Friday, June 21, 2013

Buru – Mitsubishi Corporation ('MC') 2013 drilling program

Buru Energy advises that drilling operations on the Yulleroo 4 well commenced at 12:00hrs on 19 January 2013 (AWST) using Ensign Rig#32. As at 06:00hrs on 21 January 2013 (AWST) the well was drilling ahead at 30 metres.
Yulleroo 4 is the first well in the Buru – Mitsubishi Corporation ('MC') 2013 drilling program. The Yulleroo 4 well is located in exploration permit EP 436. Buru and MC each have a 50%
interest in this well and in EP 436. The well is located some 80 kms to the east of Broome. The well location is some eight kilometres from the Great Northern Highway along the all weather Yulleroo access road. The well has a programmed total depth of 3,800 metres and is expected to take some 52 days to drill and suspend.

The Yulleroo wet gas accumulation was identified by the Yulleroo 1 well that was drilled in 1967 and tested gas at low rates from a very substantial gas column in a thick sequence of shales and sands in the Laurel Formation. The Yulleroo 2 well was drilled in 2008 by ARC Energy to appraise the Yulleroo 1 discovery, and recorded strong gas shows at the same stratigraphic level as Yulleroo 1. Buru conducted a successful reservoir stimulation operation at Yulleroo 2 in 2010, demonstrating that the reservoir was capable of flowing gas of good quality with significant hydrocarbon liquid content.

The Yulleroo 3 well was drilled by Buru and MC in 2012 and had strong gas shows over an interval of over 1,500 metres. This intersection added over a thousand metres of gas charged section above the previously interpreted top of the gas sands in Yulleroo 1, together with a number of additional sand packages. Significantly, a thin sand at around 3,200 metres is interpreted to have conventional reservoir properties. This sand has the potential to materially improve the flow rates from this well without requiring any reservoir stimulation. If this sand is developed over a larger area with similar reservoir properties it is expected to add significantly to the commercial potential of the field.

In a broader context, the gas wetness ratios and inferred pressure data in the Yulleroo 3 well are indicative of the Yulleroo accumulation being part of a basin centred gas system similar to that seen in the Valhalla area. The Yulleroo 4 well is therefore being deliberately drilled at the limits of structural closure of the Yulleroo structure, as interpreted from the 3D seismic data acquired over the field in 2011. The well will test the extent of the gas column in this part of the accumulation and is expected to confirm Buru’s interpretation that the Yulleroo field is part of a geographically
extensive basin centred gas accumulation extending beyond the mapped structural closure. If this is proved to be the case, the Yulleroo area has the potential to hold multi TCF’s of gas. The well will also help define the extent and potential recoverable volumes of gas from the conventional 3,200m sand identified in Yulleroo 3.



    Talk of shale gas wells being "several kilometres apart" in the Canning Basin and all the overblown estimates are all part of the global con job that is shale gas and oil.

    The latest figures from the IEA are all part of the on going LIE!


    Shale gas won't stop peak oil, but could create an economic crisis

    Overinflated industry claims could pull the rug out from optimistic growth forecasts within just five years

    .......A Post-Carbon Institute study authored by geologist David Hughes, who worked for 32 years as a research manager at the Geological Survey of Canada, analysed US production data for 65,000 wells from 31 shale plays using a database widely used in industry and government. While acknowledging that shale has dramatically reversed "the long-standing decline of US oil and gas production", this can only:

    "... provide a temporary reprieve from having to deal with the real problems: fossil fuels are finite, and production of new fossil fuel resources tends to be increasingly expensive and environmentally damaging."

    Despite accounting for nearly 40 per cent of US natural gas production, shale gas production has "been on a plateau since December 2011 - 80 per cent of shale gas production comes from five plays", some of which are already in decline.

    "The very high decline rates of shale gas wells require continuous inputs of capital - estimated at $42 billion per year to drill more than 7,000 wells - in order to maintain production. In comparison, the value of shale gas produced in 2012 was just $32.5 billion."

    The report thus concludes:

    "Notwithstanding the fact that in theory some of these resources have very large in situ volumes, the likely rate at which they can be converted to supply and their cost of acquisition will not allow them to quell higher energy costs and potential supply shortfalls."

    Report author Hughes said that the main problem was the exclusion of price and rate of supply: "Price is critically important but not considered in these estimates." He added: "Only a small portion [of total estimated resources], likely less than 5-10 per cent will be recoverable at a low price...

    "Shale gas can continue to grow but only at higher prices and that growth will require an ever escalating drilling treadmill with associated collateral financial and environmental costs – and its long term sustainability is highly questionable."

    Another report was put out by the Energy Policy Forum, and authored by former Wall Street analyst Deborah Rogers - now an adviser to the US Department of the Interior's Extractive Industries Transparency Initiative. Rogers warns that the interplay of geological constraints and financial exuberance are creating an unsustainable bubble. Her report shows that shale oil and gas reserves have been:

    "... overestimated by a minimum of 100% and by as much as 400-500% by operators according to actual well production data filed in various states... Shale oil wells are following the same steep decline rates and poor recovery efficiency observed in shale gas wells."

    Deliberate overproduction drove gas prices down so that Wall Street could maximise profits "from mergers & acquisitions and other transactional fees", as well as from share prices. Meanwhile, the industry must still service high levels of debt due to excessive borrowing justified by overinflated projections:

    "... leases were bundled and flipped on unproved shale fields in much the same way as mortgage-backed securities had been bundled and sold on questionable underlying mortgage assets prior to the economic downturn of 2007."

  2. Shale gas lies...cont...

    Seeking to prevent outright collapse, the report argues, the US is ramping up gas exports so it can exploit the difference between low domestic and high international prices "to shore up ailing balance sheets invested in shale assets."

    Rogers, who testified last month before the Senate Committee on Energy and Natural Resources, also expressed scepticism about the EIA's latest assessment:

    "The EIA actually does retrospective assessments of their forecasting and their track record is dismal... They admit that they overestimated natural gas production 66 per cent of the time and crude 59.6 per cent of the time in their March 2013 assessment for 2012."

    She added that "there is definitely a bubble." Though it would not have an impact as devastating as the banking crisis, she said:

    "The oil majors do have losses, but the smaller independents are being shaken out. Chesapeake and others are struggling, like Devon, Continental, Kodiak and Range. Without exception, they all have had a significant deterioration in negative free cash since 2010. This is obviously not sustainable."

    The impact of this would be greater centralisation, with smaller companies and their assets being absorbed by the oil majors through mergers and acquisitions. Rogers said:

    "What is most troubling to me is that there appears to be a complacency setting in about transitioning to a more sustainable energy economy. Shales should be used as a bridge. But we are hearing far too much euphoric talk about 100-200 years of natural gas. Therefore no need to worry, it can be business as usual. This is highly problematic in my opinion. We must globally transition away from hydrocarbons."

    Dr Nafeez Ahmed is executive director of the Institute for Policy Research & Development and author of A User's Guide to the Crisis of Civilisation: And How to Save It among other books. Follow him on Twitter @nafeezahmed

  3. Barnett's well heeled pals with the deep pockets from China seem to be having some problems.


    Credit squeeze tremors rock Chinese banks

    China's banking sector is bracing for the likelihood that access to credit will remain uncomfortably tight.

    That comes despite signs of central bank intervention to ease the situation and prevent the credit squeeze from spiralling out of control.

    Key short-term interbank lending rates fell sharply on Friday from unprecedented highs, prompting speculation that the People's Bank of China had been forced to inject cash into its banking system. Reuters reported sources saying the central bank was encouraging major state banks to resume lending to each other.

    But at the time of writing, the PBOC had yet to make any public comment, despite rumours sweeping through the industry.


    ''If they are doing anything out of the ordinary, they aren't doing it publicly,'' Carlo Reiter, an analyst at J Capital Research in Beijing said.

    State-run Shanghai Securities News took the unusual step of denying talk that the central bank had flooded the market with 400 billion yuan ($70.6 billion) of capital, or that it had bailed the Industrial and Commercial Bank of China out with 50 billion yuan.

    ''Information is flying everywhere, the financial market is becoming harder and harder to read,'' the article said.


    China financial squeeze grips as central bank wields the big stick

    China's financial system is in the throes of a cash squeeze, with interbank lending rates spiking this week and bank-to-bank borrowing nearly stalled, as the government tries to restructure the economy and punish speculators.

    With China's interbank and money market rates soaring over the past two weeks, banks and other financial institutions are afraid of lending to one another. Those in need of short-term cash, or liquidity, must pay dearly; failure to do so raises the possibility of defaults.

    China's central bank, the People's Bank of China, has refused to provide additional liquidity to the credit market. The bank is not independent, unlike many other central banks, and reports to the State Council.

    A huge shadow banking operation has emerged in China in recent years, with smaller banks and trust companies borrowing from bigger state-run banks and then re-lending that money at high interest rates to private companies and property developers, a practice that fuels speculation.


    Pressuring speculators is a risky strategy for the Chinese government, which is also grappling with a slowing economy. Many borrowers may have a harder time paying back their loans, and analysts fear the losses could ripple through the banking system.

    ''The central bank wants to accelerate reform,'' said Zhu Haibin, an economist at JPMorgan. ''They want to give the market a lesson: you need to manage your risk and not rely on the central bank.''

    Zhu and other economists say restructuring a slowing economy that has grown addicted to low interest rates and easy money could be perilous; the decision could tighten lending and slow growth too quickly.

    The worst case, absent intervention by policymakers, would be defaults at lenders with the most exposure and shakiest balance sheets. The damage could spread to other banks, setting off runs on deposits. In the near term, markets will probably continue to be rattled, especially shares in financial institutions.

  4. China choking now Singapore and Malaysia - fires in Indonesia blamed on palm oil plantations clearing forest by burning.


    Pollution crisis envelopes Singapore

    Singapore's smog index has hit the critical 400 level, making it potentially life-threatening to the ill and elderly people, according to a government monitoring site.

    The level was reached at 11am (1300 AEST) on Friday, after a rapid rise in the Pollutant Standards Index, which measures the haze crisis caused by Indonesian forest fires.

    Indonesian and Singaporean officials have been holding emergency talks on how to extinguish the fires on farms and plantations on Sumatra island, which are also affecting Malaysia.

    According to Singapore government guidelines, sustained PSI average levels above 400 on a 24-hour basis "may be life-threatening to ill and elderly persons".

    General practitioner Philip Koh said he had seen a 20 per cent spike in consultations in the past week, and estimated that about 80 per cent of all his patients are suffering from haze-related ailments.

    "My patients are telling me they are worried about how long this is going to last and how much higher this is going to go. It is already high at 400 now, how much higher will it go?" he told AFP.

    Koh also said many were turning to his clinic to buy protective masks, as supplies are low at retailers.

    "Our supplies are running low here too," he said.
    If the 400 index average is sustained over a 24-hour period, the government advises all children, elderly people and persons with existing diseases to stay indoors, keep windows closed and avoid physical exertion as much as possible.