GeoPetro Resources starts operations in Texas' Madisonville field

GeoPetro Resources reported that reworking and testing operations commenced in March 2014 in the Madisonville field, Madison County, Texas.

The Company initiated reworking and testing operations on the Ruby Magness #1 and the Angela Farris Fannin #1 wells in anticipation of restoring production in the Madisonville field. These two wells are expected to recommence production by mid-year 2014.

The Company owns a 100% working interest in certain leases in the Rodessa Formation interval within the Madisonville Field.The Company also owns a 100% interest in a natural gas treatment plant and related gas gathering pipelines and related facilities (collectively, the plant).The plant has a design capacity to treat 18 Mcf of natural gas per day.

The Company is currently conducting additional operations and work programs to restore its production from the Ruby Magness #1 and Angela Farris Fannin #1 wells. The Company also plans to further increase production in the Madisonville Field by performing workover operations in the Mitchell #1 and Wilson #1 wells in 2014.

Addressing the positive developments at the Madisonville Project, GeoPetro' s President and CEO, Stuart J. Doshi commented, "We are particularly pleased with the commencement of operations at Madisonville Field which represents a significant milestone for the Company.The recent strengthening of natural gas prices from the 10-year lows experienced over the previous two years provides us with an opportunity to position the Company to re-establish production and generate revenues and positive cash flow for the Company by not only bringing the Magness #1 and Fannin #1 wells online, but also further enhancing production by performing workovers at the Mitchell #1 and the Wilson #1 wells.Additionally, the Company continues to be focused on securing an industry partner to undertake the drilling of a deep well to test six highly prospective zones in the Madisonville Field.Our 3-D seismic shows a very attractive structural closure with a high potential for a major discovery."

The Madisonville Field has been a prolific producer of oil and natural gas.The Rodessa and shallower zones have to date produced in excess of 30 MMbbl of oil and 100 Bcf of natural gas.The six zones below the Rodessa Formation have potential recoverable reserves of approximately 1 Tcf of natural gas.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Blockline and Associate Ltd Nigeria Ltd, online.

OPEC will need to pump more oil after March plunge, IEA says

OPEC will need to pump more crude in the second half of the year to meet global demand after its production plunged to a five-month low in March, according to the International Energy Agency.

Supplies from the Organization of Petroleum Exporting Countries “plummeted” by 890,000 bpd to 29.62 MMbpd in March, the Paris-based IEA said in its monthly oil market report. That’s below OPEC’s collective 30 MMbbl production target and means the group will have to increase output in the second half of the year, it said. The agency’s global oil demand growth forecast was little changed.

“OPEC supply actually registered a steep drop in March from February highs, but this setback looks likely to be short-lived,” the IEA, an adviser to oil-consuming nations, said. “Prospects for OPEC output are also on the rise - though not without considerable political risk.”

Brent crude prices have dropped 3.3% this year to trade at about $107.12 a barrel today amid rising U.S. production and signs of slowing emerging economies. The International Monetary Fund cut growth predictions for countries including Brazil, Russia, South Africa and Turkey earlier this month.

“Demand growth is lagging supply,” Andrey Kryuchenkov, an analyst at VTB Capital in London, said in an emailed response to questions. “Despite a higher call on OPEC in the second half, supplies are plentiful. It’s little surprise OPEC supplies slipped in March since demand slows.”

Production from OPEC’s 12 members dropped in March amid declines in Iraq, Saudi Arabia and Libya, the IEA said. The group, which is responsible for about 40% of world oil supplies, pumped 30.51 MMbpd in February.

OPEC will need to provide 30.6 MMbpd of crude in the second half, the agency estimated. That’s an increase of 350,000 bpd from the previous forecast, as the IEA reduced its expectations for oil production from countries including Russia and Kazakhstan.

Oil supplies from nations outside OPEC are forecast to reach 56.2 MMbpd this year, a downward revision of 200,000 bpd from the previous month, the IEA said.

Global demand is seen increasing to 92.7 MMbpd this year, little changed from last month’s report, according to the IEA. The agency trimmed its forecast for Russian oil consumption by 55,000 bpd to 3.5 MMbpd this year as its economy slows after the nation annexed Crimea.

“One month after the events in Crimea, market watchers are taking stock of their impact on oil markets,” the IEA said. “Given the still volatile nature of the situation on the ground, there are more questions than answers.”

In separate report yesterday, OPEC trimmed estimates for the amount of crude it will need to pump this year amid rising U.S. supplies, and predicted that a “supply buffer” will accumulate before demand peaks in the summer.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Blockline and Associate Ltd Nigeria Ltd, online.

OMV to invest $550 million in Lower Austria

OMV is consolidating its commitment to oil and gas production in Lower Austria. The Weinviertel region is the third most important production site in the company’s global portfolio after the exploration and production areas in Romania and Norway.

In line with the corporate strategy, OMV has invested heavily in exploration and production in Lower Austria. Investment in Lower Austria is set to rise to around $550 million (EUR 400 million) in the next two years.
Until 2016 around 80% of OMV’s total investment of around EUR 3.9 bn worldwide will go on exploration and production.

OMV CEO Gerhard Roiss: "Anyone striving for international growth needs to have a strong foundation. For us this foundation is Lower Austria. This investment in exploration and production underlines the importance of this region in the OMV portfolio."

"We took the decision on these investments in Lower Austria last year. Resources are needed in order to counter the natural depletion and stabilize production in what are mostly mature fields. Without these investments it wouldn’t be possible for us to maintain production levels", said OMV CEO Gerhard Roiss.

Last year the region produced 35,000 boed. Despite the natural depletion of resources, this level should remain stable in 2014 as the investment is set to balance out the natural depletion of 10% per year.

Drilling additional wells in Lower Austria is the key to securing and increasing production. Up to 24 drillings will be realized in Weinviertel in 2014, with 20 more planned for 2015 and 2016, respectively. 14 projects involve exploration wells with additional production potential.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Blockline and Associate Ltd Nigeria Ltd, online.

Delineation of the 6407/1-6 S gas/condensate discovery near in the Norwegian Sea

Wintershall Norge, operator of production licence 475, has concluded the drilling of appraisal wells 6407/1-7 and 6407/1-7 A.

The wells were drilled about 8 km northeast of the Tyrihans field and 5 km northeast of the 6407/1-6 S gas condensate discovery in production licence 475. The reservoir in this discovery consists of thin sandstone layers from the Lange formation in the Lower Cretaceous. The discovery was made in January 2013. The resource estimate for the discovery was then between 3 and 20 million standard cubic meter of recoverable oil equivalents.

The objective of well 6407/1-7 was to delineate the 6407/1-6 gas/condensate discovery higher up in the structure. A new appraisal well, 6407/1-7 A, was therefore drilled downflank to investigate reservoir thickness and lithology.

Well 6407/1-7 proved gas/condensate in two sandstone intervals with a net vertical thickness of 12 m and a gross reservoir thickness of 16 m. Well 6407/1-7 A proved gas/condensate in two sandstone intervals with a vertical thickness of 7 m and a gross reservoir thickness of 13 m.

The difference in pressure measurements between wells 6407/1-7, 6407/1-7 A and the discovery well 6407/1-6 S indicates that there is no communication between the appraisal wells and the 6407/1-6 S discovery. Well 6407/1-7 has therefore proven a separate discovery, and will be reclassified as a wildcat well.

Preliminary estimates of the size of the new gas/condensate discovery range from 1 to 4 million standard cubic meter of recoverable oil equivalents.

The resource estimate for the 6407/1-6 S gas/condensate discovery has now been downgraded to between 1 and 6 million standard cubic meter of recoverable oil equivalents. The licensees will consider the discoveries in conjunction with other nearby discoveries as regards future development.

This is the second and third exploration well in production licence 475. The production licence was awarded on 29 February 2008 (APA 2007).

Wells 6407/1-7 and 6407/1-7 A were drilled to vertical depths of 3,345 and 3,311 m, respectively, below the sea surface, the latter with a measured depth of 3,571 m. Both wells were terminated in the Lange formation in the Early Cretaceous. Water depth at the site is 280 m. The well has been permanently plugged and abandoned.

Wells 6407/1-7 and 6407/1-7 A were drilled by the Borgland Dolphin drilling facility, which will now proceed to production licence 550 in the northern part of the North Sea to drill wildcat well  31/2-21 S, where Tullow Oil Norge is the operator.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Blockline and Associate Ltd Nigeria Ltd, online.