Mr. Michael Lynch

GLG News by Mr. Michael Lynch, Consultant

Petrobras has potential to corner latin American LNG market

November 20, 2009

Analysis of:40 TCF Gas Recoverable from 3 Brazilian Oil Fields | www.rigzone.com

A spokesman for BG Group said that 40 trillion cubic feet of natural gas can be recovered from Tupi, Iara and Guara oil discoveries offshore Brazil. The three fields contain between 9.1 and 14 billion barrels of oil equivalent. They will transform Brazil into a major oil exporter in the next decade. Confirmation of sizeable gas reserves will quadruple Brazil's proven reserves. The natural gas could be used for domestic power generation. Last week Sao Paulo suffered a major electric blackout.

Marginal oil and gas operations disappearing in wake of financial downturn

November 19, 2009

Analysis of:Chevron Drops Plans for Inlet Exploration | www.rigzone.com

Chevron announced that it is dropping a program to develop more oil from aging Cook Inlet. The production workforce will be reduced by 10 percent. A statement issued by the company cited "difficult economic conditions." The company will continue to operate some platforms. Chevron said the Cook Island business would contract because of production declines, high lifting costs, financial issues and volcanic activity. Total oil production from the region is 8,500 bbl/day.

Devon looks at hole card, decides to consolidate operations

November 17, 2009

Analysis of:Devon Divests All GOM, International Assets | www.rigzone.com

Devon Energy plans to reposition itself as a high-growth North American onshore company. It will divest all Gulf of Mexico and international assets. Proceeds of the sales will be used to pursue opportunities in the U.S.A. and Canada and to reduce debt. The company will open data rooms and commence divestiture in the first quarter of 2010. Process to be completed by year end 2010. Then, Devon will deliver growth funded entirely with internally generated funds.

OXY et al to redevelop 67 year old Awali oil field on Bahrain Island

November 15, 2009

Analysis of:OXY Forms Joint Co. to Further Develop Bahrain Field | www.rigzone.com

Occidental Petroleum Corporation, Mubadela Development Company and the National Oil and Gas Authority of Bahrain announced the creation of an operating company under a production sharing agreement signed in April of 2009. The joint company named Tatween Petroleum will begin work immediately. Composition of the redevelopment team will be mainly ex-Bahrain Petroleum Company employees. The revitalization of this old field represents a paradigm shift for the oil industry on Bahrain Island.

Exxon to redevelop Upper Zakum on the cheap

November 13, 2009

Analysis of:Exxon Sees Major Cost Savings on Abu Dhabi Oil Field | www.rigzone.com

Exxon Mobil expects to save billions of dollars at massive Upper Zakum oil field in the Persian Gulf. Instead of setting many steel platforms, Zadco (Exxon Mobil, Inpex and Adco) will build artificial islands from which to drill new wells. Zadco plans to increase production to 750,000 bbl/day by 2015. Zakum oil field comprises both Upper and Lower zones and is the second-largest field in the Persian Gulf. The project is on track for award of production facilities in late 2010.

Ensco gets out of town before it's too late

November 11, 2009

Analysis of:Ensco to Move Corporate Headquarters to UK | www.rigzone.com

Ensco announced that its Board of Directors has approved a plan to change the company's corporate structure. Ensco's legal domicile would change from Delaware to the U.K. Most of the senior officers would be based in the U.K. where the company has substantial operations. The move will enhance management efficiency, improve access to key customers, enhance access to European investors improve perceptions that Ensco is a global offshore drilling contractor and reduce tax rates.

Exploration in Congo (Brazzaville) should continue into 2010

November 9, 2009

Analysis of:Total Eyes Oil Production Rise in Congo By Year End | www.rigzone.com

French company Total, top operator in the Republic of Congo, plans to increase production by 20% by the end of 2009. At the end of the year, Congo will be able to produce 300,000 bbl/day. Total's new production will come from a discovery of an oil field in May of 2008 named Moho Bilondo. Estimated output from the new field is 90,000 bbl/day. The Republic of Congo is the fourth largest producer of crude oil in sub-Saharan Africa after Angola, Nigeria and Equatorial Guinea.

Halliburton to coax more oil out of largely depleted Ghawar field

November 7, 2009

Analysis of:Halliburton Wins 5-Yr Drilling Gig in Mega-Giant Ghawar Field | www.rigzone.com

Halliburton was awarded a five year integrated turnkey contract for Ghawar field. Work will be performed in Uthmaniyah, Haradh, Hawiyah and Shedgum. Halliburton will provide drilling rigs, directional and horizontal drilling tools, logging, cementing, mud engineering, perforation, completion and well construction services. Halliburton will engineer and manage the entire drilling operation.Three to four rigs will drill and complete between 153 and 185 oil and water injection wells.

Baker Hughes report shows state of oil industry worldwide

November 6, 2009

Analysis of:Baker Hughes' Profits Take a Hit, BJ Services to Advance Portfolio | www.rigzone.com

Baker Hughes reported net income for Q-3 of $0.18/share, down from Q-2's $0.28/share. Q-3 North American margins rebounded from the low of the second quarter but international results were disappointing. Revenue in Latin America declined because of reduced revenue from Venezuela, Argentina, Bolivia and Chile. Europe, Africa, Russia and Caspian declined except for Angola. The Middle East Asia Pacific declined as rig counts went down. With a new $300 million contract, 2010 should improve.

BP, CNPC face uphill climb to triple output from Rumaila field

November 5, 2009

Analysis of:BP, CNPC to Triple Output from Super-Giant Rumaila Field | www.rigzone.com

BP and China National Petroleum Corporation have signed a service contract with Iraq's South Oil Company to expand production from the field located near Basra. The plan is to triple production to almost 3 million bbl/day. BP and CNPC plan to invest $15 billion over 20 years to raise production to a plateau level of 2.85 million bbl/day. BP has gained field information as a result of a three year technical assistance program and has historic information dating to the discovery in 1953.

Devon's San Augustine good shale gas well moves field limits eastward

November 4, 2009

Analysis of:Devon Claims Highest Rate Haynesville Shale Well | www.rigzone.com

Devon announced that the Kardell Gas Unit 1H flowed 30.7 million cubic feet/day on a 24 hour test. The well was drilled to 18,350 feet including a 4,500 foot lateral. The company plans to accelerate drilling on their 47,000 acres principally located in San Augustine and Sabine counties in Texas and Sabine Parish, Louisiana. Devon has drilled 8 horizontal wells in the Carthage area. Devon has identified 950 risked drilling locations at Carthage and plans to go to a five rig program next year..

Talisman bets that natural gas prices set to rise beyond current levels in 2010.

November 3, 2009

Analysis of:Talisman Adds Acreage in North American Shale Plays | www.rigzone.com

Talisman has added 170,000 net acres in the Pennsylvania Marcellus and the Montney shales (Canada) in the last few months at a cost of C$570 million. Marcellus drilling will increase in 2010 and drilling in the Montney will begin. Talisman doubled its Tier 1 acreage which it defines as breakeven at $4/thousand cubic feet. Combined Tier 1 positions in the two areas is 350,000 acres with a potential of 4,800 locations. The last five wells drilled in the Marcellus have ultimate recoveries of 6bcf

Statoil ASA, once StatoilHydro moves on to more reliable projects

November 2, 2009

Analysis of:StatoilHydro Halts Investments in Iran in Current Climate | www.rigzone.com

StatoilHydro announced on Friday that it has no plans for further investment in the Khorramabad block. The company's seismic operations were concluded before 2009. No firm plans exist for drilling a well. The Mehr News Agency has reported that the seismic data verified extensive gas and oil reserves. National Iranian Oil Company owns the block. Anaran field in the Khorramabad block is one of several promising discoveries. U.S. sanctions restrict investment in Iran to $20 million.

Gasprom to go slow on high cost LNG in worsening market conditions

November 1, 2009

Analysis of:Russian LNG Aims Face Big Challenges in Arctic Regions | www.rigzone.com

Russia, world's largest natural gas producer, has invited international majors to help it obtain 20% of the natural gas market. Experts say it could be 2020 before new production comes on stream. Russia's priority project, Shtokman offshore field in the Barents Sea is scheduled to begin deliveries in 2014. Many experts question Gazprom's financial and technical ability to make it happen in a time of worldwide recession. Vitaly Yermakov of CERA in Moscow cited uncertainty about gas projects.

Higher crude oil prices and natural prices can and will move the needle

October 30, 2009

Analysis of:Exxon Struggles To Move The Needle | www.forbes.com

ExxonMobil earned $4.7 billion in the third quarter of 2009, in line with its peers. Earnings were off 68% from last year. Liquids production were up 2%. The poor results are surprising when the company just reported the start up of three liquefied natural gas (LNG) trains in Qatar's North field. Train number 4 scheduled to go on line by end 2009. Projects will generate 5 billion cubic feet /day and 300,000 bbl/day of high quality liquid. If Qatar can barely move the needle, what can?

Schlumberger in unique position to observe worldwide oil and gas activity

October 25, 2009

Analysis of:Schlumberger Reports 3Q Earnings of $5.43B | www.rigzone.com

Schlumberger reported third-quarter revenue of $5.43 billion compared with $7.26 billion in the third quarter of 2008. Quarterly sequential results were about the same. Oilfield Service revenue was down 22% year on year while Western Geco was down 48%. CEO Andrew Gould predicted that the remainder of 2009 could show modest gas drilling improvement but flat pricing. He saw no significant oil service activity increase until late 2010. New liquefied natural gas (LNG) will keep prices low.

World oil demand might grow if everything works out OK

October 23, 2009

Analysis of:World oil demand to grow next year | www.offshore-mag.com

The IHS and Cambridge Energy Research Associates expect crude oil demand to grow in 2010 for the first time since 2007 and return to pre-recession levels by 2012. The rebound would mark a turnaround from the largest drop in global demand since the oil crisis of the early 1980s. Oil demand dropped from a high of 86.5 million bbl/day in 2007 to 83.8 million in 2009. The last time the world experienced a severe decline in crude oil demand, nine years were required for it to reach 1979 levels.

Compressed gas as transportation fuel still rising.

October 22, 2009

Analysis of:Enthusiasm for Natural Gas Cools | www.nytimes.com

Developing countries around the world are increasingly turning to natural gas as their alternative transportation fuel of choice. But official embrace in industrialized nations has waned. After ten years of double digit growth more than 10 million vehicles worldwide are powered by natural gas.Pakistan is the global leader with more than 2 million vehicles. Argentina is in second place with1.75 million. Iran, with the world's second largest gas reserves has 1.5 million.

Devon sells high development cost assets to fund less expensive projects

October 21, 2009

Analysis of:Devon Sees Oil Majors As Main Bidders on GOM Assets | www.rigzone.com

CEO Larry Nichols of Devon Energy said that the sale of some Gulf of Mexico projects will be complete next year. Major oil companies are likely to be the main bidders. The company's data room received interest from international and national oil companies. So far the company is not in talks that would lead to deals with anybody including the Chinese. China's Cnooc is thought to be in talks with StatoilHydro for Gulf of Mexico prospects. Kaskida, St. Malo, Jack and Cascade are to be sold.

U.S. citizens to pay a high price for this legislation

October 19, 2009

Analysis of:Energy Firms Deeply Split on Bill to Battle Climate Change | www.nytimes.com

The nation's energy producers, once united, now battle over the policy decisions of the U.S. Congress. Producers of natural gas battle the oil companies. Electric utilities fight among themselves over the use of coal versus renewables. Coal companies battle natural gas producers. Supporters of Global Warming believe the divisions improve prospects for legislation. It is hard to pass clean-energy legislation when energy firms are united in opposition. Is legislation a hoax and a Ponzi scheme?

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