Oil may be the energy source on everyone's mind right now, but there is a good chance that liquefied natural gas (LNG) will surpass it as oil prices remain astronomical.
Once a bit of a backwater in the energy field, demand for LNG has been on a steady rise because it is relatively clean burning and because its liquefied state allows for transport to remote locations without construction of elaborate and expensive pipeline networks.
And while it can't hold a candle to oil's price, quite a few analysts seem to see it as the bandwagon of choice to jump on to.
Worldwide demand for LNG during the first half of 2007 was pegged at roughly 115 billion cubic metres (bcm), roughly nine per cent growth over the same period in 2006, and demand in East Asia has been growing even faster.
Tuesday, December 25, 2007
Iran Looks for Natural Gas Deal with Italy
Iran is in talks with Italian power utility Edison (EDN.MI: Quote, Profile, Research) about exporting gas to the European Union country, Iranian Oil Minister Gholamhossein Nozari said on Sunday.
Iran sits atop the world's second largest gas reserves after Russia. But sanctions, politics and construction delays have slowed its gas development, and analysts say the country is unlikely to become a major exporter for a decade.
Soaring oil and gas prices have made energy supply an acute issue in Italy, which has scarce energy resources and depends on imports for about 80 percent of its energy needs.
"We have started negotiations ... and the talks have almost been finalized," Nozari said in comments aired by state television.
"Their preliminary need for the end of 2008 is 1.5 bcf (billion cubic feet) and it will be increased to 4.5 bcf," he said, without giving details.
Edison has said it aims to boost its natural gas supplies to more than 23 billion cubic meters (bcm) from the current level of 13 bcm thanks to its participation in major gas pipeline projects and a liquefied natural gas terminal project in Italy.
The United States, leading efforts to isolate Tehran over its disputed nuclear program, has urged international companies to avoid doing business with Iran, which is also the world's fourth-largest crude exporter.
Italy is one of Iran's largest trading partners and the head of Italian oil major Eni (ENI.MI: Quote, Profile, Research) said last month it will not abandon its contracts in the Islamic state.
Iran says its nuclear work is peaceful and aimed at generating electricity so that it can export more oil and gas. Its large gas reserves make it a magnet for international energy firms, despite two rounds of U.N. sanctions since December.
Iran sits atop the world's second largest gas reserves after Russia. But sanctions, politics and construction delays have slowed its gas development, and analysts say the country is unlikely to become a major exporter for a decade.
Soaring oil and gas prices have made energy supply an acute issue in Italy, which has scarce energy resources and depends on imports for about 80 percent of its energy needs.
"We have started negotiations ... and the talks have almost been finalized," Nozari said in comments aired by state television.
"Their preliminary need for the end of 2008 is 1.5 bcf (billion cubic feet) and it will be increased to 4.5 bcf," he said, without giving details.
Edison has said it aims to boost its natural gas supplies to more than 23 billion cubic meters (bcm) from the current level of 13 bcm thanks to its participation in major gas pipeline projects and a liquefied natural gas terminal project in Italy.
The United States, leading efforts to isolate Tehran over its disputed nuclear program, has urged international companies to avoid doing business with Iran, which is also the world's fourth-largest crude exporter.
Italy is one of Iran's largest trading partners and the head of Italian oil major Eni (ENI.MI: Quote, Profile, Research) said last month it will not abandon its contracts in the Islamic state.
Iran says its nuclear work is peaceful and aimed at generating electricity so that it can export more oil and gas. Its large gas reserves make it a magnet for international energy firms, despite two rounds of U.N. sanctions since December.
Monday, December 24, 2007
Alabama Shale is a Natural Gas Play for Energen Corp
Energen Corp. has acquired additional land for natural gas exploration in Alabama, but Chief Executive James McManus identified sites only in Bibb and Greene Counties.
"It's our stealth play," McManus said in an interview, talking about natural gas land in an unidentified Alabama location. "It is an area with very little competition. We are the only ones who know what we have."
It's part of a great land grab going on mostly in St. Clair County and farther north, where Energen and a unit of New York-based rival Loew's Corp. are trying to extract natural gas from underground shale formations. Loew's has 14 wells under some stage of development in St. Clair County.
"It's our stealth play," McManus said in an interview, talking about natural gas land in an unidentified Alabama location. "It is an area with very little competition. We are the only ones who know what we have."
It's part of a great land grab going on mostly in St. Clair County and farther north, where Energen and a unit of New York-based rival Loew's Corp. are trying to extract natural gas from underground shale formations. Loew's has 14 wells under some stage of development in St. Clair County.
Sunday, December 23, 2007
Kentucky Natural Gas Exploration Under Consideration
The Henderson City-County Air Board and Henderson County Riverport Authority are considering allowing an Evansville company to explore for natural gas under their respective properties.
But the boards would like assurances that the exploration will not cause any land subsidence or other potential land-use problems. Both boards oversee land located on Kentucky 136 West between Henderson and Geneva.
"I would anticipate that the board would take action in January and that is only if they are able to guarantee that there won't be subsidence issues or obstruction of runway activities," said Air Board Chairman Scott Miller.
The riverport wants to be sure that it doesn't do something that later could complicate its efforts to persuade industries to locate at the port.
The company seeking the leases, Mid-Central Land Services LLC, has been in business for more than 30 years, according to Nathan Perdue, its director of operations.
Interest in natural gas exploration in Western Kentucky has spiked in recent years, and more than 4 million acres have been leased around the Illinois basin, according to Mark Hughes of Henderson, a vice president of the Kentucky Oil and Gas Association.
"This company is just leasing up (mineral rights from) everybody across the countryside," Greg Pritchett, director of the riverport, said Thursday.
In making his presentation to the Air Board recently, Perdue said his company might drill sideways to the natural gas so there is no well on airport property.
He made similar remarks to the riverport board, Pritchett said.
If natural gas is discovered, the airport or riverport would receive a 12.5 percent royalty payment on the total amount of natural gas that is removed over a five-year lease. But no firm dollar figures were presented verbally to the air board. Miller said the amount of money the board would receive depends on the type of drilling method used.
Riverport officials aren't sure what the revenue potential is. The port has acquired various parcels of property over the years, and while it owns 100 percent of the mineral rights under some parcels, it controls rights only at certain depths underground beneath other parcels.
"There is a percentage chance of hitting" natural gas reserves underground, Pritchett said. "There is a bigger percentage of hitting nothing."
"If we do not have sufficient underground ownership, why even try" to lease its mineral reserves, he said.
But the boards would like assurances that the exploration will not cause any land subsidence or other potential land-use problems. Both boards oversee land located on Kentucky 136 West between Henderson and Geneva.
"I would anticipate that the board would take action in January and that is only if they are able to guarantee that there won't be subsidence issues or obstruction of runway activities," said Air Board Chairman Scott Miller.
The riverport wants to be sure that it doesn't do something that later could complicate its efforts to persuade industries to locate at the port.
The company seeking the leases, Mid-Central Land Services LLC, has been in business for more than 30 years, according to Nathan Perdue, its director of operations.
Interest in natural gas exploration in Western Kentucky has spiked in recent years, and more than 4 million acres have been leased around the Illinois basin, according to Mark Hughes of Henderson, a vice president of the Kentucky Oil and Gas Association.
"This company is just leasing up (mineral rights from) everybody across the countryside," Greg Pritchett, director of the riverport, said Thursday.
In making his presentation to the Air Board recently, Perdue said his company might drill sideways to the natural gas so there is no well on airport property.
He made similar remarks to the riverport board, Pritchett said.
If natural gas is discovered, the airport or riverport would receive a 12.5 percent royalty payment on the total amount of natural gas that is removed over a five-year lease. But no firm dollar figures were presented verbally to the air board. Miller said the amount of money the board would receive depends on the type of drilling method used.
Riverport officials aren't sure what the revenue potential is. The port has acquired various parcels of property over the years, and while it owns 100 percent of the mineral rights under some parcels, it controls rights only at certain depths underground beneath other parcels.
"There is a percentage chance of hitting" natural gas reserves underground, Pritchett said. "There is a bigger percentage of hitting nothing."
"If we do not have sufficient underground ownership, why even try" to lease its mineral reserves, he said.
India Oil & Gas Spending for Natural Gas
Oil & Natural Gas Corp., India's biggest explorer, will boost spending to increase output at its biggest field and pay a mid-year dividend of 18 rupees a share.
The New Delhi-based company will spend an additional 25.5 billion rupees ($645 million) on increasing production at its Mumbai High area off India's west coast, Oil & Natural Gas said in an e-mailed statement. The explorer's board also approved the dividend payment amounting to 38.5 billion rupees.
Oil & Natural Gas, which in October approved a $1.4 billion investment on the acreage, needs to increase output to retain its position as the largest supplier of crude oil and gas in India. Oil imports by India, Asia's third-biggest oil consumer after China and Japan, are set to rise as refiners expand capacity to meet demand. India imports three-fourths of its oil requirement.
The Mumbai High region yields about 16 million tons of crude oil annually, or 320,000 barrels a day, which is more than 60 percent of the company's total output.
The explorer is investing in upgrading platforms and digging deeper wells and plans to replace pipelines as output from the aging, nearly three-decade old, area declines.
Oil & Natural Gas's spending, approved yesterday, will go toward replacing a network of pipelines, the company said. The money will be spent over three years.
The board also approved spending 1.5 billion rupees on the PY-3 field in the Cauvery basin, off the east coast. Oil & Natural Gas holds a 40 percent stake in the area, and Hindustan Oil Exploration Co. and Tata Petrodyne Ltd. hold 21 percent each.
Oil & Natural Gas plans to boost spending on developing new and existing fields by 20 percent in the year that began April 1 to 180 billion rupees from 150 billion rupees the previous year, Chairman R.S. Sharma said on April 16.
The New Delhi-based company will spend an additional 25.5 billion rupees ($645 million) on increasing production at its Mumbai High area off India's west coast, Oil & Natural Gas said in an e-mailed statement. The explorer's board also approved the dividend payment amounting to 38.5 billion rupees.
Oil & Natural Gas, which in October approved a $1.4 billion investment on the acreage, needs to increase output to retain its position as the largest supplier of crude oil and gas in India. Oil imports by India, Asia's third-biggest oil consumer after China and Japan, are set to rise as refiners expand capacity to meet demand. India imports three-fourths of its oil requirement.
The Mumbai High region yields about 16 million tons of crude oil annually, or 320,000 barrels a day, which is more than 60 percent of the company's total output.
The explorer is investing in upgrading platforms and digging deeper wells and plans to replace pipelines as output from the aging, nearly three-decade old, area declines.
Oil & Natural Gas's spending, approved yesterday, will go toward replacing a network of pipelines, the company said. The money will be spent over three years.
The board also approved spending 1.5 billion rupees on the PY-3 field in the Cauvery basin, off the east coast. Oil & Natural Gas holds a 40 percent stake in the area, and Hindustan Oil Exploration Co. and Tata Petrodyne Ltd. hold 21 percent each.
Oil & Natural Gas plans to boost spending on developing new and existing fields by 20 percent in the year that began April 1 to 180 billion rupees from 150 billion rupees the previous year, Chairman R.S. Sharma said on April 16.
Saturday, December 22, 2007
Big Three Still Forming Canada Gas Corporation for Natural Gas
VANCOUVER, British Columbia, Dec 21, 2007 (BUSINESS WIRE) -- Bighorn Petroleum Ltd. (TSX VENTURE: BHP) ("Bighorn"), Flying A Petroleum Ltd. (TSX VENTURE: FAB) ("Flying A"), Tenaka Drilling Consortium Ltd. ("Tenaka") and Wyn Developments Inc. (TSX VENTURE: WL) (FWB: YXE) (OTCBB: WYDPF) ("Wyn"), (collectively the "Partners"), continue efforts to complete the amalgamation into Canada Gas Corp. (the "Company") as soon as possible. Recent efforts have concentrated on financing the Company to meet near term commitments, which include both drilling and acquisition. Focus Energy Trust has now drilled the first well of the 2007/2008 winter season, the a-38-A/94-G-15 Triassic Halfway development well at Bougie Trutch. The well is now undergoing testing and completion and upon success, will be tied into production prior to the end of the 2007/2008 winter drill season (Q1 2008).
Wyn Developments Inc. and Flying A Petroleum Ltd. announce that they have each entered into bridge loan agreements with a third party investor for the total loan sum of $200,000, subject to regulatory approval where required. Pursuant to the Wyn bridge loan agreement, the lender agreed to lend a total of $92,000 to Wyn. Wyn has agreed to issue the lender 92,000 of its common shares as a bonus at a deemed price of $0.10 per share, issuable upon receipt of regulatory acceptance of the Wyn bridge loan agreement. Pursuant to the Flying A bridge loan agreement, the lender agreed to lend a total of $108,000 to Flying A. Flying A agreed to issue 108,000 of its common shares to the lender as a bonus at a deemed price of $0.10 per share, issuable upon receipt of regulatory acceptance of the Flying A bridge loan agreement. The Wyn and Flying A loans are repayable upon the earlier of the completion of an equity financing by Canada Gas Corp. (the merged entity) and April 30, 2008. The bridge loans bear interest at 12% per annum.
Discussions are ongoing among the Partners with a number of interested investor groups respecting the form and terms of an equity financing for Canada Gas Corp, however, the Partners will now finalize the share exchange ratios and seek conditional Toronto Venture Exchange acceptance of the transaction. The shareholder information circulars outlining the entire transaction with prospectus level disclosure will be distributed as soon as possible thereafter, ahead of shareholder meetings to be scheduled at least 25 days from mailing. After the meetings, the Partners will require court and final Exchange approval prior to the Company being called to trade.
Wyn Developments Inc. and Flying A Petroleum Ltd. announce that they have each entered into bridge loan agreements with a third party investor for the total loan sum of $200,000, subject to regulatory approval where required. Pursuant to the Wyn bridge loan agreement, the lender agreed to lend a total of $92,000 to Wyn. Wyn has agreed to issue the lender 92,000 of its common shares as a bonus at a deemed price of $0.10 per share, issuable upon receipt of regulatory acceptance of the Wyn bridge loan agreement. Pursuant to the Flying A bridge loan agreement, the lender agreed to lend a total of $108,000 to Flying A. Flying A agreed to issue 108,000 of its common shares to the lender as a bonus at a deemed price of $0.10 per share, issuable upon receipt of regulatory acceptance of the Flying A bridge loan agreement. The Wyn and Flying A loans are repayable upon the earlier of the completion of an equity financing by Canada Gas Corp. (the merged entity) and April 30, 2008. The bridge loans bear interest at 12% per annum.
Discussions are ongoing among the Partners with a number of interested investor groups respecting the form and terms of an equity financing for Canada Gas Corp, however, the Partners will now finalize the share exchange ratios and seek conditional Toronto Venture Exchange acceptance of the transaction. The shareholder information circulars outlining the entire transaction with prospectus level disclosure will be distributed as soon as possible thereafter, ahead of shareholder meetings to be scheduled at least 25 days from mailing. After the meetings, the Partners will require court and final Exchange approval prior to the Company being called to trade.
Friday, December 21, 2007
Magnum Finds Natural Gas in Canada
VANCOUVER, BRITISH COLUMBIA, Dec 20, 2007 (Marketwire via COMTEX) -- Magnum Energy Inc. ("The Company") (TSX VENTURE:MEN) is pleased to announce the test results of the recent fracture and flow test of the Cardium exploration well. Initial test rates in excess of 600 barrels/d of sweet light oil and approximately 200 Mcf/d of natural gas were reported by the operator.
According to EUB regulations the operator can only flare the natural gas for 72 hours. The operator has now shut the well in until it is equipped and tied in for both oil and gas production. This is expected to be completed early in 2008.
The operator has also made an application to the EUB for GPP (Good Production Practices) approval in order to produce the well to its maximum potential. Until the operator receives the approval, which usually takes about 30 days, the well will be restricted to 120 barrels of oil/d.
Magnum Energy Inc.
Magnum Energy Inc. is a junior oil and gas exploration company operating in the Western Canadian Sedimentary Basin. The company is headed by Ted Konyi, CEO who has had extensive experience in the financing of oil and gas projects in Western Canada. The company has established an initial core area in South Eastern Alberta which it believes will produce significant cash flow for the company upon completion of a comprehensive drilling program.
According to EUB regulations the operator can only flare the natural gas for 72 hours. The operator has now shut the well in until it is equipped and tied in for both oil and gas production. This is expected to be completed early in 2008.
The operator has also made an application to the EUB for GPP (Good Production Practices) approval in order to produce the well to its maximum potential. Until the operator receives the approval, which usually takes about 30 days, the well will be restricted to 120 barrels of oil/d.
Magnum Energy Inc.
Magnum Energy Inc. is a junior oil and gas exploration company operating in the Western Canadian Sedimentary Basin. The company is headed by Ted Konyi, CEO who has had extensive experience in the financing of oil and gas projects in Western Canada. The company has established an initial core area in South Eastern Alberta which it believes will produce significant cash flow for the company upon completion of a comprehensive drilling program.
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