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September 29, 2011

Energy Data Highlights

Crude oil futures price 9/27/2011: $84.45/bbl down$2.44 from week earlier up$7.93 from year earlier Natural gas futures price 9/27/2011: $3.827/mmBtu up$0.029 from week earlier up$0.027 from year earlier Retail gasoline price 9/26/2011: $3.509/gal down$0.092 from week earlier up$0.815 from year earlier Crude oil inventories 9/23/2011: 341.0 mmbbl up1.9 mmbbl from week earlier down16.9 mmbbl from year earlier Weekly coal production 9/17/2011: 21.208 million tons up0.514 million tons from week earlier down0.639 million tons from year earlier http://www.eia.gov/ Natural Gas/ Power News EIA Storage Release 9/22/11 (Actual): +89 Bcf Previous Week: +87 Bcf -4.3% Change from 1 Year Ago -1.6% Change 5-year Average

Upper Devonian may hold as much gas as Marcellus Shale: Range executive The Upper Devonian geologic horizon, located a couple of hundred feet above the prolific Marcellus Shale natural gas field in Pennsylvania, could contain as much gas per section as the Marcellus layer itself, a top manager at Range Resources said. Upper Devonian, found at shallower depths than the Marcellus Shale that sits

around 6,500 feet deep in southwest Pennsylvania, may hold "probably an equal amount of gas per section...as there is in the Marcellus," Ray Walker, a senior vice president of Range, said late Tuesday at the Independent Petroleum Association of America's Oil and Gas Investment Seminar in San Francisco. His comments were webcast. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6531422 Corridor drills shale gas appraisal well in Canada Corridor Resources has drilled the vertical shale gas appraisal well, Will DeMille O59 for the progress of Frederick Brook Shale program in Canada. Located north of Elgin, New Brunswick, the well with the Akita drilling rig #40 is expected to be drilled to a total depth of about 2800m by the end of October, 2011. Corridor Resources is a natural resource company engaged in the exploration for and development and production of petroleum and natural gas onshore in New Brunswick, Prince Edward Island and Qubec and offshore in the Gulf of St. Lawrence. http://drillingandproduction.energy-business-review.com/news/corridor-drillsshale-gas-appraisal-well-in-canada-290911 Kogas says gas pipe from Russia via N. Korea to cost $2.5 bil A gas pipeline from Russia via North Korea to South Korea, estimated to cost $2.5 billion, is the most "economically efficient" option for supplies of Russian gas but represents "unavoidable" political risks, an official with South Korea's Kogas subsidiary in Russia, Kogas Vostok, said Wednesday. "The project will cost $2.5 billion," Kogas Vostok general director Chang Seon Lee said, citing publicly listed information. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/8400342 Naftohaz Ukrainy, US Exxon Mobil Reach Agreement To Develop Cooperation In Exploration Of Shale Gas In Ukraine The Naftohaz Ukrainy national joint-stock company and Exxon Mobil Corporation (United States) have reached agreement to develop cooperation in exploration of gas reserves from unconventional sources. The companies have signed a corresponding agreement on Thursday in Kyiv. The sides signed a tentative agreement, envisaging cooperation in the sphere of exploration and deployment of unconventional hydrocarbons in Ukraine: shale gas, tight sandstone gas and coal-deposit gas (methane). http://un.ua/eng/article/352433.html

Green/ Alternative Energy News

Rush is on to develop smarter power In oil and gas, new, techniques for fracking fracturing rock formations with a combination of high-pressure water and chemicals hold out the hope for opening vast new fields without the environmental damage caused by earlier types. In North America, new production from tight oil reserves has helped reverse the decline in US oil output. Injection technologies are also giving new life to mature oilfields, while in provinces such as the Atlantic waters off Brazil, pioneering drillers are finding oil and gas in depths of water that would have been thought prohibitive in the recent past. New, ultra-deepwater rigs can operate in depths of up to 7,500 feet. http://www.ft.com/intl/cms/s/0/b0a8154a-e5d9-11e0-8e9900144feabdc0.html#axzz1ZFEcAp3A SP Amherst Wind Power receives Suzlon S97 turbines in Canada SP Amherst Wind Power has received Suzlon Wind Energy's first S97 turbines for the construction of a wind farm in Nova Scotia, Canada. Suzlon's 15 units of S972.1MW wind turbine will be installed on 90m hub height towers at the wind farm project located in Amherst. With a generating capacity of 31.5MW, the Amherst wind farm will be owned by SP Amherst Wind Power, a partnership between subsidiaries of Sprott Power Corp and Firelight Infrastructure Partners. At full capacity, will deliver enough electricity to power nearly 10,000 Canadian homes. http://wind.energy-business-review.com/news/sp-amherst-wind-power-receivessuzlon-s97-turbines-in-canada-290911 Carbon capture: How to match oil and gas with a green reputation To supporters, it is a groundbreaking project at the forefront of efforts to fight climate change. To critics, it is a cynical smokescreen to justify business as usual by western Europes biggest oil and gas producer http://www.ft.com/intl/cms/s/0/83cb7824-e2d1-11e0-93d900144feabdc0.html#axzz1ZGtnwITH

Crude Oil News

OPEC Daily Basket Price 9/28/2011 $104.34 (9/27/2011 $104.53) Recent Rig Counts Last Count Change Cou from Prior nt Count 6 3 +33 Date of Prior Count 16 Sept 11 16 Sept 11 July 2011 Change Date of from Last Last Year's Year Count +341 +223 +81 24 Sept 10 24 Sept 10 August 2010

Area U.S. Canada Internatio nal

23 Sept 1991 11 23 Sept 505 11 August 1183 2011

http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

Bleak times for US east coast refiners The tight market for light, sweet crude just claimed its latest victim. This week ConocoPhillips, the US oil company, announced it would sell or shut down its 185,000 barrel-a-day refinery in Trainer, Pennsylvania. The 86-year-old refinery down river from Philadelphia is the latest to face an existential threat from brutal conditions in the Atlantic basin oil markets. Sunoco earlier this month said it will try to unload two nearby refineries, or mothball them if no buyer is found. While Midwest US refiners are enjoying fat profits thanks to discounts on oils linked to the landlocked West Texas Intermediate blend, east coast rivals face a bleak reality. Input costs are high partly due to the Libyan outage across the Atlantic. Refined product markets have become highly competitive, especially for petrol, as Trainer battles with shipments from Europe and the Gulf of Mexico for market share. http://www.ft.com/intl/cms/s/0/3213b66e-ea78-11e0-b0f500144feab49a.html#axzz1ZFEcAp3A ICE confirms parallel Brent benchmark ICE Futures Europe, home of the Brent oil benchmark, has confirmed it is planning to launch a parallel Brent contract to prevent a disconnect between the derivatives and physical markets after a change in the way oil prices are calculated. Platts, the pricing agency that acts as the de facto regulator of the Brent physical market, announced earlier this month that it would overhaul the formula it uses to estimate the cost of the oil benchmark from January next year. The agency, a unit of New York-listed McGraw-Hill, said it would widen the assessment period used to calculate the price of the commodity in the physical market from the current 10-21 days forward period to a new 10-25 days forward period. Oil traders said the wider assessment window a response to falling North Sea oil production would disconnect the physical market from the futures market, which for historical reasons is based on a 10-15 days forward period. http://www.ft.com/intl/cms/s/0/d046a5e0-e9f0-11e0-b99700144feab49a.html#axzz1ZFEcAp3A Major oil field services firms back to work in Gulf after spill In another sign oil and gas activity in the deep-water Gulf of Mexico is returning to normal, the three biggest oil field services say most of their employees are back on the job in the offshore region, after being temporarily transferred to other assignments in the wake of the BP oil spill. Schlumberger, Halliburton Co. and Baker Hughes relocated hundreds of employees from the Gulf after federal regulators imposed a six-month ban on most deep-water drilling following BPs deadly Macondo well blowout in April 2010. Even after the moratorium was lifted, activity remained at a virtual standstill as oil companies struggled to obtain drilling permits that incorporated new safety and environmental rules. But in recent months, more permits have been issued, which has put many drilling rigs and their specialized crews back to work. About 80 percent of Schlumbergers Gulf workforce has returned to the U.S. offshore region after working in other deepwater basins during the slowdown, said Stephen Harris, spokesman for the worlds biggest oil services provider, with principal offices in Paris, The Hague and Houston. http://fuelfix.com/blog/2011/09/29/major-oil-field-services-firms-back-to-work-ingulf-after-spill/#loopBegin

Oil industry PR reps to meet in Houston to coordinate message on fracking An upcoming conference in Houston seeks to arm oil and gas industry public relations officials with better tools for defending the recent boom in shale gas drilling and, particularly, a controversial extraction technique known as hydraulic fracturing amid mounting criticism of the practice. The conference, called Media & Stakeholder Relations: Hydraulic Fracturing Initiative 2011, will offer practical, commercial solutions to drive forward the industrys position through the internet, social media and grassroots efforts, with the goal of presenting a united industry front in answering critics, according to promotional materials. http://fuelfix.com/blog/2011/09/28/oil-industry-pr-reps-to-meet-in-houston-tocoordinate-message-on-fracking/#loopBegin Report: North American oil output will hit all-time record by 2016 North American oil production will hit a new all-time high by 2016 given the current pace of drilling in the U.S. and Canada, according to a study released by an energy research firm this week. U.S. oil production in areas like the Permian Basin, the Eagle Ford, Bakken and others will rise by a little over 2 million barrels per day between 2010 and 2016, according to data compiled by Bentek Energy, a Colorado firm that tracks energy infrastructure and production projects. Its a reversal of the steady downward production trend that started around 1970, when U.S. oil production peaked at around 9.5 million barrels per day. Canadian crude production is expected to grow by about 971,000 barrels per day between 2010 and 2016, with much of it headed for U.S. refineries. Combined, the U.S. and Canadian oil output will top 11.5 million barrels per day, which is even more than the amount produced at the peak in 1972. http://fuelfix.com/blog/2011/09/28/report-north-american-oil-output-will-hit-alltime-record-by-2016/ Cairn Energy Drops After Abandoning Third Well Off Greenland Cairn Energy Plc, the Scottish oil company exploring in Greenland, dropped in London trading after abandoning its third well in less than two months. The shares fell 6.5 percent after Edinburgh-based Cairn said today in a statement it will abandon the Delta-1 exploration well 365 kilometers (227 miles) off Aasiaat in the Napariaq Block after failing to find hydrocarbon shows. Cairn had planned to drill as many as four wells off the island at a cost of $600 million this year, it said in May. So far, it has not found any commercially viable oil resources in its twoyear exploration campaign off the island, the worlds largest. http://www.businessweek.com/news/2011-09-28/cairn-energy-drops-afterabandoning-third-well-off-greenland.html

Weather
Tropical Storm OPHELIA http://www.nhc.noaa.gov/text/refresh/MIATCPAT1+shtml/290858.shtml Tropical Storm PHILIPPE http://www.nhc.noaa.gov/text/refresh/MIATCPAT2+shtml/290842.shtml 6 to 10 Day Outlooks Temperature

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8 to 14 day Outlooks Temperature

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