Saturday, May 30, 2009

Obama's Negative Stimulus Plan

Author: Jeff Pierce
By Martin Hutchinson
Contributing Editor Money Morning

Could the massive Obama stimulus plan end up hurting the U.S. economy?

It’s long been a worry, and now it’s beginning to seem possible.
The latest housing reports suggest that the recent rapid run-up in 10-year Treasury bond yields may be having an unhealthy effect on the U.S. housing market. That tells me that - although home prices are back to their long-term average in terms of earnings - we may not yet be close to the price bottom.

If that’s true, it’s very bad news. A further substantial decline in housing prices would destabilize the U.S. banking system again, because of all the mortgage debt in it, which would cause a very nasty “second leg” economic downturn. That would have one very ironic further implication: U.S. President Barack Obama’s $787 billion stimulus package - intended to help the U.S. economy push back the recession - would instead have succeeded in pushing it deeper into the mire.

A month ago, it appeared that the housing market might be in the process of bottoming out. The ratio of house prices to average incomes - which peaked at about 4.5 to 1 in 2006 - had fallen 33% from that apex, which brought the ratio close to its long-term average of 3.2 to 1, according to an S&P/Case-Shiller Index report. While interest rates remained low and government-backed home financing was readily available, it appeared the forces pushing up house prices (low interest rates and accessible financing) might soon come into balance and then dominate the forces that push home prices down (an inventory overage).

The jump in interest rates - from 2.07% on the 10-year Treasury bond in December to around 3.65% today - has weakened the case for a stabilization of housing prices. Mortgage rates, which were far below their levels of the last 30 years, have moved back above 5% — even for “conforming” mortgages. Thus the Mortgage Bankers Association index of new mortgage applications was down 15% in the latest week. Meanwhile, new home sales have merely stabilized at very low levels of an annual rate around 350,000 - compared to more than 2.0 million at the peak of the market, while the latest price statistics suggest that price declines continued to be quite rapid in March, and possibly even accelerated slightly.

This interest-rate increase does not currently seem to be caused by expectations of inflation, which has remained around 2% annually, although oil, gold and other commodity prices have ticked up. Instead, it seems to have been caused by the exceptionally high demands being made on the government bond market by the U.S. federal deficit, which is expected to total about 13% of gross domestic product (GDP), or more than $1.8 trillion, this year.

It’s not surprising that such a blip should have occurred this month; federal tax receipts are at their peak in April, as companies and individuals pay their taxes due, so the beginning of May saw a resumption of mammoth U.S. Treasury funding needs after a month’s pause.

If interest rates continue to increase, the effect on the already-weak housing market could be severe, as housing “affordability” would be reduced in a period in which prices were declining and unemployment was rising. That, in turn, could have a self-reinforcing downward effect on prices, as home inventories bloat further, and buyers hold back.

Currently, according to the S&P/Case-Shiller 20-city house price index, prices are down 32% from their peak, but remain 40% above 2000 levels, while consumer prices are only 24% above those of 2000. However, 2000 was not a “bear-market” year; prices had already enjoyed several years of rapid recovery from their early-1990s low. Should rising interest rates cause prices to continue falling to 2000’s level (another 28% decline), then on average every 80% mortgage undertaken since May 2002 (when the index first went above 125% of 2000’s level) would be underwater, having an owed principal amount that exceeds the actual current market value of the house. That would cause a surge in mortgage defaults more severe than any yet seen, extending far into the prime mortgage category - and probably causing the U.S. banking system to implode once again.

The stimulus-package funds, which began flowing in April, may actually induce some GDP growth this quarter. At the very least, the Obama administration infusion should hold the economy to a very minimal decline in GDP.

However, if interest rates keep rising, the effect of further housing-sector weakness and the wobbling banking system would overwhelm any stimulus benefits, and would cause a second “dip” in this recession - one that’s far worse than the first. The stimulus would, in that event, have proved counterproductive, killing the very economic recovery it was supposed to have stimulated.

Rising interest rates will have adverse effects on all countries with large budget deficits, the most notable of which are Britain and Japan. The effects would be harsh enough to actually prevent those countries from recovering from their own recessions.

For investors, the remedy is clear: Look to invest in countries that have produced only modest stimulus packages, and whose budget deficits are currently the smallest. In the invaluable statistical section of The Economist, a number of countries are projected to have budget deficits of less than 3% of GDP in 2009, in spite of their recessions.

At that level, deficits are easy to finance, and do not force up interest rates, so economic recovery should be relatively rapid.

Let’s take a look at some of those countries in question:
Canada: Budget deficit forecast of 2.5% of GDP. Americans are fond of sneering at Canada for its high public spending and sluggish growth. Well, Canada’s public spending as a percentage of GDP peaked in the early 1990s and since 2000 the country has run budget surpluses. In 2009, Canada is forecast to have public spending lower than the United States, when provinces and states are taken into account, and to continue lower than its arch rival (the United States) for the foreseeable future. I wrote a few weeks ago about investment opportunities in the Canadian energy sector; those opportunities are even more compelling with the continued rise in the oil price to current prices of more than $62 a barrel.

Denmark Finland and Switzerland: Wealthy European countries with healthy budget positions - deficits of 2.5%, 2.6% and 2.0% of GDP, respectively - will recover more quickly than their neighbors, because they have kept their economies in balance.

Brazil: Probably the best of the lot, with a projected budget deficit of only 2% of GDP, inflation of 4.4% and bond yields of 11.8% — meaning it can indulge in a little monetary expansion if it needs to. Brazil will also benefit if inflation returns (as I expect it to), because that will push up the prices of its commodities exports.

So there you have it. Maybe the U.S. bond market and housing market will stabilize, and the American economic recovery will proceed smoothly - nothing is certain. But investments in Canada and Brazil, in particular, will protect you against the possibility that the U.S. situation doesn’t improve.

[Editor's Note:When the journalistic sleuths at Slate magazine recently set out to identify the stock-market guru who correctly predicted how far U.S. stocks would fall because of the global financial crisis, the respected "e-zine" concluded it was Martin Hutchinson who "called" the market bottom.

That discovery was no surprise to the readers of Money Morning - after all, Hutchinson has made a bevy of such savvy predictions since this publication was launched. Hutchinson warned investors about the evils of credit default swaps six months before the complex derivatives KO'd insurer American International Group Inc. He predicted the record run that gold made last year - back in 2007. Then, last fall - as Slate discovered - Hutchinson "called" the market bottom.

Now investors face an unpredictable stock market that's back-dropped by an uncertain economy. No matter. Hutchinson has developed a strategy that's tailor-made for such a directionless market, and that shows investors how to invest their way to ""Permanent Wealth" " using high-yielding dividend stocks, as well as gold.

(Source: Heartland Energy Colorado)

Friday, May 29, 2009

Philippines Plans To Double Renewable Energy Capacity


A recent announcement by the Philippines government has opened the way for the country’s renewable energy capacity to double over the next 10 years. The critical factor is that the government approved rules covering the implementation of the Renewable Energy Act.

It is intended that 9,000 MW of power will be produced in the Philippines which is twice the current levels.

The country is estimated to produce some 4,531 mWs from geothermal energy; 13,097 MW from hydropower, 5.1 kilowatt hours per square meter a day from solar, 76,600 MW from wind, and 170,000 MW from oceanic waves.

It is estimated that the cost of a renewable energy development project will run to about $1 to $2 million per megawatt.

There have been letters of interest lodged from 15 local and foreign-linked companies to develop projects, most of them involving wind, hydro and biomass.

Electricity generated from renewable sources such as hydro and geothermal power comprise 33 percent of the Philippines’ current power mix, and the government has said it hopes to increase that to 40 percent in a decade.

Companies such as First Gen Corp, Aboitiz Power Corp, Energy Development Corporation, Oriental Energy, Green Power Philippines and Deep Ocean Philippines, said Marasigan, adding that state-run PNOC-Renewables Corp would take the lead in tapping renewable energy sources.

Wind Power | Luverne Wind Farm


A new wind farm is to be built by NextEra Energy Resources near Lake Ashtabula in North Dakota. It is expected that the facility will have a maximum power capacity of 169.5 MW of electricity.

NextEra Energy Resources will serve as construction manager and initial operator of the wind farm.

As part of the overall facility a smaller 49.5 MW wind farm has been proposed by Otter Tail Power Company, a division of Otter Tail Corporation, with plans to begin construction in late May and an operational date slated to be towards the end of 2009. The 49.5 MW project has been dubbed the North Farm and it will comprise 33 wind turbines. The other half of the wind farm will be a 72 turbine farm known as the South Farm located in southwestern Steele County, stretching a short distance into Griggs County. Each windmill will be powered by General Electric 1.5-kilowatt turbines.

Otter Tail Power Company will also construct a 13-mile 230-kilovolt generation outlet needed to transmit the electricity to the Pillsbury Substation.

The expected total outlay for the project by Otter Tail Power Company is going to $110 million and that will include the cost of the turbines, equipment, the site, and required transmission facilities. The company will apply for a 30 percent treasury grant available through the American Recovery and Reinvestment Act of 2009.

Heartland Energy Development Corporation Video

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Tuesday, May 26, 2009

Heartland Energy Colorado - Alternative Fuel Station Tanks Pass Test

Heartland Energy Group, Inc. (PINKSHEETS: HEGP), announced today that they have successfully completed testing of the E85 storage tanks at their flag ship station located in Oklahoma.

Binger Oil has pressure tested the storage tanks at the Oklahoma facility and gave them their approval. This is the first step towards certification in preparation for the first delivery of E85.

For full release go to Heartland Energy Corporation

Heartland Energy is working diligently to prepare the Oklahoma Fuel Station for its opening. The station is located in Southeastern, OK on a well-traveled thoroughfare carrying traffic from Tulsa, OK to Texarkana, TX.

At the Consumer Electronics Show in Las Vegas, NV the CEO of General Motors stated that the U.S. has about 1,400 ethanol stations now, but needs 15,000 to 20,000 more to serve the countries growing fleet of flex fuel vehicles.

For more information on GM CEO Statement visit: Heartland Energy Colorado

Other active stocks are Apple Inc (NASDAQ: AAPL), First Solar Inc (NASDAQ: FSLR), Mitsui and Company Ltd (NASDAQ: MITSY)

(Source: Heartland Energy Colorado) More: Heartland Energy Development News

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Monday, May 25, 2009

Oil ends slightly up, reducing most gains on demand worries


NEW YORK (MarketWatch) -- Crude oil futures ended slightly higher Thursday, giving back early gains as markets grew more nervous about recent assumptions about an economic recovery ahead of the key April jobs report due Friday.

Upbeat reports on U.S. weekly jobless claims and retailers' April sales initially helped boost stocks and commodities in morning trade, with oil up as much as 4% to $58.57 a barrel.

But some comments from Federal Reserve Chairman Ben Bernanke that the Fed wouldn't continue stimulating the economy forever pressured both stocks and crude. In addition, investors have priced in a lot of good news already, lifting the odds that Friday's jobs report might disappoint.

Crude for June delivery ended up 37 cents, or 0.7%, at $56.71 a barrel on the New York Mercantile Exchange. Despite the loss, crude still has risen more than 6% this week.

Crude oil has recently benefited from hopes that a global economic recovery will boost demand. But some analysts said the rally is overdone, as inventories still remained at a high level.

"It looks as though the market is ready to ignore high inventories," said James Williams, an economist at energy research firm WTRG Economics. However, fundamentally, the oil market remained "bearish."

Crude inventories in the U.S., the biggest oil consumer, stood at the highest level in nearly 19 years, according to Wednesday's data released by the Energy Information Administration.

Meanwhile, total petroleum demand over the past four weeks was 7.9% lower than levels a year ago, the EIA report showed.

Helping oil rallied early in the session Thursday, the Labor Department said Thursday initial claims for unemployment benefits fell 34,000 to 601,000, their lowest level since January. See Economic Report on jobless claims.

Earlier, the government also reported that productivity rose in the first quarter as U.S. firms slashed their workforces, outpacing the drop in output.

Also helping lift sentiment, retailers reported better-than-expected April same-store sales on Thursday. See full story on retailers' sales.

And also easing concerns about the financial system, big banks undergoing so-called "stress tests" will have 30 days to develop plans for how they will raise any new required capital, the Federal Reserve and other bank regulators said late Wednesday. See full story on banks' stress tests.

The official results of the tests are expected to be released Thursday.

Natural gas inventories rise

Also in energy trading, June reformulated gasoline rose 3.75 cents, or 2.3%, to $1.6655 a gallon and June heating oil added 1.39 cents, or 0.9%, to $1.4852 a gallon.

Natural gas for June delivery rose 19.3 cents, or 4.1%, to $4.08 per million British thermal units.

U.S. natural-gas inventories rose 95 billion cubic feet in the week ended May 1, the Energy Information Administration reported Thursday. Analysts surveyed by Platts had expected a buildup of 89 billion cubic feet to 94 billion cubic feet.

Stockpiles were 491 billion cubic feet higher than last year at this time and 362 billion cubic feet above the five-year average.

Nick Godt is a MarketWatch reporter based in New York. Moming Zhou is a MarketWatch reporter based in New York.

No natural gas price hike on May 1st

(Source: Heartland Energy Development Corporation)

Bucharest – The natural gas tariffs for household consumers will not be modified starting on April 1, since the representatives of the National Energy Regulation Authority (ANRE) have yet to finalize the discussions on a possible price hike that the gas suppliers had asked for, sources from within ANRE have stated yesterday for Rompres. According to them, the discussions will continue in the following days, with a possible modification to the natural gas tariffs set to be operated next month.

Gergely Olosz, the ANRE President, had stated last Thursday that the natural gas suppliers had asked the Authority to hike the natural gas price for household consumers by 8 to 10 per cent starting on April 1. They justified their demand with the unexpected import bills’ hike. Olosz added that ANRE has asked the suppliers to present supplementary documents in that regard, with a decision set to be taken afterwards.

In early March the ANRE representatives stated for Rompres that the price of imported natural gas will rise in Q2 of 2008, and that some calculations show that the price of imports could grow by up to 13.5 per cent to a level of USD 420 per one thousand cubic meters. According to the quoted sources, the price of domestic natural gas could remain unchanged for the rest of 2008.

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Thursday, May 21, 2009

Key Factors to Oil and Gas Investing

(Source: Wright Brianna)

In the last few years, we have seen a tremendous rise in investment in oil and gas. A major reason for this might be the tragic scenario in the share markets across the globe, which has forced many investors, to look out for alternative avenues of investments. As it is, oil and gas investment requires a keen sense of judgment on the part of the investor in determining what oil and gas stocks he should invest in.

Now, before you decide to invest in any particular stocks, such as the oil sands stocks, or the Canadian oil stocks, you need to take care of a few aspects. The following are some of the aspects, which you need to consider, before you go ahead with your investment:

1. First and foremost, your decision should be based on facts rather than market sentiments. That does not at all imply that you have to go against popular views; but it is always better to go by a logical analysis, instead of mood swings.

2. The most common saying that is very much applicable in Oil and Gas investment is; do not keep all your eggs in one basket. So, as it is in this case, it is advisable to diversify your portfolio and not pin all your hopes on a particular area. This would not only help you gain in the long run, but would also lower the risk factor as well. In fact the more diversified is your portfolio, the lower are your chances of loss.

3. Make sure that your research is not limited to simply market reviews. Do what most people rarely do, i.e. read journals and know about latest research and development projects as well as new patent rights which have been registered. This would give you a fair idea of promising prospects. Apart from that, make sure that you know bout the recent findings in regard to oil and natural gas reserves.

4. A common mistake which you should always avoid is investing your cash reserves, all at one time. You should always have some spare reserves, to bail you out of difficult times. Spare reserves may also play a great role in maximizing your returns as well.

Apart from the above factors, there are several other factors, which may help you in making the right kind of investment. Make sure that you do not buy overpriced stocks. For this you may check the price earning ratio. Apart from this, another factor which plays an important role is commodity prices. So, if you are looking forward to long term investment in oil and gas, then you do not have to worry much about the commodity prices. In case if you are focusing on short term investment, then in that case, commodity prices become extremely important.

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Partners & Suppliers in the Oil & Gas Services Sector - Part 2

(Source: Hans Bool -continued)

9. Prosafe ASA (Norway) 
Prosafe operates globally and has about 340 employees. The company is headquartered in Larnaca, Cyprus and is listed on the Oslo Stock Exchange with ticker code PRS. Operating profit reached USD 222.2 million in 2007. 
Prosafe comprises a parent company and the business division Offshore Support Services, the world's leading owner and operator of semi-sumbersible accommodation/service rigs. 
Prosafe has more than three decades of operational experience from the world's largest oil and gas provinces. With an excellent uptime record, a solid financial performance and the ability to offer innovative in house technology and cost-efficient solutions, the company has positioned itself as a provider of high quality services. 
Prosafe owns and operates 12 accommodation rigs (flotels).

10. Reservoir Exploration Technology (Norway) 
Reservoir Exploration Technology ASA (RXT) is a marine geophysical company specialising in multi component seismic sea-floor acquisition.

Until May 2006 RXT has been operating one crew in the Gulf of Mexico, a dual vessel operation comprising a shooting vessel and a cable/buoy handler. Their GOM operations started in June 2004 and have demonstrated the superior imaging capabilities of the VSO sensors and cables.

RXT is planning a change according to the info on their site: "What we are going to do; Innovative business models to drive the marine multi-component business: In producing fields, For obstructed area long-offset applications, For time lapse 3D, Develop a "tool box" of acquisition methods (For deep water, For shallow water, For transition zone), Focus completely on what we do best: Marine acquisition.

Vision-statement: "to become the leading supplier of multi-component sea-floor acquisition."

11. SBM Offshore (Netherlands) 
SBM Offshore N.V. is a pioneer in the offshore oil and gas industry. Worldwide, we have over 4,000 employees representing 40 nationalities, and are present in 15 countries. Our activities include the engineering, supply, and offshore installation of most types of offshore terminals or related equipment. In addition, SBM Offshore owns and operates its own fleet of Floating (Production) Storage and Offloading units. SBM Offshore has a track record of developing innovative, cost-effective solutions for the ever-changing needs of its Clients. Each company of the group contributes its technical expertise, making SBM Offshore a market leader. 
became a pioneer in Single Point Mooring (SPM) systems, dynamically positioned drilling vessels, jack-up drilling rigs, and heavy offshore cranes. 
SBM Offshore's present activities include the engineering, supply, and offshore installation of SPM systems for offshore loading and unloading of vessels or the permanent mooring of offshore oil production and/or storage vessels, as well as the turnkey supply of complete floating facilities for the production, storage, and export of crude oil and gas. 
The latter comprise (FPSOs), (FSOs), (TLPs), (FPUs) and (MOPUs).

12. Sevan Marine (Norway) 
Business Model 
Sevan Marine ASA is listed on Oslo Børs (ticker SEVAN) and is specializing in building, owning and operating floating units for offshore applications. The Company has developed a cylinder shaped floater, suitable in all offshore environments. Presently Sevan Marine has four floating production, storage and offloading units (FPSOs) and three drilling units contracted to clients. The Company is also developing other application types for its cylindrical Sevan hull, including floating LNG production and power plants with CO2 capture. 
The Company's business strategy is based on a Build-Own-Operate model, which gives Sevan control over the value creation chain.

13. Saipem (Italy) 
"The Group is now the largest, most powerful, most international and best balanced turnkey contractor in the oil and gas industry." The organization has been rationalised into three global business units: Onshore, Offshore and Drilling. It enjoys a superior competitive position for the provision of EPIC/EPC services to the oil industry both onshore and offshore; with a particular focus on the toughest and most technologically challenging projects - activities in remote areas, deepwater, gas, difficult oil.

Along with its strong European content, the major part of its human resource base comes from developing countries. Saipem employs over 30,000 people comprising more than 100 nationalities... it employs large numbers of people from the most cost effective developing countries ... and has sizeable service bases in India, Croatia, Romania and Indonesia. 
Saipem has a distinctive Health & Safety Environment Management System and its Quality Management System has been granted ISO 9001:2000 certification by Lloyd's Register Certification.

14. Subsea 7 (Norway) 
Subsea 7 is one of the world's leading engineering and construction companies offering all the expertise and assets that make Subsea Umbilical, Riser and Flowline (SURF) field development and operation possible. 
With a multi-national workforce in excess of 5,000 personnel, the company's offshore operations are supported out of the North Sea, Africa, Brazil, Gulf of Mexico and Asia Pacific.

Subsea 7's experienced and skilled project managers and experienced engineers offer all the disciplines that make subsea oil & gas development and operation possible, including complete EPIC services, and life of field IRM services. 
These services are supported by a modern fleet of pipelay, construction, diving and ROV support vessels. Global Operations include logistical and spool bases which are supported by dedicated in-house survey and positioning resources together with technology development, including robotic intervention services. 
"Our deep-rooted health, safety, environmental and quality culture is inherent in all we have achieved to date and remains the pivotal foundations of performance."

15. Technip (France) 
Engineering, technologies and construction services for Oil and Gas, Petrochemical and other industries. 
"Backed by 50 years of experience and thanks to the expertise and know-how of its teams, Technip is a key contributor to the development of technologies and sustainable solutions for the exploitation of the world's energy resources." 
2007 key figures: 23,000 employees in 46 countries, Industrial assets on five continents, A fleet of 19 vessels by 2010, Operating income from recurring activities: €247 million, Revenues: close to € 7.9 billion. 
Fields: subsea, offshore and onshore.

16. TGS Nopec (Norway) 
TGS-NOPEC Geophysical Company (TGS) is a principal resource for global non-exclusive geoscientific data products and services in the oil and gas industry. Countries worldwide have entrusted TGS to assist with licensing rounds and the preparation of regional data programs. This global presence, which includes offshore surveys conducted in more than two dozen nations, is made possible by a diverse staff on three continents. Success in this competitive marketplace reflects a proud reputation for benchmark quality and personalized service.

1. Geophysical products & services. TGS specializes in the design, acquisition and processing of 2D and 3D multi-client seismic surveys worldwide. 
2. Geological Data products & services. An industry-leading digital well log collection, well data management & services, multi-client interpretive products and subsurface consulting are also available from TGS. 
3. Imaging Services. TGS delivers advanced high performance imaging and software solutions to support its geoscience data programs.

17. John Wood Group (GB Scotland) 
Wood Group is an international energy services company with $4.4bn sales, employing approximately 25,000 people worldwide and operating in 46 countries.

Wood Group is an international energy services company with more than $4.4bn sales, employing approximately 25,000 people worldwide and operating in 46 countries.
The Group has three businesses - Engineering & Production Facilities, Well Support and Gas Turbine Services - providing a range of engineering, production support, maintenance management and industrial gas turbine overhaul and repair services to the oil & gas, and power generation industries worldwide.

Wood Group is among the global market leaders in: deepwater engineering, offshore pipelines, artificial lift using electric submersible pumps, enhancement of oil & gas production in mature fields, the repair and overhaul of industrial gas turbines.

Wood group focuses on three areas: 1.Engineering and production facilities. Greenfield, infield engeineering, production enhancement and maintenance. 2. Well support and 3. Gas Turbine services. (*)

(*) - Information gathered from the companies websites...

Partners & Suppliers in the Oil & Gas Services Sector - Part 1

(Source: Hans Bool)

There are 16 companies in this (sub) sector, most of them of Norwegian origin, two from the Netherlands and three from Britain, two from France and one from Italy. These companies have been selected from a sector overview of Goldman Sachs, focused on European companies as part of portfolio of a single analyst.

Operating in this sector requires specific knowledge, as noticed by the many abbreviations that are used in the annual reports and on the websites:

  • EPIC - engineering, procurement, installation and construction
  • IMR - Inspection, Maintenance and Repair
  • FPSO - Floating Production Storage and Offloading (systems)
  • FSO - Floating Storage and Offloading
  • TLP - Tension Leg Platforms
  • FPU - Floating Production Units
  • MOPU - Mobile Offshore Production Units
  • HD3D - high-density 3D (seismic)

1. Acergy (Norway)

Acergy's Vision: to be the acknowledged leader in seabed-to-surface engineering and construction. It's core competences are:

1. EPIC delivery. These can be further divided into: Deepwater operations (subsea infrastructure, umbilical, riser and flowline systems). And IMR ... to keep oil and gas fields worldwide producing at optimum capacity. 
2. Conventional Field Development. Conventional construction skills and capabilities that help our clients solve complex hydrocarbon extraction and field development problems, together with pipeline installation tie-ins. 
3. Trunkline expertise. "We operate the worlds largest and most successful semi-submersible pipelay barge, the Acergy Piper." 
Special attention is set - On the homepage - to HSE: health, safety and environmental protection. This topics is detailed by graphs about the safety awareness and the (declining) number of accidents over the years...

2. Aker Solutions (Norway)

Aker Solutions is informing clearly about the sectors it operates in: oil & Gas, Refining and chemicals, mining & metals, nuclear, power generation and additional services. These latter encompasses both onshore and offshore field services.

Aftermarket is one of the most strategically important and exciting growth areas for Aker Solutions. Encompassing products and services related to the maintenance, modification and development of our installed base ... has enormous potential in terms of improving our revenue streams and margins.

3. Emgs - (Norway)

EMGS is an acronym for - Electromagnetic (EM) geoservices (GS). 
Leader in technology "clearpay" for EM.

EMGS offers a different service for the oil downstream sector. "Unlike seismic surveys, which use acoustic energy to locate promising geological structures, seabed logging can directly reveal the presence of commercial hydrocarbon reserves. Seabed logging can identify reservoirs before seismic surveys are conducted ... And seabed logging has the potential to find hydrocarbons in traps that cannot be detected using seismic methods and would be overlooked by conventional workflows.

4. Expro International Group (GB)

Oil companies choose Expro for well flow management. They need services and products to measure, improve, control and process flow from oil and gas wells. "Today," Expro offers services and products through our five marketing areas of: Well Testing & Commissioning, Production Systems, Wireline Intervention, Drilling Choke Systems, Connectors & Measurements.

5. Fugro (Netherlands) 
Fugro collects and interprets data related to the earth's surface and the soils and rocks beneath and provides advice, for purposes related to the oil and gas industry, the mining industry and the construction industry. 
Fugro operates around the world at sea, on land and from the air, using professional, highly-specialised staff and advanced technologies and systems.

Services they offer are: GEOTECHNICAL (Investigation & advice on physical & chemical characteristics of the soil and construction materials). SURVEY SERVICES (like Airborne photogrammetry, lidar, and radar mapping; topographic, hydrographic and geological surveying..). 
GEOSCIENCE SERVICES (Gathering, processing and interpreting geophysical data, quantitative and qualitative estimates of oil, gas, mineral and water resources ...)

6. CGGVeritas (France)

CGGVeritas is the world's leading international pure-play geophysical company delivering a wide range of technologies, services and equipment ... mainly throughout the global oil and gas industry. 
Divisions are: Geophysical Equipment and Geophysical Services.

These... offer an advanced suite of seabed seismic services... also owns a recent vintage, well positioned library of multi-client land and marine seismic data.

CGGVeritas is a recognized leader in data processing & imaging services, made available via a worldwide network of 28 open seismic data processing centers and 15 client-dedicated centers. 
Also ... "offers the world-famous Hampson-Russell software that ... makes sophisticated technology easily accessible by the working geophysicist and has an installed base of more than 1400 licences at over 500 petroleum and service companies worldwide."

The company has a total workforce of approximately 7,000 staff operating worldwide.

7. Petrofac (GB) 
Through its three divisions - Engineering & Construction, Operations Services and Energy Developments - Petrofac: designs and builds oil & gas facilities; operates or manages facilities and trains personnel; and, where synergies are identified, co-invests to provide additional alignment.

8. Petroleum Geo Services (Norway)

Petroleum Geo-Services (PGS) is a leading worldwide geophysical company. PGS provides an extensive range of seismic services and products for the petroleum industry including data acquisition, processing, reservoir analysis and interpretation. The company also possesses the world's most extensive multi-client data library.

Formed in 1991, the company today operates 12 marine streamer vessels including 6 vessels of the unique Ramform class. The company also operates between 7 and 10 Onshore crews and has 15 data processing centers.

Since the start of the company PGS has pioneered the development of multi-streamer marine seismic acquisition, producing increasingly efficient, high-quality 3D seismic data for the industry. The company has also introduced HD3D in all environments and developed in-house expertise in geology, geophysics, and reservoir analysis. PGS also provides onshore seismic services where the company has a reputation for using the latest equipment in challenging environments and has an enviable program of sustainable development. The data processing capabilities of PGS have grown substantially from originally processing PGS data to a major player in a high technology industry. 
With its headquarters in Oslo, the company has offices in 22 different countries. (*)

(*) - Information gathered from the companies websites...

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Tuesday, May 19, 2009

Heartland Energy Colorado

For more than 15 years, the Heartland Energy Development Corp. has innovated technologies and led the oil and gas production and development industry in many ways. Thanks to the Company’s unique management style, long-term approach to resource development, and investments in both great technology and smart personnel, it has grown from a spitfire natural gas and propane seller into a a national powerhouse.

The Heartland Energy Development Corp. team can take on practically any development or extraction job. If an oilfield is located in an environmentally sensitive zone, the Company will take due care to ensure the sanctity of natural resources. It has always been a cornerstone of Heartland Energy’s philosophy to develop sensibly with respect to environmental matters –- to that end, we’ve invested a lot of money in cutting-edge technologies, educational materials, and scientific and geologic surveys.

It may come as a surprise to many who have followed the debate over domestic energy resources that the contiguous 48 states still have significant amounts of oil and natural gas to develop. Companies like Heartland Energy Development Corp. work to extract these resources so that our country doesn’t have to depend on imports from the Middle East and Russia and Venezuela to meet our energy needs. Our specialty teams, proprietary technology, and sound management practices have allowed us to remain competitive, notwithstanding the downturn in the global energy markets.

(Source: Heartland Energy Development)

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Sunday, May 17, 2009

Drilling activity continues to diminish

Sam Fletcher
OGJ Senior Writer

HOUSTON, May 15 -- The US rig count continued to contract, down by 10 to 918 rotary rigs working this week, less that half of the 1,862 units that were active in the same week a year ago, said Baker Hughes Inc.

Land operations shouldered the latest loss, down 13 rigs to 855 drilling. Inland-water activity remained unchanged with 7 rigs working. Offshore drilling increased by 3 to 55 rotary rigs working in the Gulf of Mexico out of a total of 56 on federal offshore leases.

Of the rigs still working, 728 are drilling for natural gas, down 2 from the previous week. The number drilling for oil fell by 9 to 181. There were 9 rigs unclassified. Horizontal drilling was down 1 to 379 rigs. Directional drilling totaled 160 rigs, 4 fewer than last week.

Texas continued to lead the decline among major producing states, down 13 rigs with 342 still working. Arkansas lost 4 rigs to 44. North Dakota and New Mexico laid down 3 rigs each, to respective counts of 33 and 31. California was down by 1 to 20. Oklahoma was unchanged at 84.

Wyoming and Alaska increased by 1 rig each to 36 and 6, respectively. Colorado was up 2 to 45 rigs working. Louisiana's rig count jumped by 8 to 146. In other states of interest, Pennsylvania gained 3 to 31. Utah increased by 1 to 15, and West Virginia was unchanged with 23 rotary rigs drilling.

Canada's rig count increased by 5 to 68 this week, down from 132 units working a year ago.

While assessing several oil field service companies this week, James C. West at Barclays Capital Inc. in New York had some general observations about drilling markets. "The natural gas market remains difficult, and we believe a significant recovery in gas-directed activity is unlikely until mid-2010. A modest pick-up in oil-directed activity near term and aggressive cost cutting should partially mitigate this weakness," he said.

Commenting on Basic Energy Services Inc. (BAS) in Midland, Tex., West said, "Although conditions have stabilized somewhat within the well servicing market and pricing appears to be firming, we continue to believe natural gas fundamentals will not support a meaningful recovery in utilization until mid-2010." He said, "While maintenance activity has picked up, utilization is expected to remain low, particularly in the Rockies and Midcontinent. In response, BAS stacked one third of its well-service fleet and is scaling back operations in less active markets."

In his assessment of Parker Drilling Co., Houston, West said, "While utilization has recently improved for Parker's US barge fleet, we believe business conditions for the company's domestic-oriented businesses are likely to remain challenging into 2010, given the likelihood of continued weakness in natural gas activity." He noted, "Around one third of Parker's international fleet will come off contract in 2009; however, bidding activity remains high, and many rigs are likely to find work with some gaps in between contracts. Southeast Asia is the most challenging region, while the Americas is relatively strong."

Looking at offshore marine services, West said, "We believe weakness in the shallow-water Gulf of Mexico and the North Sea will continue to pressure vessel day rates and utilization during 2009." He said, "The shallow-water gulf has become increasingly challenging—average marine vessel utilization fell to 81% from 88% in the fourth quarter, with significant declines in gulf-levered asset classes. We believe this market will remain difficult through 2009. Deepwater utilization and day rates are relatively stable."

Contact Sam Fletcher at

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MARKET WATCH: Crude oil, natural gas prices retreat

Sam Fletcher
OGJ Senior Writer

HOUSTON, May 14 -- After briefly topping $60/bbl in the previous session, oil futures prices fell May 13 on the New York Mercantile Exchange despite a government report of an unexpected drop in US inventories, the first in 10 weeks.

Crude prices continued to decline in early trading May 14 "on news that the International Energy Agency reduced its 2009 demand forecast for the ninth consecutive month," said analysts in the Houston office of Raymond James & Associates Inc. "On the natural gas front, natural gas prices dropped nearly 3% [May 13] on a report by the Energy Information Administration that industrial consumption of natural gas will drop by 8% this year. The EIA is forecasting that total US natural gas will fall by 1.9% in 2009, which compares [with] our estimate of a 3% decline."

In New Orleans, analysts at Pritchard Capital Partners LLC said the oil price decline was the likely result "of demand concerns, lower equity prices, a stronger dollar, and poor retail figures weighing on optimism of an economic recovery and as a result lower energy demand."

The EIA said commercial US crude inventories fell 4.7 million bbl to 370.6 million bbl in the week ended May 8, compared with Wall Street analysts' expectation of a 1 million bbl increase. Gasoline stocks dropped 4.1 million bbl to 208.3 million bbl in the same week. Distillate fuel inventories increased 1 million bbl to 147.5 million bbl (OGJ Online, May 13, 2009).

However, crude inventories were not reduced by increased demand but by "a sizeable (12%) drop in imports," said Pritchard Capital Partners. Gasoline inventories fell because of 1.6% decline in refining run rates, low gasoline imports, and improved demand. The analysts said, "Demand for all products is still at 10-year lows and year-to-date collections show gasoline down 0.9% year-over-year, distillate down 8%, and all petroleum products down 5.7%. Some anecdotal evidence suggests that the slight recovery in gasoline demand witnessed at the end of the first quarter may have given way to further year-over-year erosion."

Nevertheless, Paul Horsnell, a managing director and head of commodities research at Barclays Capital in London, said, "After 7 months of constant increase, the US [crude] inventory overhang seems at last to have peaked. He said, "From the time of the deepening of the financial crisis and the recovery of oil operations from the hurricanes, through to the middle of April, US inventories rose from nearly 50 million bbl below their 5-year average to more than 90 million bbl above. The rise in inventories above normal seasonal patterns amounted to some 140 million bbl over the course of about 210 days, i.e., an abnormal rise of some 650,000 b/d across 7 whole months."

Horsnell said, "Over the 2 previous weeks, the overhang above the 5-year average had declined by 3 million bbl, and in the latest data it has declined by a further 9.1 million bbl. The overhang is still large at 80 million bbl, but over the past few weeks it has become an overhang that is being whittled away and not added to by the flows. If the peak inventory overhang has been passed, and the drop of 12 million bbl from the putative peak is of sufficient scale to provide some encouragement to that view, then that is an important change in the market dynamic. It would tend to support both the recent move up of the trading range and also to encourage a continuation of the recent significant narrowing in both the West Texas Intermediate and [North Sea] Brent time spreads."

Refining outlook
Jacques H. Rousseau, an analyst at Soleil-Back Bay Research, said, "Although the headline data of declining gasoline inventories is positive for refiners, the underlying supply-demand fundamentals remain very weak. The average US refinery utilization rate of 80.4% last week was more than 6% below year-ago levels, while demand for light products (gasoline plus distillate plus jet fuel) was 7% below the same calendar week of 2008, according to the EIA data. Potential for a summer demand-driven recovery appears to be waning; thus refiners must keep production low in order to support margins, in our view."

Olivier Jakob at Petromatrix, Zug, Switzerland, reported, "Implied [US] demand for gasoline on the 4-week average is calculated to be down 235,000 b/d vs. a year ago, but it is offset by gasoline imports that are much lower than a year ago (down 318,000 b/d). Given the lower gasoline imports, refiners are producing slightly more than a year ago (up 24,000 b/d) and for that they need to keep the crude oil inputs relatively high compared to the overall drop in demand."

However, he said, "The problem is that distillate demand is down much more than gasoline demand, hence as refiners run for gasoline demand they keep on adding to stocks of middle distillates, and storage capacity is missing. Combined US stocks of middle distillates and gasoline are basically at recent historic highs and the unwanted distillates that refiners are producing need to chase gasoline out of storage capacity. If US refiners do not cut runs more aggressively, then they need to run a fine balancing act of running gasoline into minimum of inventory to free some storage capacity for distillates."

Jakob said, "One way or another it means that gasoline could remain exposed in the future to supply disruptions while there is already enough distillate to cover next winter, and this then draws a picture where the gasoline premium to distillate could still have some further upside."

IEA reports
For the ninth consecutive month, IEA reduced its previous forecast of oil demand, down 230,000 b/d in its latest adjustment to a total 83.2 million b/d, 3% below 2008 demand. "Continued oil demand weakness is premised on strong economic recovery later this year remaining elusive," said EIA officials (OGJ Online, May 14, 2009).

Only a day earlier, the Organization of Petroleum Exporting Countries reduced its 2009 demand growth forecast by 200,000 b/d to 1.6 million b/d to 84 million bbl (OGJ Online, May 13, 2009).

IEA said world oil supply averaged 83.6 million b/d in April, up 230,000 b/d from March because of increased OPEC output after the cartel had reduced production over the previous 7 months. OPEC's total production increased 270,000 b/d to 28.2 million b/d. The 11 OPEC countries other than Iraq increased production by 230,000 b/d to 25.8 million b/d, compared with their target of 24.845 million b/d.

IEA officials expect total non-OPEC supply to slip from 50.6 million b/d in 2008 to 50.3 million b/d in 2009, offset by a similar rise in OPEC NGL production.

Natural gas
Energy Solutions Inc., Verona, Wis., advisor to gas purchasers, said May 13, "The perception of a recovering economy, along with rising crude oil prices, have also provided support for natural gas prices. The value of the US dollar recently hit a 4-month low, and that has been a contributing factor to stronger crude oil prices. Weakness in the dollar, which is expected to last into late June, has trumped the fact that US crude oil inventories have reached 19-year highs, and there is an estimated 100 million bbl of crude oil being stored at sea on tankers. There is nothing bullish about crude oil fundamentals."

Company analysts reported, "Right now, fundamentals don't matter—particularly for natural gas prices. In just 1 week, the front-month natural gas NYMEX futures contract rallied by more than $1/MMbtu, surpassing a number of technical resistance price levels. The June natural gas NYMEX contract is now trading at a price level comparable to where it traded in the second half of March. We believe the primary culprit for the recent price rise in natural gas is a combination of short-covering by speculators and a surge in the purchase of shares of [Denver-based] United States Natural Gas Fund LP (UNG), an exchange-traded fund, which is designed to track in percentage terms the movements of natural gas prices."

Energy Solutions said, "When money is invested into UNG, it initiates the purchase of the underlying portfolio of products (i.e. the purchase of natural gas futures contracts). If this buying is aggressive, natural gas prices will rise quickly."

Energy prices
The June contract for benchmark US sweet, light crudes fell 83¢ to $58.02/bbl on NYMEX. On the US spot market, WTI at Cushing, Okla., was down the same amount to the identical price. The July contract dropped 74¢ to $58.97/bbl on NYMEX. Heating oil for June declined 1.7¢ to $1.49/gal. However, the June contract for reformulated blend stock for oxygenate blending (RBOB) gained 2.09¢ to $1.69/gal.

Natural gas for June fell 11.6¢ to $4.33/MMbtu on NYMEX. "The decline may have been the result of weaker equity prices, lower crude prices, and profit taking after natural gas spiked after last week's 22% advance in June NYMEX prices," said Pritchard Capital Partners. On the US spot market, gas at Henry Hub, La., increased 2¢ to $4.39/MMbtu.

EIA reported the injection of 95 bcf of natural gas into US underground storage in the week ended May 8. Working gas in storage exceeded 2 tcf. That was 497 bcf more than in the same period a year ago and 374 bcf above the 5-year average.

In London, the June IPE contract for North Sea Brent crude dropped 60¢ to $57.34/bbl. The June gas oil contract gained 50¢ to $483.75/tonne.

The average price for OPEC's basket of 12 reference crudes advanced 40¢ to $57.16/bbl on May 14.

Contact Sam Fletcher at

Friday, May 8, 2009

Alternative Energy Development In Japan - How Japan Uses Wind For Energy

As Japan is a country that is densely populated, alternative energy development is a serious matter and cannot be compared to other markets. With wind energy in use, its continuation will depend on utilising near shore as well as offshore installations and the possibilities here are endless. Once an energy network is set up in Japan it is quickly taken up by the market. As the offshore wind is usually stronger, so the costs in installation become higher. The efficiency of turbines is increasing so the price per kilowatt-hour produced is lowering due to competition with equipment. Wind energy is generating more interest and in comparison to other renewable energy sources, it is proving more competitive.

In Svend Sigaard's words, "By utilising sites near or at sea with good wind machines, then the price per kilowatt-hour is competitive against other sources of energy". Svend Sigaard is president and CEO to the biggest wind turbine maker in the world, Denmark's 'Vestas Wind Systems'. Vestas has invested heavily in capital for research, development and their efforts towards helping Japan to expand in generating capacity in wind turbine power. Offshore installations are being sought for the Japanese nation, who are ready to put a lot of investment into alternative energy by much research and development. Their efforts will surely pay off and they can then enjoy the fruits of their labour.

Japan has long run their own course, refusing to follow other foreign nations - in World War II, the U.S. crippled all their military equipment and their oil supplies - and refuse to be dictated to. Japan is an island with a lack of natural resources which are conducive for energy production, so depend on producing other alternative energy supplies of their own. They are very open to overseas investment as well as foreign development; the introduction of new and innovative technology will help them advance and become more independent. With Vestas and other corporations being allowed into Japan to help them more with wind-production, keeping it up and running smoothly, the Japanese people are moving forward and keeping up with the times towards environmentally friendly renewable energy sources. Japan have also caught on to another power source - the microhydroelectric power plants. With its myriad of rivers and available mountain streams, Japan is absolutely ideal for placing microhydroelectric power plants to produce energy. The New Energy and Industrial Technology Development Organisation has defined them as power plants which run on water and having a maximum output of less or equal to 100 kilowatts. "Minihydroelectric" power plants can, in comparison, give an output of electrical energy to a maximum of 1000 kilowatts.

For some considerable time now, Japan have regarded microhydroelectric and the smaller scaled mini hydroelectric power plants as very suitable for the mountainous terrains. Japanese cities now increasingly use these plants through refinement and have proved excellent. Smaller scale hydroelectric power plants have been developed through the involvement of Japan Natural Energy Company, Kawasaki City Waterworks and Tokyo Electric Power Company.

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Tuesday, May 5, 2009

Siemens Introduces New Second Pass Reverse Osmosis Water Treatment System For High Quality Water In Offshore Applications

May 5th, 2009
Siemens Water Technologies announces a new second pass reverse osmosis (RO) water treatment system to the offshore oil and gas industry. The new system can be used on offshore platforms and drilling rigs to generate high quality water on-board – water normally transported to the platform. By generating water on the platform, costly transportation charges are eliminated and water volume can be adjusted according to need.

The Siemens reverse osmosis system is a rugged, pre-engineered, pre-assembled, standardized system that minimizes expensive installation and start-up costs. The new second pass RO system is ideal for offshore applications because it is a compact, single-skid unit for easy installation.

Reverse osmosis is a process in which pure water is produced by forcing waste or saline water through a semi-permeable membrane. On-site generation of water helps reduce costs and provides an additional source of water supply for various applications on the platform or rig. For more information visit

About Siemens Industry SectorThe Siemens Industry Sector (Erlangen, Germany) is the world's leading supplier of production, transportation, building and lighting technologies. With integrated automation technologies as well as comprehensive industry-specific solutions, Siemens increases the productivity, efficiency and flexibility of its customers in the fields of industry and infrastructure. The Sector consists of six Divisions: Building Technologies, Drive Technologies, Industry Automation, Industry Solutions, Mobility and Osram. With around 222,000 employees worldwide Siemens Industry posted in fiscal year 2008 a profit of EUR3.86 billion with revenues totaling EUR38 billion.

With the business activities of Siemens VAI Metal Technologies, (Linz, Austria), Siemens Water Technologies (Warrendale, Pa., U.S.A.), and Industrial Technologies, (Erlangen, Germany), the Siemens Industry Solutions Division (Erlangen, Germany) is one of the world's leading solution and service providers for industrial and infrastructure facilities. Using its own products, systems and process technologies, Industry Solutions develops and builds plants for end customers, commissions them and provides support during their entire life cycle. With around 31,000 employees worldwide Siemens Industry Solutions achieved an order intake of EUR 8.415 billon in fiscal year 2008. For more information visit
(Source: Heartland Energy Development - Offshore Drilling Industry news Blog)

Marathon Oil Corporation Awarded Third Indonesian Offshore Exploration Block

HOUSTON, May 5 /PRNewswire-FirstCall/ -- Marathon Oil Corporation (NYSE: MRO - News) today announced that its wholly owned subsidiaries, Marathon Indonesia New Ventures Limited and Indonesia Kumawa Energy Limited, entered into a Production Sharing Contract with the Indonesian Government for a combined 49 percent interest in the Kumawa Block offshore Indonesia. Marathon's co-bidder, Komodo Energy LLC, a subsidiary of Black Gold Energy LLC, was awarded the remaining 51 percent interest. Marathon Indonesia New Ventures Limited will serve as the operator.

The Kumawa Block encompasses approximately 1.24 million acres and is located offshore West Papua, Eastern Indonesia, in the Semai region, approximately 180 miles south of the recently commissioned Tangguh liquefied natural gas facility. The Kumawa Block is a high-potential, under-explored area with water depths ranging from 2,400 to more than 4,000 feet.
"Marathon is pleased to further strengthen its exploration program in Indonesia with the award of the Kumawa Block," said Annell R. Bay, Marathon's senior vice president, Worldwide Exploration. "This is an important step in the continued growth of Marathon's portfolio of large-scale, high-potential blocks in the country."

Current exploration plans for the Kumawa Block call for the acquisition of 2D seismic followed by drilling operations.

Another Marathon subsidiary, Marathon International Petroleum Indonesia Limited, holds a 70 percent interest and operatorship in the Pasangkayu Block located predominantly in the Makassar Strait offshore Sulawesi Island and directly east of the prolific Kutei Basin oil and gas production region. The Pasangkayu Block covers 1.2 million acres ranging from onshore Sulawesi to water depths of up to 7,200 feet. Marathon Indonesia (Bone Bay) Limited, a separate Marathon subsidiary, also holds a 49 percent interest and operatorship in the Bone Bay Block which covers 1.23 million acres located 200 miles southeast of the Pasangkayu Block in water depths ranging between 165 and 6,500 feet.

Marathon is an integrated international energy company engaged in exploration and production; oil sands mining; integrated gas; and refining, marketing and transportation operations. Marathon has principal operations in the United States, Angola, Canada, Equatorial Guinea, Gabon, Indonesia, Ireland, Libya, Norway and the United Kingdom. Marathon is the fourth largest U.S.-based integrated oil company and the nation's fifth largest refiner. For more information on Marathon Oil Corporation, visit the Company's Web site at

Fore more news like this: Heartland Energy Development Corporation

Monday, May 4, 2009

Where next for the crude market roller coaster?

If the events of 2008 can teach the soothsayers of the oil industry anything, it must surely be that theirs is a near-impossible task, as oil prices rose further than anyone would have thought possible, then promptly fell even further and even faster.

The last twelve months have rewritten many of the assumptions about the interaction between world oil prices, supply and demand, causing changes which we are only beginning to appreciate. (See related chart: Changing outlook for 2009 world oil demand (million b/d).)

The collapse in prices seen in the latter months of 2008 and the rapid deterioration in the financial climate are causing oil companies to rethink investment plans ...Add to the mix the difficulty in estimating how deep a global recession might be and how long it might last for, and the assumptions underpinning any short-term forecasts suddenly look rather shaky.

To understand where the industry goes from here, we have to take stock of exactly what has happened over the last 12 months and what its impact will be.

Over this period, we have seen oil prices on the world's main futures exchanges reach the giddy heights of more than $147/barrel, despite the apparent paradox of weak sentiment in the underlying physical crude markets.

OPEC seemed powerless to prevent the run-up in prices, which left many market-watchers scratching their heads as they looked in vain for fundamental reasons.

The ensuing freefall in outright prices was accompanied by even more chaos, with some long-standing price relationships inverted and one of the notable periods of contango in oil markets of recent years taking hold.

Refined product crack spreads were also volatile, with refiners suffering from weak margins and reports of voluntary run cuts emerging by the beginning of 2009.

And even though the downward ride on the roller coaster happened at even more breakneck speed than the preceding ascent, it is worth remembering that oil prices averaged around $100/b for the whole of last year -- a hefty bill to pay for consumer countries already struggling with the deepening recession.

No single player or stakeholder in the oil market can claim to exercise much control over prices, but all are hostage to its vagaries.

Most obviously, consumers have been buffeted, initially by the high oil prices themselves and then by the general economic downturn.

Demand is set to fall this year, and will probably remain sluggish at best in 2010.
Just as importantly, the collapse in prices seen in the latter months of 2008 and the rapid deterioration in the financial climate are causing oil companies to rethink investment plans, with signs of reduced budgets and delayed projects sparking fears of a possible shortage of supply.
Towards the end of the first quarter, crude prices remained relatively calm, albeit at a level which most in the industry insist is too low to encourage the investment in future capacity which will be needed once the world economy picks itself up again.

OPEC has reasserted some semblance of control over prices after slashing production by a record amount since late 2008. (See related chart: OPEC crude output since March 2004 (million b/d).)

Prices remain lower than its members would like, but are perhaps better than they feared they might be three months ago.

Now all they need is for the biggest global recession of the last 50 years to come to a swift end.

For more articles like this, visit:

Energy Stocks to Look at Monday, May 4th

These are some stocks that have been tagged by users over at StockTickr:
INGN: INTROGEN THERAPEUTICS INCOutlook: Short Industry: Drug Related Products New low on 36.35 times average volume: 2,035,531 vs. 56,000(tags: short, New Low on Huge Volume)
LMNX: LUMINEX CORPORATIONOutlook: Long Industry: Medical Instruments Supls New high on 4.68 times average volume: 1,323,724 vs. 283,117(tags: long, New High on Huge Volume)
QCOM: QUALCOMM INCORPORATEDOutlook: Long Industry: Communication Equipment New high on 1.33 times average volume: 22,918,948 vs. 17,241,700(tags: long, New High on Huge Volume)
FVRL: FAVRILLE INCOutlook: Short Industry: Biotechnology New low on 35.91 times average volume: 16,508,677 vs. 459,686(tags: short, New Low on Huge Volume)
TRLG: TRUE RELIGION APPAREL INCOutlook: Long Industry: Textile-Apparel Clothing New high on 1.89 times average volume: 1,140,686 vs. 604,516(tags: long, New High on Huge Volume)
NGAS: NGAS RESOURCES INCOutlook: Long Industry: Oil and Gas Drilling Explor New high on 3.49 times average volume: 1,188,284 vs. 340,006(tags: long, New High on Huge Volume)
IVAN: IVANHOE ENERGY INCOutlook: Long Industry: Oil and Gas Drilling Explor New high on 5.08 times average volume: 5,886,434 vs. 1,159,510(tags: long, New High on Huge Volume)
SSP: E.W. SCRIPPS COMPANYOutlook: Long Industry: Publishing - Newspapers New high on 2.08 times average volume: 1,686,299 vs. 811,324(tags: long, New High on Huge Volume)
NDSN: NORDSON CORPORATIONOutlook: Long Industry: Diversified Machinery New high on 6.34 times average volume: 1,065,578 vs. 168,000(tags: long, New High on Huge Volume)
PAC: GRUPO AEROPORTUARIO DEL PACIFICO S.A. DE C.VOutlook: Short New low on 3.87 times average volume: 1,239,908 vs. 320,789(tags: short, New Low on Huge Volume)
This list is powered by StockTickr. Learn more.

(Source: Energy Development Blog)

Heartland Energy Development Corporation Oil Drilling Equipment And Methodology - Presentation Transcript

(Source: Heartland Energy Development Heartland Energy Development Corporation

  1. Oil Drilling Equipment and Methodology The drilling rig, tall and noisy, has become an iconic American image of industry. The main task that the drilling rig needs to perform is to efficiently drill a hole into the earth surface in order to reach gas and oil pockets. Small in diameter, the hole that these drilling rigs bore can run as deep as several thousands of feet. The reason the hole needs to penetrate the ground for such a long distance is so that it can ultimately reach the trapped pockets of oil and gas that are buried deep below the earth’s surface. The most noticeable feature of the drilling rig is what we refer to as the “mast” or “derrick”. This is easily recognizable as the tall structure right above the hole being drilled. Some masts can reach heights as tall as 60 meters or 200 feet. In order to drill a hole this far down the drill itself must be very durable and strong. For this reason the drill is very heavy and requires that the mast be of sufficient strength in order to support the weight of the different tools used in the drilling process. In order to drill several thousand feet below the Earth’s surface rig engineers need to incrementally add to the length of the drill. It is necessary for the mast to be as tall as it is in order to accommodate the extremely large segments of pipe that rig engineers need to join together to increase the length of the drill. The individual pieces of drill pipe are known as joints. At the end of all ©2009 Heartland Energy Development Corporation

  2. The joined pipe segments of the drill is the bit. The bit is the drilling element that is actually responsible for carving away the earth and essentially boring the hole. The amount of weight that is applied to the drill bit during operation, is regulated by a hoist known as the drawworks There are two main types of drilling methods that exist. One is known as cable-tool and the other is rotary. The cable-tool method goes back several centuries, and yet was still used as a modern drilling technique as recently as the 1940’s. This method is well suited for drilling through hard-rock. Drake and Smith used this method of drilling at Oil Creek as did many others during the same period. Although a very effective general drilling method it does not work well in sandy or muddy conditions. Another problem is that and crews are responsible for removing the soil and rock the bit carves out. The cable-tool method works by attaching a large heavy bit to a cable, and then raising the bit slightly before letting it fall to the ground. The cable and bit are attached to a seesaw type of mechanism that allows the bit to be raised and dropped repeatedly in a very short amount of time. Specific to a cable- tool rig is the seesaw mechanism that is responsible for raising and lowering the bit. It is referred to as the walking beam and it is mounted in the mast. By the peak of this style of drilling in the 1920’s, many cable-tool rigs had started to power their walking beams with a steam ©2009 Heartland Energy Development Corporation.
  3. powered engine. The tall mast was used to lift the bit out of the hole so that it could be worked on directly. When dropping the bit into the ground several weights atop the bit, named sinker bars, would help the bit to penetrate the rock. The bit for a cable-tool rig is more similar to a blade than the bit for a rotary rig. A rotary drill bit has several adjacent rows of extremely sharp edges that work to grind out the rock with every revolution of the drill. In a rotary drill rig configuration, the drill consists of several joints of metal pipe that create one long conduit. In order to reach the foundation the rig workers occasionally need to add another pipe joint to extend the length of the drill. Rotation for the drill is created by either a rotary table, or by a top drive mechanism. You can think of a rotary table as a heavy, oversized turntable. Top drives use electronic motors to power the drill. Regardless of which rotation method is employed, the system would not work without the addition of fluid circulation. While the drill is working away boring a hole, a second system, ©2009 Heartland Energy Development Corporation
    powered by a large industrial pump, is circulating a muddy fluid through the main pipe that will carry out of the hole, and remove, any of the rock debris that is created during drilling. Another benefit of the drilling mud is that it also cools down and oils the bit. The final benefit to the drilling mud is the greatest benefit of all. The mud forms a wall cake in the hole that prevents sandy or muddy foundations from seeping into, and ruining, the hole while it is being drilled.

- Heartland Energy Development Corporation is a privately held oil and gas producer with an experienced team of management and industry expertise who specialize in developing domestic gas and oil fields. Learn more: 2009+MW20090212 This is not an offer nor solicitation to buy - such may be done pursuant to a Heartland Energy Development Corporation Confidential Information Memorandum. ©2009 Heartland Energy Development Corporation

Natural Gas Line Punctured in Minneapolis

A natural gas line was struck late during rush hour this morning in Minneapolis, forcing the closure of a main artery, a utility official said.

By PAUL WALSH, Star Tribune

Last update: May 4, 2009 - 9:41 AM

A natural gas line was struck late during rush hour this morning in Minneapolis, forcing the closure of a main artery, a utility official said.

A private contractor punctured the line in the 2500 block of East Hennepin Avenue, said Centerpoint Energy spokeswoman Becca Virden.

Nearby Industrial Boulevard is blocked in the area, and emergency personnel are creating a perimeter, Virden said.

"Any spark could ignite [the gas], and that's why we don't want anyone in the area at all," she said.

Aztec Oil & Gas Announces its Third Successful Natural Gas Well in its VIII A Drilling Partnership

(Source: Source: Aztec Oil & Gas, Inc. )

HOUSTON, May 4, 2009 (GLOBE NEWSWIRE) -- Aztec Oil & Gas, Inc. (Pink Sheets:AZGS) announced another successful gas well in its newest drilling partnership, the Aztec VIII A Oil & Gas LP. As with the previous two successful wells, this gas well is also located in Goliad County, Texas.

The newest well, the West Powell #3, was drilled to a total depth of approximately 1,695 feet. The well encountered two Miocene gas sands: one at 1,662 feet (lower zone); and the other at 1,535 feet (upper zone). The lower zone has seven feet of net gas sand and the upper zone has fifteen feet of net gas sand. The upper zone was the target zone, but the lower zone will be produced first and the upper zone will be completed and produced after the lower zone is fully production depleted.

Currently the lower zone of this well is estimated to be produced at a flow rate between approximately 100,000 - 300,000 cfgpd (cubic feet gas per day) into sales pipeline. Estimated reserves in this zone, utilizing the log, flow test and 3D seismic should be between approximately 100,000,000 cfg (cubic feet gas) and 150,000,000 cfg, or 1/10th to 1.5/10ths bcf (billion cubic feet) of natural gas. As stated, this was not the target zone for this well and this zone will be produced at an accelerated rate to depletion at which time the upper zone will be completed.

Using the same foregoing analytical criteria, estimated reserves for the upper zone should be approximately 400,000,000 cfg (cubic feet gas) to 700,000,000 cfg or 4/10ths to 7/10ths bcf (billion cubic feet) of natural gas. The production rate for this upper zone is estimated to be approximately 200,000 - 400,000 cfgpd (cubic feet gas per day). As with all wells, to truly calculate reserves, the zones will need to be produced for several months.

Aztec Oil & Gas, Inc. and Resaca Resources (Operator for Aztec) have identified and spudded one (1) additional well location that is a direct analog to these three previous wells. This fourth well is being drilled and completed immediately.

"We are very pleased with the results of these first three wells for the Aztec VIII A Partnership. While Aztec is presently inclined to focus on drilling oil wells for its partnerships, all potential wells are evaluated on a stringent economic, rather than emotional scale. If the economics favor a partnership we will drill for gas, as we did in this instance. Aztec's focus always remains on making the most money for its shareholders and investor partnerships in every situation," stated Waylan R. Johnson, President of Aztec Oil & Gas, Inc.

About Aztec Oil & Gas, Inc.

Aztec is an oil and gas exploration, development and production company focusing on numerous areas throughout the U.S. It owns a minority interest in a 29-well oil and natural gas program in Pennsylvania. Aztec also owns a minority interest in two producing Deep Lake wells in Cameron Parish, Louisiana ranging from 13,600 feet to 14,300 feet in depth. Aztec additionally owns a minority interest in one Wharton County, Texas producer; and one Barnett Shale play area well located in Wise County, Texas which had good initial oil and gas shows, is producing, but is experiencing mechanical difficulties. Aztec has a minority interest in three producing gas wells in Oklahoma of which two are conventional wells, and the third is a horizontal, Coal Bed Methane (CBM) well.

In 2007, through its wholly-owned subsidiaries, Aztec Energy, LLC and Aztec Drilling & Operating, LLC, Aztec completed and now manages a successful four (4) well drilling program in the Doddridge County area of West Virginia in which it owns a 30% interest. Aztec Energy, LLC also manages a second Aztec drilling partnership focused in Tyler County, West Virginia in which it owns a 30% interest. In 2008 Aztec's third drilling partnership subsequently successfully completed two wells in Tyler County, WV. Aztec also manages this third partnership and owns a 30% interest in same. The fourth drilling partnership, referenced in this press release, focuses on drilling in Texas. Aztec also owns a 30% interest in that partnership and acts as its managing partner. In general clarification of its activities, Aztec sponsors low risk, development drilling programs which include significant tax benefits, all of which are sold through FINRA Registered Broker Dealers to Accredited Investors. Aztec's drilling programs are very unique and also incorporate a sophisticated exit strategy for investors.

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This presentation/document contains certain statements, estimates and forecasts with respect to future performance and events. All statements other than statements of historical fact included in this presentation/document, any Aztec Memorandum, or the Aztec Website, including statements regarding future performance of events, are forward-looking statements. All such forward-looking statements are based on various underlying assumptions and expectations and are subject to risks and uncertainties which could cause actual events to differ materially from those expressed in the forward-looking statements. As a result, there can be no assurance that the forward-looking statements included in this presentation, any Aztec Memorandum, or the Aztec Website will prove to be accurate or correct. In light of these risks, uncertainties and assumptions, the future performance or events described in the forward-looking statements in this presentation/document, any Aztec Memorandum, or the Aztec Website might not occur. Accordingly, investors should not rely upon forward-looking statements as a prediction of actual results. Also, the price Aztec Oil & Gas, Inc., its managed partners and the other parties involved in any properties receive for the oil and natural gas produced on their properties may be less than quoted NYMEX prices at any given time. The Company does not undertake any obligation to update any forward-looking statements, whether as a result of new information, future events, subsequent circumstances or otherwise.