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July 2013

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David Havens

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• • • • • Forecasting shale Analyzing cash flow Protect against fraud Q&A with UAE minister OGFJ100P quarterly report

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A quick start guide to MAXIMIZING our interactive features. Fit the issue to your screen. To p o il se rv ic e fir m s February 2013 ® ® Laredo Petroleum INSIDE • • • • • Equipment trends NGL volumes soar Investing in midstream Seismic exploration tools OGJ150 quarterly report focuses on Permian . Click directly on the page to ZOOM in or out. DOWNLOAD the issue to your desktop. SHARE an article via email. PRINT any or all pages.

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Allow 30 days for change of address. What doesn’t garner as much notice is fraud against oil and gas companies themselves. Tulsa. 14 V10/#7 COVER STORY: In an interview with OGFJ. (CCC). MA 01923. 1421 S. to photocopy articles for a base fee of $1 per copy of the article. 29 Legacy lawsuits Louisiana legacy lawsuits create unknown risks for some E&P companies. DEPARTMENTS 5 Editor’s Comment 6 Capital Perspectives 10 Upstream News 12 Midstream News 32 Deal Monitor 34 OGFJ100P 42 Industry Briefs 45 Energy Players 64 Beyond the Well ➤ 31 Canadian shale Canada is in the early stages of developing its unconventional resources. POSTMASTER: Send address changes to Oil & Gas Financial Journal. Permission. Danvers. plus 35 cents per page. Fax (508) 750-4744. Change of address notices should be sent promptly with old as well as new address and with ZIP or postal code.. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines up to $25.000 for violations. Sheridan Rd. Payment should be sent directly to the CCC. Havens. however. 1421 S. the empirical production data at well level. A large portion of the nation’s production potential has yet to be unlocked. comes fraud.CONTENTS ✱ ON THE COVER: Crédit Agricole managing director David S. and additional mailing offices.com • Oil & Gas Financial Journal July 2013 . 2 www.ogfj. Tulsa.) All rights reserved. OK 74112. (Registered in US Patent & Trademark Office. Phone (508) 750-8400. OK. FEATURES 20 Forecasting shale oil To forecast shale oil production. Requests for bulk orders should be sent directly to the Editor. Sheridan Rd. Most of the attention centers on fraudulent stock scams. Copyright 2013 by PennWell.. 23 UAE Minister Suhail Mohamed Faraj Al Mazrouei talks about the rapid growth of the UAE and its diversifying energy portfolio. 26 Fraud protection With every oil boom. and company budgets and spending plans. 222 Rosewood Drive. monthly by PennWell. Periodicals Postage Paid at Tulsa. OK 74112. Back issues are available upon request. 48 Special Report: Denmark Oil & Gas Financial Journal® (ISSN: 1555-4082) is published 12 times per year. Crédit Agricole managing director David Havens talks oil markets and investment indicators. is granted for libraries and others registered with the Copyright Clearance Center Inc. look at the detailed geology of the formations.

ENERGY INDUSTRY EXPERTISE THAT OPENS NEW DOORS Opportune LLP is an independent consultancy focused on the energy industry.opportune.com © 2013 Opportune LLP . We are led by seasoned professionals with senior executive experience Our mission statement is simple. OPEN THE DOOR TO OPPORTUNE ACROSS ENERGY SEGMENTS. OUR PRACTICE AREAS INCLUDE: Corporate finance Complex financial reporting Process and technology Strategy and organization Dispute resolution Enterprise risk Tax Outsourcing www. but direct: add value to our clients. serving America and Europe.

com Vice President and Group Publisher Mark Peters markp@pennwell.com. Blair Regional Sales Manager OGFJ is available as an app. Access oil and gas industry news and market data in an easy-to-use format on your smartphone.com Official Publication CORP. Houston. Lauinger Find OGFJ on Twitter (@OGFJ) and join the Oil & Gas Financial Journal group on LinkedIn.com • Oil & Gas Financial Journal July 2013 . The OGFJ Midstream Report focuses on the financing. managers. Pickering. and learn more about Crosstex’s terminal facilities to export Utica Shale production. In addition to our long-standing Shale Monitor and Global Shale Monitor.com Associate Publisher (713) 963-6286 mitchd@pennwell. Larry Hickey.ogfj. The Regulatory Monitor shines a light on key federal.com Senior Associate Editor Mikaila Adams mikaila@pennwell. RBN Energy LLC Michael A.ogfjsubscribe. Don Warlick Editorial Advisory Board E. EnerVest Ltd. President/Chief Executive Officer Robert F. Nick Snow. Brian Lidsky.com Sales Representative Mary Sumner Houston (713)963-6274 marys@pennwell. + OGFJ APP ▲ = Editorial Creative Director Jason T. Follow along with other petroleum industry executives. Triple Double Advisors Ron Whitmire. Carole Minor. Russell “Rusty” Braziel. and implementation of facilities needed to transport and process greater volumes of crude oil. analysts.9144 ext 194 Fax: 219. get analysis on Marathon Oil’s $1. Biolchini 4 www. Sign up to receive OGFJ’s newsletters today at ogfj.com To change your address Call: (847) 559-7501 Email: ogfj@omeda. Tammer Qaddumi. on OGFJ. C. CirculationManager Ron Kalusha ronk@pennwell. White. and investors looking for credible.OGFJ FEATURED STORIES ▼ Find featured content and up-to-date news on OGFJ.com Robert McGarr Reprint Sales 866. Suite 400. TX 77027 USA Tel: (713) 621-9720 • Fax: (713) 963-6285 www.com ® PennWell Corporation 1455 West Loop South. and more.com. HEADQUARTERS 1421 S. Baker Botts LLP Bradley Holmes.com/subscribe/ enewsletter-subscribe. Holt & Co. BHP Billiton John M. Sheridan Rd. OK 74112 USA P. Get all this.com Contributing Editors Laura Bell. Tulsa.com Custom Publishing Roy Markum roym@pennwell. Search ‘OGFJ’ in your App Store or on Google Play and install the FREE app today! (713) 963-6256 rmcgarr@pennwell. and NGLs. Cinelli. construction.com Mitch Duffy Editor Don Stowers dons@pennwell. and local regulatory issues that impact the oil and gas industry.ogfj.com Rhonda Brown NEWSLETTERS To start or renew your subscription visit www. every day. 1900 – 1988 GET SOCIAL! Chairman Frank T. Encore Communications Jaryl Strong. state. Paula Dittrick.2023 rhondab@fosterprinting.5B sale of Angolan assets.561.879. .com Subscriber Service OGFJ has four monthly electronic newsletters to keep you informed. Investor Relations Consultant Maynard Holt. natural gas. useful information about oil and gas industry developments and join the discussion today. Read about trends in physical US natural gas trading volumes.. Tudor. Lauinger.

according to a Dow Chemical executive. up from 36. services. managing director and head of securities at TPH. “An estimated 80% of wells are now non-vertical. the lack of a sensible long-term energy policy and fragile global economies elsewhere continue to have an effect on investor confidence. and editorial writers for decades is making a comeback.” he said. “New pipelines are needed to transport product from the unconventional oil and gas fields to processing facilities. refiners can export refined product.” Pursell said. The BoyarMiller law firm recently held a conference in Houston that examined this dramatic reversal and the impact that abundant.” he said. “We host the energy forum each year providing current trends and developments to help our clients stay ahead of the curve and make smart.com .” Tom Hargrove. “The Gulf of Mexico has recovered from the Deepwater Horizon spill with increased activity in deepwater exploration. “We’ve all heard the news. The end result is a dramatic increase in the amount of oil and gas resources that can be profitably developed today. nanoscale reservoir analysis.” he said. and natural gas production continues to grow despite a significant drop in its pricing and the number of rigs drilling for it. Wallis added. and will have implications on foreign policy. which is good for refineries and for the areas where they are located.Editor’s Comment Cheap domestic energy is driving US economy Don Stowers Editor-OGFJ Carbon emissions actually reached a 20-year low in 2012.” OGFJ 5 G uess what? The US manufacturing industry that has been proclaimed dead by economists. discussed capital markets and their impact on the energy industry. “Pipeline construction miles are projected to increase to approximately 41.” he said. particularly the oil and gas business.” One of the speakers. One takeaway from the event is that while investors are injecting more capital into energy. but increased supply. “The people who will profit are companies that transport and refine it. informed business decisions. David Pursell of Tudor. Holt & Co. a vice president at Lime Rock Partners. We see new rigs moving into the market and once-rare deepwater production platform orders are now on backlog. according to Pursell. means there will be a disconnect between the pricing of oil in the US and everywhere else. He says this is a long-term trend that is due in part to less expensive natural gas replacing dirtier coal for power generation.000 in 2012. real-time microseismic monitoring.. It is turning into a big solution for the US and the world and that’s good for everybody. “We are producing more natural gas. an estimated $95 billion worth of processing plants are planned domestically.ogfj. the law firm’s founder and former chairman. he added. As US crude becomes less expensive. especially in the manufacturing sector driven by natural gas and electricity. Decreased dependence on energy imports will lower our foreign trade deficit. Pickering. making it cheaper and globally competitive.” Recent advancements such as simultaneous fracking. “The industry has reversed a decadeslong trend of declining crude oil production. and from a capital standpoint. low-priced natural gas has had on the manufacturing sector. “The US is becoming more self-reliant. and total pipeline construction expenditures are expected to reach $41 billion in 2013 – a $7 billion increase from 2012. and we are doing it with fewer rigs.” said Pursell. This is the best thing that has happened to the US economy. analysts. but combined have made a big impact on the industry’s understanding of tight reservoirs and its ability to develop “bad rock” more efficiently. strengthen the US dollar. and now we are doing it with fewer and fewer rigs. And the domestic energy industry can claim partial credit for this amazing turnaround. “Producers are becoming victims of their own success. Our technologies and techniques will be exported. called for the administration to approve construction of the Keystone XL pipeline.” In addition. combined with the export ban. “A significant amount of the heavy crude from Canada is already being transported to the Gulf Coast by rail and will continue to do so for the next decade. making less money due to the increased supply of oil and natural gas. horizontal drilling requires more equipment. “For years we couldn’t grow natural gas production. James Wallis.” Hargrove noted that there is a huge demand for capital from pipeline service companies. and pad drilling individually are evolutionary rather than revolutionary. “The energy industry is a significant driver for Houston’s growth and an important part of our practice. managing director with GulfStar Group. and people than vertical drilling. “Reversing the flow in segments of existing pipeline rather than building new pipe according to specifications is insufficient. talked about private equity and noted that a “renaissance” in the US oil and gas industry is underway.” said Bill Boyar.” US law prohibits the export of domestic crude.” July 2013  Oil & Gas Financial Journal • www. and tight oil will fill a really big gap in future global supplies that existed previously.000 in 2013.

com • Oil & Gas Financial Journal July 2013 .p 50% 40% 30% 20% 10% 0% 10 30 P90 MIN 50 70 P50 P50 Mean 90 P10 P10 110 130 150 170 Quantity of recoverable resources MAX P90 www. and costs. The PRMS defines the technically recoverable volume of a discovered petroleum accumulation as a random variable with lognormal distribution (See Figure 1). are discounted at the same rate. However. the listed oil companies are obliged to report those portions of undeveloped and developed resource volumes for what the commerciality is thought unquestionable. regardless of their uncertainties. It is. while the associated investment risk is taken into account in the cost of capital. it is the conclusion to be drawn from the fact that recoverable resource volumes. Led by this rationale.Capital Perspectives The value of petroleum resources: analyses of cash-flows and uncertainties Imre Szilágyi Exploration geologist and petroleum economist Budapest. How much value can investors attribute to the appraisal projects if they have no information on the discovered volumes to be appraised? On the other hand. Nevertheless. cash-flow forecasts are normally based on the Mean values of the variables determining future revenues. Presuming the proportionality of the recoverable resources and the cash-flow expectations of the field development projects. are discounted by the same rates. but interestingly it does not have any effect on resource valuation. Under the terminology used by the PRMS. however. In this view. Hungary NOTE FROM THE AUTHOR: Following guidelines from the Society of Petroleum Engineers (SPE). the P50 is the estimated quantity of petroleum for what there should be at least 50% probability that the quantities actually recovered Questions on resource evaluations The disclosure of reserves is meticulously elaborated in the regulations and guidelines of the Securities and Exchange Commission (SEC) and SPE with the outspoken objective of the protection of investors’ security interests. is that the best way to manage such risks? Evaluation of the uncertainty of resource estimates is one of the most important issues affecting the petroleum industry. are characterized by the very same investment risk? To have the answers. green and brown field development projects. ascertainable that cash-flow forecasts based on these reported volumes are less than what investors can expect on the grounds of the probability theory. 1: Probalistic Resources Categorization Model of the Petroleum Resource Management System 100% 90% 80% 70% 60% Probability density function Cumulative probability function P. most oil companies disclose 1P and/or 2P Reserves. we can conclude that the cashflows based on the Mean would be more than those based on a less recoverable volume. regardless of the uncertainty. expenditures. the uncertainty of the estimations is apparently ignored as an investment risk due to the fact that resources. Furthermore. Is it really true that appraisal. The current practice seems like a precautionary measure that serves to diminish investor risk that arise from the fact 6 Fig. the Reserves are the most important fundamentals of upstream business ventures. we have to see the details. This article analyses the consequences of these two oddities on the valuation of petroleum resources.ogfj. volumes of discovered resources subject to appraisal are not reported as reserves despite the fact that the positive NPV of the appraisal projects should obviously add to the company’s value. To assist investors in assessing their cash-flow and risk expectations. the reported reserves are always based on a technically recoverable volume that is less than the Mean value of the estimate. that estimation of recoverable volumes is uncertain. Probability-driven reserve reporting and the expected value Most publicly-traded oil companies follow the Petroleum Resources Management System (PRMS) guidelines for petroleum resources categorization. However. I n economic evaluations. oil and gas companies disclose all the information related to the fundamentals on what the actual asset pricing is taking place.

However. that may not be correct because the Mean is estimations. The Proved (1P) 25% Reserves are derived from the P90/LE 0. reserves. The An argument on behalf of using the Mean instead of the BE/ conclusion suggests that the prevailing (2P) reserve reporting P50 could be that in future predictions usually the statistical practice may devaluate the investors’ cash-flows at the NPV Mean is relied upon if the distribution of the random variable calculations. there may be logic behind matically calculated. 0.g. the Mean is autoIn special circumstances.ity between resource volumes.3xLE + 0. if the Mean of the recoverable resource is more skewness of the lognormal Probability Density Function.5 and Possible (3P) are given based on 15% the P10/HE resource category. BE and HE). or costs.Capital Perspectives will equal or exceed the estimate. Cash-flow is usually cut back (Mean ≈ 0. The uncertainty of it is always more than the BE/P50. 2: Relative deviation of the Mean and the Best and P10 are the minimum quantiEstimate of the recoverable resources in the function ties with at least 90% and 10% probskewness and fatness of the Probability Density Function abilities.ogfj.8 3. it can well relying upon a value that is less than “normally” expected. while the Proved. Therefore it seems a bit of unnecesbe given as the ratio of the Minimum and the Best Estimate.4xBE + 0. P50 35% and P10 are replaced by the Low.2 2. the probabilistic P90.3HE). Assuming the proportionalbecause this is the volume that is most likely forecasted to pro. Best and High Estimates be a kind of risk aversion. and cash generation duce. In the case of probabilistic analyses. binomial or exponential). The separation of the 2-15% difference is relevant. the Proved and Probable (2P) 0. Are the assumptions above Relative deviation of Mean and Best Estimate July 2013 Oil & Gas Financial Journal • www.1 30% The Reserves are the commercial (economic and marketable) subsets 0. Deterministically approached. tations are set based on the 1P reports. P90 Fig. if the investor perceives extra risk over the market risk. sary precaution to devaluate cash-flows just because the while “Skewness” is the ratio of the Maximum minus Best estimations of resource volumes are uncertain.3 volumes.8 That is fine.9 of the random variable recoverable resource volumes (Figure 1) the obvi0% ousness of taking the P50/BE estimate 1.4 1.0 for the base of economic evaluation Skewness [(MAX-BE)/(BE-MIN)] is questioned.for example the uncertainty of estimates made on prices.com Flatness (MIN/BE) 7 . The devaluation is even more if cash-flow expecis other than normal (e.6 1. (“Flatness” can revenues. than the BE/P50 estimate the Reserve based on the Mean From one point it seems correct to consider the P50/BE would be more than the 2P. I think in our case the logic is false. As shown in Figure 1. 0. I think a are ready for field development. Annual 0. P50/BE and the Mean is attributed to the right-hand side Logically. we can conclude that the Mean-based cashthe quantity of petroleum that is in fact expected to recover. but….0 2. ability Density Function of the distribution. It is found that the Expected Value (Mean) of the recoverable volumes differs from the P50/BE. Is the difference relevant? the resource volume estimations is as “natural” as it is It depends on the “flatness” and the “skewness” of the Prob.once we start 5% thinking about the lognormal behavior 0. respectively.4 2.4 20% Reserves are subsets of the P50/BE estimates. In deterministic estimations. Estimate and the Best Estimate minus Minimum differences).8 2. due to the lognormality the Mean. Best and High Estimates (LE. be assessed using the Swanson formula where it is given as The rationale behind this consideration might obviously the weighted average of the Low. too.2 of the resources.6 2. Poisson.6 reports most often present the 2P Reserves and some companies disclose 0. Probable 0.0 1. flows might be 2-15% more than those of the 2P-based.2 1.7 10% the 1P. Figure 2 presents that the difference of the Mean and the Resources subject to appraisal BE/P50 ranges between 2-15% in a flatness and skewness So far we have been talking about recoverable resources that domains being typical of recoverable resources.

and therefore a variance figure alone tells us little uncertainties and about the overall risks. exercising the disclosure of of petroleum accumulations populated with the variances. the PRMS field development. Obviously the uncerinvestments. but it may not be may try to perform a new resource evaluation by reservoir a proper answer for the question as to how much risk. Under and/or quality are insufficient to start the field development. Technical. our Low uncertainty treated.” In financing and engineering.Capital Perspectives extendable for those resources that have been discovered but Considering the uncertainty. but can quantify that. Why is it not like that in the correct. However. advises companies to determine the P90/P50/P10 or the LE/ Upon completion of the field development after a certain BE/HE.step reasonably should be. 3: Maturity driven resource uncertainty categorization resource volume. I doubt those in fact we are uncertainties relying on our should block perceptions when the disclosure. perception on resources the uncertainty Correlation is connected to Maturity of uncerthe quantity and tainty and quality (reliability investment and relevancy) risk of the available information on the reservoir and the fluWhen talking about risks I want to clearly separate project ids. and commercial purpose of the resource evaluation is to decide what the next risks are project risks that are managed by well-known evalua. based simulation or by a non-volumetric estimation method (mateon the volume estimation’s uncertainty we face against our rial balance. economic. but unfortunot approve them. the measure of the for field development and therefore suggests categorizing uncertainty (randomness) is always the variance (or its square them as contingent resources. but not limited to their comAlthough we Appraisal Field Early Mature production production development merciality. decline curve analyses). it adds to the comnately it would not be very informative on the uncertainty pany value. but… the appraisal project targeting these resources field of petroleum resources management? must have a positive NPV. Once the uncertainty of the estimations represents an investment risk or not. no such database is Resources subject to appraisal are attributed with relevant available. tainty of these estimations is much lower than it is prior to or 8 Uncertainty www. it may be better to use the still require appraisal? As these volumes also have a lognorterm “randomness” that we humans in general feel somemal behavior the P90/LE.ogfj. Once a discovery is made by a wildcat well. the actual and investments risks. The hopes that our uncertainty will lessen. Should we want the investors to valuate these of the actual recoverable volume. we propose that. P50/BE and P10/HE recoverable thing the more uncertain the greater deviations we can quantities. the recoverable resources subject to appraisal seems to be it would be very easy to set up an “objective” uncertainty justified. the scope of this study. as well as the Mean can be given. If we had a global database NPV during the asset pricing. perceive from the “average. otherwise management would The variance could easily be determined. In High uncertainty resources tors will be able the case of recovdecide whether erable volumes Medium uncertainty and how the risks of discovered resources and uncertainpetroleum accuties should be mulations. we able resource volume of an accumulation. In fact.com • Oil & Gas Financial Journal July 2013 . including uncertainty of a Fig. I we “classify” the think the invesuncertainty. I am dealing with the investment risk we propose to capture additional data and information in that is interpreted in the investor’s portfolio context.period of production with a careful onward monitoring. it is a genuine categorization of the recover. The approach is apparently root. If the NPV is there. resource estimation is perceived “low enough” to launch the Regarding the uncertainty of the resources. the standard deviation). The project to start proper question is whether the uncertainty of the resource at this point is the appraisal. categorization guideline. as The PRMS characterizes these resources that are immature well as in the natural and social sciences. tion methodologies and are quantifiable with a standard senIf we perceive that the available data in terms of quantity sitivity analyses resulting in several types of thresholds.

empirical evidence would be gained if oil companies would disclose the High. He currently works as an independent advisor and lecturer. Accordingly.com. with other words on the maturity. I conclude that the uncertainty categorization of the recoverable resources is in fact based on a perception of the uncertainty. field development projects might be more sensitive to market variations than the mature production projects are). if companies continue reporting their 1P and/or 2P Reserves only. allowing the investment community to properly valuate them. Discussing the uncertainty of resource estimations I conclude that in fact it is connected to the maturity status of the actual project. If that be the case. in a company with the same weighted average cost of capital (WACC). I must admit here that at the moment I can quantify neither the “project betas” nor the magnitudes of risk premium. or is it just a slap-dash routine? Some arguments may be aligned to challenge the approach above. Should we accept that the currently applied discount rate matches the risk of “normal” field developments targeting Medium Uncertainty Resources. The project betas may July 2013 Oil & Gas Financial Journal • www. In my approach the Means are subject to economic analyses. three uncertainty categories may be proposed as follows (Figure 3): High Uncertainty Resources are those discovered volumes that are subject to further appraisal before the field development may commence. Our perception relies on the quality and quantity of the available information. 9 . the High Uncertainty Resources (subject to appraisal) might be discounted by a rate with a positive premium while in case of the Low Uncertainty Resources (subject to mature production) the premium could be negative. higher risks should see higher costs of capital. the quantities of the High. Is it an agreement based on common sense. Now we have arrived at the question as to whether the resource estimation uncertainty has any effect on the risk of upstream project investment. Medium. and Low Uncertainty resource volumes. Should we accept that the uncertainty of resources estimations triggers a kind of relevant risk. accordingly. The dissimilar sensitivity of the different project types to economic cycles suggests that the correlation exists. In light of the above assumptions. However. we might conclude that it is be reasonable to introduce different “project betas” for the different uncertainty categories. and mature production projects is still questionable. Empirical evidences would be of a great importance. My assumptions are merely theoretical. and Low Uncertainty Resources are the respective Mean values. The other option to modify the cost of capital might be the introduction of a risk premium. Currently. Medium and High Resources remains shadowed the evidences shall never be surfaced.Capital Perspectives in the course of the early production. He can be reached at im. field development. The term “mature” refers to the judgment that the captured production data allows the relevant reduction of uncertainty compared to the earlier “immature” production phase. which are riskier than the investments in mature production. He holds an MS degree in geology from Eötvös Loránd University of Budapest and an MBA from Budapest University of Technology and Economics.szilagyi@hotmail. and the Mean values of the Low. Szilágyi recently completed a study dealing with petroleum resources’ valuations. I demonstrated that – besides Reserves – the disclosure of the Mean value of the technically recoverable resources may better assist investors in setting cash-flow expectations. The cost of capital is the function of the beta being the indicator of the investment’s relevant risk (the higher the beta is the more sensitive the investment is to market variations). Medium Uncertainty Resources are volumes subject to field development and/or are under early (immature) production.com increase with the growth of resource uncertainty. In the study above. and the cash-flows of the given projects represent the investors’ expectations. or mature production). Medium. It suggests that investors may find all three upstream project types equally risky. The term “early” refers to the judgment that the captured production information may not result in considerably lower uncertainty than that perceived prior to the field development phase. resources subject to appraisal are named as High Uncertainty Resources. this estimation is applied to the NPV calculations regardless of the project maturity status (appraisal. Hungary. In other words. In line with the antecedents above. The correlation between the resource estimations’ uncertainty and the investment risk of the appraisal. recoverable volumes subject to field development and early production are referred as Medium Uncertainty Resources while the category name for the quantities of mature production could be Low Uncertainty Resources. We should consider that the exposure of the appraisal projects might be much higher to economic cycles or to oil price expectations than that of the field development projects (and. investments made into appraisals seem riskier than the field development projects. Unfortunately. Low Uncertainty Resources are volumes estimated on the ground of a non-volumetric production forecast method in the mature production stage.ogfj. Summary and conclusions Most publicly-traded oil companies report reserves according to the guidelines laid down in the SPE’s Petroleum Resources Management System. Under this categorization approach. In this regard. OGFJ About the author Imre Szilágyi is an exploration geologist and petroleum economist based in Budapest. field development.

which have been entered into over the past few years. a company with foreign joint venture partners in fve US plays. $2. despite being the lowest of the “big-spenders” on the above 10 Fig. as they were last year. but the Marcellus has seen lots of drilling completed and data collected in the past 5 years. Carrizo’s (CRZO) new agreement with Indian NOC. is also noteworthy as it has enabled an increase of around Fig. are drilling at an average cost of $5 million per completed well. GAIL. and these investors are clearly not set to sit back for a gentle ride over the next year. Big spends here are to be expected. meaning the play has become a very low-risk environment close to a crucial demand center. and the outstanding statistic. 2).ogfj. It will be a big year in particular for Chesapeake Energy (CHK). Joint venture agreements with foreign companies make up almost half of the top 10 estimated/reported budgets for the play in 2013. Marcellus This play is still very much a US stronghold in terms of ownership.Upstream News Chesapeake. and especially Chesapeake’s. Range Resources Corp. being almost three times larger than the estimated budget in 2012. 2: Eagle Ford 2013 CAPEX budgets Chesapeake/CNOOC EOG Resources Marathon Anadarko Talisman/Statoil Pioneer/Reliance ConocoPhillips SM Energy Rosetta Resources Carrizo/GAIL 0 Source: Evaluate Energy US/foreign JV US company 500 1000 1500 2000 US$ Millions 2500 3000 3500 www. Chesapeake again have the highest spend budget (Fig.7 million cheaper than the average for the play. may seem high spends in the current climate for what is primarily a gas play. with reasonably low average well costs. Eagle Ford The Eagle Ford has seen far more foreign activity in the M&A market over the last few years than the Marcellus. it becomes clear that foreign companies will have a huge infuence on how the industry develops over the coming year. (RRC). along with Chinese state-owned CNOOC this time. and will be amongst the biggest spenders in the country for the second year in a row. Joint ventures involving foreign investors. foreign partners set for big US shale spend in 2013 nalyzing Evaluate Energy’s recently released 2013 capital expenditure and average well cost data for the major US shale plays. The company and its various partners are estimated to be the biggest spenders among companies with available drilling plan data in three of those fve plays in 2013. have budgeted to spend big this year. and fellow Asian companies Reliance Industries (RIL) and GAIL also have signifcant plans for the year ahead with their respective partners.com • Oil & Gas Financial Journal July 2013 . However. Antero Resources Noble Energy Southwestern Cabot Oil & Gas Range Resources 0 Source: Evaluate Energy A US/foreign JV US company 200 400 600 800 1000 1200 1400 US$ Millions chart. Chesapeake’s arrangement with Norwegian Major Statoil (STO) is estimated by Evaluate Energy to the biggest budgeted spender in the play for the second year in a row. as estimated by Evaluate Energy. 1) still shows this. Chesapeake’s joint venture CAPEX budget with CNOOC is the big change from last year in the play. and to be drilling the most wells. These. due to the high oil content in large areas of the formation. and this year’s drilling CAPEX budget graph (Fig. 1: Marcellus 2013 Capex budgets Chesapeake/Statoil EQT Corp.

and of course its partners. as new gas wells. Haynesville. This is probably the main reason behind the low CAPEX budgets set by other companies in the play.0 trillion cubic feet (Tcf) with a gross mean of 1. even if the 60% drilling carry from Total is taken into account. The second appraisal well at the Gunfint feld found 109 ft of net oil pay. located in the Alon C license approximately 20 miles northeast of the Tamar feld. this year could well turn out to be pivotal for Chesapeake’s future.06% interest. for wells that will be primarily gas prone. Discovered gross resources. This report was created using Evaluate Energy’s collection of approximately 200 estimated and reported US and Canadian shale play capital expenditure budget fgures. The Karish discovery is the ffth discovered feld with an estimated gross mean resource size over 1 Tcf.783 feet and encountered 184 feet of net natural gas pay in lower Miocene sands.8 Tcf. will be hoping that large spends in the lower cost environments of the Marcellus and the Eagle Ford – the plays have an average completed well cost for 2013 of around $7. Other PDC Energy partners in the project are Ecopetrol America Inc. (31. The company.700 feet of water. Utica The Utica in Ohio is another play where Chesapeake and its foreign joint venture partner are planning a big year.5%). however well data from the Ohio Department of Natural Resources has since shown that. The Karish well.47% interest. The data here is even more striking (Fig. Barnett. Noble Energy makes new offshore discoveries oble Energy Inc. Fayetteville. Noble Energy is the operator of the Alon C license with a 47. especially at the relatively high average well cost for 2013 in the Utica of around $10 million. Eagle Ford. and Samson Offshore LLC US$ Millions (19.6 and 2. But Chesapeake and its partner Total will defnitely be leading the way in trying to turn the fortunes of this play around. the company sparked a rush for land in Ohio after initial well results from Chesapeake predicted large oil content in the play. was drilled to a total Chesapeake/Total depth of 32. total discovered gross mean resources in the Levant Basin are now estimated to be approximately 38 Tcf. squeezing the joint venture into the top 10 budgets for the year.Upstream News $200 million on the company’s spend last year. Niobrara. Montney.ogfj. Tuscaloosa Marine and the Utica. Source: Evaluate Energy 11 N July 2013 Oil & Gas Financial Journal • www. 2013.7 million and $7.5 million respectively – will reap enough reward to cover potential hardship should the data from Ohio continue in this disappointing trend. The company also confrmed deepwater oil at Gunfint in GoM on — Mark Young.2 billion is a large estimated outlay for Chesapeake. the play has been producing gas. with Chesapeake and French major Total (TOT) estimated to be spending over four times more than the second highest reported budget in 2013. Chesapeake will maybe feel they have a point to prove in this play. The data covers 11 plays: Bakken. The joint venture’s budget in the Utica of around $2.14% working interest. wireline Hess/CONSOL logs. 3: Utica 2013 CAPEX budgets discovery well. Marcellus. It is also the seventh consecutive feld discovery for Noble Energy and its partners in the Levant Basin. The Mississippi Canyon 992 No. Results of drilling. 1 well.com .13%). Evaluate Energy June 25. Co-owners are Avner Oil and Delek Drilling each with a 26.800 ft in a water depth of 6. The discovery well offshore Israel was drilled to a total depth of 15. Marathon Oil 0 500 1000 1500 2000 2500 (18. are not something many companies will be drilling in the current climate of low prices and already abundant supply. Noble Energy operates Gunfint Antero Resources US company with a 31. drilling plans and average well costs for 2013. 3). combined with the de-risked resources in an adjacent fault block on the license.100 ft. 1 mile west of the original Fig. and reservoir data have confrmed Gulfport an estimated gross resource range of 65 Halcon to 90 MMboe in the primary strucUS/foreign JV ture. All fgures correct as of May 1st. In 2011. is in 5. in the main. With the addition of Karish and the recent increase in resource estimates at Tamar and Leviathan.23%). if it is at all possible. from available data. Following the disappointing results in the Utica. Duvernay. are estimated to range between 1. has discovered natural gas at the Karish prospect offshore Israel and oil at Gunfint in the Gulf of Mexico (GoM).

to own natural gas liquid (NGL) fractionation trains 7 and 8. at a rate of 24. Texas. The Constitution Pipeline has been designed to transport up to 650. Inc. and are expected to begin commercial operations in the fourth quarter of 2013. the company has recently increased its Riverside’s crude oil transloading capacity with the completion of the southern Louisiana facility’s Phase II expansion. This business includes natural gas gathering and processing assets located in Texas. an offering of partnership units in the MLP would follow registration with the SEC. which are currently under construction at Enterprise’s complex in Mont Belvieu. Oklahoma. C Enterprise.ogfj. will leverage the partnership’s existing tankage and piping. as well as the capabilities of its truck fleet in the Ohio River Valley. Crosstex president and CEO.000 barrel-per day above-ground crude oil storage tank. N. is a Delaware master limited partnership formed by Anadarko Petroleum Corp. Since last spring Constitution Pipeline Company has been involved in the FERC pre-filing July 2013 Oil & Gas Financial Journal • www. Devon will own the general partner of the MLP. crude oil. The Riverside facility’s capacity to transload crude oil from railcars to the partnership’s barge facility has increased to approximately 15. Trains 7 and 8 have a design capacity to fractionate approximately 170. Enterprise Products Partners LP is a North American provider of midstream energy services to producers and consumers of natural gas. Constitution Pipeline seeks FERC approval to construct Marcellus connection C Devon Energy to form midstream MLP evon Energy Corp. to the Iroquois Gas Transmission and Tennessee Gas Pipeline systems in Schoharie County. Devon expects the MLP to file a registration statement with the Securities and Exchange Commission (SEC) in the third quarter of 2013. The OHCR is a 70-mile short line freight railroad that interchanges with the Columbus and Ohio River Railroad. As part of the Phase II expansion. The Black Run facility is a state-of-the-art 20-car rail rack with tracking gangways designed to top load multiple products. Pa. Cabot Oil & Gas Corp. The Black Run rail terminal is the first facility to move light oil condensate out of the region to premiumpriced refinery and petrochemical markets. and a crude offloading facility with pumps and metering as well as a truck unloading bay.” said Barry E. a rail spur with a 26-spot crude railcar unloading rack.. Phase II additions to the Riverside facility include a 100. adjacent to the partnership’s oil gathering pipeline. has filed an application with the Federal Energy Regulatory Commission (FERC) seeking approval to construct a 122-mile pipeline connecting domestic natural gas production in northeastern Pennsylvania with northeastern markets by spring 2015. on the Ohio Central Railroad (OHCR). and Enterprise retains the remaining 75% ownership interest.000 barrels of crude oil per day. 12 D onstitution Pipeline Company LLC.000 barrels per day (BPD) of NGL. all of its incentive distribution rights. a limited liability company owned by subsidiaries of Williams Partners LP.Midstream News Crosstex offers additional solutions to Utica producers. Western Gas has acquired a 25% minority ownership interest in the JV. offering additional midstream solutions to producers.com . Ohio Southern Railroad and Wheeling and Lake Erie Railway. Western Gas Partners LP. Piedmont Natural Gas Co.000 dekatherms of natural gas per day (enough natural gas to serve approximately 3 million homes) from Williams Partners’ gathering system in Susquehanna County. Riverside also was modified so that sour crude can be unloaded in addition to sweet crude. “The re-activation of our Black Run rail facility enables us to offer producer customers in the Utica Shale an immediate midstream solution to export their products to out-of-region markets to maximize value for our customers. The Black Run terminal. and a majority of its common units following completion of the initial public offering.. Devon expects to utilize proceeds from the sale of MLP common units to fund its continuing operations. refined products and petrochemicals. CSX Transportation. Additionally.000 barrels per day.. and WGP Holdings Inc. including light oil condensate and various grades of crude oil. NGLs. the Black Run rail loading terminal allow the export of Utica Shale light oil condensate production.. Davis. has approved a plan to form a publicly traded midstream master limited partnership (MLP). Subject to market conditions. Located in Frazeysburg. to own. and Wyoming. operate. Norfolk Southern. expands Riverside rosstex Energy LP has re-activated its Black Run rail loading terminal and completed the Phase II expansion of its Riverside facility. Ohio. Western Gas form JV for ownership of NGL fractionation trains E nterprise Products Partners LP announced June 12 that it has entered into a joint venture (JV) with Western Gas Partners LP. The MLP is expected to initially own a minority interest in Devon’s US midstream business. acquire and develop midstream energy assets. The capital cost of the project is estimated to be $683 million.Y.

Euler senior vice president of business development and Brian Hermes (of Germany). and Saudi Aramco 63. ton. Second phase of Sadara integrated chemicals project financing signed he second phase of the financing for the construction of Sadara Chemical Company’s integrated petrochemicals production complex in Jubail Industrial City II. NY. PA. including COFACE (of France). Chevron’s subsidiary.com 13 . Milbank acted as international counsel to all of the offshore Angola to an onshore liquefaction plant on the lenders as well as to the joint lead managers of Sadara’s coast near the Congo River. Sadara is a joint venture nergy private equity firm First Reserve and a between The Dow Chemical Company and Saudi Arabian veteran management team have formally launched Oil Company. Through their subsidiaries. This financing is the largest ever multiCentury Midstream LLC. The pipeline route filed with the FERC this month reflects changes to more than 50% of the original pipeline alignment – most as a direct result of stakeholder input. soliciting input from citizens. FIEM (of Spain).’s subsidiary Cabinda Gulf Oil Arabia. First Re. Williams Partners owns a 41% share of Constitution Pipeline and. advised by Shearman & Sterling LLP. raising an aggregate of US$12. The new Hous. UK Export Finance (of the previously served as president and COO of NiSource United Kingdom) and US Ex-Im Bank (of the US). Blount K-sure (both of Korea).5 billion. and 125 million cubic feet per day of natural gas for Al Fahad are Saudi Arabian counsel to the lenders. The Midstream & Minerals Group. Angola LNG plans to use associated natural gas produced from existing crude oil operations operated by Chevron and other partners as well as new non-associated gas from other offshore fields. confirmed that initial production integrated chemical compound ever built in a single phase of liquefied natural gas (LNG) has commenced with a capital cost of around US$19 billion.4% interest in the joint-venture.EMEA region. Blount and Howard are joined by Jim Avioli. Saudi Arabia was signed on June 16. Located in the Eastern Province of Saudi hevron Corp. and terminate in Schoharie County. OGFJ to the development of Angola’s natural gas industry. The $10 half of 2015. Dow Chemical is ity to produce 5. along with Sonangol with a 22. NY. Angola LNG is one of the tion units are expected to come on line in the second largest energy projects on the African continent. This integrated hydrocarbon and chlorineserve will support Century with up to US$500 million of based production complex will include 26 manufacturing equity capital to co-found the company.8% interest and subsidiaries of Total. and it is expected to contribute to Dow Chemical. NY. are Saudi Arabian counsel LNG project in Angola. Cabinda Gulf Oil Co. Chevron confirms first as well as Saudi and international commercial banks and cargo from Angola LNG Islamic institutions participating in Wakala and Procurement facilities. will provide construction.ogfj. Jr. TX-based company will be led by Joseph A. with an emphasis among the largest project financings undertaken in the on emerging liquids and liquids-rich shale plays. lenders included Saudi Arabia’s Public Investment Fund. has a 36. a new energy company focused on the development. Ali Moshiri. This phase of Jr. into Broome County. First producat the Angola LNG project.. acquisition and expansion of sourced project financing in the petrochemicals sector and midstream assets across North America. Ltd. the complex is projected to be the world’s largest Company Ltd.2 million metric tons per year of LNG. president of Chevron Africa and Latin America Exploration and Production Company. The 30-inch underground transmission pipeline would stretch from Susquehanna County. each with a 13. through its affiliates. K-Exim and Raber as senior vice president of engineering. BP and ENI. The project is expected to reduce natural gas flaring and greenhouse gas emissions from offshore producing areas. Cabot owns a 25% share. “The project represents the first Hatem Abbas Ghazzawi & Co. with all production units coming on line in billion project will collect and transport natural gas from 2016. Blount.” said First Reserve helps establish Century Midstream with investment up to $500M T E C July 2013 Oil & Gas Financial Journal • www. and domestic consumption. and support continued offshore oil field development. The project has the capacearlier US$2 billion Sukuk issuance.Midstream News process. Delaware County. and extensive supporting infrastructure.6% interest. Piedmont Natural Gas owns a 24% share and WGL owns a 10% share of the company. Chenango County. NY. The Law Office of Abdulaziz H.units (notably a mixed feed steam cracker and an aromatics plant) as well as three on-site third party process units.000 barrels per day of natural gas liquids for export by White & Case LLP. as the financing involved the participation of seven export credit agencies. governmental entities and numerous other interested parties to identify and address issues with the proposed pipeline alignment. as CEO with John Howard serving as president and COO. operation and maintenance services for the new pipeline.

While there. and I traded the energy book there until we all got clobbered [in the recession]. going into finance with an engineering background was pretty simple. There were a lot of opportunities. It was a bit of a cultural shock going down to Nashville for four years. OGFJ: Are you from Tennessee? You don’t have a Southern accent. More recently. I spent five years on the sell side covering oilfield services as an associate analyst. I was with them a little more than eight years. Crédit Agricole Drilling operations in PCD’s Wattenberg Field Photo courtesy of PCD Energy Crédit Agricole analyst discusses oil markets. You might want to consider getting a master’s or MBA to improve your chances [of landing a job].ogfj. MANAGING DIRECTOR.INTERVIEW WITH DAVID S. investment indicators Don Stowers. Today. and then I went over to the proprietary trading desk for three years. At that time. And I came to Crédit Agricole in July of 2012 covering the sell side. HAVENS: No. HAVENS: I started in the business in 1999 at Morgan Stanley in their equity research group down in Houston. I’m from Philly [laughs]. I was over at Citadel on the buy side covering oilfield services and equipment. www. 14 OGFJ: What about your education? HAVENS: I went to Vanderbilt and graduated from their engineering school. Editor – OGFJ OIL & GAS FINANCIAL JOURNAL: How did you get into the business of being a research analyst? Would you tell our readers a little about your background? DAVID S. I think it’s a different landscape if you’re straight out of college.com • Oil & Gas Financial Journal July 2013 . HAVENS.

com 15 . right? OGFJ: Let’s move on to the impact that shale development has had on North America. is just trying to figure how where the market’s head is at. making sure I’m in touch with the management teams. I tend to rank the major global markets around the world by the opportunities present. but in the US we have to what’s happening on the E&P side. of being in the US. It has the appeal. It’s re-set how non-OPEC production can in capital expenditures. I think it’s probably one of the better opportunities because of its size of the reserve and because of the pace of the cash conversion among E&Ps. if you don’t have a very good pulse of what’s in your models and understand really what the financials and the sensitivities are – the sensitivities being more from a cash-flow perspective and a balance sheet perspective – it’s very tough to be an effective analyst. So. I think this is going to be a long-term phenomenon. and. whether it’s new regulato make forecasts about companies that serve that tions for hydraulic fracturing or constraints on offshore sector? drilling and production. that generates a higher degree of certainty and a higher degree of probability of success. I think we are going to spend a great deal of money in this country for the next decade-plus. We have to be in tune so we know be viewed. tion using fewer rigs. I spend a lot of my day figuring out where the market’s head is at. your models can get very stale very quickly. So. to answer your question. I think that’s generally where people tend to fall short on the sell side versus the buy side. first. OGFJ: Are investors eager to invest in the United States because it is less risky than other countries? HAVENS: In part. you really have to have an almost equal if not greater from.OGFJ: Another thing that has changed is drilling icantly. So you almost need to cover two sectors in order efficiency. unexpected and was a blow to many companies operating there. And I think it will prove ultimately to be one of the highest return markets within the entire energy complex worldwide. of having the highest rate of return on invested capital. That was HAVENS: Yes. On the sell side. what are the key variables. How long do you think we can sustain this level of production? Is this a long-term trend? HAVENS: Oil or gas? OGFJ: Oil. a great institution. I think it is going to be longer term. whether we cover them or not. too. especially the smaller ones. and reinvest it in capital expenditures to my guys. which attracts capital. one of the biggest reserves in the world. three. just to make sure we have a consistent overview of what’s being said out there. but let’s not forget the [drilling] moratorium in the Gulf of Mexico in 2010. What’s the set-up for the stocks? What is the consensus? What are the key catalysts that should either disprove the consensus or support it? And then we spend a great deal of time talking about management teams to make sure we keep our pulse on the company. what I spend a great deal of time on. I know people who say that you cannot overestimate the impact that this dramatic increase in production has had on the energy sector. To answer your question HAVENS: I find that to be an effective oil services anafrom an engineering perspective. what’s the biggest pivot in the US for the last 10 pulse on the E&P companies because that’s our bread years? It’s the fact that the inertia of supply has dramatiand butter. On the buy side. HAVENS: The way I look at the group. It has truly been a game-changer. one of the fastest cash-conversion cycles. OGFJ: You specialize in the oilfield services sector. you don’t have the same issues. and we run through the models a lot. Ultimately. to sum it up. and fine-tuning the models to keep them current. OGFJ: Would you tell our readers what an analyst does? Can you describe a typical day for us? HAVENS: That will differ greatly among analysts. First in gas and now in oil and liquids. That is. in order take into account regulatory risk. If you look at the US and the opportunities in crude production. Each week we try to touch at least two management teams. To me. about any major strategic shifts or capital outlay changes among the E&Ps because that will move our stocks signif. To me. the pace at which they spend money. We may think that geoOGFJ: Don’t you have to keep up with trends and political risk is the only concern. particularly in the morning. The afternoon will get a little bit quieter.ogfj. How has that impacted the service industry? July 2013 Oil & Gas Financial Journal • www. four. which is where I come lyst. So. since 1999. Still there is more consistency or transparency of law in the US. and I think that’s a big difference between the two. recollect cash. We need to know about things such as shifts cally reversed. yes. Vandy is a wonderful school. The US has achieved this record producto do your job effectively. No fault to the analysts themselves because their schedules generally have a lot more marketing and things of that nature.but I thoroughly enjoyed it. second. what’s the consensus.

we attracted a lot of capital for land rigs and frack equipment. If you fracked. The actual drilling rig and mobilization would have been between 40% and 50% of the total cost of the well. the average cost of a well was about $2 million.drilling a well today is not the drilling rig. or new companies being created? 16 www. about 10 years ago. So we’re drilling more wells with the same number of rigs. and the primary delta in that number is largely frack related. But the revenue opportunities will be continually increasing. HAVENS: Oilfield services has become a polynomial. You’re looking at 30. A higher intensity well means higher revenue intensity. Now there are several other data points that influence revenue. like the Bakken and the insignificant relative to the overall cost of drilling that well. Natural gas got the double-whammy. The major cost of now to sustain development. OGFJ: Several people have told me that the cost of completing a well today equals or exceeds the drilling cost. which all comes down to the intensity of the well. However. So as opposed to a linear relationship with the rig count. we were drilling mostly vertical wells. plus you have a higher revenue content per well. How likely is it that crude prices will plummet due to oversupply and stay down for some time? HAVENS: I think the difference between gas and oil is that when you clip the pace of drilling in gas – the key word there being the “pace” of drilling because it has become more of a manufacturing process – it was augmented by oil. maybe twice. once you get down to that $65 level. I’d say that the completions component of drilling a well has increased to OGFJ: Crude oil prices are sufficiently high right a par with the drilling costs. OGFJ: Sustained low gas prices seem to have caught the industry by surprise.to 36-stages and even up to about 40. So if you’re going ate an oversupply and prices fall. but that’s the biggest difference between oil and natural gas. meaning that there used to be a very tight correlation of revenue versus rig count. You don’t care because the penalty is fairly some of the major shale plays. The consensus among consolidation. A lot of these shales wouldn’t have been drilled if it weren’t for higher oil prices. Frankly. We increased rig efficiency by more than 15% last year. the technology that had to be deployed demands a much higher return. Even the CEO of ExxonMobil said recently that he didn’t expect gas prices to stay this low this long. What happens if we cre. If you look at a Bakken well.operators I’ve talked to is that prices breaking below $80 won’t crush the opportunities. but the frack cost of drilling that well can be upwards of $2 million to $3 million. if not above. so profitability will probably be a little more measured.com • Oil & Gas Financial Journal July 2013 . Is that an accurate statement? Enerplus operations in the Marcellus shale. That’s quite an admission coming from someone of his stature. The multi-stage fracking that is widely used today is mainly what has driven up costs. it’s not augmented by anything. Given the returns we were earning back in the 2010-2011 time frame. to below $80 a to cut a drilling program. When you cut the pace of drilling in oil. Margins can be a bit of a different story. if you will. and we’ll probably see a similar increase this year. you have rig count plus how many horizontal wells you’re drilling plus the length of the lateral. Today it’s about 10% to 13% of the cost of the well. It’ll drop like a brick. Back in the day. although this varied somewhat from region to region. Efficiencies are going up. you’re going to go out there and barrel? What is the breakeven point for crude prices in just slash the rig. you fracked it once. We have more wellbores being drilled. the drilling cost has come down from about $8 million to close to $6 million. industry ken or some of the other shale plays. say. HAVENS: Ten years ago. Eagle Ford? OGFJ: What is happening in the oil services sector HAVENS: I don’t have a great breakeven for the Baktoday? Are we seeing much M&A activity. Total well costs have gone up to about $6 million to $8 million. then we have to remember what happened to gas. which creates more opportunities for service companies.ogfj. Obviously there will be a lag time because there are wells that haven’t been completed and that are being brought online. Photo courtesy of Enerplus.

With oilfield services. I believe the first LNG export facility is scheduled to start up in 2016-2017. If you look at all of these in aggregate. HAVENS: It’s hugely important. If you looked at any ultradeepwater well in the Gulf of Mexico 10 years ago. and reinvest it in capital expenditures. directional drilling. So when that same engineer comes forward with a $1 billion project with a 40% chance of success rather than 30%. I’m a little surprised we haven’t seen even more participants in that business. completion technology. ” of wells for better production efficiency. You’re tying up significantly less capital. I think we’re going to see multiple trends that were all born from one simple fact – that is. the opportunities are quite big. you’re buying a lot of acreage and it has to occur over a long period of time. but it has yet to reach its full potential. If you look at the US and the opportunities in crude production. This has translated into a mushrooming of deepwater opportunities. However. These are capital-intensive projects. And you’re able to get into and out of the investment much faster. recollect cash. I wouldn’t call it a game-changer.to eight-month time frame. Look at the advancements we’ve made in seismic. Private equity is investing in oil services for one major reason – the amount of capital needed is generally smaller than what is needed by E&P companies. but how important is offshore to America’s energy future? Companies are spending billions to develop the deepwater Gulf of Mexico. I don’t expect to see any major $10 billion-type transactions. you’re basically investing in fracking. but every incremental source of demand for US natural gas is extremely important. which also includes seismic with 4D – all in the last 10 years. Low prices do impact demand. We have come to the position where we can add significant capacity that’s behind pipe within about a six. And increased usage of natural gas for electric power generation is so slow. OGFJ: Water is a major factor in hydraulic fracturing. but it takes a while. it has increased the probability of success by about 10 percentage points. it’s glacial.HAVENS: One of the trends is public offerings from private equity firms. HAVENS: It has turned into a pretty major business segment. the inertia of supply was quickly reversed with the development of shale. That may actually occur simultaneously with additional industrial demand and transportation demand. Frankly. I think it is going to be longer term. OGFJ: It looks as if the current administration in Washington is starting to approve LNG export facilities on a case-by-case basis. I believe you’re going to see a lot more private oil service companies go public. Talk a little about how this oil services sector has grown in recent years. Now you are talking about upwards of a $1 billion project. IndusJuly 2013 Oil & Gas Financial Journal • www. It’s really ballooned in the past five years. It looks to me as if a lot of potential market participants are still looking to see exactly what the right market opportunity is for them. I don’t think M&A will be as big as public offerings from PE firms over the next year or two. Water management is one of the larger growth opportunities. the demand for natural gas in the US really hasn’t changed. OGFJ: We’ve talked a lot about shale development. is this another gamechanger for the energy industry? HAVENS: It is certainly incrementally important because if you look at the US natural gas market. the probability of success in the deepwater has increased by over 1. For E&Ps. production technology.com trial users of gas don’t go out and build $500 million plants based on one or two years of low gas prices. It’s one of the better opportunities because of the size of the reserve and because of the pace of the cash conversion among E&Ps – the pace at which they spend money. Given that our gas reserves in North America are huge. it tends to get a little more traction. So the fund’s investors are going to be out a lot of money for a considerable time. which has a payback period of less than a year in many cases.ogfj.000 basis points in the last 10 years. largely 3D. Any M&A will involve relatively small companies getting acquired. and there has been a revival of sorts in the shallow waters of the shelf as well. which significantly improved the placement “I tend to rank the major global markets around the world by the opportunities present. which are now playing 17 . but they may finally give US gas producers access to foreign markets and help revitalize a struggling industry segment. those engineers would have applied somewhere between a 27% and 30% probability of success. Whether it’s transportation or disposal or filtering.

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PennWell MAPSearch ESRI: Terrain Service Better Monitoring.or.enertia-software. This information is provided on a best efforts basis and PennWell Corporation does not guarantee its accuracy.Coded by Commodity Truck Unloading Facilities Distribution/Receiving Terminals Underground Storage Facilities Storage/Tank Farm/Terminals Compressor Stations Pump Stations Cities Railroads PROPOSED / UNDER CONSTRUCTION ABBREVIATIONS Corpus Christi NUECES APC BDE CHEVCORP CRSTEX ENTPP ETC JLDAVI PNRI REGENCY SPECTRA Anadarko Petroleum Corporation Blue Dolphin Energy Company Chevron Corporation Crosstex Energy Inc. One Solution.bmpenterprises.L.com Supplement to PennWell Co. Regency Energy Partners LP Spectra Energy Corporation Oil Wet Gas Dry Gas Shale © Copyright 2013 PennWell's MAPSearch 800.com FALLS ROBERTSON MADISON Franklin Belton 2013 | Natural Gas & Petroleum TRINITY Eagle Ford Shale POLK Huntsville Groveton Cameron Facilities & Infrastructure Livingston MILAM BRYAN HICKS (ETC) Bryan Georgetown BRYAN HICKS (ETC) Caldwell BRYAN HICKS (ETC) WALKER Coldspring Anderson SAN JACINTO A AND M (ETC) LEE BURLESON Conroe MONTGOMERY GRIMES Giddings LIBERTY WASHINGTON Brenham Bastrop GIDDINGS (SPECTRA) LAGRANGE (ETC) Hempstead Liberty BASTROP AUSTIN Bellville WALLER Lockhart La Grange CALDWELL HARRIS Houston FAYETTE Columbus COLORADO LAVACA Richmond Gonzales GONZALES YOAKUM CRYO (ENTPP) Hallettsville FORT BEND Wharton N ) ARMSTRONG (ENTPP) GALVESTON Galveston WHARTON Angleton DEWITT (SPECTRA) DEWITT Cuero ARMSTRONG (ENTPP) Edna Bay City JACKSON BRAZORIA Victoria MATAGORDA Goliad VICTORIA Port Lavaca R OAK CORP) GOLIAD CALHOUN BEE ARANSAS Refugio REFUGIO Sinton Rockport Gulf of Mexico PIPELINES ACTIVE Crude Oil LPG/NGL Natural Gas Other Refined Products Trunklines Gathering MAJOR FACILITIES ACTIVE Refineries LPG Fractionators Gas Processing OTHER FACILITIES Facilities Color . Data used to create this map are available in GIS as well as other digital formats from PennWell MAPSearch. Such information has been reprinted with the permission of PennWell Corporation.com . BERG 0 3 6 12 18 Miles 24 Data Sources: Energy Industry GIS data . Publications This map includes information copyrighted by PennWell's MAPSearch. Enterprise Products Partners LP Energy Transfer Partners LP J.ch2mhill. Period • Completion Services • Downhole Monitoring Solutions • Pipeline Leak Detection www. Davis Pioneer Natural Resources Inc.823.6277 | mapsearch. nor warrant its fitness for any particular purpose.7445 Leaders in Selling Private Businesses  upstream and midstream services  infrastructure construction info@ RLI logistics.259.com Eagle Ford/South Texas houstonsales@oilcenter. Enertia Software! To learn more Visit www.com Oil & Gas | Environmental | Water & Wastewater | Transportation www.com RLI logistics.com | 800.

but I’m not convinced the US market is going to take another leg up in the absence of gas price recovery. which has a much higher probflip side in the US. such as the Middle East. We’re going to see lots more activity from East Africa. Right now. from all over. which has in turn attracted more capital. Why do you think this is happening? HAVENS: Same answer as before – probability of success. We also need Security is also a problem in some areas. given the new to keep an eye on oil prices and the pace of production technology and the increased probability of success. meaning that we actually have access to these reserves. To my way of thinking. Since three-quarters of the earth’s surface is water. it’s a lot more expensive to drill in the ocean. more intensity in Norway. it’s far ing. However. for example.” which is the Gulf of Mexico. Look at the biggest incremental investors – ExxonMobil. expansion. which is the best in the world. but we have to be the international markets. Look at the Gulf of Mexico today – it’s less than Bakken preparing to run surface casing. OGFJ: Most of the areas you just named are offshore opportunities. it tells you there is a high degree of risk and cost that you bear to drill offshore relative to the conviction among the operators. and the US has been derisked a lot more than most international markets. it was just a matter of developing the technology to recover them.com • Oil & Gas Financial Journal July 2013 . If you look at the crude oil side of the business. right? But on the opportunities onshore. from Japan. The vestment increase. and (4) the returns. reinvestment is the or Canada. 18 www. These areas are going to become an integral part of the energy complex over the next 20 years.ogfj. It’s largely a function of low look at pretty intensely is reinvestment. particularly if companies are trying to 200 new deepwater rigs in the last decade. (2) service infrastructure. OGFJ into the US. West Africa. higher return assets. concerned about longer-term profitability. including the rig construction business. West Africa. you don’t have the same choices. OGFJ: Final question: Is there HAVENS: Let’s look at the Gulf anything in particular we should of Mexico back in 2001. That’s a major grab market share. incremental investment in the US may more appealing to go for the onshore. (3) capital conversion at the pace in which it is done. higher return opportunity. HAVENS: One of the things I 15%. If you see reingas prices. more intensity in Southeast Asia. We’ve built main indicator. there is the possibility of overbuildability of success with a lower capital commitment. the Red Sea.out. where else but the US are you going to get (1) this type of access. from China. from India. I think we’re going to see significant growth outside the traditional “Golden Triangle. Good. The shale plays in North America offer as much as a 90% degree of success. but also the opportunities on onshore land. so this is a fairly safe investment with a healthy return on capital. OGFJ: We’ve run several stories in OGFJ in recent months about the capital flow from outside the US OGFJ: Thanks very much for your time. and Brazil. and even Mexico. There watch for to indicate there is were 155 jackups in the Gulf of trouble ahead for the oil and gas Mexico. and it is all a result of the improved probability of success. it seems obvious that there would be more hydrocarbons beneath the sea than on the 25% of the globe that is land. Generally that tends to bring growth. On the other hand. Capital tends to flow to lower risk. the risk in the US. But if you look at provide some near-term confidence. Bottom line: we’re going to continue to see outside oil and gas companies coming to the US because the best opportunities are here. And the industry responds to this. OGFJ: How do these trends apply outside the US and the Gulf of Mexico? HAVENS: Given that we’ve had sustained high oil prices and broad geopolitical support. although I think for the next few years we’re still going to be hampered by lack of takeaway capacity is tolerable even in places that are less secure than the US for pipelines. Obviously this has been a boon for the oil services sector as well. We knew the reserves were there all along. It’s coming from Europe. but at the end of the day they did it because it was a lower risk. 80% of which were directed Statoil Carkuff drilling operations in the industry in North America? towards natural gas. We can all debate their timing [in acquiring XTO Energy in a $41 billion deal back in late 2009] and entrance into the domestic natural gas market.

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Forecasting shale oil production
Per Magnus Nysveen, Rystad Energy, Oslo, Norway

S

hale oil production in the US and Canada added one million barrels to domestic production over the last year. Current activity may bring North American shale oil supply from 3.5 million to 8 million barrels per day before 2020 (see OGFJ, May 2013). Such rapid growth from new oil wells has not been seen since Saudi Arabia increased its oil production capacity in the early 1970s. The timing for the world economy is ideal: the global oil supply balance was stretched to its limits in 2007-2008; Saudi expansion since then has mostly been to balance decline from northern Ghawar, and BRIC demand and Iraq supply now appear increasingly fragile. We believe the world would be headed into an oil-driven recession without the North American shale oil revolution. In order to make an accurate forecast for shale oil production, we need to assess the profitability of every existing well and future well location, and to make forecasts of the industrial capacity to drill and complete new wells on the prospective acreages. Three different types of information are needed: detailed geology of the target formations; empir-

ical production data at well level; and company budgets and spending plans.

Play analysis
The key subsurface parameters determining profitability for shale oil plays are: hydrocarbon content (total organic content, thermal maturity, gas/oil/water saturation), formation structure (folds, faults, natural fractures), “frackability” (silica/calcite, minimum stress planes), formation pressure (depth, gas expulsion, pressure gradient) and “drillability” (hardness/integrity/pressure of the target formation and shallower packs). Some parameters have large variability over the acreage area (thickness, depth, thermal maturity, structures), other parameters vary more vertically (TOC, silica/ calcite), and some parameters are more formation-specific with less local variations (kerogen type, depositional environment). Figure 1 shows the horizontal distribution of two key parameters for the Bakken: thickness and depth of the Middle Bakken. Combined thickness of the Bakken/Three

Fig. 1: Map of Statoil/Brigham and Continental’s acreage in Bakken with Middle Bakken isopach and depth curves
Saskatchewan Manitoba

Bakken Continental Resources
Source: NASMaps by Rystad Energy

0 Miles

40

Statoil

Depth

Thickness

20

www.ogfj.com • Oil & Gas Financial Journal July 2013

Forks is also a key factor. Sweet spots in the northern and eastern parts of the play (Mountrail County) are primarily driven by thickness, whereas depth and pressure (high thermal maturity, gas expulsion) contributes to a larger extent to the high production rates observed in the western part of the play,

Fig. 2: Estimated well curve based on given IP , Di and b value for Statoil acreage in the Rough Rider area Bakken. The type curve is compared with state data.
1,400 1,200
Estimated well curve Production from state data

Production, kboe/d

Well curves
Shale oil wells typically decline 10% to 15% faster than shale gas wells over the first year (Fig 2). In the high-pressure zone of the Bakken, decline rates above 90% over the first year of production are common. But since the decline is also highly hyperbolic, the ultimate reserves can still correspond to more than 500 days of the initial production rate. Artificial lift by using pump-jacks also contributes to long flat tails as the downhole pressure falls. Hyperbolic decline curves, with IP from 400-2,000 boe/d, Di from 2-5% per day and b values of 1.5-2.5 fits nicely with most normalized curves from wells within one specific area, and the fit improves when adjusting for the number of stages. The discounted net present value for the wells and the acreage is highly sensitive to small variations in these parameters. The shape parameters are also strongly correlated; a high IP typically implies a high initial decline and also a higher hyperbolic b value. A detailed analysis of “heat maps” and empiric well production rates are crucial to achieve accurate forecasts.

1,000 800 600 400 200 0
0 10 20 Month 30 40

Source: NASWellData by Rystad Energy

Rystad works bottom-up from individual wells for all shale analysis and pays close attention to individual subsurface characteristics and official production data. In our analysis, we truncate the hyperbolic curves when the reserves reach a limit we feel confident about. This usually occurs after 10 to 30 years of production, depending on the maturity of the play and confidence provided by

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He holds an master’s degree from the Norwegian University of Science and Technology and an MBA from INSEAD. corresponding to free gas versus absorbed gas in gas wells. the transient phase is considered to last more than five years.com • Oil & Gas Financial Journal July 2013 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 22 2020 . and accurate microseismics provided better understanding of the fracture dynamics. IP learning curve Bakken statistics show an average increase of 24-hour initial production rates from 600 to 800 boed/d over 2009-2012 as the completion techniques were fine-tuned (Fig 3). www. proppants and fluids were improved. The industry commonly applies a terminal constant decline rate of 5% to 10% per year.a. whereas from Williams McKenzie Divide 2014 our own independent assessment takes precedence.e. well-spacing estimate well count and well costs for 2013. experimental wells in the deeper and high-permeability/lowpressure wells in the southern part of the play (Whiting). various versions of quasi-linear loglog curves. i. and overall development maturity of the play. Also increased use of open-hole completions and sliding sleeves 50 in the Middle Bakken has reduced time to completion to a few days. and the transition will happen gradually. 3: Average initial Bakken production by year of completion. the flow pattern will be a combination of both regimes. the technology is optimized. The average number of stages increased from 19 to 27 over the same period. after the drilling activity peaks on the acreages. The IP learning curve has now apparently peaked. 1. Fig. also the physical effect of artificial lift is poorly documented by shale oil decline analysis. the frack intensity for each stage and the fracking pressure increased. We expect IP rates to fall by 5% p. In reality.200 Average initial production (boe/d) 1. financial capacity. acreage quality and diversity.ogfj. thanks to overpressure and gas saturation in the Bakken and the presence of a matrix of natural microfractures in the Marcellus. we need to estimate the expected/ risked well locations and a realistic drilling schedule (Fig 4).e. Also. Fig. Our Mountrail Dunn Source: NASWellData by Rystad Energy consistent assessment on long-term drilling and completion activity on individual acreages depends on oil price assumptions. exponential). drilling on the shallower Bakken in the west (Continental). share of proved 400 to unproved well locations.000 800 Drilling schedule Number of wells Once the various well-curves are established for the different portions of the acreage. 600 To determine the risking factor. is also argued by academics (Duong method). i.000 net acres. Both in the Bakken and Marcellus. transient dominated flow (pre bubble point) and boundary dominated flow (post bubble point) in oil plays. we take into account average well spacing. but not beyond. Company guiding and activity outlooks are con2008 2009 2010 2011 2012 2013 sidered for the estimate of well count for 2013. whereas the traditional “plug & perf” operations typically 40 last for a week on cemented long laterals. However. Efficiency gains are considered to Bakken (125. the average IP rate has decreased from 800 to 700 boe/d. and some of the sweetest locations have already been drilled. The decreasing IP comes from down-spacing wells in the Mountrail (EOG). The time of transition between the initial hyperbolic shape and terminal exponential decline is a topic for debate. 4: Drilling profle for typical acreage in infrastructure constraints. Over 2012 and 2013. 312 risked net wells) In the Bakken the average spuds per rig-year have increased 70 from 9 to 15 wells per year as operators move from exploratory 60 drilling and HBP drilling into pad-based development drilling. OGFJ 30 20 10 0 Source: NASReport by Rystad Energy About the author Per Magnus Nysveen is senior partner and head of data analysis at Rystad Energy. while the average rate of production per stage decreased from 36 to 25. He has 20 years of experience within risk management and financial analysis. absolute size of the undeveloped 200 acreage. and availability of rigs and of fracking fleets. Also the fit of alternative curves. a constant b value over the life cycle is an over-simplification and forecast models should allow adjustments for this in the tail-end phase.the empirical well data. It is worthwhile to note the physical justification for the two different regimes (hyperbolic. Base decline is determined from official data and in-house 0 estimates. 320 acres.

Focus Reports for OGFJ OIL & GAS FINANCIAL JOURNAL: As the youngest and only Arab OPEC minister to have experience at a foreign company. I was seconded to Shell EP in the Netherlands where I focused on diversifying my portfolio from an international point of view working on a number of projects in Nigeria. if you must choose between burning fuel and the more expensive option. The challenge lies in linking this with what is facing us in the future. portfolio to ensure that we strike that balance. the challenge is one of technology is obviously good for the nation and its people. I believe the latter would AL MAZROUEI: This depends on the strategies we be more favorable. the North Sea. I was exposed to a commercial perspective of the industry until I was eventually appointed as Minister of Energy in March of 2013. I was involved in major upgrades of Abu Dhabi’s Marine Operation Company (ADMA OPCO) and Zakum Development Company (ZADCO) that amounted to multi-billion dollar projects. you can see that we welcome the introduction of the latest technologies. I gained a technical and management background in reservoir engineering. dealing with this issue? In any case. as noted by ADNOC’s managing director. What challenges are you facing in exploiting the reserves and what role can foreign partners play in addressing these? AL MAZROUEI: I believe we are well developed within that space. Without that. and project management from managing the production and facilities engineering for five operating companies of the Abu Dhabi National Oil Company (ADNOC).com 23 .ogfj. I was responsible for the growth and business development of the company that is now present in 12 countries. I joined Mubadala in 2007 where together with a small team I contributed to establishing what is now known as Mubadala Petroleum. One of my aims is to devise a new strategy that will tackle all of these challenges relating to the growth of local demand as well as our role as an OPEC member supplying the world with oil and gas. the relatively new joint venture in Abu Dhabi working on the Shah sour gas project. How are you which lead to dramatic actions such as the importation of more expensive options such as LNG. The underlying issue here is not the abundance of the resource. Progress resources. and the Netherlands. is a good illustration of that readiness to work with the providers of technology OGFJ: The modernization and economic development who can help us to enhance the development of our gas of the UAE has been a double-edged sword. Through my six-year practice at Mubadala. MINISTER OF ENERGY. almost half of the country’s total production at that time. could you please introduce yourself to the readers of OGFJ? SUHAIL MOHAMED FARAJ AL MAZROUEI: I earned my Bachelor of Science degree in petroleum engineering in 1996 from Tulsa University in the United States. production operations. This is especially true if you are faced devise to balance and tackle the future of the country’s energy considerations. I managed and coordinated a collective daily production of more than one million barrels. Al Hosn. There are a number of on-going projects aimed at realizing this ambition and we are on track to realizing this capacity production by 2017. Take the example of the introduction of nuclear energy. Within that period. At this given moment. OGFJ: Despite the country’s vast proven gas reserves. Brunei. I returned to the UAE and was given the responsibility of looking after all of Abu Dhabi’s five offshore companies. Instead.5 million bpd. a key milestone that will contribute up to 25% of Abu Dhabi’s electricity consumption. I believe we with a cyclical demand for energy as we do in the UAE have made good progress towards diversifying our energy between the summer and winter. and greater energy consumption means less to sell overseas. Moving away from these technical aspects. Subsequently. we would be more dependent on our natural resources and burning more of it. Even in the more challenging areas. rapid growth in domestic energy demand over the past few years has caused the UAE to become a net-importer of natural gas prompting the country to renew its focus on exploiting its gas reserves. In my capacity as a manager of production and facilities engineering. July 2013 Oil & Gas Financial Journal • www. Almost all of our electricity today is generated by gas and we only tap into insignificant amounts of fuel oil or diesel sources when required. I recently highlighted the need to revamp and increase our export capacity to 3. but and of forward thinking and planning before demand spikes it means energy usage has soared.AN INTERVIEW WITH SUHAIL MOHAMED FARAJ AL MAZROUEI. The gradual elimination of the consumption of liquid fuel for energy is also an initiative to maximize the UAE’s benefit and reduce our environmental footprint. UNITED ARAB EMIRATES Rapidly growing UAE modernizing and diversifying its energy portfolio Crystelle Coury. We intend to continue that critical role.

com • Oil & Gas Financial Journal July 2013 . rather than the regulators. capacity and flexibility to respond to such Similarly. As you “The challenge is one of technology and of forcan see. Just as with any OGFJ: It is fair to say that today the UAE is an “oil and other organization. in growth so that we can respond to it more effectively. I see on supply conditions. We are more interested AL MAZROUEI: A lion’s share of that capacity growth will in stabilizing the market to enjoy a degree of predictability stem from the major operating companies within Abu Dhabi. How is the with the major resources to have that addiUAE responding to the shale gas and tional capacity and flexibility to respond oil “revolution” in North America? Do to the changing environment.ogfj. but they will certainly gas” nation.OGFJ: Abu Dhabi has embarked on an ambitious growth plan in terms of oil production capacity. is steadily progressing towards aforementioned flexibility in production capacity is one of the achieving its new capacity targets. Of course. OGFJ: The UAE is one of the OPEC members that We know that the resources exist. a few points lead us to believe the energy mix of your country is evolving. I think the fair price of gas will be price of oil remained at record high levels. a key role in the balancing of the market. tight oil formations. capacity and actual production which is interrelated with our role as an OPEC member in supplying the market with equi. gas has three key prices depending ward thinking and planning before demand spikes on where that gas is discovered. In addition.” How would you respond to that to encourage investment despite the knowledge of future gas statement? prices? I believe these are the major challenges investors are facing today. History has taught us that every spike in the price of oil is subsequently followed by a decrease. we would the gas can or will be exported from the have expected to see a different price United States is a question for the indusreaction. That instability is not our ultimate interest regardless of whether member countries realize a short-term benefit. despite an opportunity there. ” industry’s responsiveness to the pull and push of technology. and will continue to play. such as LNG. a long-term resource for that country. and you also recently publicly stated that “we strategy on how we tackle the evolving market dynam24 www. The evolution of technology and infrastructure in the US is something that would help securing the gas to accommodate the rapid growth of certain countries as in China. How much of Under normal circumstances. which is set to increase to 3. relates to the investments required in Canada to export their gas to the market and determining the price that will be deemed as reasonable by investors. Moreover. As a net importer the economic slowdown in Europe. the original goal of OPEC. as a member of OPEC. there are challenges. for instance. as are the ADMA OPCO measures that will allow the OPEC members to manage onand ZADCO joint ventures. along with its partners. anticipated that the turbucountry? lence in the Middle East would evolve so rapidly. another question and challenge developments. However. which lead to dramatic action such as the imporIn my view this is not entirely a negative considering the tation of more expensive options. Canada is rapidly developing its oil Broadly speaking. the nization is maintaining our unity and strategizing around UAE recently inaugurated the world’s largest solar plant. Key suppliers must have the try to answer. The ADCO. you see any of this as a threat to your for instance. the investments we are observing today sands. That had a significant impact AL MAZROUEI: On the contrary. we level in decades due to technological developments that are committed to ensuring a good balance between price and have enabled economic production from shale and other supply. Specifically what investments does this entail and what opportunities do they create for existing and prospective partners? ics and how we can continue to best balance the market to both protect the consumers and the interests of its member countries. We need to develop a common Shams 1. the of gas. As you have just not make OPEC an obsolete or inactive body. they be extracted and supplied to the consumers? Is that some industry observers have said that OPEC is increastechnology barrier or infrastructure barrier reasonable enough ingly “irrelevant. There is a difference between going market dynamics. No one. Both coundemonstrate that there is a need for those countries endowed tries are developing LNG export facilities.OGFJ: American oil production has risen to its highest librium amounts of oil. However. however at what cost will realized a record oil income in 2012. nuclear energy is expected to account for up What we need to focus on moving forward as an orgato 25% of power generation by 2021.5 million bpd by 2017. OPEC has played. AL MAZROUEI: I do not believe that is a fair statement and must disagree. recently. pointed out. dictated by market forces.

and investment perspective. Dhabi and Dubai but that is precisely what we are working Norway is an excellent example of both a significant hydrocartowards. This is a common challenge for the to stronger commitments. These characenergy mix beyond what has already been announced by Abu teristics of the UAE serve as a differentiator for our country. Both are of the utmost to develop principle regulations that will take into considimportance to us and I think it is difficult to find many exameration all forms of energy in an unbiased manner. For the time being. From this prospective. As we move to the future.want to seize the opportunities presented by clean energy technologies. Looking ahead.that make sense.OGFJ: What is your final message for our readers? tions. In order to support these ambitions. I believe we will be conserving our environment while proud of the renewable R&D technologies being developed helping the government to better serve its people by channelthere. I think the UAE is demonstrating tion to attain reasonable percentages in the future.000MW. what we are working towards here at the Ministry to devise a Simultaneously. Ultimately. In addition to this. gas will continue to country’s early history cared tremendously about its environbe the core source of energy for the UAE. what we lack is a holistic its proper use as well as the related high level of subsidies the strategy on a federal level to tackle those issues that could lead government is providing. The major challenges we are therefore facing is the lack or 1. From an implementing renewable sources but we do have the aspiraenvironment perspective. Some are more focused on the production of hydrocarEurope and we are using them as a benchmark to be ready to bons. we ment.was encouraging ADNOC and its partners to adopt of energy. Dubai for instance has combons producer and a front runner in sustainable energies. I ing in a very high per capita usage. renewables will play a more UAE government is also highly supportive of initiatives complementary role while increasingly gaining a share of the designed to improve the technologies to advance other enerUAE’s energy mix. while Abu Dhabi is working towards a 7% of awareness on the importance of energy conservation and contribution by 2020. I am very optimistic about of our gas resources. an international level of awareness and care that lead to our The challenge in the use of renewables relates to regulaleading role in hosting the headquarters of the International tions. effecIf you are a net importer of energy. That is.Renewable Energy Agency (IRENA) in Abu Dhabi. We are trying to strike that balance in We do not yet have a clear answer on the UAE’s future between these two poles which is no easy feat. from the lab all the way up to the implementation stage through collaboration with commercial organiza. In this context. The Supreme Petroleum Council . and which energies will play a more complementary role? where will the country fit in this rapidly evolving world energy map? AL MAZROUEI: This goes back to the UAE’s founder. The sphere. we are trying to support most of the one is more cost effective given the given gas price? This is initiatives that make sense in that space. sustainable energy sources are rather well devel. tive sources of energy. gies. the agency which may be unfair. while other are more focused on developing alternaadapt to the future. on the potentials for renewable energy. these topics are well developed in time. OGFJ July 2013 Oil & Gas Financial Journal • www. I believe this initiative that the Abu Dhabi government sanctioned is undoubtedly a step in the right direction and if AL MAZROUEI: The UAE is opening up. GCC countries where the energy is heavily subsidized resultOn the other hand. is tasked with facilitating access to all relevant information You need to look at this issue from the future perspective.ogfj. we are aiming as a major supplier of hydrocarbons. the late Sheikh Zayed bin Sultan Al Nahayan. The issue we are facing locally is the heavy tion to address the pressing issues of climate change. The foroped in Europe and a number of other countries due to the mation of IRENA heralds a new era of international cooperalack of oil subsidies. If we succeed in reducing recently visited the Masdar Institute of Technology and was that.com 25 .” Could you elaborate as to which energies will form the core of the UAE’s future mix. we need all the help ogies. who during the AL MAZROUEI: For the time being. In addition. energies a reality. These efforts are aimed at making all forms of such ling the subsidies to more beneficial initiatives and projects. We are an open we continue gaining the local governments’ support then we economy and continue to encourage the sort of partnerships can achieve significant milestones in developing these technol. best practices. Although realistically gas will continue to be the central we can get to tackle the challenges related to the development energy source for the time being. warming and energy security. would you choose to tive financial mechanism and state-of-the-art technological import gas? Or do you develop a renewable source? Which expertise. global subsidy of some forms of energy as opposed to renewables. mitted to having a 5% contribution of renewables by 2030. From a ples of countries that are trying to achieve both at the same regulatory point of view. looking at the technological aspect. We are in the initial chapter of developing and a zero flaring policy and the reduction of emissions. we are balancing this goal with our role strategy and guideline around that. it is important that we tackle these issues from a number of fronts including the OGFJ: How do you foresee the Emirates in 10 years and regulatory. R&D.the highest authorare working on a communicated percentage increase in terms ity responsible for the petroleum affairs in the Emirate of Abu of the contribution of alternative and more sustainable sources Dhabi . I believe that the SPC and ADNOC the future of the advancements being made in the renewable in Abu Dhabi are approaching this with an open mind.

billing for undelivered rental equipment. It’s not a small problem.Protect your company from field-level fraud in the oil patch Megan McFarland.ogfj. the Association of Certified Fraud Examiners estimates in its annual survey that a typical business loses five percent of its revenues to fraud each year. What doesn’t garner as much notice is fraud against oil and gas companies themselves. reporting rules require safeguards on corporate reporting and audit of financial statements. comes fraud.com • Oil & Gas Financial Journal July 2013 . Hein & Associates LLP. especially those home to the big energy plays. Two main types of field fraud Field fraud varies significantly. 26 There are enough varieties of field-level fraud that we have either heard about or experienced in our practices that could easily inspire song lyrics to dozens of “She done me bad. First I’ll look at some various types. In the oil and gas business. but what about operations? For oil and gas companies. Most of the attention centers on fraudulent stock scams. Examples include: phony invoicing for unperformed or under-delivered goods and services. and then give a typical — but mythical — example of the most prevalent types of field fraud. but you can divide it into two main categories. which hit the courts regularly in every state. The first is vendor fraud. there are some steps companies can take to fight field-level fraud in the oil and gas business. CPA.” country western songs. Finally. I done her worse. Dallas W ith every oil boom. Although we are unaware of statistics particular to the oil and gas industry. billing ghost hours or even fabwww. field operations are likely more vulnerable to fraud than any other part of the business.

unusual hunting. and may not be in the form of cash. The kickback can come in different ways. General Manager CenterPoint Energy Mobile Energy Solutions • David Schultz. Establishing LNG as a Primary Resource for Traditional and Emerging Markets. kickbacks can include gambling trips. Company officials almost always just fire the employee. The second type of fraud is more expensive because it involves collusion from employees at the oil company. but that can produce mixed results. siphon off a portion of the profit. there are other types of non-cash kickbacks. or ski trips not offered by the vendor to other companies as a normal course of business. excessive or frequent restaurant and night club bills. and finally it can mean the purchase of sexual favors for the employee. They may even buy the employee or a spouse a personal item such as jewelry. Most of these frauds involve kickback schemes. 2013 Workshop A: Comprehensive Analysis of LNG Opportunities Against the Natural Gas Backdrop Workshop B: Infiltrating the Mainstream With Small-Mid Scale Opportunities a Robust “Setting Infrastructure for the Enduring Success of Small-Mid Scale Programs. firearms or customized cowboy boots. In the travel and entertainment arena. cars. The vendor arranges to provide services to the employee. Gas & Water on the significant role utilities play in seeding the LNG market July 2013 Oil & Gas Financial Journal • www. companies take it in the teeth and walk away. TX Two Pre-Conference Workshops: August 13. There are even numerous instances of vendors charging the energy company for used oilfield pipe. Lipka.ricating ghost employees. such as pouring driveways.ogfj. and getting companies to commit to a high rate when there is no competition and then not re-bidding the job when more competitors come in. Vice President. liquor.com For More Information. Featuring Case Studies From Leading Experts Including: • Brad Bodwell. clothing. billing more than the going rate. Small-Mid Scale LNG Market Optimization Capitalizing on LNG Development for Increased Opportunity in Small-Mid Scale Applications August 13-15. furs. The amount of money stolen is not usually material enough to report to shareholders. Some vendors buy the employee boats. Fuels Pivotal LNG/AGL Resources ” Attending this Premier marcus evans Conference will Enable You to: • Centerpoint Energy Mobile Energy Solutions on exploiting the mobile natural gas pipeline • AGL Resources on effectively developing small-mid size LNG Liquefaction Plants • The Texas Commission on Environmental Quality on Environmental Quality on securing grants for Natural Gas Vehicles and infrastructure • Exelerate Energy on advances in floating storage and regasification for the small-mid scale LNG supply chain • Memphis Light. USA security advisor for Encana Oil & Gas Inc. those fences aren’t cheap. Senior Vice President. 6483 Scan Here for 27 More Information: . Corporate/Regional Energy Solutions Manager North America. are not reported by companies to the authorities.. Senior Vice President Business Development & Legislative Affairs Gulf Oil • Dale Lewis. field fraud takes up to 18 months for companies to discover. golf clubs. More often than not. transportation and expenses for the employee’s vacation. or other heavy equipment services. Lipka says. and using that pipe to build fencing for a ranch or lot. The employee responsible for bidding a service or supply has the vendor charge a fictitious amount. Commonly. patios or patio covers. With today’s prices for pipe. According to a presentation by John F. Corporate & Business Development Prometheus Energy • Bill Caffee. motorcycles. barbecue pits and roping arenas. Gift cards are a popular way to pay a kickback. They may pay wives or girlfriends as if they had worked for them. fishing. Please Contact: Robin Yegelwel E: robiny@marcusevansch.com P: (312) 540-3000 ext. 2013 | Houston. golf carts. as is extravagant entertaining. It could involve home repairs or improvements such as landscaping. trucks. road work. They may be embarrassed by the theft or believe that it would cost more to prosecute than they would recover. and pay the employee. once discovered. motor homes or horse trailers. travel trailers. Some of the craftier fraudsters set up a business and have the vendor write a check to their company. Director of Strategic Analysis CSX Transportation • Dimitri Karastamatis. golf. Usually these types of thefts. South America and APAC Regions Newmont Mining Corporation • Laura Scott. airplanes. The company can try and recoup losses from the vendor.

Harry is really only hauling eight loads • Compare field tickets to a day. This step is skipped months. companies may not check references or call the fraudster’s past employer. Good ol’ Boy is fired. A representative of the his cell phone. amounting to more SEC and other complex reporting requirements and has than $350. The fraudulent field employee usually knows many people in the industry and can find work. you become too dependent on one One day. Internal audit staff or outside consultants comon the action. a full-service public cipal of the partnership and sets her up in a trailer not accounting and advisory firm with offices in Denver.com • Oil & Gas Financial Journal July 2013 . but he also happens to have Megan McFarland is the National Energy Practice a girlfriend. learned of as accountants and consultants. plined. operations? For oil and gas companies. when overcharged. and if they do. over time. which leads to shortcuts in hiring. and asks him about the operating company gets together with the field supervisor to compare field tickets to invoices. if you add all of the field fraud up.000. because as we said. and promises him that no one will notice pare what you are paying versus the industry norm. consider the following steps: • Separate the bid and approval process. our tale is influenced by real events we have checks are not typically performed in this industry. Steps to take to prevent field fraud If you want to avoid the Harry Hustlers and Good ol’ Boys of the world. Although • Check references when hiring. the field supervisor at a get lucky with some solid information. his water hauler. — he agrees to set up a limited partnership as a water Field fraud in the oil and gas industry is widespread disposal company. perform vendor audits after the work After thinking about it and justifying it — because was completed. Let’s look at a typical oil and gas field fraud. Normal job reference fictional. They create two separate invoices for and not talked about. is charging him ten for each job insures you’ll avoid being loads a day. but what about • Create an approved vendor list.However. Many times. competitive bid process. $300-million exploration company • Rotate vendors and use a discioperating in the Barnett Shale. Is it happening to you? OGFJ the water hauling contract. The fraud isn’t prosecuted. This goes on for two years. audit of financial statements. relationships become too close. reporting rules that aren’t supported with signed field require safeguards on corporate reporting and tickets. but has since found new employment in Louisiana. than any other part of the business.ogfj. Field fraud continues to be a problem because finding qualified workers is tough. field Use a vendor application process. Harry immediately offers Good ol’ Boy in tive. one from Harry that is legit and another to Good ol’ Boy Water Hauling Ltd. Good ol’ Boy calls Harry on too often. He lists Norma as the prinLeader for Hein & Associates LLP. RotatWater used in the drilling process ing vendors can be a logistical hassle. wife finds out what’s going on and turns him in to his company via its fraud hotline. of Houston. that employer might be reluctant to divulge information for fear of legal trouble. about $10. all at the company’s expense. Good ol’ Boy notices that vendor. The purchasing department should solicit and select bids while the Field fraud: An example field supervisor approves invoices. significant experience assisting companies with the impleThe scheme only gets discovered after Good ol’ Boy’s mentation and reporting of internal controls. Additionally. Now About the author Good ol’ Boy is married. This has been going on for six invoices received. taking into consideration price and Good ol’ Boy thinks he should be making more money performance. it can be significant to the company. do a little homework and you might our story on Good ol’ Boy.000 stolen from Good ol’ Boy’s employer. We focus Make the call. • Perform analytical reviews from a financial perspecdiscrepancy. Be sure the person who is responsible for bidding is not also responsible for approving invoices. check the vendors operations are likely more vulnerable to fraud with other operators to learn of their experiences. Dallas and Orange County. Don’t pay invoices In the oil and gas business. and ensure your field personnel only use vendors from this list. qualified employees are tough to find. a guy by the name Going through the bidding process of Harry Hustler. far from the oil fields. such a small amount of money. has to be recovered and taken to a but companies should know that when processing site for cleaning and re-use. She specializes in course. Norma Rae. 28 www.

Id. creating a great deal of uncertainty when headed into a trial where a plaintiff is seeking substantial sums. of dollars in damages when their property is valued at a fraction of those amounts. Act 312 did not streamline litigation or expressly curtail the amount of damages a plaintiff could recover for environmental damage. For oil and gas companies. some oil and gas companies have begun mitigating risk by creating site specific trust accounts (SSTAs) when divesting property. in practice. these lawsuits have been likened to winning the lottery. 29 . A minimum $100. however. “[t]he party acquiring the oilfield site shall thereafter be the responsible party for the purposes of this Part.S. SSTAs are authorized pursuant to the Louisiana Oilfield Site Restoration Law. however. In 2012. an SSTA will generally release a transferor and prior responsible parties for regulatory liability for site restoration costs.. v. plaintiffs have sought hundreds of millions or. the cost of original condition restoration is exponentially higher than restoration to regulatory standards. This is.R. which they aver include restoration to original condition.ogfj. 30:88. oil and gas companies have attempted to mitigate risk. additional legislation was enacted that purports to resolve some of the issues not resolved by Act 312. Importantly. see La. when the Louisiana Supreme Court handed down its ruling in Corbello v. after the SSTA is funded. In Corbello. such provisions may end up being of little value because of the financial status of the buyer years after the deal is closed. provided little relief to the oil and gas industry. The scope of potential liabilities discussed above were not necessarily readily apparent in Louisiana until at least 2003.S. 30:88(F).Louisiana legacy lawsuits create unknown risks for some E&P companies Adam B. Office of Conservation. 30:88(B). leaving an oil and gas company uncertain as to the activity that took place on an oil and gas lease after it was sold or assigned. The purpose of the inspection is “to determine the site restoration requirements existing at the time of the transfer. in part. oil and gas companies remain liable for their leasehold obligations. operators likely will have transferred their operational files to subsequent operators. Farms. Exxon Mobil Corp. regardless of whether an SSTA was created. Compounding the problem for oil and gas companies.R. La. Iowa Production.” La. “legacy litigation” often represents a potential substantial liability that. Thus.S. Based upon the site restoration requirements. and it has been interpreted to allow a trial before the DNR can opine on an appropriate standard of remediation. or because the parties to the agreements litigate their meaning until the bitter end. if satisfactory.S. further creating a gap in knowledge about pertinent operations. the matter should be referred to the DNR to determine an appropriate remediation plan. Among other things. Act 312. Historically. In some instances. once established and fully funded. because the lawsuits often allege successor liability for operations that occurred decades ago by predecessors. Each party that files a limited admission is responsible for certain costs incurred by the DNR. and landowners aver they get to pocket the difference. with hundreds of such suits now pending.000 deposit is required by an admitting party. approved by the Louisiana Department of Natural Resources (the “DNR”). In such cases. the assets at issue were often divested years prior to the litigation.” La. they argue that the market value of the property is irrelevant to the cost of the restoration.” See M. Moreover.J. SSTAs are a statutory mechanism by which oil and gas properties being transferred are inspected by State-approved contractors prior to the transfer. and were not required to use the damages to actually restore the property. in part. 30:88(C). They generally posit that the property should be restored beyond regulatory standards to its “original” condition. 2d 686 (La. 30:88(D). even billions. Funding of the site-specific trust account includes a contribution to the account at the time of transfer. landowners were permitted to recover substantial damages for remediation that were not tethered to the value of the land.com funding proposal is reviewed. was previously unknown.S. Moreover. Landowners. For landowners. Legacy litigation increased significantly after the Corbello decision. generally argue that. La. 850 So. defense and indemnity provisions can be enforceable. More recently. In 2006. by including various defense and indemnify provisions in an asset purchase agreements or other transfer documents. until they are served with a lawsuit. Ltd. 30:29. 2003). and consistent with historic industry practice. and enacted “legacy legislation” commonly known as “Act 312. 36 (La. regardless of how ironclad they seem. 998 So. the Louisiana legislature responded to Corbello. One of the more significant changes to Act 312 opens the door to DNR involvement in creating a remediation plan before the parties go to trial if limited admissions of liability for all or part of the environmental damage at issue are made. Oftentimes. and.S. and make the transferee the responsible party in the eyes of regulators. In legacy lawsuits. a July 2013 Oil & Gas Financial Journal • www. In sum. Zuckerman. R. 2d 16.R. Baker Donelson. 2008). to the extent permitted under the law.R. New Orleans L ouisiana “legacy litigation” involves hundreds of lawsuits claiming environmental harm caused by oil and gas exploration and production activities.R. La.

who argued that plaintiffs had no right to seek remediation damages in excess of those found necessary to fund the plan for remediation mandated by Act 312 absent an express provision in the lease. Take a photo with a QRcode app! MEXICO Granite Wash + 30 Go to www. 2012-0884 (La. Finding that the statute was procedural in nature and did not affect the substantive rights of landowners.com • Oil & Gas Financial Journal July 2013 . Get up-to-date information on the most talked about formations in the unconventional resources space –– all in one place.ogfj. Barnett. Bakken Montana Thrust Belt Cody Gammon Shale resource plays. He earned a BS from the University of Georgia and earned his JD from Loyola University School of Law. Worth Basin Maverick sub-basin Barnett Eagle Ford Rio Grande Embayment Where are the high BTU plays? C A N A D A Niobrara and YES. Bakken. which admission plaintiffs may attempt to use at trial to argue liability for exponentially greater damages to restore property to its “original condition.com N orth American shale plays such as the Eagle Ford. They also include tight gas.Ostensibly. Find shale rankings. 2013. Louisiana Supreme Court.. 30. Calogero. oil and gas litigation. we have maps! Avalon. and represents clients throughout the federal and state appellate process. Marcellus. the latest shale news. In a closely watched decision.” Moreover. a judge or jury may be deprived of this information unless the parties admit regulatory liability. Act 312 allowed recovery of damages by a landowner in excess of the cost of the approved feasible remediation plan. top producers.com <http://www. on January 30. interpreting Act 312 on the issue of a landowner’s right to be awarded damages beyond the cost of the regulatory remediation plan. The Louisiana Land & Exploration Co. Bone Spring Eagle Ford ® Marcellus SW Penn. the Court concluded that. a DNR-approved remediation plan coupled with evidence of the cost to implement the plan could help a finder of fact determine an appropriate measure of damages.. Reports from Don Warlick of Warlick International provide insight into the top 5 US shale plays and the 7 factors driving the shale business. et al. v. natural gas pipeline expropriation proceedings. 2013). Visit our Unconventional Resources Center on OGFJ. Zuckerman served as Bankruptcy Law Clerk to the United States Trustee for the Eastern District of Louisiana. and heavy oil. but unconventional resources include more than shale. 2013 WL 360329. However. lower 48 states Williston Basin Hilliard Baxter-Mancos Greater Green River Basin Uinta Basin Mancos Michigan Basin Antrim Appalachian Basin Devonian (Ohio) Forest City Basin Piceance Basin Cherokee Platform Excello-Mulky Illinois Basin New Albany Marcellus Utica Hermosa Paradox Basin Lewis San Juan Basin Marfa Basin Pierre Woodford Anadarko Basin Bend Raton Basin Black Warrior Basin Fayetteville Arkoma Basin Ardmore Basin Conasauga Chattanooga Palo Duro Basin Permian Basin Barnett-Woodford Pearsall-Eagle Ford FloydValley and Ridge Neal Province Texas-LouisianaMississippi Salt Basin Haynesville-Bossier Ft. and also served as Judicial Law Clerk to Chief Justice Pascal F. He represents creditors in bankruptcy and other collection proceedings. and construction litigation. coalbed methane. In sum. even after the 2012 amendments to Act 312. and Woodford are all noteworthy formations.ogfj.ogfj. the Louisiana Supreme Court issued its opinion in State of Louisiana. et al. Bentek’s Rusty Braziel provides expert analysis. OGFJ About the author Adam Zuckerman is a shareholder at Baker Donelson. by its clear language. environmental litigation arising out of oil and gas exploration and production activities. liquidrich plays. oil sands. potentially creating a rush to verdict without the benefit of the DNR’s recommendation for remediation. including contract and business tort litigation. It remains to be seen if there will be a significant increase in legacy litigation following this ruling. assuming liability. The Court affirmed the appellate court’s ruling denying partial summary judgment to the defendants. Jan. E&P companies are shifting budgets to high-BTU.com/> and click Unconventional Resources www. legacy lawsuits continue to remain a potentially substantial liability for companies that own or previously owned or operated oil and gas assets in Louisiana. the landowners’ position generally remains that a trial should proceed simultaneously with the DNR proceedings. Haynesville. He represents clients in a variety of commercial litigation matters.

Other participants in the play include Royal Dutch Shell and PetroChina. Because of its potential. Muskwa (British Columbia – The Devonian Muskwa shale of the Horn River Basin is said to contain 6×1012 cu ft (170×109 m3) of recoverable gas.5% to 5% by weight total organic carbon. Encana. from 150 to 700 feet (210 m) thick. Quicksilver Resources.com to extract the gas from the low-permeability shales. Gas rich silty shales occur in the northern and western fringes of the deposit. Utica (Quebec) –The Utica shale is a black calcareous shale. Chevron. and strong developmental growth in the shale has rewarded leading producers such as Encana with high-quality natural gas. Major leaseholders in the play are EOG Resources. and ExxonMobil that already hold large acreage positions.” It is located in a remote and largely unexplored part of northeastern British Columbia. Nexen. Based on the production from those wells. Companies operating in the region include Encana. For Canadian producers. Wood Mackenzie’s research analysts noted the play has the potential to become one of North America’s most attractive liquids-rich shale plays. In watching the development of these emerging shale plays. which may discourage operators due to concern about a fracking ban. However. The Duvernay formation in Alberta. The British Columbia government has granted royalty credits to companies for drilling and infrastructure development in the area. Still in its infancy in terms of development. making it the third-largest North American natural gas accumulation discovered prior to 2010. Horn River Basin (British Columbia) – Gas is produced from the siliceous shale of the Horn River formation in the Greater Sierra field. Investor interest in the Montney has surged due in part to a reduction in royalty rates by the provincial government of Alberta. Here is a brief description of several other prominent and emerging plays in Canada and the latest news from each: Liard Basin (British Columbia) – Apache has called the Liard the “best and highest quality shale gas reservoir in North America. and Devon Energy. More than 25 E&P companies are operating in the area. with from 3. Lawrence River between Montreal and Quebec City. Frederick Brook (New Brunswick) – An emerging play in the maritime province of New Brunswick in eastern Canada. Interest has grown in the region since Denver-based Forest Oil Corp. giving one company alone a natural gas find that is two-thirds the size of the entire Horn Basin. especially tight oil. based on the volume of gas three test wells are producing.ogfj. Apache announced it has 48 tcf of marketable gas within its Liard Basin properties. One well alone produced 21 million cubic feet of gas a day over a 30-day test period. Tight oil is expected to play an increasing role in Canada’s overall production mix. Montney (Alberta and British Columbia) – Gas is produced from the Montney formation in the Peace River country in British Columbia and Alberta. it has attracted companies like Encana. ExxonMobil. The identified liquidsrich plays in the Western Canada Sedimentary Basin have become increasingly relevant due to new horizontal drilling and hydraulic fracturing and completion technologies employed in the development of these unconventional plays. which has been compared to the Eagle Ford shale play in South Texas. north of Fort Nelson. Apache Canada was one of the first companies (in 2010) that began drilling horizontal wells to tap the Lower Carboniferous shale deposit. have marketable gas of 78 tcf. with the majority of the proceeds coming from shale gas prospects. this means that a large portion of that nation’s production potential has yet to be unlocked. South Africa’s Sasol Ltd. Stone Mountain Resources. it is generally acknowledged that it is crucial that only the most lucrative liquids-rich plays be developed. and oil is produced from the formation in northern Alberta. Apache says its Laird Basin wells are the most prolific in the world. Apache. and Apache. announced a significant discovery there after testing two vertical wells. the Frederick Brook shale is located near Sussex in the province. owns a 50% stake in Talisman Energy’s Montney assets in the Farrell Creek project that Talisman operates. there is significant opposition to hydraulic fracturing in the province. the Duvernay is a large play that covers much of west-central Alberta. Canada is in the early stages of developing its unconventional resources. The Utica Shale play focuses on an area south of the St. By way of comparison. Talisman. Horizontal drilling and fracturing techniques are used July 2013 Oil & Gas Financial Journal • www. one of three other major shale gas basins in the province. The government of British Columbia has already received billions of dollars in lease proceeds. which has made production economic – at least as long as oil prices remain high. OGFJ 31 .Canadian shale update C ompared to its neighbor to the south. has drawn the most intense focus to date. EOG. In evaluating well results in the Duvernay. The original gas-in-place volumes are estimated to be up to 500 tcf. all companies active in the Horn River Basin.

Prepared by PLS Inc. Houston P LS reports that from May 17 to June 16. EP Energy was born out of the transaction that occurred back in October 2011 when Kinder Morgan paid $37. At press time as of June 20. global deal markets in Q2 totaled just $17.Deal Monitor EP Energy takes center stage as deal markets remain on the slow side Brian Lidsky. 32 www. Canada has stalled with only 10 deals for $35 million. PLS Inc.com • Oil & Gas Financial Journal July 2013 . Korea National Oil Corporation and Access Industries for $7.8 billion to buy El Paso Corporation.5 billion. Monthly Deal Monitor – Select transactions US Transactions Date Announced 9-Jun-13 9-Jun-13 2-Jun-13 31-May-13 28-May-13 20-May-13 + = Buyer Atlas Resource Partners Atlas Energy Kodiak Oil & Gas Wapiti Energy NorthWestern Energy EnerVest Management Partners Seller EP Energy EP Energy Liberty Resources Layline Petroleum Devon Energy Laredo Petroleum Asset Location Coalbed Methane Coalbed Methane Bakken Multi Region Rockies Mid-Continent Total Transaction value Number of Transactions International Transactions Date Announced 14-Jun-13 13-Jun-13 11-Jun-13 27-May-13 23-May-13 23-May-13 17-May-13 Buyer Banco BTG Pactual SA Centrica Surge Energy Inc Pine Cliff Energy Osaka Gas Parkmead Group Plc Tuscany Energy Seller Petrobras Cuadrilla. Validity of data is not guaranteed and is based on information available at time of publication.15 billion just a little over a year ago in February 2012. 23% of original reserves and 24% of original production.300 bopd respectively. For perspective.9 billion (188 deals) struck in Q1 2013.6 billion (169 deals) putting the markets within range of eclipsing the low-water mark (since 2007) of quarter deal value of $20. 2013. Canada $1.3 billion of assets in a series of deals.5 billion (versus 45 deals for $2.com. email memberservices@plsx.6 billion last month.8 Tcf of gas reserves and 201 MMbbls of oil reserves producing 746 MMcfpd and 22.3 billion. For more information. Riverstone. The US total is $6. This month EP Energy takes center stage in the US deal markets where it sold $1.ogfj. At the time of the private-equity purchase. EP Energy had 2. the sales represent an important step toward transforming and concentrating the portfolio to 05/17/13 . AJ Lucas Group Cenovus Energy Undisclosed Seller Horizon Oil Lochard Energy Group Plc Diaz Resources Asset Location Nigeria United Kingdom Saskatchewan Alberta Papua New Guinea UK North Sea Multi Canada Total Transaction value Number of Transactions PLS Inc. yet international markets are improving having struck 39 deals for $5.. the pace of US oil and gas deal activity slowed to just 27 deals for $2.8 billion and international is $9. According to EP Energy. Kinder Morgan sold off the upstream assets of El Paso to a private equity led consortium of Apollo.06/16/13 PLS Inc.5 billion compared to 12 deals for $1. The current series of deals represent roughly 18% of the original purchase price.1 billion last month).. Subsequently.

60 per unit.090 287 2P Reserves ($/Boe) $26.584 $2.450 $20. by way of agreement with ARP.833 2. In the largest deal of the EP Energy deals.846.3 1.31 $47.742 $3.3 6 $133. In other deals.880 689 1.000 net acres and 6.56 Production ($/Mcfe/d) $6. Atlas Energy.26 per proved Mcf (398 Bcf of reserves) and $6.5 billion and in Canada.ogfj.P.57 $1.153 $15.866 $28.959 $46.0 Non 2P Reserve Value ($MM) $133.0 $526.93 $16.1 $51. L.525.455 $1. Penn West has started a process to review all strategic alternatives. Occidental is reportedly looking to sell Middle East assets and in Canada.43 per Mcf and $6.66 $1.00 $13.87 $9.506 Reserves ($/Mcfe) $1.53 per proved Mcf and $5.44 $8.0 Reserves (MMBoe) 77. Louisiana and North Dakota from Layline Petroleum. Deemed to be “transformative” by ARP’s CEO Edward Cohen.700 2.28 $36.98 $10. These assets are 100% natural gas.48 $1. (ATLS) who picked up 45 Bcf of EP Energy’s coalbed methane assets in the Arkoma basin in southeastern Oklahoma for $67 million.160 $5.050 per daily Mcf. OGFJ Proved Reserve Value ($MM) $733. The metrics for this 100% gas deal are $1.557 9.732 2P Reserves ($/Mcfe) $4.37 Production ($/Boe/d) $36.09 $2.24 Production ($/Boe/d) $57.52 $15.500 boepd.16 $6. unless disclosed.383 $4.300 $27. These two deals were struck at a combined $1. Alabama’s Black Warrior basin (141 Bcf).160 per daily Mcf.5 billion asset sales target from Freeport McMoRan Copper & Gold following the completion of its acquisition of Plains E&P and McMoRan Exploration and Halcon Resources selling four conventional US packages totaling 4.0 $70. Kodiak struck a $660 million deal to buy out Liberty Resources’ Bakken position adding 42.3 $33.000 boepd of production.625 Reserves ($/Boe) $9.Deal Monitor focus on high-margin oil plays while retaining the largest gas asset in the Haynesville shale.9 Median Mean $9. July 2013 Oil & Gas Financial Journal • www.985 $79.5 3.8 $31. is ARP’s parent. Elsewhere in the US markets.1 $7. 97% operated and have current annualized EBITDA of ~$10 million.57 $1. The second buyer.627 $1. Petrobras sold a 50% interest in its African assets to BTG Pactual for $1.7 7.0 $228.167 5.2 $438. Production is 13 MMcfpd from over 550 wells and the metrics on this deal are $1.866 $46. On June 17 (one day after the timeframe in the Table below). In total. Surge Energy bought Shaunavon tight oil assets in Saskatchewan from Cenovus for $235 million.69 $1.664 $13.48 $6.com 33 .918 $92.04 Production ($/Mcfe/d) $9. EP Energy sold 909 Bcf of conventional and CBM gas reserves and 215 MMcfpd of production at valuations of $1.67 $2.150 per daily Mcf. 100% proved developed.9 - legacy conventional South Texas gas package.1 $375. with funding from Wells Fargo and Carlyle.810 Note: Canada transactions assume 20% royalty. Privately-owned Wildhorse Resources II bought conventional Ark-La-Tex and North Louisiana assets while an undisclosed buyer purchased EP Energy’s Non Proved Reserve Value ($MM) $133.2 10.160 $7.978 $7. the deal will immediately be accretive to cash fow and ARP increased its 2014 distribution guidance up by 27% to $2.0 $22. These metrics provide a good valuation market data point for today’s natural gas PDP-oriented deals.67 $2.88 $6. for producing assets in Texas.3 2. Privately-held Wapiti Energy paid $375 million.264 $47. EP Energy announced two more deals totaling $500 million.209.211 $7. New large deals hitting the markets include a $1.49 $2.57 per proved Mcf and $6. The assets (93% PDP) nearly double ARP’s existing production and are split between New Mexico’s Raton basin (320 Bcf).771 2P Reserve Value ($MM) $1.454 $45. Atlas Resource Partners (ARP) picked up 119 MMcfpd of coalbed methane production and 466 Bcf of reserves for $733 million.8 28.3 2.5 23.0 $6.0 Production (Boe/D) 26.024 per daily Mcf (total of 83 MMcfpd of net production).859 $1.959 $30.00 $13.25 $1.5 Production (Boe/D) 19.0 $67.978 $4.22 $7.300 2.2 - 2P Reserves (MMBoe) 8.576 $7.44 $11. and Wyoming’s County Line region (6 Bcf).5 Median Mean $10.0 7 $191.

The rankings are based on operated production only within the United States. overall No. 9. jumping into the group at No.206 billion. LLC Walter Oil & Gas Corp.796. Post Oak funded $12 million at closing. and rounding out the gas producers list at No. and Petro-Hunt Group.com www. WildHorse Resources also moved itself into a Top 10.889.445. Another change to the Top 10 private gas producers list is the removal of Dynamic Offshore Resources.055.qbsol. the last data set for 2012. Dropping out of the overall Top 10 by BOE were Citation Oil & Gas Corp.594. The largest jump was that of Sheridan Production Co.388.com • Oil & Gas Financial Journal July 2013 . J-W Operating Co. 11 spot to enter the Top 10 at No.286 74.824 Top 10 private liquids producers Rank 1 2 3 4 5 6 7 8 9 10 100P Rank 4 3 1 11 7 13 8 9 10 6 Company GeoSouthern Energy Corp. we take a look at some of the transactions in the private company space since the April 2013 issue and the last installment of the OGFJ100P. LLC Gas (Mcf) 230. Liquid (bbl) 16.OGFJ100P OGFJ100P company update I ndependent research frm IHS Herold Inc. 9 to its current No.878 6. With a focused presence in the Terryville Field in Lincoln and Claiborne Parishes.373 43. has provided OGFJ with updated production data for our periodic ranking of US-based private E&P companies.620 Source: IHS Herold Source: IHS Herold Software for Oil & Gas Commercial Operations 34 www. Capital Unranked Maverick Brothers Energy LLC recently received a commitment of $35 million in equity capital from investment partnerships managed by Post Oak Energy. up ten spots from its previous position at No. Based on the closing price of SandRidge common stock of $7. Mewbourne Oil Co. 5.090.227 9. Inc.368. The company was acquired by SandRidge Energy Inc. Oklahoma-based Maverick’s drilling program and acreage acquisitions. 7 in this issue.471.267. Citation Oil & Gas Corp. Endeavor Energy Resources LP LLOG Exploration Co. Merit Energy Co. the acquisition’s aggregate consideration is valued at approximately $1. Hilcorp Energy Co. 8 in the April issue to No. The company landed in the Top 10 at No. Not only did Sheridan break into the overall Top 10.613 13. LLC Slawson Exploration Co. there were a few notable changes in the Top 10 listing. 8 in the list of Top 10 private gas producers.146 98.925 14. with the remaining $23 million available to support future develop- Top 10 private gas producers Rank 1 2 3 4 5 6 7 8 9 10 100P Rank 2 1 3 5 6 4 15 18 10 7 Company Samson Investment Co.240 7. but the Permian Basin-focused company fnds itself as a Top 10 liquids producer.994 9.798. 18 WildHorse comes in at No. Hilcorp Energy Co.015 39. Mewbourne Oil Co. 16 in this installment.ogfj.619. Merit Energy Co.475 12. Louisiana.097 186. Funding will be used for Enid. LLC. and Petro-Hunt Group dropped from No.531. Yates Petroleum Corp. Sheridan Production Co. 10.085 158. GeoSouthern Energy Corp.11 per share on April 16. 2012.137.545.927.443 8. WildHorse Resources LLC Walter Oil & Gas Corp.672.750 59. 17. Citation dropped from its previous position at No. Here. Breaking into the Top 10 is LLOG Exploration Co.267 42. The company jumped two spots from its previous No.852. Top 10 In this.180.102.107 76. Sheridan Production Co. in this installment. 11 spot. The addition of Sheridan and WildHorse to the Top 10 gas producers list displaced Chief Oil & Gas LLC and Citrus Energy Corp. for $680 million in cash and approximately 74 million shares of SandRidge common stock in April 2012.936 10. LLC.

Maverick has accumulated a contiguous acreage position of more than 10. According to The Houston Business Journal.440.983. GeoSouthern Energy Corp. The assets up for sale include total net proved reserves of Growth No.274.481.9 million.971 28.544. Hilcorp Energy Co.043 40.ogfj.504 Total wells 5. has set its sights on a new offce building in The Woodlands.197.616 11. Oklahoma and has completed four horizontal gas wells in the Mississippian Osage formation.18 MMboe (~88% oil/liquids) with a PV-10 of $15.068 10. BOE 44.569. 33 of this issue.214 14.236. Sale WildHorse Resources puts yet another stamp on this issue of the OGFJ100P as the buyer of certain Ark-La-Tex assets from EP Energy LLC. Yates Petroleum Corp.com 35 . Hunt Oil Co.535. Sheridan Production Co.647.100.729. LLC Walter Oil & Gas Corp. 1.495 3.282 39 76 2.168 17.com www. Samson Investment Co. EP Energy LLC agreed to sell conventional gas assets in East Texas and North Louisiana to WildHorse Resources II LLC.918 5.533.153 19.OGFJ100P ment activities on leasehold acreage and other growth initiatives.657 287 3. Bass Companies Slawson Exploration Co.qbsol. The company. and a multi-year development program with 96 Eagle Ford horizontal PUDs. TX.590 1. average net operating cash fow of $223. TX with the help of E-Spectrum Advisors LLC as its exclusive agent.000 gross/135 net boe/d (84% oil/liquids).337/month (for the trailing three-months ending March 2013).885. and 41 horizontal producing wells (36 Eagle Ford and 5 Pearsall wells).616 986 323 644 Largest feld Painter Reservoir East Ignacio-Blanco Judge Digby De Witt Powder River Basin Coal Bed Lipscomb Fuhrman-Mascho Sprayberry Mississippi Canyon Block 0503 West Delta Block 0112 Sho-Vel-Tum Quahada Ridge Southeast Van Hook Eagleville Quorum Production & Revenue Accounting ™ July 2013 Oil & Gas Financial Journal • www. and Bart Brickman. The assets hold current production of 6. TX.848 14. Mewbourne Oil Co. 4-ranked GeoSouthern Energy Corp.985 11.383 20. As noted in Deal Monitor.794-square-foot building. p. vice president.9 million. Inc.128 14. Offering up its non-operated Eagle Ford properties is privately-held Kirkpatrick Oil & Gas LLC.020 2. specializing in production of Austin Chalk and Eagle Ford unconventional formations with large acreage positions in Gonzales and Lavaca counties. the company will lease roughly half of the 127. OGFJ 2012 Year-to-date production ranked by BOE Rank 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Company Merit Energy Co. Maverick’s leadership team includes Bret Brickman.641 4. a three-story building slated for completion in January 2014.364 15. Citation Oil & Gas Corp. PDP net reserves of 178 Mboe with a PV-10 of $6. The Oklahoma Citybased company is looking to sell certain non-operated oil and gas interests located in La Salla and Frio Counties. president and CEO.000 gross acres in Dewey County.489 44. plans to relocate to Wildwood Corporate Centre. LLC Endeavor Energy Resources LP LLOG Exploration Co.

Summit Petroleum LLC Henry Resources LLC BOE 10.069 3. Indigo Minerals LLC Ankor Energy LLC Black Elk Energy LLC Ballard Exploration Co.554. Ltd.428. Zenergy Inc.703 3.171 3.979 4.313 4. Stephens Production Co.711.373.998 3.740.804. Alta Mesa Holdings LP Pruet Production Co. DCOR LLC FIML Natural Resources LLC Reliance Energy Inc.qbsol.928. Laredo Energy IV Killam Oil Co.087. Tana Exploration Co.785 Total wells 809 400 913 722 1.440 3.554 4.338 3.646.617 3.170 8.876 3.296.605 7. Red Willow Production Co.505. Kaiser-Francis Oil Co.302. Valence Operating Co.800.494.541.918 3.731 6.164 3.256 5.ogfj.471.835.295 3.507 5.263.690.OGFJ100P Rank 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 Company J-W Operating Co.148. Venture Oil & Gas Inc.756 4.723. Chief Oil & Gas LLC Citrus Energy Corp.756 6. Inc.015.038.631 5. Petro-Hunt Group Fasken Oil and Ranch Ltd.086. Castex Energy Inc.259 5.986 3.317.181 3.212 8.007 3.981 202 217 126 326 427 258 919 153 91 459 36 96 324 85 244 183 252 535 292 207 Largest feld Elm Grove Charlson Sprayberry Terryville Luling-Branyon Ashland Dimock Mehoopany Ignacio-Blanco Carthage Caspiana South Marsh Island Block 0073 Galveston Block 0389 Yellow Rose Atchafalaya Bay Gragg Banks East Texas Weeks Island Brooklyn Mills Ranch Oklahoma City Round Mountain Dos Cuadras Sprayberry Sprayberry Owen Cuba Libre West Cameron Block 0076 Winchester South Loco Hills Timbalier Bay Centrahoma Sanish Madisonville West Magnet Withers Sprayberry Sprayberry Quorum Accounting / ERP Financial & Cost Accounting 36 ™ www.com • Oil & Gas Financial Journal July 2013 .628. BASA Resources Inc. CML Exploration LLC Milagro Oil & Gas Inc.664 4.234.773 3.342 54 26 400 560 312 114 202 66 48 800 226 2.459.674.665 5.597 6.576 3. Pisces Holding Co. Burnett Oil Co.516.364.com www. Jones Energy Holdings LLC Murex Petroleum Corp. Inc.959.695 5.597 3.026.591.519 7. Sanguine Gas Exploration LLC New Dominion LLC MacPherson Oil Co.450.928.446 7.425 4.381 1.257. WildHorse Resources LLC Texas Petroleum Investment Co.484.

Antero Resources LLC Legend Natural Gas LP Tellus Operating Group LLC Vantage Energy LLC Berexco Inc.112. Finley Resources Inc.584 486 46 752 47 584 654 96 78 141 23 81 1.626 1.706 2.669 1. Rosewood Resources Inc.006 2.com 37 .874 2.792. LLC R. Battalion Resources Holdings LLC Tidelands Oil Production Co.326 2. E&B Natural Resources Management Corp. Gary.613. Samuel Jr & Associates Inc.428. Crawley Petroleum Corp. Sklar Exploration Co.008 Total wells 412 953 134 358 403 214 1.698.106 1. Le Norman Operating LLC Cobra Oil & Gas Corp.952 2.674 1.102 1.314 241 429 22 70 257 39 159 212 458 1.com ™ ™ www.207.059.788.406 2.759. Sanchez Oil & Gas Corp. BOE 3. Cleo Thompson & James Cleo Thompson.594 2.931.251 2.857.376 2. Davis Petroleum Corp. Manti Resources Inc.102.635 2. Faulconer Inc. White Oak Energy.129 2.196 2.394 2.276 2.543 2.130.719 2. LP Choice Exploration Inc.962 1.501.316 2.029.938. West Bay Exploration Co. Lacy Inc. Vess Oil Corp.357 3.909.666.295.610 2. Eagle Oil & Gas Co. Border To Border Exploration LLC Stephens & Johnson Operating Co.167.717 2.405.834.319 2.894.616.363 1.208 2.674.112.105 189 Largest feld Big Mineral Creek Wolfbone Reams Southeast Garcias Ridge Baxterville Newark East Cushing Sprayberry Green Canyon Block 0448 Leleux Laurel Fullerton Sprayberry Powder River Basin Coal Bed Wilmington Magnolia Springs Oklahoma City Hospital Bayou Watonga-Chickasha Trend Ford West Napoleon Converse Marceaux Island Covenant Lac Blanc Poso Creek Kurten La Sal Vieja Dist 4 Belle Isle Southwest Cottonwood North Brooklyn Carthage Lard Ranch Sprayberry Talihina Northwest Strong City District Waverly Hargill Quorum Land Management / GIS July 2013 Oil & Gas Financial Journal • www.596 2.617 2.523 2.280 2. Inc.440.645. Jr.861 2. J. Wolverine Gas and Oil Corp.628 2. CrownQuest Operating LLC Deep Gulf Energy LP Square Mile Energy Petro Harvester Oil & Gas LLC Texland Petroleum LP Parsley Energy Co.819.qbsol. Wagner Oil Co.466 2.921.145.688.567.219.299.732 3.853.651 177 2 35 429 641 233 1.219.443 1.982. Ward Petroleum Corp.OGFJ100P Rank 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 Company Jetta Operating Co.ogfj. Vernon E.

CFO. VP land. CEO Denton Copeland. CFO. For more information about IHS Herold’s Private Company Database. chair. Muncy. Michael Anderson.551. W. CEO.176 1. Bass Companies Battalion Resources Holdings LLC Berexco Inc.738 1. Castex Energy Inc.853. pres.676 1. John Stoika. prod. CFO.631 3. Murfn Drilling Co. pres.756 2.619. CEO Philip Boschetti. McCreight.672.507 2. Hughes Co. pres John Hinton. Ballard.234.616 2. VP. Kevin Kilstrom. Anne Marion. pres. Sam Fragale. McGowan Working Partners Ricochet Energy Inc. Mike Ellis. 2012 Year-to-date production – alphabetical listing Rank 33 26 55 91 28 32 12 66 59 27 68 45 29 21 82 Company Alta Mesa Holdings LP Ankor Energy LLC Antero Resources LLC Augustus Energy partners Ballard Exploration Co. CEO. co-founder. chair. sr VP. James Hagemeier.541.319 2. pres.918 5. chair. Glen Warren. CFO.885 Total wells 981 1.944 1. Steven Woodward.317. bus dev mgr.296. William Pollaru. pres. VP ops.622. Duane Zimmerman. pres. pres Kevin Ikel.026. pres.554 11.com/research. COO Adam Beren. Trevor ReesJones.706 5.547.613. founder. Hal Chappelle.554.458 1. VP prod Keith Knapstad.029.645. ops mgr Paul Rady. pres.634. Helis Oil & Gas Co. Inc. pres. BOE 4. CEO. Michael Foster.com www.OGFJ100P Rank 91 92 93 94 95 96 97 98 99 100 Company Augustus Energy partners Muskegon Development Co.598 5. COO. Black Elk Energy LLC Border To Border Exploration LLC Burnett Oil Co. VP. CEO. founder.979 5.qbsol.742. pres. CEO. COO. LLC JM Cox Resources LP Dan A. Robert Fisher. Sandra Wallace. chair Jon Martin. visit herold. pres. chair John Hoffman.196 City Houston New Orleans Denver Billings Houston Dallas Fort Worth Denver Wichita New Orleans Austin Fort Worth Houston Dallas Arlington State TX LA CO MT TX TX TX CO KS LA TX TX TX TX TX Top executive offcials Michael McCabe.504 1. Chief Oil & Gas LLC Choice Exploration Inc.com • Oil & Gas Financial Journal July 2013 . VP exp. Some agencies are delayed by as many as several months in releasing data which may impact rankings.076 1.280 3.598 1. sr VP ops.263. VP exp.695. co-founder Mitchell Roper.516. bus dev Steve Durrett.664 6. pres. BASA Resources Inc.269 1. Matthew Telfer. exp mgr.717 1. Folsom. W.729. exec VP. Rice Energy LLC Strat Land Exploration Co.734. VP. CEO. VP ops A. Logan Magruder. VP.contact_us Production totals based on latest fgures as reported to and recorded by individual state agencies and tabulated by IHS at time of publication. CFO.ogfj. owner Robert Marshall. Inc. exp mgr.herold. CFO. BOE 1. Lary Knowlton. Sam Allen. CFO John Gaines.742.323 13 328 320 105 8 817 122 946 Largest feld Vernon Antrim Amity Lipscomb Shuler Roleta Galveston Block 0350 Sprayberry Pearsall Williamson Source: IHS Herold. John Smitherman. David Brooks.102. H.256 4.664. VP ops Quorum Division of Interest 38 ™ www. owner.

land Autry Stephens.128 8.251 2. Jetta Operating Co.458 3.544. Davis Petroleum Corp. Timothy Dunn. Jeanette Clark. Jr. Dennis Grindinger.170 Fort Worth Midland Austin Addison TX TX TX TX Processing / Gathering Management July 2013 Oil & Gas Financial Journal • www.428.731 3. Bill Fairhurst. exp mgr. Helis Oil & Gas Co.834. Pat Bolin.076 2. VP. owner. pres. James Tague. DCOR LLC Deep Gulf Energy LP E&B Natural Resources Management Corp. treas. sr VP. pres.504 5. Gordon Roberts. Robert Osborne. oil gas mgr Mark Bingham.006 3. pres. Cleo Thompson & James Cleo Thompson. Samuel Jr & Associates Inc.com 39 . GeoSouthern Energy Corp. land. CEO. principal. VP Thomas Hardisty. JM Cox Resources LP Jones Energy Holdings LLC J-W Operating Co. VP land. Keith Jordan.597 1. Jeff Lang. Darrell Lohoefer. CEO. VP acq. CFO. Jim Henry.VP bus dev Ben Stickling.985 6. CEO Dan Hughes. BOE 14. CEO Jeffrey Warren. land. Dan Hughes. Rick Cornelius. COO. principal Dave Huber. planning. CFO.qbsol.295 2. CFO. Jimmy Davis.619. Jonny Jones. CEO James Thompson. David Kerstein. pres.015.674. Jess Nunnelee. James Drennen.363 2. exec VP. VP contracts. Daniel Hawk. David Crass. ops mgr. chair. exec VP. ops mgr. CEO.440 2. VP land. CFO. CEO. exec VP.983. pres. A&D. CFO George Bishop. CFO. pres.OGFJ100P Rank 11 22 49 86 88 60 99 77 38 61 78 74 8 17 39 72 75 4 97 52 3 14 25 54 Company Citation Oil & Gas Corp. Craig Ambler. VP.357 City Houston Castle Rock Kingwood Wichita Falls Oklahoma City Midland Beeville Houston Ventura Houston Bakersfeld Dallas Midland Midland Denver Fort Worth Denver The Woodlands New Orleans Midland Houston Dallas Houston Dallas State TX CO TX TX OK TX TX TX CA TX CA TX TX TX CO TX CO TX LA TX TX TX TX TX Top executive offcials Curtis Harrell. gen mgr.207. VP.971 10. Mark Merritt. owner Michael Schott.740. exec VP.481. prod mgr. chair.861 28. mgr Jeff Dillard. Endeavor Energy Resources LP Fasken Oil and Ranch Ltd. Lance Peterson. exec VP. chair. Inc. CEO. Shannon Nichols. pres 53 98 47 15 3. exec VP ops.299. CFO.com Quorum TIPS® www. pres William Temple. pres. pres. chair.785 40. managing partner Greg Bird.219. bus dev. CrownQuest Operating LLC Dan A. Lee Beckelman. pres. pres. founder. pres Lindsay Solis. VP bus dev Francesco Galesi. CEO Hal Hawthorne. Hughes Co. William Pritchard. CEO Jeffery Hildebrand. COO. Lonnie Brock. Tom Young.274. pres Warren Ayres. pres.130. partner Norbert Dickman.732 1.551.626 1. Lee Staiger. founder. VP prod Becky Bayless. Jason Rebrook. Steven Pearson. Paul Habenicht. ops mgr. COO.952 15. Greg Lalicker. Eagle Oil & Gas Co. dir. exec VP. Gary. Hunt Oil Co. pres. CFO.364. CFO Stephen Hatfeld. Michael Reddin.316 2. Dexter Harmon. John Jarrett. Mike Richardson.505. pres. VP fnance. James Crawley. VP.759. co-founder. owner. Mike McConnell. partner. Christopher Phelps. Craig Fleming. treas. VP. CFO. co-owner.ogfj. William Templeton. sr VP ops David Oberbrockling.617 10.723.605 3. sr VP bus dev. dir Clinton Koerth. pres Samuel Gary. chair. VP. VP ops.819. Stephen Layton. founder. LLC Henry Resources LLC Hilcorp Energy Co. FIML Natural Resources LLC Finley Resources Inc. CEO. exec VP.440. dev. CEO. VP Robert Floyd. Indigo Minerals LLC J. VP.295.617 1. Richard Haskin. Thomas Cwikla. CFO Steve Suellentrop.383 1. Citrus Energy Corp. pres. pres. John Cox. pres. CFO. managing member.676 3. Brent Talbot. Kenneth Nelson.148.428. mgr.894. VP exp. James Finley. VP corp dev. chair Tony Meyer. CML Exploration LLC Cobra Oil & Gas Corp.471. partner. pres.543 2. controller.112.622. Stephen Clark. VP exp dev. Crawley Petroleum Corp. Travis Armayor. VP exp.665 3. Robert Kennedy. exec VP exp.

pres. VP land. Ken Cravens. A&D Donald MacPherson. William Murfn.597 3. VP. Randy Pick. mgr. Red Willow Production Co. David Murfn. VP exp. VP prod. Steve Trujillo. Kenneth Waits. James Phyler. Stephen Goff. pres. Rice Energy LLC Ricochet Energy Inc.171 2. dir acq. founder. principal. bus dev. Sanchez Oil & Gas Corp. COO.982. pres.647.944 1. pres. VP ops.695. CEO. CEO. pres.986 1. Scott MacPherson. Randy Holt. co-founder. VP. Can. New Dominion LLC Parsley Energy Co. sr VP. owner. chair. VP. pres. COO Gas & Liquids Flow Measurement 40 Quorum PGAS® www.338 3. Tim Lindsey. Marshall Munsell. CEO.168 3. managing dir. COO.ogfj. sr VP. Joseph R. Bill McFie. chief geo. Petro Harvester Oil & Gas LLC Petro-Hunt Group Pisces Holding Co. CEO Glenn Hart. founder Monty Whetstone. prod/ops.com www. pres. William Gayden.236. founder. Murex Petroleum Corp. pres.038. Radcliffe Killam. David Doyel. pres. CFO. Chris Maier. sec. pres. Toby Rice. Jaime Casas. partner. CEO. CEO.646. David Russell.835. sec Bluford Crain. John McGowan. Stacy Schusterman.666. VP ops. Jerry Holditch. dir IR. Robert LaRocque. Scott King. Ltd. VP. David McGowan. Laredo Energy IV Le Norman Operating LLC Legend Natural Gas LP LLOG Exploration Co. VP.176 1.181 3.459. VP Linda Tucker. pres. Ben McCrackin.087. Bruce Insalaco.848 3.489 19. Bruce Hunt.313 1.628. exec VP. VP prod William Myler. Daniel Rice IV. CFO Joseph McGowan. J. treas.734. VP. pres.876 1.688.547. pres. Kevin Ryan.008 City Tulsa Laredo Houston Oklahoma City Katy Houston Santa Monica Corpus Christi Jackson Dallas Tyler Houston Houston Wichita Mount Pleasant Tulsa Midland Plano Denver Metairie Jackson Longview Ignacio Midland Cannonsburg San Antonio Dallas Tulsa Houston State OK TX TX OK TX TX CA TX MS TX TX TX TX KS MI OK TX TX CO LA MS TX CO TX PA TX TX OK TX Top executive offcials Henry Kleemeier. COO. fnance. Jack Reed. founder. Charles Rigdon. CFO. Barry Clark. VP acq. Reliance Energy Inc. CFO. VP. Bradford Williams. Rosewood Resources Inc. Rogers Crain. Lacy Inc. chair. pres.043 1.628 8. Murfn Drilling Co. Julie Edgerton.OGFJ100P Rank 20 42 41 85 56 9 37 70 95 1 6 50 48 100 92 36 65 63 16 43 34 84 23 40 93 96 89 2 90 Company Kaiser-Francis Oil Co.com • Oil & Gas Financial Journal July 2013 . CEO Jerry Hamblin. pres.669 6.069 1. VP. pres. John Newman. Paul Thompson.788. exp. Curtis Mewbourne.164 2. VP geo. exec VP. McGowan Working Partners Merit Energy Co.212 3.596 14. pres Robert Voorhees. R. Mitch Ackal. CEO David Killam. VP ops. CEO Bryan Sheffeld. Gary Conrad. Donald Kessel. pres. exec VP. pres.634.792. VP. exec VP. CFO. CEO Tony Sanchez III. VP ops. VP prod. Robert Helm. Leon Rodak. VP exp. VP exp David Adams.703 4.qbsol. Ann Crain. pres. James Winne. pres. Susan Keary. COO.674 44.259 3. CEO. chair. CEO Jean Antonides. Roe Buckley. LLC MacPherson Oil Co.885. John Barrett. Milagro Oil & Gas Inc. Randy James. co-founder. Raymond Gallaway. treas. Manti Resources Inc. treas Waldo Ackerman. James Ivey. Douglas Hunt. Gareth Roberts. sr VP. VP Robert Young. chair. William Griffn. CFO B.928. Don Millican. VP admin. chair Scott Gutterman. sr VP.690. VP.484. CFO. Killam Oil Co. CFO David Le Norman. CEO. VP fnance.269 3. owner. CFO.373. CFO Chris Douglas.664. COO. COO. Rick Calhoon. Scott Rowland. sr VP bus dev. Gary McKinney. BOE 7.394 1. bus dev int'l.504 44. managing gen partner. completion. CFO.931. Jim Flowers. controller Daniel Rice. partner. CEO Tom Nelson.804. CFO. Kevin Easley. Pruet Production Co.711. bus dev US. VP exp dev. Mewbourne Oil Co. VP drilling. COO. Michael Becci.885 1. Geoff Ice. owner Gary Mabie. VP fnance. CEO Meghan Cuddihy. CEO. George Kaiser.501. COO. pres Dennis Justus. pres.443 2. pres Bill Gray. Lee Barberito. Hilton.197. owner Mark Tantillo. Scott Stevenson. DeDominic.938. VP geo. Muskegon Development Co. principal J. CFO.276 2. Samson Investment Co.

VP. pres.405. VP ops. chair Source: IHS Herold. VP exp Donald Slawson. CEO Howard Sklar. treas Matt Assiff. pres. co-owner. CEO. owner. Michael Domanski. gen mgr.ogfj. VP.059. Dennis Johnson.106 2. CEO. pres.719 14. acq Bryan Wagner. pres. chair. acct.569.364 2..921. Walter Oil & Gas Corp. engineering Steve Manning. Chris Farrell. pres. exec VP. CEO Harry Graham. co-founder. Vess Oil Corp.466 5. co-owner. CEO. controller Gary Loveless. John Perini. VP exp.738 3. principal Frank Kyle. VP land. exec VP.959. Gregory Mendenhall. Wagner Oil Co. Russell McGhee. Vernon E.773 2. pres.576 2. exec VP. COO Jay Fenton. CFO H Sallee. VP exploitation. pres.494. Zenergy Inc.533. CEO John Yates Sr. White Oak Energy. Sidney Jansma. sec. admin. exec VP. NGLs. owner. co-owner. Mark Etheredge. pres.874 2.com/research. CEO Gary Bleeker. pres. Thomas Wofford. co-founder. Vernon Faulconer. VP ops. Jarvis Hensley. VP land. COO. CFO Matthew Johnson. Thomas Tyree. Vantage Energy LLC Venture Oil & Gas Inc. chair. eng. Some agencies are delayed by as many as several months in releasing data which may impact rankings. VP bus dev. pres. co-founder.qbsol.068 2.800. treas Scott Nonhof. David Rataj. VP. Valence Operating Co. CEO. pres.567.214 1. CFO.100. VP exp Don Foster. Square Mile Energy Stephens & Johnson Operating Co. LLC Slawson Exploration Co.635 7. LP WildHorse Resources LLC Wolverine Gas and Oil Corp. Texland Petroleum LP Tidelands Oil Production Co. pres. bus dev Richard Mills. CFO. controller. pres. Anthony Bahr. exec VP. VP ops Tom Markel. mgr. bus dev. Jim Bass. CEO.326 2. visit herold. owner.376 20.contact_us Production totals based on latest fgures as reported to and recorded by individual state agencies and tabulated by IHS at time of publication. chair.302.591.208 2. sr VP.519 2. pres. Carl Comstock. David Barlow. Cory Ezelle. pres WR Stephens.440.com 41 July 2013 Oil & Gas Financial Journal • www.928. exec VP ops. pres Barry Hill. Crude Oil www. Ronnie Nutt. CFO.962 11. J. pres. Thomas Fago. Jerry Namy. CEO Richard Tozzi. Faulconer Inc. Bryan Lee.257. CEO. William Ward. CFO. Inc. VP fnance. CEO Roger Biemans.616. CFO.446 2.153 4.herold. For more information about IHS Herold’s Private Company Database. CEO.219. chair. CEO Fred Stephens. chair. James Wilkes. Mike Kennedy.674. exec VP. VP. Strat Land Exploration Co. LLC Sklar Exploration Co. Gilbert Tompson. William Lesikar.. owner. VP land. John Yates Jr.756 1. COO. COO Robert Zinke. fnance. Wiliam Crawford.167. CFO.698. ops. VP fnance.998 3.112. Robert Tucker. Yates Petroleum Corp. VP exp Kevin Talley. HE Patterson.406 7. Stephens Production Co. pres. Jean Crawley.695 2. sr VP Joseph Walter. Brian Gaudreau. pres Jay Graham. emeritus. VP.OGFJ100P Rank 35 7 83 13 62 69 30 94 51 46 57 19 64 67 24 58 44 71 79 80 10 87 73 81 18 76 5 31 Company Sanguine Gas Exploration LLC Sheridan Production Co.610 4. Lew Ward. chair. pres. Thomas Isler. David Enright. Mike Rayburn. Summit Petroleum LLC Tana Exploration Co.909. West Bay Exploration Co. CFO.672. Michael Vess.com .425 City Tulsa Houston Shreveport Wichita Houston Wichita Falls Fort Smith Tulsa Midland The Woodlands Ridgeland Houston Fort Worth Long Beach Kingwood Englewood Laurel Tyler Wichita Fort Worth Houston Enid Traverse City Houston Houston Grand Rapids Artesia Tulsa State OK TX LA KS TX TX AR OK TX TX MS TX TX CA TX CO MS TX KS TX TX OK MI TX TX MI NM OK Top executive offcials Randolph Nelson. COO. pres.086. Ward Petroleum Corp.145. Quorum Marketing Gas. BOE 4. CFO. Walter Scherr. Kathy Atkins. pres. Tellus Operating Group LLC Texas Petroleum Investment Co. Mark Kapelke.450.523 2. CEO Larry Darden. Douglas Scherr. pres.535. Lisa Stewart.594 3. CFO. VP land. chair.129 2.857. CEO. pres.007 17. Thomas Fuller. James Brown.

and the deal is viewed favorably as it lowers debt and shows the “hidden value within Whiting’s portfolio of assets.S.000/flowing boe and $15. The transaction has a total value of approximately $1. with total commitments of $7. Marathon International Oil Angola Block 31 Limited. Sonangol P&P holds 20%.5 billion to $3 billion of divestitures over the period of 2011 through 2013. Closing is anticipated in the fourth quarter of 2013. These asset sales have also removed approximately $10 million of budgeted CAPEX commitments for Abraxas. San Antonio. With its balance sheet in check.33%. The operator is BP Exploration Angola with a 26. The company paid $116. Abraxas has divested approximately 502 boepd for gross proceeds of $47.5B Marathon Oil Corp.9 billion in divestitures since 2011.” they noted. As for Breitburn. subsidiary. SSI Thirty-One Limited currently holds a 5% working interest in the block. at the upper end of its targeted $1.3 billion in 19 companies. Fund V will make investments in energy and power business around the world..67% working interest.1 million in additional capital expenditures associated with these new wells in 2013. and associated control systems.2 billion. along with associated midstream assets. nologies’ scope of supply includes subsea trees and wellheads. look for the company to increase its push into the Niobrara. driving additional production from existing wells.. Marathon Oil to sell Angolan assets for $1. NY-based energy investment firm Riverstone Holdings LLC closed its latest conventional energy private equity fund. for subsea equipment for the Egina field. risk and opportunity await.5 billion to roughly $650 million. being CO2 EOR wells.7 billion. Riverstone Global Energy and Power Fund V LP (Fund V).” Net proceeds from the sale are expected to reduce the company’s outstanding balance on its $2 billion credit facility from $1. 42 FMC Technologies wins $1. Angola’s state-owned oil company. Production from the PSVM development on Block 31 commenced in the fourth quarter of 2012. “These assets are integral in allowing BBEP to rebuild the distribution coverage cushion that has been eroded by expiring natural gas hedges and continue its steady distribution growth. for approximately $35. The concessionaire of Block 31 is Sonangol. said Global Hunter Securities analysts. FMC Tech- www. The Egina field is located in Block OML 130 offshore Nigeria. agreed to sell its 10% working interest in the Production Sharing Contract and Joint Operating Agreement in Block 31 offshore Angola to SSI Thirty-One Limited (Sonangol Sinopec International). E-Spectrum Advisors LLC acted as divestiture agent for Abraxas on the sale. With this transaction. including eight repeat management teams. has received an order from Total Upstream Nigeria Ltd. Risk and opportunity exist in the acquired assets.5 billion.000/flowing boe ( $19.46/ bbl of proved reserves) versus a historical average of $98. The award has an estimated value of $1.7B energy and power fund New York.com • Oil & Gas Financial Journal July 2013 . putting it at a strong debt-to-capitalization ratio of just over 20%. Whiting had been looking to monetize the mature Oklahoma Panhandle assets “for some time. NRP anticipates funding $8. The acquisition consists of approximately 13. a portion of which will be paid at closing. and SSI Thirty-One Limited currently holds 5%.500 net acres that are held by production with an estimated average working interest of 11% in the Bakken/Three Forks play. from Whiting Oil and Gas Corp. By selling the majority of its non-operated Bakken Shale properties. manifolds. Natural Resource Partners enters Bakken as Abraxas shifts focus with sale Natural Resource Partners LP has entered the Bakken Shale/Three Forks play with an agreement to purchase non-operated working interests in producing oil and gas properties in the Williston Basin of North Dakota and Montana from Abraxas Petroleum Corp. Statoil Angola A. The equipment is scheduled for delivery commencing in 2015. The acquisition includes approximately 120 producing wells in addition to interests in 22 wells that are in various stages of development. To date. While there will be a learning curve.50/bbl of reserves. for approximately $860 million. holds 13. installation tooling. The fund’s original target was $6 billion. the analysts noted.” noted Wunderlich Securities analysts. Whiting sells OK assets to Breitburn for $860M BreitBurn Energy Partners LP (BBEP) has agreed to purchase interests in the Postle and North East Hardesty oil fields. best practices can hopefully be applied to other BBEP properties. Inclusive of the non-operated Bakken sale.3 million in cash. TXbased Abraxas Petroleum is shifting its focus to a core operated portfolio. the company said June 25. Scotia Waterous served as Marathon Oil’s financial advisor on the transaction.Industry Briefs Riverstone Holdings closes $7.ogfj. NRP expects the acquisition to close in the third quarter of 2013 and to be immediately accretive to NRP’s unitholders. a whollyowned subsidiary of Whiting Petroleum Corp. Sonangol EP holds 25%.3 million since the beginning of 2013. Fund V has invested $2.2B subsea equipment order from Total FMC Technologies Inc. noted Wunderlich Securities. flowline connection systems. the company has agreed upon or closed on nearly $2.

with subsidiaries in UK.” BBEP is acquiring additional interests in certain of the acquired assets from other sellers for an additional $30. historical transactions. Financing for the transaction was provided by THL Credit.. Statoil amend agreement in Southern Georgina Basin PetroFrontier Corp. a petroleum geochemistry and fluid analysis company based in Calgary. to build a fleet of fast moving land-based oil and gas programmable AC drilling rigs. arranged a $60 million senior secured credit facility for Independence Contract Drilling (ICD). Deutsche Bank has now will not actively engage in the mining arranged US$1. but highlighted the “liquids-rich nature of the transaction (98%) vs. India and Kenya. The lessees of the properties will manage any commodity price risk associated with the operations. who also led the 2011 financjoined KMP as president of Kinder ings. Throughout 2012 and the first half of 2013. the former CEO of Cairn India Ltd. has assisted oil and gas companies with all aspects of acquiring. Delek Drilling. Isramco is the largreserves within its Terminals business est local partner in the Project and segment to pursue non-operating owns a 28. Warburg Pincus affiliate invests up to $600M in new African E&P Delonex Energy Ltd. KMP institutions. CIT lead arranger in $60M financing for Independence Contract Drilling CIT Group Inc. Isramco gets US$500M financing for Tamar field Milbank. Dhir was also recently an executive-in-residence at Warburg Pincus. Holland. has received an investment of up to $600 million from an affiliate of private equity firm Warburg Pincus. Gushor specializes in the integration of geology. but will lease properties it acquires to various operators in exchange for royalty payments. a vertically integrated premium land drilling services provider.com PetroFrontier. financing for Isramco’s share of the development of the Tamar offshore gas field since 2011. a senior and Gas and Alon Gas Exploration. The other investors are Noble reserve properties and infrastrucEnergy. the field which became operational leasing and acquiring natural resource in March 2013. executive with more than 35 years of Financing was arranged by Deutsche experience in the coal industry. PetroFrontier and Statoil jointly spent approximately US$30 million on 43 . has Bank.5% stake in the Tamar gas investments in coal and other mineral field. fluid properties. where he worked in close collaboration with the firm over the past several months to formulate Delonex’s business plan. a global private equity firm. Schlumberger acquires Alberta-based Gushor Schlumberger has acquired Gushor Inc. has invested in Holland Services. Richard M. and Natixis and was successMorgan Resources LLC. Avner Oil ture. the Central African Rift System. selling and developing land and mineral rights since 1985.25 billion in debt July 2013 Oil & Gas Financial Journal • www.. The loan proceeds partially refinance the US$750 milKinder Morgan initiates lion bridge and term loans extended new business to Isramco in 2011 and also support Kinder Morgan Energy Partners LP is future development and expansion of initiating a new business of owning.2 million. a large land services provider serving multi-national and domestic energy firms. has agreed to amend the existing farmin agreement with Statoil Australia Oil & Gas AS whereby Statoil has committed to spend the next US$50 million throughout the remainder of 2013 and 2014 to fully fund up to a 385 km 2D seismic program and the drilling and stimulation of four to six vertical test wells. A University of Calgary spin-off formed in 2006. Whiting. that provides exploration and production (E&P) solutions in the heavy oil and oil sand industry. Delonex Energy’s strategic areas include the East African Continental Rift System. Hadley & McCloy LLP has advised the lenders and hedge counterparties on a further US$500 million term loan financing for Isramco Negev 2 LP (Isramco) in support of its share of the development of the Tamargas field located of the coast of Israel. Tweed. Holland Services gets investment from HIG Capital An affiliate of HIG Capital LLC. not KMP. the US commercial bank subsidiary of CIT.Industry Briefs respectively. which will fully syndicated to a large number own mineral reserve properties and of onshore and offshore financial other assets in North America. Canada. noted the analysts. petroleum geochemistry and reservoir engineering information.ogfj. CIT Corporate Finance served as Sole Lead Arranger and Sole Lead Administrative Agent in the transaction. Delonex Energy is headquartered in London. and the coastal margins of East Africa. of coal or other natural resources. Delonex Energy plans on accessing opportunities in these areas through farm-in and direct awards from host governments. Delonex Energy is led by CEO Rahul Dhir. The investment in Holland is the second time THL and HIG have partnered to invest in the oilfield services sector. Terms of the transaction were not disclosed. Alberta. Financing was provided by CIT Bank. a new exploration and production company (E&P) focused on Central and East Africa.

000 net acres in the Unit. for the exploration and development of 7. a provider of non-seismic geophysical imaging services. an investment vehicle managed by 4D Global Energy Advisors. The Spyglass Hill Unit comprises approximately 113. Dean Witte. including those depths and formations below the CBM Mesa Verde coal formation. approximately $57 million was used to repay outstanding borrowings under the company’s credit agreement and $5 million was held in reserve to pay transaction related costs and expenses. Statoil could spend a total of up to US$175 million by the end of 2016 before PetroFrontier will be required to contribute further.6 million total barrels for the project. Founding Partner of 4D Global Energy Advisors Jérôme Halbout has joined the ARKeX board as a non-executive director alongside the existing investors Energy Ventures. a provider of analytic interpretation and modeling. has raised US$15 million in new equity from 4D Global Energy Investments. Warren is not updating its full-year gas production guidance at this time. GeoMet Inc. a provider of SaaSbased decision-support technology for the upstream oil and gas industry.Industry Briefs exploration in the Southern Georgina Basin. Austin. Northern Territory. Warren holds approximately 88. the Company and the other working interest owners are required to drill 25 CBM wells each year. The additional wells are expected to be placed into sales in the latter part of 2013. Simultaneously with the close of the property sale.300 acres of oil leases in the Mississippian field of southern Kansas.com • Oil & Gas Financial Journal July 2013 . Under the Amended Farmin Agreement. 2013. Transform’s president and co-founder. is increasing its 2013 capital expenditure budget by $15 million to $73 million. which is a sub-basin of the Greater Green River Basin. ARKeX raises $15M in new investment ARKeX. has acquired Denver-based Transform Software & Services Inc. Ferd. Kabe’s five year operational plan is expected to bring 24 new oil wells into production. has been named senior vice president of research for Drillinginfo and CEO of the Transform division.. DrillingInfo acquires Transform Drillinginfo Inc. Dejour names auditor At its Annual and Special Meeting of Shareholders held June 14 in Vancouver. Australia. The new investment will enable ARKeX to expand its full tensor gravity gradiometry (FTG) multi-client data library and proprietary services. Murray Roth. up to the next US$160 million of exploration costs will be fully funded by Statoil over three phases to the end of 2016. in return for 80% of PetroFrontier’s working interest in EP 103/EP 104 (100% WI). Details of the transaction were not disclosed. therefore. or a potential 9. Statoil will also become the operator effective September 1. of all of its coal bed methane properties located in the state of Alabama. Dejour Energy Inc.2 million to account for net cash flows from the effective date to the closing date. In connection with this repayment the nonconforming “Tranche B” portion of total outstanding borrowings. has entered into a letter of intent to form a joint venture partnership with Canadian oil and gas holding company International Equity Partners Oil & Gas Inc. closed the previously announced sale 44 www. including the liquidation of certain natural gas hedge positions. an industry veteran and geophysicist. a Paris-based growth capital investor that specialises in the energy sector. Under the terms of the Amended Farmin Agreement. GeoMet closes Alabama producing properties sale On June 14. has been eliminated and the company no longer has a borrowing base deficiency under the credit agreement. a Houston based divestiture firm. borrowings outstanding under the credit agreement totaled $77 million and such amount has been established as the new borrowing base. Transform’s CEO and co-founder. PhD.000 gross acres and holds all of the leases within the Unit to all depths. Vaquero Capital served as the mergers and acquisitions advisor to Drillinginfo on the transaction. and SEP. 2013. EP 127/EP 128 (75% WI) and EPA 213/EPA 252 (100% WI) in the Southern Georgina Basin. Lantana Oil & Gas Partners. Each well in the area is estimated to yield 400. is now vice president of worldwide consulting for Drillinginfo and president of the Transform division. In order to maintain and perpetuate the Unit. The increase in planned capital expenditures is due to a decision to drill 25 new coalbed methane (CBM) wells in the Spyglass Hill Unit in the Washakie Basin.ogfj. appointed BDO Canada LLP as the company’s auditors for the ensuing year. After this repayment. International Equity Partners Oil & Gas will contribute capital and expertise toward developing the assets for production.000 barrels of oil. Kabe to form exploration JV with Canadian firm Kabe Exploration Inc. represented GeoMet in this transaction. Warren Resources increases 2013 Capex Warren Resources Inc.. Wyoming. which has existed since August 2012. The sale resulted in net proceeds of approximately $62 million after normal and customary purchase price adjustments of $1. TX-based Drillinginfo will retain Transform’s Denver-based office and all of its employees.

Tillman to the board of directors and to succeed Cazalot as president and CEO effective Aug. new leadership is in the best interests of the company and its shareholders at this time. Marathon Oil Corp. and president of Texaco’s worldwide production operations. He became chairman oil Marathon Oil Corp. Woitas. McCullough has worked in the information technology field. Doug Suttles has 30 years of oil and gas leadership experience. 2013 to transition his responsibilities. have elected to retire from the company. the company has appointed Eddie LeBlanc to the role of 45 Luquette to retire after 35-year career at Chevron Chevron Corp. where he most recently served as director.ogfj. Cazalot. Ward.Energy Players Marathon execs plan retirement Two Marathon Oil Corp. a private equity fund focused on the oil and gas industry. Additionally. Tillman most recently served as vice president of Engineering for ExxonMobil Development Company where he was responsible for all global engineering staff engaged in major project concept selection.. executives with decades of company service between them. Clayton Woitas. president Cazalot and CEO of Marathon Oil Corp. Clarence P. 1. BP Exploration & Production. Luquette opened new frontiers by advancing Chevron’s presence in the Deepwater Gulf of Mexico and acquiring significant shale gas positions in Pennsylvania and Canada. has named Jeff Shellebarger president of Chevron North America Exploration and Production Company. 2013 following more than 32 years of service. Reilley.” James Bennett. News of Cazalot’s retirement comes one week after Thomas K. the Oklahoma City-based oil and natural gas company is transitioning its leadership team. effective August 1. Prior to joining SandRidge. had. United Kingdom and Indonesia. Randall D. chairman. Alberta Energy Co. 2013. 31. 31. currently Marathon Oil lead director. Sneed will serve as vice president of IT Services until Sept. 2013. He holds a Bachelor of Science degree in chemical engineering with honors from Texas A&M University and a PhD in chemical engineering from Auburn University. Bennett was managing director for White Deer Energy. Lead independent director Jeffrey Serota will serve as interim non-executive chairman. Shellebarger is currently managing July 2013 Oil & Gas Financial Journal • www. The Marathon Oil board of directors has elected Lee M. will retain his title as president and will replace Ward as CEO of the company. who remains as a director of the company. founder and now-former CEO Tom Ward. SandRidge continues leadership transition After nearly a year of scrutiny focused on SandRidge Energy Inc. primarily in the oil and gas sector. served as chairman and CEO. Ltd. Since joining Chevron in 1980. The board of directors intends to nominate Dennis H. Eresman. Shellebarger has held a variety of upstream positions in the US. McCullough will succeed Sneed as vice president and CIO. Cazalot will continue as executive chairman through Dec. is the designated future chairman of the board. 2013. 2013. As the head of the company’s North America upstream business. Encana names Suttles as president. He previously held key exploration and production positions in Louisiana.com . Cazalot served as vice president of Texaco Inc. California. (NYSE: MPC) in mid-2011. who founded the company in 2006. Suttles has served as COO. the company’s previous president and CEO. Shellebarger succeeds Gary Luquette. retired from the company in January after nearly 35 years with the company and its predecessor. 1. director of Chevron’s IndoAsia Business Unit. CEO Encana has appointed Doug Suttles as its president and CEO and a director of the Calgary-based company. who will retire from Chevron after 35 years of service. has departed the company based on the Board of Directors’ decision that “despite Ward’s many contributions to SandRidge. Cazalot  joined Marathon in March 2000. after almost 14 years leading Marathon Oil and 41 years in the oil and gas industry. (NYSE: MRO) following the spin-off of Marathon Petroleum Corp. Sneed.’s vice president and chief information officer announced his retirement plan set for Sept. Suttles Most recently. 1 to facilitate an orderly transition. Luquette will stay with the company until September 1. has elected to retire on Dec. Angola and Indonesia. He is a mechanical engineer and a 2008 recipient of the University of Texas Mechanical Engineering Distinguished Alumni Award. as non-executive chairman upon Cazalot’s retirement. Luquette has led Chevron’s North America Upstream business since 2006. Bennett graduated with a bachelor’s degree from Texas Tech University. took over as interim president and CEO while the company conducted its search for Eresman’s successor. since graduating from Baylor University with a bachelor’s degree in computer science. an Encana director. McCullough joins Marathon Oil from Anadarko Petroleum Corp. front end design and engineering. Prior to Marathon. who has served as CFO of SandRidge Energy since January 2011 and was promoted to president in March 2013. Jr. Global Business Systems. until June 19. Bruce A.

He received a master’s degree and graduated as a registered accountant from Nyenrode Business University in The Netherlands.. Craine was a partner in the University of Houston. ofDevon Energy Corp. president and COO of Devon names Craine as CCO technologies that are used in the oil Energy. Ian Williamson and Dave Reed have been named to the respective VP roles in Contracts & CommerReed cial. Brunand CEO of Ocean Energy and. In paratrooper and combat engineer. and a Juris Doctor from Southern Methodist University’s Dedman School of Law. 2013. Craine. Subsea service firm this capacity. compliance matters. Hager to the position of 46 www.) to become Senergy. At Bracewell ter of Mechanical Engineering from on August 1. His background also from the University of Illinois and an law firm Bracewell & Giuliani LLP. through 2013. and Business Efficiency. Express Energy Services names Brunnert COO Former Anadarko CEO joins Riverstone Holdings Express Energy Services has named David BrunEnergy and powernert as executive vice focused private investpresident and COO. global business unit Anadarko on June 4.. From 2003 to 2012. Hackett erford International from 1997 was CEO of Anadarko Petroleum. and other engineering management Earlier in his career. Hackett to the nert. He holds a bachelor’s degree from the University of Louisiana at Lafayette (formerly the University of Southwestern Louisiana) and is a certified public accountant and a chartered financial analyst. Ascent Energy Co. Craine has also led numerous independent investigations for publicly traded companies. served in various operational co-head of the Houston management positions with Weathoffice. 2013. Craine was also actively involved in the SEC’s and FINRA’s oil and gas task forces.com • Oil & Gas Financial Journal July 2013 . PostRock Energy Corp. and Coho Energy Inc. He holds a bachelor’s degree Patrick K. 2013 as part of manager of performance drilling tools a long-planned succession process. including having served as CFO at East Resources Inc. director. Frank Eggink who will left firm on the firm’s White Collar Defense. He is an alumnus of Harvard Business School after completing several Executive Education programs. Previously de Vreede was at Redevco. European finance ficers. boards. and counseled agement appointments Prologis where he served as senior companies.. global general manager of 2013. He will succeed & Giuliani. joining Chesapeake Energy Corp. as Corps of Engineers where he was a chief compliance officer (CCO). Range Resources Corp. Williamson will be based in the company’s Queen’s Terrace office in Aberdeen and Reed will operate from Kuala Lumpur.Brunnert received his bachelor’s deDeepOcean hires new CFO peake General Counsel Jim Webb and gree from the United States Military Dennis de Vreede will join Deepthe Audit Committee of the compaAcademy at West Point and his MasOcean Group Holding BV as its CFO ny’s board of directors. he served as an enforcement attorney with the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). he was chairman roles.ogfj. ment firm Riverstone He will be based in Holdings LLC has Express’ headquarters added former Anadarko in Houston. where he held the position of CFO. after Chesapeake Energy nert created more than 25 patented that.. he will report to Chesa. Senergy appoints new VPs Senergy has appointed two new vice presidents. InJune 30.Energy Players executive vice president and CFO. at both private and publicly held companies. He fills the role of CFO vacated when Bennett was named CEO and president. BrunJames T. a 20-year industry Hackett firm as a partner and veteran. Hackett stepped down from drilling tools. is includes four years with the US Army MBA from Harvard University. Prior to Brunnert Petroleum executive joining Express. Both were employees of Xcavo – a well engineering and performance management company – which merged with subsurface consultancy RML (Reservoir Management Ltd. Dennis de Vreede ternal Investigations and Regulatory Devon makes senior manjoins from industrial real estate firm Enforcement practice. Before entering private practice. and directors in regulatory and David A. a partner with the and gas industry. de Vreede earned a bachelor’s degree from The Hague University of Applied Sciences. Craine holds a bachelor’s degree from Wabash College. including vice presiwhere he served as chairman of the dent of drilling tools and intervention board of directors from 2006 to services. Williamson and Reed have Williamson been part of Senergy since the company’s inception in 2005. LeBlanc brings to SandRidge broad financial experience in the exploration and production industry. has appointed vice president. While at Weatherford. committees.

Roger Giovanetto and Peter Carpenter. Armstrong joined BP in 1983. Buckeye Partners makes organizational changes Buckeye Partners LP has appointed Khalid A. Before joining BG Group. Archer joins TPH specializing in midstream Tudor. Pine joined Buckeye in 2009 and has served in various Greene’s Energy Group names Yuille CFO of Testing and Services Greene’s Energy Group (GEG). Archer as managing director in investment banking. corporate development and strategic planning. served in various roles with GE. has promoted Mark Yuille to CFO of the Testing and Services business unit Yuille based in Houston. He will be based in Houston. rentals and specialty services. also did not stand for re-election. Hager has over 30 years of oil and gas exploration and production experience. serving in Russia. In addition. Lloyd’s Register board appointments support energy business Lloyd’s Register has appointed Chris Finlayson. and has had an extensive career in offshore operational roles. Englot. has appointed Michael Doyle as chairman. Two other directors. Brunei and the North Sea. DaSilva joins with nearly 12 years of banking experience. (TPH) has hired Scott W. Tony Vaughn has been promoted to the position of executive vice president. ending his career with BP as CFO of exploration and production. and Dennis DaSilva have been added to the Calgary-based Energy practice in Wells Fargo’s Corporate Bank- July 2013 Oil & Gas Financial Journal • www. He holds a bachelor’s degree from Purdue University and an MBA from Southern Methodist University. Archer will specialize in midstream and MLPs at Archer the energy investment banking firm. exploration and strategic services. having served most recently as Buckeye’s senior vice president. Peter Borsos. He holds a BSc and PhD from Imperial College. as well as support the company’s growth strategy in Canada. Vaughn previously served as Devon’s senior vice president. he led a commercial banking team. who retired from Buckeye at the end of June. They have joined to lead the expansion of the bank’s lending capabilities to the energy services and equipment sector. Prior to his new role.com . Chris S. exploration and production. a provider of integrated testing. Englot has nearly 30 years of Canadian banking experience in the energy industry. and an MBA from Stanford Business School. eight of which has been devoted to the energy services sector in Canada. Morgan. Yuille was CFO for GEG and earlier. Finlayson gained over 33 years’ technical and commercial experience in the oil and gas indusArmstrong try with Royal Dutch Shell plc where he was a member of the exploration and production leadership team. Doyle also serves on the company’s Compensation Committee and is chair of the Governance and Nominating Committee. and leadership functions. he served as COO of Kerr-McGee prior to its 2006 merger with Anadarko Petroleum Corp. Archer joins TPH after 13 years with Bank of America Merrill Lynch’s Global Energy & Power Group. Yuille has a Bachelor of Science in Business Administration with a specialization in Finance and Economics. Muslih succeeds Mary F. Archer received an MBA with honors from The University of Texas and received a BBA degree with dual majors in Honors Business and Finance also from The University of Texas. Borsos and DaSilva are reporting to Bret West.ogfj. corporate development and business analysis functions during his tenure. chief executive of BG Group plc. and Ellis Armstrong. where he focused primarily on Midstream and MLP energy companies. focused on oilfield services. head of Energy Services and Equipment. Holt & Co. Doyle appointed chairman at Equal Energy Equal Energy Ltd. Vaughn spent 12 years with Kerr-McGee. Muslih has been an integral member of the Buckeye executive team since 2007. Borsos joins with nearly 16 years of banking experience. Prior to joining Devon in 1999. commercial and planning roles. He holds a bachelor’s degree from the University of Tulsa and a bachelor’s degree from Oral Roberts University. ing Group. the company’s previous chairman did not stand for re-election. Hager has served as executive vice president. Pine has been promoted to vice president. exploration and production since 2009 after serving on Devon’s board of directors beginning in 2007. corporate development and strategic planning. Dan Botterill.Energy Players COO. ex-CFO of E&P at BP plc. In addition. Muslih as president of Buckeye’s International Pipelines and Terminals business unit. as non-executive directors on the board Finlayson of Lloyd’s Register Group Ltd. Prior to joining Wells Fargo. having recently managed a commercial banking group focused on middle market energy customers. Nigeria. 47 Wells Fargo adds to Calgary energy practice Perry Englot. Pickering.

For further information. thus strengthening our regional position. distributing and trading in energy and related products in Northern Europe. DONG Energy is one of the leading energy groups in Northern Europe. DONG Energy has more than 30 years of experience in exploration and production of oil and natural gas in the North Sea. mobile phones. producing. DONG Energy has nearly 7. Clothes. We have a fast growing E&P business. we use in everyday life.com MOVING ENERGY FORWARD www. PCs.OIL AND NATURAL GAS IN EVERYDAY LIFE In addition to being essential for transportation and heating. The Group generated DKK 67 billion (EUR 9. We are experts in terms of getting the most out of our oil and natural gas felds in a safe and environmentally responsible way. oil and natural gas are important ingredients in many of the products. see www.dongenergy. glasses and bottles are no exceptions. Our business is based on procuring.000 employees and is headquartered in Denmark.dongenergy. and we plan to double our production by 2020.0 billion) in revenue in 2012.com .

advertisement " T hose who lead a quiet life.ogfj. and you should never ever assume you are better than the next person. Publisher: Ines Nandin.” That has been the historically resounding proverb for the Danes when it comes to business – and its oil and gas industry is no exception. Editorial Coordinator: Herbert Mosmuller. Project Coordinator: Kirsty Avril Jane Walker.focusreports.focusreports.net The www. For exclusive interviews and more info. Even commuting to work is a humble affair: from politicians to CEOs to delivery boys. plus log onto energy. one senses that everyone abides by the same rules: you do not shout about what you do. each one hidden amongst the rush of other cyclists on the town’s busy streets. lead a good life. 50% of Copenhageners commute by bicycle.net or write to contact@focusreports. Danish Twist This sponsored supplement was produced by Focus Reports. you do not boast to your neighbors.net 49 .com • Oil & Gas Financial Journal July 2013 energy. Upon arriving in Copenhagen.

too.This modest approach could also be used to describe the country’s attitude towards its energy industry. Denmark’s Minster of Finance. That’s good news for government. Martin Næsby. While Denmark’s reserves may not be the largest. Minister of Finance gen is now a candidate to host the next World Petroleum Congress.7% -3. Innovation requires talent and investment.8% -3.ogfj. For the last few years.0% 20.7% Gas Coal Renewables 10.9% 14.2022 hand-in-hand. Each percentage increase in the extraction rate means more than $8 billion gross value at today’s rates. Energy and Building Bjarne Corydon. Denmark has made some substantial technological contributions to the global oil and gas industry. opened its doors to make the country more visible on the world energy map. the country nonetheless is producing 0.com . which would bring the country an extra boost and more recognition. On May 1.2010 % Change 2010 . The challenge lies now in that even more innovation will be needed to increase extraction rates from the country’s mature chalk felds.7% 40.8% 22. CopenhaMartin Næsby. with black in the supporting role.6% 1. This means a supply of black energy for roughly the next 10 years at current rates of consumption. many companies that have contributed to Denmark’s status on the international scene learned from the highly challenging conditions in the Danish North Sea and took that expertise abroad. Despite this assurance. Oil Gas Denmark Martin Lidegaard.” Indeed. Internationalization is also part of this: Danish service companies that have matured in the Danish sector of the North Sea are now applying for projects in Brazil or Norway.5% remains. Denmark’s energy production has been about 20% higher than its energy consumption.6% -21.3% of the world’s oil. Few people know that Denmark is the only country in the European Union that supplies all of its own energy. attracting more attention and brining more investment to the Danish North Sea stronghold.” said Bjarne Corydon. So a change in the traditionally reserved attitude appears to be creeping in: it seems both the public and the private sector are taking notice of their neighbors’ backyards and wondering just what lies in their own. 2012 the industry’s new voice. the Minister of Climate.4% Oil -4. Managing Director.” said Lidegaard. Figures from 2012 show that a proven 870 million barrels of oil equivalent (BOE) lurk under the extremely tight chalk of the Danish Continental Shelf (DCS). “A key focus of the association is on the continued development of the service companies that supply the oil industry. The Danish Energy Agency (DEA) forecasts that oil production will drop 30% by 2014.0% ’90 ’92 ’94 ’96 ’98 ’0 ’2 ’4 ’6 ’8 ’10 ’12 ’14 ’16 ’18 ’20 ’22 Source: The Danish Energy Agency: “Danmarks olie-og gasproducktion 2010” 50 energy. managing director for OGD. 1: Energy consumption in Denmark (1990-2022) Share of total energy consumption in Denmark (%) 100 90 80 70 60 50 40 30 20 10 0 % Change 1990 .2 billion in tax revenues.net July 2013 Oil & Gas Financial Journal • www. there is a twist in the country’s energy focus. As such.focusreports. The ambition is to organize the round before the end of 2013. “We want to be self-suffcient and prove that it is possible for a modern welfare state to become independent of fossil fuels in 30-40 years’ time.1% 6.5% 28. rather they go Fig.” This growing political focus on renewable energy prioritizes offshore wind and that is drawing resources and top talent away from the oil and gas industry.6% 16. Yet despite these advancements in the oil and gas sector.7% Percent 10. Over the frst months of 2013. Denmark is still one of Europe’s biggest oil and gas producers. Denmark has set perhaps the most ambitious targets for green energy the world has seen so far. but this has not overshadowed the country’s remaining potential. proposing “a level playing feld” for them.4% 5. such as the horizontal drilling techniques developed by the Danish Underground Consortium (DUC). the DEA – together with Martin Lidegaard. Energy and Building – will organize the 7th licensing round for felds in the DCS. That raises questions: Is the oil and gas industry merely an instrument to pay for Denmark’s ‘green transition’? Or can the two offshore industries work together to create the right energy mix for Denmark? 39.3% 38. the government announced a change in tax regime on oil and gas revenues for companies producing in the Danish North Sea. In addition to its expertise in black energy. as just last year the industry generated $5. Oil Gas Denmark (OGD). “The Danish parliament is completely green when it comes to the Danish demand. as long as international demand 43. Minister of Climate.8% 15. But investment requires Denmark to communicate its stability and potential more forcefully. the spotlight is certainly cast on green. Lidegaard reiterates.9% 18. Lidegaard offers assurances that this way of dealing with Denmark’s energy future is not intended as an aggressive opposition to the oil industry. but we are also in complete agreement that we should be a part of the fossil fuel supply system. said. The government has established the goal of being 100% powered by renewable energy as of 2050. “We believe it will provide us with a more modern and neutral tax system in the North Sea than we have right now.

Sources: Norwegian Petroleum Safety Authority: Statoil. leading to tangible results such as increased production and inherently safer interventions.DO MORE WITH LESS PROVIDES TANGIBLE RESULTS Welltec® enables operators to perform heavy duty well interventions with much less equipment and manpower.WELLTEC. Norwegian Ministry of Petroleum and Energy WWW.COM EL . Number of interventions (bars) 200 Personal injury rate – Drilling and Workover Recovery rate % for large fields (>50 mil Scm oil) RLWI (Subsea) Tractor (E-line) Coil Snubbing Injury frequency* (dark line) Recovery rate % (green line) 55 55 50 45 150 40 35 30 100 25 20 50 15 10 5 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 0 0 *Injury frequency is calculated as number of injuries per 1000000 work hours.

“Welltec has looked at great new ways to decrease the costs of wells. Denmark’s current oil and gas production comes exclusively from mature chalk felds. Chevron.” said Steen. “We decided from day one to be an international company. “The techniques used globally in the production from tight reservoirs have for an important part been developed in Denmark.focusreports. DUC is comprised of Maersk Oil (operator) along with current percentage. as Næsby states. many of the techniques Steen refers to have been developed or improved by the DUC. “If we wish to produce more than the E&P on the DCS: a never-ending story? Never before has the Danish oil and gas industry seen its three operators so active at the same time: with Maersk Oil and its partners Shell and Chevron responsible for 85% of production.” Interestingly. which traditionally has dominated exploration and production on the Danish continental shelf. that the Danish oil and gas industry “represents 15. which has developed from a start-up to generating $300 million annual revenue in under 20 years. 2: Majority of the Danish oil and gas reserves have been produced – increasing recovery requires substantial technological leap Oil reserves in 2011 MMboe (percent of total) 899 (21%) 2. reserves resources resources Production value of the remaining proved oil resources and possible oil resources are estimated to be worth DKK 700B = USD123B and DKK 550B = 97B respectively* Reserves as per 1. the rest of the world should look up and take notice of what is happening in Norway when it comes to enhanced oil recovery. ageing of the installations and technical development. 9% of Danish exports. as well as extensive modifcations of existing installations due to changing environmental and reservoir conditions. and since July 2012.net July 2013 Oil & Gas Financial Journal • www. All three have new building projects going on. an area the country has developed great expertise in. “Even on our website. why consider to be tied to one market when you have the entire world to play with?” Today. did not develop from a focus on Denmark. “The rest of Peter Helmer Steen.808 (100%) ~9 years remaining reserves with 2011 production level Exploration resources Total Produced Commercial Contingent Techn. NSF. North Sea Fund Fig.346 (100%) ~11 years remaining reserves with 2011 production level Exploration resources Total Possible resources Proved resources Produced Commercial Contingent Techn. but on northern neighbor Norway.com .” Welltec founder and CEO Jorgen Hallundbæk told Focus Reports. Gas reserves and gas production is sales gas *Based on 2010 average exchange rate and oil price (USD/DKK exchange rate of 5. $8. reserves resources resources Gas reserves in 2011 Adding value to the Danish North Sea MMboe (percent of total) 343 (19%) 964 (53%) 205 (11%) 99 (5%) 198 (11%) 1. “Norway has been focusing on enhancing recovery rates for more than 20 years and still today is the global benchmark for enhanced oil recovery. we need to keep costs low in all aspects of drilling. you have to look carefully before you will fnd anything Danish and that is fully intentional. Welltec.” said Hallundbæk.271 (52%) 264 (6%) 629 (15%) 283 (6%) 4. CEO of national oil company North Sea Fund (NSF) which has been the state participant since 2005 and holds a 20% stake in all licenses as a commercial partner.ogfj.4 billion. CEO. Another example is Welltec. Indeed. Hallundbæk explained.5 and Brent oil price of USD 110 Source: The Danish Energy Agency 52 energy. and a great deal of innovation. DONG E&P 10% and Hess 5%. adding that. and the completion techniques that Welltec is working with could be a possible cost reduction in the completion of these wells.2011.000 work places.After all one must not forget.1.” said Peter Helmer Steen.” Shell.

2 Telecommunications Financial and insurance 17.4 0.4 5.ogfj.7 0. “The current recovery rate is around 26-27%.1% 1.focusreports. More signifcantly.7 billion 5.3% 10.” Denmark could take Hallundbæk’s comments as Jørgen Hallundbæk.net 53 .3 0.8 2. “We should consider. almost 70% of our production actually comes from Norway today.4 4.” According to Hallundbæk.5 2.” said Soren Gath Hansen.2 0. OGD managing director. Welltec The Hejre-feld that Hansen refers to is one of the most signifcant developments that the DCS has seen in a long time.000 boe/day. DONG focused on small feld development.0 Manufacture of furniture and other manufacturing 4.0 1. which is low in comparison with other producers such as Norway.4 Knowledgebased services 1. DONG estimates probable reserves at 44.4 1. CEO. Nonetheless. government revenues from the oil and gas sector includes carbon tax and proft-sharing Source: Statistics Denmark.4 2. however.9% 2. clear advice.2 3. Vice President.8% 7.2 3. or ‘vacuum cleaning’ as we like to call our activities Søren Gath Hansen. 3: Oil and gas government’s top revenue source Corporate tax contributing industries in 2010 DKK billions 23.com • Oil & Gas Financial Journal July 2013 energy.2 Additional tax* not included in DST data 7.7 16. the Danish Energy Agency the world and the other North Sea countries are not there yet.” Hansen said.” That is one kind of strategy and it takes a particular kind of company.0% Extraction of oil and gas Pharmaceuticals 15.« CEO John Westwood. most of it oil.2 23.7 16. for every 1 million barrels of oil equivalent produced. -World class know-how about energy at sea www. DONG is the biggest holder of acreage in that area. the Hejre-feld. the Danish industry takes pride in the signifcant rise of its extraction rates over the past decades. but Hansen realized that he would not be able to develop the company and the portfolio on the long term only focusing on late-life felds and vacuum cleaning. “Although one of our largest developments. is in Denmark.2 2. and the UK is nowhere near the levels of Norway. DONG E&P »Most importantly Port of Esbjerg has considerable experiences in working with the demands from the ofshore industry and simultaneously Esbjerg already has great wind-mill experience. “Our Siri-feld is a success story as we have actually been able to keep the area alive by vacuum cleaning. that it went up from 5-6% on the outset.5% Share of total (percent) In 2010.9 1.3 0. while we are also investing heavily west of Shetland. government revenues of DKK ~170 million were generated *In addition to ordinary corporate taxes.9% 5.5 Wholesale and retail trade Transportation DKK 8.Fig.2 The Danish Energy Agency estimates the total direct corporate tax contribution* from the oil and gas sector to be DKK 23.3% 2.4 7.” said Martin Næsby. vice president DONG E&P.9 0.2 USD 1. “At the outset.8 2.” Indeed the phrase ‘vacuum-cleaning the Danish Continental Shelf’ recurred several times throughout our interviews with Denmark’s operators. Douglas-Westwood on the DCS.4 8. and seen in that light it actually is a great achievement. “Denmark is still at an average point in terms of recovery factors.

” said Steen Brødbæk. is how much of this not-so-low hanging fruit will be harvested.in safety. The question. DONG E&P. “The Hejre-feld is the frst High Pressure. a project engineering company and one of Denmark’s fastest growing energy companies of the past decade. the number of appraisal drillings in the past three years averages close to zero for Denmark. Whether this is the right strategy to optimize exploration and production is hotly debated by key stakeholders of Denmark’s energy industry. High Temperature (HPHT) feld put in production in Denmark. environment and quality Work with us . Trond Bjerkan. We need the government to support that strategy. “Therefore. This is an inter- Oil and xxxx gas projects . citing far-reaching changes in the tax regime and consequent devaluation of its assets. “Denmark no longer appears attractive. CEO of Semco Maritime. Vice President and Country Manager. but some of the reservoirs are also more challenging than the traditional mature chalk felds. it instead took the tax rules that the DUC operates under and applied them to the rest of the oil companies operating in the Danish North Sea. oil production is declining rapidly and a mid-size player in the Danish context. The water-depth at 60/65 meters is slightly deeper than existing producing felds. Denmark has to continue exploring as the UK and Norway are doing. Bayerngas. said. the outcome is easy to predict. and a good example of the not-so-low hanging fruit on the DCS. the North Sea Agreement. If they do not. While a recent fnd by Wintershall of potentially 100 million barrels of recoverable oil in the Hibonite exploration well inspired hope. but also that the extraction rate stands at a mere 27% for the current felds while the world is screaming for more energy.” said Flemming Horn Nielsen. When the current government realized that it could not change taxes for the DUC without setting off costly compensation clauses in the contract. “It is extremely important for the Danish government to realize that the country is a net exporter of oil and gas and that the oil and gas industry generates around $30 billion in tax revenues.” Brødbæk added.” Flemming Horn Nielsen. “We have stopped all preparations for bidding in the next licensing round because it no longer makes sense. country manager Denmark. recently announced it might pull out of Denmark.max uptime No compromise . DONG E&P Denmark Bayerngas responded to government efforts to harmonize the different tax arrangements under which oil companies currently operate on the DCS.Hejre is the frst feld coming into production that is not situated in the low-temperature and low-pressure chalk felds in the southern part of the Danish North Sea. which the former government made with the DUC in 2003. The amendments follow a 12-month investigation into the possibility to change a deal. Furthermore.” Bayerngas’ country director Denmark. “We cannot produce enough energy to substitute the growth rate for countries outside of the Organization for Economic Co-operation and Development (OECD).our strength is our people 30 YEARS OF EXPERIENCE TO SHARE WITH OUR CUSTOMERS WITHIN THE ENERGY SECTOR . however.

“Denmark has been known for many years as a chalk reservoir. OUR CUSTOMERS’ ASSETS AND THE ENVIRONMENT semcomaritime.” Steen Brødbæk. Luanda. Stavanger. President and CEO.” Steen said. more neutral taxation. “It is not easy oil. but very interesting nonetheless. Forty years and four generations of exploration had been going on with companies coming in and trying their best. Vice President. A lot of good.” In a response to industry criticism. Houston. Vice President. and still Johan Sverdrup was not found. Therefore much of the seismic investigation has been targeted to chalk. critics would say that this again is not an example of the type of forward-looking activity that the DCS needs in order to avoid becoming a sunset production area. “My expectations are high. which perhaps has led some opportunities to stay below the radar until “Data collected since the 6th licensing round in 2006 indicates that there is a lot of oil left in the Danish subsoil. I would like to point out Johan Sverdrup in Norway. 709 km south of fellow member city. a decision taken on the basis of the new tax rules. only weeks after the proposal came out.” now. new data has been developed in the last years. VP of Exploration Lars Nydahl Jørgensen.” said Peter Helmer Steen of NSF. Perth. and we are enhancing revenues for a nation that has to invest in growth. It might come as a surprise to some to see the name of Esbjerg among the likes of Aberdeen. Maersk Oil said: “It is clear that the Danish Continental Shelf is a mature area where exploration has been going on for many years.” Esbjerg: the Missing Link? The board of the World Energy Cities Partnership (WECP).” Corydon can put forward that Maersk Oil announced its plan to invest $800 million in the development of Tyra South East.com .000 on the Danish west coast. However. the largest investment by the DUC partners since the approval of Halfdan Phase 4 in 2007. “The rules that apply to new concessions for the DUC partners under the North Sea Agreement should also apply to the concessions handed out before 2004. Maersk Oil Before the end of this year the DEA hopes to organize the 7th licensing round.national business and international oil companies are putting their money where they can get most back. and Villahermosa. a city of 70. But to Søtrup it is logical. Head of Exploration.robust and reliable solutions WE CARE ABOUT PROTECTING OUR PEOPLE.one stop facilities around the world Stregthening xxxx windpower projects Project management . Søtrup is the mayor of Esbjerg.EPCI . Head of Exploration. will soon welcome Johnny Søtrup as its 20th member. Stavanger.service Products and technology . Asked about the signifcance of the DCS for Maersk Oil. We are creating a level playing feld. Port Harcourt. a non-proft organization comprised of the mayors of the different member cities. “We bring a new dimension Rig projects xxxx . Finance Minister Bjarne Corydon told Focus Reports that. The other layers have not been targeted that much. Semco Maritime Lars Nydahl Jørgensen.

the shortage of human resources for Esbjerg’s oil and gas industry seems to be changing.” Søtrup said. 4: Most People in the sector work in Esbjerg Main oil and gas employee distribution areas in Denmark (avg.” said Henrik Hansen. “They ran into serious trouble dealing with the harsh environment and weather conditions. most Danes thought that the oil and gas industry would close down within a couple of years and that the industry would be fully replaced by renewables. the marriage between te city's oil and gas and wind industry is not perfect.” said Anders Eldrup. CEO.020 (60%) Johnny Søtrup. “We are undoubtedly the member with the biggest offshore wind industry.Esbjerg's Fishing Harbour in the 1950s. Q-Star Energy Esberg -1. Courtesy of the Fisheries and Maritime Museum. many of Esbjerg’s key oil and gas players have been quick to grasp opportunities resulting from the national government’s push for a greener energy mix. in Esbjerg they do not wait. 2008 . Esbjerg’s success can be seen as proof that the green profle of Denmark’s energy policy actually has positive effects on the country’s oil and gas industry. Now they are using competences from the oil and gas industry and leaning heavily on the oil and gas industry’s supply chain. and in the right direction. mainly offshore wind.” Minister of Finance Bjarne Corydon said. with around 300 of his people active on North Sea platforms. On top of that. they just start Fig. But the title of ‘Member City’ brings more.” Hansen knows the challenge all too well. “Many are waiting for something to happen. “It is the same companies and decision makers. and they have to do something different now. joining this organization is an acknowledgment of its contributions to the global energy industry. Although it remains a serious challenge. the chairman of Offshore Center Denmark and former CEO of DONG Energy. young people will start looking at the oil and gas business again and realize that it is a viable and even attractive alternative. they simply did not believe there was a future and would prefer to work in wind energy. but to actually capitalize on member’s expertise and set up partnerships between organizations and companies.com . Their expertise was happily welcomed by a wind industry that desperately needed to build up offshore expertise.2010) % DENMARK Copenhagen -680 (40%) Source: Statistics Denmark – “Registerbaseret arbejdsstyrkestatik” 56 energy. “This made it very hard to attract new people to the oil and gas industry. in Esbjerg we clearly show that it is possible to swap between the oil and gas and the renewables industry and that it is possible to to the table among these 19 members.” People familiar with the city’s business community maintain that it is more than a good geographic location that has led to Esbjerg’s success. a provider of multi-skilled manpower to the oil and gas and renewables industry. “Just two years back. Esbjerg founder of Q-Star Energy.” Still. “I am confdent that.” Hansen said. Chairman. and many local companies have a foot in both. we are a frontrunner in uniting that offshore wind industry with our offshore oil and gas industry. successfully harnessing both sectors.ogfj. “Also.” said Steen Brødbæk. apply expertise and experience from the oil and gas industry in the renewables industry. “Many cities in Denmark have seen industries crucial to their economy leave. Mayor of Esbjerg Anders Eldrup. The WECP is not just a way to share experiences. Offshore Center Denmark. CEO of Semco Maritime. in a couple of years.” Indeed. CEO and Henrik Hansen.focusreports.” For Esbjerg. “The city of Esbjerg is the best illustration that we do not see our green energy industry as a substitute for an economically effcient and progressive way of using our oil resources: its offshore industry mixes both green and black. “The frst offshore wind park was constructed by a company that had experience building these parks onshore.net July 2013 Oil & Gas Financial Journal • www.

We possess unique knowledge and skills. no CO2 emissions and an ambitious target to reduce the cost of energy.ANOTHER 900.000 employees and is headquartered in Denmark. Our business is based on procuring.0 billion) in revenue in 2012. distributing and trading in energy and related products in Northern Europe. London Array is by far the world’s largest offshore wind farm.dongenergy. T Towards 2020.com . For further information. DONG Energy has nearly 7.dongenergy. T Together. we believe that offshore wind energy will be an important part of the future energy system. we aim to quadruple our installed offshore wind capacity and lead the industry in driving down cost. Driven by the powerful wind at sea. DONG Energy and our partners put the London Array and the Anholt offshore wind farms on stream. The Group generated DKK 67 billion (EUR 9. from early development. which we use in every step of an offshore wind project. With a capacity of 630 MW.000 HOUSEHOLDS THIS SUMMER DONG Energy has built more offshore wind farms than any other company in the world. This summer. these two offshore wind farms can produce electricity equivalent to the annual consumption of 900. producing.000 households.com MOVING ENERGY FORWARD www. DONG Energy is one of the leading energy groups in Northern Europe. to make offshore wind competitive with traditional energy sources. during construction and through to operation and maintenance. see www. Anholt Offshore Wind Farm of 400 MW is the largest offshore wind farm in Denmark.

but also for the smaller and mid-sized companies. Atlantic Frontier. . a provider of freight solutions. “Around the North Sea. with shipments ranging from small courier parcels containing o-rings to project transport of complete oil rigs to the Middle East.” said Søren Fløe Knudsen. the Faroe Islands and Greenland. Brazil. We cannot just sit here in Esbjerg and wait for things to happen. That also means that. Global Manager Oil & Gas Division. Jens Anders Jensen. global manager of the company’s oil and gas division said: “Since the early years of the Danish oil and gas industry. it is not necessarily part of a long term strategic decision that took years to develop. Dancopter ESVAGT delivers safety and support to the ofshore oil & gas and wind industry Our most important tasks are emergency and oilspill preparedness in and around the oil fields as well as services for the ofshore wind farms where our specialized vessels and crew are an important part of safety. the offshore operation has expanded to 16 helicopters on two continents with the world’s most respected oil and gas companies. Thomas Bek. Europe’s fastest growing helicopter company between 2009 and 2012. Esbjerg’s largest offshore base with operations in Australia. and the Far East.” Thomas Bek. We move around with our customers. many companies have shown that they are capable of capitalizing on opportunities in the oil and gas industry around the world. Blue Water Shipping Søren Fløe Knudsen. Blue Water has supplied drilling equipment to the industry. in Brazil. Norway. Also. managing director. “Denmark is a small country but has to be global. it can also be an opportunity that shows up.” Asked how on earth an Esbjerg-based company developed a particular expertise in dealing with freight in one of the former Soviet Union’s most remote areas. “Dancopter has indeed been through a fantastic growth period. Irish Sea and West of Shetland. the Middle East. the North Sea. seems to be an exponent of this praised Esbjerg mentality.” Esbjerg is also home to Dancopter. Bek explained: “One of the biggest customers we have in the industry is Keppel. transporting oil rigs to every corner of the planet. parts of the virtues ascribed to Esbjerg are born out of necessity. Today.” Blue Water Shipping. It would be great if we could make the spirit of Esbjerg spread to the rest of the country. Danbor Still. Venezuela. “The willingness to do something else is crucial. and the UK.” he said. we have a particularly strong position in Central Asia.” said Jens Jensen. Asia. and it was through this relationship that we went into the Caspian. Italy. “This does not just go for the biggest companies like Ramboll and Maersk Oil.something new. Dancopter performed its frst fight in Esbjerg. when asked what enables Esbjerg’s business community to box above its weight internationally. the world’s largest rig manufacturer.” Knudsen continued. CEO of Danbor. when we are entering a new market. CEO. Just ten years ago. CEO. Our fleet comprises of 36 units – anchor handling/tug/supply/tanker assist/oil recovery/survey/ERRV vessels.

an offshore cable laying company.“In 2011. when it comes to connecting windpower offshore www. We must be able to compete with other alternatives for power Offshore Wind: Causing a Stir In 1991 Denmark erected its frst offshore wind park.ctoffshore. industrialize those concepts. is fully aware of this responsibility and the challenge of bringing the cost of offshore wind down in order to make it a competitive source of energy. we had established ourselves in Nigeria through a fve-year contract with Shell. Samuel Leupold. “given that we have accumu- generation. partly owned by DONG Energy. and responsible for building 38% of European capacity. Otherwise. “We can do something as a single entity… We can always strive to complete projects more effciently. DONG Energy Wind Power’s new vice president puts it simply. servicing Maersk Oil and the 15 felds of the DUC. we won the biggest contract in the Danish North Sea. COO of CT Offshore. and that is why I say that our suppliers must understand that it is in their best interest that they help us be creative.000 turbines of experience on board rd Expertise in Subsea Cable Installation Repair Maintenance Survey Visit A2SEA. in 2010.dk CT Offshore is part of A2SEA A/S . perform early commissioning by using the experience we Thomas Gellert. the cost of offshore wind needs to fall to 100 euro per megawatt hour for parks constructed from 2020.” lated deep know-how all along the value chain. we need to make sure that it remains within the cost frame acceptable for society in the long term.com and learn how we ofer integrated installation and service solutions to the ofshore wind industry. part of the installation vessel company A2SEA. “If it does not happen. A year earlier. COO. CT Offshore 1. We also started to work with Shell from Den Helder in the Netherlands and Norwich in the UK. Gellert feels that “where this industry might be in the verge of taking a wrong turn is in terms of the lack of cooperation between parties especially at early project stages.” He adds. and now the country’s 2012 Energy Agreement prescribes that Denmark’s energy supply must consist of 100% renewables by 2050.” His comments are echoed by Thomas Gellert.” But Leupold also notes: “Suppliers need to understand that if offshore wind wants to maintain a long-term perspective. by 2020. it might be very diffcult to bring down cost to a sustainable level for the industry. DONG recently announced that. satisfying demand is not a problem… we have the portfolio and all the skills to bring this to life. Leupold is not concerned about delivery. DONG Energy Wind Power. the world’s market leader in offshore wind. develop the value and supply chain to such a degree that the cost really come down to the level we have indicated. come up with new concepts. This would enable the wind industry to sit side by side with Denmark’s oil and gas industry in keeping the country energy self-suffcient in the years to come. Further to this. we jeopardize our industrial future”.

worldwide team of transport and logistics experts.focusreports. and although Hansen admitted that “fnding highly skilled engineers and professional project managers is always a challenge”. precise and tailormade for your needs. flexibility. Executive Vice President Wind Power. larger generators and other features resulting in increased production. harmonization would drive costs down. “the growth we have achieved over the last years Serving the world with safety.” Moreover. Siemens Wind Power Samuel Leupold. could help. on the other hand.have. CEO Offshore E W EMEA OF. Jens Frederik Hansen.” Hannibal has his work cut out for him. There is still almost a ‘start-up’ environment in the industry that would beneft greatly by being more stable and industrial like Denmark’s oil and gas industry. we have been able to reduce costs by 40% per decade. A2SEA CEO Jens Frederik Hansen notes that. A2SEA Michael Hannibal.: +45 7612 1450 www.bws.dk Tel. or migration of talent from the black energy industry to the green one. if offshore wind does not look to the oil and gas industry for cost reduction capabilities.dk www. Our in-house specialists can handle all types of challenging projects. But to really lower the cost of energy is a joint task… it is a matter of joining forces and managing the interfaces. CEO Offshore E W EMEA OF.com . they have become more effcient with larger rotors. OIL & GAS www. LOGISTICS Blue Water Shipping is a strong. there are many challenges faced from a managerial. and precision At DanCopter we provide helicopter transport of personnel and materials from base to offshore installation all over the world. So. Safe. “Ultimately. procedural and best-practice point of view. The turbines have grown. “Since 1991.net July 2013 Oil & Gas Financial Journal • www. There is one threat that faces the oil and gas industry from offshore wind in Denmark: the ‘brain drain’. but the commodities sector to learn how to industrialize and mass produce offshore wind. as the oil and gas industry has managed to secure. CEO.dk 60 energy.dancopter. These cost reductions have for a very large part been caused by turbine design and turbine innovation.ogfj. believes that as the wind industry has grown so fast.” Leupold. saying that “the answer to the future solution will require companies like Siemens to continue to innovate on the turbines.dk Contact: tbek@bws. he also pointed out that.dancopter. A2SEA has installed more than 50% of the world’s total offshore wind turbine capacity. “Denmark is well recognized for clean energy and wind power and for that reason we receive a large community of international engineers wanting to be part of our unique ability to promote and develop green energy. what can green learn from black? Hannibal suggests that harmonized legislation across Europe.” Michael Hannibal.” He concludes that it is not the oil and gas industry they need to look to as a cost example. DONG Energy and increase visibility on every country’s specifc procedures. Siemens Wind Power remarks on his optimism about bringing down the cost of offshore wind.

The best way of advancing the development of renewables is to work with the oil industry and integrate the two from a competence perspective. One example is Esvagt. been progressive in developing its energy industry. We can provide vessels that can act Søren Nørgaard Thomsen.DANBOR. gas and wind industry in Europe. The key for Denmark’s offshore energy success may lie in making a ‘black and green’ industry prosper under a stable government framework. Partner.COM www. it is about offshore together.focusreports.net 61 . a company that operates a fast-growing feet of Emergency Response and Rescue Vessels (ERRVs) and Anchor Handling Tug Supply (AHTS) vessels in the North Sea from its base in Esbjerg. having seen the opportunities and having the ability to leverage their capabilities. It is not either or. travelling from shore to the turbines for maintenance takes too much time. The company’s business was frmly anchored in the oil and gas industry from the start. by promoting discussion and debates on wind energy.” Esvagt’s managing director Søren Nørgaard Thomsen said. and now they are driving the development of offshore wind energy. Deloitte as service ships. Esvagt Morten Mønster. “As the wind turbines are placed further from shore. The Danes were pioneers in exploration and production of oil and gas in the North Sea. we have been working closely with universities.ogfj. We can apply that in black and green. then perhaps this is where green and black can see eye to eye.” COMPETENT PEOPLE Q-STAR ENERGY is a solid Danish company supplying competent people for the oil. Morten Mønster. WHEN EXPERIENCE IS A FACT… Q-STAR ENERGY A/S Stormgade 99 DK-6700 Esbjerg Tel. but talking offshore in Denmark is not just about offshore oil and gas anymore. partner with Deloitte. Some companies have made the jump into offshore wind from the oil and gas industry where they so comfortably sat. and combining our different initiatives. and its unique trait is that we are good at working together. It is also offshore wind. Managing Director. Denmark has. They were the frst country to develop a district heating system. “Wind energy is decisively moving offshore and there is a requirement for maintenance. over the decades.” Surely this does not sound like the “quiet life” we expect Danes to lead. Also. When asked about the offshore industry from an external perspective.dk WWW. and this factor has really improved our capacity to meet and retain the best talent available on the market. where we have technicians on board with a workshop and a warehouse for spare parts.: +45 75 45 63 22 q-star@q-star. summed it up: “I would say that it is black and green.has given our company a worldwide reputation.” If companies like Esvagt can successfully leverage capabilities to their advantage both ways in offshore. too. or even transitioning from black to green.com • Oil & Gas Financial Journal July 2013 energy. Denmark is a small country.

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Saudi Arabian Oil Co. The index is provided as a service. Whiting Petroleum WildHorse Resources Williams Partners LP Wunderlich Securities Xcavo XTO Energy Zakum Development Company PAGE 46 32. 21 Hatem Abbas Ghazzawi & Co. 44 International Renewable Energy Agency 25 Isramco 43 Kabe Exploration Inc.42.47 13 13 44 33 43 44 46 33. White & Case LLP White Deer Energy Whiting Oil and Gas Corp. 13 Hein & Associates LLP 26 HIG Capital LLC 43 Holland Services 43 Husky Energy Inc. Chevron Corp. UK Export Finance US Ex-Im Bank Vaquero Capital Wapiti Energy Warburg Pincus Warren Resources Inc.42 ESVAGT 58 Euler Hermes 13 Evaluate Energy 10 Express Energy Services 46 ExxonMobil 16.47 20 13 11 34. 12 PLS Inc. Alon Gas Exploration Anadarko Petroleum Corp.46 54. Chief Oil & Gas LLC CIT Group Inc. Samson Offshore LLC SandRidge Energy Inc. PAGE 44 59 13 42 23 23 32 45 43 12. 34-41 Qv21 Technologies Range Resources Corp.46 31. Citadel Citation Oil & Gas Corp. 43 Halcon Resources 33 Harwood Capital Inc.45 34 43 14 34 34 10 13 46 64 12 22 14 12 61 60 46 44 11. Cabot Oil & Gas Corp. Tudor.Companies mentioned in this issue of Oil & Gas Financial Journal are listed in alphabetical order with advertisers in boldface type. 47 E-Spectrum Advisors LLC 35. 31 Freeport McMoRan Copper & Gold 33 GAIL 10 GeoMet Inc. Ltd. Red Cross Reliance Industries IBC 10 64 10 July 2013 Oil & Gas Financial Journal • www. Delek Drilling Delonex Energy Ltd. 32 K-sure 13 Lantana Oil & Gas Partners 44 Liberty Resources 33 Lime Rock Partners 5 LLOG Exploration Co. Century Midstream LLC Chesapeake Energy Corp.45.55 46 44 13 23 34 6 13 42 10.31.43 43 COMPANY Deutsche Bank Devon Energy DONG Energy Dow Chemical Co. 64 IHS Herold Inc.45. The publisher does not assume any liability for errors or omission. 43 Petro-Hunt Group 34 Piedmont Natural Gas Co. 44 Netherland Sewell & Associates Inc. 46 Q-STAR ENERGY 61 Quicksilver Resources 31 Quorum Business Solutions Inc. Al Fahad Abraxas Petroleum Corp. Riverstone Holdings LLC Royal Dutch Shell plc Rystad Energy Sadara Chemical Co. Citrus Energy Corp.47 51 12 12 13 45 42 22 34 12 42 46 18 23 Kerr-McGee 47 K-Exim 13 Kinder Morgan 32. Pickering.29.43 29 47 44 60 5 13. Ecopetrol America Inc. Encana Energy Ventures Enerplus Enertia Software ENI Enterprise Products Partners LP EOG Resources DrillingInfo Energy Services Group 19. CNOOC COFACE Coho Energy Inc. El Paso Corp.45 31 32 44 46 33 11.45 Marcus Evans 27 Masdar Institute of Technology 25 Maverick Brothers Energy LLC McMoRan Exploration Milbank.44 EP Energy 32. LLC Continental Resources Crédit Agricole Crosstex Energy LP Danbor DanCopter DeepOcean Group Holdings BV Dejour Energy Inc.31. LLC Society of Petroleum Engineers Sonangol SSI Thirty-One Ltd. Tweed.47 46 42 33 47 13 12 33 10 33.46 13. ConocoPhillips Constitution Pipeline Co. Holt & Co. BC Nexen 31 NGP Energy Capital Management 1 NiSOurce 13 Noble Energy Inc.45 13 43 42 12. Carlyle Carrizo Cenovus Energy Inc. Dynamic Offshore Resources East Resources Inc.13 34 46 11 32 27. Company/Advertiser Index PAGE 43 12.45 FERC 12 Ferd 44 FIEM 13 FIRNA 46 First Reserve 13 FMC Technologies Inc. Statoil Stone Mountain Resources Surge Energy Talisman Texaco Inc.35 Equal Energy Ltd.43 14 23 53 43 42 COMPANY 4D Global Energy Advisors A2SEA Abdulaziz H.46 48. Abu Dhabi National Oil Company Abu Dhabi’s Marine Operation Company Access Industries Alberta Energy Co. LLC 34 Lloyd’s Register 47 Louisiana Department of Natural Resources 29 Marathon Oil Corp.13 44 5. 32 Post Oak Energy 34 PostRock Energy Corp.57 5.com 63 .42 31 33 31 45 30 43 11. 35 Global Hunter Securities 42 Greene’s Energy Group 47 GulfStar Group 5 Gushor Inc. 44 GeoSouthern Energy Corp.31 COMPANY PAGE COMPANY Reservoir Management Ltd.43 Kirkpatrick Oil & Gas LLC 35 Kodiak 33 Korea National Oil Corp. 42 Forest Oil Corp. Weatherford International Wells Fargo Welltec Western Gas Partners LP WGP Holdings Inc. 11.31.31.18.64 13 10. Hadley & McCloy LLP Morgan Stanley Mubadala Petroleum Municipality of Esbjerg Energy Metropolis Natixis Natural Resource Partners LP 34 33 13. Inc. The Louisiana Land & Exploration Co THL Credit Total Transform Software & Services Inc. Schlumberger Scotia Waterous SEC Semco Maritime Senergy SEP Shearman & Sterling LLP Shell Sheridan Production Co.43 Norsofonden 52 Occidental 33 Ocean Energy 46 Ohio Department of Natural Resources 11 OPEC 23 Opportune 3 PCD Energy 14 Penn West 33 Petrobras 33 PetroChina 31 PetroFrontier Corp. Atlas Resource Partners Avner Oil and Gas Baker Donelson Bank of America Merrill Lynch BDO Canada LLP Blue Water Shipping BoyarMiller BP Bracewell & Giuliani LLP BreitBurn Energy Partners LP BTG Pactual Buckeye Partners LP Cabinda Gulf Oil Co.42. 34 Imperial Oil 64 Independence Contract Drilling 43 International Equity Partners Oil & Gas Inc.28. 11.64 44 16 IFC 13 12 22.ogfj. Apache Apollo ARKeX Ascent Energy Co.

surrounding neighborhoods. with many lending a helping hand. “Our thoughts are with all of those who are dealing with the impact of this flood. reported Bloomberg. and CEO. One Calgary-based Encana Corp. Canada-based Imperial Oil. stripping the record from June 2005 when. surging waters forced the evacuation of 1. as well as from ConocoPhillips Canada employ$250. OGFJ A 64 www. Alberta. collective industry volunteer response to aid those communities impacted by or even months. and will be doing over the coming days and weeks.000 Mikaila Adams per employee as part of the company’s Senior Associate Editor – matching gifts program. June 20. cleanup begins.com • Oil & Gas Financial Journal July 2013 . oil and gas companies Active in Canada for over 100 years. million to support relief efforts. Anyone wishing to support the ongoing Red Cross response to this disaster may do so by donating to the Canadian Red Cross Alberta Floods Response. truly reflects the rainfall caused the Bow and strong sense of community in Calgary Elbow rivers to surge from and throughout southern Alberta. Encana’s executive vice have wreaked havoc on Calgary and president and chief corporate offer. according to the city’s website. but also the resilience of those impacted and the dedication of first responders.Beyond the Well Companies rooted in Canada contribute to flood relief efforts ern Alberta. As the water recedes. Cross to assist in immediate relief work The company will also match donations in impacted communities.” their banks. through its main philanthropic arm. and Calgary area and elsewhere in southwe want to support the outstanding work that emergency responders and organizations like the Red Cross have been doing.000 to be allocated to a number ees and US employees and retirees. and our sincere thanks to the volunteers who have been working to help their neighbours. the Imperial Oil Foundation. as well as the many volunfter more than a day of extreme teer citizens who have pitched in to help their neighbours. Husky Energy Inc. employee donations to registered charities will be matched by Encana up to $25.” said Ken Lueers. In addition. and ultimately caused C$400 million (US$383 million) in damages. has also stepped up with $1 million. “Recovery will be a long process. The number includes an allocated to local non-profit organizainitial donation of $250. Alberta Premier Alison Redford told reporters at a June 21 press conference that water on the Elbow River was flowing more than three times faster Flooding in Blairmore.” CEO Asim Ghosh said in a press release.ogfj. president of ConocoPhillips Canada. We applaud the Red Cross and other emergency organizations for their immediate response and believe it is important to provide the practical assistance needed.” Additionally. “We have witnessed the devastating impact of flooding.500 people.000 residents were forced to evacuate parts ment to work with city officials and of southern Alberta that authorities say industry associations to coordinate a could remain without power for weeks. late June 20 than during the 2005 Photo courtesy of Government of Alberta flood. An initial donation of $250. rooted in Calgary are pitching in to ConocoPhillips contributed US$1 help.000 to the Canadian Red Cross to support emergency assistance efforts. Imperial chairman. flooding.000 homes. We are pleased to join that effort.” said Rich Kruger. “Our thoughts are with Albertans who need assistance at this time. and already. The floods are Calgary’s worst in nearly a century. The company will then work with its community partners to determine how best to allocate the remainder of the donation.000 to assist with flood to the Red Cross and the other half relief efforts.000 will go to the Red Cross for immediate relief efforts. OGFJ “The hard work being done by relief agencies and emergency services personnel. president. has committed $100. record-breaking floods said Bill Oliver. damaged 40.000 to the Red tions supporting the recovery efforts. of Encana’s partners which are actively “So many people in southern Alberta engaged in the effort in both the have been impacted by this disaster. Three The company pledged its commitpeople were killed and over 100. has half of the donation will be presented donated $500.” Another $1 million will come from Cenovus Energy Inc.

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