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Northern Oil and Gas Increases Sales but Misses Estimates on Earnings

Northern Oil and Gas (AMEX: NOG  ) reported earnings on May 7. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Northern Oil and Gas whiffed on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share grew.

Margins increased across the board.

Revenue details
Northern Oil and Gas notched revenue of $50.5 million. The five analysts polled by SP Capital IQ wanted to see a top line of $60.5 million on the same basis. GAAP reported sales were 87% higher than the prior-year quarter’s $27.1 million.

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Source: SP Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.23. The 10 earnings estimates compiled by SP Capital IQ predicted $0.24 per share. GAAP EPS were $0.14 for Q1 compared to -$0.11 per share for the prior-year quarter.

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Source: SP Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 87.1%, 420 basis points better than the prior-year quarter. Operating margin was 29.3%, 7,490 basis points better than the prior-year quarter. Net margin was 17.4%, 4,350 basis points better than the prior-year quarter.

Looking ahead
Next quarter’s average estimate for revenue is $69.8 million. On the bottom line, the average EPS estimate is $0.29.

Next year’s average estimate for revenue is $302.0 million. The average EPS estimate is $1.26.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 595 members out of 658 rating the stock outperform, and 63 members rating it underperform. Among 112 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 93 give Northern Oil and Gas a green thumbs-up, and 19 give it a red thumbs-down.

Of Wall Street recommendations tracked by SP Capital IQ, the average opinion on Northern Oil and Gas is outperform, with an average price target of $31.20.

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The Steve Jobs Betrayal
You may already know that in the final year of his life, Jobs revealed a stunning betrayal — and told his biographer, “I will spend my last dying breath… and every penny of Apple’s $40 billion in the bank to right this wrong.” What was it that made Jobs so irate — and why could it make a few in-the-know investors some major profits over the coming months and years?

Enter your email address below to find out what made Jobs so enraged!


Article source: http://us.rd.yahoo.com/finance/external/mfool/rss/SIG=139g0h6iu/*http://www.fool.com/investing/general/2012/05/07/northern-oil-and-gas-increases-sales-but-misses-e.aspx?ticker=NOG&source=eptyholnk303100&logvisit=y&npu=y

May 7th, 2012 | Posted in Exploration | Read More »

Dejour Secures $14MM Debt Financing Commitment

DENVER–(BUSINESS WIRE)–

Dejour Energy USA Corp., a wholly owned subsidiary of Dejour Energy Inc.
(NYSE AMEX: DEJ / TSX: DEJ) (“Dejour” or the “Company”), executed a
binding commitment for a revolving credit facility from an institutional
lender, to begin to develop the Kokopelli Field leases. As previously
disclosed, Dejour’s Phase 1 Development at Kokopelli includes a total of
four well pads along with associated access roads, gathering lines, and
production facilities. Dejour can drill and complete up to forty-two
Williams Fork wells within this framework, initially; twenty-four of
which are scheduled through 2013.

Development activities on Dejour’s leasehold adjacent to the Garfield
Creek State Wildlife Area (GCSWA) began in November 2011 with the
construction of the first of the four Phase 1 drilling pads on acreage
located just outside of the GCSWA. (See cover of Dejour’s March 2012
PPT). This approval for expansion into the GCSWA was a critical and
final step in the regulatory approval process leading to the
commencement of drilling in 2012. Dejour’s entire 2,200 gross acres of
proven and probable undeveloped reserve leasehold in the Kokopelli Field
will be held by production (HBP) as a result of this Phase 1 program.

The provisions of this revolving credit facility commitment include a
24-month term, a competitive rate of interest with flexible drawdowns
subject to certain closing conditions. The Company expects to meet the
closing requirements and finalize this arrangement during Q2-2012.

“We are very pleased to secure the project capital for Phase 1
development of Kokopelli, at this point in time. This enables us to
finally begin to realize the true value of this asset for all
stakeholders, after virtually three years of planning,” states Robert
Hodgkinson, CEO.

“As we finalize plans for the first series of wells, we have begun to
work with Williams (WPX Energy Inc., NYSE:WPX) on multiple
infrastructure optimization strategies that could reduce our initial
infrastructure costs for this program by as much as 25%. As we finalize
these costs, we are witnessing benefits from increased availability and
price competition among service providers,” adds COO, Harrison Blacker.

About Dejour

Dejour Energy Inc. is an independent oil and natural gas exploration and
production company operating projects in North America’s Piceance Basin
(100,000 net acres) and Peace River Arch regions (11,000 net acres).
Dejour’s seasoned management team has consistently been among early
identifiers of premium energy assets, repeatedly timing investments and
transactions to realize their value to shareholders’ best advantage.
Dejour maintains offices in Denver, USA, Calgary and Vancouver, Canada.
The company is publicly traded on the New York Stock Exchange Amex (NYSE
AMEX: DEJ) and Toronto Stock Exchange (TSX: DEJ.TO – News).

Statements Regarding Forward-Looking Information: This news
release contains statements about oil and gas production and operating
activities that may constitute “forward-looking statements” or
“forward-looking information” within the meaning of applicable
securities legislation as they involve the implied assessment that the
resources described can be profitably produced in the future, based on
certain estimates and assumptions. Forward-looking statements are based
on current expectations, estimates and projections that involve a number
of risks, uncertainties and other factors that could cause actual
results to differ materially from those anticipated by Dejour and
described in the forward-looking statements. These risks, uncertainties
and other factors include, but are not limited to, adverse general
economic conditions, operating hazards, drilling risks, inherent
uncertainties in interpreting engineering and geologic data,
competition, reduced availability of drilling and other well services,
fluctuations in oil and gas prices and prices for drilling and other
well services, government regulation and foreign political risks,
fluctuations in the exchange rate between Canadian and US dollars and
other currencies, as well as other risks commonly associated with the
exploration and development of oil and gas properties. Additional
information on these and other factors, which could affect Dejour’s
operations or financial results, are included in Dejour’s reports on
file with Canadian and United States securities regulatory authorities.
We assume no obligation to update forward-looking statements should
circumstances or management’s estimates or opinions change unless
otherwise required under securities law.

The TSX does not accept responsibility for the adequacy or accuracy
of this news release.

Follow Dejour Energy’s latest developments on:
Facebook http://facebook.com/dejourenergy
and Twitter @dejourenergy

Article source: http://us.rd.yahoo.com/finance/news/rss/story/*http://finance.yahoo.com/news/dejour-secures-14mm-debt-financing-174000024.html

May 7th, 2012 | Posted in Exploration | Read More »

Diamond Still at Neutral

We have maintained our Neutral recommendation on Diamond Offshore Drilling Inc. (DO), a major contract driller providing comprehensive offshore drilling services to the global energy industry.

The company recently announced upbeat first quarter results, which beat the Zacks Consensus Estimate mainly on higher day rates for its deepwater rigs.

We believe Diamond Offshore has solid fundamentals with significant free cash flow potential and a clean balance sheet that enhance the possibility of further share buybacks and/or special dividends in the years ahead.

Diamond is aiming to increase its footprint in emerging markets (such as Brazil and West Africa) to reap benefits from the recent deepwater discoveries. The company’s Brazilian backlog saw solid growth with extensions on Ocean Valient at increased dayrates. Another 15 rigs are already working for Petrobras (PZE). These are expected to enhance revenues for Diamond in view of the increased demand in Brazil and the inability of the region to develop a local offshore rig construction industry.

Again, the gradual improvement in the drilling market in the Gulf of Mexico (especially after the deepwater drilling ban was lifted), along with better bidding activity, will prove beneficial for a contract drilling company like Diamond Offshore.

Moreover, Diamond has signed a new contract for Ocean Victory at a dayrate of $419,500, up from the prior rate of $325,000. Further, Ocean Saratoga is also moving to the GoM for a single well job. These are expected to receive follow-on contracts, as the markets offer immense growth potential.

Diamond is expanding its ultra deepwater leverage through the construction of three drillships. The increasing demand in some regions of West Africa and GoM is likely to benefit the existing fleet along with the newbuilds –– Ocean Onyx scheduled for delivery in the third quarter of 2013 — as they may be contracted at higher dayrates. 

However, Diamond Offshore remains leveraged to lower-spec deepwater and midwater floater markets where we believe utilization and dayrates could dampen over the next couple of years. Again, we remain cautious due to the anticipated increase in newbuilds entering the market over the next few years. Additionally, foreign currency fluctuation is also a threat to the company’s profitability.

Diamond holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. It faces competition from Noble Corporation (NE).

Read the Full Research Report on NE

Read the Full Research Report on DO

Read the Full Research Report on PZE

Zacks Investment Research

More From Zacks.com

Article source: http://us.rd.yahoo.com/finance/news/rss/story/*http://finance.yahoo.com/news/diamond-still-neutral-180037315.html

May 7th, 2012 | Posted in Exploration | Read More »

Brazil Talks With UN on Drilling for Oil Outside Boundary

Brazil is in talks with the United
Nations
to get recognition for so-called pre-salt oil deposits
that stretch outside the country’s continental shelf.

A “small” portion of the resources, buried under a layer
of salt in the Atlantic Ocean, are located outside the country’s
maritime borders, Marco Antonio Almeida, the Energy Ministry’s
oil and natural gas secretary, said today in Rio de Janeiro.

“The UN has already approved a large section of the
continental platform for Brazil to include. There are three
areas still under discussion,” Almeida told reporters in Rio de
Janeiro. “These three things need to be resolved for a
definitive solution.”

Brazil has found more oil than any other country over the
past decade with the biggest discoveries located in the pre-salt
area. The country plans to more than double crude output by 2020
as state-controlled Petroleo Brasleiro (PETR4) SA and other producers
start pumping oil from miles below the seabed.

The country also has “big” potential for oil discoveries
near the equator in northern Brazil where the government plans
to auction exploration areas. The energy ministry is waiting for
President Dilma Rousseff to authorize the bidding round, known
as Round 11, for the area and it may occur as early as this
year, Almeida said.

To contact the reporter on this story:
Juan Pablo Spinetto in Rio de Janeiro at
jspinetto@bloomberg.net

To contact the editor responsible for this story:
Dale Crofts at
dcrofts@bloomberg.net

Please enable JavaScript to view the comments powered by Disqus.

Article source: http://www.bloomberg.com/news/2012-05-07/brazil-talks-with-un-on-drilling-for-oil-outside-boundary-1-.html

May 7th, 2012 | Posted in Exploration | Read More »

More Oil Struck in Turkana Oil Exploration

Nairobi — The ongoing oil exploration in Turkana County has yielded an additional 80 meters of oil bearing column at the Ngamia 1 drilling site.

Prime Minister Raila Odinga announced that the explorers from Tullow Oil discovered more oil bearing rock stratum after reaching drilling depth of 1,515 meters earlier on Monday morning.

He said a total of 100 meters of oil reservoir has so far been discovered at the Ngamia 1 site after another 20 meters of net oil pay was found earlier.

“The well which has now deepened from 1,041m to 1,515m was found with good quality oil bearing reservoirs with a total pay count of at least 100m has been determined over a gross oil bearing interval of 650 meters,” Odinga announced.

He however told a press conference at his office that the commercial viability of the find was yet to be established but said samples from the well indicated that the quality of the Turkana oil was better than those recently discovered in Uganda and Ghana.

“Whereas we are very encouraged by the results, it is far too early to speculate on the potential viability of Ngamia 1 or the basin as a whole,” the PM said.

The premier said plans to undertake more exploration ventures at Twiga 1 drilling site within the county and another at Paipai well in Marsabit County were underway to establish the extent of the oil deposit in Northern Kenya.

He said the results of findings from the proposed additional exploration sites were expected to come out within the third quarter of the year but stressed on the government’s commitment to undertake the activities in a socially and environmentally responsible manner.

Odinga said the government was working on modalities to review and streamline relevant policies to conform to the best international practice and align with the new constitutional dispensation.

“On the regulatory front, the government has an important role to play in establishing policy framework which will support the development and the growth of the sector in a transparent and accountable manner,” he said.

The premier at the same time dispelled fears that the oil find could turn out to be a curse rather than a blessing and assured that the government will ensure that nation gained positively from the expected proceeds.

He also announced plans to engage the host communities in all aspects of the project to bridge the gap between key stakeholders and the general public to avert negative speculation.

Others present during the press conference were Energy Minister Kiraitu Murungi, his regional Development counterpart Fred Gumo and assistant ministers Mohamud Mohamed, Magerer Langat, and Josephat Nanok.

Article source: http://allafrica.com/stories/201205071623.html

May 7th, 2012 | Posted in Exploration | Read More »

Temasek and RRJ Agree to Invest Approximately $468 Million in Cheniere and Propose Strategic Partnership for LNG Sales, Marketing and Trading

HOUSTON, May 7, 2012 /PRNewswire/ — Cheniere Energy, Inc. (“Cheniere”) (LNG) announced today that Temasek and RRJ Capital have agreed to make an equity investment in aggregate of approximately $468 million in Cheniere.  Cheniere intends to use the proceeds from this offering and cash on hand to purchase, on a pari passu basis, $500 million of the $2 billion of equity securities anticipated to be issued by Cheniere Energy Partners, L.P. (“Cheniere Partners”) in connection with the financing of the Sabine Pass LNG liquefaction project (“Sabine Project”).  Additionally, Temasek, RRJ Capital and Cheniere are in discussions on a strategic partnership focused on developing LNG sales, marketing and trading relationships and opportunities in Asian markets.  The partnership would market LNG volumes from the proposed Sabine Pass and Corpus Christi LNG liquefaction facilities. 

(Logo: http://photos.prnewswire.com/prnh/20090611/AQ31545LOGO)

“We are pleased to confirm that we have recently agreed to invest in Cheniere alongside RRJ Capital. Cheniere’s established LNG expertise and experience give it the first mover competitive advantage in LNG energy supply,” said Greg Lanham, Managing Director, Investments, Temasek.  “This investment helps to expand our longer term interest in the energy and resources sector.  We look forward to working with both Cheniere and RRJ Capital and others to tap into opportunities in Asia which are driven by the energy demand of growing middle income populations and continued urbanization in the decades ahead.”

“We are very excited about our long-term strategic investment in Cheniere,” said Richard Ong, Chairman and CEO of RRJ Capital.  “We strongly support Cheniere and their vision to become a world leader in the global LNG industry, including the key Asian LNG market.”

“Temasek and RRJ Capital have committed to make a significant investment in Cheniere and we look forward to exploring commercial opportunities with our new shareholders,” said Charif Souki, Chairman and CEO of Cheniere.  “Their proposed investment would allow us to increase our equity holdings in Cheniere Partners, which we believe is an attractive, long-term opportunity that better aligns us with the Sabine Project and its investors.  Additionally, Temasek and RRJ Capital would enhance the further development of our LNG business through their expertise and experience in investments, marketing and trading in Asian markets.”

Incorporated in 1974, Temasek is an Asian investment company headquartered in Singapore. Supported by 12 affiliates and offices in Asia and Latin America, Temasek owns a S$193 billion portfolio as of March 31, 2011, concentrated principally in Singapore, Asia and growth markets.  Temasek’s investment themes center on transforming economies, growing middle income populations, deepening competitive advantages and emerging champions.  Its portfolio covers a broad spectrum of industries, including financial services; transportation and industrials; telecommunications, media and technology; life sciences, consumer real estate; and energy and natural resources.  It has a corporate credit rating of AAA/Aaa from rating agencies Standard Poor’s and Moody’s, respectively.   For further information on Temasek, please visit www.temasek.com.sg.

RRJ Capital is a US$2.3bn Asia-focused private equity firm targeting on key growth sectors such as energy, natural resources, financial institutions, consumer and healthcare.  RRJ Capital has offices in Hong Kong and Singapore.

Cheniere is a Houston-based energy company primarily engaged in LNG related businesses, and owns and operates the Sabine Pass LNG terminal and Creole Trail pipeline in Louisiana. Cheniere is pursuing related business opportunities both upstream and downstream of the Sabine Pass LNG terminal.

This press release contains certain statements that may include “forward-looking statements” within the meanings of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included herein are “forward-looking statements.” Included among “forward-looking statements” are, among other things, (i) statements regarding Cheniere’s business strategy, plans and objectives, including the construction and operation of liquefaction facilities, (ii) statements regarding our expectations regarding regulatory authorizations and approvals, (iii) statements expressing beliefs and expectations regarding the development of Cheniere Partners’ LNG terminal and liquefaction business, (iv) statements regarding the business operations and prospects of third parties, (v) statements regarding potential financing arrangements and (vi) statements regarding future discussions and entry into contracts. Although Cheniere believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Cheniere’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in Cheniere’s periodic reports that are filed with and available from the Securities and Exchange Commission. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Other than as required under the securities laws, Cheniere does not assume a duty to update these forward-looking statements.

May 7th, 2012 | Posted in Exploration | Read More »

BreitBurn Energy Partners L.P. Reports First Quarter Results and Announces Substantial Increase in 2012 Capital Program Given Positive Drilling Performance

LOS ANGELES–(BUSINESS WIRE)–

BreitBurn Energy Partners L.P. (the “Partnership”) (NASDAQ:BBEP – News) today
announced financial and operating results for its first quarter of 2012
as well as a substantial increase in its 2012 capital program.

Key Highlights

  • The Partnership had strong first quarter operating and financial
    results, with net production on an annualized basis trending in-line
    with its guidance range, despite the first quarter being the
    Partnership’s lowest producing quarter due to weather related
    restrictions on production.
  • On April 25, 2012, the Partnership announced it entered into a
    definitive agreement to acquire oil properties located in Park County
    in the Big Horn Basin of Wyoming for approximately $98 million from
    Legacy Energy, Inc., a wholly-owned subsidiary of NiMin Energy Corp.
    The acquisition is subject to customary closing conditions and
    purchase price adjustments, as well as approval by NiMin shareholders.
    The transaction is expected to close before July 25, 2012.
  • On April 19, 2012, the Partnership announced an increased cash
    distribution for the first quarter of 2012 of $0.4550 per common unit,
    or an annualized rate of $1.82 per common unit, to be paid on May 14,
    2012 to the record holders of common units at the close of business on
    May 7, 2012. This represents a 9% increase over the cash distribution
    for the first quarter of 2011 and the Partnership’s eighth consecutive
    quarterly distribution increase. On February 14, 2012, the Partnership
    paid its fourth quarter 2011 distribution of $0.450 per unit,
    representing a 9% increase over the fourth quarter 2010 distribution.
  • On April 19, 2012, the Partnership also announced the completion of
    its regularly scheduled borrowing base redetermination and received a
    substantial increase in its borrowing base from $788 million to $850
    million. As of May 7, 2012, the Partnership had $84 million in
    outstanding borrowings under its bank credit facility.
  • On February 8, 2012, the Partnership completed a public offering of
    9.2 million common units. Net proceeds from the offering were used to
    reduce borrowings under the Partnership’s bank credit facility.
  • On January 13, 2012, the Partnership completed a private offering of
    $250 million in aggregate principal amount of 7.875% Senior Notes due
    2022. Net proceeds from the offering were used to reduce borrowings
    under the Partnership’s bank credit facility.

Management Commentary

Hal Washburn, CEO, said: “The Partnership delivered another quarter of
consistent operating performance, and we continued executing on our
growth through acquisitions strategy. Our recently announced Wyoming
acquisition increases our exposure to crude oil and is an excellent
addition to our Wyoming operations. Based on our ongoing review of our
diverse portfolio, we are increasing our 2012 capital program by $19
million, or 28%, to approximately $87 million, to pursue attractive oil
drilling opportunities in California where we are currently receiving
Brent-based pricing, which is well above WTI. We continue to be very
active in growing our business and are targeting $300-$500 million in
oil and gas acquisitions this year in our key operating areas as well as
new states.”

First Quarter 2012 Operating and Financial
Results Compared to Fourth Quarter 2011

  • Total production decreased from 2,065 MBoe in the fourth quarter of
    2011 to 1,987 MBoe in the first quarter of 2012, consistent with past
    seasonal trends. Average daily production was 21,835 Boe/day in the
    first quarter of 2012 compared to 22,450 Boe/day in fourth quarter of
    2011.

    • Oil and NGL production was 859 MBoe compared to 871 MBoe.
    • Natural gas production was 6,769 MMcf compared to 7,168 MMcf.
  • Adjusted EBITDA, a non-GAAP measure, was $61.4 million for the first
    quarter of 2012, down from $64.4 million in the fourth quarter of
    2011. The decrease was primarily due to the delay of a Florida crude
    oil shipment from late March to the first week of April and lower
    natural gas sales revenue during the quarter. Unlike most of our
    properties, crude oil sales from our Florida fields are made in
    periodic, large barge shipments. Although this sale included
    approximately 120,000 net barrels of crude oil that was produced in
    the first quarter, the sale actually occurred in the Partnership’s
    second quarter. Accordingly, the Partnership’s second quarter Adjusted
    EBITDA will include this Florida sale.
  • Lease operating expenses per Boe, which include district expenses,
    transportation expenses and processing fees and exclude production and
    property taxes, increased to $19.16 per Boe in the first quarter of
    2012 from $18.44 per Boe in the fourth quarter of 2011, primarily due
    to the effect of higher crude oil prices on materials and services.
  • General and administrative expenses on a per Boe basis, excluding
    non-cash unit-based compensation, decreased to $4.07 per Boe in the
    first quarter of 2012 from $4.59 per Boe in the fourth quarter of
    2011, primarily due to acquisition-related costs incurred in the
    fourth quarter of 2011.
  • Oil and natural gas sales revenues, including realized gains and
    losses on commodity derivative instruments were $111.6 million in the
    first quarter of 2012, down from $117.6 million in the fourth quarter
    of 2011, primarily reflecting lower sales volumes due to the timing of
    Florida sales, partially offset by higher prices. Fourth quarter 2011
    revenues of $117.6 million exclude a $36.8 million loss related to the
    early termination of crude oil derivative contracts.
  • Realized gains on commodity derivative instruments were $17.6 million
    in the first quarter of 2012 compared to realized losses of $28.9
    million in the fourth quarter of 2011. Realized losses in the fourth
    quarter of 2011 reflect the $36.8 million loss on the early
    termination of crude oil derivative contracts. Excluding the loss on
    termination, realized gains on commodity derivative instruments would
    have been $7.9 million in the fourth quarter of 2011.
  • NYMEX WTI crude oil spot prices averaged $102.98 per barrel and Henry
    Hub natural gas spot prices averaged $2.44 per Mcf in the first
    quarter of 2012 compared to $94.01 per barrel and $3.33 per Mcf,
    respectively, in the fourth quarter of 2011. Brent crude oil spot
    prices averaged $118.71 per barrel in the first quarter of 2012
    compared to $109.42 in the fourth quarter of 2011.
  • Realized crude oil and NGL prices averaged $90.36 per Boe and realized
    natural gas prices averaged $6.18 per Mcf in the first quarter of 2012
    compared to realized crude oil and NGL prices, excluding the realized
    loss on termination of oil derivatives, that averaged $84.00 per Boe
    and $6.02 per Mcf, respectively, in the fourth quarter of 2011.
  • Net loss attributable to the Partnership, including the effect of
    unrealized losses on commodity derivative instruments, was $50.0
    million, or $0.76 per diluted common unit, in the first quarter of
    2012 compared to a net loss of $30.4 million, or $0.51 per diluted
    common unit, in the fourth quarter of 2011.
  • Capital expenditures totaled $16.5 million in the first quarter of
    2012 compared to $17.4 million in the fourth quarter of 2011.

Impact of Derivative Instruments

The Partnership uses commodity and interest rate derivative instruments
to mitigate the risks associated with commodity price volatility and
changing interest rates and to help maintain cash flows for operating
activities, acquisitions, capital expenditures, and distributions. The
Partnership does not enter into derivative instruments for speculative
trading purposes. Non-cash gains or losses do not affect Adjusted
EBITDA, cash flow from operations or the Partnership’s ability to pay
cash distributions.

Realized gains from commodity derivative instruments were $17.6 million
during the first quarter of 2012. Realized losses from interest rate
derivative instruments were $0.7 million during the first quarter of
2012. Non-cash unrealized losses from commodity derivative instruments
were $53.6 million and non-cash unrealized gains from interest rate
derivative instruments were $0.2 million during the first quarter of
2012.

Production, Statement of Operations, and
Realized Price Information

The following table presents production, selected income statement and
realized price information for the three months ended March 31, 2012,
December 31, 2011 and March 31, 2011:

 

 

 

Three Months Ended

March 31,

 

 

 

 

 

December 31,

 

 

 

 

 

March 31,

Thousands of dollars, except as indicated

2012

2011

2011

Oil, natural gas and NGLs sales

$

94,007

$

109,720

$

92,575

Realized gain (loss) on commodity derivative instruments (a)

17,591

(28,851

)

6,443

Unrealized loss on commodity derivative instruments (a)

(53,596

)

(8,614

)

(112,620

)

Other revenues, net

 

1,145

 

 

894

 

 

898

 

Total revenues

$

59,147

 

$

73,149

 

$

(12,704

)

Lease operating expenses and processing fees

$

38,073

$

38,093

$

28,908

Production and property taxes

 

7,573

 

 

7,946

 

 

5,769

 

Total lease operating expenses

$

45,646

 

$

44,645

 

$

34,677

 

Purchases and other operating costs

370

210

154

Change in inventory

 

(2,755

)

 

255

 

 

1,980

 

Total operating costs

$

43,261

 

$

46,504

 

$

36,811

 

Lease operating expenses pre taxes per Boe (b)

$

19.16

$

18.44

$

17.75

Production and property taxes per Boe

3.81

3.85

3.54

Total lease operating expenses per Boe

 

22.97

 

 

22.29

 

 

21.29

 

General and administrative expenses excluding unit-based compensation

$

8,083

 

$

9,480

 

$

7,058

 

Net loss attributable to the partnership

$

(49,970

)

$

(30,392

)

$

(94,747

)

Net loss per diluted limited partner unit

$

(0.76

)

$

(0.51

)

$

(1.67

)

 

Total production (MBoe)

1,987

2,065

1,629

Oil and NGLs (MBoe)

859

871

773

Natural gas (MMcf)

6,769

7,168

5,138

Average daily production (Boe/d)

 

21,835

 

 

22,450

 

 

18,098

 

Sales volumes (MBoe)

 

1,899

 

 

2,080

 

 

1,682

 

Average realized sales price (per Boe) (c) (d) (e)

$

58.66

$

56.48

$

58.78

Oil and NGLs (per Boe) (c) (d) (e)

90.36

84.00

73.81

Natural gas (per Mcf) (c)

 

6.18

 

 

6.02

 

 

7.38

 

 

 

 

Non-GAAP Financial Measures

This press release, the financial tables and other supplemental
information, including the reconciliations of certain non-generally
accepted accounting principles (“non-GAAP”) measures to their nearest
comparable generally accepted accounting principles (“GAAP”) measures,
may be used periodically by management when discussing the Partnership’s
financial results with investors and analysts, and they are also
available on the Partnership’s website under the Investor Relations tab.

Among the non-GAAP financial measures used is “Adjusted EBITDA.” This
non-GAAP financial measure should not be considered as an alternative to
GAAP measures, such as net income, operating income, cash flow from
operating activities or any other GAAP measure of liquidity or financial
performance. In addition, this press release presents certain non-GAAP
financial measures, which exclude the effect of a $36.8 million loss
relating to the early termination of crude oil derivative contracts in
the fourth quarter of 2011. Management believes that these non-GAAP
financial measures enhance comparability to prior periods.

Adjusted EBITDA is presented as management believes it provides
additional information relative to the performance of the Partnership’s
business, such as our ability to meet our debt covenant compliance
tests. This non-GAAP financial measure may not be comparable to
similarly titled measures of other publicly traded partnerships or
limited liability companies because all companies may not calculate
Adjusted EBITDA in the same manner.

Adjusted EBITDA

The following table presents a reconciliation of net loss and net cash
flows from operating activities, our most directly comparable GAAP
financial performance and liquidity measures, to Adjusted EBITDA for
each of the periods indicated.

 

 

 

 

 

 

 

Three Months Ended

March 31,

 

 

 

 

December 31,

March 31,

Thousands of dollars

2012

2011

2011

Reconciliation of net loss to Adjusted EBITDA:

 

Net loss attributable to the Partnership

)

)

)

 

Unrealized loss on commodity derivative instruments

53,596

8,614

112,620

Depletion, depreciation and amortization expense

38,281

31,149

24,641

Interest expense and other financing costs (a)

14,458

11,492

10,443

Unrealized gain on interest rate derivatives

(164

)

(340

)

(1,366

)

Loss on early termination of commodity derivatives (b)

-

36,779

-

Loss (gain) on sale of assets

125

(71

)

14

Income taxes

(559

)

(321

)

(1,002

)

Unit-based compensation expense (c)

5,591

5,707

5,413

Net operating cash flow from acquisitions, effective date through
closing date

 

-

 

 

1,808

 

 

-

 

Adjusted EBITDA

$

61,358

 

$

64,425

 

$

56,016

 

 

 

Three Months Ended

March 31,

December 31,

March 31,

Thousands of dollars

2012

2011

2011

Reconciliation of net cash flows from operating activities to
Adjusted EBITDA:

 

Net cash (used in) provided by operating activities

$

71,299

$

(241

)

$

54,399

 

Increase (decrease) in assets net of liabilities relating to
operating activities

(23,168

)

15,503

(7,597

)

Interest expense (a) (d)

13,206

10,394

9,139

Loss on early termination of commodity derivatives (b)

-

36,779

-

Income from equity affiliates, net

(154

)

(41

)

103

Incentive compensation expense (e)

-

(2

)

(24

)

Income taxes

220

278

30

Non-controlling interest

(45

)

(53

)

(34

)

Net operating cash flow from acquisitions, effective date through
closing date

 

-

 

 

1,808

 

 

-

 

Adjusted EBITDA

$

61,358

 

$

64,425

 

$

56,016

 

 

 

 

Hedge Portfolio Summary

The table below summarizes the Partnership’s commodity derivative hedge
portfolio as of May 4, 2012. Please refer to the updated Commodity Price
Protection Portfolio via our website for additional details related to
our hedge portfolio.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

2012

2013

2014

2015

2016

Oil Positions:

Fixed Price Swaps – NYMEX WTI

Hedged Volume (Bbls/d)

2,501

2,580

2,500

3,000

1,000

Average Price ($/Bbl)

$

86.58

$

87.13

$

92.62

$

98.90

$

93.08

Fixed Price Swaps – IPE Brent

Hedged Volume (Bbls/d)

2,538

3,900

3,500

2,000

500

Average Price ($/Bbl)

$

105.43

$

97.23

$

96.86

$

96.46

$

-

Collars – NYMEX WTI

Hedged Volume (Bbls/d)

2,426

500

1,000

1,000

-

Average Floor Price ($/Bbl)

$

110.00

$

77.00

$

90.00

$

90.00

$

-

Average Ceiling Price ($/Bbl)

$

145.25

$

103.10

$

112.00

$

113.50

$

-

Collars – IPE Brent

Hedged Volume (Bbls/d)

-

-

-

500

500

Average Floor Price ($/Bbl)

$

-

$

-

$

-

$

90.00

$

90.00

Average Ceiling Price ($/Bbl)

$

-

$

-

$

-

$

109.50

$

101.25

Total:

Hedged Volume (Bbls/d)

7,465

6,980

7,000

6,500

2,000

Average Price ($/Bbl)

$

100.60

$

92.05

$

94.36

$

96.10

$

92.93

 

Gas Positions:

Fixed Price Swaps – MichCon City-Gate

Hedged Volume (MMBtu/d)

18,928

37,000

7,500

7,500

-

Average Price ($/MMBtu)

$

6.97

$

6.50

$

6.00

$

6.00

$

-

Fixed Price Swaps – Henry Hub

Hedged Volume (MMBtu/d)

16,000

19,000

23,000

23,000

-

Average Price ($/MMBtu)

$

4.88

$

4.90

$

5.24

$

5.41

$

-

Collars – MichCon City-Gate

Hedged Volume (MMBtu/d)

18,929

-

-

-

-

Average Floor Price ($/MMBtu)

$

9.00

$

-

$

-

$

-

$

-

Average Ceiling Price ($/MMBtu)

$

11.24

$

-

$

-

$

-

$

-

Total:

Hedged Volume (MMBtu/d)

53,858

56,000

30,500

30,500

-

Average Price ($/MMBtu)

$

7.06

$

5.96

$

5.43

$

5.55

$

-

 

Calls – Henry Hub

Hedged Volume (MMBtu/d)

-

30,000

15,000

-

-

Average Price ($/MMBtu)

$

-

$

8.00

$

9.00

$

-

$

-

Premium ($/MMBtu)

$

-

$

0.08

$

0.12

$

-

$

-

 

Other Information

The Partnership will host an investor conference call to discuss its
results today at 10:00 a.m. (Pacific Time). Investors may access the
conference call over the Internet via the Investor Relations tab of the
Partnership’s website (www.breitburn.com),
or via telephone by dialing 888-510-1785 (international callers dial
+1-719-325-2457) a few minutes prior to register. Those listening via
the Internet should go to the site 15 minutes early to register,
download and install any necessary audio software. In addition, a replay
of the call will be available through May 21, 2012 by dialing
877-870-5176 (international callers dial +1-858-384-5517) and entering
replay PIN 7248609, or by going to the Investor Relations tab of the
Partnership’s website (www.breitburn.com).
The Partnership will take live questions from securities analysts and
institutional portfolio managers; the complete call is open to all other
interested parties on a listen-only basis.

About BreitBurn Energy Partners L.P.

BreitBurn Energy Partners L.P. is a publicly traded independent oil and
gas limited partnership focused on the acquisition, exploitation,
development and production of oil and gas properties. The Partnership’s
producing and non-producing crude oil and natural gas reserves are
located in Michigan, Wyoming, California, Florida, Indiana and Kentucky.
See www.BreitBurn.com
for more information.

Cautionary Statement Regarding Forward-Looking
Information

This press release contains forward-looking statements relating to the
Partnership’s operations that are based on management’s current
expectations, estimates and projections about its operations. Words and
phrases such as “believes,” “expects,” “future,” “impact,” “guidance,”
“will be” and variations of such words and similar expressions are
intended to identify such forward-looking statements. These statements
are not guarantees of future performance and are subject to certain
risks, uncertainties and other factors, some of which are beyond our
control and are difficult to predict. These include risks relating to
the Partnership’s financial performance and results, availability of
sufficient cash flow and other sources of liquidity to execute our
business plan, prices and demand for natural gas and oil, increases in
operating costs, uncertainties inherent in estimating our reserves and
production, our ability to replace reserves and efficiently develop our
current reserves, political and regulatory developments relating to
taxes, derivatives and our oil and gas operations, risks relating to our
acquisitions, and the factors set forth under the heading “Risk Factors”
incorporated by reference from our Annual Report on Form 10-K filed with
the Securities and Exchange Commission on February 29, 2012, and if
applicable, our Quarterly Reports on Form 10-Q and our Current Reports
on Form 8-K. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such forward-looking
statements. The reader should not place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. Unless legally required, the Partnership undertakes no
obligation to update publicly any forward-looking statements, whether as
a result of new information, future events or otherwise. Unpredictable
or unknown factors not discussed herein also could have material adverse
effects on forward-looking statements.

BBEP-IR

 

 

 

 

 

 

 

BreitBurn Energy Partners L.P. and Subsidiaries

Unaudited Consolidated Balance Sheets

 

 

 

March 31,

December 31,

Thousands

2012

2011

ASSETS

Current assets

Cash

$

6,380

$

5,328

Accounts and other receivables, net

43,840

73,018

Derivative instruments

70,027

83,452

Related party receivables

2,160

4,245

Inventory

9,229

4,724

Prepaid expenses

 

902

 

 

2,053

 

Total current assets

132,538

172,820

Equity investments

7,337

7,491

Property, plant and equipment

Oil and gas properties

2,599,116

2,583,993

Other assets

 

13,582

 

 

13,431

 

2,612,698

2,597,424

Accumulated depletion and depreciation

 

(561,021

)

 

(524,665

)

Net property, plant and equipment

2,051,677

2,072,759

Other long-term assets

Derivative instruments

40,538

55,337

Other long-term assets

 

26,530

 

 

22,442

 

Total assets

$

2,258,620

 

$

2,330,849

 

 

LIABILITIES AND EQUITY

Current liabilities

Accounts payable

$

38,275

$

33,494

Derivative instruments

20,110

8,881

Revenue and royalties payable

18,056

19,641

Salaries and wages payable

5,123

13,655

Accrued liabilities

 

14,802

 

 

14,218

 

Total current liabilities

96,366

89,889

 

Credit facility

85,000

520,000

Senior notes, net

548,665

300,613

Deferred income taxes

2,024

2,803

Asset retirement obligation

83,801

82,397

Derivative instruments

17,063

3,084

Other long-term liabilities

 

4,835

 

 

4,849

 

Total liabilities

837,754

1,003,635

Equity

Partners’ equity

1,420,413

1,326,764

Noncontrolling interest

 

453

 

 

450

 

Total equity

 

1,420,866

 

 

1,327,214

 

Total liabilities and equity

$

2,258,620

 

$

2,330,849

 

 

Common units outstanding

69,144

59,864

 

 

 

 

 

 

 

 

 

 

 

 

 

BreitBurn Energy Partners L.P. and Subsidiaries

Unaudited Consolidated Statements of Operations

 

Three Months Ended

March 31,

Thousands of dollars, except per unit amounts

2012

2011

Revenues and other income items

Oil, natural gas and natural gas liquid sales

$

94,007

$

92,575

Loss on commodity derivative instruments, net

(36,005

)

(106,177

)

Other revenue, net

 

1,145

 

 

898

 

Total revenues and other income items

59,147

(12,704

)

Operating costs and expenses

Operating costs

43,261

36,811

Depletion, depreciation and amortization

38,281

24,641

General and administrative expenses

13,674

12,471

Loss on sale of assets

 

125

 

 

14

 

Total operating costs and expenses

 

95,341

 

 

73,937

 

 

Operating loss

(36,194

)

(86,641

)

 

Interest expense, net of capitalized interest

13,800

9,420

Loss (gain) on interest rate swaps

494

(343

)

Other income, net

 

(4

)

 

(3

)

 

Loss before taxes

(50,484

)

(95,715

)

 

Income tax benefit

 

(559

)

 

(1,002

)

 

Net loss

(49,925

)

(94,713

)

 

Less: Net income attributable to noncontrolling interest

 

(45

)

 

(34

)

Net loss attributable to the partnership

 

(49,970

)

 

(94,747

)

 

Basic net loss per unit

$

(0.76

)

$

(1.67

)

Diluted net loss per unit

$

(0.76

)

$

(1.67

)

 

 

 

 

 

 

 

 

 

 

 

 

 

BreitBurn Energy Partners L.P. and Subsidiaries

Unaudited Consolidated Statements of Cash Flows

 

Three months ended

March 31,

Thousands of dollars

2012

2011

Cash flows from operating activities

Net loss

$

(49,925

)

$

(94,713

)

Adjustments to reconcile net income to cash flow from operating
activities:

Depletion, depreciation and amortization

38,281

24,641

Unit-based compensation expense

5,591

5,437

Unrealized loss on derivative instruments

53,432

111,254

Income from equity affiliates, net

154

(103

)

Deferred income taxes

(779

)

(1,032

)

Loss on sale of assets

125

14

Other

809

257

Changes in assets and liabilities:

Accounts receivable and other assets

30,670

4,462

Inventory

(4,505

)

2,446

Net change in related party receivables and payables

2,085

1,789

Accounts payable and other liabilities

 

(4,639

)

 

(53

)

Net cash provided by operating activities

 

71,299

 

 

54,399

 

Cash flows from investing activities

Capital expenditures

(14,054

)

(12,735

)

Proceeds from sale of assets

 

507

 

 

-

 

Net cash used in investing activities

 

(13,547

)

 

(12,735

)

Cash flows from financing activities

Issuance of common units

166,155

100,482

Distributions

(28,130

)

(23,559

)

Proceeds from issuance of long-term debt, net

310,885

60,500

Repayments of long-term debt

(498,000

)

(175,500

)

Change in book overdraft

(2,097

)

(1,003

)

Debt issuance costs

 

(5,513

)

 

(37

)

Net cash used in financing activities

 

(56,700

)

 

(39,117

)

Increase in cash

1,052

2,547

Cash beginning of period

 

5,328

 

 

3,630

 

Cash end of period

$

6,380

 

$

6,177

 

Article source: http://us.rd.yahoo.com/finance/news/rss/story/*http://finance.yahoo.com/news/breitburn-energy-partners-l-p-123000515.html

May 7th, 2012 | Posted in Exploration | Read More »

Northern Oil & Gas Earnings: Falls Short of Street Estimates

Northern Oil Gas, Inc (NYSEAMEX:NOG) reported its results for the first quarter. Northern Oil Gas is an independent energy company engaged in the acquisition, exploration, exploitation, and development of oil and natural gas properties.

Investing Insights: What’s the Future of Microsoft’s Stock?

Northern Oil Gas, Inc Earnings Cheat Sheet for the First Quarter

Results: Reported a profit of $8.8 million (14 cents per diluted share) in the quarter. Northern Oil Gas, Inc had a net loss of $7.1 million or a loss 11 cents per share in the year-earlier quarter.

Revenue: Rose 1899.5% to $50.5 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Northern Oil Gas, Inc reported adjusted net income of 23 cents per share. By that measure, the company fell short of mean estimate of 24 cents per share. It fell short of the average revenue estimate of $65.3 million.

Quoting Management: Michael Reger, CEO, commented: “The first quarter of 2012 was another breakthrough quarter for Northern Oil and included quarterly records for Production, Oil and Gas Sales and Adjusted EBITDA. The pace of drilling in the Bakken and Three Forks plays continues to accelerate, and our acreage position is turning to production at an increasing rate. Importantly, we are seeing a broader range of opportunities to acquire strategic, non-operated interests, which we believe will allow us to continue growing our acreage position in a careful and methodical manner. We are pleased to see the additional efficiencies that are embedded in future wells through the use of pad drilling, which also indicates operators’ intentions to capitalize on future downspacing in these plays. Our capital position remains secure and we believe we are well positioned to develop and grow our asset base.”

Key Stats:

The company has now missed analyst estimates for the last four quarters. It fell short by 4 cents in the fourth quarter of the last fiscal year, by 3 cents in the third quarter of the last fiscal year, and by 7 cents in the second quarter of the last fiscal year.

The company reported a profit last quarter, following a quarter of being in the red. The company booked a net loss of $28.6 million, or 46 cents per share, in the third quarter of the last fiscal year.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the second quarter has moved down from 32 cents a share to 29 cents over the last ninety days. The average estimate for the fiscal year is $1.27 per share, down from $1.44 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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Article source: http://us.rd.yahoo.com/finance/external/xwscheats/rss/SIG=134dj4lak/*http://wallstcheatsheet.com/stocks/northern-oil-gas-earnings-falls-short-of-street-estimates.html/

May 7th, 2012 | Posted in Exploration | Read More »

Kulczyk Oil Ventures Inc.: Drilling Commences At North Makeevskoye, Ukraine


CALGARY, ALBERTA, May 07, 2012 (MARKETWIRE via COMTEX) –
Kulczyk Oil Ventures Inc. (“Kulczyk Oil”, “KOV” or the “Company”)
(warsaw:KOV), an international upstream oil and gas exploration and
production company, is pleased to announce that the North
Makeevskoye-1 (“NM-1″) exploration well has commenced drilling. The
NM-1 well, which is operated by KUB-Gas LLC (“KUB-Gas”), a subsidiary
in which KOV has a 70% effective ownership interest, is the first
well to be drilled on the North Makeevskoye Exploration Licence in
Ukraine.

North Makeevskoye Exploration Well

The North Makeevskoye-1 (“NM-1″) exploration well is expected to take
approximately 40 days to reach a planned total depth (“TD”) of 2,500
metres. Some drill stem tests (“DSTs”) may be undertaken and, if
initiated, additional time may be needed before TD is reached. The
NM-1 well will target a prospect with multiple reservoir units in
Bashkirian, Muscovian and Serpukovian aged sediments and will be
drilled with the KUB-Gas owned K-200 drilling rig. The NM-1 well is
located approximately 10 kilometres to the northeast of the
Olgovskoye Field. RPS Energy, the Company’s independent engineering
firm, in their 2011 year-end report dated March 20th, 2012, allocated
Low, Mid and High Case Prospective Resources to the NM-1 prospect,
net to KOV, of 7.78 Bcf, 30.23 Bcf and 75.04 Bcf respectively.

North Makeevskoye Licence

In January 2011, KOV announced that KUB-Gas was awarded the North
Makeevskoye exploration licence area in Ukraine. The North
Makeevskoye Exploration Licence is located immediately northeast of
KUB-Gas’ Makeevskoye and Olgovskoye licences, near the City of
Lugansk in eastern Ukraine. The Company believes the licence to be
geologically similar to the productive areas which lie along the
primary South-Eastern Dnieper-Donets Basin gas/condensate structural
trend – such as the adjacent KUB-Gas Makeevskoye and Olgovskoye
Licences. The award of the 19,050 hectare (47,073 acre) North
Makeevskoye Licence to KUB-Gas increased the Company’s total holdings
to five licence areas and increased KUB-Gas’ total area under licence
by more than 110% to 36,315 hectares (89,736 acres). The North
Makeevskoye Exploration Licence has a five year term effective from
29 December 2010.

Jock Graham, Executive Vice President of KOV, commented:

“We are excited about the potential of the North Makeevskoye Licence,
which we consider to be highly prospective. There are several large
undrilled structures on the licence, one of which will be targeted by
the NM-1 exploration well. Wells such as NM-1 have the potential to
add significant value to the Company and help provide the basis for
future reserves and revenue growth.”

During the second quarter of 2011, KUB-Gas acquired 71 kilometres of
new 2D seismic data over the North Makeevskoye Licence.
Interpretation of this new data in combination with approximately 275
kilometres of pre-existing 2D seismic data resulted in NM-1 being
defined as the first drilling location on this new licence. In the
first quarter of 2012 225 km2 of new 3D seismic data was acquired
over the majority of the North Makeevskoye Licence. Processing of the
seismic data is currently underway and interpretation of the
processed data may define additional drilling locations by August
2012.

Defined Terms

“Prospective Resources” are those quantities of petroleum estimated,
as of a given date, to be potentially recoverable from undiscovered
accumulations by application of future development projects.
Prospective Resources have both an associated chance of discovery and
a chance of development. Prospective Resources are further subdivided
in accordance with the level of certainty associated with recoverable
estimates assuming their discovery and development and may be
sub-classified based on project maturity.

About Kulczyk Oil

Kulczyk Oil is an international upstream oil and gas exploration and
production company with a diversified portfolio of projects in
Ukraine, Brunei and Syria and with a risk profile ranging from
exploration in Brunei and Syria to production and development in
Ukraine. The common shares of the Company trade on the Warsaw Stock
Exchange under trading symbol “KOV”.

In Ukraine, KOV owns an effective 70% interest in KUB-Gas LLC. The
assets of KUB-Gas consist of 100% interests in five licences near to
the City of Lugansk in the northeast part of Ukraine. Four of the
licences are gas producing.

In Brunei, KOV owns working interests in two production sharing
agreements which gives the Company the right to explore for and
produce oil and natural gas from Block L and Block M. KOV owns a 90%
working interest in Block L, a 1,123 square kilometre area covering
onshore and offshore areas in northern Brunei and a 36% working
interest in Block M, a 1,505 square kilometre area onshore in
southern Brunei.

In Syria, KOV holds a participating interest of 50% in the Syria
Block 9 production sharing contract which provides the right to
explore for and, upon the satisfaction of certain conditions, to
produce oil and gas from Block 9, a 10,032 square kilometre area in
northwest Syria. The Company has an agreement to assign a 5%
ownership interest to a third party which is subject to the approval
of Syrian authorities, and which, if approved, would leave the
Company with a remaining effective interest of 45% in Syria Block 9.

The main shareholder of the Company, Kulczyk Investments S.A. owns
approximately 44% of the issued common shares. Kulczyk Investments
S.A. is an international investment house founded by Polish
businessman Dr. Jan Kulczyk.

For further information, please refer to the Kulczyk Oil website
(
www.kulczykoil.com ).

Translation: This news release has been translated into Polish from
the English original.

Forward-looking Statements This release contains forward-looking
statements made as of the date of this announcement with respect to
future activities of KUB-Gas and related to its five licence areas
(Vergunskoye, Krutogorovskoye, Makeevskoye, North Makeevskoye and
Olgovskoye) in Ukraine and to certain wells drilled within those
licence areas that are not historical facts. Although the Company
believes that its expectations reflected in the forward-looking
statements are reasonable as of the date hereof, any potential
results suggested by such statements involve risk and uncertainties
and no assurance can be given that actual results will be consistent
with these forward-looking statements. Various factors that could
impair or prevent the Company from completing the expected activities
on its projects include that the Company’s projects experience
technical and mechanical problems, there are changes in product
prices, failure to obtain regulatory approvals, the state of the
national or international monetary, oil and gas, financial, political
and economic markets in the jurisdictions where the Company operates
and other risks not anticipated by the Company or disclosed in the
Company’s published material. Since forward-looking statements
address future events and conditions, by their very nature, they
involve inherent risks and uncertainties and actual results may vary
materially from those expressed in the forward-looking statement. The
Company undertakes no obligation to revise or update any
forward-looking statements in this announcement to reflect events or
circumstances after the date of this announcement, unless required by
law.


        Canada
        Suite 1170, 700-4th Avenue S.W., Calgary, Alberta, Canada
        Telephone: +1-403-264-8877
        Facsimile: +1-403-264-8861
        Dubai
        Al Shafar Investment Building, Suite 123, Shaikh Zayed Road,
        Box 37174, Dubai, United Arab Emirates
        Telephone: +971-4-339-5212
        Facsimile: +971-4-339-5174
        Poland
        Nowogrodzka 18/29
        00-511 Warsaw, Poland
        Telephone: +48 (22) 414 21 00
        Facsimile: +48 (22) 412 48 60

        Contacts:
        Kulczyk Oil Ventures Inc. - Canada
        Norman W. Holton
        Vice Chairman
        +1-403-264-8877
        nholton@kulczykoil.com

        Kulczyk Oil Ventures Inc. - Poland
        Jakub J. Korczak
        Vice President Investor Relations  Managing Director CEE
        +48 22 414 21 00
        jkorczak@kulczykoil.com

www.kulczykoil.com            

SOURCE: Kulczyk Oil Ventures Inc.


        mailto:nholton@kulczykoil.com
        mailto:jkorczak@kulczykoil.com

http://www.kulczykoil.com

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Article source: http://www.marketwatch.com/story/kulczyk-oil-ventures-inc-drilling-commences-at-north-makeevskoye-ukraine-2012-05-07-84470

May 7th, 2012 | Posted in Exploration | Read More »

Coming Soon: Oil drilling on the Arctic Ocean’s outer continental shelf

Despite U.S. Geological Survey warnings that drilling in waters north of Alaska could have deleterious effects on ocean habitats and wildlife, the Obama administration proceeded with a lifting of the moratorium on off-shore drilling. Pictured: An Oiled brown pelican awaits cleaning in the wake of the BP Deepwater Horizon disaster.

Despite U.S. Geological Survey warnings that drilling in waters north of Alaska could have deleterious effects on ocean habitats and wildlife, the Obama administration proceeded with a lifting of the moratorium on off-shore drilling. Pictured: An Oiled brown pelican awaits cleaning in the wake of the BP Deepwater Horizon disaster.

In November 2011 the Obama administration began lifting the moratorium on off-shore drilling that had been imposed in the wake of the Deepwater Horizon disaster. Interior Secretary Ken Salazar announced a five year plan including 15 leases for oil development on Alaska’s Outer Continental Shelf and in the Gulf of Mexico. For now the East and West coasts of the continental U.S. have been spared from drilling, but environmentalists are particularly worried about opening up the fragile Alaskan Arctic to off-shore rigs.

“This five-year program will make available for development more than three-quarters of undiscovered oil and gas resources estimated on the [Outer Continental Shelf], including frontier areas such as the Arctic, where we must proceed cautiously, safely and based on the best science available,” Salazar told reporters.

Republicans were incensed that more acreage was not being made available for off-shore drilling, but environmentalists couldn’t believe what they were hearing for different reasons: In June 2011 the U.S. Geological Survey (USGS) had released a 292-page report commissioned by Interior Secretary Salazar “to identify the gaps in scientific or technical knowledge about how drilling in the Beaufort and Chukchi seas north of Alaska would affect the region,” reports Jerry Bellinson in Popular Mechanics. The report, Bellinson says, “details several areas where those gaps exist, including oil-spill cleanup technologies, basic mapping of currents and the effects of underwater noise on sea mammals.” Despite the USGS’s warnings, the Obama administration decided to proceed anyway.

“Drilling infrastructure permanently alters ocean floor habitats,” reports Defenders of Wildlife. “Drill rig footprints, undersea pipelines, dredging ship channels, and dumped drill cuttings—the rock material dug out of the oil or gas well—are often contaminated with drilling fluid used to lubricate and regulate the pressure in drilling operations.” The group adds that contaminated sediments are carried long distances by currents and can kill important small bottom-dwelling creatures at the bottom of the marine food chain.

Defenders also argues that spills, leaks and occasional BP-like catastrophes are unavoidable with off-shore oil drilling, if history is any guide. “Even with safety protocols in place, leaks and spills are inevitable—each year U.S. drilling operations send an average of 880,000 gallons of oil into the ocean.”

As for wildlife, off-shore drilling can have devastating effects even with no spills or leaks. “Seismic surveys conducted during oil and gas exploration cause temporary or permanent hearing loss, induce behavioral changes, and even physically injure marine mammals such as whales, seals and dolphins,” reports Defenders. “Construction noise from new facilities and pipelines is also likely to interfere with foraging and communication behaviors of birds and mammals. Because they are at the top of the food chain, many marine mammals will be exposed to the dangers of bioaccumulation of organic pollutants and metals.” And off-shore drilling only adds insult to injury as far as Defenders is concerned: “In the face of the climate crisis, the U.S. needs to look for ways to decrease petroleum consumption, not…increase it.”

CONTACTS: Defenders of Wildlife, www.defenders.org; Popular Mechanics, www.popularmechanics.com/science/energy/coal-oil-gas/oil-drilling-in-the-arctic-ocean-is-it-safe.

Article source: http://blastmagazine.com/the-magazine/technology/earth/coming-soon-oil-drilling-on-the-arctic-oceans-outer-continental-shelf/

May 7th, 2012 | Posted in Exploration | Read More »

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