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Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 1,965 for the week ended July 06, 2012. This was up by 6 from the previous week's count and represents the first increase in the past 4 weeks.
The current nationwide rig count is more than double that of the 6-year low of 876 (in the week ended June 12, 2009) and comfortably exceeds the prior-year level of 1,887. It rose to a 22-year high in 2008, peaking at 2,031 in the weeks ending August 29 and September 12.
Rigs engaged in land operations climbed by 3 to 1,896, offshore drilling was up by 2 to 50 rigs, while inland waters activity gained a rig to reach 19 units.
Natural Gas Rig Count: The natural gas rig count – which recently slumped to a 13-year low – increased for just the fourth time in 26 weeks to 542 (a gain of 8 rigs from the previous week). Despite the weekly improvement, the number of gas-directed rigs is down approximately 42% from its 2011 peak of 936, reached during mid-October.
In fact, the current natural gas rig count remains 66% below its all-time high of 1,606 reached in late summer 2008. In the year-ago period, there were 873 active natural gas rigs.
Oil Rig Count: The oil rig count – which was at a 25-year high of 1,421 in the previous week – was down by 2 to 1,419. Nevertheless, the current tally is way above the previous year's rig count of 1,007. It has recovered strongly from a low of 179 in June 2009, rising by nearly 8 times.
Miscellaneous Rig Count: The miscellaneous rig count (primarily drilling for geothermal energy) at 4 remained unchanged from the previous week.
Rig Count by Type: The number of vertical drilling rigs fell by 4 to 549, while the horizontal/directional rig count (encompassing new drilling technology that has the ability to drill and extract gas from dense rock formations, also known as shale formations) was up by 10 at 1,416. In particular, horizontal rig units – that reached an all-time high of 1,193 in May this year – increased by 3 from last week's level to 1,174.
Weekly Summary: Rigs engaged in exploration and production in the U.S. totaled 1,965 for the week ended July 06, 2012. This was up by 6 from the previous week's count and represents the first increase in the past 4 weeks.
The current nationwide rig count is more than double that of the 6-year low of 876 (in the week ended June 12, 2009) and comfortably exceeds the prior-year level of 1,887. It rose to a 22-year high in 2008, peaking at 2,031 in the weeks ending August 29 and September 12.
Rigs engaged in land operations climbed by 3 to 1,896, offshore drilling was up by 2 to 50 rigs, while inland waters activity gained a rig to reach 19 units.
Natural Gas Rig Count: The natural gas rig count – which recently slumped to a 13-year low – increased for just the fourth time in 26 weeks to 542 (a gain of 8 rigs from the previous week). Despite the weekly improvement, the number of gas-directed rigs is down approximately 42% from its 2011 peak of 936, reached during mid-October.
In fact, the current natural gas rig count remains 66% below its all-time high of 1,606 reached in late summer 2008. In the year-ago period, there were 873 active natural gas rigs.
Oil Rig Count: The oil rig count – which was at a 25-year high of 1,421 in the previous week – was down by 2 to 1,419. Nevertheless, the current tally is way above the previous year's rig count of 1,007. It has recovered strongly from a low of 179 in June 2009, rising by nearly 8 times.
Miscellaneous Rig Count: The miscellaneous rig count (primarily drilling for geothermal energy) at 4 remained unchanged from the previous week.
Rig Count by Type: The number of vertical drilling rigs fell by 4 to 549, while the horizontal/directional rig count (encompassing new drilling technology that has the ability to drill and extract gas from dense rock formations, also known as shale formations) was up by 10 at 1,416. In particular, horizontal rig units – that reached an all-time high of 1,193 in May this year – increased by 3 from last week's level to 1,174.
Gasco Energy Provides Second Quarter 2012 Operations Update
Jul 12, 2012 7:00:00 AM
DENVER, July 12, 2012 /PRNewswire/ -- Gasco Energy, Inc. (NYSE Amex: GSX) ("Gasco" or the "Company") today provided an interim operations update on its Riverbend Project in Utah's Uinta Basin and on its California projects in the San Joaquin Basin.
Riverbend Project Operations Update
Quarterly Production
Estimated cumulative net production for the quarter ended June 30, 2012 was 563.4 million cubic feet equivalent (MMcfe). By commodity for Q2-12, Gasco reported net crude oil volumes of 4,781 barrels and net natural gas volumes of 534.7 MMcf.
During Q1-12, Gasco conveyed a 50% interest in certain of its Uinta Basin properties to its joint venture partner concurrent with the March 22, 2012 closing of the joint venture. Q2-12 is the first full reporting period in which Gasco's Uinta Basin net production reflects this conveyance under the terms of the Gasco-operated joint venture. The Uinta Basin accounts for 100% of Gasco's production. By comparison, prior to the effect of the conveyance of the joint venture partner's interest, Gasco would have produced 870.2 MMcfe for the second quarter 2012.
Production Update
Gasco recently installed improved lifting equipment on each of the Green River wells that were drilled during the first half of 2012. The Federal 34-19G-9-19 has averaged 32 gross barrels of oil per day (BOPD) over the past 31 days, as compared to average production of approximately 12 to 15 BOPD prior to installing the new equipment. The Federal 23-30G-9-19 recently had the new equipment installed and is being brought back into production. Gasco continues to work on its Green River wells in an effort to increase black wax production.
Second-Half 2012 Drilling Plans
As previously announced, Gasco plans to commence its Uinta Basin drilling and completions program during the third quarter of 2012. The program contemplates a capital expenditure budget of approximately $3.6 million for the drilling and completion of six gross (1.0 net) new Green River Formation oil wells and six gross (2.0 net) new-drill natural gas wells. A single recompletion (0.3 net) was included in the initial capital expenditure budget, however, additional Green River recompletions and workovers are now being considered for 2012. All of the scheduled wells within the drilling program are in the permitting process. While actual timing of the wells is dependent upon receipt of the approved permits, the Company believes it will have the necessary inventory of permits to complete the 2012 drilling program on schedule.
"Artificial gas lift can be effectively utilized for Green River oil production in the Uinta Basin," said King Grant, Gasco's President and CEO. "Our Green River oil production, however, is shallower and did not best respond to gas lift. The improved rates resulting from newly installed rod pumps in the place of artificial gas lift on the wells are encouraging. We believe this is a cost-effective way to optimize production and we intend to use rod pumps in our new-drill Green River wells in an effort to attain higher estimated ultimate recoveries."
California Projects Update
Willow Springs
As previously announced, the exploration well tested non-commercial rates of oil in the Phacoides Formation and the partners moved up the well bore to test additional potential pay horizons. Two tests were made of the Monterey Shale in an off-structure position. While both zones indicated decent quality reservoir characteristics, both zones encountered non-commercial rates of hydrocarbons. Based upon all of the testing results, Gasco's partner made the decision to plug and abandon the well. While the Willow Springs well did not find commercial hydrocarbons, it did confirm Gasco's structural geologic model, found oil within the Phacoides Formation and confirmed the existence of Monterey Shale reservoir.
Gasco's partner has the option of spudding a second well within the Willow Springs acreage before March 2013.
Antelope Valley Trend
In order to complete the processing of the large Antelope Valley 3D seismic survey, Gasco's partner has been granted a one-year extension in the spudding of the first test earning well at Gasco's Antelope Valley Trend of prospects. The first test well will spud before July 2013. In exchange for the drilling extension, Gasco's partner has also committed to spudding a well on the Southwest Cymric prospect prior to December 31, 2013.
Northwest McKittrick
Permit issuance continues to be delayed within the California Fish and Wildlife Department. Gasco's partner is waiting on final approval of a "takings" value for endangered species mitigation. Upon approval, payment can be made to the Kern Water Bank and a permit to drill will be issued. Gasco believes that the first earning well can be drilled this year.
Commenting on the Company's California projects, Mr. Grant continued: "While not a producer, the Willow Springs exploratory well did yield important information for the partners. Further analysis revealed that we came in on the flank of the structure and we believe that the oil is trapped up-dip in the structure which can be drilled at a later date pending further structural and reservoir analysis. Importantly, the reservoir rock was good quality which is encouraging for further exploratory drilling in the area. In addition, we believe that more detailed analysis of the Antelope Valley 3-D seismic data could yield additional drilling locations for further exploration on our lands, and we are pleased our partner is planning to drill a well on the Southwest Cymric prospect."
About Gasco Energy
Denver-based Gasco Energy, Inc. is a natural gas and petroleum exploitation, development and production company engaged in locating and developing hydrocarbon resources, primarily in the Rocky Mountain region and in California's San Joaquin Basin. Gasco's principal business is the acquisition of leasehold interests in petroleum and natural gas rights, either directly or indirectly, and the exploitation and development of properties subject to these leases. Gasco focuses its drilling efforts in the Riverbend Project located in the Uinta Basin of northeastern Utah, targeting the oil-bearing Green River Formation and the natural gas-prone Wasatch, Mesaverde, Blackhawk, Mancos, Dakota and Morrison formations. To learn more, visit Gasco's website at www.gascoenergy.com.
Treaty Energy Appoints Non-Executive Director
George Warren, a Director of Tanjung Offshore, a Malaysia based Company Offering Comprehensive Services to the International Oil, Gas & Energy Industries, Accepted Appointment to the Board of Treaty Energy Corporation
Jul 12, 2012 8:30:00 AM
NEW ORLEANS, July 12, 2012 /PRNewswire/ -- Treaty Energy Corporation (OTCQB: TECO), (www.treatyenergy.com), a growth-oriented international energy company, announced today the appointment of George W. Warren Jr to the company's Board of Directors as Independent Non-Executive Director, effective September 1, 2012.
Andrew V. Reid, Chairman of Treaty Energy Corporation, commented, "George Warren first became an investor in Treaty in September of 2011. After several meetings and conversations he indicated he would like to introduce Treaty to possible investors in Malaysia. After many months of due diligence a group of investors, introduced to us by Mr. Warren, began acquiring shares in Treaty. Once the Malaysian group achieved a sizable equity position they requested Board representation as they continued to grow their investment in our company."
Mr. Reid added, "Treaty decided that in order to more fully benefit from this growing relationship it would be prudent to offer Mr. Warren a seat on our board of directors, an offer he accepted. We believe that Mr. Warren will be integral to bringing major foreign investment and technical expertise to Treaty Energy that will help propel the company toward our goal of becoming a Major Oil Exploration and Production Company."
As an Independent Non-Executive Director of Treaty Energy, Mr. Warren will have the same general fiduciary responsibilities to the company as any other Director. The Board as a whole is collectively responsible for the success of the company.
The Treaty Board of Directors:
Provides entrepreneurial leadership of the company within a framework of prudent and effective controls which enable risk to be assessed and managed.
Sets the company's strategic aims, ensures that the necessary financial and human resources are in place for the company to meet its objectives, and reviews management performance.
Sets the company's values and standards and ensured that its obligations to its shareholders and others are understood and met.
Bio for George W. Warren Jr – Independent Non-Executive Director of Treaty Energy Corporation:
George William Warren Jr., an American, aged 42, was appointed as Independent Non-Executive Director of Treaty Energy Corporation, effective September 1, 2012. He also serves as Independent Non-Executive Director of Tanjung Offshore since August 28, 2007. He holds a Bachelor of Science Degree in Accounting (Graduating with Beta Alpha Psi Accounting Honors) from the Louisiana State University. In 1993, after graduation, he joined Wegmann Dazet & Co., a professional corporation of certified public accountants in New Orleans, LA, where he was both a Senior Auditor and a Forensic Auditor.
In 1997, he was appointed as the Managing Director of BWB Controls, Inc., at Houma, LA, a worldwide manufacturer of pneumatic, hydraulic and electric surface safety equipment engineered specifically for the oil and gas industry. In 2006, he became a Director/Investor in Mezco Fabrication, L.L.C., at Carencro, LA, a manufacturer of precision sheet metal parts utilizing laser cutting technology for the oil and gas industry, a position he continues to hold. He also serves as a member of the AC of Tanjung. For more about Tanjung Offshore, headquartered in Kuala Lumpur, Malaysia, go to: http://www.tanjungoffshore.com.my/portal/
Mr. Reid concluded, "We see George Warren, with his international knowledge and experience in the offshore oil, gas and energy industries, as a wonderful addition to our Board. We look forward to working with George and his Malaysian investors for many years into the future."
Since the financial crisis of 2008, spending on exploration for oil and gas has dried up.
But after two years of lackluster spending, and with oil flirting with $100 a barrel, I expect oil companies to aggressively begin spending on exploration.
Which is where my energy stock, Schlumberger [NYSE: SLB], comes in. It provides the picks and shovels these oil and gas companies need.
But I keep coming back to Schlumberger, despite the run it's been on, as a stock to buy before the next wave of exploration spending begins.
Why Schlumberger?
Schlumberger is the clear leader in oilfield services in terms of size, scope, and technology, and it's in a superior position to benefit from a ramp up in oil exploration spending.
The company's size -- which dwarfs its nearest competitors Halliburton, Baker Hughes, and Weatherford -- makes it a key partner for the largest oil companies in the world. And it helps produce the most attractive profit margins when business is booming.
National and major public integrated oil companies will likely be aggressive investors in the next spending cycle, which I expect to occur in international oilfields and deepwater drilling.
This scenario puts Schlumberger in the sweet spot, since it's a one-stop shop with close ties to national oil companies. Schlumberger is one of the few companies with the ability to integrate technology, from seismic all the way to well completion, in one integrated package, which attracts large oil companies.
What's more, the company's focus on international operations is a hidden catalyst as customers ramp up spending. After all, international rig counts recently reached an all-time high.
Schlumberger's geographical reach, which put it at a disadvantage to competitor Halliburton over the past year as spending heated up in North America, should reverse as the exploration focus shifts overseas. With more than 40% of sales coming from exploration and 75% from international markets, Schlumberger is poised to grow its share of oil services revenue.
Schlumberger's size has also differentiated it from its peers thanks to its clear technological lead -- plus a research and development budget that's larger than that of its three closest competitors combined.
The bulk of service and equipment spending over the past year came from gas shale plays in North America, where independent exploration and production companies spent primarily based on equipment price versus quality.
This should reverse as Schlumberger's major customers beef up spending in harder to reach places like the deep waters off the coasts of West Africa and Brazil.
Oil is not getting any easier to find, and Schlumberger's strong technological lead will be key in the next spending cycle.
3 critical elements to the thesis
The price of oil does not need to reach $140 a barrel again for this investment to work out. All we need is stability above $75 a barrel for oil companies to bring exploration spending back online.
Schlumberger brings in three-fourths of its revenue from international markets, which are at an all-time high in terms of rig counts. International exploration spending typically lags that in North America at the beginning of a cycle. Brazil, the Middle East, and Africa are key regions where activity is expected to be robust and growing.
Margin expansion. Schlumberger's strongest margins come from its international business, which should expand over the next few years. As an added kicker, margins in North America should rebound after the company has reorganized its fragmented operations domestically, and the recent wave of mergers and acquisitions will bring larger players to North America -- Schlumberger's primary customer base.
What could go wrong?
Schlumberger should gain market share and expand its profit margins as exploration spending heats up.
Economic growth from emerging markets like China and India should support oil demand, but a major economic meltdown would curb the spending cycle -- or at least shorten the duration. The broader economy is a huge factor here.
Political and operational risk is always high. Iraq is a key region in the Middle East, as it boosts production and is expected to absorb a good deal of capacity. This will be a key component of margin expansion internationally.
Growth overseas may also stall as projects that were put on hold in 2008 take longer than expected to restart.
But at the end of the day...
I expect earnings per share to surpass its prior peak in 2008 and could break above $5 a share in 2012, which makes it a solid pick for the next few years.
This post is for DD purposes only and not a recommendation to buy or sell.
Transocean [NYSE: RIG] is now notorious for being the company that operated the fateful Deepwater Horizon drilling rig for BP.
But it's much more than that.
Transocean is the world's largest offshore drilling contractor with 140 rigs operating around the world. Locations include Africa, the North Sea, South America, Southeast Asia, and of course the Gulf.
It contracts the operation of these rigs to oil companies like BP, ExxonMobil, and Anadark. These companies pay Transocean a dayrate ranging from $50,000 to $650,000 per day, depending on the type of rig. Ultra-deepwater rigs (those that can drill in water up to 40,000 feet) command the most, while standard jackups command the least
First, let's state the obvious risks
Unfortunately for the company, 11 of its 12 rigs in the Gulf are ultra-deepwater and right now, most are not operating.
When (or if) all these rigs can get back to work isn't known yet, despite the U.S. government lifting its moratorium on drilling in the Gulf. Tougher regulations will certainly be coming, which will cost money to satisfy. And now Europe is considering toughening its regulations, with other regions likely following suit.
Another concern is the ability to negotiate high dayrates going forward. Many rigs have moved out of the Gulf, increasing competition elsewhere. If Transocean follows, that competition could hold down what it can charge.
Finally, there is the legal liability. Despite having indemnity clauses in its contracts, investors are concerned that Transocean will be found partially responsible for the oil spill in the Gulf. How much that liability might be is unknown, but it could potentially run into the billions.
So why should you consider buying?
Transocean brought in roughly $765 million in free cash flow over the past four quarters.
Now consider the following. Over the past five years, Transocean has grown free cash flow by roughly 42% per year.
Given the concerns above, yes, it might have a bit of a problem growing free cash flow for the next couple of years. But, a lot of that concern is going to be resolved over the next few years with the likelihood of higher expectations baked into the price.
Among its competitors, it has the lowest expectations at current prices.
All of which means...
Transocean provides a compelling opportunity to take advantage of some really low market expectations.
I believe Transocean will either be able to restart those rigs in the Gulf or move them. Plus, it's about to bring three more rigs on board.
The world's demand for oil is not declining despite what happened in the Gulf, and Transocean will continue to play a leading role in extracting it while adapting to new regulations.
Warren Buffett reminds us that we pay a hefty price for a cheery consensus. There is definitely no cheery consensus surrounding Transocean today, but waiting until the risks are resolved will not serve us well.
If you're interested in this company, I recommend you follow my lead with a mid-sized position because of the legitimate legal risks Transocean faces and its debt level compared to its peers'.
There's one more energy stock that would make a solid addition to your portfolio today. It's a dominant player in its specialty, and without it, most oil and gas companies wouldn't be able to operate.
This post is for DD purposes only and not a recommendation to buy or sell.
Why now's the time to consider buying
Although dayrates (the fees drilling contractors receive from oil and gas companies for their services) have increased, utilization rates have gone down slightly because of lower activity. Add in the uncertainty still lingering around the Gulf of Mexico after the Deepwater Horizon oil spill, and it's no surprise that the market hasn't paid much attention to the stock until very recently.
However, recent drilling success in areas like East Africa, along with increasing activity in other areas like the Black Sea and Falklands give the company reason for optimism.
The industry as a whole is primed for an uptick
In fact, the industry anticipates spending close to half a trillion dollars on exploration and production in the coming year. And with companies like ExxonMobil and Chevron leading the way, it's hard to believe this is just a hunch.
This marks a huge shift from the cautious spending of the past few years. What's more, with experts forecasting that the current price of oil is sustainable and set to increase, deepwater drilling should become more profitable.
Shareholders and managers unite
CEO Bruce Streeter is a busy man, serving as both the company's COO and President. But I'm not concerned.
You see, insiders own 10% of GulfMark's outstanding shares. Even better, the company ties compensation to operating income. Together, these two facts ease my concerns about Streeter's multiple roles.
What's more, stock ownership guidelines require management to own a percentage of shares in the company, meaning they have a strong incentive to make good decisions.
Risks to be aware of
Global oil and small-cap companies present their fair share of risks. At GulfMark, there's a few factors to monitor:
Spin cycle: This is a cyclical industry, so be prepared for some volatility. However, a long-term pinch in demand could be dangerous.
As the world turns: GulfMark will provide global exposure to your portfolio, but this diversity also brings the inherent risks of dealing in foreign economies.
Drydocking pay: Drydocking expenses (taking a ship out of water to conduct repairs) are a cost of doing business in this line of work. More drydocking expenses means less work and less money.
Getting more than what you pay for
Valuing an oil services company based on cash flows is tricky given the price of oil, sporadic capital expenditures, and unforeseen incidents like last year's BP oil spill.
Nevertheless, GulfMark's capital expenditures should drop significantly going forward, adding a nice boost to cash flows. The stock trades today at roughly 1.3 times its tangible book value, below the 10-year average of 1.7.
Any increase in demand for oil would boost free cash flow, giving us a fair entry point today for a company with significant growth prospects ahead.
Oil and natural gas are sure to be long-term winners. They're finite resources that will serve a vital role in our global economy for many years to come, and GulfMark Offshore is a strong way to play on that outlook.
I was bold with this small cap, giving it a 6% position in my real-money Rising Stars portfolio. I invite you to join me, as I anticipate some serious gains for years to come.
This, of course, isn't the only way to play energy right now. Next we'd like to share with you a drilling contractor that has a lot of investors nervous -- meaning opportunity abounds.
This post is for DD purposes only and not a recommendation to buy or sell.
GulfMark Offshore [NYSE: GLF] provides offshore marine services throughout the world to companies involved in the exploration and production of oil and natural gas.
This $1.3 billion company owns vessels that transport materials, supplies, and personnel, and position drilling structures.
GulfMark's fleet is one of the youngest in the industry, with 77% of the fleet less than 12 years old.
U.S. Natural Gas Fund (NYSE: UNG ): Natural gas prices have had a strong run over the last few months, with benchmark Henry Hub Natural Gas futures rising from multi-year lows earlier this year. In April, prices traded below $2 per bcf and have since traded higher to $2.94 per bcf. Should the heatwave continue, demand for natural gas could increase, as it is used for powering homes and appliances. Thus, higher temperatures could increase demand for air conditioning, fans, and other summer-specific appliances, increasing demand for power and by default natural gas.
Read more: http://community.nasdaq.com/News/2012-07/3-securities-to-watch-for-the-heatwave.aspx?storyid=154232#ixzz20QOxVfPs
Yeah I get what you are saying though.
I am sure current management is under considerable pressure as well having a 52 week high of $16 and a current share price of just over $3. Would of hated to be one of the those buyers. Probably a never ending battle between averaging down or taking a loss.
Yeah seemed to be the understanding I had just didn't caught the rational behind "scam trades" but thanks for the feedback.
Seems to be one of the underlying questions for any stock but point taken.
Ahhh I see I had to pull up a map when you said that LOL.
Ahhh got you. Do you expect further management changes?
I have been around the markets a long time but market making still seems to be a bit of a mystery to me. Can you elaborate on what you mean by scam trades as it pertains to these ones? TIA
Thanks for your highlights. Seems to leave a lot of unanswered questions about how to proceed with the financial restraints. What do you make of this RDMP involvement / ownership?
Who are some of the players drilling in Israel with ATP? If I recall Noble? Zion?
Can you link me to the filings showing RDMP's holdings? Their balance sheet doesn't seem to have a lot of cash available for buying stock in another company so this is interesting to me. Are they working to support XBOR to support their developments?
NOTE 4. OIL AND GAS PROPERTIES
Villarreal - Zapata County, Texas
The purchase price of this property was approximately $3,100,000, and included a prepaid drilling credit from the well operator of approximately $680,000. At acquisition, there were eight producing wells on this property. Black Rock acquired the approximate 13.942% working interest and 10.46% net revenue interest in seven of the producing wells and remaining leasehold. Black Rock also acquired approximately a 15.65% working interest and 11.74% net revenue interest in one producing well. During the period ended February 29, 2012, Black Rock elected to participate in all of the drilling operations commenced by the operator of the property, ConocoPhillips. Those drilling operations included capital expenditures on two wells plus drilling three new wells. Total development costs incurred by Black Rock during the three month period ended February 29, 2012, were approximately $561,314.
Frost Bank - Duval County, Texas
The purchase price of this property was approximately $200,000. At acquisition, there were five producing wells. Black Rock acquired an approximate 31.968% working and 23.976% net revenue interest in the well production. No drilling activity occurred during the period ended February 29, 2012. RMR Operating is the operator of the Frost Bank lease.
Resendez and LaDuquesa - Zapata County, Texas
The purchase price of this property was approximately $36,000. At acquisition, there were two producing and two shut in wells. Black Rock acquired an approximate 23.125% and 50.007% working interest in Resendez and LaDuquesa, respectively, and 17.34% and 37.56% net revenue interest in the well production for Resendez and LaDuquesa, respectively. No drilling activity occurred during the period ended February 29, 2012. RMR Operating is the operator of the Resendez and LaDuquesa leases.
Madera Prospect - Lea County, New Mexico
The purchase price of this property was approximately $4,774,000, including approximately $27,000 in acquisition related costs. At acquisition, the two leases comprised two producing wells and one shut in well. Black Rock acquired a 100% working interest and a 75% net revenue interest in one producing well, a 56.05% working interest and a 42.04% net revenue interest in the shut in well and a 41.38% working interest and a 31.04% net revenue interest in the second producing well. On April 29, 2011, Black Rock issued a promissory note to Red Mountain in return for borrowing approximately $4,900,000 to close this lease acquisition. The promissory note was cancelled upon closing of the transaction between Red Mountain and Black Rock.
The Company agreed to drill one test well to at least 9,000 feet by November 1, 2012 or incur $15,000 per month penalty until completed. We have drilled and completed the Madera 24-2H to fulfill this obligation. Upon commencement of the Madera 24-2H, the Company owned approximately 39.68% working interest and 29.76% net revenue interest; however, a portion of the other working interest owners elected not to participate in the drilling and completion of the Madera 24-2H. As a result of these non-consents, the Company increased its ownership to approximately 96.5% working interest and 72.38% net revenue interest. RMR Operating is the operator of the Madera leases. Total development costs incurred by Black Rock during the three month period ended February 29, 2012 were approximately $5,676,250.
Pawnee Prospect – Lea County, New Mexico
On July 8, 2011, Black Rock entered into a Purchase and Area of Mutual Interest Agreement (“PAMI”), effective as of July 1, 2011, that governed the relationship between Black Rock and certain other parties with respect to oil and gas leases in the Permian Basin (the “Pawnee prospect”) in which Black Rock acquired an 82% ownership interest. Pursuant to the PAMI on July 25, 2011, Black Rock acquired the remaining 18% ownership interest in the land from such other parties. The total acquisition cost was $439,222 or $350 per acre. Pursuant to the PAMI, on July 27, 2011, Black Rock acquired an 87.5% working interest with a 66.94% net revenue interest for $98,000 or $350 per acre. Additionally pursuant to the PAMI, on July 27, 2011, Black Rock acquired a 100% working interest with a 76.5% net revenue interest in one lease; a 100% working interest with a 75% net revenue interest in three leases; and a 100% working interest with a 77.75% net revenue interest in four leases. The total acquisition cost was $114,000 or $600 per acre. RMR Operating is the operator of the Pawnee leases.
In December 2011, Black Rock acquired a 100% working interest and a 78% net revenue interest from COG Operating, LLC and Oxy USA, Inc. in a lease for $16,000. In December 2011, Black Rock acquired 7 wellbores from Draco Energy, Inc. for the assumption of the plugging liability.
Two wells were completed and brought online on the Pawnee prospect during the quarter ended February 29, 2012: the Big Brave #1 and the Good Chief #1. Total well costs capitalized for the Pawnee prospect as of February 29, 2012 were $5,151,531.
The total cost of the Pawnee prospect was $6,064,076, which includes acquisition and closing costs. $46,713 in leasehold costs associated with proved reserves was reclassified as proved property from unproved property during the quarter, leaving $686,376 in leasehold costs associated with unproved property as of February 29, 2012. We have excluded $179,000, related to the Pawnee prospect, from depletion. Total costs incurred by Black Rock during the three month period ended February 29, 2012 were approximately $856,988.
Martin Prospect – Andrews County, Texas
On August 16, 2011, Black Rock acquired a 100% working interest with a 75% net revenue interest in the "Martin Lease" in exchange for 320,000 shares of Red Mountain's common stock. The fair value of assets acquired was $320,000. The Martin Lease is held by production and is for all rights 5,000 feet and below the surface of the land. In the event the Company elects to perform operations on this property, RMR Operating will be the operator.
Shafter Lake Prospect – Andrews County, Texas
On August 16, 2011 Black Rock acquired a 100% working interest with a 75% net revenue interest in the “Shafter Lake Lease” for $250,000 and 250,000 shares of Red Mountain’s common stock. The fair value of assets acquired was $500,000. The Shafter Lake Lease is held by production and is for all rights from surface to approximately 4,520 feet below the surface of the land. In the event the Company elects to perform operations on this property, RMR Operating will be the operator.
The Martin and Shafter Lake prospects were unproved properties for the quarter ended February 29, 2012 and had no proved reserves associated with these prospects.
Cowden Leasehold Interests– Ector County, Texas
On November 1, 2011 Black Rock acquired the “Cowden Leasehold Interests” and certain surface property located within the Cowden Leases for $1,150,000. The fair value of assets acquired was $1,556,384, offset by an asset retirement obligation of $406,384. At acquisition, the Cowden Leases contained 17 producing wells. Black Rock acquired 100% working interest with a 75% net revenue interest in two leases; a 100% working interest with a 79.375% net revenue interest in one lease; and a 75% working interest with a 62.8% net revenue interest in one lease. RMR Operating is the operator of the Cowden Lease.
Total unproved property costs, comprised of leasehold costs, amounted to $1,584,662 as of February 29, 2012.
NOTE 1. DESCRIPTION OF BUSINESS
Red Mountain Resources, Inc. ("Red Mountain", "we," "us" or the "Company") is a holding company that operates through its wholly owned subsidiaries, including Black Rock Capital, Inc. (“Black Rock”) and RMR Operating, LLC (“RMR Operating”). Red Mountain is engaged in the business of operating and investing in oil and gas properties in Texas and New Mexico through its wholly owned subsidiaries. Black Rock is a passive investor and does not operate its properties; however, RMR Operating acts as operator for a majority of the Black Rock properties.
Black Rock was originally formed on October 28, 2005 as an Arkansas limited liability company under the name “Black Rock Capital, LLC”. From inception through May 2010, Black Rock had no operations.
In May 2010, Black Rock entered into an agreement to purchase two separate oil and gas fields out of the bankruptcy estate of MSB Energy, Inc., which became effective as of June 1, 2010. Those fields are located in Zapata County and Duval County, Texas. In October 2010, Black Rock entered into an agreement to purchase two separate oil and gas fields located in Zapata County, Texas, also out of the bankruptcy estate of MSB Energy, Inc., which became effective on October 1, 2010.
On March 22, 2011, Black Rock entered into an agreement to be acquired by Red Mountain, a publicly traded shell company. For accounting purposes, Black Rock was treated as the acquirer and the transaction was treated as a recapitalization. The agreement provided for Red Mountain to issue 27,000,000 shares of common stock in exchange for all of the then outstanding equity of Black Rock. On June 22, 2011, the transaction was completed and the reverse recapitalization with Red Mountain was completed. Upon completion of the transaction, Red Mountain's $850,000 non-interest bearing Commercial Promissory Note issued by Black Rock on May 24, 2011 and its $4,900,000 non-interest bearing Secured Commercial Promissory Note issued by Black Rock on April 29, 2011 were extinguished. As a condition to the completion of the transaction, Black Rock assumed and acquired a loan of $2,681,201(the “Bamco Note”) from the First State Bank of Lonoke (“FSB”) that had previously been issued to Bamco Gas, LLC (“Bamco Gas”), which is in receivership. As a result, the Bamco Note was cancelled, Black Rock executed a new note to FSB (the “Replacement Note”) and the Replacement Note became the sole outstanding note owed to FSB by Black Rock. FSB also had the following requirements as conditions to completion of the transaction: (i) Alan Barksdale, Black Rock's sole officer, director and shareholder, was required to be the only officer as President of Black Rock and Chief Executive Officer of Red Mountain during the term of the loan; (ii) Black Rock's 1,000 common shares (100%) were to be pledged as collateral to secure the repayment of the Replacement Note; (iii) Black Rock's assets were to remain held in the name of Black Rock during the term of the loan; and (iv) 2,000,000 shares of common stock of Red Mountain were pledged to secure the repayment of the Replacement Note.
In June 2011, Black Rock filed Articles of Conversion with the Secretary of State for the State of Arkansas to convert from a limited liability company into a corporation. The conversion became effective July 1, 2011 and accordingly Black Rock was converted to “Black Rock Capital, Inc.” As a result of the conversion, all the membership interest holders of Black Rock Capital, LLC became shareholders of Black Rock. Black Rock and Red Mountain have adopted a fiscal year end of May 31.
How can Syria claim anything Israel has, doesn't make sense geographically?
ATP Oil & Gas Corporation : ATP Announces Management Change
06/07/2012 | 06:20pm US/Eastern
On June 1, 2012, ATP Oil & Gas Corporation (NASDAQ:ATPG) announced that Mr. Matt McCarroll replaced Mr. T. Paul Bulmahn as Chief Executive Officer of the company. Mr. Bulmahn continues to serve as Chairman and also in the newly created position of Executive Chairman of ATP. However, as of today, June 7, 2012, the company announced that it was unable to reach a mutually agreeable employment agreement with Mr. McCarroll and effective today he has submitted his resignation. In conjunction with his resignation, the previously announced purchase of shares from the company by Mr. McCarroll mentioned in the June 1, 2012 press release was rescinded.
About ATP Oil & Gas Corporation
ATP Oil & Gas is an international offshore oil and gas development and production company with operations in the Gulf of Mexico, Mediterranean Sea and the North Sea. The company trades publicly as ATPG on the NASDAQ Global Select Market. For more information about ATP Oil & Gas Corporation, visit www.atpog.com.
Cons to consider: the debt dilemma
Perhaps nothing needs more watching than ATP's rising debt levels, which threaten to hurl this company into bankruptcy court by 2015 (or sooner) if it can't figure out a way to boost production and cash flow quickly.
ATP boasts a balance sheet with over $2 billion in debt, of which $1.5 billion comes due in May 2015. At its current rate of production, there is precisely zero chance of paying that debt off without a massive secondary offering, which would dilute shareholder value to smithereens. Based on ATP's first-quarter interest payment of $76.5 million, the company will be divvying out more than $300 million in just interest expenses each year; not a very pretty picture if you ask me.
Even worse, ATP has failed to consistently produce positive cash flow over the past couple of years. It's therefore imperative for ATP to quickly and successfully build out its properties so that it can begin generating enough cash flow to cover its rapidly approaching debt window.
More DD regarding Gulf of Mexico drilling demand and Clipper development
Even with properties in the North Sea and hope abounding off the coast of Israel, it should be noted that a vast majority of ATP's revenue still is tied to production in the Gulf of Mexico. It's therefore imperative that drilling demand remains strong and that it continues to find ways to boost production in the region.
The big news for investors here is that ATP expects its two wells in the Clipper Field region of the Gulf to be operational by either later in the third quarter or early in the fourth quarter. The two wells are expected to add an additional 22,000 barrels of oil equivalent per day according to Foolish energy sector savant Isac Simon. That represents an 89% increase over ATP's production levels in 2011 and will tie its two wells directly into Murphy Oil's (NYSE: MUR ) Front Runner production facility.
Prior to Clipper, ATP has faced a world of problems. The Deepwater Horizon disaster and subsequent spill in 2010 placed a temporary moratorium on drilling from which ATP still hasn't fully recovered. On the other hand, deepwater driller Ensco (NYSE: ESV ) is back to operating at near full capacity in the Gulf, and Cobalt International Energy (NYSE: CIE ) is planning to drill three additional wells in the Gulf on top of the one it's working on now. Things are progressing quickly for ATP's peers, but not for ATP itself.
DD regarding the Shimshon well
The white knight for ATP Oil & Gas shareholders could turn out to be the company's deepwater interests off the coast of Israel in the Levant Basin. Preliminary estimates signal that the Shimshon well possesses between 2.5 trillion cubic feet to 3.4 TCF of natural gas. That's a potential game-changer for ATP, which has struggled to grow its production.
Two particular aspects of this find make it particularly notable (beyond the fact that we're talking about 3 TCF of natural gas). First, European and Asian demand for natural gas is high, and so are prices for the cleaner-energy resource. U.S. prices for natural gas may be near decade lows, but that's not the case across the water. Higher prices should mean considerably better cash flow for ATP.
Secondly, Noble Energy's (NYSE: NBL ) success in the region bodes well for ATP's prospects. Noble Energy had previously been the only other foreign company with the rights to drill off of Israel, so this could be a detriment to them. However, with claims to approximately 20 TCF of natural gas according to estimates, I don't think Noble shareholders will be crying the blues.
Chevron Issues Interim Update for Second Quarter 2012
Jul 11, 2012 3:20:00 PM
Copyright Business Wire 2012
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SAN RAMON, Calif.--(BUSINESS WIRE)-- Chevron Corporation (NYSE: CVX) today reported in its interim update that earnings for the second quarter 2012 are expected to be higher than first quarter 2012. Upstream results are projected to be lower between sequential quarters, due to lower average crude oil prices, partially offset by foreign exchange gains. Downstream earnings in the second quarter are expected to be significantly higher, reflecting improved refining margins and gains on asset sales.
Basis for Comparison in Interim Update
This interim update contains certain industry and company operating data for the second quarter 2012. The production volumes, realizations, margins and certain other items in the report are based on a portion of the quarter and are not necessarily indicative of Chevron's full quarterly results to be reported on July 27, 2012. The reader should not place undue reliance on this data.
Readers are advised that portions of the commentary below compare results for the first two months of the second quarter 2012 to full first quarter 2012 results, as indicated.
UPSTREAM
The table that follows includes information on production and price indicators for crude oil and natural gas for specific markets. Actual realizations may vary from indicative pricing due to quality and location differentials and the effect of pricing lags. International earnings reflect actual liftings, which may differ from production due to the timing of cargoes and other factors.
2011 2012
2Q 3Q 4Q 1Q
2Q thru
May
2Q thru
Jun
U.S. Upstream
Net Production:
Liquids MBD 478 453 447 456 466 n/a
Natural Gas MMCFD 1,299 1,260 1,290 1,170 1,196 n/a
Total Oil-Equivalent MBOED 694 662 661 651 665 n/a
Pricing:
Avg. WTI Spot Price $/Bbl 102.34 89.51 93.98 103.00 98.81 93.34
Avg. Midway Sunset Posted Price1 $/Bbl 108.67 102.99 107.83 112.01 108.42 102.72
Nat. Gas-Henry Hub "Bid Week" Avg. $/MCF 4.32 4.20 3.55 2.73 2.11 2.21
Nat. Gas-CA Border "Bid Week" Avg. $/MCF 4.24 4.32 3.74 2.96 2.27 2.40
Nat. Gas-Rocky Mountain "Bid Week" Avg. $/MCF 3.88 3.81 3.35 2.56 1.74 1.88
Average Realizations:
Crude $/Bbl 108.80 101.27 105.37 108.37 108.80 n/a
Liquids $/Bbl 103.63 96.75 100.65 101.93 102.14 n/a
Natural Gas $/MCF 4.35 4.14 3.62 2.48 2.05 n/a
International Upstream
Net Production:
Liquids MBD 1,388 1,353 1,369 1,338 1,305 n/a
Natural Gas MMCFD 3,670 3,496 3,658 3,849 3,868 n/a
Total Oil Equivalent MBOED 2,000 1,937 1,980 1,980 1,950 n/a
Pricing:
Avg. Brent Spot Price 2 $/Bbl 117.04 113.41 109.35 118.60 114.52 108.29
Average Realizations:
Liquids $/Bbl 106.84 102.82 101.33 110.03 104.47 n/a
Natural Gas $/MCF 5.49 5.50 5.55 5.88 6.23 n/a
1 As of second quarter 2012, Avg. Midway Sunset Posted Price is based on the average of four companies’ posted prices to better reflect realizations. Prior to second quarter 2012, the price is based only on the Chevron average posting.
2 The Avg. Brent Spot Price is based on Platts daily assessments, using Chevron’s internal formula to produce a quarterly average.
U.S. net oil-equivalent production increased 14,000 barrels per day during the first two months of the second quarter, largely reflecting increased production in the Gulf of Mexico. International net oil-equivalent production during the first two months of the second quarter decreased 30,000 barrels per day. Continued shut-in of production at the Frade field in Brazil and planned maintenance in Kazakhstan contributed to the majority of the decline. Production ramp-up at Usan in Nigeria partially offset these effects.
U.S. crude oil realizations during the first two months of the second quarter were in line with first quarter prices, reflecting the typical monthly lag on pricing in the Gulf of Mexico. International liquids realizations decreased $5.56, to $104.47 per barrel. U.S. natural gas realizations decreased $0.43 to $2.05 per thousand cubic feet, while international natural gas realizations increased $0.35 per thousand cubic feet during the first two months of the second quarter.
DOWNSTREAM
The table that follows includes industry benchmark indicators for refining and marketing margins. Actual margins realized by the company will differ due to crude and product mix effects, planned and unplanned shutdown activity and other company-specific and operational factors.
2011 2012
2Q 3Q 4Q 1Q
2Q thru
May
2Q thru
Jun
Downstream
Market Indicators:
$/Bbl
Refining Margins
U.S. West Coast – Blended 5-3-1-1 19.41 14.31 14.45 19.64 23.20 21.32
U.S. Gulf Coast – Maya 5-3-1-1 27.72 24.45 11.84 20.56 25.01 24.89
Singapore – Dubai 3-1-1-1 9.00 10.39 8.77 9.73 9.78 9.30
Marketing Margins
U.S. West – Weighted DTW to Spot 7.26 5.07 5.39 4.16 7.62 10.14
U.S. East – Houston Mogas Rack to Spot 4.49 4.46 4.35 3.90 5.33 5.10
Asia-Pacific / Middle East / Africa 5.74 6.19 5.65 4.75 6.42 n/a
Actual Volumes:
U.S. Refinery Input MBD 875 897 763 926 921 n/a
Int’l Refinery Input
MBD
1,017 882 805 779 853 n/a
U.S. Branded Mogas Sales MBD 510 529 515 505 519 n/a
For the full second quarter, U.S. refining and marketing margins increased compared to first quarter 2012, while international refining margins decreased over the same period.
International downstream earnings in the second quarter are expected to include gains of approximately $200 million from asset sales. Additionally, favorable inventory effects are projected to benefit earnings consistent with the sharp decline in crude and product prices toward the end of the second quarter.
During the first two months of the second quarter, U.S. refinery crude-input volumes were in line with the first quarter. International refinery crude-input volumes increased 74,000 barrels per day compared to the first quarter, largely reflecting completion of planned maintenance at the Yeosu, South Korea and Cape Town, South Africa refineries.
ALL OTHER
The company’s general guidance for the quarterly net after-tax charges related to corporate and other activities is between $300 million and $400 million. Due to the potential for non-ratable accruals related to income taxes, pension settlements, environmental and other matters, actual results may significantly differ from the guidance range.
NOTICE
Chevron’s discussion of second quarter 2012 earnings with security analysts will take place on Friday, July 27, 2012, at 8:00 a.m. PDT. A webcast of the meeting will be available in a listen-only mode to individual investors, media, and other interested parties on Chevron’s website at www.chevron.com under the “Investors” section. Additional financial and operating information will be contained in the Earnings Supplement that will be available under “Events & Presentations” in the “Investors” section on the website.
Acorn Energy Companies DSIT and US Seismic Collaborate to Win $900,000 BIRD Development Grant
Jul 11, 2012 8:00:00 AM
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MONTCHANIN, Del., July 11, 2012 /PRNewswire/ -- Acorn Energy, Inc. (NASDAQ:ACFN), announced today that two of the Acorn Energy portfolio companies, DSIT Solutions Ltd. and US Seismic Systems Inc., were awarded a $900,000 grant from the BIRD Israel-U.S. Binational Industrial Research and Development Foundation. The grant is being awarded for the joint development of the next generation integrated passive/active threat detection system for underwater site protection. The BIRD Foundation provides funding money for projects involving joint innovation and development between American and Israeli companies.
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John Moore, CEO of Acorn commented, "We encourage all of the Acorn portfolio companies to take advantage of synergies within the Group in order to reach company goals faster and better. In this case we are very pleased to see that USSI and DSIT are cooperating on a very exciting project that has generated serious interest and funding from the BIRD Foundation. USSI, a company with vast experience in the field of fiber optic seismic sensors, has developed revolutionary, state-of-the-art fiber optic underwater passive sensors. DSIT is a world leader in active Diver Detection Sonar systems. Both companies bring to the project their unique expertise and experience, in order to develop and integrate a very comprehensive passive/active underwater security system that will meet the needs of water bound energy facilities, offshore platforms, ports and harbors."
The integrated passive/active underwater security system that is the subject of this grant is potentially the most comprehensive system of its kind available. The advantages of combining the world's best passive and active sensors will lead to an underwater system that provides extremely efficient and effective coverage of all areas of a site. The combined system will be designed to provide a much greater probability of threat detection with a lower rate of false alarms for all types of threats.
The BIRD Foundation grant is designated to cover 50% of the development costs of the project over a period of two years. The grant calls for the signing of a Cooperation and Project Funding Agreement between the companies and the BIRD Foundation within 3 months to enable commencement of the funding. Dr. Eitan Yudilevich, the Executive Director of the BIRD Foundation: "BIRD's support of U.S.-Israel partnerships has led to very significant successes during its 35 years of existence. These partnerships have contributed to both the U.S. and Israel, by promoting innovation and reducing the risks of joint projects. This project is a great example of the special U.S.-Israeli synergy in the area of Homeland Security."
About the BIRD Foundation
The BIRD (Binational Industrial Research and Development) Foundation works to encourage cooperation between Israeli and American companies in the various areas of technology, and provides assistance in locating strategic partners from both countries for developing joint products. Approaching its 35th birthday, the BIRD Foundation has invested in close to 830 projects, which have yielded revenues of about $8 billion. The BIRD Foundation supports projects without receiving any rights in the participating companies or in the project itself. The financial assistance is repaid as royalties from sales. The Foundation provides support of up to 50% of a project's budget, beginning with R&D and ending with the initial stages of sales and marketing. The Foundation shares the risk and does not demand that the investment be repaid if the project fails to reach the sales stage. The BIRD Foundation works in full cooperation with the Chief Scientist's Office at the Ministry of Industry, Trade, and Labor in Israel, and with the U.S. Commerce Department's National Institute of Standards and Technology (NIST).
About US Seismic Systems, Inc.
US Seismic Systems, Inc. designs, integrates, manufactures and sells fiber-optic sensing systems and solutions for the Energy and Defense markets. USSI utilizes all-optical fiber sensing technology for its state-of-the-art sensors. USSI's proprietary optical fiber and electronics combine to form the sensor system, which is designed to replace the legacy electronic-based sensor systems at a lower cost and with improved performance and reliability. For more information visit the USSI website at: www.ussensorsystems.com.
About DSIT
DSIT develops sonar and acoustic solutions and acts as a system integrator for advanced Security Command and Control systems. The Company's offerings are designed to provide the latest in technology and its intelligent application for the energy, commercial, defense and homeland security markets. The Company's offerings include: AquaShield™ Diver Detection Sonar (DDS), PointShield™ Portable DDS, Sonar Simulators and Trainers, MAR™ Portable Acoustic Ranges, Underwater Acoustic Signal Analysis (UASA) systems, and Sonar Upgrade Programs (SUP). For more information visit www.dsit.co.il.
About Acorn Energy, Inc.
Acorn Energy, Inc. (NASDAQ: ACFN) is a holding company focused on making energy better by providing digital solutions for energy infrastructure asset management. The four businesses in which it has controlling interests improve the world's energy infrastructure by making it: more secure - providing security solutions for underwater energy infrastructure (DSIT); more reliable - providing condition-based monitoring to critical assets on the electric grid (GridSense, OmniMetrix) and more productive and efficient - increasing oil and gas production while lowering costs through use of permanent ultra-high sensitive seismic tools that allow for a more precise picture of reservoirs (US Seismic). For more information visit: http://www.acornenergy.com.
Buyers into the stock.
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8) 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4) 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price
Common Stock, $1.00 Par Value 07/10/2012 M 801 A $ 24.94 30,458 D
Magellan Midstream and Occidental Petroleum Extend Open Season for Proposed BridgeTex Pipeline to July 18
Jul 11, 2012 5:35:00 PM
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TULSA, Okla. and HOUSTON, July 11, 2012 /PRNewswire/ -- Magellan Midstream Partners, L.P. (NYSE: MMP) and Occidental Petroleum Corporation (NYSE: OXY) announced today a one-week extension of their binding open season initiated on June 11, 2012 to solicit capacity commitments from shippers to transport crude oil from Colorado City, Texas to the Houston Gulf Coast area on the proposed BridgeTex Pipeline. Binding commitments are now due on July 18, 2012.
As previously announced, Magellan and Occidental are jointly assessing customer interest to transport up to 278,000 barrels per day of crude oil from Colorado City to Texas City. The project includes approximately 400 miles of newly-constructed pipeline from Colorado City to Houston and an expansion by Magellan of its distribution system between East Houston and Texas City. Subject to sufficient commitments from shippers and necessary permits and regulatory approvals, the proposed BridgeTex Pipeline is expected to begin service by mid-2014.
For customer inquiries about the open season, please contact Mark Daggett of Magellan at (918) 574-7022 or mark.daggett@magellanlp.com. More information about the project and the open season is available at www.magellanlp.com/uploadedfiles/BridgeTex Open Season.pdf.
About Magellan Midstream Partners, L.P.
Magellan Midstream Partners, L.P. (NYSE: MMP) is a publicly traded partnership that primarily transports, stores and distributes petroleum products. The partnership owns the longest refined petroleum products pipeline system in the country, with access to more than 40% of the nation's refining capacity, and can store 80 million barrels of petroleum products such as gasoline, diesel fuel and crude oil. More information is available at www.magellanlp.com.
About Occidental Petroleum Corporation
Occidental Petroleum Corporation (NYSE: OXY) is an international oil and gas exploration and production company with operations in the United States, primarily in the Permian Basin, California and Midcontinent areas, the Middle East/North Africa and Latin America regions. Oxy is the fourth-largest U.S. oil and gas company, based on equity market capitalization. Oxy's wholly owned subsidiary OxyChem manufactures and markets chlor-alkali products and vinyls.
Oxy is committed to safeguarding the environment, protecting the safety and health of employees and neighboring communities and upholding high standards of social responsibility in all of the company's worldwide operations. More information is available at www.oxy.com.
Northern Oil and Gas, Inc. Provides Second Quarter 2012 Production and Drilling Update and Provides Oil Derivative Summary
Jul 11, 2012 5:45:00 AM
WAYZATA, Minn., July 11, 2012 /PRNewswire/ -- Northern Oil and Gas, Inc. (NYSE MKT: NOG) ("Northern Oil") today provided a second quarter production and drilling update and oil derivative summary.
PRODUCTION UPDATE
Northern Oil expects to continue providing production updates on a going-forward basis shortly after the end of each fiscal quarter once the majority of quarterly production data becomes available. Given Northern Oil's significant inventory of non-operated wells, management believes these continued quarterly updates will be an effective way to supplement the annual guidance previously provided.
Northern Oil expects second quarter 2012 production to increase approximately 20% compared to first quarter 2012, resulting in an average of approximately 10,200 barrels of oil equivalent per day. During the first two months of the quarter, the weighted average days on production was approximately 52 out of a possible 61 producing days, or approximately 85% of potential producing days. Preliminary estimates of June's weighted average days on production appear to be consistent with the first two months of the second quarter.
DRILLING & COMPLETIONS UPDATE
During the second quarter of 2012, Northern Oil had approximately 162 gross (15.8 net) wells completed and placed into production. As of June 30, 2012, Northern Oil was producing from a total of 955 gross (87.6 net) wells.
As of June 30, 2012, Northern Oil was participating in an additional 150 gross (10.8 net) wells that were drilling, completing or awaiting completion.
DIFFERENTIAL UPDATE
Northern Oil observed differentials tighten from approximately $18.50 per barrel on average in April 2012 to approximately $11.50 per barrel on average in May 2012, and currently expects differentials to average approximately $14 per barrel for the second quarter of 2012.
Targa Resources Announces Second Quarter 2012 Dividend and Distribution
Jul 11, 2012 4:38:00 PM
2012 GlobeNewswire, Inc.
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HOUSTON, July 11, 2012 (GLOBE NEWSWIRE) -- Targa Resources Corp. ("TRC" or the "Company") (NYSE:TRGP) and Targa Resources Partners LP ("Targa Resources Partners" or the "Partnership") (NYSE:NGLS) announced their respective quarterly dividend and distribution for the second quarter of 2012.
Targa Resources Corp. announced today that its board of directors has declared a quarterly cash dividend of 39.375¢ per share, or $1.575 per common share on an annualized basis, for the second quarter 2012. The approved dividend represents increases of approximately 8% over the previous quarter's dividend and 36% over the dividend for the second quarter 2011. This cash dividend will be paid August 15, 2012 on all outstanding common shares to holders of record as of the close of business on July 23, 2012.
Targa Resources Partners LP announced today that the board of directors of its general partner has declared a quarterly cash distribution of 64.25¢ per common unit, or $2.57 per common unit on an annualized basis, for the second quarter 2012. The approved distribution represents an increase of approximately 3% over the previous quarter's distribution and 13% over the distribution for the second quarter 2011. This cash distribution will be paid August 14, 2012 on all outstanding common units to holders of record as of the close of business on July 23, 2012.
About Targa Resources Corp. and Targa Resources Partners LP
Targa Resources Corp. is a publicly traded Delaware corporation that owns a 2% general partner interest (which the Company holds through its 100% ownership interest in the general partner of the Partnership), all of the outstanding incentive distribution rights and a portion of the outstanding limited partner interests in Targa Resources Partners LP.
Targa Resources Partners is a publicly traded Delaware limited partnership that is a leading provider of midstream natural gas and natural gas liquid services in the United States. The Partnership is engaged in the business of gathering, compressing, treating, processing and selling natural gas; and storing, fractionating, treating, transporting and selling natural gas liquids, or NGLs, and NGL products; and storing and terminaling refined petroleum products and crude oil. The Partnership owns an extensive network of integrated gathering pipelines and gas processing plants and currently operates along the Louisiana Gulf Coast primarily accessing the onshore and near offshore region of Louisiana, the Permian Basin in West Texas and Southeast New Mexico and the Fort Worth Basin in North Texas. Additionally, the Partnership's logistics and marketing assets are located primarily at Mont Belvieu and Galena Park near Houston, Texas and in Lake Charles, Louisiana with terminals and transportation assets across the United States. Targa Resources Partners is managed by its general partner, Targa Resources GP LLC, which is indirectly wholly owned by Targa Resources Corp.
The principal executive offices of Targa Resources Corp. and Targa Resources Partners are located at 1000 Louisiana, Suite 4300, Houston, TX 77002 and their telephone number is 713-584-1000.
Anybody attending?
LINN Energy Announces Second Quarter 2012 Earnings Conference Call
Jul 11, 2012 3:30:00 PM
2012 GlobeNewswire, Inc.
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HOUSTON, July 11, 2012 (GLOBE NEWSWIRE) -- LINN Energy, LLC (Nasdaq:LINE) announced today that management will host a conference call Thursday, July 26, at 10 a.m. Central/11 a.m. Eastern to discuss the company's second quarter 2012 results and its outlook for the remainder of 2012. Prepared remarks by Mark E. Ellis, Chairman, President and Chief Executive Officer, and Kolja Rockov, Executive Vice President and Chief Financial Officer, will be followed by a question and answer period.
Prior to trading Thursday, July 26, LINN Energy expects to issue its earnings results for the second quarter 2012, as well as guidance for the remainder of 2012.
Investors and analysts are invited to participate in the call by phone at (877) 224-9081 (Conference ID: 11461293) or via the internet at www.linnenergy.com. A replay of the call will be available on the company's website or by phone at (855) 859-2056 (Conference ID: 11461293) for a seven-day period following the call.
Copano energy maintains quarterly cash distribution
Jul 11, 2012 3:15:00 PM
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HOUSTON, July 11, 2012 /PRNewswire/ -- Copano Energy, L.L.C. (NASDAQ: CPNO) announced today a cash distribution for the second quarter of 2012 of $0.575 per unit, or $2.30 per unit on an annualized basis, for all of its outstanding common units. This distribution will be payable on August 9, 2012, to holders of record of common units at the close of business on July 31, 2012.
"Copano will maintain its $0.575 quarterly distribution to unitholders," said R. Bruce Northcutt, President and Chief Executive Officer of Copano. "We expect that our second quarter distribution coverage will be significantly higher than our first quarter coverage but less than 100% due primarily to the effect of lower commodity prices.
"At our Houston Central Complex, our 200,000 Mcf/d cryo plant is performing better than originally expected and we are continuing to see increased volumes from the Eagle Ford. We are making good progress on our 2012 Eagle Ford capital projects and will start to see the benefits of our fully integrated strategy once our first 400,000 Mcf/d processing expansion and Formosa's 75,000 Bbl/d fractionation expansion are complete early next year," Northcutt added.
This release serves as qualified notice to nominees under Treasury Regulation Sections 1.1446-4(b)(4) and (d). Please note that 100% of Copano's distributions to foreign investors are attributable to income that is effectively connected with a United States trade or business. Accordingly, all of Copano's distributions to foreign investors are subject to federal income tax withholding at the highest effective tax rate for individuals or corporations, as applicable. Nominees, and not Copano, are treated as the withholding agents responsible for withholding on the distributions received by them on behalf of foreign investors.
Interesting news today.
US Natural Gas Corp Looks to Expand Its West Virginia Operations through Acquisition of Gas Company
Acquisition would add 40 Natural Gas Wells and 9000 Acres of Leases
Jul 11, 2012 11:06:00 AM
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ST. PETERSBURG, Fla., July 11, 2012 /PRNewswire/ -- US Natural Gas Corp (OTC Pink: UNGS), an energy exploration company with operations in the Appalachian Basin announced today that the Company has entered into the bidding process to acquire the operations of a natural gas production company located in Wayne County, West Virginia.
If successful, the acquisition would add 40 producing natural gas wells and 9000 acres of mineral rights leases to its current portfolio bringing the total to 162 natural gas wells and 21,000 acres of mineral rights under lease all within the same county. The 40 natural gas wells produce on average 5000 MCF per month. Management projects this level of production to increase by 50 percent after each of the wells is addressed under a water maintenance plan.
The Company will have two options for delivery from this newly acquired field. Current production is transported to a local utility company with hedging at prices well above the spot price for natural gas. In addition, a separate active transmission line crosses one segment of the leasehold base. The Company has been afforded the opportunity to tap into this line for an alternative transmission and delivery method.
The Company is currently in negotiations with two potential partners to joint venture on the acquisition. The Company would retain the operations of the gas company, while the joining partner would retain the acquired mineral rights. The Company would simultaneously lease the acquired mineral rights from its partner. The Company will submit its bid on July 13, 2012. The winning bidder will be notified prior to month's end with the closing transaction to take place during the month of August. Terms of the proposed acquisition have not been disclosed.
"The proposed acquisition will complement our producing properties in West Virginia," said Wayne Anderson, President of US Natural Gas Corp. "To be afforded the opportunity to acquire an operation of this size within 20 minutes of our current operation is extremely beneficial. We look forward to submitting our bid later this week and will keep shareholders abreast of the outcome."
Liberty Energy Corp. Announces Draw-Down to Fund Exploration of New Leases and Operational Activities
Jul 11, 2012 8:00:00 AM
2012 GlobeNewswire, Inc.
HOUSTON, July 11, 2012 (GLOBE NEWSWIRE) -- Liberty Energy Corp. (OTCBB:LBYE) ("Liberty" or "the Company") is pleased to announce a draw-down from its equity financing agreement.
The funds have been drawn to support the exploration of the Company's newly acquired Texas acreage and the ongoing operational activities on its existing oil and gas leases.
The Company has received the draw-down under the terms of its equity investment agreement that does not include any debt financing and facilitates funding of up to $8,000,000.
The Company is working to finalize geological and geophysical work plans to be completed on the new leases. The new leases make up over 1,000 acres in Texas and are considered to be low risk being positioned within proven, multiple payzone, producing counties. The Company also intends to work with existing partners to investigate and further develop the new and existing leases.
"We are delighted to have the continued support and financial backing of our investors. We are working with geologists and consultants to determine the best approach for our Company and its stakeholders. With the continued support of the financing agreement we hope to proceed with developing our new and existing assets" commented Ian Spowart, CEO of Liberty Energy Corp.
ABOUT LIBERTY: Liberty Energy Corp. (OTCBB:LBYE) is an Independent Oil and Gas Exploration and Production Company dedicated to the sourcing and production of fuel supplies in the United States and Europe. Headquartered in Houston, Texas, the company has signed agreements to acquire leases and royalties in both Texas and Bulgaria, covering several wells with extensive potential for future development. In Texas, four leases – Dahlstrom, Ratliff, and two at Lockhart Northeast – are identified as rich oil and gas sites based around numerous geological pay zones. In North-West Bulgaria, Liberty has acquired royalty rights to a 1,000,000+ acre natural gas property (the A-Lovech exploration block), an area of high quality, low- sulphur natural gas condensate. Through this combined international reach and domestic focus, Liberty Energy is committed to the development of US fuel reserves while seeking out further opportunities for the global energy markets.
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HII Technologies Announces Acquisition Strategy with Oilfield Services Focus
Jul 11, 2012 8:25:00 AM
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HOUSTON, July 11, 2012 /PRNewswire/ -- HII Technologies, Inc. (OTCBB: HIIT), a development-stage energy services company located in Houston, Texas, announced its intent to increase its efforts related to acquiring operating businesses servicing active shale-based resource plays including those located in South Texas. The Company is currently evaluating three separate operating company candidates for potential acquisition.
While the Company cannot give assurances of term sheets being executed with any of the current acquisition candidates or any acquisition ultimately being consummated, the Company has had initial discussions with several companies fit its target profile. The Company's target profile for operating companies includes growing revenues, good cash flow and little or no debt with its current business.
The Company's CEO, Matt Flemming, stated, "Owner-operated private companies located in and around the Eagle Ford shale area of South Texas as well as other energy-resource plays in Texas have presented attractive candidates for HII to acquire. Some of these targeted candidates are debt free, providing some flexibility in financing an acquisition and many with good history of profitable operations. HII's current goal of acquiring one or more of these businesses could leverage our estimated $30 million tax loss carry-forward and help build value for our stockholders."
Duma Energy Enters Negotiations for African Concession
Jul 11, 2012 8:10:00 AM
2012 GlobeNewswire, Inc.
HOUSTON, July 11, 2012 (GLOBE NEWSWIRE) -- Duma Energy Corp. (OTCBB:DUMA) (the "Company") is pleased to announce that it has entered into the final stage of negotiations regarding the proposed acquisition by the Company of a private corporation with a significant interest in an African concession totaling approximately 6 million acres (25,000 square km) (the "Proposed Acquisition"). The Company is seeking to expand beyond its current U.S. operations and acquire highly prospective opportunities in emerging exploration regions.
"Our success in the last two years has put us in a strong position for growth. We believe it is the right time to be aggressive and continue to pursue our stated goal of seeking projects that offer huge potential returns. There are great opportunities out there," said Jeremy G. Driver, President and Chief Executive Officer of Duma Energy Corp.
Any such Proposed Acquisition will be subject to the execution of definitive acquisition documentation together with the satisfaction of certain conditions precedent which would be standard in acquisitions of this type.
Circle Star Energy Closes Acquisition of Approximately 14,000 Acres in Northwest Kansas
Jul 11, 2012 12:11:00 PM
FORT WORTH, TX -- (Marketwire) -- 07/11/12 -- Circle Star Energy Corp. (OTCBB: CRCL) (the "Company" or "Circle Star") an emerging development and production company with interests in several notable oil and gas plays in Texas and Kansas is pleased to announce two transactions resulting in the acquisition of leases totaling approximately 12,500 and 1,500 acres in Sheridan and Trego Counties, Kansas, respectively.
The acquired leasehold interests include 100% working interest and an average net revenue interest of approximately 80%. Additionally, the transactions include approximately 6.5 square miles of processed 3D seismic.
The consideration for the acquisitions includes a combination of cash and common shares of the Company for a total consideration of less than $130 per acre.
Jeff Johnson, CEO of Circle Star Energy, comments, "The acquisition of this leasehold acreage in Northwest Kansas is another step toward developing a meaningful position in a potential world-class oil play, which is still in the early stage of its life-cycle." Johnson continues, "Over the past few months, we have seen several larger oil companies take acreage positions in and around our focus area. We look forward to drilling and developing these assets later this year, with the goal of providing short-term production growth and long term shareholder value."
The common shares issued in connection with the acquisitions have not been and will not be registered under the United States Securities Act of 1933, as amended or any state securities laws.
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Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1.Title of Security
(Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code
(Instr. 8) 4. Securities Acquired (A) or Disposed of (D)
(Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s)
(Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I)
(Instr. 4) 7. Nature of Indirect Beneficial Ownership
(Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 07/02/2012 A 3,125 A $ 0 234,760 D