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KURDISTAN A planned withdrawal of Gulf Keystone Petroleum

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KURDISTAN A planned withdrawal of Gulf Keystone Petroleum

Post Thu Jul 16, 2015 9:00 pm

​The unresolved dispute over oil and gas export revenue distribution between the Kurdish Regional Government (KRG) and Baghdad hampers both the Kurdish and the overall Iraqi economy.
On top of the global oil price slump, the regional crisis in Iraq has affected confidence, led some companies to withdraw staff, and further worsened the region’s fiscal crisis, as well as burdening it with large numbers of displaced people and hence increasing fuel and electricity demand.

As Jaafar Altaie of Al Manaar Energy Consulting and Project Management pointed out, the unresolved political and fiscal dispute between KRG and federal Iraq perpetuates the downward economic cycle.

“If the KRG does not have a strong relationship with Federal Iraq, which is vital for its survival at the moment, then it will not receive full payments from Federal Iraq,” Altaie said.
He went on: “In turn, it leads to not paying out all salaries to Kurdish government employees, government cash deficits, lower domestic spending, shortage of funds to establish infrastructure – both oil and gas infrastructure and public infrastructure such as railways – no payments to IOCs for exports and sales. No payments lead to halted developments, such as Exxon Mobil’s; withdrawals of IOCs, such as Hess and Petroceltic, Western Zagros. Also a planned withdrawal of Gulf Keystone, and even arbitration cases such as Dana Gas case.”

The dispute between the KRG and the central government couldn’t have come at a worse time. “They have a huge draw on the government budget in Iraq now because of the war with ISIS combined with the economic challenges.” Majid Jafar, the chief executive of Crescent Petroleum, a UAE-based company that has an equal share in the Dana Gas-run project in Iraq, said during the May 2015 World Economic Forum on the Middle East in Jordan.
As Iraq Oil Report explained in June, according to the KRG Minister of Natural Resources Mr. Ashti Hawrami, the total accumulated debt to oil companies in Kurdistan is over $3 billion, whereas the KRG has only received one partial payment from federal government in the last 18 months.

In December 2014, the KRG Ministry of Natural Resources and the Federal Iraqi Ministry of Oil seemed to have finally reached an agreement on the budget provision for 2015, under which KRG committed to transfer 550,000 barrels of oil per day (bpd) to the federal Iraq’s State Oil Marketing Organization (SOMO). In return, SOMO was expected to pay a 17 per cent share of Iraq’s federal budget minus some state operating expenses to KRG.

Minister Hawrami confirmed to the media in June that SOMO had earned nearly $800 million from its northern oil sales in May but the KRG had only received about half that amount.

Since June, the Kurds have taken full control of all oil exports from their regions and are shipping as much as 600,000 bpd from their fields without transferring any quantities to SOMO.

However, by going around SOMO, the KRG has raised tensions with Iraqi authorities in Baghdad, with relations already strained due to the controversial dispute of KRG ownership claims to oil and gas revenues and their territorial independence. Given the current circumstances, another stretch of lengthy disputes will not benefit either party, so a renewed deal would have to be reached shortly.

“Keeping in mind the fight with the ‘Islamic State’ (ISIS) in the region, the KRG needs to maintain strong relationships with Federal Iraq to receive payments for the Peshmerga. ISIS remains a threat to border areas of the KRG and has interrupted oil and gas operations there,” Roa Ibrahim, a Consultant at Manaar Energy Consulting & Project Management, said.
Under-the-Radar Canadian Company’s is sitting on three times the total oil reserves of Texas and their investment in Argentina could soon pay investors 75% - 116%.

The war with ISIS, combined with the existing economic challenges, brought a huge deficit in the government budget. In order to generate more revenues, the government relies on the experience and expertise of IOCs to explore, develop, and produce natural resource reserves.

The high security and political risk of conflicting natural resource claims between Erbil and Baghdad deters international oil and gas companies from pursuing development projects.

“In my opinion, Kurdistan has great oil and gas export potential, but its relationship with IOCs and the federal government of Iraq needs strengthening,” Roa Ibrahim said.

The potential is large indeed. According to Manaar Energy Consulting studies, discovered gas reserves to date are 200 billion cubic meters (BCM) (7 trillion cubic feet- TCF) of 2P (Proven and probable reserves) gas reserves and 615 BCM (22 TCF) of 2C (Best estimate of contingent resources) gas reserves.

Given this large resource base, even with a fast-growing domestic demand, the KRG has significant potential to export gas. The only feasible current markets for Kurdish gas are the domestic market, Turkey (with possible onward transit to Europe), and federal Iraq, given that Iraq’s current gas-flaring challenges may lead to shortages, especially in Baghdad.

KRG is currently producing about 3.5 BCM, entirely for domestic electricity generation, according to Manaar Energy’s figures, and it has plans to export 5 BCM/year by 2019 and 10 BCM by 2020 to Turkey.

“With longer-term internal demand in the range of 10 BCM, these plans are consistent with a discovered resource base that could support 28 BCM/year or more of production from 2020,” Ibrahim pointed out.

The gas pipeline to Turkey is expected to start operating by 2019, and the feasible export price of gas from KRG to the Turkish border within the range of $3.50 – $6.59/ MMBTU is quite competitive compared to current Turkish gas imports prices from Russia, at a base price $8.75/MMBTU, and the Caspian region, at a base price of $7.16/MMBTU.

The Kurdish gas price for Baghdad of $3.50 – $3.80/MMBTU would also have a significant advantage over the current prices of Iranian gas supply to Bagdad in the range of $8.80 – $9.19/MMBTU.
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Re: KURDISTAN A planned withdrawal of Gulf Keystone Petroleu

Post Thu Jul 16, 2015 9:01 pm

Helios Investment Partners Independent Resources (LON:IRG) Investment ... agNNPlVhUY

PRIVATE-equity firm Helios Investment Partners has about $800m to invest in businesses in Africa and is looking to partner UK Oil companies looking for co-investors in the rest of Africa.

The London-based, Africa-focused private equity firm said it was well placed to share knowledge with UK companies that wanted to share the risk when deploying funds in the rest of Africa. Helios Investment Partners said they were looking for financial investments in oil explorers in Tunisia and Egypt .

In its latest investment, eight-year-old Helios Investment Partners this week announced it was co-investing $276m in a consortium with Vitol, the world’s biggest independent oil trader.

The consortium reached an agreement to buy a majority stake in the downstream business of JSE-listed Nigeria-based Oando, which has more than 400 service stations in Nigeria and 84,000 tonnes of storage.

In May, Helios Investment Partners invested $100m for a 12.4% stake in Africa Oil, a Canadian oil and gas company with assets in Kenya and Ethiopia. The company is investing its Fund III, which closed this year and raised $1.1bn.
There is a rumoured investment in UK explorer Independent Resources who have just started a mapping programme on its Ksar Hadada development where there has multiple interest from local and global players.

Following these recent investments its chief operating officer and partner, Henry Obi, said the firm still had notable capital to co-invest with South African firms looking to expand in the rest of Africa.

"We have a significant amount of money left in the fund. I would say over $800m. This will be invested over the next four years," said Mr Obi, who was in SA to meet investment bankers and South African companies looking to do deals in the rest of Africa.

"We are looking for South African companies to partner with them across the whole of Africa in any sector."
One of the companies that Helios has co-invested with before is Shanduka Group, a black-controlled company previously owned by Deputy President Cyril Ramaphosa but merged with businessman Phuthuma Nhleko’s investment firm Pembani.

In 2011 an affiliate of Helios Towers bought Nigerian telecoms firm Multilinks from SA’s state-owned phone operator, Telkom.

In 2013 Helios Investment Partners invested in unsecured credit provider Bayport after financial services firm Transaction Capital exited the business.

Mr Obi said Helios Investment Partners had also co-invested with family offices from SA and funds of funds, but was willing to do more.

Helios Investment Partners is also raising $300m in a side-fund, which will be earmarked exclusively for oil and gas investments. It hopes to close it by the end of this year.
In the oil and gas sector, it is also invested in SA’s Impact Oil and Gas, which is exploring off the coast of the Cape.
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Re: KURDISTAN A planned withdrawal of Gulf Keystone Petroleu

Post Thu Jul 16, 2015 9:09 pm

Petroceltic comes under fire from investor – again

A bitter boardroom dispute entered a new phase today as investor Worldview Capital called on shareholders to block a $175million fundraising limit for Irish oil firm Petroceltic.

The Cayman Islands-based hedge fund wants to limit the Petroceltic board’s borrowing powers. Worldview, which holds a majority 29% stake – accused the board of abusing “unfettered borrowing powers”, “poor corporate governance” and squandering the “company’s crown jewel”.

Worldview, owned by Angelo Moskov, is backing an emergency meeting to oppose Petroceltic’s proposed $175million bond, secured on one its Algerian assets, and its continued and unrestricted borrowing ability. The request for an extraordinary general meeting was officially filed by Vidacos Nominees Ltd, which holds a 26.5% stake in Petroceltic, and of which Worldview is the beneficial owner.

In a notice to shareholders Worldview said: “Petroceltic appears to have now run out of money. As a result it is proposing to pledge the company’s crown jewel, namely its participation in the Ain Tsila asset, as a security for a contemplated $175 million bond issuance. In our view, this will result in squandering shareholder value.”

It added: “Given the company’s past history of very poor financial management and false claims, Worldview is extremely concerned that such bond issuance will be perilous to shareholders. Owing to the company’s consistent inability to produce sufficient cash flows, proceeding with the bond issue on the announced terms would, in our view, likely result in bondholders eventually securing the world-class asset for a derisory sum.”

Petroceltic said it is taking legal advice further announcements will be made in due course.
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Re: KURDISTAN A planned withdrawal of Gulf Keystone Petroleu

Post Fri Jul 17, 2015 4:16 am

For years Ukraine has had to walk a tightrope in its relations with Russia to ensure a steady supply of gas to keep it warm during harsh Eastern European winters. But in the past decade, political and pricing disputes have cut off the supply, and Ukraine has been scrambling to find alternate sources.

Ukraine says it’s reduced its reliance on Russian gas, getting no more than one third of the fuel from the Moscow’s state-run Gazprom so far this year because it’s found less expensive gas from its European neighbors. That import rate, however, may not be enough for the coming winter.

Enter Frontera Resources Corp., a Houston-based company that’s considering shipping liquid natural gas (LNG) to Ukraine. Frontera and Ukraine’s state-run energy company Naftogaz have signed a memorandum of understanding (MOU) to explore for gas and produce it in Ukraine, and to discuss shipping LNG to Ukraine from nearby Georgia.

In November, Georgia opened a pipeline terminal in Poti, on the Black Sea, as a transit point to provide gas to the European market. It’s part of a network to ship gas from Azerbaijan’s Shah Deniz gas field in the Caspian Sea that’s expected to ship 560 cubic feet of gas per year to its customers. The first countries receiving the fuel will be Georgia and Turkey in 2018 and the rest the next year.

Meantime, it is just as easy for Frontera to use Georgia as a base to ship LNG to Ukraine, also with a large Black Sea coast. And perhaps not all of that oil would have to come from the Shah Deniz field because the Texas energy company has identified 12.9 trillion cubic feet of prospective natural gas resources in Georgia itself.

“This important MOU reflects Frontera’s ongoing focus to progress its Greater Black Sea Strategy by pursuing new growth throughout a region that contains significant underdeveloped and under-explored oil and gas potential,” Frontera Chairman and CEO Steve Nicandros said in a statement.

“I strongly believe that our closer work with Naftogaz will open avenues to strategically supply Ukraine with LNG from across the Black Sea,” Nicandros said. “This will serve to diversify the country’s supply of natural gas and, by doing so, bring Georgia to the forefront as a strategic supplier of natural gas to Europe.”

The supply of Russian gas has been of growing concern to Europe over the past few years. So far, customers in the European Union have received about 30 percent of their gas from Gazprom, half of it through pipelines running through Ukraine. That supply has been interrupted three times – in 2006, 2009 and 2014 – because of disputes between Kiev and Moscow.

And on July 1, Gazprom cut off Ukraine’s fuel supply in yet another disagreement over pricing. But so far the flow of gas to the rest of Europe hasn’t been affected.

Because of such uncertainty, the promise of the Shah Deniz gas flowing through Georgia, as well as a new-found gas reserves in Georgia itself, should ease the energy concerns of both Ukraine and the EU.
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Re: KURDISTAN A planned withdrawal of Gulf Keystone Petroleu

Post Fri Jul 17, 2015 4:25 am

Shares of oil minnow Sound Oil (LSE: SOU) jumped by as much as 8% in early trade
after the company announced that it been awarded the production concession for its Italian Casa Tonetto project.

Sound Oil’s Casa Tonetto project includes the Nervesa discovery located in north-east Italy, which was first drilled by the company during 2013. Exploration drilling revealed that the prospect had the potential for three wells and the initial test well produced a total gas flow rate of 2.7 million standard cubic feet per day.

The granting of the production concession is the final step in the permitting process to enable commercial production from first well drilled by Sound Oil during 2013. With the permit in place, Sound Oil can now commence the construction of the production facilities at the project. Based on current projections, first commercial gas production is expected later this year.

Commenting on the concession news, Sound Oil’s chief executive, James Parsons, said:

“First commercial gas at Nervesa will be a significant milestone for the Company…
“Similar to the Company’s other existing onshore discoveries, Nervesa benefits from very strong gas prices. A Gas Sales Agreement with a long-term partner is expected to be signed shortly.”

Next steps
2015 has been a transformative year for Sound Oil. The company’s preliminary results for the financial period ended 31 December 2014 showed production growth that exceeded management’s expectations, up 97% year on year, and a doubling of revenue. In addition, excluding exceptional items, group operating losses for the period declined by 60%.

What’s more, the company’s outlook has drastically improved. City analysts are now expecting Sound to report full-year 2015 revenues of £8.1m, up a staggering 710% year on year. Further growth is expected during 2016. Analysts have pencilled in revenue growth 70% for 2016.

And unlike many other oil minnows, Sound Oil has a solid cash balance with which to fund growth.

At the end of April, the company announced a placing to raise £12m, adding to the unaudited cash balance of £12.6m reported with full-year 2014 results. With an estimated £24.6m of cash on hand, Sound Oil has plenty of financial headroom for growth.

However, it’s unclear how much of this cash has been spent on exploration activities so far this year. Although, as City analysts expect Sound Oil to report a pre-tax profit of £1.3m for 2015, it’s reasonable to assume that the company is generating cash from operations to supplement its existing cash pile.

Expensive growth
With Sound Oil’s maiden profit expected this year, it’s little wonder that the company’s shares have gained 70% year to date.

Still, after recent gains Sound Oil’s shares now trade at a forward P/E of 242, which does not leave much room for error if things don’t go to plan.

Nonetheless, based on current City forecasts, if everything goes to plan over the next 18 months, Sound Oil will report EPS 0.5p for full-year 2016, up 616% year on year. With such rapid growth predicted, figures suggest Sound Oil is trading at a PEG ratio of 0.1.

Growth at any cost?
So, Sound Oil could be a great growth play if you're willing to take on the risk. But if Sound Oil's not for you, The Motley Fool's top analysts have recently identified a company that they consider to be one of the market's "top small caps".
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Re: KURDISTAN A planned withdrawal of Gulf Keystone Petroleu

Post Fri Jul 17, 2015 5:07 am

ABERDEEN-based Ithaca Energy has reported a strong operational update from its oil producing assets in the second quarter.
North Sea-focused Ithaca told investors that average production in quarter two had been 12,667 barrels of oil equivalent per day (boepd).

It means average production by the Aberdeen-based oil and gas operator came in at 12,578 boepd for the first six months of the year.

Ithaca, which is planning to bring the Greater Stella Area in the central North Sea into production in the second quarter of next year, reiterated its full-year guidance of 12,000 boepd. This takes into account planned maintenance shutdown activities in the second half of the year.

The company, due to announce its quarter two results on August 13, noted that its producing assets continued to perform well during the second quarter, highlighting “solid operational uptime” on its main fields.

It confirmed that the tie in of the Ythan field development field was completed and brought into production in May – before the planned maintenance shutdown of the Dons facilities and Sullom Voe Terminal (SVT) in mid-June.

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“The initial performance of the Ythan well has been encouraging,” Ithaca said.

“The SVT shutdown has now been completed and production has been restarted.”

Ithaca repeated its warning that third quarter production will below the average guidance level for the year as a result of maintenance shutdowns on facilities serving a number of the company’s fields. The interruptions will include a two-month shutdown on the Cook field during the third quarter to allow life extension work to be carried out on the Anasuria floating production and offloading facility that serves the field.

However it declared that continued progress had been made in the second quarter on the Greater Stella Area development programme.

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Ithaca reported that net debt at June 30 was $788m out of total debt facilities of $950.

The company completed the sale of subsidiary Ithaca Petroleum Norge AS to MOL last week. Ithaca, which inherited the bulk of assets through its £203m takeover of Valiant Petroleum in 2013, received an initial £40 million, with a further £20m contingent on the results of drilling on Norwegian licences over the next two years. Shares in Ithaca closed up 0.5p at 45p.
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Re: KURDISTAN A planned withdrawal of Gulf Keystone Petroleu

Post Fri Jul 17, 2015 6:28 am

Otto Energy to make acquisition Red Emperor Resources (ASX:RMP, AIM:RMP) is earning a 15% stake in SC55.

Otto has also received an expression of interest from the Philippines National Oil Company-Exploration Corporation to farm-in to earn a 15% working interest.

Otto Energy (ASX:OEL) has been granted an ASX trading halt in relation to a potential acquisition.

The halt will last until the earlier of the announcement being made or the start of trade on Tuesday, 21st July 2015.

Otto is due to drill in August the Hawkeye-1 exploration well in Service Contract 55 in the Palawan Basin, offshore Philippines.

The Hawkeye prospect was identified on 2D seismic originally acquired by Otto in 2007 and further defined with the 600 square kilometre 3D seismic acquisition in late 2009.

This has best estimate in-place oil of 480 million barrels of oil.
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Re: KURDISTAN A planned withdrawal of Gulf Keystone Petroleu

Post Fri Jul 17, 2015 7:39 am

Study: Utica Shale Larger Than Previous Estimates

The size of the Utica shale play’s technically recoverable resources is larger than previously thought, a recent study by West Virginia University (WVU) has found.

WVU found that the Utica play contains technically recoverable resources of 782 trillion cubic feet (Tcf) of natural gas and around 1.9 billion barrels of oil. That’s higher than the U.S. Geological Survey’s (USGS) 2012 estimate of technically recoverable resources at 38 Tcf of gas and 940 million barrels of oil.

The study results indicate that the Utica – which spans West Virginia, Kentucky, Pennsylvania, Ohio and New York – is comparable to the Marcellus shale play in terms of size and potential recoverable resources. The Marcellus is the large U.S. shale play and second largest shale oil and gas play in the world.

Most of the Utica play lies beneath the Marcellus. The interval between the Marcellus and deeper Utica plays ranges from 4,000 feet in Ohio to more than 6,500 feet in West Virginia. The drilling depth of the Utica ranges from less than 4,000 feet in Ohio to more than 12,000 feet in West Virginia, which is over two miles below the surface.

The results of the Utica Shale Play Book Study, a two-year geological study undertaken by the Appalachian Oil and Natural Gas Research Consortium, a program at WVU’s National Research Center for Coal and Energy, were presented at a July 14 workshop in Canonsburg, Penn.

“The revised resource numbers are impressive, comparable to the numbers for the more established Marcellus shale play, and a little surprising based on our Utica estimates of just a year ago which were lower,” said Douglas Patchen, director of the consortium and well-known expert on the Appalachian Basin.

The project had three main objectives: assess the geological characteristics of the Utica and equivalent rocks in the northern Appalachian Basin; define Utica oil and gas fairways; and provide resource assessments.

“The research spanned basin-wide subsurface correlation and mapping of potential pay zones to macroscopic and microscopic examination of cores and thin sections of reservoirs to the nano-scale development of porosity in organic rich zones,” Patchen said.

The project officially ended a year ago, but since that time, researchers have continued to work on the resources estimates.

“The more wells that are drilled, the more the play area may expand, and another year of production from the wells enables researchers to make better estimates,” Patchen said in a press statement.

Researchers found that the most productive area of the Utica shale play is neither the Utica nor shale. The most productive area of the Utica is actually the Point Pleasant formation, which sits beneath the Utica and above the Trenton limestone, said Michael Hohn, director of the West Virginia Geological and Economic Survey, part of the West Virginia Department of Commerce. The Point Pleasant formation also not a shale in the same sense as an uninterrupted, fine grain mudstone like the Marcellus, but alternates between shale and limestone beds.

The resource estimates for the Utica went up significantly over the past year, partly due to the fact that researchers had more up-to-date information, Hohn told Rigzone. Researchers had twice the amount of data this time as they did last year, letting them do a better job of fitting curves for estimated ultimate recovery rates. The production from newer wells is doing much better than older wells, either because of improvements in technology or because producers are better at finding the sweet spots. Hohn imagines that improvements are coming after oil and gas companies – who likely first tackled the Utica using petrophyiscal models from other shale reservoirs – eventually found the techniques that worked best for the Utica.

The technically recoverable resources are part of original gas-in-place estimates of approximately 3,192 Tcf and original oil-in-place of approximately 82,903 million barrels of oil. Hohn said that the researchers did not find the playwide oil recovery factor of around three percent and gas recovery factor of around 28 percent in sweet spot areas to be out-of-range or unusual, given the permeability and porosity of the play. A recovery rate range of 10 to 20 percent in the Appalachian region, even for conventional reservoirs, is not uncommon.

Consortium members include the WVU National Research Center for Coal and Energy; Washington University; the Kentucky Geological Survey; the Ohio Geological Survey; the Pennsylvania Geological Survey; the West Virginia Geological and Economic Survey; the USGS; Smith Stratigraphic, and the U.S. Department of Energy National Energy Technology Laboratory (NETL).

Consortium sponsors include Anadarko Petroleum Corp.; Chevron Corp.; CNX; ConocoPhillips; Devon Energy Corp.; EnerVest; EOG Resources Inc.; EQT; Hess Corp.; NETL Strategic Center for Natural Gas and Oil; Range Resources; Seneca Resources; Royal Dutch Shell plc; Southwestern Energy and Tracker Resources.

In late June, WVU initiated the United States’ first integrated research initiative on shale gas drilling after months of study and preparation in an effort to monitor well activity, according to a June 29 article by the Register-Herald Reporter. The five-year, $11 million project is the first comprehensive field study of shale gas resources in which scientists will study the shale drilling process from start to finish, according to a WVU press release.
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Re: KURDISTAN A planned withdrawal of Gulf Keystone Petroleu

Post Sun Jul 26, 2015 10:27 am

Frontera resources for me is possibly the most undervalued stock on AIM.....
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