Aubrey McClendon acquires stake in Oklahoma shale pipeline

Aubrey McClendon, the U.S. shale wildcatter who’s raised $10 billion in capital since getting fired from Chesapeake Energy Corp. last year, acquired a stake in an Oklahoma pipeline project.

An affiliate of McClendon’s American Energy Partners LP contributed natural gas lines in exchange for a minority interest in Tall Oak Midstream LLC’s planned 250-mi pipeline and processing network, Oklahoma City-based Tall Oak said in a Business Wire statement today, June 25.

McClendon’s company also dedicated drilling prospects spread throughout six Oklahoma counties to the new network, according to the statement. Casey Nikoloric, a Tall Oak spokeswoman with the public-relations firm Ten 10 Group, said the size of the acreage commitment wasn’t disclosed.

American Energy, also based in Oklahoma City, has an option to increase its stake to as much as 50%. McClendon announced plans on June 18 to expand his growing shale empire into the pipeline business, with backing from buyout firm The Energy & Minerals Group.

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Oilfield set aside for U.S. Navy 99 years ago goes to auction

The U.S. government wants to sell a naval petroleum reserve field first set aside by presidential decree 99 years ago to ensure fuel supplies for American warships.

The Energy Department is seeking bids for the Teapot Dome field north of Casper, Wyoming, by Sept. 30, according to an offering document published on the website of Meagher Energy Advisors Inc. today, June 23. The field, which includes several layers of shale and oil wells more than 1 mile (1.6 km) deep, currently produces about 240 bbl of crude a day.

The Teapot Dome field was designated a naval reserve in 1915. The 9,481-acre parcel is the last such reserve still under control of the Energy Department, according to the offering document.

The field has several untapped layers of oil- and gas-soaked rocks that may be suitable for enhanced recovery techniques such as carbon-dioxide flooding, according to the offering. A data room with technical details about the geology of the field is scheduled to open on July 30.

The U.S. began divesting naval petroleum reserves in 1998, when it sold the Elk Hills field near Bakersfield, California, to Occidental Petroleum Corp. for $3.65 billion.

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Carrizo Oil & Gas provides operational updates on Niobrara, Utica activities

Carrizo Oil & Gas reported an operational update, which includes initial test results from its Niobrara A bench wells. Testing flowed at an average peak 24-hr rate of 1,127 boed, including one well which tested at 1,633 boed.

Carrizo recently began production from its first multiple geological bench downspacing pilot in the Niobrara formation. The pilot consisted of eight wells in the company' s Bringelson Ranch area in Weld County. The pilot tested both B-A-B and B-B-B lateral orientations, spaced 300 ft apart, equating to 40 acre spacing. The wells were drilled with an average effective lateral of approximately 4,000 ft and completed with an average of 14 frac stages.

The average peak rate from the eight wells was 1,021 boed, 89% oil. This compares to the company’s current Area 1 type curve, which assumes an average IP rate of approximately 800 boed, 80% oil. The five B bench wells had a peak rate of 957 boed, 89% oil, while the three A bench wells had a peak rate of 1,127 boed, 88% oil. One of the A bench wells, the Bringelson Ranch 6-20, had a peak 24-hr flowrate of 1,633 boed, 87% oil, the strongest peak rate to date from the company' s Niobrara program. Carrizo operates the Bringelson Ranch wells with an approximate 29% working interest.

The company is currently drilling its second 40-acre B-A-B downspacing pilot in its Hemberger area in Weld County. Current plans call for the pilot to include three wells in the B bench and two wells in the A bench, with the laterals spaced approximately 300 ft apart. Carrizo operates the Hemberger wells with an approximate 26% working interest.

The spudder rig has arrived on the location of Carrizo' s second Utica shale well, the Brown 1H in Guernsey County, Ohio, and drilling is expected to begin shortly. The company currently plans to drill the top hole with the spudder rig and bring in a larger rig to drill the horizontal section in July. The company plans to drill the well with an effective lateral of 6,280 ft and complete it with 26 frac stages. Carrizo operates the Brown 1H well with a 50% working interest. Carrizo currently plans to keep both the spudder and larger rig active for the remainder of the year.

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Tethys awarded 15-year extension to Kazakhstan gas contract

Tethys Petroleum, following the recently reported Kazakh State Reserves Committee (GKZ) approval, confirmed that it has received approval from the Ministry of Oil & Gas of the Republic of Kazakhstan (MOG) for the extension its Kyzyloi Production Contract for a further 15 years, to June 2029.

The contract area currently covers some 287 sq km, and the company is currently producing gas from the shallow Kyzyloi sandstone in this area. This contract extension will give Tethys significantly more time to produce natural gas from the area.

The reserves attributed to the Kyzyloi contract area, determined in accordance with National Instrument 51-101 of the Canadian Securities Administrators, are included in the company' s reserves evaluation for its oil and gas interests in Kazakhstan.

Tethys is focused on oil and gas exploration and production activities in Central Asia and the Caspian region, with activities currently in the Republics of Kazakhstan, Tajikistan and Georgia.

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Genel’s Kurdistan oil production jumps after pipeline opens

Genel Energy Plc, the oil explorer headed by former BP Plc CEO Tony Hayward, said production jumped in June after Iraq’s Kurdistan region opened an export pipeline to Turkey.

Net production averaged 84,000 bpd in June compared with a 63,000 bpd rate for the whole of the first half, the company said in a statement.

The opening of the pipeline in May allowed the autonomous region to increase exports through Turkey, bypassing the central Iraqi network. While the government in Baghdad disputes Kurdistan’s right to sell oil directly, the regional administration has sold a cargo of oil at international prices and banked the proceeds in a Turkish bank, Genel said.

Kurdistan, which plans a referendum on independence from Iraq, has largely remained calm as Islamist militants fight the central government for control of large parts of the country. London-based Genel said its operations remain safe and secure.

Genel maintained a forecast for average output in 2014 of 60,000 to 70,000 bpd and said revenue would be $500 million to $600 million.

The pipeline will allow Kurdistan to raise exports to 200,000 to 250,000 bpd this month from 125,000 bbl early last month, Ashti Hawrami, the regional natural resources minister, said on June 18. Daily shipments may increase to 400,000 bbl by the end of the year, he said.

Iraq, excluding the Kurdish region, holds 150 billion bbl of proven crude reserves in the world’s fifth-biggest deposits. The Kurdistan regional government controls 45 billion bbl and has attracted international oil companies including Genel, Exxon Mobil Corp. and Total SA with financial terms many see as more generous than those in the rest of the country.

Genel fell 0.8% to 1,015 pence by 8:31 a.m. in London. The company said today, July 3, an exploration well off Malta was plugged and abandoned without discovering oil and gas.

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Eni granted three new permits in Algeria

Eni has been granted three prospection permits by Sonatrach, the Algerian state company. The permits authorize Eni, as operator, and Sonatrach to carry out prospection activities in the basins of Timimoun and Oued Mya, in onshore southern Algeria.

The three permits (El Guefoul, Tinerkouk and Terfas), issued from the national agency for the exploitation of hydrocarbon resources (Agence Nationale pour la Valorisation des Ressources en Hydrocarbures, ALNAFT), are valid for two years and cover a total area of 46,837 sq km. The work program includes studies and drilling of prospection wells to define the potential of the areas. The three areas are considered of great interest and potential.

Eni has been present in Algeria since 1981 and has interests in 29 exploration and development licenses, which are currently in production, and in 3 permits under development. Eni is the leading international producer in the country, with daily equity production of approximately 125,000 boe.

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