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Oil & Gas Atlas
Obama: Weaning the US off the barrel?
Energy Market Indices WoW Changes
⇒ S&P/TSX Energy Index: +0.1%
⇒ S&P 500 E&P Index: +0.5%
⇒ Oil Service Sector Index: 2.4%
⇒ UK FTSE Oil & Gas Producers Index: +0.3%
⇒ Asia Pacific Oil & Gas Producers Index: 2.6%
Weekly Market Recap
Energy markets rallied last week on the strength of crude oil prices that continue to be
propped up by unrest in Libya with Gadhafi loyalists continuing to show resistance
against the rebels. Furthermore, oil prices benefitted from manufacturing data out of
China that was better than expected.
In the US, President Obama called for the country to lower its dependence on foreign oil.
The ambitious plan would see oil imports lowered by a third in 2035 and would be
achieved through more domestic production. Oil consumption is planned to be reduced
through switching to alternative fuels such as natural gas and bio mass. The government
will likely try to induce oil and gas exploration and production through subsidies. Also,
consideration has been given to switching the fuel source of the government’s vehicles to
natural gas from oil. This would increase demand for natural gas fuelling stations
providing the infrastructure necessary for citizens to convert their vehicles to natural gas.
Although a good plan on paper, this strategy will likely face implementation hurdles.
In Europe, Tullow Oil and Max Petroleum were hot in the news last week. The day after
announcing a discovery at Teak-2, offshore Ghana, Tullow and its Uganda farm-in
partners, Total and China National Offshore Oil Corp (CNOOC), announced they have
agreed to pay the Ugandan Government at least US$283m to resolve a prolonged tax
dispute, which unleashed a farm-out deal worth US$2.9bn to Tullow. On Friday,
Max Petroleum announced intermediate discovery at Asanketken in Block E, Kazakhstan
and a rig tender award for its first pre-salt exploration well to be drilled in August 2011.
Premier Oil successfully encountered 64ft of net vertical oil pay with the Burgman
sidetrack that targeted Lower Tay sandstones. San Leon Energy also outlined a 10-well
drilling programme for 2011 including its first well into Poland’s Baltic basin to be drilled in
Aug this year. Petrofac won US$240m Majnoon, Iraq contract, further increasing its
existing E&C backlog of US$10.2bn. Within the Europe Integrated universe, BP was
awarded 44% participating interest in the Tanjung IV CBM PSC and 45% participating
interest in the Kapuas I, II, and III CBM PSCs in Indonesia. Royal Dutch Shell agreed to
sell most of its Downstream business in Chile for total consideration of US$614m.
We initiated coverage on two companies last week, FX Energy (FXEN US) and DeeThree
Exploration (DTX CN). FX Energy is focused on the exploration and development of
conventional and unconventional resources in Poland and has working interest in over 4m
gross acres. We have an Outperform rating and a US$15 target price. DeeThree is a junior
oil and gas producer whose primary operations are located in southern Alberta targeting the
emerging Alberta Bakken play as well as, West Pembina Brazeau and the greater Peace
River Arch area of Alberta. The company currently produces approximately 3,000boe/d. We
have an Outperform rating and C$6.00 price target.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Oil & Gas Atlas
Obama: Weaning the US off the barrel?
Energy Market Indices WoW Changes
⇒ S&P/TSX Energy Index: +0.1%
⇒ S&P 500 E&P Index: +0.5%
⇒ Oil Service Sector Index: 2.4%
⇒ UK FTSE Oil & Gas Producers Index: +0.3%
⇒ Asia Pacific Oil & Gas Producers Index: 2.6%
Weekly Market Recap
Energy markets rallied last week on the strength of crude oil prices that continue to be
propped up by unrest in Libya with Gadhafi loyalists continuing to show resistance
against the rebels. Furthermore, oil prices benefitted from manufacturing data out of
China that was better than expected.
In the US, President Obama called for the country to lower its dependence on foreign oil.
The ambitious plan would see oil imports lowered by a third in 2035 and would be
achieved through more domestic production. Oil consumption is planned to be reduced
through switching to alternative fuels such as natural gas and bio mass. The government
will likely try to induce oil and gas exploration and production through subsidies. Also,
consideration has been given to switching the fuel source of the government’s vehicles to
natural gas from oil. This would increase demand for natural gas fuelling stations
providing the infrastructure necessary for citizens to convert their vehicles to natural gas.
Although a good plan on paper, this strategy will likely face implementation hurdles.
In Europe, Tullow Oil and Max Petroleum were hot in the news last week. The day after
announcing a discovery at Teak-2, offshore Ghana, Tullow and its Uganda farm-in
partners, Total and China National Offshore Oil Corp (CNOOC), announced they have
agreed to pay the Ugandan Government at least US$283m to resolve a prolonged tax
dispute, which unleashed a farm-out deal worth US$2.9bn to Tullow. On Friday,
Max Petroleum announced intermediate discovery at Asanketken in Block E, Kazakhstan
and a rig tender award for its first pre-salt exploration well to be drilled in August 2011.
Premier Oil successfully encountered 64ft of net vertical oil pay with the Burgman
sidetrack that targeted Lower Tay sandstones. San Leon Energy also outlined a 10-well
drilling programme for 2011 including its first well into Poland’s Baltic basin to be drilled in
Aug this year. Petrofac won US$240m Majnoon, Iraq contract, further increasing its
existing E&C backlog of US$10.2bn. Within the Europe Integrated universe, BP was
awarded 44% participating interest in the Tanjung IV CBM PSC and 45% participating
interest in the Kapuas I, II, and III CBM PSCs in Indonesia. Royal Dutch Shell agreed to
sell most of its Downstream business in Chile for total consideration of US$614m.
We initiated coverage on two companies last week, FX Energy (FXEN US) and DeeThree
Exploration (DTX CN). FX Energy is focused on the exploration and development of
conventional and unconventional resources in Poland and has working interest in over 4m
gross acres. We have an Outperform rating and a US$15 target price. DeeThree is a junior
oil and gas producer whose primary operations are located in southern Alberta targeting the
emerging Alberta Bakken play as well as, West Pembina Brazeau and the greater Peace
River Arch area of Alberta. The company currently produces approximately 3,000boe/d. We
have an Outperform rating and C$6.00 price target.
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