural decline rates [all drilling stops] for fields past their peak is 9% and rising.
•
Observed decline rates [drilling/maintenance continues] for fields past their peak production rate is 6.7% today, rising to 8.6% by 2030.

Much of the media coverage of the WEO 2008 focused on the stated need to discover and/or develop 64 million barrels a day—“6 new Saudi Arabias”—of new production by 2030. Digging deeper into the IEA’s detailed assumptions uncovered some trends which IEA forecasts that raise major questions:
•
Will the US will only lose 400,000 bpd in production over the next 22 years, compared to 800,000 bpd over the last seven years?
•
Will Mexico only lose 500,000 bpd from its 3.5 million bpd in 2007, despite production at their mainstay producing field (Cantarell) being in a tailspin?
•
By 2030, will China only lose 200,000 bpd, despite China’s admission that their production should peak by 2012; etc.?
Yet despite these and other weaknesses, the report’s “unsustainable” position statement was one of many that broke new ground.

Finally, in an important post-script to their WEO 2008, Dr. Fatih Birol, the IEA’s chief economist, was interviewed by the Guardian newspaper during mid-December. When asked what the phrase oil production “leveling off towards the end of the projection period” meant, Birol gave the interviewer the date 2020. Yes, peak oil by 2020… While that’s still way too optimistic a view for many realists and pragmatists, that statement represents a major turnaround for an agency that has previously supported the “no peak in sight” mantra.

5. The Campaign and the Elections

Until the price crash which started in July, it looked as if this year’s US federal elections were going to be about gasoline prices and little else. As prices rose to the $4 - $5 level, politicians running for office became so nervous that proposals to counter high gasoline prices were flying all over the landscape. Some wanted to cut gas taxes; many wanted to scrap environmental restrictions on drilling; and some wanted to ban speculation. That most of these suggestions were of dubious value or would take many years to implement was of little import. It was the appearance of concern that counted.

As gasoline prices fell during the summer and fall, however, and the need for immediate action diminished, the wilder proposals disappeared, but a fundamental disagreement of whether more domestic and offshore drilling would solve the problem continued to November. Yet the hard facts—that offshore drilling won’t contribute substantively to supply for a decade, that peak flow from the “new offshore” would perhaps equal 1+ percent of current consumption, etc.—were generally missing from the dialogue.

The election of Barak Obama to the presidency clearly will bring about a major change in the US government’s approach to global warming and energy policies. As yet, there has been little discussion of oil depletion by the new administration outside of ritualistic and poorly-informed pronouncements about energy independence. So far statements and appointments made by President-elect Obama show that he will clearly place a major emphasis on reducing fossil fuel emissions, promoting renewable sources and efficient use of energy, goals which are compatible with preparations for peak oil.

6. OPEC Cuts Production

Last spring, OPEC, and most particularly the Saudis, came under heavy pressure to increase production as oil prices were increasing so rapidly it seemed as if industrial civilization was about to be pushed over the edge. President Bush visited the Saudis and Riyadh even put on a special producer/consumer gathering in June to announce that the Kingdom was increasing production from newly completed wells to help with the crisis.
Within weeks, however, the landscape shifted and oil prices began the unprecedented plunge that brought the average prices that OPEC received for its oil from an all time high of $147 a barrel in early July to $35 last week. As prices fell through $100 in mid-September and then $60 in mid-October, OPEC became increasingly nervous. Not only was oil falling below the cost of exploring and drilling, for new production, the producers’ national budgets which are heavily dependent on oil revenue were being devastated.

In a series of meetings beginning in September, OPEC announced production cuts that now total on the order of 4 million b/d. As ignoring such cuts is a long tradition within OPEC, the oil markets were rightly skeptical that the cuts would actually be made. Much to OPEC’s chagrin, oil prices continued to fall as each production cut was hinted at or announced. In the last week, however, as more details of the cuts have been announced and OPEC’s customers have started reporting that they expect to receive less oil in coming weeks, the market’s skepticism has been slackening.

7. The Large Exporters: from Boom to Busted

As oil prices rose steeply in recent years, OPEC and the other major oil exporters benefited greatly. In 2001 the average value of OPEC oil exports for the year was $23 a barrel and in 2008 it was on the order of $95. This four-fold increase in oil revenues had varying effects. Some countries such as Norway and the smaller Gulf States quietly stashed the money away in sovereign wealth funds for the benefit of their grandchildren. A few, such as Russia, Iran, and Venezuela, became belligerent, using the new-found wealth to promote their leaders’ ideological goals and great power aspirations. Resource nationalism abounded as governments felt they could now do without foreign investment and technical expertise.

In the last six months however, many of these aspirations have been brought up short by the collapse in oil prices. Hardest hit have been those exporters with large populations to support such as Iran (65 million), Venezuela (26 million), Russia (140 million), Mexico (110 million) and Nigeria (146 million). Adding insult to injury, production in all five of these countries is either declining or flat while domestic consumption increases; that means declining net exports—another hit to the bottom line for the exporters, plus a looming pothole for the world’s oil importers.

Although 2008 was a banner year for exporters, as prices were above $100 a barrel until September, after the price crash their cash flow is becoming a huge problem. Development projects are being cancelled, stock markets are crashing, budgets are being reworked and political unrest may be in the wind as countries like Iran consider eliminating large gasoline price subsidies. Even some of the more belligerent geopolitical posturing seems to be moderating as governments turn to more pressing domestic issues.

Unless prices rebound soon, major exporters with little other revenue will be hurting.

8. Shale Gas: Game Changer or Rope-a-Dope? [or “a mixed blessing”]

After essentially no net increase from 1994-2006, U.S. natural gas production rose 4% during 2007 and will have increased between 6% and 7% in 2008, despite shut-ins for Gustav and Ike. The biggest single reason for this is increased flows from shale gas. In a world without deep recessions, this success might have continued the current run for several more years. Indeed, shale gas will still play a key role in US natural gas production for decades, but that isn’t unqualified good news.

The industry knew about shale gas for many decades. In fact, the nation’s second-largest producing field today—Texas’ Barnett Shale—was discovered in 1981. But back then, the industry didn’t know how to exploit the resource on a large scale. Application of horizontal drilling in the Barnett Shale changed that. Compared to drilling vertical wells for conventional gas, this unconventional resource requires more drilling, more hydraulic fracturing work—more cost and more energy inputs. The breakeven costs (plus 10%) for most of the shale-gas plays falls between $5 and $6.50 per Mcf of natural gas. During the last five months of 2008, natural gas prices dropped 50% from their July peak; the combination of that price crash plus recession-induced destruction of demand for natural gas forced the gas industry to start idling rigs. Of the 1600 rigs drilling for gas as recently as September, as many as 400 will likely be stacked soon.

There’s a related nasty catch with shale gas: during the first year after a shale-gas well is drilled, upwards of 2/3 of the ultimately recoverable gas flows from the well; that’s a lot faster decline rate than conventional wells experience. So the more reliant we become on shale gas wells, the more susceptible we will become to wider swings in supply. Relying on shale gas is likely to cause much more volatility in prices.

9. Food vs. Fuel Hit Pocketbooks Worldwide

2008 started with a rash of reports by respected organizations about a worrisome if highly predictable phenomenon: increased use of biofuels was helping push up food prices worldwide. Two Purdue University agricultural economists published in late 2007 that two-thirds of food cost increases from 2005-2007 were related to biofuels. During the previous six years, land planted for biofuels increased from 12 to 80 million hectares as subsidies and national policies mandating their use were driving the rush to biofuels. The UN’s food price index, based on export prices for internationally traded foodstuffs, climbed 14 percent in 2006, 37 percent in 2007, and continued apace into 2008.

Rapidly rising food prices obviously result in hunger and political instability as more people become desperate in their search for affordable food. During 2008 food riots erupted in Mexico, Italy, Morocco, Pakistan, Yemen, Senegal, Mauritania and elsewhere. Press reports popped up about “how the rich are starving the world by making biofuels—dubbed by some as “a crime against humanity.”

In the US, the ethanol industry and its reported $25 billion in federal handouts started in 1978, picked up enormous momentum after the August 2005 Energy Security Policy Act, and accelerated even faster after Congress passed the Renewable Fuels Standard in December 2007. Now, thanks to one of the most divisive agricultural policies in the US, there are 178 ethanol distilleries in the US that will likely consume over 30% of the US corn crop and produce just under 600,000 b/d of corn ethanol. (Adjusted for energy equivalency, that offsets roughly 400,000 b/d of US oil consumption—around 2% of our daily oil diet—excluding the large net-energy problem that plagues corn ethanol.) Yet after 30 years of R&D, a $0.51/gal tax credit and tariffs on imported biofuels, the industry still can’t compete; large ethanol player VeraSun filed for bankruptcy in late October, and now the industry is asking Congress for bailout dollars.

The year ended with an op-ed from the Investor’s Business Daily in which they made this point: “The heavily subsidized ethanol industry is the latest to seek a federal bailout. If there is any industry that deserves to go bankrupt, it's this one. Time has come to stop putting food in our gas tanks.” In the interests of the food vs. fuel battle, we tend to agree.

10. Global Production Peaks, on the Production Plateau

The EIA reports that since 2005 production of conventional oil has been on a plateau, cycling up and down between 72 and 74 million b/d. In July 2008 production reached a new all-time high of 74.86 million b/d and has been dropping since. As OPEC is currently implementing production cuts totaling 4 million b/d, several major producers such as Mexico and Russia are in decline or do not have much growth potential; and investment in new production is drying up due to economic conditions, the likelihood that the July bump to a new high will stand as the all-time peak of world conventional oil production is increasing.
The IEA reports that “all-liquids” production which includes conventional oil, biofuels, natural gas liquids, and tar sands production, reached 86.5 million b/d in November, but this is subject to revision.

It is ironic that the all-time peak of world oil production seems to be happening in the midst of a global recession of unknown duration. While it is possible that the global economy could rebound in the next few years and markedly increase the demand for oil, it is clear that the industry is no longer able to respond with large increases in production as it did earlier this decade. All things considered, it is inevitable that declining world oil production, which is currently linked to declining demand and OPEC policy, will eventually be governed by production constraints. These constraints, due to a combination of geological factors, lack of adequate investment, geopolitical conflicts, and resource nationalism, make it likely that oil production will never again reach the highs seen in 2008.

[sumisu]

UPDATE 1-RESEARCH ALERT-CIBC cuts WTI crude oil price forecast

Wed Dec 10, 2008 1:00pm EST

http://www.reuters.com/article/marketsNews/idCABNG41664820081210?rpc=44

[sumisu]

'Lowest breakeven price of Oil is $30 a barrel'

2008-12-05 09:10:00



http://www.commodityonline.com/news/Lowest-breakeven-price-of-Oil-is-$30-a-barrel-13153-2-1.html

Based in Calgary as BMO Capital Markets’ oil and gas analyst for Canada, Mark Leggett shares his home province with what’s called Canada’s “trillion-barrel tar pit.” Alberta’s oil sand deposits reportedly contain about 1.7 trillion barrels of bitumen in-place, comparable in magnitude to the world's total proven reserves of conventional petroleum and second in volume only to Saudi Arabia. The catch? It costs up to $25 per barrel to extract oil from oil sands, compared to $2 to produce Saudi crude—numbers that don’t work well with oil at $50 a barrel. In this exclusive interview with The Energy Report, Mark talks about oil sands plays and how today’s oil prices affect them. He says that may not yet have bottomed out, but longer term he sees restored demand growth that will cause prices to climb again.

At that point, oil sands production may nudge peak oil’s day further into the future. Global oil consumption stands at about 87 million barrels per day, a figure that—despite recent demand destruction in North America and Europe—will climb as ascendant economies in India and China increase their appetites for oil. Peak oil theorists argue that production of conventional crude is already maxed out, meaning imminent shortages and sharper price spikes; more optimistic experts believe that peak oil’s day—when production of conventional crude reaches its pinnacle—won’t dawn for 20 to 30 years.

The Energy Report: Oil sands seem to be a big Canadian opportunity, particularly in Alberta.

Mark Leggett: It’s certainly topical in terms of what oil price those projects need to move them forward. In this economy, and with today’s oil prices, we’ve seen a lot of companies scale back their spending on it. This speaks to the supply response side of the equation. Right now, we’re seeing demand destruction that’s bringing down all the commodities (including oil).

The concern in the medium to long term is (when we do work our way through this trough) will there be sufficient supply to meet that, or will oil prices just run back up to where they were before? In other words, if demand picks up, what amount of supply will have come off the table because of uneconomic price deck?

TER: How far down do you think oil will go? Are we approaching a bottom here?

ML: It looks like it’s hopefully more than the 80/20 rule. I would say that we’re approaching the bottom, but I think we’re going to go into the 40s first. OPEC scheduled another meeting for the end of November in Cairo to reassess the current oil demand and supply fundamentals. The last cut didn’t really do much in terms of supporting oil prices, but the market probably expects a cut, and the speed at which they’re moving speaks to the amount of demand destruction they may be seeing.

TER: Is this demand destruction perceived or real?

ML: It is real. The U.S. gasoline demand is down year-over-year. Given pump prices over $4, I think we maybe have found that inflection point where the consumer just couldn’t stomach that price at the pump and so we’ve seen actual demand destruction there. European demand is down as well as Japanese; so really the OECD demand destruction seems to be getting confirmed by the various members. What the crude oil bulls were looking for was the non-OECD country demand growth to offset that demand destruction.

That’s becoming a concern now because China seems to be softening, and questions remain whether it will be hard landing for them. We have had a little bit of time since the Beijing Olympics, because they built up diesel and distillate inventory to ensure that the lights stayed on during the Olympics. That has now transpired, but I have read articles that electricity demand contracted in China in October so that speaks to softening demand there, too. That is probably why crude oil prices have fallen even lower than what people thought they would.

TER: Do you have any statistics on automotive consumption of oil-based products compared to other usage? If it’s 50% or 60%, that’s one thing, but if it is 25%, demand destruction from less driving shouldn’t have much impact. In other words, what does the price at the gas pump really mean in terms of consumption?

ML: I believe gasoline represents about 50%. That’s from a North American perspective in terms of what refiners are set up to produce. It’s basically a gasoline refining producing system here, which is not necessarily the case elsewhere in the world. What we saw last year and into this year is the “dieselization” of the vehicle fleet in Europe and also strong diesel demand for power generation in South America and, most importantly, in China.

So, demand destruction is very North American-oriented for the gasoline part of the story. But when you look at the data, you see that diesel exports were rising for U.S. refiners because that’s where the strong margin was. Diesel demand, the distillate demand, underpinned strong crude oil prices in the first half of the year. That’s what the refiners were chasing for positive margins, not gasoline. So that was different than the prior year, when it was gasoline-driven. This year it’s been a diesel story, but now we see the European economies going into recession and Chinese diesel demand appears to be softening. That was the one pillar that was supporting strong oil prices; when that started to shake, crude oil prices came down.

TER: Other than the OPEC meeting and reducing production, what else are you looking for to signal that the price of oil is at the bottom and will start to turn?

ML: That’s a great question. The lowest breakeven price I’ve seen from anybody in the world, whether it’s accurate or not, is $30 a barrel. Eventually, a time may come when oil can’t go any lower because nobody can afford to produce it. That would be the ultimate low, but I’m reading that only Saudi Arabia can produce at those levels. Nobody else can. We’re talking about oil sands projects as being a very big piece of the incremental supply picture in the medium term on a global basis, but $80 to $100 oil is required on those projects.

TER: Given the rate of consumption and growth, especially in the BRIC countries, various people are saying that we won’t be able to produce enough oil to meet the demand. Choose your year—2020, 2030, 2050—we will not be able to produce enough oil even if demand continues to slow elsewhere. When those phenomena intersect, we’ll need new oil production to supplement old or ultimately won’t be able to meet demand.

ML: It’s not a stretch at all to say that. Based on a bit of old data—from 2005 I believe—vehicle ownership per thousand people in China was the equivalent of 1917 vehicle ownership in the United States. What that fact highlighted was the ownership growth profile in China is in its infancy. If China just goes to Eastern European standards, it would add an incremental 12 million barrels a day of production to demand, which would take us closer to 100 million barrels a day in global demand if we assume a normal demand environment of roughly 88 million. With demand destruction underway, now it’s coming back down closer to 86 but it’s still in the ballpark. The point, though, is that demand in the long term is fairly visible but the global supply picture of 100 million barrels a day is not as visible. That’s going to be a challenge because you are in constant decline unless you have oil sands. Oil sands is the only project that does not decline.

TER: How does oil produced from oil sands differ from free-flowing crude that comes from oil wells? And why would those reserves not decline?

ML: Basically, a conventional oil pool holds a certain amount of liquid and you erect a well that acts like a straw and you drain oil out of the pool. Eventually, this empties the pool. With oil sands, you mine for the thick, heavy substance called bitumen. It’s basically oil within the sands. At Fort McMurray (Alberta), all the companies have set up the mining processes to get the oil out of the sands. It goes through a number of manufacturing processes. Without going into all the many details, you’re digging up the ground or tar sands, putting that into a process, and extracting a barrel of oil at the end of it.

The Athabasca deposit in northeastern Alberta contains the largest reservoir of crude bitumen in the world and is largest of three major oil sands deposits in Alberta. So it’s an area laden with oil sands. There are better quality reserves in some regions than others, and all the top-quality leases have been acquired. Canadian Natural Resource’s Project Horizon’s first barrel of production there is imminent. But it’s very, very capital intensive because of what it takes to extract that barrel of oil.

TER: That’s why it would take $80 to $100 a barrel to justify it. But why would oil sands be an inexhaustible resource?

ML: “Inexhaustible” may overstate it, but any given area can have a 50-year reserve life. You literally shovel and fill up your trucks and drive the trucks to have the oil sands processed, you have a constant source of supply. You work one phase, maybe 100,000 barrels a day, mining enough bitumen to supply the process for X number of years. Then you move on to the next phase.

TER: Output from that process would represent what level of production relative to the 87 million barrels that are being produced worldwide today?

ML: If all the projects now on the drawing boards were to come on stream between now and 2015, the growth profile that people see is in the order of magnitude of going from nearly three million barrels a day now to five million barrels a day—so adding two million barrels a day of incremental production.

Another huge project that is a good light oil play is the Kazakhstan offshore Caspian Sea Kashagan project. That is an extremely complex play; drilling through a salt dome that’s one kilometer thick to get to the oil. And that’s been delayed year upon year due to cost increases. That project has been delayed now from 2008 out to 2013. So whether you’re mining tar sands at Fort McMurray, which is very capital intensive, or executing a very technically challenging job in the Caspian Sea, it is capital intensive. High prices are needed.

One thing that is consistent throughout the industry, oil is never brought on earlier than expected or cheaper than expected. It is always delayed and more expensive, which speaks to higher price requirements to generate a return on capital.

TER: Given these more expensive production techniques—the tar sands or the Caspian Sea, which requires $80 to $100 oil—why wouldn’t the oil cartel just keep the price in the $70 range? It’s cheap for them to pump it out of the ground and it keeps these other projects from going in.

ML: There have been comments in various industry articles that the $70 to $90 range is something that OPEC is comfortable with. Given their economics, certain countries are comfortable with that, but it also depends on OPEC’s own internal needs for crude oil going forward. That was something new to the whole crude oil demand picture—the Middle East was seeing some refinery growth and increased internal consumption as well. Looking at the supply in the rest of the world, they decided the $90 a barrel made sense but, at the same time, the fact that they’re using more and more of it may push the price higher.

I think right now we’re seeing these ridiculously low prices because of the lack of capital. If you do not have the capital to expand these expensive projects, it’s a lot easier to take crude down than to push it up. If the capital gridlock is unlocked and reasonable terms are being announced and companies can start bringing their projects back to the board for approval and restore capital spending to prior expectations, that would speak to a more visible supply response further down the road—but we have incurred a delay. With that being said, I think it will go hand in hand with better demand as well, which would provide an overall positive sentiment to it all.

TER: It’s kind of a catch-22. Until the demand returns, the price is going to be relatively low, and capital markets are not going to come back that quickly. So they’re going to look for something with a more guaranteed return.

ML: My own personal view is that the whole supply response supports the long-term price. I agree and I understand; I get it, but that’s not going to happen in the near term. That’s kind of putting the cart in front of the horse; we need the demand first or else the supply doesn’t matter.

TER: One of the companies you follow is NuVista Energy Ltd. (NVA.TO) (NUVSF.PK)

ML: Very disciplined, strong balance sheet. The Board is a very, very strong disciplined team. NuVista is in Saskatchewan and Alberta, but they’re trying to take advantage of what’s going on in Alberta because of all the capital that’s been allocated out of the province given higher royalties. So they decided to target a particular area called Wapiti, and they’ve built out a land base there of 110,000 net acres, and they’re targeting a natural gas resource play. And land prices came down because of the royalty announcement in Alberta, so they got their land for a lower price deck.

When we were in the natural gas trough last winter, they were maybe the only company that had access to capital to get a transaction completed. They did a private equity deal with Ontario Teachers Pension Fund, and it was of the view that NuVista was the cream of the crop in terms of a trustworthy, disciplined management team. What they needed to add to their business model was more of these resource plays, longer-life assets, and the Wapiti play is just that. It gives them some internal growth potential, and if they have the multiple to get M&A done, they will also look at that.

TER: So they’re currently producing natural gas, and the Wapiti is an expansion for them?

ML: Natural gas in Alberta and Saskatchewan, and Wapiti is an area within Alberta. It’s a pretty small part of the company right now that represents its growth profile.

TER: One of the companies that intrigues Rick Rule is Oilsands Quest Inc. (AMEX:BQI).

ML: I’ve just heard of them because they’re located in Saskatchewan, which in the good times had everything going for it—the Bakken light oil play, Potash Corporation and Cameco with its uranium play. Then Oilsands Quest came to the table with maybe an oil sands play. Don’t know if it’s real or not yet, though.

TER: That darn province has it all.

ML: It seems to. But they’re a hard working bunch, so they deserve it.

TER: Any other companies you can comment on for us?

ML: In the general sell-off in terms of the companies, it’s difficult to time the bottom, but the type of stock to pick away at on a disciplined basis throughout the bottoming is Suncor. You’ve got to move up the level of quality and go for the bigger companies. Suncor Energy (NYSE:SU) (SU.TO) is a very, very strong company that is oil sands pure play. It’s been around for a number of years and has real production.

Suncorp is the best operator, and has scaled back capital spending in response to current markets. But it’s these kinds of companies that at some point do reach a bottom, and speculation would be that they can’t stay down so low forever; otherwise someone would maybe take a look at them.

TER: When you were on TV, on BNN, when was it that you did that interview?

ML: It seems like every day is a week long now, so it’s feels longer ago that it really was. It was probably only three weeks ago, but it feels like a three months.

TER: At any rate, you mentioned Husky Energy (TSX:HSE) and Oilexco Inc. (TSX:OIL).

ML: Oilexco has become very topical, and we actually went to a neutral rating on that after they reported Q3, because their lead banker, Royal Bank of Scotland, is having an enormous amount of trouble over in the UK. Oilexco had a $200 million line due January 31. The Royal Bank of Scotland extended 70% of that out into Q4 of next year, so that was good from that standpoint. But crude oil prices are so low it overrides getting the credit extension.

TER: Scary for shareholders, that’s for sure.

ML: Yeah, the stock has fallen off more. We’ll see what happens. It’s a great example of a very successful team that just got caught in the crosshairs of a very violent market.

TER: What about Husky?

ML: More of a stable business. Husky has a low breakeven price on their East Coast offshore production of light oil. They do have some oil sands exposure, and actually went into partnership on U.S. refineries with BP. So they’re more of a stable company that will for sure survive this difficult time.

TER: Do you cover just Canadian companies? How does that work at BMO?

ML: Yes, I just cover the Canadian intermediate and junior groups.

TER: Can you tell investors who may be looking to get into oil companies the value of an oil sands play vis-à-vis the value of, say, light crude? It sounds as if oil sands has a pretty darned expensive extraction process versus light crude, which is more along the lines of putting the straw into the big pool under the ground.

ML: Absolutely. That’s why all the conventional light oil plays were chased first. It’s just cheaper and easier. A big part of the cost component for oil sands is labor. Is it possible for labor to come down very hard to bring down the breakeven prices on oil sands? Probably, but for how long would be the question. Would it be maybe a temporary setback for two years, after which labor prices would just go right back up? No matter who you spoke to around the globe prior to the current credit crisis, they consistently reference tight labor markets.

I guess in terms of the oil sands players themselves, companies that did not have a project off the ground yet will not get it off the ground. For instance, UTS Energy Corp. (TSX:UTS), which is a partner in the Fort Hills project north of Fort McMurray, just issued a press release saying that it would be a multiple billion-dollar project, and they don’t have access to capital to be able to fund it now.

Oilsands Quest? A company like that is very interesting when we’re in the $100 per barrel oil price environment. But now if you do not have an asset base with a real cash flow platform, you’re not going to get from Point A to Point B because you need the capital. So I guess I would segregate the oil sands producers from those that have production and those that just have a project on paper. And then if you have oil players that can hit oil wells at lower breakeven prices—EOG has a very good Bakken play in North Dakota—that kind of play can make money at lower breakeven prices and is not as capital-intensive.

So in this environment right now, picking one over the other, I would say you could go with a Suncor, the top performer within that oil sands play. That being said, though, they’re both having troubles right now. I would suspect that if you’re buying an oil investment, you’re taking the view that prices will recover at some point. And if that means that the demand is coming back into the picture, the oil sands will be needed and revalued and there would be good appreciation there for companies with assets that are producing. So the Bakken and the oil sands both make sense for different reasons.

TER: Has Oilsands been pushed down further because of the production costs than a play like Bakken? Or have they been equally decimated by the market in general?

ML: No, I would say the oil sands companies that don’t have a good-sized scale of operations already producing have been hit a lot harder because of their inability to access capital. The Bakken players have been hurt, but they haven’t been killed.

TER: So what kind of movement in oil prices do you see in the near term?

ML: Likely testing the downside. OPEC meetings in the near term are likely the only catalysts to potentially provide support for crude oil prices.

Oil and gas analyst Mark Leggett joined BMO Capital Markets as an integrated oils associate in 2002. He was promoted to analyst in 2004. Based in Calgary, he covers Canada’s intermediate and junior oil and gas producers. A Chartered Financial Analyst (CFA), Mark previously gained twelve years’ industry primarily at Canadian Natural Resources. An oil and natural gas company that produced about 1,400 barrels of oil a day and had market capitalization of about $1 million in 1989, it has since grown to production exceeding 565,000 barrels per day and an enterprise value of approximately $30 billion. Its first delivery of light, sweet synthetic crude from Project Horizon is targeted for late in the fourth quarter 2008, with startup capacity pegged at 70,000 barrels per day, moving up to 110,000 barrels per day late in the first quarter of 2009. Future phases will see production of 232,000 - 250,000 barrels daily, followed in due course by an expansion to 500,000 barrels. As work continues on Phase 1, future expansions to the project are in the design and engineering stages. The University of Calgary awarded Mark his Bachelor’s of Commerce degree in finance in 1990.

Courtesy: The Energy Report

[Mt. Blanc]

Those who disrespect oil will be punished by higher prices.

The game is on!

DIG is on its way!

mb

[sumisu]

Dundee starts 9 Canadian energy companies with positive

Tue Sep 30, 2008 11:20am EDT

(Reuters) - Dundee securities began coverage of nine Canadian junior and intermediate oil and natural gas companies, saying the time was ripe to buy into them as their stocks were trading at discounts to the commodities. The brokerage, however, said given the recent volatility in equity markets, investors need to be patient to realise any gains. "We believe investors with a 12-month horizon will be rewarded," analyst Grant Daunheimer wrote in a note to clients. "When stability returns to the equity markets shares of junior/intermediate oil and gas producers will recover and reflect current commodity price levels."

Among the companies initiated were oil and natural gas producers TriStar Oil and Gas Ltd (TOG.TO) and ProEx Energy Ltd (PXE.TO), both initiated with a "buy" rating. TriStar has diverse crude oil-weighted asset base in Bakken shale and Alberta, said Daunheimer, adding that its assets offered significant potential reserve upside for the company.

[continued in following link]

http://www.reuters.com/article/marketsNews/idCABNG14208920080930?rpc=44

[johnlw]

It's cracked and sideways, but new well spurs investors
Technology may open huge natural gas find

Jon Harding
Calgary Herald

Tuesday, August 19, 2008

Investors piled into Fairborne Energy Ltd. Monday after the former income trust drilled a prolific horizontal well and applied fracturing technologies that analysts speculate could crack open two trillion cubic feet of recoverable gas beneath the company's west-central Alberta properties.

The billion-dollar oil and gas explorer, as measured by market value, released drilling results from a horizontal well at Harlech, an area in the west-central part of Alberta, where the foothills begin to grow towards the Rockies.

The closely watched play marked the arrival of the same drilling technologies and so-called multi-stage fracturing techniques that have helped propel a rush of companies into various shale gas plays in northeastern British Columbia, such as the Montney and Horn River.

Unlike the B.C. shales, Fairborne drilled into a shallower sand formation known as the Nordegg, which traditionally hasn't offered up prolific volumes of gas across the Western Canadian sedimentary basin.

Fracturing involves using pressure to break up rock formations underground along the horizontal well's path, thereby releasing more natural gas.

Fairborne said well testing at Harlech measured flow rates as high as 13 million cubic feet a day, 10 times the rate seen on Fairborne's three vertical natural gas wells at Harlech.

The company's total natural gas production at the end of the second quarter was about 60 million cubic feet a day.

"We drilled the three vertical producers and concluded a horizontal well could make a real difference in the production profile," said Steve VanSickle, Fairborne's CEO. "We're very pleased with this."

Shares of Fairborne Energy Ltd., traded on the TSX, climbed almost 14 per cent, or $1.42, to $11.61 with near three times the average volume changing hands.

The company owns 110 contiguous sections of land in the Harlech region and VanSickle said the company, which had already raised its capital spending program in June $38 million to $208 million, will move capital towards drilling two more wells at Harlech before year-end.

He said plans are in the works for five more horizontal wells after those two.

Analysts speculated the result, applied over Fairborne's Harlech land position, could support estimates the property holds between 45 billion cubic feet and 50 billion cubic feet of original gas in place per section. Across 110 sections, that's a jaw-dropping figure of 5.5 trillion cubic feet of original gas in place.

"The recovery is not going to be 100 per cent, so even if you assume a 25 per cent to 40 per cent recovery rate, we're talking about a range of anywhere between 1.5 tcf and 2 tcf of gas," said Brad Borggard, an analyst with CIBC World Markets. "In context to Fairborne's scale, 2 tcf is almost five-and-a-half times today's company-wide reserves."

Borggard also noted that while the Nordegg around Harlech could soon see big resource numbers attached to it, Fairborne and others in the area will face "puts and takes," just as players do in B.C.'s Montney and Horn River.

The $9 million Fairborne reported it took to drill and complete the Harlech horizontal well is roughly double the cost of a Montney unconventional well.

"So it's an issue of capitalizing the resource," Borggard said. "If they drill three or four a year, it's going to take 50 years."

[e-mail]

[fringe_remnant]

RXR Looks Very Nice Here Ed -e-

[johnlw]

Saskatchewan land sales leave Alberta in the dust
No, it's not because of the increased royalty rate, says drillers association

Calgary Herald; Canwest News Service

Friday, June 13, 2008

CALGARY - Saskatchewan continues to set new records for land buying after it racked up the third-largest land sale in its history Thursday, while Alberta recorded one of its lowest.

Saskatchewan's June land sale raised $142.5 million while a similar auction in neighbouring Alberta brought in $20.25 million.

Saskatchewan's year-to-date revenue figure for 2008 now stands at $605.4 million, shattering the previous single-year record of $250.3 million set last year. It was also the third-consecutive sale in excess of $100 million, something that has never happened before in Saskatchewan.

The numbers contrast with $415 million raised thus far in Alberta, down sharply from $705 million in 2007 when oil and natural gas prices were half of what they are today.

Driving the interest in Saskatchewan is a light oil discovery called the Bakken play, which the Canadian Society of Petroleum Geologists (CSPG) says holds 100 billion barrels in Canada.

The United States Geological Survey (USGS) estimates an additional 400 billion barrels are south of the border, which is larger than the proven reserves of Saudi Arabia.

Nancy Malone, the Canadian Association of Oilwell Drilling Contractors' economic analyst, said the Alberta government's decision to jack up royalty rates is only one factor in the exodus of land dollars out of Alberta into neighbouring provinces like Saskatchewan and British Columbia.

"Until we find something new in Alberta, everybody is going where the opportunity is," she said.

Saskatchewan's sale was also noteworthy for the highest price paid for a single parcel at just under $39 million. Standard Land Company Inc. purchased the 9,094-hectare exploration licence located south of Lake Alma, near the Canada-United States border, making it the highest price ever paid for a single plot in the province's history.
© The Edmonton Journal 2008

[Ed Monton]

RXR

[Ed Monton]

Reece Energy tests and finds oil in first Bakken well


2008-06-06 05:51 MT - News Release

Mr. Lorne Swalm reports

REECE'S FIRST BAKKEN WELL A SUCCESS

Reece Energy Exploration Corp.'s first exploratory Bakken well has been successfully tested for oil. As previously announced (see news issued in Stockwatch), the well (50-per-cent net to Reece) penetrated the Bakken formation for the full-lateral section, extending approximately 1,400 metres horizontally. Oil was detected in the majority of the samples and "oil over the shaker" was observed during drilling. The well has been tested over the past six days with satisfactory oil recovery without fracture treatment. Reece and its partner will evaluate the well in the coming weeks.

"We are very pleased to have resource success in the first of our three exploratory Bakken areas. This success will help to prove up the 6,000 gross acres of joint venture lands in the immediate area and bolsters our optimism for the our other two Bakken project areas," said Lorne Swalm the president and chief executive officer of Reece.

As of today's date, the drilling rig is moving to the company's second Bakken location to commence drilling in the second of the three larger land blocks acquired by Reece and its joint venture partner in the area.

We seek Safe Harbor.

[IBN4Profits]

AROX might be worth a look here.

Alderox, Inc. Annnounces Trials in Canadian Oil Sands
Tuesday June 3, 9:30 am ET


SAN CLEMENTE, Calif., June 3 /PRNewswire-FirstCall/ -- ALDEROX, INC. (OTC Bulletin Board: AROX - News), a world leader in productivity enhancing, environmentally friendly anti-stick release agents and lubricants to the mining sector, announces that formal trials with a large, heavy equipment manufacturer have been scheduled to take place in the Canadian oil sands.
Alderox® ASA-12® Mining has been successfully, though informally, tested within the Canadian oil sands in the past. A heavy equipment manufacturer has now scheduled formal trials during which the Alderox® product will be applied to materials handling/haulage equipment. Due to confidentiality agreements, the Company is unable to disclose further information at this time. Management is confident that the trial will be a success and that use of the Alderox® ASA-12® Mining product will prove to be of significant value when used at oil sands operations.

Michael Davies, CEO of Alderox, Inc., stated, "Although Alderox® ASA-12® Mining has previously shown successful results in the oil sands, the Company has been unable to penetrate this extremely closed loop, multi-billion dollar market. Management is confident that independent testing by this high profile equipment supplier will assist greatly in penetrating the oil sands market." Mr. Davies concluded, "As the Company continues to develop the oil sands market, along with increasing the productivity of other mines, management believes that use of the Alderox line of products will become a standard operating procedure to the mining industry as a simple and reliable means of enhancing productivity and thus the bottom line."

In order to better understand the value enhancements made possible through the use of Alderox products, please review the powerpoint presentation at the Company's website at http://www.alderoxasa.com/resources/technical/Company_and_Product_Summary.ppt

About Alderox, Inc.

Headquartered in San Clemente, CA with offices in Colorado, Utah, and Tennessee, Alderox, Inc. manufactures and globally markets its Alderox® line of release agents and lubricants to heavy industry. The Company's patented formulations, which are 100% environmentally friendly, biodegradable, non- hazardous and non-toxic, are used to reduce or eliminate the massive problems associated with the build-up of materials in mining haul truck beds and on mining equipment.


Alderox, Inc.'s website is located at http://www.alderoxasa.com.

Contact:
Mike Davies, CEO, Alderox, Inc., Tel. [phone]

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical are forward- looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward- looking statements, including, but not limited to, certain delays beyond the company's control with respect to market acceptance of new technologies or products, delays in testing and evaluation of products, and other risks detailed from time to time in the company's filings with the Securities and Exchange Commission.

[johnlw]

Petrostar enters LOI to develop Sask. oil zones

2008-06-03 06:04 MT - News Release

Mr. Robert Sim reports

PETROSTAR PETROLEUM CORPORATION: LETTER OF INTENT SIGNED TO DEVELOP BAKKEN OIL PLAY IN SE SASKATCHEWAN

Petrostar Petroleum Corp. has entered into a letter of intent with Leaf & Stone Resonance Services Ltd. (L&SRS) of Saskatoon, Sask., to develop certain leaseholds acquired by L&SRS located in southeastern Saskatchewan. The leases will cover up to 12 quarter sections of freehold lands that have been acquired.

The area to be developed has two potential oil-bearing zones; the Frobisher, at a depth of approximately 500 metres, and the Bakken, at a depth of 1,100 metres to 1,400 metres.

Under the terms of the agreement, Petrostar will be the operator and provide up to $250,000 in drilling funds, which matches the technical and mineral rights acquisition costs provided by L&SRS. All future costs will be shared on an equal 50/50 basis.

It is planned to initiate a three-well drilling program, which will commence as soon as permitting and establishment of surface lease requirements for the well site are received. The initial well is to be the first of a potential three-well program designated for the project.

Petrostar is the operator of the project and has retained DJ Craven Oilfield Consultants to supervise and assemble equipment and services to prepare for spudding of the first well. At this time, the intent is to drill the three wells consecutively while the services and equipment is readily available.

The parties will also continue to locate and acquire additional lands within the general area of the Bakken play under the same terms and conditions. More developments will be forthcoming as the project proceeds.

We seek Safe Harbor.

[Tackler]

Tango Energy sells Cecilia assets for $10-million

2008-05-28 15:53 MT - News Release

Mr. John Gunn reports

TANGO ENERGY INC. - OPERATIONAL UPDATE

Tango Energy Inc. has sold its Cecilia area assets, which represent approximately 200 barrels of oil equivalent per day of natural gas production net to Tango. The property consists of two adjoining sections of land containing eight natural gas wells, with an average working interest of 40 per cent. The effective date of the sale is April 1, 2008, and the purchase price is $10-million. The proceeds from the sale will be used to eliminate Tango's debt of approximately $4-million, and the balance will be used together with cash flow to finance Tango's continuing activities.

Subsequent to the sale, Tango will have approximately 360 barrels of oil equivalent per day of remaining production, approximately 400 barrels of oil equivalent per day of additional production behind pipe and waiting to be tied in in Quaich, and a positive working capital position of approximately $6-million.

The operator of Quaich has advised that it expects to commence pipelining at Quaich after spring breakup and after surface access restrictions have been removed in June. It is then anticipated that production from the Quaich well will commence in early August, 2008. A seismic program and an additional well are expected to be a part of the capital program for this property prior to the end of 2008.

[johnlw]

Got SSN's annual report today.
I see Stalin got a $150,000 bonus from the company.
Nice.
I wonder what for?

[KastelCo]

Painted Pony

http://siliconinvestor.advfn.com/readmsg.aspx?msgid=24571948

[johnlw]

A pipe dream come true

Deborah Yedlin
Calgary Herald

Thursday, May 08, 2008

When Canadian Natural Resources chairman Allan Markin stands in front of shareholders today at the company's annual meeting, it will be as the steward of an enterprise valued at more than $50 billion.

That's a far cry from what things were like at CNQ when he joined the company 20 years ago. At that time, the shares were trading at 18 cents, oil production was 123 barrels a day and gas was five million cubic feet per day.

In an interview dating back to 1990 when one of the questions addressed the company's future, Markin said there was more to come. No kidding.

The company's shares hit an all-time high of $92 Tuesday, closing at $91.81 Wednesday and marking a more than $30 jump since the beginning of February, when they were trading at $60.95.

Year-to-date it is the best performing big-cap energy stock listed on the S&P/TSX. And from the 123 barrels a day produced in Alberta back in 1988, the company produced an average 609,289 barrels of oil equivalent per day from Canada, the North Sea and West Africa and generated cash flow of $6.2 billion in 2007.

Markin might well say today, as he did 18 years ago, there is more to come. The big challenge for CNQ, as for any big oil company generating scads of cash flow, is how best to reinvest the cash. Numbers crunched earlier this year by one investment firm showed that an increase in the oil price from $80 a barrel to $90 added a total of $10 billion in cash flow to the country's four largest, non-integrated producers -- EnCana, Nexen, Talisman and Canadian Natural.

With oil prices now $40 beyond the $80 baseline, the numbers are eye popping. And CNQ wasn't the only energy player to reach a record high this week.

Suncor, after having been given the "dead parrot" treatment by the market when its shares fell to $85.72 in January, hit a record high of $121.12 on Tuesday -- putting the value of the company at $56 billion.

The same held true for Nexen, which closed at $37.72 on Tuesday, and Talisman, whose shares were worth $21.99 on the same day. This week's run in the share price of the big cap companies arguably has something to do with a Goldman Sachs research report that hit the street Tuesday, which talked about a "super spike" in prices that could cause a barrel of crude to hit between $150 and $200 in the next six to 24 months.

Some were more bullish, saying $150 oil by October wasn't out of the question. Given the record intra-day trading price of $123.80 reached on Wednesday, even as U.S. crude oil inventories rose by 5.7 million barrels, that $150 mark might be closer than many think.

The fact remains -- as CIBC World Markets chief economist Jeff Rubin noted two weeks ago in a report addressing the question of how high prices will go -- that global oil supply is not growing, but global demand for gasoline is.

That simple dynamic means the era of cheap oil is indeed behind the western, industrialized world. Rubin called for oil at $150 by 2010 and $200 by 2012 in that same report; given what has taken place this week, it might already be outdated.

Each week, it seems, more data appears showing the growing demand for gasoline and crude oil in the developing parts of the world. While some point to this fact and say it's evidence the countries are industrializing -- a good thing -- and creating a middle class with a higher amount of disposable income, there is another side to consider. A significant amount of the gasoline consumption is because of the high subsidies in places such as Venezuela, Iran and other oil-producing nations within the Organization of Petroleum Exporting Countries.

The subsidies are creating an addiction to cheap gasoline, decreasing what is available for export and, with a rising middle class, the rate of consumption is going to keep going up.

The rising demand is increasingly being juxtaposed against the mounting evidence that supply will not be able to keep up. Whether it's the result of a lack of investment by countries with energy resources -- such as Russia and Mexico -- the inability to rely on production from countries such as Nigeria or the reality that the supply cushion that once existed within OPEC is inadequate in the context of current global demand, it's getting harder to make the case that current prices can't last.

They can and they will. All this leaves Canada's big cap energy players -- especially those like Canadian Natural with mammoth oilsands exposure -- in positions of financial strength that were nothing more than pipe dreams 20 years ago.

[e-mail]
© The Calgary Herald 2008

[loadedgun]

Anybody got and pinks with Bakken leases?

[thinkerman]

I thought that you might interested in this info. It does relate to Canada because the issue of the gas line from Alaska crossing Canada according to this book it will not be built. America apparently has three more oil feilds that have already been discovered. Two of the fields are the same of the existing field and the other is four times larger the North slope find.

The Energy Non-Crisis by Lindsey Williams


Lindsay Williams
About the Author

Lindsey Williams, who has been an ordained Baptist minister for 28 years, went to Alaska in 1971 as a missionary. The Transalaska oil pipeline began its construction phase in 1974, and because of Mr. Williams' love for his country and concern for the spiritual welfare of the "pipeliners," he volunteered to serve as Chaplain on the pipeline, with the subsequent full support of the Alyeska Pipeline Company.
Because of the executive status accorded to him as Chaplain, he was given access to the information that is documented in this book.
After numerous public speaking engagements in the western states, certain government officials and concerned individuals urged Mr. Williams to put into print what he saw and heard, stating that they felt this information was vital to national security. Mr. Williams firmly believes that whoever controls energy controls the economy. Thus, The Energy Non-Crisis.
Because of the outstanding public response that has been generated by this book, Lindsey Williams is in great demand for speaking engagements, radio, and TV shows.

(Addition to the fourth printing of the second edition.)

Please keep in mind when you read this eye-opening book that BAPTIST John D. Rockefeller BOUGHT the U.S. government after the Supreme Court decision to outlaw his monopoly in 1911.


Forword

The content of this manuscript is only as valuable and useful to the reader as the credibility of the authors.
The honesty, integrity, and therefore the credibility, of the authors of this book is unquestionable to the limit of their combined facts and knowledge.

I can personally attest to many of the facts, and certainly many of the conversations quoted in the book, as I spent a week with Chaplain Lindsey on the North Slope of Alaska during the construction of the Trans-Alaska pipeline. I was privileged to talk with high officials of Alyeska Pipeline Service Company. For reasons unknown to me, I was given access to private information that apparently very few outsiders were ever given. I moved among the men at work and in the baracks. My week on the North Slope was a liberal education.
The motivation for this book is to bring facts to the American people as the authors know them. They do not have a political ax to grind nor any personal advantage by bringing forth these facts.Our President has stated that our energy problem is the equivalent of war. Yet he has embraced policies that have continually discouraged and hampered the development of our oil industry.
Nearly ten years ago President Nixon warned of a pending energy shortage unless our domestic production be drastically increased, but Congress insisted on restrictive price controls.

Congress has been urged—and sometimes threatened—by special interest groups to take a negative stance on energy production, but they have miserably failed to take proper action to increase our domestic production. In fact, as you read this book you must come to the realization that energy production has been fiercely stifled by "Government Bureaucracy, " and Congress has sat on its collective hands.
You, the reader, will be left to make your own conclusions as to why this set of facts and circumstances conflict many times with what we have been told by the news media—which is fed its information by Government Agencies and Departments.

It is with great pride and pleasure that I endorse this manuscript and compliment the authors for taking time to do the research and make it available to all of us.

March 19, 1980 Hugh M. Chance
Former Senator of
The State of Colorado

--------------------------------------------------------------------------------

Please keep in mind when you read this eye-opening book that BAPTIST John D. Rockefeller BOUGHT the U.S. government after the Supreme Court decision to outlaw his monopoly in 1911:

Chapter I The Great Oil Deception
Chapter 2 Establishing Credibility
Chapter 3 Shut Down That Pipeline
Chapter 4 An Important Visit by Senator Hugh Chance
Chapter 5 Amazing Facts About the Oil Fields
Chapter 6 The Workings of An Oil Field
Chapter 7 Toilet Paper Holder for Sale Cheap—Only $375.00!
Chapter 8 Want Some Falcons? just Two Million Dollars... A Pair!
Chapter 9 How About An Outhouse for $10,000 (Extra for the Mercedes Engine, Of Course!)
Chapter I0 One Law for the Rich, Another for the Poor
Chapter 11 The Barges Froze and Cracked and Popped
Chapter 12 Those Welds Are Not Faulty!
Chapter 13 Why Are These Arabs Here?
Chapter 14 The Plan to Nationalize the Oil Companies
Chapter 15 Waiting for a Huge New Oil Field
Chapter 16 Gull Island Will Blow Your Mind!
Chapter 17 If Gull Island Didn't Blow Your Mind—This Will!
Chapter 18 The Oil Flows—Now the Tactics Change
Chapter 19 The Energy Non-Crisis of Natural Gas: A StartlingPrediction Comes True
Chapter 20 A Scandal Greater Than Watergate?

thinkerman

[Rocketred]

Might as well get some handouts too :)))))

[johnlw]

A few quarters isn't going to make you a farmer in the eyes of CRA-sorry to tell you that....but go for it anyway.

I wasn't aware that land owners also owned the mineral rights in Sask.

Sounds like you got it all figured.

[Rocketred]

WAs thinking about buying a few quarters of land then I can milk the system too like farmer joe does plus maybe hits some black gold too

[johnlw]

Sounds like you will be moving back to the promised land soon then.

[Rocketred]

Ya thats why land sales in BC and SASK have Surpassed AB for the first time in History.

Yup should of had more taxes and shut down the whole province of AB

20 billion in Heritage fund and not 1 red cent to any Alberta people.Go Figure

[johnlw]

Read the article, pay taxes or explore.
That's the gist of it.

The royalty review is going to look like a stroke of genius for Alberta...probably didn't go high enough on it
All these big numbers coming out.
The extra couple billion the gov't gets is going to look like chickenfeed spread out among all the producers.

[Rocketred]

Ya Invest in SASK

[Rocketred]

Just slam them with more taxes

[Arctec]

The lost boys of oil and gas are back

NORVAL SCOTT
Friday, April 18, 2008
CALGARY — — David Johnson remembers the dark days of last winter, when interest in small oil and natural gas companies like his was so low that investors in Toronto wouldn't even bother meeting with juniors seeking to raise money.

His company, ProEx Energy Ltd., has been chasing gas in unconventional plays in northeastern British Columbia since 2002, and has built up an attractive collection of prospects and healthy and growing production. He had enough money to operate, but investors had lost interest and the stock had fallen to a three-year low.

What a difference a winter — and a big leap in natural gas prices — makes. Since December, ProEx's stock is up 50 per cent, money managers are clamouring to get into its Montney play and Mr. Johnson can finally afford to sneak away to his boat off the Gulf Coast of Florida for a respite from the renewed energy rush.

"From an investor perspective, what's changed is the fundamental rejuvenation of the industry," he said this week from the deck of his boat.

"When you have one breakthrough it really sparks a whole series of incremental advances that are revitalizing the Western Canadian basin. It's got everyone pumped up, myself included."

Oil hit new records this week — including a record trade of $117 (U.S.) a barrel yesterday afternoon. That's created anxiety among motorists and economists but put the bloom back on the rose of Alberta's junior oil and natural gas industry and its increasingly unconventional resource plays.

The share prices of companies with exposure to those potentially lucrative areas are through the roof and interest in providing financing to them is returning in tandem, with a spate of major deals seen this month alone. (Measuring a cross-section of more than 100 companies, ARC Financial's Junior Producers Equity Index has risen by about 20 per cent in 2008. The TSX composite is up 2.9 per cent.)

While high oil and gas prices play a huge part in the turnaround, they're not the only factor. Investors, fleeing the carnage of the financial sector, are seeking a safe haven for their cash — and they appear to be attracted to the promise of new technology that is taking companies like ProEx and Birchcliff Energy Ltd. to new frontiers. Another unconventional gas player, Birchcliff's stock has more than doubled since December, prompting the company to launch a new equity issue in February that was oversubscribed by at least twofold.

It's a dramatic shift in sentiment. The junior sector had been wallowing in misery for nearly two years, a slump that started with the implosion of the country's energy trusts in 2006, when Ottawa took away the popular option that had created a wealth of buyers for the growing assets of junior companies.

A cocktail of other factors — disappointing gas prices, higher costs, and changes to Alberta's royalty regime — had driven investors further away from the sector. Share prices bottomed out in December and January. Lines of credit ran dry. The outlook was bleak.

What changed wasn't just perceptions of where commodity prices were headed, although that didn't hurt. Instead, there was a realization that junior companies are mastering the exploitation of unconventional resources at a time when demand for oil and gas looks to be stronger than ever — a heady combination of factors that, to many investors, smells of substantial long-term gains.

"The basin is changing, and the business model is changing too. Conventional firms can still be successful, but the economics are getting more difficult, in Alberta especially," said John Chambers, president of Calgary-based First Energy Capital Corp. "Resource plays — with their longer reserve lives — are the focus."

NEW FRONTIE RS

For Canada, the sea change is not the return of juniors but the fact that their hottest fields aren't necessarily in Alberta, the country's traditional oil and gas home. Companies are looking to the booming Bakken and Shaunavon oil fields in Saskatchewan, and even to the possibility of producing gas from shale rock in Quebec.

The greatest excitement, however, is in the Montney play, located mostly in northeastern British Columbia, although it extends into Alberta. (It gets its name from a B.C. town close to the Alberta border, northwest of Fort St. John.)

Montney is estimated to hold as much as 50 trillion cubic feet of gas (tcf), more than the proven reserves for all of Alberta (41 tcf). The challenge: How to profitably extract the resource at current prices.

The development of new fracturing techniques — in effect, setting off underground explosions to free the gas — has made that possible, so much so that Montney is now seen as viable. Companies don't have to do much more there than dig another well next to the one that's already working, rinse and repeat, and watch the money roll in.

Doing just that, Duvernay Oil Corp. is also feeling the Montney love. The large Calgary-based junior produces more than 20,000 barrels of oil equivalent a day. Its stock has almost doubled in value since December to all-time highs, as dramatic successes at Montney helped boost both production and estimates of its oil and gas reserves.

Earlier this week, Duvernay launched a $77.4-million (Canadian) bought-deal financing — a deal in which a broker buys new shares in a company in exchange for guaranteed cash, before selling on the equity to buyers — in order to fund an expanded drilling program. The move, coming at a time of relative drought for such arrangements, raised an eyebrow.

"We wouldn't have done the deal four months ago. We certainly wouldn't have got this price," Mike Rose, Duvernay's chief executive officer, said in an interview. "But our share price had had a nice appreciation from its lows and commodity prices are strong … and we had a fair idea it would be favourably received."

It was. Not only did brokerage Peters & Co. sell the new Duvernay stock almost instantly, but it felt it could have sold three times as much as was on the table.

"Montney is such a hot play right now, there's substantial activity there and the companies are having no problems making money," said David Doig, a Calgary-based analyst at Union Securities Ltd. "It's going to be a very successful play, so people are throwing cash at it."

Among juniors with Canadian oil and gas production, the only bigger financing this year than Duvernay's was one by Birchcliff Energy, which secured $130-million from investors in February. The carrot, again, is Birchcliff's vast exposure to unconventional gas; the company has as much as $1.5-billion worth of drilling opportunities in Alberta, much of it in the Montney play.

"The institutions are very focused on these large resource plays where you can do significant development work, and they'll finance repeatable, sustainable drilling," said Birchcliff chief executive officer Jeffrey Tonken, speaking from Toronto's airport after a hectic three-day tour meeting U.S. and Canadian investors.

According to Mr. Tonken, the company could have sold two or three times as much equity to institutions, but decided to raise only as much as it needed to pay off a bridging loan and finance some drilling.

"We had significant support because of our results and commodity prices, so we went to the market," he said. "Rule number one in this business is take the money when you can get it."

Almost 18 per cent of Birchcliff's stock — worth $230 million — is held by one investor: Seymour Schulich, the billionaire philanthropist with a reputation for investing in only a few companies, but regularly backing the right horse.

Mr. Schulich bought another 1.2 million shares in Birchcliff in the February financing deal; he believes that the stock could climb to $50 a share in the next three years from more than $11 a share today, as long as natural gas prices hold up.

"I really like them, and the play has a lot of potential," he said in an interview. "But the management has had some great success in the past and they run the company as it should be run, which is very attractive. You can't pay too much for good management or too little for bad management." HOW TO BE JUNIOR

While the management teams that run Canada's juniors vary wildly, from slick money makers to cowboy wildcatters, their business plans have never wavered far from a simple template.

They aim to find an asset, prove it has some decent reserves, get production to about 1,000 barrels of oil equivalent a day, and sell out to an energy trust with deep pockets that's aiming to boost its resources. If successful, the company management does the same thing all over again, but with greater backing from investors who now trust that the team knows how to create big returns.

It's a strategy that has served the country well, creating a thriving market for junior oil and gas companies, the likes of which doesn't exist anywhere else in the world. However, the rug was pulled out from the sector's feet in October, 2006, when Finance Minister Jim Flaherty pulled out his Halloween surprise — that income trusts would have to pay tax like normal corporations in the future.

As well as crippling the trusts, the decision effectively removed juniors' planned exit routes in one fell swoop, leaving their business plans in tatters. Several body blows followed; natural gas prices — so strong in 2005 because of hurricanes Katrina and Rita — stagnated, as mild North American summers and winters left demand flat.

Costs of manpower and materials continued to rise because of the oil sands boom, while the knockout punch was delivered last October, when the Alberta government introduced a new royalty structure on gas and oil production. Producers will have to pay the government more when prices are high.

Last winter, matters came to a head; all companies, not just juniors, slashed their drilling plans in Alberta, either turning turtle altogether or redeploying capital to B.C. or Saskatchewan. Drilling in Alberta fell to five-year lows.

Since then, drilling firms have cut prices for rigs, some by as much as 25 per cent from last year.

For Jennifer Stevenson, managing director at Qwest Energy Investment Management Corp., that means busy times. Her equity fund subscribed to all three April bought-deal financings — Crew Energy Inc., Celtic Exploration and Duvernay — and expects to be involved when new offerings take place.

Her rationale for the purchases is that she believes the junior market has bottomed out and is on the way up. Cost structures are much improved, and companies are making money again.

"In the last eighteen months, these companies have largely not been able to access the equity market for hard dollars, but now the positive tone is back," she said. "The strong companies have survived the downturn and now they're beginning to prosper."

For Ms. Stevenson, one big change is in natural gas. Usually, North American prices for the commodity dip in April — the so-called "shoulder season" — as demand for heating gas falls. Equally, summer demand (for electricity generation, to power air conditioners) hasn't yet kicked in.

This April, gas prices are above $10 a million British thermal units — a figure that's historically high by any measure, let alone for the time of year. They're a strong indication that North America has worked through the overhang in inventories seen in 2006 and 2007.

"The markets are starting to appreciate that the price is here to stay," she said. And for Ms. Stevenson, comparing the futures market for gas to the valuations of natural gas juniors, there's only one conclusion: Companies are substantially undervalued. She wants to get hold of as much equity as possible in gas-weighted names, particularly those with exposure to big unconventional plays.

THE NEW HIGH TECH

The shift to unconventional supplies is a direct result of the maturing Western Canada Sedimentary Basin, where much of the easily accessible oil and gas reserves have been used up. That's pushing firms into developing so-called unconventional supplies — natural gas found in tight shale formations or in coal beds. Or, of course, the mix of grit and crude that comprises Alberta's oil sands.

The problem with unconventional resources is that the oil or gas is difficult to get out, so companies have to throw science and money at it.

Even with better cost structures and prices, attacking unconventional resources might still seem a bit of a stretch for junior firms that don't have the capital base — and room to play — as, say, an EnCana Corp., the leader in developing unconventional gas resources.

Quietly, that picture changed last year. People started to notice that Petrobank Oil and Gas Resources Ltd., a junior oil and gas company with a reputation for trying out new technology, was getting remarkable results from the Bakken oil field.

Most firms saw Bakken, where light oil is trapped in very tight formations of shale, as being too tricky and expensive to develop. While there was clearly oil there, it was trapped in non-porous rock formations that kept it from flowing out into wells in any great volume. Essentially, the play was seen as being uneconomic.

Petrobank turned the conventional wisdom on its head by using a system that was developed by Packers Plus Energy Services, a closely held company whose technology had attracted attention for opening up tight gas plays in the United States, but hadn't yet gained traction north of the border.

"We knew we had to do something different to get the oil out of there, and our technical guys basically tore the whole [play] apart trying to work out what the best solution was," said Petrobank vice-president Chris Bloomer. "It turned out the fracturing technology was the key."

The system works by creating a series of explosions along the length of a horizontal well, literally breaking apart the rock formations and opening up fissures in the shale. Vast amounts of sand — as much as 75 tons — are pumped down the well, keeping the cracks open and allowing oil or gas to flow out at volumes far more comparable to a conventional well.

Effectively, multifracturing allows a company to replace as many as 10 vertical wells with one single horizontal well, greatly reducing the costs of developing unconventional plays like Bakken or Montney, while producing five times as much oil or gas. Not bad for a system that Dan Themig, Packers Plus's chief executive, first came up with when doodling on an airline napkin.

After Petrobank reported its Bakken production figures last year, Mr. Themig's phone started ringing "off the hook" as companies called up to use Packers Plus's technology, he said in an interview at the firm's head office in Calgary.

"We couldn't get any momentum until Bakken hit, but then company after company started to call and say that they wanted to use this system," he said. "It was the quickest adaptation of technology I've ever seen."

As a result of its success in the U.S. and now Canada, Packers Plus's rise has been meteoric. Mr. Themig says the firm has doubled in size every year since 2005, and is on course to do again in 2008, while the number of employees has soared from 30 to 240. The company expects to fracture as many as 1,000 wells this year worldwide. OLD FEARS

For Art Korpach, head of global oil and gas at CIBC World Markets, the mood is one of excitement that juniors are once again a viable business in which to invest. But there is also caution, and investors are focusing solely on firms' long-term strategies.

"The primary reason for the renewed interest is that companies have found some exciting things to pursue," he said. "But the market is distinguishing far more today between firms than it did in the past. Interest depends on the company's strategy, how it's going to use its money, and the reputation of its management. For firms trying to get capital for a marginal story, it's more difficult."

As a result, the juniors sector is set to be bifurcated between the haves, who got into resource plays early and are poised to make big profits, and the have-nots. The consequences will be that the strong companies will buy out the weak ones, Mr. Korpach said, leading to a situation where juniors get substantially bigger, effectively becoming intermediate players with a greater ability to more capably take on expensive, yet profitable, plays like Montney and Bakken.

"The junior space will consolidate to create a set of larger entities that have the ability to play in some of these trends," he said. "People are very much focused on getting into a longer-term game."

ProEx's Mr. Johnson has come to a similar conclusion. He expects juniors to attempt to copy the success of firms like his own by chasing unconventional plays elsewhere, in order to achieve success.

"Everyone in this business is smart, and people are going to look at what assets are doing well and say that they should get hold of some of those," he said. "They're going to have to go out and find something that's more appealing to investors or die on the vine."

[johnlw]

Energy companies expect to announce windfall profits
Analysts say firms need to figure out best way to use higher-than-expected earnings

Jon Harding
Canwest News Service

Saturday, April 19, 2008

CALGARY -- Earnings season in the Canadian oilpatch begins Monday and due to the surprising heights to which oil and natural gas prices have risen, industry watchers say management teams will feel pressure to put windfall profits to good use.

"Actual first-quarter cash-flow numbers versus analyst and investor expectations from six months ago will be like night and day," said Martin Molyneaux, oil and gas analyst at FirstEnergy Capital Corp.

Tristone Capital Inc. analyst Chris Feltin was also succinct, telling Reuters on Thursday: "We're expecting pretty much every company to outperform what even they were expecting to do."

The price of oil averaged roughly $97.70 US in the first quarter, 60 per cent higher than a year ago when it was $58.13 US. Year-over-year, Canadian heavy oil prices were roughly 80 per cent higher in the recent quarter.

More important, oil's strength has exceeded even the most bullish company forecasts from last fall, when 2008 capital spending programs were crafted -- and in some cases knocked back from previous years -- as oil hovered at around $75 US a barrel.

Natural gas, meanwhile, has risen nearly 40 per cent since January and the North American supply-demand picture has changed dramatically from last fall, when it looked like a stubborn overhang on U.S. inventories might last forever.

Canadian producers were also bogged down back then by the uncertainty around the Alberta government's plan to hike royalties, a situation that became clearer but not until last week, when a pair of incentive programs were unveiled to spur more deep gas and deep oil exploration in the province.

The timing means chief financial officers will be scrambling to find the best ways to take advantage of the unexpected gains, all the while satisfying fickle investors, analysts said.

Feltin said Canadian producers will certainly take a hard look at boosting capital spending in the year's second half.

Molyneaux predicted spending increases will be a top priority, ahead of paying out special dividends or even share buybacks, which has become a less favourable option as share prices for many Canadian oil and gas companies surged in recent weeks. Shares of EnCana, Suncor and Canadian Natural are all trading at or near their all-time highs.

"These companies have had enough time to noodle through what Alberta's new royalty regime will look like starting Jan. 1, 2009, and I guarantee you among the big caps a top priority is finding where they can deploy more cash to get heavy oil," said Molyneaux.

"For the companies that can look outside Canada, they also have to consider that the whole world is a busy place right now."

Husky Energy Inc. kicks things off Monday, with first quarter reports from EnCana Corp. and Suncor Energy Inc. also due next week.

Canadian Oil Sands Trust, Talisman Energy Inc., Nexen Inc., Petro-Canada and Imperial Oil Ltd. will follow the week after.
© The Vancouver Sun 2008


Close

[Tackler]

pigs make bakken

[johnlw]

The Bakken is good.

[Tackler]

Stetson Oil acquires Saskatchewan petroleum and gas JV

2008-03-25 06:58 MT - News Release

Also News Release (C-VST) Vast Exploration Inc

Mr. Bill Ward of Stetson Oil reports

STETSON OBTAINS JOINT VENTURE IN SE SASKATCHEWAN

Stetson Oil and Gas Ltd. has agreed to assume the interest of Vast Exploration Inc. in a joint venture (JV) arrangement with Samson Oil and Gas Inc. (SOGI) in southeast Saskatchewan (SamVast JV). Stetson will be the operator of the joint venture and will have a 50-per-cent working interest. As consideration for the assumption of the Vast interest in the JV, Stetson will reimburse Vast for $137,500 of costs incurred to date on the JV and will reserve a 5.0-per-cent non-convertible gross overriding royalty.

The SamVast JV was created in September, 2006, to jointly acquire and develop petroleum and natural gas rights with first nations bands in Saskatchewan by providing access to lands pursuant to the treaty land entitlement (TLE) process. Under the TLE process, open Crown mineral rights can be frozen for a term of 18 months whereupon, if surface rights are acquired, the mineral rights will be allocated to the first nations band that applied for the freeze. The SamVast JV then has the right to farm in on these lands as to a 100-per-cent working interest subject to Saskatchewan Crown equivalent royalties, plus 5.0 per cent. Stetson's assumption of Vast's interest in the SamVast JV is subject to the receipt of approval of the TSX Venture Exchange. The SamVast JV has signed agreements with four first nations bands, however, at present no land or mineral rights have been acquired by the SamVast JV.

In connection with the joint venture, Stetson intends to focus its exploration efforts on the Bakken production fairway in southeast Saskatchewan. The Bakken formation produces light 42- to 44-degree API oil and has been developed primarily by horizontally drilling four wells per section. Newly developed fracturing technology has resulted in improved productivity rates and recoverable reserves, with individual wells initially producing at rates as high as 250 bopd (barrels of oil per day).

The Bakken area has drawn significant interest in recent months, as prices paid for mineral leases in southeast Saskatchewan at Crown land sales have been robust. The Feb. 11, 2008, Crown land sale brought in bids totalling $132,399,338 on 43,784 hectares of land from the southeast Saskatchewan region alone, representing an average bid of $3,024 per hectare. Stetson believes that the SamVast JV will provide a competitive advantage in acquiring mineral rights in this area.

[mhlld]

USD $1.2 billion project, Strata Oil (SOIGF), yesterdays news has this on fire today. Yummy.

[mhlld]

Strata Oil & Gas Completes Pre-Feasibility Study on Its Cadotte Project, NPV Exceeds $1 Billion
Wednesday March 5, 3:32 pm ET


CALGARY, AB--(MARKET WIRE)--Mar 5, 2008 -- Strata Oil & Gas Inc. ("Strata") (OTC BB:SOIGF.OB - News) has released its Pre-Feasibility Study on its 100% owned Cadotte Project in the Peace River Oil Sands area of Alberta, Canada.


Based on forecast prices and costs, this Pre-Feasibility economic analysis indicates that the development of Strata's Cadotte Project is economically viable with a net present value (discounted at 10%) of cash flows before income taxes of USD $1.2 billion.

Norwest Questa Engineering Corporation ("Norwest") of Golden, Colorado completed this independently prepared Pre-Feasibility report on behalf of Strata. Norwest conducted an initial economic evaluation of the Cadotte Project, at a level of study consistent with that of a Preliminary Feasibility Study, based on the Most Likely potentially recoverable portion of the Discovered Petroleum Initially In Place (Discovered PIIP) estimate of 517 MMSTB. The term "Discovered PIIP" replaces "Discovered Resources" as defined in the COGE Handbook. Norwest estimates the Low Estimate of the potentially recoverable portion of the Discovered PIIP to be 245 MMSTB with a High Estimate of 855 MMSTB.

In a report dated August 16, 2007, Strata released an independent analysis, prepared by Norwest, of the drilling results and existing data available on a portion of the leases held by Strata in the Peace River Oil Sands area. Norwest evaluated data from 57 wells in the area to determine the thickness variation of the ore. Geophysical logs and laboratory measurements for 18 of these wells were also evaluated. In the report, Norwest's independent analysis gave a "High Estimate" of the original oil in place of 2.25 billion barrels of bitumen. This volume is considered to be a "High Estimate" of the in-place Discovered Resource made in accordance with the procedures of the Canadian Oil and Gas Evaluation (COGE) Handbook that applied during 2007. Norwest gave a "Low Estimate" of 1.44 billion barrels in place at a minimum bitumen grade of 8 percent by weight and an ore thickness of more than 10 metres. Norwest's "Best Estimate," which has a grade cut-off for bitumen of 8 percent by weight but no thickness constraint, is 1.99 billion barrels in-place.

The Pre-Feasibility Report released today by Strata, which is based on the August 16, 2007 report, is an evaluation of the estimated recoverable portion of the Discovered PIIP of bitumen on just a part of Strata's total Cadotte lease area. The lease area being evaluated in this report covers an area of 29 sections (approximately 18,345 acres) in the Peace River Oil Sands region of Alberta. This represents approximately 50% of Strata's total Cadotte area lease holdings.

The assumptions utilized in the current economic evaluation were based on a review of published public data for similar projects. The analogy method was utilized to develop recovery factors that were applied to the original bitumen-in-place estimates to obtain a low, most likely, and high estimate for potentially recoverable bitumen. Several projects using technology similar to that expected to be implemented on Strata's Cadotte Project were used as analogies for a bitumen recovery method and a resultant range of recovery factors. For the purpose of the present report, it is anticipated that production of the bitumen from Strata's Cadotte Project will be achieved by the application of one or more forms of in-situ extraction technology.

Production for Strata's Cadotte Project is estimated to be a maximum of approximately 56,000 barrels per day during the main period of development. The production life for this schedule exceeds 20 years.

"This Pre-Feasibility Study demonstrates that our Cadotte Project is a major project that is exploitable and substantial," stated Manny Dhinsa, President and CEO of Strata. "We are currently undertaking production testing in order to determine the most favorable method for extracting the bitumen."

The Pre-Feasibility estimate prepared by Norwest is compliant with the requirements of National Instrument 51-101 with respect to classifying the resource as Discovered PIIP. Dr. John D. Wright, Ph.D., P.E., President and Chief Engineer, of Norwest Questa Engineering Corporation is a qualified person as defined by National Instrument 51-101. Dr. Wright supervised the preparation of the technical information in this news release.

Strata Oil & Gas Inc. is a Canadian junior exploration company focused on carbonate-hosted bitumen deposits in the Peace River area of Alberta, Canada. Strata's current total land holdings consist of approximately 112,692 acres with 111,692 acres (approximately 165 sections) being located in the Peace River area.

Strata Oil & Gas is a trademark of Strata Oil & Gas Inc. This announcement contains forward-looking statements which involve risks and uncertainties that include, among others, limited operating history, risks related to petroleum exploration, limited access to operating capital, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All statements made herein concerning the foregoing are qualified in their entirety by reference to the Pre-Feasibility Study which ahs been filed with the SEC. More information is included in Strata's filings with the Securities and Exchange Commission which may be accessed through the SEC's web site at www.sec.gov.

Also see our website at www.strataoil.com



Contact:
Contact Info:
Investor Relations
1-800-488-0032
1-403-668-6539



--------------------------------------------------------------------------------
Source: Strata Oil & Gas Inc.
http://biz.yahoo.com/iw/080305/0371112.html

[Tackler]

http://investorshub.advfn.com/boards/read_msg.asp?message_id=26295663

[johnlw]

TAQA North completes PrimeWest acquisition
Deal part of Abu Dhabi's push to grow global franchise

Shaun Polczer
Calgary Herald

Thursday, January 17, 2008

If oil companies are measured by the height of their office towers, TAQA North Ltd. is shooting for the moon.

Perched atop the 51st floor of the Petro-Canada building, TAQA on Wednesday closed its $4.6-billion acquisition of PrimeWest Energy Trust to become a top-10 player in Calgary's oilpatch.

Peter Barker-Homek, who heads the Abu Dhabi National Energy Co., called it a "formative" day for the United Arab Emirates member's drive to establish a $60-billion global franchise.

"It's the first time the company has created a business that has the ability to invest in itself and grow organically," he said in an interview. "The closing of this transaction is an important milestone in our company's history."

With the deal, TAQA -- which is 75 per cent owned by the government of Abu Dhabi -- becomes one of the first state-backed enterprises to become a major oil and gas company outside its country of origin.

PrimeWest president and CEO Don Garner takes over the reins of the merged outfit, which will be run as a wholly owned subsidiary.

In conjunction with the takeover, TAQA announced a $500-million capital program, roughly double what PrimeWest would have spent this year.

"This is an opportunity to move forward our development programs we had at PrimeWest," Garner said.

"We all know what's happened around here with natural gas prices and capital markets, and executing those kinds of programs in a trust model was challenging."

TAQA North is targeting 140 per cent reserve replacement, which Barker-Homek and Garner both agreed is an "optimistic" view of a troubled market that has seen tax changes to royalty trusts and impending hikes to royalty rates in Alberta.

Compounding the situation in Canada, Garner said, the credit crunch south of the border is limiting the ability of Canadian and American companies to access much-needed capital.

Joining forces with TAQA effectively removes those barriers, he added.

"The market is in a pessimistic mood and we're seeing a pullback in development. A lot of people don't realize how hard it's come down," he said. "But we're not caught up in that pessimism. That number ($500 million) is real and it's exciting."

In less than a year, TAQA has spent about $7.5 billion to acquire roughly 100,000 barrels per day of production.

The company is targeting $20 billion worth of Canadian assets in five years, and both Garner and Barker-Homek said to expect more deals.

Analysts said TAQA is well within its means to fulfil that pledge. As the wealthiest of the United Arab Emirates, Abu Dhabi is widely considered to be among the richest cities in the world.

"There are pockets of capital around the world that would blow people's minds," said Dirk Lever, an analyst with RBC Capital Markets in Toronto who covered PrimeWest.

Lever described TAQA's takeover as a blueprint of things to come as governments laden with petro-dollars look to diversify their holdings worldwide.

"Most people think they overpaid (for PrimeWest) but I don't think it matters to them," he said. "Money is money. The amount of dollars in government-owned organizations out there is staggering. It far exceeds most people's imaginations. I'm interested to see where those organizations put it."

Steve Calderwood, an oil and gas analyst with Raymond James in Calgary, said the entire junior sector is ripe for consolidation in light of falling prices and rising costs.

He covers Compton Petroleum Corp., which has been fingered as the next TAQA takeover target, a deal that could be worth more than $2 billion.

Compton in December hung out the For Sale sign after one of its largest shareholders requested the company to review strategic alternatives.

Calderwood said it's probably a good time for buyers to be shopping heavily discounted assets.

"If you've got a longer-term view, then yeah, these companies are all ripe for takeover," he said.

When asked if Compton was in TAQA's sights, Garner shrugged: "We're friendly with them," he said.

[e-mail]
© The Calgary Herald 2008

[Tackler]

Its like a Quebec with weapons.

[Ed Monton]

Is Kurdistan a country ? They just don't want to say Iraq.

[Tackler]

From Vast MD&A...

During the nine months ended October 31, 2007, the Company began the process of exploring the possibility of acquiring oil and gas concessions in the country of Kurdistan. Accordingly, costs totaling $228,724 associated with this development project have been capitalized as at October 31, 2007...

The Company is optimistic and continues to investigate its strategic alternatives. The Company has recently hired a new CEO and management under his direction will review all of the Company’s assets. The alternatives may include, among other things, revisions to the Company's strategic plan, asset divestitures, operating partnerships or identifying additional capital sources. The Company does not intend to comment on developments regarding the evaluation of alternatives until such time as the Board of Directors has approved a specific course of action or such a decision regarding a specific course of action is probable. There is no assurance that this process will result in any changes to the Company's current strategic direction.

[johnlw]

The Fairbourne crooks are back at it:

Fairborne sheds trust status
Private equity firm gains $100M stake

Lisa Schmidt
Calgary Herald

Thursday, December 20, 2007

Fairborne Energy Trust reverted to a corporation Wednesday -- the first trust to successfully convert back -- in a deal that gives a U.S. private equity firm a $100-million stake in the new exploration and production company.

The conversion to Fairborne Energy Ltd. was completed Wednesday after the deal was approved by 98 per cent of shareholders at a special meeting a day earlier.

"The first order of business is to get back to drilling," said chief executive Steven VanSickle, adding the company plans to spend up to $150 million in 2008.

"We're out in the field building a couple of locations right now so we can start drilling activities between Christmas and New Year's."

The conversion was closely watched in the sector since no trust had successfully folded back into a corporation after the federal government last year imposed new tax rules for the sector starting in 2011.

In March, unitholders voted down conversion plans by True Energy Trust, angered by an options plan they called too favourable to management. They also argued there was no reason to convert so quickly into the transition period.

The impending tax changes have driven a wave of consolidation in the sector, which is also struggling with lower natural gas prices that have forced some trusts to cut payouts to unitholders.

But analysts also said the case of Fairborne -- an exploration-oriented trust that landed an equity deal -- is not necessarily representative and most trusts will likely hang on to the tax shelter as long as possible.

Under the deal, Fairborne issued 13.4 million shares of the new company to U.S. private equity firm Denham Commodity Partners Fund IV LP at $7.45 each. The proceeds of $100 million will be used initially to pay down debt.

Fairborne, which converted to a trust two years ago, operates in central, northwestern and west-central Alberta and produces about 13,100 barrels of oil equivalent a day. In March, the trust cut distributions to unitholders and struck a deal to acquire its original spinoff, Fairquest Energy Ltd.

VanSickle said it's too early to tell whether the early conversion will give the company a first-mover advantage.

"The market hasn't been kind to a lot of E&P (exploration and production) companies of late, but I do think there's a lot of opportunities out there right now in Western Canada," he said.

The equity injection from Denham will allow the company more room on its balance sheet, allowing it to pursue acquisitions at a time of lower natural gas prices, VanSickle said.

In trading, Fairborne units fell 10 cents to $5.40 on the Toronto Stock Exchange.

[e-mail]
© The Calgary Herald 2007

[sumisu]

Bulldog Resources Announces Fertile Pool Reduced Well Spacing Approval, Updated Reserves Evaluation and Third Quarter Results

Thursday November 8, 4:05 pm ET

CALGARY, ALBERTA--(Marketwire - Nov. 8, 2007) - BULLDOG RESOURCES INC. (TSX:BD - News)

HIGHLIGHTS

- Fertile Pool - reduced well spacing approved

- September 30, 2007 GLJ reserve update - 60% increase in proven plus probable reserve to 5.194 million BOE from 3.240 million BOE as at December, 31, 2006

- Drilled 14 oil wells (6.75 net) in Q3 (100% success rate )

- Increased Q3 production volumes 23% to 2,031 BOE/day from 1,648 BOE/day in Q2

- Increased Q3 cash flow per share 33% to $0.36 per share from $0.27 per share in Q2

- Achieved Q3 "top decile" field netback and cash flow of $56.98 and $53.93 per BOE.

- Continued operational efficiencies resulted in low production and transportation expenses in Q3 of $3.55 per BOE.

QUARTERLY SUMMARY

[continued in following link]

http://biz.yahoo.com/ccn/071108/200711080424241001.html?.v=1