B07 Oil and Gas Extraction

Origin Energy spins off oil and gas business

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 & 20 : 7-Dec-16

Australian-listed Origin Energy has revealed plans for a partial demerger in 2017, with its conventional oil and gas assets to be held by a separately listed company. However, Origin will retain its stake in the Australia Pacific LNG project in Queensland, while it will not hold a stake in the new company. Origin CEO Frank Calabria says an IPO was deemed to offer the best value, although he adds that the group would be open to an offer that represented better value than a float. JP Morgan estimates that the assets that will be spun off are worth around $A1.8bn.

CORPORATES
ORIGIN ENERGY LIMITED – ASX ORG, AUSTRALIA PACIFIC LNG LIMITED, JP MORGAN AUSTRALIA LIMITED, SANDON CAPITAL INVESTMENTS LIMITED – ASX SNC, TATTS GROUP LIMITED – ASX TTS, ILUKA RESOURCES LIMITED – ASX ILU, MACQUARIE CAPITAL PTY LTD, UBS HOLDINGS PTY LTD, ALLAN GRAY AUSTRALIA PTY LTD, AGL ENERGY LIMITED – ASX AGL, BEACH ENERGY LIMITED – ASX BPT, STANDARD AND POOR’S FINANCIAL SERVICES LLC, MOODY’S INVESTORS SERVICE INCORPORATED

BHP tops big oil in Mexico

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Original article by Peter Ker
The Australian Financial Review – Page: 1 & 6 : 7-Dec-16

BHP Billiton has acquired a 60 per cent stake in the Trion oil field in the Gulf of Mexico, following a highly-contested auction process. BHP will initially pay $US62.4m for the stake, while the deal also requires it to spend at least $US320m ($A429m) on an appraisal program. Mexico’s state-owned Pemex, which will have a 40 per cent stake in Trion, estimates that the oil field could contain about 485 million barrels of oil equivalent. BP also submitted a bid to acquire the Trion stake.

CORPORATES
BHP BILLITON LIMITED – ASX BHP, PEMEX PETROLEOS MEXICANOS, BP PLC, COLONIAL FIRST STATE GLOBAL ASSET MANAGEMENT, MACQUARIE GROUP LIMITED – ASX MQG, RIO TINTO LIMITED – ASX RIO, NEWCREST MINING LIMITED – ASX NCM, OZ MINERALS LIMITED – ASX OZL, MEXICO. MINISTRY OF ENERGY

Producers spot better returns

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Original article by Matt Chambers
The Australian – Page: 21 : 6-Dec-16

Data from EnergyQuest shows that the spot price of gas in Adelaide rose to nearly $A10 per gigajoule in the September 2016 quarter, while the spot price in Sydney and Brisbane also rose. In contrast, the LNG netback price at the Wallumbilla processing hub in Queensland fell to around $A6 per gigajoule. EnergyQuest expects LNG producers to capitalise on the rise in gas prices by redirecting more of their output to the domestic market.

CORPORATES
ENERGYQUEST PTY LTD, QUEENSLAND CURTIS LNG PTY LTD, ROYAL DUTCH SHELL PLC

Too early to say goodbye to tough times

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 20 : 2-Dec-16

AWE Limited CEO David Biggs says that oil and producers are unlikely to increase their capital investment until the longer-term impact of OPEC’s production cuts on the crude oil price is known. He believes that a sustained price above $US60 per barrel will be needed for oil companies to commit to increased spending. Beach Energy director Jim McKerlie agrees that the OPEC deal will not be a "gamechanger" for oil and gas producers.

CORPORATES
AWE LIMITED – ASX AWE, BEACH ENERGY LIMITED – ASX BPT, ORGANISATION OF PETROLEUM EXPORTING COUNTRIES, HORIZON OIL LIMITED – ASX HZN, SANTOS LIMITED – ASX STO, OIL SEARCH LIMITED – ASX OSH, ORIGIN ENERGY LIMITED – ASX ORG, WORLEYPARSONS LIMITED – ASX WOR, WOODSIDE PETROLEUM LIMITED – ASX WPL, FAR LIMITED – ASX FAR, RBC CAPITAL MARKETS

Mega-project days over: Exxon

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 : 1-Dec-16

ExxonMobil Australia chairman Richard Owen says the energy giant will consider options for undertaking a staged development of the Scarborough gas field. He has told a business lunch in Sydney that ExxonMobil is likely to examine ways to start delivering cash flows from new oil and gas projects at an earlier stage of their development, rather than the so-called "mega-project" approach of recent years. The Gorgon LNG has commenced shipments more than six years after construction commenced.

CORPORATES
EXXONMOBIL CORPORATION, WOODSIDE PETROLEUM LIMITED – ASX WPL, CHEVRON CORPORATION, GORGON PTY LTD

Mega-project days over: Exxon

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 15 : 1-Dec-16

ExxonMobil Australia chairman Richard Owen says the energy giant will consider options for undertaking a staged development of the Scarborough gas field. He has told a business lunch in Sydney that ExxonMobil is likely to examine ways to start delivering cash flows from new oil and gas projects at an earlier stage of their development, rather than the so-called "mega-project" approach of recent years. The Gorgon LNG has commenced shipments more than six years after construction commenced.

CORPORATES
EXXONMOBIL CORPORATION, WOODSIDE PETROLEUM LIMITED – ASX WPL, CHEVRON CORPORATION, GORGON PTY LTD

LNG giants face bill for underpaid royalties

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Original article by Paul Garvey
The Australian – Page: 19 & 22 : 29-Nov-16

The royalty regime for the North West Shelf LNG project is under scrutiny following a review by the Australian National Audit Office. Amongst other things, the ANAO concluded that there are deficiencies in the way royalty payments are calculated, while the project’s partners may not be entitled to all of the deductions which they have claimed. A spokeswoman for Woodside Petroleum says the company has strict compliance procedures regarding royalty payments, and any underpayment is unlikely to exceed $A11.6m.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, NORTH WEST SHELF LNG PTY LTD, AUSTRALIAN NATIONAL AUDIT OFFICE, AUSTRALIA. DEPT OF INDUSTRY, INNOVATION AND SCIENCE, WESTERN AUSTRALIA. DEPT OF MINES AND PETROLEUM, BHP BILLITON LIMITED – ASX BHP, BP PLC, CHEVRON CORPORATION, ROYAL DUTCH SHELL PLC, JAPAN AUSTRALIA LNG PTY LTD, MITSUBISHI CORPORATION, MITSUI AND COMPANY LIMITED

AGL mulls gas import to beat supply crunch

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Original article by Matt Chambers
The Australian – Page: 19 & 22 : 15-Nov-16

The high domestic price of gas in Australia’s southeastern states and supply constraints may prompt AGL Energy to source natural gas from regions such as Asia, Europe or the Middle East. AGL will undertake a feasibility study on the proposal to build an LNG import terminal and processing facility, which would capitalise on a global oversupply of LNG. Shell Australia chairman Andrew Smith put forward a similar suggestion earlier in 2016.

CORPORATES
AGL ENERGY LIMITED – ASX AGL, SHELL COMPANY OF AUSTRALIA LIMITED

Forrest branches into oil and gas

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Original article by Paul Garvey
The Australian – Page: 19 & 20 : 2-Nov-16

Goshawk Energy and a company owned by Fortescue Metals Group founder Andrew Forrest have applied for oil and gas exploration permits covering about 220,000 square kilometres in Western Australia’s onshore Canning Basin. Forrest has applied for the permits via Squadron Energy, which is a subsidiary of Minderoo. A spokeswoman for Minderoo says the company is not currently considering the use of fracking in the Canning Basin, but environmental groups have urged Forrest to rule out using the technology.

CORPORATES
FORTESCUE METALS GROUP LIMITED – ASX FMG, SQUADRON ENERGY, MINDEROO PTY LTD, GOSHAWK ENERGY PTY LTD, BURU ENERGY LIMITED – ASX BRU, ENVIRONS KIMBERLEY, HANCOCK PROSPECTING PTY LTD, MINERAL RESOURCES LIMITED – ASX MIN, AUSTRALIAN LABOR PARTY, CONOCOPHILLIPS, APACHE CORPORATION, HESS CORPORATION, PETROCHINA COMPANY LIMITED, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO, LAKES OIL NL – ASX LKO, EMPIRE OIL AND GAS NL – ASX EGO

Woodside plays down $US5 billion Wheatstone cost blowout

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Original article by Angela Macdonald-Smith
The Australian Financial Review – Page: 13 : 1-Nov-16

Woodside Petroleum has advised that a 17 per cent increase in the cost of the Wheatstone LNG project will have limited effect on the capital expenditure guidance it issued in early 2016. The oil and gas producer has a 13 per cent stake in the Chevron-led project, whose total cost has risen by $US5bn ($A6.6bn) to $US34bn. Saul Kavonic of Wood Mackenzie says he had already anticipated a cost over-run of at least 15 per cent.

CORPORATES
WOODSIDE PETROLEUM LIMITED – ASX WPL, CHEVRON CORPORATION, WOOD MACKENZIE, RBC CAPITAL MARKETS