BG Group posted a 37% drop in third-quarter core earnings but raised its full-year production guidance as output increased sharply in the period.

Earnings before interest, tax, depreciation and amortisation came to $1.24bn in the quarter, down from $1.98bn in the same period last year but better than the $1.15bn expected by analysts.

The company lifted its output guidance to between 680,000 and 700,000 barrels of oil equivalent per day from 650,000 to 690,000, as it reported a 26% rise in third-quarter production to 716,000 boed.

Revenue for the period fell to $4.15bn from $4.58bn, with pre-tax profit down to $466m from $1.99bn.

BG said its Upstream business maintained positive momentum in growth projects in Australia and Brazil and continued to improve reliability and efficiency in its base assets.

It added that liquefied natural gas operations saw a robust operating performance despite challenging market conditions.

Chief executive Helge Lund said: "We are on track to deliver our promised operating and capital cost savings for 2015 and are adding new low cash cost volumes through Australia and Brazil. These actions will help mitigate the impact of lower commodity prices on our financial results.

"We continue to work with Shell on integration planning and to secure the necessary regulatory approvals ahead of the shareholder vote. The transaction remains on track to complete in early 2016."

- See more at: http://www.digitallook.com/news/news-and-announcements/bg-lifts-production-guidance-as-third-quarter-earnings-drop--912449.html#sthash.hAn3ZUYf.dpuf

A stubborn 16-month crude rout with no end in sight is driving the largest U.S. oil producers away from costly, high-risk megaprojects long touted as the industry’s future and toward safer shale operations that generate the cash needed to satisfy anxious investors.

Exxon Mobil Corp., Royal Dutch Shell, Chevron Corp., ConocoPhillips and Hess Corp. have all either delayed or abandoned projects that range from the deep seas of the Gulf of Mexico to Canada’s oil sands and the U.S. Arctic. At the same time, Exxon and Chevron both announced plans to substantially increase U.S. crude production, largely as a result of their shale operations.

“What makes more sense in this environment: drill a $100 million well in the deepwater Gulf that might come up empty, or poke lots of holes in west Texas where you already know there’s oil for a few million apiece?” said Michael Webber, deputy director of the University of Texas Energy Institute.

Explorers are expected to slash spending on deep-water wells by 20 percent to 25 percent next year, compared with a 3 percent to 8 percent overall reduction on all types of fields, according to Barclays Plc analysts including J. David Anderson. The type of giant reservoirs that require megaproject treatment are now found in only the roughest, deepest and coldest parts of the world.

One example: An equipment failure forced Chevron to put its $5.1 billion Big Foot development, a deepwater Gulf of Mexico project that was supposed to begin pumping crude this year, on hold until at least 2018. The San Ramon, California-based company hasn’t said whether the delay will bloat the price-tag, which already had risen 28 percent from a 2010 estimate of $4 billion.

International producers are failing to deliver 80 percent of megaprojects on time and on budget, compared with about 50 percent in 2005, said Neeraj Nandurdikar, oil and gas director at Independent Project Analysis Inc.

Exxon and Chevron may update investors on their biggest ventures when they report third-quarter results on Friday. “Chevron is taking actions responsive to the current price environment,” said Kurt Glaubitz, a company spokesman. “We are getting our cost structure down and actively managing to a smaller capital program.” An Exxon spokesman declined to comment.

ConocoPhillips, the third-biggest U.S. oil producer, canceled in July plans to search the deep Gulf of Mexico this year. Terminating a long-term rig lease may cost the Houston-based company as much as $400 million.

The shale drilling boom led to a supply glut that deflated prices by more than half since 2014 and shale remains one of the most economic options for producers. For Exxon and Chevron, that’s meant rededicating their spending to a region they’d mostly ignored for the half century before the shale boom while they pursued giant overseas discoveries.

“Projects are getting bigger and bigger and they are failing more often,” said Howard Duhon, systems engineering manager at Gibson Applied Technology and Engineering Inc., which advises major oil companies on how to design deep-water projects. Equipment is more complex and project teams are three or four times bigger, and “it’s not clear we’re getting any better results,” he said.

http://www.bloomberg.com/news/articles/2015-10-29/oil-producers-curb-megaproject-ambitions-to-focus-on-u-s-shale

---

Attached Files

 Marathon Oil Corp. reduced its quarterly dividend by 76 percent in an effort to increase cash flow with oil prices holding below $50 a barrel.

Marathon’s Dec. 10 payout to investors will drop to 5 cents a share from 21 cents, the company said in a statement Thursday. The dividend cut is expected to increase annual cash flow by more than $425 million.

“We believe the revised dividend appropriately addresses the uncertainty of a lower for longer commodity price environment,” Lee M. Tillman, the company’s president and chief executive officer, said in the statement.

http://finance.yahoo.com/news/marathon-oil-cuts-quarterly-dividend-104228391.html

Iran may roil global oil markets with plans to sell about 45 million barrels of fuel stored in tankers in the Persian Gulf within three months of the removal of sanctions on its economy, according to analysts.

Most of the stored oil is condensate that contains a sulfur compound, which complicates sales because many refineries can’t process it, said Victor Shum of IHS Inc. and Robin Mills at Dubai-based Manaar Energy Consulting. To market this large amount of oil within three months -- the equivalent of about half a million barrels a day -- Iran will have to resort to offering deep discounts, they said.

“Iran’s getting ready to open the taps,” Shum, IHS’s head of oil market research, said by phone on Oct. 26. “If they want to unwind this supply in the current weak market, they’ll have to offer discounts. It’s a buyer’s market.”

The country is seeking to claw back the market share it lost under sanctions by boosting oil exports after a July deal with world powers to return to energy and financial markets. The condensate in tankers moored off its southern coast will add to a worldwide oil glut, putting more pressure on crude prices that have dropped more than 40 percent in the last year. Sanctions curbed Iran’s sales of crude and condensate to 1.4 million barrels a day in 2014 from 2.6 million in 2011, the U.S. Energy Information Administration said in June.

Iran pumped 2.8 million barrels of crude a day in September, making it the fifth-largest producer in the Organization of Petroleum Exporting Countries, according to data compiled by Bloomberg. It plans to boost crude production and exports by 500,000 barrels a day within a week after sanctions are lifted,Roknoddin Javadi, managing director of state-run National Iranian Oil Co., said Oct. 21 in an interview in Tehran. Iran will add another 500,000 barrels in daily sales within six months after curbs are removed, he said.

Shipments of the 45 million barrels of condensate over three months would come on top of these planned crude exports, Javadi said, and surpass current expectations about the wave of Iranian oil poised to hit the market. The condensate, a light hydrocarbon liquid, is pumped from the offshore South Pars natural gas deposit.

“What is probably in the price consensus is around a half-million-barrel-a-day hike” in shipments, Eugen Weinberg, an analyst at Commerzbank in Frankfurt, said by phone on Oct. 28. “If the increase is stronger than expected, it’s likely to have a negative impact on the price.”

http://www.bloomberg.com/news/articles/2015-10-29/iran-seen-jolting-oil-market-with-90-day-supply-after-sanctions

China unveiled four more shale gas fields in the country. These fields have potential for commercial use. That's why the country is confident in becoming the third largest shale gas producer this year after the US and Canada. But the efficiency of shale gas in the country remains uncertain.

China has so far discovered 500 billion cubic meters of shale gas, arguably the world's largest, with 6 billion cubic meters available for commercial exploitation.

"The abundance of shale gas reserves in China is encouraging. There's one field, which is only 3,800 square meters in scale, but has 3,800 cubic meters of shale gas. That's a treasure," said Zhai Gangyi, oil & gas director of China Geological Survey.

Zhai says his team is studying the commercial value of other fields.

Data by China Geological Survey shows China has issued 54 licences for shale gas exploration, covering 170 thousand square meters of fields. 25 billion yuan has been invested into the sector, setting up 840 drill wells.

"The production of shale gas in China in 2014 was six times the amount in 2012, hitting 130 million cubic meters. This year, the production is set to be over 5 billion cubic meters. That means China will become the world's third largest shale gas producer," said Ren Shoumai, researcher of China Geological Survey.

But that target is facing challenges. That's the word from the country's powerful economic planner, the NDRC. Although China is preparing for a US-style shale gas boom, the demand for energy lost steam on the cooling economy this year. Both foreign and domestic companies halted exploration work.

http://linkis.com/english.cntv.cn/2015/aXDXP

Highlights

= Unit costs declined by $0.36 per mcfe, or 12% compared to the prior-year quarter.
= Production volumes averaged 1,445 Mmcfe per day, a 20% increase over the prior-year quarter.
= Marcellus production averaged 1,277 Mmcfe per day, a 27% increase over the prior-year quarter.
= First Utica well in Washington County, Pennsylvania estimated to have 15 Bcf EUR, or 2.8 Bcf per 1,000 feet of lateral.
= Second Utica well brought online with choke management at 13 Mmcf per day rate and projected to = have higher EUR than the first well.
= Full-year 2015 capital budget of $870 million is on track to deliver 20% annual year-over-year growth.
= Mariner East I with full operations for propane and ethane expected by the end of the year.

Commenting, Jeff Ventura, Range's Chairman, President and CEO, said:

'Our operational results in the third quarter continued to improve during this challenging commodity period. Range is expecting to deliver our 20% production growth target in 2015 from a significantly lower capital budget of only $870 million, compared to $1.5 billion in 2014. We believe Range has one of the most capital efficient operations in the industry and we expect to continue improvements in 2016 and beyond. The keys to increasing capital efficiency are our large, concentrated, stacked pay acreage position that can deliver high quality returns at low-cost and right-sized takeaway capacity to move products to better or improving markets. This gives Range a sustainable competitive advantage in the current market and becomes more important as the natural gas markets improve.

'We are continuing to work on potential non-core asset sales for areas in our portfolio that cannot compete against the Marcellus for capital. Range expects to close one or more non-core asset sales prior to year-end. Any sales proceeds will be used to reduce debt and strengthen our balance sheet. Importantly, we are continuing to drive down costs and implement innovative marketing solutions that are expected to deliver improved margins. We also see signs of improved pricing ahead, especially in Appalachia, as the Mariner East I project becomes fully operational by year-end and completion of other infrastructure projects to move natural gas and NGLs out of the basin. Each of these projects is expected to improve the basis differentials in the southwest area of the Marcellus in the near-term. These projects, combined with the industry slowdown and reduction in capital spending, should help to bring supply and demand in balance both nationally and regionally, thus improving our prices and margins going forward.'

Capital Expenditures

Third quarter drilling expenditures of $188 million funded the drilling of 25 (20 net) wells with a 100% drilling success rate. During the third quarter, 31 wells were turned to sales. In addition, during the third quarter, $9 million was expended on acreage, $6 million on gas gathering systems and $4 million for exploration expense. Range is on target with its $870 million capital budget for 2015. Similar to recent years, the 2015 capital budget is front-end loaded and has been redirected to more dry gas drilling to maximize expected rates of return. The Company started the year running 15 rigs, is currently running five rigs and plans to finish the year with five rigs. Range expects to have 50 to 60 wells waiting on completion at the end of the year, consistent with prior-year averages.

http://www.oilvoice.com/n/Range-Resources-Corporation-announces-third-quarter-2015-results/381607e52772.aspx

---

Attached Files

Genel Energy has announced the sale of a 20% participating interest in the Chia Surkh Production Sharing Contract, in the Kurdistan region of Iraq, to Petoil Inc.

As consideration for the sale of the 20% interest, Petoil will carry Genel's share of the costs associated with the Chia Surkh-12 (CS-12) appraisal well. The total cost of the CS-12 well is estimated at about $50 million, with drilling expected to commence in first-quarter 2016.

The drilling will help refine the contingent resource estimate for the Chia Surkh license, which is currently estimated at 250 MMboe.

On completion of the transaction, which is subject to Kurdistan Regional Government (KRG) approval, Petoil will transfer $10 million to Genel in the form of security, which will be released at different stages of well operations in accordance with cash calls, wellcompletion and testing. The operatorship of the Chia Surkh PSC will also transfer from Genel to Petoil for the duration of the CS-12 well.

On completion, Genel will have a 40% participating interest in the Chia Surkh license, with Petoil at 40% and the KRG at 20%.

http://www.worldoil.com/news/2015/10/29/genel-energy-sells-20-interest-in-kurdistan-psc

- Q3 2015 Production Averaged 160,590 BOE/d after 8,700 BOE/d of Q2 2015 Property Sales

- Q3 2015 Discretionary Cash Flow Totals $280 Million

- Enhanced Completions Contribute to 44% Quarter-over-Quarter Productivity Increases in Williston Basin

- Enhanced Completion Pad at Cassandra Prospect Tests at Average Rate of 5,224 BOE/d per Well

- Announces $400 Million of Total Asset Sales Year-to-Date

- Credit Commitments Unchanged at $3.5 Billion, Zero Drawn at September 30, 2015

= Whiting's production in the third quarter 2015 totaled 14.8 million barrels of oil equivalent (MMBOE), 89% crude oil/natural gas liquids (NGLs). Third quarter 2015 production averaged 160,590 barrels of oil equivalent per day (BOE/d) after 8,700 BOE/d of Q2 2015 property sales. This represents a 38% increase over the third quarter 2014.

James J. Volker, Whiting's Chairman, President and CEO, commented:

'Our third quarter results demonstrate we remain on track to balance capital spending and cash flow in 2016 at approximately $1.0 billion while maintaining our longer term growth profile. Total capital expenditures decreased 46% from the second quarter while production adjusted for asset sales was relatively flat. We spent $266 million in our core Williston Basin Bakken/Three Forks and DJ Basin plays in the third quarter, largely before we dropped three rigs to reach our fourth quarter eight rig program. Non-operated spending and facilities spending during the quarter were $58 million and $32 million, respectively. As they decline during the fourth quarter, we anticipate total capex under $300 million.

'In addition, we expect production in the fourth quarter to benefit from the continuing transition to high volume, enhanced completions as evidenced by the outstanding results at our P Johnson pad, which tested an average rate per well of 5,224 BOE/d. The pad incorporated 7.0 million pounds of sand per completion versus our typical 5.0 million pound completion.'

http://www.oilvoice.com/n/Whiting-Petroleum-Corporation-announces-third-quarter-2015-financial-and-operating-results/a1a972ab6dc0.aspx

ConocoPhillips reported its widest quarterly loss in more than six years as a crash in oil and natural gas prices tempered growth from Texas to Canada.

The largest major U.S. oil company without refining operations said it further reduced 2015 spending by $800 million for an anticipated total of $10.2 billion. ConocoPhillips lost $1.07 billion, or 87 cents a share in the third quarter, compared with a gain of $2.17 a share a year earlier, the Houston-based company said in a statement Thursday. It was the biggest loss since the fourth quarter of 2008.

The loss mirrored those of other major oil companies, including Royal Dutch Shell Plc, which reported a third-quarter net loss of $7.42 billion Thursday, the most in more than a decade. Exxon Mobil Corp. and Chevron Corp. report earnings Friday.

Chairman and Chief Executive Officer Ryan Lance has said ConocoPhillips will continue to support its dividend, which has a yield of about 5.6 percent and is among the highest for companies that explore for and produce oil and gas. Some analysts have questioned whether the company can continue to make those investor payments while funding new drilling and limiting spending to what it receives in cash from operations.

“That will be a challenge for them,” Brian Youngberg, an analyst at Edward Jones & Co. in St. Louis, said in an interview before the earnings release. “Operationally, they’re doing well with what they can control, but they can’t control prices.”

ConocoPhillips is among producers that have turned to asset sales to help shore up their finances, pay dividends and continue drilling after oil fell by more than half and natural gas declined to the lowest level in more than three years.

Oil and gas production rose 5.5 percent to the equivalent of 1.55 million barrels a day. Excluding one-time items, the company lost 38 cents a share in the third quarter, in line with the 38-cent average of 21 analysts’ estimates compiled by Bloomberg.

http://www.bloomberg.com/news/articles/2015-10-29/conocophillips-reports-loss-as-oil-crash-limits-shale-growth

• 
  

China's Sinopec Corp, Asia's largest refiner, posted a 47.8 percent fall in net profits in the first nine months of the year, as oil prices fell.

The state-controlled company's net profit was 27.0 billion yuan ($4.25 billion), compared to 51.8 billion yuan a year earlier, it said in a filing with the Shanghai bourse.

The company plans to cut back operations at its refineries by around 5 percent in the fourth quarter compared with the first half of the year as fuel inventories rise and demand for diesel slows, industry sources told Reuters.

Operating profit at the exploration and production business reported an operating loss of 3.4 billion yuan, as crude oil production fell 2.4 percent, Sinopec said in the filing, without providing a production figure.

The refining business made an operating profit of 14.9 billion yuan, up 34.3 percent on year, while the marketing division had an operating profit of 21.5 billion yuan, down 18.7
percent on year.

The chemicals division had a net operating profit of 15.0 billion yuan, compared to a loss of 18.5 billion yuan during the same period last year.

In 2014, Sinopec reported a worse than expected fourth-quarter net loss of 5.3 billion yuan - its first quarterly loss since becoming a public company in 2000.

http://www.reuters.com/article/2015/10/29/sinopec-corp-results-idUSL3N12S39X20151029

---

Attached Files

PetroChina Co., the country’s biggest oil and gas producer, posted its worst quarterly profit as a plunge in crude prices punished revenue.

Net income dropped to 5.2 billion yuan ($818 million), or 0.03 yuan a share, from 27.9 billion yuan, or 0.15 yuan, a year earlier, the Beijing-based company said in a statement to the Shanghai Stock Exchange on Thursday. That compared with the 10.9 billion yuan average of four analyst estimates compiled by Bloomberg.

“It’s a pretty weak performance across all segments,” Neil Beveridge, an analyst at Sanford C. Bernstein & Co., said by phone from Hong Kong. “PetroChina is struggling in the low crude environment and needs to find a way to stop the bleeding.”

PetroChina relies on oil and gas production for most of its revenue, and the tumble in crude prices since last year has taken a toll on the explorer.

Sales dropped 29 percent to 427 billion yuan in the third quarter. The company’s realized crude price fell 49 percent to $51.16 a barrel in the first nine months, according to the statement, while oil and gas output rose 3.6 percent to 1.1 billion barrels of oil equivalent.

http://www.bloomberg.com/news/articles/2015-10-29/petrochina-third-quarter-profit-falls-81-as-oil-prices-plunge

French oil and gas company Total's net adjusted profit tumbled 23 percent to $2.756 billion in the third quarter compared with the same period a year ago, the firm said on Thursday, hit by a sharp fall in global oil prices.

The firm however revised its production growth target higher to more than 9 percent this year from 8 percent previously following a 10 percent jump in production in a third quarter boosted by new projects.

Analysts on average had expected $2.391 billion in net adjusted profit, according to Thomson Reuters I/B/E/S estimates.

"In a context where the oil price has fallen by 50 percent in one year, Total was able to demonstrate its resilience by limiting to 23 percent the decrease in its third quarter adjusted net income of $2.8 billion," Chief Executive Officer Patrick Pouyanne said in a statement.

Record-high margins in the European refining sector boosted profits at Total's downstream division, which were up 82 percent on the previous year in the third quarter.

Total said that it was on track to more than beat its target of $1.2 billion in cost reductions in 2015, while organic investments after nine months were $16.6 billion, in line with the objective of $23-24 billion for 2015.

Rival BP on Tuesday announced a third round of spending cuts and more asset sales over the coming years to tackle the extended period of low oil prices and help pay for its $54 billion U.S. oil spill settlement.

http://www.reuters.com/article/2015/10/29/total-results-idUSP6N0QQ01Z20151029

Tesoro Corp. reported record profit Wednesday for third quarter, as earnings jumped 91 percent.

The San Antonio-based refiner’s earnings from continuing operations jumped to $759 million, or $6.13 a share, compared with earnings of $397 million, or $3.06 a share, for the same period a year ago.

Favorable margins and high utilization of its plants aided the results. Margins on Tesoro’s products rose to $15.57 a barrel compared with $11.82 for the third quarter of last year.

“We reported very strong results for the third quarter,” CEO Greg Goff said, attributing the results in part to “strong performance across all business segments.”

http://fuelfix.com/blog/2015/10/28/tesoros-profits-soar/

Suncor Energy Inc. has posted a third-quarter net loss of $376 million, a sharp reversal from the $919-million profit from the same period a year earlier.

However, stripped of one-time items, Suncor eked out operating earnings of $410 million, down from $1.3 billion during the third quarter of 2014.

U.S. pipeline opponents celebrate downturn in Alberta oilsands
Canada's oil patch on track for deep losses in 2015, slow recovery until 2019

In the release announcing Suncor's third-quarter results late Wednesday, CEO Steve Williams said that if Suncor were able to increase its stake in the Syncrude oilsands mine, operations at the sprawling development north of Fort McMurray, Alta., would run more smoothly.

"We believe that we can drive real improvements in Syncrude's performance with a larger ownership interest," Williams said.

Oil producers like Suncor have been squeezed by persistent weakness in crude prices, which have fallen to around $43 a barrel — down 60 per cent from the high point of last year.

During the third quarter, oilsands cash operating costs per barrel decreased to $27 — the lowest Suncor has seen since 2007 — from $31.10 a year earlier.

Overall production rose to 566,100 barrels of oil equivalent per day from 519,300.

"Our focus on operational discipline continues to pay off," said Williams.

"We're delivering on the reliability targets and cost reduction measures we established, leading to the lowest cash operating cost per barrel for oilsands operations in eight years — the results clearly demonstrate the impact this discipline has on Suncor's performance."

http://www.cbc.ca/news/canada/calgary/suncor-q3-2015-loss-syncrude-oil-sands-1.3293512

Profit adjusted for one-time items and inventory changes dropped to $1.77billion from $5.85billion a year earlier. The firm’s upstream business bore the brunt of the financial dip.

Chief executive Ben van Burden said:“Shell’s integrated business and our performance drive are helping to mitigate the impact of low oil prices on the bottom line, in what is a difficult environment for the industry today.

“We continue to improve the operational performance of our assets, and production volumes are up. Costs are falling across the company and Shell’s performance drive is delivering at the bottom line.
Our financial framework is highly competitive, with balance sheet gearing at 12.7%, similar to year ago levels, despite a halving of oil prices. Both net investments and dividends have been covered by operating cash flow over the last year, when oil prices have averaged $60 per barrel.

“While our cash flow and our operating performance in the quarter were strong, the headline numbers we’re reporting today include substantial charges. These charges reflect both a lower oil and gas price outlook and the firm steps we are taking to review and reduce Shell’s longer-term option set.

“We have halted exploration activities offshore Alaska, and stopped the construction of the Carmon Creek in-situ oil project in Canada.

“These are difficult, but impactful decisions. I am determined that Shell will become a more focused and competitive company as a result.”

The company leader confirmed its takeover of BG was still on track for 2016 target date. He said the deal would act as a “springboard to focus Shell into fewer and more profitable themes, especially deep water and integrated gas.”

https://www.energyvoice.com/oilandgas/91735/shell-suffers-major-financial-hit/

---

Attached Files

National Oilwell Varco posted better than expected third quarter results, recording earnings of $155million, compared to $289million in the previous three-month period, whilst stating it expected to take advantage of investment opportunities in the continued downturn.

Revenues for the third quarter of 2015 were $3.31 billion, a decrease of 15% from the second quarter of 2015 and a decrease of 41% from the third quarter of 2014. Analysts had predicted lower revenue and earnings ahead of today’s results.

Chief executive Clay Williams, said: “The sharp decline in oil prices and activity since late last year has impacted each of our segments, and will drive activity lower in the fourth quarter.

We believe our strong financial resources will enable National Oilwell Varco to invest in the extraordinary opportunities that will arise from this downturn, and we expect to emerge with greater capability and efficiency.

“In the meantime, with limited visibility into the timing of a recovery, we remain focused on managing costs and improving performance, while continuing to develop technologies that help our customers to improve their returns in a lower commodity price world.”

https://www.energyvoice.com/marketinfo/91706/national-oilwell-varcos-third-quarter-results-reflect-downturn/

---

Attached Files

EdgeMarc Energy is a small driller headquartered in the Pittsburgh area, formed in 2012.

The company has leased 50,000 acres in the Marcellus and Utica Shales. On Monday EdgeMarc issued a press release to announce they’ve attracted a new investor–the Ontario Teachers’ Pension Plan–which has promised the company up to $300 million in cash in return for part ownership (called an “equity commitment”).

The announcement also says EdgeMarc currently drills and produces natural gas in Monroe and Washington counties in Ohio, and Butler County in Pennsylvania.

In checking the latest issue of our 2015 Marcellus and Utica Shale Databook series, Volume 2, we find that EM Energy (which we assume is EdgeMarc) received permits to drill or continue work on 11 different wells in Butler County from May through August 2015.

Including an existing equity commitment from Goldman Sachs, EdgeMarc, a private company, has now sold off $750 million worth of the company to outside investors…

http://marcellusdrilling.com/2015/10/marcellus-driller-edgemarc-gets-300m-from-ontario-teachers/?utm_source=dlvr.it&utm_medium=twitter

Sleeping giant oilfields that were once thought mature and largely tapped out are getting a second lease on life with the latest in revolutionary enhanced oil technology: the futuristic-sounding Plasma Pulse Technology—a potentially billion-dollar business hitting the markets hard and backed by major investments.

Major strategic investors have been playing the enhanced oil recovery (EOR) market for some time, but a recent $15-million investment specifically in Propell Technologies Group, Inc. (OTCQB:PROP)’s Plasma Pulse Technology (PPT) gives us a glimpse of where this revolutionary tech is going.

The past few years have demonstrated that EOR is the savior of the North American oil boom, and the only thing that makes sense for producers who understand that operators have to be able to withstand price volatility.

Plasma Pulse Technology uses a series of impulse waves to reopen permeability for up to one year per treatment. Data from an average of 27 oil wells showed a 295% increase in initial production after a single PPT treatment, while an average from 36 injector wells showed a 545% increase of the amount of fluid after a single plasma treatment.

In an Oklahoma oil field, the application of PPT led to an amazing 1040% increase in daily well production—and that is just one of many successful plasma pulse case studies.

In addition to making wells more profitable, PPT enables the re-opening of wells without requiring water, without polluting chemicals, and without causing earthquakes. The technology doesn’t open rock like fracking; rather, it comes in afterwards and cleans up well bores to clear the pathway for oil to flow faster and more efficiently to the surface.

We’re looking at the immediate returns for this commercially proven method of getting more oil out of the ground, with the potential to double a well’s output by using PPT. This is exactly what investors today want to see from an operator, particularly in an atmosphere of depressed oil prices.

And the savings go far beyond the well. With anti-fracking sentiments at an all-time high, and new stringent regulations popping up, PPT offers a cheap and easy alternative.

http://oilprice.com/Finance/investing-and-trading-reports/The-Next-Big-Thing-In-Enhanced-Oil-Recovery.html

---

Attached Files

U.S. crude oil refinery inputs averaged over 15.6 million barrels per day during the week ending October 23, 2015, 271,000 barrels per day more than the previous week’s average. Refineries operated at 87.6% of their operable capacity last week. Gasoline production increased last week, averaging 9.7 million barrels per day. Distillate fuel production increased last week, averaging 4.9 million barrels per day.

U.S. crude oil imports averaged over 7.0 million barrels per day last week, down by 439,000 barrels per day from the previous week. Over the last four weeks, crude oil imports averaged over 7.2 million barrels per day, 3.8% below the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 722,000 barrels per day. Distillate fuel imports averaged 108,000 barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 3.4 million barrels from the previous week. At 480.0 million barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at least the last 80 years. Total motor gasoline inventories decreased by 1.1 million barrels last week, but are above the upper limit of the average range. Both finished gasoline inventories and blending components inventories decreased last week. Distillate fuel inventories decreased by 3.0 million barrels last week but are in the middle of the average range for this time of year. Propane/propylene inventories remain unchanged last week and are well above the upper limit of the average range. Total commercial petroleum inventories decreased by 3.7 million barrels last week.

Total products supplied over the last four-week period averaged over 19.5 million barrels per day, up by 1.0% from the same period last year. Over the last four weeks, motor gasoline product supplied averaged over 9.1 million barrels per day, up by 3.4% from the same period last year. Distillate fuel product supplied averaged about 4.0 million barrels per day over the last four weeks, up by 10.0% from the same period last year. Jet fuel product supplied is up 1.9% compared to the same four-week period last year.

Cushing saw a draw of 785k barrels (the largest in 4 weeks)

http://ir.eia.gov/wpsr/wpsrsummary.pdf

---

Attached Files

                                     Last Week   Week Before   Year Before

Domestic Production...... 9,112             9,096             8,970



http://ir.eia.gov/wpsr/overview.pdf

---

Attached Files

Italian oil contractor Saipem is asking investors to pump in fresh capital equivalent to its current market value to help it to weather the oil service recession and plot a path to recovery as main investor Eni takes a step back.

Saipem, which is 43 percent owned by Eni, said on Wednesday that it would hold a 3.5 billion euro ($3.87 billion)rights issue in the first quarter of next year as part of a new four-year turnaround plan aimed at ensuring the company's survival without its Eni safety net.

At the same time Eni said it had agreed to sell about 12.5 percent of its Saipem stake to state-owned investment fund Fondo Strategico Italiano (FSI). That deal, in conjunction with a shareholder pact with FSI, will see Eni relinquish its control and cut 5.1 billion euros of debt from its balance sheet.

State-controlled Eni, the A- credit rating of which had previously helped Saipem to service its debt, is looking to focus on its bread-and-butter business of finding oil and gas and is keen to get its subsidiary on a standalone footing.

Saipem, which has now been given a Baa3 investment grade rating by Moody's, said the 3.2 billion euros of gross debt remaining after the rights issue would be refinanced by new credit lines.

"We are ready to go it alone. I think there's always a good time in the history of a company for step change. This is certainly a major change," Saipem Chief Executive Stefano Cao told Reuters.

With margins and orders battered by low oil prices, Saipem needs a large capital injection to get the group back on its feet. It has issued two profit warnings in a little more than 30 months and in July announced cost cuts including 8,800 redundancies.

Saipem, which expects the market to recover in 2017, said it had expanded a previous cost savings target of 1.3 billion euros to 1.5 billion euros and is ready to dispose of non-core assets to lift its profit margins.

"The rights issue was good news, since it was bigger than expected, but it will only happen next year and that means dragging out the pain and suffering for another four months or so," he said.

http://www.reuters.com/article/2015/10/28/saipem-eni-fsi-idUSL8N12S01H20151028

---

Attached Files

Occidental Petroleum Corp, the fourth-largest U.S. oil producer, swung to a significant net loss for the third quarter on Wednesday as it booked charges for dropping futures prices and halted projects while saying it was exiting North Dakota.

The company, which also has operations in the Middle East and Colombia, showed a net loss of $2.61 billion, or $3.42 per share, in the third quarter ended Sept. 30, compared with a profit of $1.21 billion, or $1.55 per share, in the year-ago quarter.

The result reflects the tough times a more than 50 percent drop in crude prices over the last year has wrought on oil companies.

Charges it took "reflect the sharp decline in the oil and gas futures price curves, as well as projects that management determined it would cease to pursue," Occidental said in a statement.

On an adjusted basis, Occidental was able to beat expectations as it lifted output from a year earlier and slashed costs to offset tumbling prices.

Houston-based Occidental slashed its capital budget by $300 million in the quarter, and Chief Executive Steve Chazen said the company has "made a strategic decision to exit" the Bakken, which had drained resources away from Occidental's core Texan shale fields.

Reuters reported this month that Occidental had sold its North Dakota assets to private equity fund Lime Rock Resources. It was the most significant pullback by a big company from the Bakken fields of North Dakota since the downturn started.

Excluding one-time items, the company earned 3 cents per share.

By that measure, analysts expected a loss of a penny per share, according to Thomson Reuters I/B/E/S.

Average daily production rose 16 percent to 689,000 barrels of oil equivalent (BOE) from the year-ago quarter, even as the average price Occidental received for its oil fell 49 percent to $47.78 per barrel. It had started up its Al Hosn oil field in the United Arab Emirates, which produced 50,000 barrels a day in the third quarter, and its oil output in West Texas surged 72 percent to 74,000 barrels a day.

http://www.reuters.com/article/2015/10/28/occidental-results-idUSL3N12S4C620151028

---

Attached Files

Hess Corp. plans to cut spending by about 27 percent next year after its oil and natural gas business lost more than $2 million a day during the third quarter.

Hess estimated its 2016 capital budget will fall to $2.9 billion to $3.1 billion from $4.1 billion this year, according to a statement from the New York-based company on Wednesday. Daily oil and gas output will decline to the equivalent of 330,000 barrels to 350,000 barrels next year, an 8.7 percent drop from the full-year 2015 target, based on the mid-range of those numbers.

The company posted a net loss of $279 million, or 98 cents a share, compared with profit of $1.01 billion, or $3.31, a year earlier, according to the statement. Excluding one-time items, the per-share loss was $1.03, beating the average estimated loss of $1.20 from analysts in a Bloomberg survey.

Hess’s exploration and production unit lost $188 million during the quarter as a 53 percent plunge in the price the company received for each barrel of crude more than offset a 19 percent jump in production. Even with hedges in place intended to help the company lock in prices for its output, its average selling prices for crude was $45.66 a barrel, compared with $96.78 a year earlier.

http://www.bloomberg.com/news/articles/2015-10-28/hess-beats-estimates-slashes-2016-drilling-budget-on-price-drop

---

Attached Files

U.S. refiner Valero Energy Corp reported a better-than-expected quarterly profit, helped by robust demand for refined products and lower crude costs.

Valero also raised its quarterly cash dividend to 50 cents per share from 40 cents.

The company's shares were up 2.4 percent at $63.99 in premarket trading on Wednesday.

Refiners have been pumping out strong profits due to high crack spreads, the difference between crude oil and prices of refined products, as crude prices have more than halved since June last year due to a supply glut.

Valero expects continued healthy gasoline demand in the fourth quarter, Chief Executive Joe Gorder said in a statement on Wednesday.

Gasoline demand is expected to remain buoyant, helped by lower prices, even after accounting for a seasonal winter downturn in the consumption of motor fuel.

Valero's refining margin rose to $14.38 per barrel in the third quarter ended Sept. 30, from $11.81 per barrel a year earlier.

Net income from continuing operations attributable to Valero's stockholders rose 30 percent to $1.38 billion, or $2.79 per share.

Analysts on average had expected earnings of $2.66 per share, according to Thomson Reuters I/B/E/S.

Operating revenue fell 34.4 percent to $22.58 billion.

http://www.reuters.com/article/2015/10/28/valero-energy-results-idUSL3N12S3XM20151028

France’s Engie said it has executed a 5-year deal with US LNG player Cheniere to buy up to 12 LNG cargoes per annum.

According to the agreement, the cargoes will be delivered ex-ship at the Montoir-de-Bretagne regasification terminal in France from Cheniere’s Corpus Christi and Sabine Pass LNG export plants currently under construction in Texas.

The sales price for the LNG cargoes is linked to Northern European indexes. The deliveries will start in 2018, Engie said on Wednesday.

The US LNG can alternatively be shipped to other European terminals, the French company added.

http://www.lngworldnews.com/engie-strikes-5-year-lng-spa-with-cheniere/

---

Attached Files

Iran's exports of crude oil and condensate dropped to a seven-month low this month, hit by refinery maintenance and a lull in demand ahead of winter, according to an industry source with knowledge of the nation's tanker loading schedule.

Still, loadings of the light oil condensate grade were robust - the second highest for the year - due to Iran's attractive pricing relative to other producers, the source said.

Iran this month exported 1.07 million barrels per day (bpd) of crude and condensate, down 13 percent from revised figures in September and the lowest since March, when India and Japan took no oil to stay within sanction limits, said the source who keeps a close watch on the producer's shipping programme.

Asia's Iranian crude oil imports for the last two years have dipped in October, however, before recovering due to seasonal winter demand, and some industry sources said Chinese loadings are likely to rebound again in the coming months.

Iran's exports of condensate, a by-product of natural gas output, in October totalled 240,000 bpd, the second-highest this year and down 10 percent from top-month September.

Industry sources attributed the recent high condensate shipments in part to Unipec - the trading arm of Chinese state giant Sinopec - resuming its purchases after laying off the light oil for several months, taking about 1 million barrels each month in September and October.

Regional grades such as Australia's North West Shelf condensate have also become more expensive and Iranian supply more competitive, industry sources said.

"Iranian condensate is very cheap and we have been paying close attention," said a source with a North Asian buyer of condensate from Iran's South Pars gas fields.

To counter competing condensate from Qatar, among others, Iran has offered discounts to retain market share after its crude exports have more than halved from 2.5 million bpd in 2011, sources said.

Officials at state-owned National Iranian Oil Company did not immediately respond to an emailed request for comment.

Iranian crude and condensate loadings by Tehran's main customers - China, India, Japan and South Korea - declined for a third straight month to around 850,000 bpd in October, down 12 percent from September.

http://www.reuters.com/article/2015/10/28/iran-oil-asia-idUSL3N12Q15K20151028

---

Attached Files

In the third quarter, the Company achieved a total net production of 127.5 million barrels of oil equivalent (BOE), representing a significant increase of 23.8% year over year (yoy). Net production from offshore China reached 83.3 million BOE, a 28.2% yoy increase, primarily due to the production contribution from newly commenced projects in Bohai and the Eastern South China Sea. Meanwhile, net production from overseas rose 16.5% yoy to 44.3 million BOE, mainly because of maintenance at the Buzzard oilfield during the same period last year and new production from the Golden Eagle project in the U.K. North Sea.

CNOOC Ltd said its third-quarter unaudited sales revenue from oil and gas fell 32.3 percent on low oil prices as its average realized oil price declined by 51 percent to $48.84 a barrel.

The company reported sales of 36.25 billion yuan ($5.70 billion) for the third quarter, compared with 53.57 billion a year earlier, according to a filing with the Hong Kong bourse. The state-controlled firm does not publish quarterly earnings.

The company said its capital expenditure fell 44.0 percent on year to roughly 14.75 billion yuan ($2.32 billion) amid belt-tightening.

During the period, the Company made 3 new discoveries and drilled fourteen successful appraisal wells in offshore China . The Caofeidian 6-4 structure was successfully appraised and proved to be a mid-sized oilfield, which represents a significant breakthrough after several years of oil and gas exploration in western Bohai. The new discovery of Liuhua 21-2 further demonstrated the exploration potential of Baiyun Sag in Pearl River Mouth basin and is expected to be developed jointly with adjacent oil structures in the area, including Liuhua 20-2. In the third quarter, the Luda 10-1 oilfield comprehensive adjustment project commenced production, while other projects progressed smoothly.

In the third quarter, the unaudited oil and gas sales revenue of the Company reached approximately RMB36.25 billion , representing a decline of 32.3% yoy. The Company's average realized oil price declined by 50.7% yoy to US$48.84 per barrel, while the average realized natural gas price declined by 3.0% yoy to US$6.41 per thousand cubic feet.

Facing a low oil price environment, the Company continued to lower costs and enhance efficiency, in addition to decreasing its full-year capital expenditures. During the period, the Company reduced its capital expenditures by 44.0% yoy to approximately RMB14.75 billion .

Mr. Li Fanrong , CEO of the Company commented, "In the third quarter, the Company made smooth progress in overall business, including exploration, development and production. Our cost controls and enhanced efficiency measures were executed effectively and achieved remarkable results as we aimed to proactively respond to the impact of low oil prices. Meanwhile, we are confident that we will achieve our production and operation targets for the year."

http://finance.yahoo.com/news/cnooc-limited-announces-key-operational-082700545.html

Nabors Industries posted a $296 million loss in the third quarter amid a slowdown in the oil patch that has dried up demand for its services in the United States and abroad.

The company, which provides drilling and rig services across the globe, said it does not expect oil field activity to significantly rebound soon and will continue slashing costs to meet its minimum goal of breakeven free cash flow.

“We remain committed to emerge from this cycle a stronger and even more financially sound drilling company,” William Restrepo, Nabors’ chief financial officer, said in a statement.

The company’s loss of $1.02 per share in the the three-month period ending Sept. 30 was down from a profit of $106 million, or 36 cents per share, during the same time last year.

Its third quarter earnings included $251 million in pre-tax charges, largely due to its stake in C&J Energy Services, but also related to other small asset impairments and severance costs.

Nabors, which is based in Bermuda but has main offices in Houston, saw an uptick in its international operating revenues from the prior quarter, and expects to end the year with better international results than it did last year, but income still slipped 11 percent. As several international programs start to wind down, Nabors predicts further declines.

Weakening North American activity continues to hammer the company’s finances, the company said. Nabors operated 14 percent fewer rigs in the third quarter and saw income plunge by $45.5 million from the prior quarter.

The company has indefinitely delayed commencement of the full operating day rate for its newest platform rig in the Gulf of Mexico because of problems with the installation of the customer’s platform, Nabors said. It did not elaborate.

http://fuelfix.com/blog/2015/10/27/nabors-posts-296-million-loss-amid-weakening-oil-field-activity/

For Europe’s biggest oil companies, $60 is the magic number.

BP Plc, one of the first companies to predict a prolonged price downturn, has “reset” its business to generate surplus cash flow with oil at about $60 a barrel by 2017. It joins Total SA, which last month unveiled investment cutbacks and project delays that will enable it to fund dividend payouts in the same circumstances without the need to borrow.

A year after oil sank into a bear market, the industry is preparing for an extended downturn, with drillers slashing investments in exploration and production by a record 20 percent this year, according to International Energy Agency. With third-quarter earnings season barely under way, producers in the U.S. have already written down the value of their assets by $6.5 billion. BP’s Chief Financial Officer Brian Gilvary doesn’t expect a recovery in prices until late 2016.

“For the next nine months, I can’t see any up move,” Gilvary said in an interview Tuesday. “We’re in the process of resetting the company. Fortunately, we had a sense that the oil price is going to go low sooner than most people anticipated.”  

BP, Europe’s third-largest oil company, said Tuesday it will cut capital spending to about $19 billion this year after investing roughly $23 billion in 2014. Annual spending will remain curtailed at $17 billion to $19 billion to 2017, the company said as it reported a 40 percent drop in third-quarter profit.

Total, Europe’s No. 2, has similar plans, trimming investment to $20 billion to $21 billion in 2016 from as much as $24 billion this year, the company said at its annual strategy update last month. Like BP, it plans annual capital spending of $17 billion to $19 billion in 2017, down from a previous target of $20 billion.

In the first nine months of this year, with Brent crude averaging about $56, BP’s cash flow from operations and asset sales totaled $16.9 billion, not enough to cover $18.5 billion in capital expenditure and dividend payouts, according to the company. If oil recovers to around $60 in two years, the companies say they will have sufficient cash flow to maintain payouts to shareholders while still investing in new projects for the future.

http://www.bloomberg.com/news/articles/2015-10-28/oil-at-60-is-the-magic-number-for-bp-in-prolonged-downturn

Statoil ASA, Norway’s biggest oil company, stepped up cuts in its investments and delayed projects after third-quarter earnings missed forecasts amid a collapse in crude prices.

The Stavanger-based company cut planned investments in 2015 by $1 billion to $16.5 billion and pushed production start of its Aasta Hansteen and Mariner fields to the second half of 2018 from 2017, it said Wednesday in its quarterly earnings report.

Adjusted net income, which excludes financial and other items, fell to 3.7 billion kroner ($436 million) from 9.1 billion kroner a year earlier, missing a 5.1 billion-krone estimate in a Bloomberg poll of analysts. The company reported a net loss of 2.8 billion kroner after booking net impairment charges of 4.8 billion kroner.

"We continue to reduce underlying operational costs and deliver a quarter with strong operational performance and solid results from marketing and trading,” Eldar Saetre, Statoil’s chief executive officer, said in a statement. “In the third quarter, our financial results continued to be affected by low liquids prices.”

Statoil, 67 percent owned by the Norwegian government, is cutting investments and costs alongside competitors such as Royal Dutch Shell Plc and BP Plc. The world’s biggest oil companies are seeking to shield shareholder payouts after oil prices fell as low as $42 a barrel in August from highs of about $115 in June, 2014.

Statoil’s production rose to 1.91 million barrels of oil equivalent in the third quarter from 1.83 million barrels a year earlier. That beat a 1.9 million barrel a day estimate in a survey of 31 analysts conducted by Statoil. The company now expects production growth in 2015 to exceed 3 percent, compared to a previous forecast of about 2 percent.

A reduction in maintenance to save costs has boosted oil and gas production for Norway as a whole this year.

Adjusted earning for marketing, midstream and processing unit rose 39 percent to 6 billion kroner in the quarter. Lower oil prices have made refining more profitable.

Statoil is cutting capital expenditure from $20 billion in 2014 as it shields shareholders payouts. The company said it will pay a dividend of 22 cents a share for the third quarter, in line with its July forecast.

http://www.bloomberg.com/news/articles/2015-10-28/statoil-quarterly-profit-falls-60-percent-after-crude-collapse

U.S. oil and natural gas company Anadarko Petroleum Corp reported a quarterly loss that met Wall Street expectations compared with a year-earlier profit as results were hurt by a slump in crude prices.

Anadarko, like other oil companies faced with a more than 50-percent decline in crude, is working to improve drilling efficiency and productivity while keeping a close eye on costs, Chief Executive Officer Al Walker said in a news release.

The Houston-based company reported a third-quarter net loss of $2.24 billion, or $4.41 per share, for the third quarter ended Sept. 30. A year earlier, Anadarko had a profit of $1.09 billion, or $2.12 per share.

Excluding one-time items, Anadarko had a per-share loss of 72 cents per share, a figure that was in line with Wall Street's expectations for a loss of 73 cents per share, according to Thomson Reuters I/B/E/S.

In the third quarter, the company's total sales volumes of oil and gas averaged 787,000 barrels oil equivalent per day, down from 849,000 boepd in the year-ago period.

Anadarko said it has so reached deals to shed $2 billion in assets this year, sales that have affected output.

Royal Dutch Shell Plc will not continue construction of its 80,000 barrel per day Carmon Creek thermal oil sands project in northern Alberta because of the lack of infrastructure to move Canadian crude to market, the company said on Tuesday.

Shell said the decision to halt the project was also the result of "current uncertainties" and chief executive Ben van Beurden said the company was having to manage costs in today's low oil price environment.

"We are making changes to Shell's portfolio mix by reviewing our longer-term upstream options world-wide, and managing affordability and exposure in the current world of lower oil prices. This is forcing tough choices at Shell," van Beurden said in a statement.

Canada's oil sands hold the world's third largest crude reserves but carry some of the highest project breakeven costs globally. Western Canada also struggles with market access issues due to limited export pipelines, which can lead to a glut of crude building up in Alberta and weighing on prices.

The plunge in benchmark oil prices has prompted a number of companies to defer costly new oil sands projects, although so far few have been cancelled outright once underway.

Shell originally sanctioned the Carmon Creek in October 2013 but said in March that it would be delayed by two years as the company retendered some contracts and adjusted the design to take advantage of lower costs during the market downturn.

On Tuesday the company said following a review of potential design options, updated costs, and capital priorities, it had decided the project did not rank in its portfolio at this time.

Shell, which owns 100 percent of Carmon Creek, will retain the leases and preserve some equipment while continuing to study options for the project.

The company expects to take net impairment, contract provision, and redundancy and restructuring charges of around C$2 billion ($1.51 billion) as a result of the decision.

Last month Shell also pulled the plug on its plans to drill for oil in the Arctic, citing high costs and disappointing well results and in February shelved plans for its 200,000 bpd Pierre River oil sands mining project.

http://www.reuters.com/article/2015/10/27/shell-canada-carmon-creek-idUSL1N12R3LD20151027

Ecopetrol S.A. hereby reports that, as decided by its Board of Directors, Ecopetrol will take over the operation of the Rubiales field following the conclusion of the Rubiales risk participation and Piriri joint venture contracts on June 30, 2016. These joint venture contracts were signed with Metapetroleum, an affiliate of Pacific Exploration & Production Corp.

The Company congratulates Pacific for the work it has done on the Rubiales field, which made it possible to convert this field into one of the most important in Colombia and the Americas.

Ecopetrol and Pacific will continue to jointly undertake activities and initiatives with the goal of optimizing operations, infrastructure and social responsibility endeavors in the production areas of Llanos Orientales.

Furthermore, they affirm their interest in building synergies to carry forward future projects that will generate value for the benefit of the two companies and for all Colombians.

http://www.oilvoice.com/n/Ecopetrol-announces-decision-to-take-over-operation-of-Rubiales-field/99c08aa3e337.aspx

A lot of oil companies are struggling with the price of crude stubbornly stuck below $50 a barrel. Their struggles are largely due to two factors: They have too much debt and their costs are too high. However, neither is a problem at Apache Corporation, which has reduced both substantially over the past year. As a result, the company is poised to thrive even if oil stays in its current range.

Over the past year, Apache has repositioned its portfolio to focus its attention on three core areas. It has sold a number of assets, including its deepwater assets in the Gulf of Mexico to Freeport McMoRan, its LNG assets, and a number of its international assets. Those sales brought in $10 billion in cash since the start of last year, which it used to pay down debt. It's reduced net debt by 28% just since the end of the first quarter of this year:

Not only has the company substantially reduced its outstanding debt, but it also has a tremendous amount of liquidity, with $2 billion in cash on its balance sheet to go along with $3.5 billion available on its credit facility. That gives the company ample cash to operate in the currently tough environment.

Now, contrast that with Freeport-McMoRan, which has been burdened by weak oil prices, as well as weakness in its mining operations. Because of this price weakness, Freeport expects to produce only $3.3 million in operating cash flow this year, which isn't nearly enough to cover the company's $6.3 billion in planned capex spending. With more than $20 billion in debt already on the books, and a troubling 3.9 debt-to-EBITDA ratio, the company can't really afford to bridge the gap between cash flow and capex with debt. This situation is forcing Freeport to look for other alternatives, including the potential sale of a stake in its oil and gas business to bring in some much-needed cash.

Freeport-McMoRan is far from the only company struggling to bridge a growing gap between its cash flow and capex. However, it's a struggle we don't see at Apache. It can easily grow its production by the low single digits even while staying within the cash flow its oil and gas production has generated. In other words, that $2 billion in cash on its balance sheet is a real cushion that the company would need only in an emergency situation. It's an emergency stash that Freeport-McMoRan and many of its other peers would really love to have in the current environment.

That Apache has such strong cash flow is largely a result of the abundant cash flow from the international assets it held onto, in Egypt and the U.K. North Sea, even at a low oil price. Further, its legacy North American assets are low-decline plays, which don't require much capital to maintain production. Also helping the company is that it jettisoned cash-consuming projects, such as the Gulf of Mexico assets it sold to Freeport-McMoRan and its stakes in LNG projects. Because of this strategic shift, the company has a lot of cash flow to reinvest elsewhere, which is primarily going toward drilling North American shale wells that start generating their own cash flow really quickly.

The other important factor here is that the company has captured strong cost reductions, with its North American well costs and G&A cash costs both down 25% year over year, while its lease operating expense per barrel of oil equivalent is down 13% over that same time frame. All of its key plays thus have economic drilling opportunities at sub-$50 oil. This combination of lower capital requirements and strong economic drilling opportunities are the key to Apache's ability to live within its cash flow next year, while still being able to deliver modest production growth even if oil prices remain weak.

http://www.fool.com/investing/general/2015/10/27/apache-corporation-is-built-to-thrive-at-50-oil.aspx?source=eogyholnk0000001&utm_source=yahoo&utm_medium=feed&utm_campaign=article

---

Attached Files

Turkish pipeline operator Botas said on Tuesday it would take Russia's Gazprom to international arbitration over a price discount it said it was promised on imports of Russian natural gas.

Russia has looked to bolster gas ties with Turkey after the European Union rejected its proposed South Stream pipeline to Bulgaria but political relations have soured over Moscow's military involvement in Syria.

Turkey announced a deal in February under which it was to receive a 10.25 percent price discount on gas from Gazprom but a final deal has proved elusive and state-run Botas said it had appealed to the International Chamber of Commerce (ICC).

Botas said it notified Russia's Gazprom on Monday that the arbitration would aim to cover the price of Russian natural gas purchased since the start of the year.

A spokesman for Gazprom said: "The possibility of an out-of-court settlement as well as an arbitration decision still remains."

"Gazprom has failed to sign the amendments regarding the agreement on price discount between the two companies," Botas said in a statement. It said it had written a final letter to Gazprom calling on it to sign the deal.

Turkish energy officials have said Russia has added preconditions for finalising the gas deal linked to its planned TurkStream gas pipeline.

Russia is Turkey's largest gas supplier with sales of 28-30 billion cubic metres annually worth around $6.5 billion.

Turkey imports 60 percent of its gas and 35 percent of its oil from Russia. Russians also make up a growing proportion of Turkey's tourist traffic, key for financing the country's current account deficit.

But political relations have soured since Russia began air strikes in Syria in support of President Bashar al-Assad, whose removal from power has long been advocated by Turkish President Tayyip Erdogan.

Gazprom said this month it had decided to halve the planned capacity of TurkStream to 32 billion cubic metres of gas per annum and delay its launch, in further evidence of strained relations.

http://www.reuters.com/article/2015/10/27/russia-turkey-gas-idUSL8N12R1RX20151027

Cuts to retiree benefits and an asset sale brought Consol Energy Inc. into a profit for the third quarter 2015.

The Cecil-based oil and gas, and coal company reported income of $119 million, or 52 cents per share, during the past three months, compared to a loss of $1.6 million, or 1 cent per share, a year ago.

Revenue was $814 million, down from $885 million in the third quarter of 2014.

Falling natural gas prices continued to hammer the company, resulting in a 28 cent loss for every thousand cubic feet of gas it produced during the quarter.

Coal prices followed a similar trajectory, but Consol reported a margin of about $15 for each ton of Pennsylvania coal it sold during the third quarter. At Buchanan, its Virginia metallurgical coal mine, however, costs exceeded the sales price by $2 per ton.

Consol’s coal spinout, CNX Coal Resources LP, which operates the Pennsylvania thermal coal complex and went public in June, reported earnings Monday, showing a profit of $14.7 million.

Consol reaffirmed next year’s capital budget of $400 million to $500 million, a significantly reduced figure that reflects Consol’s decision not to drill any new wells until 2017.

http://powersource.post-gazette.com/powersource/companies/2015/10/27/Oil-and-gas-to-the-masses-crowdfunding-drilling/stories/201510270014

---

Attached Files

Brazil's government is set to introduce regulatory changes aimed at making local content policies more responsive to the challenges faced by oil companies and Brazilian suppliers.

http://www.upstreamonline.com/live/1415063/local-content-back-on-agenda?utm_source=twitterfeed&utm_medium=twitter

Saudi Arabian government said it’s considering an increase in domestic energy prices.

OPEC’s biggest producer is studying whether to raise domestic energy prices in order to cope with the decline in oil prices, Reuters reported, citing Ali Al-Naimi, the kingdom’s oil minister. The country drained 11 percent of its foreign reserves in the year to August, started selling debt and is curbing domestic investment to cope with a more than 40 percent decline in Brent crude prices in the past 12 months. The Tadawul is poised for the worst year since 2008.

"Reports that Saudi Arabia may reduce oil subsidies caused panic among investors because the cost of doing business will rise," said Tariq Qaqish, the head of asset management at Dubai-based Al Mal Capital PSC, which is seeking opportunities to buy Saudi stocks if prices fall further.

"Raising government revenues in a weak oil-price environment is a trend emerging throughout the region," said Riyadh-based Muhammad Faisal Potrik, the head of research at Riyad Capital. "Reducing or eliminating subsidies for industries such as petrochemical producers and cement for example can have a very direct negative impact on corporate profits.”

http://www.bloomberg.com/news/articles/2015-10-27/saudi-arabian-stocks-decline-to-two-month-low-as-oil-retreats

Yasref oil refinery, a joint venture between Saudi Arabian Oil Co. and China Petroleum & Chemical Corp., is processing crude at full capacity of 400,000 barrels a day amid improving refining margins for the plant, its chief executive officer said.

The facility on Saudi Arabia’s Red Sea coast reached its output limits in July and currently produces 265,000 barrels a day of low-sulfur diesel and 91,000 barrels a day of 91-octane and 95-octane gasoline, Mohammad Alshammari said at a conference in Riyadh. Yasref’s refining margins have improved since August even as the global industry faces a significant capacity surplus, he said.

“I think we suffered back in August quite a dip in refining margin, but now we see them turning around,” Alshammari said in an interview later in the day. “Last month, we averaged much much better than August, and this month the numbers are much better. It’s still a tight-margin market.”

Yasref’s main international markets are Europe, Asia and Egypt, Alshammari said.

“Our target market for diesel is mainly Europe because we produce ultra-low-sulfur diesel that’s the cleanest diesel you can get,” he said. The plant’s output may put pressure on refining margins in Europe but probably not in Asia, he said.

http://www.bloomberg.com/news/articles/2015-10-27/saudi-yasref-oil-plant-running-at-capacity-as-margins-improve

Kazakhstan’s government is considering levying a penalty on a venture led by BG Group Plc and Eni SpA that operates the nation’s second-biggest producing oil and gas field as the state seeks extra revenue to bolster its finances, according to two people familiar with the plan.

The fine on the Karachaganak project could be as much as $2 billion, one of the people said. That would be roughly in line with penalties the government threatened to impose in a 2010 dispute that ended with the state taking a 10 percent stake in the project.

The Central Asia nation is studying the possibility of imposing the fine because the companies haven’t fulfilled certain contractual obligations, the people said, asking not to be identified because the matter isn’t public. The penalty may be a precursor to the government increasing its stake in Karachaganak, they said.

Kazakhstan, which depends on energy products for about three quarters of its exports, needs additional funds to balance its budget after the collapse in crude oil reduced state revenue and weakened the currency by about 45 percent against the dollar since the beginning of last year. The government of President Nursultan Nazarbayev has in the past forced its oil company KazMunaiGaz National Co. into projects to increase state control over operations.

http://www.bloomberg.com/news/articles/2015-10-27/kazakhstan-said-to-weigh-2-billion-penalty-on-bg-eni-project

---

Attached Files

The United States plans to sell 58 million barrels of crude oil from its strategic petroleum reserve between 2018 and 2025 under a budget deal reached on Monday by the White House and top lawmakers from both parties, Bloomberg reported.

The proposed sale represents more than 8 percent of the 695 million barrels of reserves, held in four sites along the Gulf of Mexico coast, the report said.

http://www.reuters.com/article/2015/10/27/usa-reserves-idUSL3N12R3UI20151027

Last year International Paper’s Ticonderoga mill in northern New York, near the Vermont border, received $1.75 million in grant money from Andrew Cuomo and New York State (that is to say, from we the taxpayers) to help with an $11 million project to convert the plant from using oil to using natural gas (see the Albany Times Unionstory: $100M in upgrades at International Paper mill in Ticonderoga follows state deal for aid, cheap power). Kind of ironic that Andy was willing to give big money to an evil corporation to use more natural gas because he banned the extraction of fracked natural gas in NY later that same year. However, the plant was threatening to close. It’s the biggest employer in the area representing 600 jobs. Because of Cuomo’s $1.75M grant, the plant stayed open and converted to natgas, but that means it needs a lot of natgas on a regular basis. International Paper had planned to build a pipeline from Vermont to feed the plant as a permanent solution. In the meantime, it was using a “virtual pipeline” of a constant stream of trucks delivering compressed natural gas (CNG) from NG Advantage (subsidiary of Clean Energy Fuels Corp.), trucking CNG to the plant 24/7. International liked the CNG operation so much, and disliked the regulatory hassles of building the pipeline so much, they’ve decided to keep the virtual pipeline over a real one as a permanent solution…

About 4 million barrels of crude oil bought by a Chinese state trader for the country's strategic reserves have been stranded in two tankers off an eastern port for nearly two months due to a lack of storage, two trade sources said.

The delays will cost millions of dollars and indicate how China is struggling to import record amounts of crude if storage and port capacity at Qingdao, its largest oil import terminal, are unable to keep pace.

Ocean Lily and Plata Glory, two very large crude carriers (VLCCs) carrying oil for Sinochem Corp, arrived at Huangdao, Qingdao's main oil terminal, in early September, and both were still at anchor this week, waiting to unload, according to Reuters' shipping data, and trade and port sources.

"They are both for SPR (strategic petroleum reserve), but no tank space is available to take that oil in," said a senior trader familiar with Sinochem's oil trading.

China's crude oil imports rose nearly 9 percent in the first nine months of the year over a year earlier to 6.65 million bpd, driven partly by reserve building.

China said late last year the first phase of the government's emergency stockpile is storing about 90 million barrels of crude oil, with the construction of a second phase due by 2020, partly through private investment.

Huangdao is the site of one of China's first SPR tanks, with space for 20 million barrels of oil and also has plans for a second phase of similar size.

A recent move to increase competition for oil imports by granting quotas to independent refineries has added to congestion at Huangdao, where operations were already hampered following a pipeline accident two years ago.

"Storage and berths were not ready for such a quick market opening," the trader said.

Huangdao has experienced cargo congestion since a pipeline explosion that killed 66 people two years ago, with tighter security checks and repairs to old and damaged pipelines slowing tanker unloading.

Congestion has worsened following a scramble by a raft of new crude buyers to bring in oil, trading sources have said.

Since July, China has granted a total of nearly 1 million barrels per day (bpd) of crude import quotas to a dozen independent refineries in an effort to boost competition and private investment.

The pace of the reform has been much quicker than the market expected, with the newly approved quotas making up more than 10 percent of China's current total imports.

Broker reports show that Sinochem owns Ocean Lily, while Plata Glory was fixed on a six-month charter at around $37,750 a day in April, with an option to extend for another six months, putting the cost of keeping the two vessels idle at several million dollars.

http://www.reuters.com/article/2015/10/27/china-oil-reserves-idUSL3N12Q3KJ20151027

---

Attached Files

Global demand for liquefied natural gas is likely to grow strongly over the long term, according to the head of U.K.-based gas and oil company BG Group (BG.LN), despite the recent slump in prices in regions such as Asia.

"There should be no doubt LNG will have an increasingly influential role in the changing landscape of global energy supply," said Helge Lund, BG chief executive at an energy conference in Singapore, on Tuesday.

Liquefied natural gas prices have been dealt a severe blow this year as demand in key importing countries such as China has moderated. Robust supply growth and competitive coal pricing have also put gas prices under pressure.

The benchmark U.S. natural-gas price tumbled to its biggest one-day percentage drop overnight since February 2014 on expectations of a deepening supply glut.

http://www.marketwatch.com/story/bg-chief-lng-demand-to-rise-up-to-6-through-2020-2015-10-27

Crestwood Midstream's DELTA pipeline project will launch a non-binding open season later this week, seeking commitments for crude and condensate flows starting at the company's proposed Orla terminal in the Delaware Basin, Senior Vice President Brian Freed said Monday at Hart Energy's Midstream Texas conference.

The pipeline would carry 200,000 b/d of crude and condensate from the gathering facility in Orla, Texas, to takeaway pipelines as far away as Midland and McCamey, Texas. Depending on the pipeline connections the company can secure, the crude and condensate could then make its way to export and refining markets near Houston or Corpus Christi, Texas.

The Orla terminal will be able to stabilize 75,000 b/d of condensate, and the DELTA pipeline will be batched, which means condensate processed at the terminal could make its way to coastal export markets without losing its export-eligible status by mixing with unprocessed crude.

The Orla terminal will have 200,000 barrels of crude and condensate storage capacity and a truck facility capable of handing 64,000 b/d, along with access to the company's RIGS gathering system.

The company is able to work on the project despite the downturn in oil prices because it is located in an active part of Texas' Delaware Basin, Freed said.

"The devil is in the details, and you've got to look at things on a localized basis," he said. "Sub $60/b works in some areas and doesn't in others."

Even beyond that, Christopher Keene, the CEO of Rangeland Energy II, which is also building midstream infrastructure in the Permian Basin said he does not think the market is going to remain low forever.

http://www.platts.com/latest-news/oil/houston/crestwood-to-launch-open-season-for-delta-crude-21357238

---

Attached Files

A pipeline to America’s largest crude-oil hub is about to find itself in an unfamiliar position: not full.

One of the main pipelines that carries crude to Cushing, Oklahoma, will run at less than capacity in December for the first time in nearly two and a half years. The drop in supply coincides with the opening of a pipeline to Quebec, giving shippers the option of diverting some oil from the middle of the U.S.

“There will be less light sweet crude available to make its way to Cushing,” said Andy Lipow, president of Lipow Oil Associates LLC in Houston. “There’s going to be some significant rebalancing of where oil flows in North America.”

Shippers on Enbridge Inc.’s Spearhead pipeline only asked to transport about 155,000 barrels of crude a day in December, below the system’s capacity to move about 193,000 to Cushing from Flanagan, Illinois. It’s the first time shippers haven’t filled the line since August 2013. Some months shippers request 10 times more space than is available.

The drop in Spearhead interest comes as Enbridge plans to start another pipeline carrying 300,000 barrels of crude a day from the Midwest to Montreal by the end of 2015. Suncor Energy Inc. and Valero Energy Corp. have said they plan to use the line to supply refineries in Quebec with crude from Western Canada and the U.S. Midwest.

Crude in eastern Canada competes with the global benchmark, Brent, which is priced a few dollars higher than West Texas Intermediate in Cushing.

Enbridge next month will also start filling its Southern Access pipeline, which carries crude within Illinois from Flanagan to Patoka, according to a U.S. regulatory filing. The company expects to put the 168-mile-long spur in service in December.

https://www.energyvoice.com/other-news/91454/oil-flows-east-leaving-an-oklahoma-pipeline-unusually-empty/

BP’s downstream boosts offset by upstream losses

Oil major BP’s cost profit in the third quarter of the year has more than halved since the same period in 2014.

The company, which announced its third quarter results today, said it had made a profit of $0.8billion, compared with $3.9billion this time last year.

BP reported underlying replacement cost profit of $1.8 billion for the quarter, compared with $1.3 billion for the previous quarter and $3.0 billion for the third quarter of 2014. Compared with a year earlier, the result primarily showed the impact of sharply lower oil and gas prices but also the benefits of a continuing strong downstream environment and performance and steadily lower cash costs throughout the Group.

The lower results, BP said, were primarily due to the effect of lower oil and gas prices.

In its downstream business the operator continued to see a strong performance which saw an increase in profit from $1.5billion last year to $2.3billion.

Strong refining operation and fuels marketing and cost benefit simplification was said to have boosted the area of the business.

Income from other sources including Rosneft for the quarter have also increased from $110million in the third quarter last year to $383million.

BP said the company has almost completed its current divestment programme which is expected to approach $10billion by the end of 2015.

A further $3-5billion in divestments are expected next year, before returning back to a rate if around $2-3billion a year thereafter.

The company’s chief executive Bob Dudley is set to brief investors today on the oil major’s results.

He said staff were working hard to rebalance their books at $50 oil.

Dudley said: “Last year, we acted decisively to reset BP for a sustained period of lower oil prices and the results are coming through well. We are now in action to rebalance our financial framework in this new price environment.

“And I am confident that BP’s strong and well-balanced portfolio of businesses and projects gives us the ability to grow value into the future. All of this underpins our strong priority of sustaining our dividend and then growing free cash flow and shareholder distributions over the long term.

“BP has successfully adapted to changing circumstances many times in its history and, in a hard time for the entire industry, I believe we will once again successfully take on today’s challenges. We are already in action, with a quality portfolio and clear plans for the future, underpinned by enduring principles. I am confident BP will continue to deliver value into the years and decades ahead.”

BP’s operating cash flow for the third quarter was $5.2billion, bringing the total for the first nine months of the year to $13.3billion.

Organic capital expenditure over the nine month period was $13.2billion.

Net debt was $25.6billion, representing a gearing level of 20%, including 1% arising from the agreements in principle, BP said, to settle with the US government and Gulf states over the 2010 Deepwater Horizon oil spill.

In July the company said it had reached, in principle, an agreement to settle all outstanding federal and state claims arising from the incident.

It included payments of up to $18.7billion over a period of 18 years.

A hearing is set for March 2016 to consider final approval.

BP said it also entered into an agreement with five Gulf states and has accepted releases received from the vast majority of local government entities and payments required under those releases were made during the third quarter.

A charge of $426million for the incident was also taken in the third quarter, bringing the total pre-tax charge to $55billion.

During the quarter BP was awarded five new blocks in the UK North Sea.

In October it was announced that, subject to government approval, BP was also awarded three shallow water blocks in the Mediterranean Sea off Egypt.

The Woodside-operated Western Flank A project offshore Western Australia, the latest phase of the North West Shelf development, began production in October.

Capital expenditure from now until 2017 is expected to be between $17-19billion.

Last year, expectations for capital expenditure were $24-26billion while they were estimated at just under $20billion in the second quarter of this year.

https://www.energyvoice.com/marketinfo/91464/bps-downstream-boosts-upstream-losses/

---

Attached Files

Santos Ltd., which last week rejected a $5.2 billion takeover offer, has received a binding bid from Quadrant Energy Pty for Australian oil and gas fields the companies jointly own, people with knowledge of the matter said.

Santos is considering the offer of about A$1.5 billion ($1.1 billion) for its stakes in the fields in Western Australia state as part of a broader review of its assets, according to the people. Japanese trading house Marubeni Corp. is separately in talks to buy 3.6 percent of Exxon Mobil Corp.’s Papua New Guinea liquefied natural gas plant from Santos for more than A$1 billion, the people said, asking not to be identified as the details are private.

The Australian energy producer is speaking to a number of parties about different sets of assets, according to the people. Santos hasn’t made a final decision on which parts of its portfolio to sell or whether it needs to raise equity in addition to the divestments, the people said.

Santos said in August it’s considering strategic options and that Chief Executive Officer David Knox will step down as the rout in commodity prices triggered concerns that the company has too much debt. The company last week rejected a A$6.88-per-share takeover offer from Scepter Partners, an investment firm backed by Asian and Middle Eastern royalty, saying it was too low and “opportunistic.”

Santos’s Western Australian assets, located in the Carnarvon Basin, accounted for 24 percent of its production last year, according to the company’s website. It owns 45 percent of the Reindeer, John Brookes and Spar gas fields there, while Quadrant owns the rest and is the operator. Santos also owns 37.5 percent of the Fletcher Finucane oil field in the region and is the operator.

Perth-based Quadrant Energy was formed after a group led by Macquarie Group Ltd. and Brookfield Asset Management Inc. agreed in April to buy Apache Corp.’s Australian assets for $2.1 billion. Macquarie has since sold part of its holding to other investors including Wesfarmers Ltd. and Western Australia businesswoman Angela Bennett’s family investment firm.

Separately, both Santos and Quadrant are seeking buyers for the Stag oil field off the Western Australian coast, people familiar with the matter said in September. Santos owns 66.7 percent of the field, while Quadrant owns the rest and is the operator.

http://www.bloomberg.com/news/articles/2015-10-27/santos-said-to-get-1-1-billion-offer-for-australian-gas-fields

Crude prices edged lower on Monday on worries that the oversupply in oil products could swell from unseasonably warm weather and the waning maintenance cycle for U.S. refineries.

Influential Wall Street trading house Goldman Sachs warned of downside risk for oil prices through spring 2016 as U.S. and European storage utilization for distillates, which include diesel, neared historic highs.

Traders told Reuters that as refined oil product storage tanks fill up, unwanted diesel and jet fuel cargoes were backing up outside Europe's ports and taking longer, slower routes around the southern tip of Africa.

"There's talk in the market about ULSD (ultra low sulfur diesel) storage potentially reaching 'tank tops', and that's weighing on crude," said Dave Thompson of Washington-based broker Powerhouse.

Goldman it would take 50 fewer heating degree days (HDDs) than normal in Europe for storage there to hit tank tops.

HDDs are measured by the difference between the average temperature outside and the 70 degrees Fahrenheit (21 degrees Celsius) level, which is deemed to be neutral indoors for heating. The lower the reading, the less energy products such as heating oil and natural gas are expected to be required for heating.

"While our distillate balances suggest that stocks will fall short of capacity, the margins of error are small and the risks high, leaving risks to current crude oil prices and timespreads as skewed to the downside through next spring," analysts at Goldman Sachs wrote.

Investments in oil are likely to decline further in 2016 after sliding this year by more than a fifth, Fatih Birol, executive director of the International Energy Agency (IEA), said.

"If it comes true, this will be the first time in two decades we will see oil investments declining for two consecutive years and may be an indication for future oil markets," Birol said at Singapore International Energy Week.

http://www.reuters.com/article/2015/10/26/global-oil-idUSL3N12Q1CG20151026

Japanese liquefied natural gas (LNG) demand will dive by 17 percent or 15 million tonnes in five years to below 80 million tonnes a year as more nuclear reactors are restarted, said a top executive of Tokyo Gas on Monday.

"Last fiscal year, the imported volume of LNG was 89 million tonnes. By 2020, that demand could be reduced," said Shigeru Muraki, executive advisor of Japan's top gas utility on the sidelines of the Singapore International Energy Week.

He said 15 to 20 nuclear reactors could restart in about five years. Other estimates have put the number of nuclear restarts in the next few years as low as seven.

All of Japan's nuclear reactors were shut following the March 2011 tsunami disaster, with the country restarting only two as of August and October.

Still, Tokyo Gas is looking to add 2 million to 3 million tonnes of LNG a year to its current annual offtake of 13 million tonnes as the company expects demand from its own customer base to increase, Muraki said.

Muraki also said Tokyo Gas will continue to use long-term contracts for its basic supply, but he expects traditional sellers to provide more flexibility to buyers, including not limiting contract cargoes to a single destination.

"I don't think traditional sellers will continue to stick to the traditional way of doing contracts. For instance, in the U.S., our LNG contract is based on long term supply but has flexibility in the destination," he said.

"We don't need to offtake everything to our terminals."

With LNG markets more than amply supplied over the next several years, buyers have a chance to get sellers to offer better contractual terms, Muraki said.

Tokyo Gas is also not giving up hopes of investing in a natural gas pipeline linking Russia to Japan despite U.S. sanctions against Russia, or of offtaking LNG from Mozambique despite a lack of infrastructure in East Africa, Muraki said.

http://af.reuters.com/article/mozambiqueNews/idAFL3N12J2H020151026?sp=true

---

Attached Files

We always thought Aubrey McClendon could sell snow to Eskimos–as the now-politically incorrect but old saying goes. Aubrey can charm money out of your grandmother. At last check more than a year ago he’d raised $8.7 billion of OPM–other people’s money–for use in his aggressive drilling ventures

. We’re pretty sure that number exceeded $10B at some point over the past year.

But then this year we began to hear whispers that Aubrey wasn’t paying his bills. And then Bloomberg published a hit-piece saying Aubrey had sold his investors a bill of goods . Indeed it appears the bloom is off the money-raising rose for Aubrey. According to inside sources, Aubrey has hired investment banks (plural) to help him find more money to keep going…

http://marcellusdrilling.com/2015/10/bloom-off-the-rose-mcclendon-eeks-help-from-investment-banks/?utm_source=dlvr.it&utm_medium=twitter

The Santos takeover approach is unique. While clearly Santos shareholders’ interests are paramount, the national interest also becomes important because the Santos bid is a first step in overcoming looming chronic gas shortages and much higher prices ahead for Sydney and later Melbourne.

On the national interest front, the most exciting aspect of the proposed Santos takeover is that some of the longest term oil and gas investors in the world -- the ruling families of Brunei and the United Arab Emirates -- are prepared to invest vast sums to solve Australia’s dreadful gas morass.

Of course, they expect to win longer term, but Australia has never needed substantial investment in our gas industry more than we do now. Most of the existing players are cash-strapped.

Australia’s biggest and most prosperous gas company, Woodside, looked hard at Santos and the domestic gas crisis and decided there were better returns bidding for Oil Search in PNG.

The mismanagement of the three Queensland coal gas ventures -- the consortiums headed by Santos, British Gas and Origin -- created our domestic gas crisis because collectively they contracted to export more gas than they had available in Queensland.

The shortfall was met by gas from the Cooper Basin, which was earmarked for Sydney. Already, steps are being put in place to pipe gas out of the Bass Strait to meet Sydney’s shortfalls, which threatens Melbourne’s supply.

In fairness to Santos and the other Curtis Island gas players, the environmentalists have blocked exploitation of coal gas reserves in other areas to meet the shortfalls.

Nevertheless, what’s required is much bigger investment in the Cooper Basin and in Queensland to develop the gas needed to satisfy the Curtis Island LNG export contracts and our eastern states’ domestic demand.

Debt-racked Santos simply does not have the money to do this because the slump in world gas and oil prices has hit its envisaged LNG cash flows. Indeed, so bad is the current debt position at Santos that the board, which made the fundamental mistakes that got the company into this mess, are looking to break the Santos network up, which may make it even harder for Australia to solve the problem.

Although the crisis has been there for all to see, for over a year Santos is only now getting around to preparing a plan. The proposed asset sales and other moves, when they are announced, will need to be compared to a takeover bid.

If the asset sales involve essential parts of the gas supply network, then Santos shareholders may need to agree to large payments in the future to create an attractive asset for infrastructure investors.

http://www.businessspectator.com.au/article/2015/10/26/resources-and-energy/santos-takeover-could-reignite-gas-sector?utm_content=SocialFlow&utm_campaign=EditorialSF&utm_source=BusinessSpectator&utm_medium=Twitter

---

Attached Files

Japan-based Mitsui has signed an agreement with Petróleo Brasileiro (Petrobras) for partial acquisition of shares in the latter's natural gas distribution unit Petrobras Gás (Gaspetro) for about R$1.9bn ($489m).

Through Mitsui Gas, Mitsui is set to acquire 49% of shares in Gaspetro which has equity stakes in local gas distribution companies (LDCs) in 19 Brazilian states.

Mitsui Gas with equity interests in LDCs in seven states was acquired by Mitsui in 2006 and since then the companies worked to improve the gas distribution infrastructure in Brazil.

According to the company, the acquisition of Gaspetro shares will increase the number of states served by gas companies in which Mitsui Gas has an equity interest to 19.

The gas distribution business in the country comprises regional monopolies based on the concessions that are granted by state governments.

Distribution companies develop the gas distribution infrastructure in their service areas in each state including gas pipeline networks, as part of concession agreements signed with the governments.

Gas purchased from Petrobras would be supplied by the companies to power stations and general industrial and commercial users, as well as residential consumers.

Gaspetro's portfolio covers several regions, including central, northeastern, and southern Brazil.

Mitsui acquired an equity interest in Companhia in December 2014 and is currently engaged in gas distribution operations in eight Brazilian states.

http://www.hydrocarbons-technology.com/news/newsmitsui-to-acquire-stake-in-petrobras-natural-gas-distribution-unit-for-489m-4701675

The latest weather report showed mild weather across a wide section of the U.S. in the next two weeks, triggering a 9.8 percent plunge in the front-month natural gas contract. The futures ended the session at $2.06 MMBtu, a level last seen in 2012.

By Francisco Marcelino

Brazil’s pre-salt oil reserves are viable even with oil prices at $48 per barrel, as Petroleo Brasileiro
SA has gained scale, Solange Guedes, the head of exploration and production of the state-owned company, told O Estado de S.Paulo.

Petrobras, as the oil producer is known, has reduced its per-barrel production costs by 11 percent in the past year, Guedes said in an interview conducted via e-mail on Oct. 23 and published Sunday by the Sao Paulo-based newspaper. The company’s well construction costs dropped by about half in the past five
years, O Estado said, citing Guedes.

Guedes also said that Petrobras is renegotiating contracts with suppliers to reduce operating costs, according to O Estado.

---

Attached Files

U.S.-based Cheniere Energy doesn't believe it will become Europe's leading liquefied natural gas (LNG) player despite bullish export plans.

The company, headquartered in Houston, is at the forefront of what is being called a U.S. energy renaissance with plans to churn out its first batch of LNG for overseas shipments in the next few months.

Export production volumes at its Sabine Pass export terminal are expected at 27 million metric tons per year (mmtpy), a number set to rise to 60 mmtpy by 2025. That's sparked market talk of whether Cheniere could overcome Russia to become Europe's leading supplier once it begins exporting to the region. Gazprom, Russian state-owned company, currently supplies more than 30 percent of Europe's gas.

But CEO Charif Souki remains cautious, for now.

"Russian gas will still be the dominant player in Europe," he said at the Singapore International Energy Week conference on Monday.

"Cheniere's entry into Europe won't dent [LNG] prices there…I don't see us as price makers."

But European nations are already courting Cheniere in an attempt to wean themselves off Russian supply. Earlier this month, Lithuania's Energy Minister Rokas Masiulis announced it was in talks with the U.S. firm regarding potential imports.

"We would love to have U.S. cargo in our region to have competition with Gazprom. But of course negotiations will depend on price terms," Masiulis told Reuters.

Cheniere's shipments are likely to start in January, with natural gas supplies due to arrive at its LNG plant later this year, Souki said on Monday.

http://www.cnbc.com/2015/10/26/cheniere-we-wont-compete-with-russia.html?utm_source=twitterfeed&utm_medium=twitter

Portugal's Galp Energia posted a stronger-than-expected 49 percent rise in adjusted quarterly net profit on Monday, boosted by higher refining margins and a steep increase in oil output in Brazil.

Galp said that after pumping a record 45,700 barrels of oil equivalent per day in the third quarter, production has increased further lately to surpasss the 50 kboepd milestone as the giant Lula/Iracema oilfield off Brazil was pumping more crude than initially expected.

The third Lula/Iracema oil platform off Brazil's coast should reach a plateau during this quarter, ahead of schedule, the company said. Another platform at Lula/Iracema was ramping up production after an early start in July, while two more platforms were on track to be deployed in the first quarter of next year, it said.

Galp reported a net profit of 180 million euros ($199 mln) in the July-September period. Earnings before interest, taxes, depreciation and amortization (EBITDA) rose about 9 percent to 411 million euros. The results are adjusted to reflect changes in the company's stocks of crude.

Analysts polled by Reuters had forecast, on average, an adjusted net profit of 153 million euros and EBITDA of 415 million euros.

Galp's refining margin rose to $6.7 per barrel from $4.7 a year ago, following global trends amid a fall in crude prices. Galp's sales were also helped by recovering demand for fuel in Portugal and Spain.

The company said earlier this month that oil output rose by nearly 44 percent in the third quarter.

http://www.reuters.com/article/2015/10/26/galp-energia-results-idUSL8N12Q0QL20151026

U.S. energy firms reduced oil rigs for an eighth week in a row this week but slowed the rate of those cuts to just one rig, data showed on Friday, a sign some drillers may soon return to the well pad with hopes of rising crude prices in the future.

The total rig count for the week ended Oct. 23 fell to 594, the least since July 2010. Over the past eight weeks, drillers cut a total of 81 rigs, oil services company Baker Hughes Inc said in its closely followed report.

The reduction this week was the lowest since drillers started cutting rigs at the start of September after adding 47 rigs over the summer. Drillers decided to add the rigs over the summer during the spring when crude prices averaged $60 a barrel in May and June.

U.S. oil futures this week however have lost over 5 percent to average $45 a barrel, sliding for a second straight week, on continuing oversupply concerns even as China's latest interest rate cut raised hopes for stronger demand from the world's top energy consumer.

The total count this week is less than half the 1,595 oil rigs in the same week a year ago. Since hitting an all-time high of 1,609 in October 2014, weekly rig count reductions have averaged 19.

With natural gas rigs up one to 193 this week, the total oil and gas rig count held at a 13-year low, according to Baker Hughes.

The rig count is one of several indicators traders look at in trying to figure out whether production will rise or fall over the next several months. Other factors include how fast energy firms complete previously drilled but unfinished wells and rising well efficiency and productivity.

Despite the overall decline in oil rigs, drillers added rigs in two of the four major U.S. shale oil basins this week. They added three in the Niobrara in Colorado and Wyoming and one in the Eagle Ford in South Texas, but removed three in the Permian in West Texas and eastern New Mexico. There were no changes in the Bakken in North Dakota and Montana.

On a weekly basis, the amount of U.S. oil pulled out of the ground has remained about 9.1 million bpd since the start of September, according to EIA's weekly field production report, well below the 9.6 million-barrel per day peak seen in April.

http://www.reuters.com/article/2015/10/23/usa-oil-rigs-baker-hughes-idUSL1N12N1NW20151023

China's Yantai Xinchao Industry Co Ltd has agreed to spend about 8.3 billion yuan ($1.31 billion) to buy oilfields in the U.S. state of Texas, the company said in a corporate filing late on Saturday.

The oilfields, in Howard and Borden counties, will be bought from Tall City Exploration LLC and Plymouth Petroleum LLC, Xinchao said in the filing to the Shanghai Stock Exchange.

The transaction has aready been approved by the U.S. Treasury's Committee on Foreign Investment, it added.

http://www.reuters.com/article/2015/10/25/xcic-usa-idUSL3N12P05620151025

 A final report approved by a Brazilian congressional panel investigating corruption at state-run oil company Petrobras has blamed suppliers and rogue employees for the graft, rather than politicians or the company.

The committee's final report did not criticize any politicians, including those closely associated with Petrobras, such as President Dilma Rousseff, who was chairwoman of the company's board when much of the corruption happened.

It also spared Eduardo Cunha, the speaker of the lower house who is under investigation by police and prosecutors for alleged corruption.

Rousseff, who is facing a possible impeachment battle, has not been charged or accused by police or prosecutors of any criminal wrongdoing.

The report, which followed eight months of investigation and was approved by a vote of 17 to 9 with one abstention, also denied "institutional corruption" existed at Petroleo Brasileiro SA, as the company is formally known.

Five amendments attempting to alter the text were rejected.

The report has been criticized for failing to censure any politicians or two previous Petrobras chief executives.

Approval of the report comes the week after Brazil's government said Swiss authorities froze $2.4 million in accounts held by Cunha.

Federal prosecutors are investigating Cunha over allegations made during plea bargains that he received a $5 million bribe as part of the Petrobras corruption scheme.

Cunha, who is a member of Brazil's Democratic Movement Party, part of the ruling Workers' Party-led coalition, previously told the committee he had no Swiss bank accounts.

The committee's official rapporteur, Luiz Sergio Nóbrega de Oliveira, a member of the Workers' Party, said his panel received no proof Cunha had bank accounts abroad.

The final report criticizes police and prosecutors handling of the Lava Jato or "Car Wash" probe into contract fixing, bribery and political kickbacks at Petrobras.

The report also criticizes the use of "an excess" of plea-bargains in exchange for reduced sentences to win confessions from key players in the case. The report says there was no proof that money was diverted from Petrobras projects to politicians.

Brazil's plea-bargain law requires that cooperating witnesses provide evidence as well as testimony in order to receive reduced sentences.

http://www.reuters.com/article/2015/10/23/brazil-petrobras-investigation-idUSL1N12N0O420151023

Cabot Oil & Gas Corp. on Friday reported a third-quarter loss of $15.5 million, after reporting a profit in the same period a year earlier.

On a per-share basis, the Houston-based company said it had a loss of 4 cents. Losses, adjusted for one-time gains and costs, came to 1 cent per share.

The results did not meet Wall Street expectations. The average estimate of 17 analysts surveyed by Zacks Investment Research was breakeven on a per-share basis.

The independent oil and gas company posted revenue of $305.3 million in the period, which also missed Street forecasts. Ten analysts surveyed by Zacks expected $354.4 million.

Equivalent production in the third quarter of 2015 was 142.1 billion cubic feet equivalent (Bcfe), consisting of 133.0 billion cubic feet (Bcf) of natural gas and 1.5 million barrels (Mmbbls) of liquids (crude oil/condensate/natural gas liquids). These figures represent increases of 7 percent, 5 percent, and 57 percent, respectively, compared to the third quarter of 2014.

Cash flow from operations in the third quarter of 2015 was $146.4 million, compared to $358.3 million in the third quarter of 2014. Discretionary cash flow in the third quarter of 2015 was $150.4 million, compared to $296.0 million in the third quarter of 2014. Net loss in the third quarter of 2015 was $15.5 million, or $0.04 per share, compared to net income of $100.8 million, or $0.24 per share, in the third quarter of 2014. Excluding the effect of selected items including a $17.6 million after-tax non-cash mark-to-market loss on natural gas derivatives, net loss was $2.2 million, or $0.01 per share, in the third quarter of 2015, compared to net income of $85.0 million, or $0.20 per share, in the third quarter of 2014.

EBITDAX in the third quarter of 2015 was $167.6 million, compared to $325.9 million in the third quarter of 2014. Significant reductions in realized prices for both natural gas and oil were the primary drivers for the lower results in the quarter, partially offset by higher equivalent production and lower overall operating expenses. See the supplemental tables at the end of this press release for a reconciliation of non-GAAP measures including discretionary cash flow, net income excluding selected items, EBITDAX and net debt to adjusted capitalization ratio.

Natural gas price realizations, including the effect of hedges, were $2.02 per thousand cubic feet (Mcf) in the third quarter of 2015, down 34 percent compared to the third quarter of 2014. Excluding the impact of hedges, natural gas price realizations for the quarter were $1.68 per Mcf, representing a $1.09 discount to NYMEX settlement prices. Oil price realizations were $43.71 per barrel (Bbl), down 54 percent compared to the third quarter of 2014.

Total per unit costs (including financing) decreased to $2.35 per thousand cubic feet equivalent (Mcfe) in the third quarter of 2015, an improvement of 7 percent from $2.53 per Mcfe in the third quarter of 2014.

http://finance.yahoo.com/news/cabot-oil-gas-corporation-announces-103000778.html

Petronet LNG Ltd, India’s biggest liquefied natural gas importer, is shelling out INR 400 crore every quarter in demurrage charges for ships idling because of its PSU buyers refusing to buy expensive imported gas.

The company is taking only 68 per cent of the volumes it agreed to in 25-year contracts with RasGas of Qatar after a slump in global energy prices led to gas being available in spot or current market a roughly half that rate.

Senior officials said that state-owned GAIL India Ltd, Indian Oil Corp (IOC) and Bharat Petroleum Corp Ltd (BPCL) have committed to buy all of the 7.5 million tonne a year of LNG Petronet is to import from Qatar. But with slump in global prices, they have opted to buy gas from spot market rather than use the long—term LNG.

The reduced offtake by the buyers forced Petronet to cut its purchase from RasGas. This resulted in idling of three cryogenic ships it had chartered hired for ferrying gas in its liquid form at sub—zero temperatures from Qatar to its import terminal at Dahej in Gujarat.

An official said that “The cut in volumes has meant that on an average one out of the three ships is idling.”

But as per charter hire conditions, Petronet continues to pay the day rates.

Official said that “The demurrage charges come to about INR 400 crore per quarter.”

While LNG in the spot market is available at USD 7-8 per million British thermal unit, the price of gas under the long-term contract with RasGas is close to USD 13 per mmBtu.

Pricing of LNG under the long-term deal is linked to the previous 12-month Japan Crude Cocktail (JCC), including caps and floors based on average JCC prices of the past 60 months.

Petronet had hired two LNG tankers of 138,000 cubic meters capacity and one tanker of 155,000 cubic meters capacity from a consortium of shipowners led by Mitsui OSK Lines Ltd of Japan for transportation of 7.5 million tonne per annum of LNG from Qatar to Dahej.

The time-charter agreement is valid till April 30, 2028.

The two 138,000 cubic meters ships were hired at a dayrate of USD 68,900 while the bigger one charges USD 72,880 a day.

http://steelguru.com/gas-oil/petronet-pays-hefty-demurrage-as-psus-refuse-costly-gas-import/437476#tag

---

Attached Files

Image Source: Economic TimesEconomic Times reported that the government has rejected the Cairn India's plea to renew the contract for the prolific Rajasthan block with the existing terms and conditions and has asked for the investment plan for the renewal period to assess the extent to which the state's share of profit can be raised.

Cairn India, controlled by billionaire Mr Anil Agarwal, is seeking to extend the contract to operate the oil and gas block in Barmer, Rajasthan, by 10 years after the 20-year agreement runs out in 2020.

Cairn owns 70% in the joint venture that manages the Barmer block, responsible for nearly one-fourth of India's local oil production, with state-run Oil and Natural gas Corp (ONGC) owning the balance.

The company has been lobbying the government for about two years for an early extension, arguing a clarity on this would make it easier for them to plan future investments. It has also argued against any suggestion of alteration to the terms of the contract.

A senior government official said that "Legally, we can change the terms of the contract if we choose to extend it. We will take a call on the new terms of the contract only after the company shows us their investment plan and output projection for the block."

http://steelguru.com/gas-oil/govt-rejects-cairn-appeal-to-renew-rajasthan-block-deal/437486#tag

---

Attached Files

Gazprom PJSC, the world’s biggest natural gas exporter, is planning for the lowest price for its fuel in its main European market for more than a decade.

The state-run exporter is drafting its budget for 2016 with preliminary estimates for gas prices outside the former Soviet Union of about $200 per 1,000 cubic meters ($5.45 a million British thermal units), said two people with direct knowledge of the matter who asked not to be identified because the information is private. That compares with the company’s estimate of an average price for the region, which covers Turkey and Europe outside the Baltic States, in 2015 of about $238 per 1,000 cubic meters and $349 last year.

The company’s press office declined to comment on estimates.

Gazprom, which supplies about a third of Europe’s gas and relies on exports of the fuel for 40 percent of its annual revenue of more than $100 billion, is facing declining prices abroad as most of its contracts are linked to oil with a time lag of six to nine months. Brent crude has lost 16 percent this year after a 48 percent drop in 2014. The company is also facing increased competition as the U.S. prepares to export its first liquefied natural gas from the Gulf Coast.

“Gazprom’s forecasts look reasonable,” Alexei Kokin, an energy analyst at UralSib Financial Corp. in Moscow, said by phone Friday. Russia has the capacity to maintain its market share in Europe given lower prices next year even amid the predicted glut in LNG, he said.

The Moscow-based company is set to this year note its lowest revenue outside the former USSR in a decade in dollar terms. Sales in rubles may rise to a record, reflecting a 2.2 percent weakening of the Russian currency against the dollar this year, following a 46 percent drop last year.

Exports to the region are expected to stay stable at about 160 billion cubic meters (5.6 trillion cubic feet) in 2016 with revenue in rubles declining but still near the average of the past few years, according to one of the people.

http://www.bloomberg.com/news/articles/2015-10-23/gazprom-said-to-see-its-lowest-eu-gas-price-in-11-years-in-2016

---

Attached Files

Russian Energy Minister Alexander Novak said on Friday Kremlin-controlled gas producer Gazprom has offered gas supplies to Iran under a swap arrangement, and similar oil deals were also under consideration.

Moscow has boosted efforts to foster political and economic ties with Tehran and increased its activity after a decision in July to lift international sanctions on Iran in principle. The ending of sanctions, related to Iran's nuclear programme and including restrictions on oil exports, have yet to take effect.

Novak said Iran normally supplies gas to its northern regions from the south of the country and the proposed swap deals would help to cut its transportation costs.

"We could supply gas through to Iran's north and receive gas from the south (of Iran) via swap deals in the form of liquefied natural gas or pipeline gas," Novak told Russian state-run TV Rossiya-24.

"Similar swaps could be done with oil. This is a reduction of transportation costs. Our colleagues have given a positive response to the idea," he added.

Iran is keen to recover oil market share it lost as a result of the international sanctions.

http://www.reuters.com/article/2015/10/23/russia-iran-energy-idUSL8N12N1KU20151023