InterOil Increases Condensate Recovery at 2nd Sidetrack of Antelope-1

InterOil reports increased condensate recovery in the second side track of the Antelope-1 well. Drill Stem Test (DST) #11, performed over an interval from 7,529 feet to 7,700 feet (2,295 to 2,347 meters) in the Antelope-1ST2, recovered surges of between 25 to 100 barrels of condensate per million cubic feet of natural gas. Antelope-1ST2 kicked out from the Antelope-1 wellbore at 6,726 feet (2,050 meters) on May 1st and reached the current total depth of 7,700 feet (2,347 meters) on May 5th. The increased gas-to-condensate ratio indicated from this test, which was conducted deep in the hydrocarbon column confirms our original assumptions, which were based on observations from worldwide gas and condensate fields, and support our decision to case the well for further testing.

The formation in which the DST packer was set did not completely seal allowing gas from above to channel into the test interval, resulting in limited testing capability with these DST tools within the large open hole interval. Given the encouraging results of the DST, the company has elected to case the well and isolate the 1,968 feet (600 meters) of gas pay behind pipe. Forward plans are to drill out underbalanced to further test this zone and additional zones of interest in the lower portion of the Antelope reservoir with the improved isolation of a cased wellbore and without further contamination by drilling fluids during managed pressure drilling.

Analysis of the test pressure data and condensate by third parties is in progress. The Company is in the early stages of evaluation and has not yet determined the final volume, and in particular whether condensate volumes would be sufficient to be commercially exploitable.

Read more...

InterOil's Antelope-1 Well Flows at Record Gas Rate

InterOil Corporation says that its Antelope-1 well flowed at 382 million cubic feet of natural gas per day (MMcfd) with 5,000 barrels of condensate per day (BCPD) for a total 68,700 barrels of oil equivalent per day (BOEPD), setting a new record rate for the country of Papua New Guinea.

The flow test recorded a maximum calculated rate at 545 MMcfd for a dry gas reading through a 6 inch capacity choke that was only opened to 3 ½ inches or about 30% of capacity. Conservatively adjusting the dry gas flow rate of 545 MMcfd to compensate for 13 Bbls of condensate per MMcf results in the 382 MMcf effective gas flow rate. The company says that as far as we are aware, the world record breaking gas flow rate from a vertical well confirms other records recently established by the well, such as the largest vertical hydrocarbon column height in a single onshore carbonate reef structure and the largest calculated absolute open flow (CAOF) at 17.7 Billion cubic feet of natural gas per day. The well results establish the country of Papua New Guinea as a world class gas resource base in close proximity to the largest and most well developed LNG market in the world.

InterOil believes the Antelope-1 well clearly confirms the gas resource potential sufficient to proceed with plans to build a liquefied natural gas (LNG) plant on company land next to the InterOil refinery. Antelope-1 and previous wells, have confirmed over 120% of full capacity, estimated at 500 MMcfd, for the first proposed LNG train.

Third party resource estimates are underway and will be released when completed in the next few weeks. Recent settlement agreement with Merrill Lynch uniquely positions InterOil to enter direct negotiations with industry partners on an ownership stake in the Elk/Antelope structure, an ownership stake in the proposed LNG plant and long-term LNG offtake contracts.

Read more...

Chavez Moves to Take Over Oil Service Companies in Venezuela

May 8 (Bloomberg) -- Venezuelan President Hugo Chavez signed a law to allow the government to seize assets from oilfield services companies and said he’ll start taking over boats and docks on Lake Maracaibo today.

The National Assembly approved the law earlier yesterday, allowing for the nationalization of services including water injection at wells, gas compression and dock control.

“I’m going to enact this law immediately,” Chavez said last night. “We’re going to start to recover these assets, which will become property of the state. Now they’re liberated.”

Petroleos de Venezuela SA, the state oil company, is pressing foreign services companies to lower rates as growing debts hamper oil output. Production in Venezuela, the biggest oil exporter in the Americas, was down 8.4 percent last month from a year ago, according to Bloomberg estimates, and services firms have idled rigs this year because of past-due payments.

Venezuela depends on oil exports to finance half the government’s budget.

Chavez didn’t provide names of companies that would be targeted today.Schlumberger Ltd. and Halliburton Co., the world’s biggest and second-biggest oilfield services companies, both operate in Venezuela. The two companies declined to comment when asked about the new law on May 6.

Boats, Docks
Oil and Energy Minister Rafael Ramirez said the state oil company today will seize 300 boats, 61 diving boats and 39 terminals and docks and other assets used by the oil industry on Lake Maracaibo in Venezuela’s western Zulia state. PDVSA, as the oil company is known, will absorb 8,000 employees from subcontractors.

“These intermediary companies speculated, and took a large part of our oil earnings,” Ramirez said yesterday on state television. “With this, we’ll continue reducing costs in our oil industry.”
Venezuela’s output may fall below 2 million barrels per day for the first time in 20 years, said Patrick Esteruelas, a Latin America analyst at Eurasia Group in New York, in a research note yesterday.

Venezuela has already started expropriating assets this year from services companies that have idled equipment.

Yesterday, John Wood Group Plc, a services company based in Aberdeen, Scotland, said that PDVSA took over one of its contracts, and Houston-basedBoots & Coots International Well Control Inc. said it suspended operations in the first quarter because of past-due payments.

Williams Cos. said on April 29 that it wrote off $241 million for uncollectible Venezuela payments, while Helmerich & Payne Inc. said it may not be able to collect $116 million.
Helmerich has idled seven rigs, while Dallas-based Ensco International Inc. idled one, which was later seized by PDVSA.

Investment Plan
PDVSA cut its investment plan for this year to $14 billion from a previously planned $24 billion on April 28, and in February Ramirez said the company asked service providers to cut their fees by 40 percent after the price of oil plunged.

Chavez has pledged to maintain spending on social programs that provide subsidized food, health care and housing to the poor, even after crude oil prices plunged 61 percent since July.

Crude oil for June delivery rose 37 cents, or 0.66 percent, to $56.71 a barrel on the New York Mercantile Exchange yesterday.

Ramirez said May 6 that Venezuela, a member of the Organization of Petroleum Exporting Countries, supports efforts to raise the price of oil to $70 a barrel.

Angel Rodriguez, a lawmaker and president of the Energy and Mines Commission in the National Assembly, said in an interview May 6 the government won’t expropriate foreign-owned oil and gas drilling rigs.

To contact the reporter on this story: Matthew Walter in Caracas at mwalter4@bloomberg.net
Last Updated: May 7, 2009 23:54 EDT

Read more...