SGS, the world’s leading inspection, verification, testing and certification signed a service agreement dealing with comprehensive inspection and expediting services for various on- and off-shore projects under the direction of Saipem. The agreement, signed in February 2012, will last until end of December 2014.

Headquartered in Milan, Saipem has been operating in the oilfield service industry as a gas and oil contractor offering engineering and construction of on- and off-shore projects for over fifty years. Saipem enjoys an international reputation as one of the best and most balanced turnkey contractors in the oil and gas industry.

SGS INSPECTION AND EXPEDITING SERVICES HELP IMPROVE BUSINESS

Recognized worldwide, SGS comprehensive inspection reduces risk and ensures quality control during all phases of construction. SGS exhaustively inspects equipment and materials for mechanical defects or regulatory deficits at the manufacturer level as well as on site in order to prevent exorbitant corrective measures during construction or disastrous malfunctions or shutdowns during operation. SGS inspection includes specifically tailored periodic examination and reporting of manufacturer and vendor quality status. Extensive monitoring of manufacturer and vendor quality control planning, meticulous inspection throughout supply periods and observation of intermediate and final testing shape the scope of SGS superior inspection services.

SGS complete coordination in ensuring well-planned supply scheduling strategies by evaluating and modifying proposed vendor timetables as well as anticipating, analyzing and preventing potential delays which might affect delivery dates is key to meeting strict construction deadlines and avoiding costly holdups. SGS experts closely compare manufacturer data books and vendor shipping documents such as packing lists and invoices for accurate accounting of orders placed and products received. Highly-trained SGS professionals make certain that information is promptly exchanged between vendors and contractors and oversee any activity necessary to perform slated visits and or required reporting. Exceptional logistical supervision in coordination, documentation and communication blueprint the design of SGS reliable expediting services.

SGS SUPPORTS CLIENTS TO SAVE TIME AND MONEY

SGS unsurpassed inspection and expediting services are fundamental in assuring contractors and operators quality, compliant materials delivered intact and on time. SGS examination of piping, PV&HE, rotating equipment, electrical machines, switchboard, cable, and instrumentation at production and distribution guarantees top quality products and eliminates the costly risk of receiving substandard, non-regulatory products. SGS expediting expertise ensures punctual, secure and documented delivery of goods ordered and deters delinquency and inaccuracy which might otherwise cause substantial needless expense. Comprehensive inspection and excellent expediting services, as only SGS can provide, are the smart cost control tools of thoughtful construction contractors and astute business operators.

SGS takes great pride in supporting Saipem in these distinguished projects and looks forward to this cooperative and lucrative collaboration.

Source

The safe operation culture inculcates careful and meticulous attitude to health, safety and environmental protection in all employees and contractors of the company and ensures strict compliance with all standards and regulations of the company. A special and very important role in integration of the safe operation culture is entrusted to leaders and managers of company subdivisions who imbue responsible attitude to the work and environment in all employees.

The project was presented at a round table meeting dedicated to industrial safety, where E. Kompasenko served as the moderator. Best specialists from the USE, Europe, and Central Asia highly appreciated the project, discussed its different aspects, and outlined possibilities for its implementation in international practice.

“Safety is one of the highest priorities of TNK-BP. Adherence to industrial safety rules and regulations may only be ensured by personal leadership and absolute intolerance to their violations. We are confident that the safe operation culture in any company is based, first of all, on the behavioral standards of employees. This is why these aspects are discussed in TNK-BP at all levels – from the Board of Directors to personnel lounges,” said she.

Source

Cadogan published its financial report for 2011 on 30 April 2012.

Financial position

At 17 May 2012 the Group had current cash and cash equivalents of approximately $56.6 million.

Operations

The Group continues to operate safely and efficiently throughout the period.

The Group spudded a 5,160 metres appraisal well at Zagoryanska 11 on 7 March 2012. It is anticipated that Zagoryanska 11 will be completed and tested by the end of Q2 or early Q3 2012. Although results on the Zagoryanska work-overs have been delayed due to technical issues, the Group continues to test Zagoryanska  2 which was worked over in Q3 and Q4 of 2011. Zagoryanska 8 is also being worked over at present.  All of these wells are close to the Zagoryanska 3 well, which continues to produce at around 31mcm/day of gas and 5 ton/day of condensate.

Initial results from the exploratory Pokrovskoe 1 well, which was deepened in 2011, and   Pokrovskoe 2a well, which was re-drilled in Q4 of 2011 and Q1 of 2012, were not as positive as hoped. The indications of hydrocarbons during the drilling operations will allow Cadogan to consider options to re-enter the Pokrovskoe 2a well to assess the potential of the Upper Visean in the future.

Efforts continue to farm-out the Group’s highly attractive Bitlyanska asset in western Ukraine. The Group intends to review possible work-over projects for the Pirkrovskoe field in eastern Ukraine. Low cost analysis techniques are being reviewed for use on the Group’s producing shallow gas fields in Debeslevetska, aimed at stimulating production increases, whilst a borehole formation cleaning programme is underway at Monastyretska with the aim of increasing oil production from the existing wells.

Litigation

The Group is owed $30 million by Global Process System Inc (‘GPS’) of Dubai under the settlement agreement entered into October 2009. The settlement was based on the sale of two gas plants, which were manufactured by GPS but not required by the Group. Under the agreement GPS undertook to take the plants back into stock and resell them. Cadogan retains title over the plants manufactured and is pursuing legal remedies to recover the outstanding debt, whilst continuing to assist GPS in its attempts to sell the plants.

Source

The updated Health, Safety and Environmental Policy have been approved at OAO TATNEFT, which includes two versions – in the Russian and English languages.

The work in the field of industrial health and safety and prevention of occupational injuries in the Company is performed in compliance with the corporate regulations and standards. The updated version of the document has been actualized in order to further improve the integrated management system in this area in accordance with the requirements of ISO 14001: 2004 and OHSAS 18001: 2007.

OAO TATNEFT is constantly improving equipment reliability and operational safety of hazardous production facilities, improves the personnel working conditions. Much attention is paid to prevention of occupational diseases, reducing the personnel injury rate and to development of sustainable skills and techniques of safe work.

The updated document of Health, Safety and Environmental Policy is the basis for further improving the environmental, industrial and fire safety in the Company.

Source

This event is supported by the Russian Ministry for Energy.

The key topic to be discussed at the Conference is establishment of EPC contractors in the Russian market.  Most countries of the world organize the oil and gas construction process according to the EPC  Engineering, Procurement and Construction) model.  This approach means that a customer chooses a single general contractor who takes responsibility for the following types of works:  design, engineering, procurement.  The EPC contractor searches for subcontractors who perform construction works.

Giving the whole project to a foreign EPC contractor may cause difficulties, as the Russian customers and foreign contractors still speak different languages (literally and figuratively).  This work should be performed by Russian specialists, who are familiar with the advanced foreign experience, know foreign languages, but as well understand the regulatory base and bureaucratic processes in Russia and can contact with Glavgosexpertiza and other state authorities.  A EPC contractor from abroad does not know the Russian equipment and, consequently, plans to use in the project the foreign products familiar to him.  That is why establishment of Russian EPC contractors is very important in terms of supporting the Russian industry.

Participating:

- Bogdan Budzulyak, President of Non-Commercial Partnership “SRO OSGINK”;

- Alexander Fridman, Deputy Chairman of the Board of NOVATEK OJSC

- Abdulla Karaev, Director of the Directorate for Procurement and Capital Construction of Gazprom neft;

- Kirill Sergeev, Director for Procurement for Large and Capital Projects, TNK-BP Management OJSC;

- Alexei Konovalenko, Director of Services Procurement Department of TNK-BP Management;

- Valery Nugmanov, First Deputy Head of Procurement Department, Tatneft OJSC

- Evgeny Smykov, Head of Department for Capital Construction of Tatneft OJSC

- Alexander Rezyapov, Deputy General Director for Capital Construction of Surgutneftegaz OJSC;

- Sergei Tsybin, Director of Department for Capital Construction of Bashneft OJSC ;

- Sergei Kartavy, Deputy General Director of TNK-Uvat LLC;

- Valery Eremin, Head of Construction and Procurement Service of Gazprom invest South;

- Natalia Galeta, Director of Procurement Department of Irkutsk Oil Company LLC;

- Yury Orlov, Director of Department for Oil and Gas Construction in theRussian Federationof Stroytransgaz OJSC;
- Vazgen Gevorkyan, Chairman of the Board of Directors of Zakneftegazstroy-Prometey LLC;

- Valery Kolikov, General Director of Mezhregiontruboprovodstroy OJSC;

- Yury Komarov, Vice-President of Stroygazconsulting LLC;

- Denis Danilochkin, General Director of Neftegazmontazh CJSC;

- Ramil Khismatullin, General Director of OZNA Management LLC;

- Radames Aflyatonov, General Director of PromStroySertifikatsia LLC.

- Alexander Yastrebov, First Deputy General Director of Sibregiongazstroy LLC;

- Ayrat Kamaltdinov, General Director of CB&I;

- Igor Tarabukin, Acting Head of Department of Stroygazmontazh LLC;

- Igor Kramarenko, Chairman of the Board of Directors, Pipe Insulation Plant LLC;

- Vitaly Gorny, President of EVRAKOR CJSC;

- Alexander Tereschenko, First Deputy Head of the Main Department for Commerce of Globalstroy-Engineering OJSC;

- Representatives of Total, Caspian Pipeline Consortium (CPC-R) and many oil and gas construction contractors.
Delegation of Gazprom OJSC is being formed.

Source

OJSC Severneftegazprom is a gas producing company of Gazprom Group. Gazprom, BASF and E.ON are its shareholders. The Company holds the hydrocarbons exploration, development and production license for the Yuzhno-Russkoye oil and gas field located in the Krasnoselkupsky District of the Yamal-Nenets Autonomous Okrug of Tyumen region. ABC1+C2 natural gas reserves of the field exceed 1 trillion cubic meters.

In October 2007 the field was put into commercial production. In August 2009 the Yuzhno-Russkoye field reached its annual design capacity of 25 billion cubic meters one year ahead of schedule. In 2012 it is planned to produce more than 26 billion cubic meters of gas.

Source

For all the regional news, updates and happenings simply follow us to stay on top of all the #oilgasnews. Operator news, company releases, market trends all tweeted directly to you.

The meeting addressed the current status of the Russian-Bulgarian cooperation in the energy sector. The focus was placed on the South Stream project implementation.

The meeting participants underlined that the project was being implemented within the preset deadlines. In addition, the parties noted the successful results of a tender procedure selecting the contractor for carrying out the spatial planning, environmental impact assessment and project documents preparation for the Bulgarian section of the South Stream gas pipeline.

Source

The parties discussed the current situation in the global gas market and the partnership between the two companies in the energy sector.

In addition, the meeting participants noted significant progress in the Nord Stream project and paid attention to Russian gas supplies to France via the Nord Stream gas pipeline as well as to prospects for the further project development.

Source

Key Points:

— New 25-year Production Enhancement Contract on oil field
— Existing producing oil wells
— Significant upside in undrilled areas – additional geophysical data to be acquired
— MOU for potential Exploration Agreement on an exploration block in North Ustyurt Basin

Dr David Robson, Chairman, President and Chief Executive Officer of Tethys, added: “We are delighted that we have been awarded this new oil field in Uzbekistan. I would like to thank our partners, Uzbekneftegaz, Uzneftegazdobycha and Uznefteproduct, for their support and hard work in negotiating this new contract. We believe the Chegara Group of Fields has good potential through increasing production in existing wells and also large upside in undrilled areas. It has only had minimal, initial drilling work carried out on it and we believe with additional geophysical data we will be able to develop this field more efficiently and increase production substantially. In addition the newly signed MOU now sets out a clear timetable to potentially signing an exploration agreement for a block in the Ustyurt basin which we believe has very similar geological characteristics to the Akkulka block where we have our Doris oil discovery.”

The Chegara Group is an underdeveloped group of fields located 14 kilometers south-west of the existing Tethys asset of North Urtabulak, and contiguous to the prolific Urtabulak gas condensate Field, within the world-class Amu Darya Basin. The reservoirs comprise Upper Jurassic age carbonates at an approximate depth of 2,650 meters, trapped below a regionally prevalent salt and anhydrite seal. The oil is of moderate gravity and at present there are 3 producing wells all flowing naturally under reservoir pressure. This currently has limited existing oil production, and will form the baseline production under the new Chegara PEC with Uzbekneftegaz. Tethys believes there is substantial additional production potential in the field.

Tethys has collected and interpreted a significant volume of historic seismic, drilling, geological and production data relating to the Chegara Group of fields, and plans to initially work over the existing well stock using technologies and techniques that have been successfully implemented to increase production on the North Urtabulak Field over the previous 12 years under a very similar contractual arrangement. Furthermore, it is intended that additional geophysical data will be acquired on the field to identify undrilled areas that provide high potential upside. Currently there are only State reserves assigned to the field and no figures yet under NI 51-101 reporting procedures.

The contract will become effective following standard regulatory approvals, which include the issuance of a Presidential Decree and the completion of a Feasibility Study. The PEC has a term of twenty-five (25) years and under the new PEC CPL is allocated refined products for the crude oil it produces and sells these outside Uzbekistan. Furthermore Tethys has been granted exclusive rights to carry out operations with liquid hydrocarbons on Chegara.

The MOU signed with NHC Uzbekneftegaz sets out a fixed timetable to potentially sign an Exploration Agreement for a large Exploration block in the North Usyturt basin in Uzbekistan. TPL will submit a proposal for an exploration program for the block by the end of June 2012. After approval by NHC Uzbekneftegaz and the Government of the Republic of Uzbekistan an Exploration Agreement will be negotiated.

Source

Fairstar had a facility in place with DNB Bank ASA (‘DNB’) that would have provided not only the funding required to take delivery of the FORTE as well as make a progress payment for the FINESSE, it provided the Company with a performance bond facility that is required under the various contracts Fairstar has signed for Gorgon, Ichthys, Golden Eagle and CMMP Iraq. The DNB facility had a change in control clause giving DNB the right to withdraw the facility if any one party breached a 30% threshold. A beach occurred on April 22, 2012 when Dockwise and its concert party announced their acquisition of over 50% of Fairstar’s outstanding shares. The DNB facility is no longer available to Fairstar.

Fairstar has conscientiously explored other options since April 22. We have an obligation to pay our partners in China for their work on FORTE and FINESSE. They will be paid. We have an obligation to our partners in Gorgon, Ichthys, Golden Eagle and CMMP Iraq to issue performance bonds equivalent to 10% of the contracts’ value. These performance bonds will be issued. Fairstar is currently negotiating with a new bank group to finalize a facility that will provide the liquidity we need to pay for our ships. It will also allow us to issue the performance bonds we have promised to provide. Most importantly, the facility will not disadvantage one group of our shareholders for the benefit of another. We are committed to fair play and prudent, transparent financial management. Details of our ongoing discussions will be released once the facility has been signed.

Fairstar remains concerned that Dockwise continues to release false and misleading information. The financial reporting of our Company has been properly audited and punctually released. Our auditors were present at the AGM to answer all of the questions asked by the Dockwise representatives. The AGM minutes will reveal that the Dockwise representatives had failed to read the accounts accurately. The suggestion made by Dockwise in their OSE release on 15/5 of “insufficient disclosure” is not true.

Fairstar has consistently invited Dockwise to engage in a constructive dialog concerning the fair valuation of our Company. We have produced clear evidence that the combination of the two companies is accretive up to NOK 14. We have expressed appropriate concerns for the future of our Team, the interests and expectations of our clients and the rights of our shareholders who will not accept the low ball offer of NOK 9.3.

Dockwise has engaged in a hostile and dishonest campaign against Fairstar. They have told our employees that no changes will be made “for the foreseeable future”, they have told the market “ the interests of minority shareholders who will remain in Fairstar will be PROPERLY TAKEN INTO ACCOUNT.” This type of ambiguous language is the specialty of clever lawyers. The words are hollow and their true intentions are perfectly clear.

Fairstar will respond in detail to the Dockwise Offer tendered today, once we have examined it carefully and properly. In the meantime we will continue to manage Fairstar with the same competence, skill and determination our Stakeholders have always expected of us.

Source

The Company reports financial results in accordance with International Financial Reporting Standards (“IFRS”).

RECENT HIGHLIGHTS

--  Q1 2012 Total Revenue was USD$6.49 million (Q1 2011: USD$4.48 million)
--  Q1 2012 average oil and gas production was 5,117 barrels of oil
    equivalent per day (Q1 2011: 4,531 barrels of oil equivalent per day)
--  Q1 2012 average oil production from the Doris field in Kazakhstan was
    1,038 barrels of oil per day (Q1 2011; 337 barrels of oil per day)
--  Q1 2012 average gas production was 566 Mcm/d (Q1 2011: 511 Mcm/d)

The full Q1 Results together with a Management Discussion & Analysis have been filed with the Canadian securities regulatory authorities. Copies of the filed documents may be obtained via SEDAR at www.sedar.com or on Tethys’ website at www.tethyspetroleum.com. The summary financial statements are attached to this press release.

The above highlights along with other operational and financial details will be further discussed in a scheduled conference call. Details of the conference call can be found below:

Conference Call:

A conference call will be held at 8:00 AM Eastern Standard Time 1:00 PM British Summer Time on Wednesday, May 16, 2012. The North American conference call number is 800-261-3417 and the outside North America conference call number is +1 617-614-3673. The conference call code to use is 26577200 . Please call in about 10 minutes before the starting time in order to be patched into the call.

Webcast:

The call is being webcast and can be accessed at:

http://phoenix.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=213714&eventID=4773558

Key Points:

• Mean unrisked recoverable prospective resources of 1.17 billion barrels (Bbbls) of oil
• Upgrade due to additional 2D and 3D seismic acquisition and interpretation as well as drilling data
• Chance of Success increased due to drilling success in the area
• Dyna exploration prospect (128 million barrels mean unrisked recoverable prospective resources) to be tested with the AKD07 well
• Recent two-year extension to Akkulka Exploration Contract
• In addition to these oil resources there is additional associated mean unrisked gas prospective resources of 231 BCF and also separate non-associated gas prospective gas resources of 374 BCF

The resource report was prepared by Gustavson Associates of the United States and has been prepared in accordance with the reporting requirements of NI 51-101 adopted by Canadian securities regulatory authorities.

Continued drilling campaign

The next appraisal/exploration well, AKD07, is expected to spud mid-year 2012 and will be located to the south-east of the original AKD01 (Doris) discovery well and will target 3P reserves at the Cretaceous Aptian sand level in what is believed to be a channel sand system, whilst simultaneously targeting the Dyna Prospect (128 Million barrels mean unrisked Prospective Resources) which is shallower and is interpreted to be part of a different, larger sand fan system. It is also targeting a third target, a Jurassic sand similar to the horizon that tested oil in the AKD03 exploration well. To date, over 13,000 bopd have been tested from exploration and appraisal wells in and around the Doris oil discovery.

Dr David Robson, Chairman, President and Chief Executive Officer of Tethys, added:

“We are extremely pleased with this significant increase in our estimated oil resources in Kazakhstan. With oil production forecast to steadily increase this year following the upgrade to the Aral Oil terminal, we believe that our strong and growing cash flow and upside in these large exploration targets provides a well-balanced development and exploration portfolio. Furthermore one of these exciting prospects will be drilled in the near future with the AKD07 appraisal/exploration well.”

The references in this press release to “prospective resources” means those quantities of petroleum estimated, as of April 30^th 2012, to be potentially recoverable from undiscovered accumulations by application of future development projects. Prospective resources have both an associated chance of discovery and a chance of development. There is no certainty that any portion of these resources will be discovered. If discovered, there is no certainty that it will be commercially viable to produce any portion of these resources.

The resources estimates contained or referred to are estimates only and are not meant to provide a determination as to the volume or value of hydrocarbons attributable to the Company’s properties. There are numerous uncertainties inherent in estimating quantities of resources and cash flows that may be derived, including many factors that are beyond the control of the Company. The following is a non-exhaustive list of factors which may have a significant impact on the above estimates of prospective resources: despite the classification that they are as yet undiscovered but may be potentially recoverable the Company maybe unable to carry out the development or their potential recovery; the activity may not be economically viable; the Company may not have sufficient capital or time to develop them; there may be no market or transportation routes for the production; legal, contractual, environmental and governmental concerns might not allow for the recovery being undertaken; reservoir characteristics might prevent recovery. The recovery of the resources is subject to the following risks and uncertainties: market fluctuations, the proximity and capacity of oil and gas pipelines and processing equipment, government regulation, political issues, export issues, competing suppliers, operational issues (exploration, production, pricing, marketing and transportation), extensive controls and regulations imposed by various levels of government, lack of capital or income, the ability to drill productive wells at acceptable costs, the uncertainty of drilling operations, factors such as delays, accidents, adverse weather conditions, and the availability of drilling rigs and the delivery of equipment.

Additional information prescribed by NI 51-101 appears in a material change report to be filed, and which will be available, on www.sedar.com.

Source

Operational highlights

• Well EZ #306 spud on January 9, 2012, drilling ahead at 3,637 metres, after coring KT-I
• Currently well EZ #301 is producing an average 252 barrels per day by natural pressure, after being permitted by regulators to return to production
• EZ well #213 is pumping at a daily rate of 152 barrels

Operational highlights – outside of period

• East Zhagabulak field resumes production on May 3, 2012
• Well EZ #315 spud May 9, 2012, surface casing set
• Well EZ #308 spud on July 16, 2011 -  production casing  set to 4,775 metres, running production tubing Sakramabas #316 spud on July 22, 2011, encountered net pay zones aggregating 184.8 metres, well log survey underway

Outlook 2012

• Presently, preparations are ongoing for a well-log survey and acoustic cement bond logging

• Success at well #316 will enable Aral to declare a commercial discovery in the North Block

• Completion of construction and commissioning of the gas pipeline to transfer gas to the Alibekmola Gas Processing Plant is expected to occur in Q4 12/Q1 13

• Concurrently, the pilot production stage will end and the development stage will begin in East Zhagabulak

Financial highlights

• Oil revenues before transportation costs $505,000 (2011: $304,000)
• Comprehensive loss was $2,225,000 (2011: $2,185,000)
  • For the three months ending March 31, 2011, CEK’s comprehensive loss was $2,225,000, this compares to a comprehensive loss for the three months ending March 31, 2011, of $2,185,000.  Caspian recorded charges of $1,397,000 (1Q 2011 – $719,000) pertaining to finance expense. Depletion, depreciation and accretion expenses were $60,000 and $55,000, respectively. CEK’s operations used $843,000 in cash during the three month period and used $751,000 for the comparative quarter of 2011.

Financial Performance

For the period ended March 31, 2012, Caspian’s comprehensive loss was $2,225,000 (2011: $2,185,000).  Caspian recorded a charge of $1,397,000 (2011 – $719,000) pertaining to finance expense. Pursuant to the pronouncements of IFRS, Caspian’s convertible debentures constitute a financial liability with an embedded derivative (which is the conversion feature of this instrument).  Revaluation of the derivative component of the Company’s Convertible Debentures from the date of the Second Amending Agreement to quarter end has resulted in an unrealized gain equal to $118,000 as the fair value of the conversion option has decreased due to the deteriorating market value per share of the Company’s common shares. Through to the end of Q1 2012, due to the fluctuation in the Canadian dollar versus the United States dollar and Kazakh Tenge, mostly unrealized foreign exchange losses of $477,000 were recorded (to the close of 2011 – $939,000).

Depletion, depreciation and accretion expenses were $60,000 and $55,000 respectively. CEK’s operations used $843,000 in cash during 2012 and used $751,000 for 2011.

At the close of Q1 2012, Caspian had a working capital deficiency of $47.6 million; however, this figure reflects the pro rata addition of Aral’s current liabilities, which include $31.3 million of Caspian’s loan that had been assigned to Asia Sixth pursuant to the transaction. The residual amount of the loan, $52.3 million, retained by Caspian and present in Aral’s records, prior to consolidating elimination, provides an avenue to receive tax-free distributions from Aral.

The Company had a cash balance of $872,000 in Canadian accounts and domestic liabilities of $337,000, at the close of the first quarter.

Oil revenues before transportation costs during 1Q 2012 were $550,000 and for Q1 2011 were $304,000.  For the quarter ended March 31, 2012 operating costs were $317,000 and for the 2011 comparative period, operating costs were $121,000, while transportation expenses were $24,000 and $118,000, respectively. Administrative expenses for the same periods were $618,000 and $537,000, respectively.

Operational Performance

East Zhagabulak

Currently, well EZ #301 is producing an average 252 barrels per day by natural pressure, after being permitted by regulators to return to production on May 3, 2012 on the premise that both East Zhagabulak wells will begin capturing solution gas by year-end. EZ #213 is pumping at a daily rate of 152 barrels.

Completion of construction and commissioning of the gas pipeline to transfer gas to the Alibekmola Gas Processing Plant is expected to occur in Q4 12/Q1 13. Concurrently, the pilot production stage will end and the development stage will begin in East Zhagabulak.

Well EZ #308 spud on July 16, 2011. Production casing was set to 4,775 metres. Electronic logging operations have identified substantial intervals of possible pay in the KT-I zone and an additional 88 metres of net pay in the KT-II. Presently, production tubing of varying sizes is being run in the well.

Well #306 spud on January 9, 2012. It is intended to delineate the southern extent of the discovery and further confirm the considerable value of the East Zhagabulak field. The geological conditions for Well 306 are the same as for the recently drilled well 308, targeting the same hydrocarbon bearing horizons; KT-I at a depth of 3,360 to 3,879 metres and KT-II at 4,070 to 4,700 metres. Well #306 is presently drilling ahead at 3,637 metres, while having cored the KT-I at 3,628 – 3,637 metres.

Sakramabas well #316 spud on July 22, 2011. This well encountered net pay zones aggregating 184.8 metres and equates to a new discovery well in the West Zhagabulak field of Kazakhstan.

Following successful logging, Well #316 has been cased to a depth of 4,950 metres. Presently, preparations are ongoing for a well-log survey and acoustic cement bond logging.

Success at well #316 will enable Aral to declare a commercial discovery in the North Block. Successful testing of this well, followed by government confirmation, will qualify us to seek an extension of our exploration contract over the entire Greater Zhagabulak field by a further two or possibly three years. The current three-year exploration contract expires December 29, 2012.

The rig which drilled well #316 to total depth in the West Zhagabulak field, was immediately mobilized to East Zhagabulak, where it set surface casing on Well 315 on May 9, 2012. If successful, well #315 will result in the material conversion of P3 (possible) reserves to P2 (probable) reserves.

West Zhagabulak

Sakramabas well #316 spud on July 22, 2011. This well encountered net pay zones aggregating 184.8 metres and equates to a new discovery well in the West Zhagabulak field of Kazakhstan.

Following successful logging, well #316 has been cased to a depth of 4,950 metres. Presently, preparations are ongoing for a well-log survey and acoustic cement bond logging.

Success at well #316 will enable Aral to declare a commercial discovery in the North Block. Successful testing of this well, followed by government confirmation, will qualify us to seek an extension of our exploration contract over the entire Greater Zhagabulak field by a further two or possibly three years. The current three-year exploration contract expires December 29, 2012.

The rig which drilled well #316 to total depth in the West Zhagabulak field, was immediately mobilized to East Zhagabulak, where it set surface casing on well #315 on May 9, 2012. If successful, well #315 will result in the material conversion of P3 (possible) reserves to P2 (probable) reserves.

Funding

Aral Petroleum Capital LLP (Aral or APC), the operating entity in Kazakhstan, holds a 25-year production licence for East Zhagabulak and a three-year exploration permit for the larger North Block, an area of some 1,549 square kilometres in West-Central Kazakhstan that contains both East and West Zhagabulak.

The deal with Asia Sixth was signed November 1, 2010 and closed on December 29, 2011, with satisfaction of the last of several conditions precedent. Caspian now owns 40 per cent of Aral Petroleum Capital LLP, the operating entity in Kazakhstan, while Asia Sixth Energy Resources Limited owns 60 per cent of Aral.

Caspian, originally a 50 per cent owner in Aral, conveyed 10 per cent ownership to Asia Sixth in return for Asia Sixth’s undertaking to finance capital expenditures to the cumulative threshold of US$80 million over the duration of the deal. Caspian also receives a US$2 million loan, secured by production-oriented cash flow, plus access to a further two million on each of the first two anniversaries of the transaction. This arrangement permits Caspian to access a total of US$6 million over two years, if the Company so decides. Loans have a maturity of 10 years and bear interest at 10 per cent per year for the first five years.

These loans, together with the US$80 million capital facility, ensure that Caspian will have sufficient funds for the initial phase of the project in East Zhagabulak, though the program should become self-funding before the loan facility is fully expended.

Under the Exploration Agreement with the ROK, the approved work program calls for expenditures of US$25.8 million in 2011 and US$22.5 million in 2012. The various requirements of the work program agreed to with the Ministry of Oil and Gas for 2011, both in terms of functions and expenses, have been carried out by Aral. During 2011, Aral’s total expenditures for the year exceeded the commitment, reaching a total of US$34.3 million. As at March 31, 2012, Aral had incurred US$11.0 million of qualifying expenditures.

Share structure

On April 16, 2012, 1,672,012 common shares and 836,007 share purchase warrants were issued to satisfy the 4Q 2011 interest obligation on the Company’s Convertible Debentures. The deemed price of the stock issued is US$0.139625 per share and the warrant exercise price is US$0.191065.

Nabors dispute

During 2007, Aral had a dispute with its drilling subcontractor, Nabors, in relation to a mechanical failure at the drilling site that resulted in the loss of the well and the re-drilling of an interval of the well. Nabors made a claim for compensation. Aral viewed Nabors as responsible for the failure. The matter was under negotiation and the amount of possible cash outflows was not then determinable.

The negotiations to settle were unsuccessful and on October 25, 2011, the Specialized Inter-District Economical Court of Almaty City found in favour of Nabors and ordered Aral to pay the equivalent of approximately US$3.2 million to Nabors. Aral appealed this decision and on December 28, 2011, the Almaty City Court (Appellate Collegium) upheld the lower court’s decision.

Aral continues to believe in the merits of its defence against Nabors’ claim and is making legal arrangements to file a supervisory appeal to The Supreme Court of the Republic of Kazakhstan, which is Aral’s final route of appeal.  If Aral is unsuccessful in its appeal, Caspian will be required to fund approximately US$1.6 million of Aral’s obligation to Nabors pursuant to an indemnity in favour of Asia Sixth.

The Company’s existing sources of financing and expected cash flow from operating activities are not sufficient to meet: (i) the repayment of the Loans payable of US$36,818,000; and (ii) the Convertible Debentures plus accrued interest, totalling US$9,408,000 on March 31, 2012, which mature on June 2, 2013.

The Company’s ability to continue as a going concern is in significant doubt and is dependent upon achieving profitable operating results from its Kazakhstan operations.  There are no assurances that these initiatives will be successful. See Note 1 to the Condensed Interim Consolidated Financial Statements (Unaudited).

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·     Award of 170.7 sq km Giorgievskoye exploration licence in Adygea, southern Russia

·     Successful exploration well Z-04 in the Zaplavskoye exploration licence in Poltava, Ukraine

·     Commencement of production from the Elizavetovskoye licence in Poltava, Ukraine

·     Completion of tender for multi-stage frac at Rudenkovskoye field in Ukraine, with the contractor scheduled to start operations in the third quarter.

JKX Chief Executive, Dr Paul Davies, said:

“The start-up of our Russian project has been the focus of the early part of 2012 and I am pleased to report that we have begun delivery of gas. We anticipate ramping-up production through the mid-year. We have also been awarded the adjacent Giorgievskoye exploration licence, part of which surrounds our Koshekhablskoye production licence.

“The first exploration well on the recently awarded extension to the Zaplavskoye licence in Ukraine was drilled with encouraging results and is being followed-up with additional 3-D seismic acquisition in the second half of the year. Additionally, we have initiated production from our Elizavetovskoye licence in Ukraine.

“We continue to benefit from buoyant oil, gas and LPG prices in Ukraine and anticipate improving revenues in the second quarter with increased production from Hungary and the addition of production from Russia.”

Production

Ukraine: Average production in the first quarter was 7,000 boepd comprising 32.0 MMcfd of gas and 1,674 bpd of oil and condensate, with LPG sales averaging 56.5 tons per day.

Hungary: Gross production from the Hajdunanas Field in the first quarter was 661 boepd comprising 3.3 MMcfd of gas and 103 bpd of oil and condensate (JKX share: 50%). Only the Hn-2 well was in full production during the period with a two week test of Hn-1 providing some additional oil.
Russia: Gas sales commenced in Q2 (April).  Outlook: We anticipate average production in the second quarter to be approximately 8,500 boepd.

Ukraine
Development and Workover Activity: First quarter drilling activity was exploration and appraisal orientated with workover activity focused on adding production from existing wells. One appraisal well and one exploration well were completed with a second appraisal well nearing completion. Two
wells were worked-over in the period. Well M-172 was an appraisal to the successful M-170 “wedge zone” deep Devonian sandstone gas discovery in the Molchanovskoye licence and was drilled some 500m to the southwest with a TD of 3,203m. Despite encountering the target approximately 200m above the gas water contact in the discovery well, the reservoir was water bearing. This result is attributed to an unseen fault between the wells. Seismic data are being reprocessed in anticipation of further appraisal in the area.  Exploration well Z-04 was drilled to a TD of 2,937m in the northwest part of the Zaplavskoye licence area and encountered gas in the V-25 and V-26 sandstone reservoirs. The V-25 reservoir was over- pressured and was completed first. Initial rates exceeded 20 MMcfd with a rich condensate and LPG content but, as anticipated, the rates declined rapidly. Plans are underway to re-complete in the V-26 sandstone reservoir in the second quarter.

The Skytop rig relocated to the west flank of the Ignatovskoye structure to drill appraisal well IG-135, a high-angle well targeting a down-faulted Visean carbonate reservoir. The target reservoir proved tight but a completion in the upper Visean carbonate is now flowing at 250 bopd with 0.45 MMcfd of gas through a 1 5/8-inch choke with a FWHP of 181 psi. The next development well in the schedule is well NN-78 in the NovoNikolaevskoye field. The rig will then relocate to the Rudenkovskoye field for preparatory work for the forthcoming frac operations.

Planning and logistics for the multi-stage frac of the long horizontal well R-103 are well under way with the contractor, when appointed, scheduled to start operations in the third quarter. The TW-100 workover rig embarked on a lengthy fishing job to prepare Rudenkovskoye well R-102
for additional perforations in the Tournasian sandstone. Following perforation, there was a small increase in gas rate but insufficient to sustain production. The well has been suspended pending the results of the R-103 frac. Water shut-off and recompletion of the Devonian sandstone in the
Molchanovskoye M-168 well was partially successful with flow rates reaching 1.05 MMcfd before dropping off sharply suggesting cross-flow; the well has been placed on intermittent production. In April, the rig performed a workover on the rod pump system in well IG-105, replacing rods and
cleaning up the tubing. The well is again flowing at around 125 bopd with a 35% water cut. The rig has since moved to well IG-150 where it is carrying out a water shut-off and recompletion operation in the Devonian sandstone reservoir.

Facilities: Operations at the main production facility and the LPG plant continued smoothly through the period. Work continues on debottlenecking the plant, re-routing flowlines to reduce back pressure, and wax clearance to enhance production from the available well stock. A major overhaul of the K-220 compressor to handle lower inlet pressures will be carried out in the third quarter.

Exploration: Following the success of well Z-04, additional 3D seismic in this part of the Zaplavskoye licence area will be acquired in the third quarter.
Elizavetovskoye Licence: Agreement to start production from the M-53 well on the Elizavetovskoye licence was concluded in the period and testing of the well commenced in April. Following a successful test reaching 3.8 MMcfd, the well has been put into production on a smaller choke and is currently averaging 2.9 MMcfd. JKX is the sole licence holder and receives 33.3% of the production under a Joint Production Agreement for the wells which were drilled by the previous licence holder. This test data will prove invaluable ahead of any further drilling on the licence.

Russia
Development and Workover Activity: Work began in the period to bring wells 20, 27 and 25 into production in readiness for the Gas Processing Facility (“GPF”) start-up. Well 20 is now producing to the GPF and debottlenecking is in progress. The next well scheduled for production is well 27 where
the completion is currently being re-run following difficulties in removing the temporary plug after the extended shut-in period. As reported previously, testing of well 25 indicated a partial blockage downhole and a further side-track is now planned at the end of the second quarter. The Geostream rig will return to complete operations on Callovian wells 9 and 22 once operations on wells 27 and 25 are complete.

Facilities: Commissioning of the GPF was completed in the first quarter with gas in the plant. Sales gas has been flowing to the Gazprom network since mid-April as part of the plant acceptance procedures. All regulatory inspections and approvals have been formally concluded this month. The
Permit to Operate is anticipated in the second quarter, in parallel with increasing production to plant design capacity.

Exploration: The Company was awarded the 170.7 sq km Giorgievskoye exploration licence in May. The largest part of the licence lies adjacent to, and immediately south, of the Koshekhablskoye production licence but a significant part of it also runs to the northwest of the Koshekhablskoye field as well as covering the west and east flanks of the field. The whole of the mapped field area is now secured under licences held by the Company. Most of the Oxfordian 2P reserves in the new licence area were already expected to be recoverable through existing wells on the field, but a further 30-90 Bcf of contingent Oxfordian gas resources could be recovered by additional drilling, together with a total 140-180 Bcf of Callovian gas resources. There is also an additional lead in the south of the block, beyond the existing 3D seismic coverage, with estimated P50 gas resources of 30 Bcf unrisked.

Hungary
Development Activity: The Hadjunanas and Gorbehaza fields (JKX: 50%) produce from three wells to a single separator, and then via a 14.5 km export line to an existing facility for input to the Hungarian gas pipeline system. Production last year was affected by water influx and the operator
temporarily shut-in both fields. Well Hn-2 was in production throughout the first quarter averaging 3.3 MMcfd with 68 bcpd (gross). Well Hn-1 has been recompleted as a Miocene oil producer and new separation facilities are being installed with start-up expected in the second quarter.

Exploration: Hernad licences: JKX holds a 50% equity interest in the two Hernad licences in the northern Pannonian Basin. The 2011 3D seismic data acquisition in the Jaszsag area in the south of the Hernad II licence was interpreted and a two well drilling programme planned for the end of 2011.
The first well, Pely-02, was unsuccessful and drilling at the second location was deferred while the data was re-evaluated. A tilted fault block structure with amplitude supported Lower Pannonian reservoir intervals lies up-dip from the Tiszavasvari-6 well discovery and appraisal drilling is planned
for the second half of 2012 Veszto licence: JKX holds a 25% equity interest in a 15.6 sq km part of the Veszto exploration licence in the east Hungarian Pannonian Basin. The operator is continuing the evaluation of appraisal locations and a further well is under consideration for the second half of 2012, following award of the Mining Plot.

Turkeve area: Exploration well Ny-7 (JKX: 50%) made a significant gas discovery in the Turkeve area in 2011. However, the proportion of CO2 (25%) requires a more complex treatment plant. The operator is evaluating treatment and development options with the aim of bringing the field into
production at the end of 2012.

Bulgaria

Exploration: The B1 Golitza licence, in which JKX held a 40% interest, expired in March 2012. JKX has a 18% carried interest in the 1,787 sq km Provadia licence operated by Overgas. The 380 km 2D seismic survey has been completed and the data are now being evaluated.

Slovakia
Exploration: JKX holds a 25% equity interest in the Svidnik, Medzilaborce and Snina exploration licences in the Carpathian fold belt in north east Slovakia. The Cierne-1 exploration well location in the westernmost Svidnik licence has been selected. The well will be drilled to more than 3,500m
with a number of additional targets identified in this sub-thrust play. Spud date is not now expected until early 2013.

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The conference was attended by Director of OGRI Academician Anatoly Dmitrievsky, President of the Union of Oil and Gas Industrialists Gennady Schmal, scientists and specialists of more than 30 academic and research organizations, industrial enterprises and energy companies.

Conference was opened by Professor Anatoly Zolotukhin, Vice-Rector for International Relations of Russian Gubkin Oil and Gas University who read the greetings by Professor Victor Martynov., Rector of Russian Gubkin Oil and Gas University to the participants and guests of the Conference, noting the relevance of technological modernization of the  industry in the light of global threats to the competitiveness of Russian  energy companies and the lack of attention given to the introduction of domestic technologies, in particular, advanced well systems.

Chief Editor of ”Automation and IT in the Oil Industry” magazine Professor Alexander Yegorov told about the problems associated with standardization of individual areas of oil production in an integrated system of environmental management. Executive Director of Gubkin NTO of petroleum specialists, Director of the Institute of Drilling Technologies Professor Valery Kulchitsky drew attention to unique domestic drilling technologies  and the need for high-tech development of underground space (geospace). Director of IBM Business Development for Petroleum Industry Sergey Gumerov spoke about the global experience managing large-scale oil and gas projects on the basis of an integrated model of i-field. Deputy Director of IGiRGI , Professor Alexander  Khavkin focused on the prospects of enhanced oil recovery in fields with heavy oil by the use of nanotechnology effects.

On the second day the conference was continued in sections ”Simulation of Development” and “Advanced technologies for hydrocarbon production”, which were moderated by Professors of Gubkin Oil and Gas University Igor Gutman and Valery Kulchitsky. A total of 30 lectures on modern technologies and equipment were delivered. Of particular interest were the reports from NPF “Packer” of Oktyabrsky, Bashkiria, EXTRO-CIS of Houston, USA, LUKOIL Overseas in Dubai, UAE, OJSC “Samotlorneftegas”,Nizhnevartovsk, OAO “Gazprom Neft”, Sankt-Petersburg, NPF “DIEM”, Moscow, and Schlumberger SIS, Perm.

In the closing session of the Conference it was decided to establish on the basis of Gubkin NTO of petroleum specialists of an Expert Committee and Internet forum for promoting scientific and technological progress in recovery of hydrocarbons through the interaction of scientists, industrialists and representatives of public organizations regardless of their departmental affiliation and geographic location. An appeal to the Minister of Energy of Russia and industry professionals to develop forms of consolidation of industrial, academic, governmental and social forces involved in the strategic development of oil and gas complex of Russia was also adopted.

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The task for the builders this year is to construct 40 well pads to accommodate the new drilling program. Varyoganneftegaz (VNG) also plans to run a six-kilometer pressurized oil line from Yermakovskiy central gathering facility to Nizhnevartovsk central heat distribution station at a cost of 233 million rubles. An underwater crossing has already been drilled under the Ob riverbed.

VNG is laying a 13.4-km-long gas pipeline and a condensate separation unit at Verkhne-Kolik-Yoganskoe field to supply more gas to Yugragazpererabotka, says Sergey Karavaev, the general director of Varyoganneftegaz. 495 million rubles has been earmarked for these purposes. “VNG’s oilfields will also receive 3 new slag-paved intrafield roads before the year ends. Production facilities and well pads will be fitted with video surveillance systems,” he adds.

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- The average price of Brent in the first three months of 2012 was 12% higher than in the same period of 2011, up from US$105 per barrel to US$119 per barrel.

- Net profit amounted to 75bn Tenge (US$508m) and earnings per share – 1,070 Tenge (US$1.2 per GDR), an increase of 27% and 32%, respectively, compared to the same period of 2011.

Production Highlights

In the first three months of 2012 KMG EP produced 3,029 thousand tonnes of crude oil (249 kbopd), including the Company’s stakes in Kazgermunai (KGM), CCEL and PetroKazakhstan Inc. (PKI) which is 5% less than in the same period of 2011. JSC Uzenmunaigas (“UMG”) produced 1,236 thousand tonnes (101 kbopd), which is 177 thousand tonnes less than in the same period of 2011. JSC Embamunaigas (“EMG”) produced 675 thousand tonnes (55kbopd), which is 6 thousand tonnes less than in the same period of 2011. The total volume of the oil produced at the production facilities of UMG and EMG in the first three months of 2012 was 1,911 thousand tonnes of oil (156 kbopd), 9% less than in the same period of 2011.

First quarter production volume was about 150 thousand tonnes (7%) behind the plan, primarily due to adverse weather conditions. As prompted by the first quarter performance indicators, the 2012 UMG annual target of 5.8 million tonnes looks rather challenging. Management expects the production to recover at a moderate pace. In the middle of the year following the second quarter production trend, KMG EP intends to confirm or update its 2012 annual production projection.

The Company’s share in the production from KGM, CCEL and PKI for the three months of 2012 amounted to 1,119 thousand tonnes of crude oil (93 kbopd) or 4% more than in 1Q of 2011.

Crude Oil Sales

In the first three months of 2012 the Company’s export and domestic sales from the UMG and EMG were 1,496 thousand tonnes (122 kbopd) and 457 thousand tonnes (37 kbopd) respectively.  The Company’s share in the sales from KGM, CCEL and PKI was 1,105 thousand tonnes of crude oil (93kbopd). It includes 766 thousand tonnes (64kbopd) supplied to export markets.

Net Profit for the Period

Profit after tax (net income) in the first three months of 2012 was 75bn Tenge (US$508m). This represents a 27% increase compared to the same period of 2011, which is mainly explained by a higher oil price, domestic supplies price increase according to agreement reached with Government on 2012 and lower SG&A expenses partly offset by a decline in exports.

Revenues

The Company’s revenues in the first three months of 2012 increased by 8% compared to the same period of 2011, and amounted to 207bn Tenge (US$1,396m). This was mainly due to a 14% increase in the average realized price to 104,302 Tenge per tonne (US$97.39 per barrel) partly offset by reduced export volumes.

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FMC’s scope of supply includes seven offshore footless marine loading arms, four for liquefied natural gas and three for liquefied petroleum gas. FMC’s Loading Systems business in Sens, France will design and manufacture the equipment.

“Today’s announcement expands our existing support of the Prelude development, having received the subsea equipment contract in June of 2011,” said Robert Potter, FMC’s Executive Vice President, Energy Systems. “The Prelude FLNG facility will be the largest floating offshore facility in the world, and we are pleased the Technip Samsung Consortium has selected our loading systems.”

FLNG opens up new business opportunities for countries looking to develop their gas resources, bringing more natural gas to market. Shell is the first to go ahead with such a project, Prelude FLNG.

The Prelude facility will be built by TSC at the Samsung Heavy Industries shipyard in Geoje, Korea. It will measure 1,600 feet (488 meters) from bow to stern and weigh around 600,000 tonnes when fully loaded. It will be moored over 120 miles (200 kilometers) from land and will produce gas from offshore subsea fields. The facility will treat and liquefy the gas onboard via a cooling process before storing and exporting the LNG via conventional LNG carriers

Amongst the key benefits that the STP9000 series offers are:

Robustness – Its IP67 environmental protection rating means that it will still function after having been submerged in up to 1m of water for up to 30 minutes. This makes the range ideal for operatives in the marine, fire and rescue, open-cast mining or heavy industrial sectors, whose role demands a totally robust TETRA radio.  However, it is also an excellent solution for sectors, such as police, ambulance, utilities and transport, where there is occasional – and unpredictable – exposure to harsh and challenging environments.  The STP9000 series’ robustness is enhanced still further by its Connector Protector technology, which provides additional protection against the risk of salt water and salt fog damage to the radio’s connectors for users who are based on or near the sea.

Ease of use – The STP9000 incorporates an enhanced user interface, which provides three different presentation styles that users can select according to their personal preference.  The options cater particularly for those who prefer user interfaces on smart phones or other GSM devices, thus helping to reduce training costs for both existing staff and new recruits.

Advanced resource management – the STP9000 series’ built-in RFID tag assists organisations in managing their resources more efficiently, particularly those utilising pool-issued radios.

Other key features – The STP9000 series offer enhanced battery life, superb full-duplex audio and, of particular relevance in today’s economic climate, is compatible with all Sepura STP8000 series accessories.

Commenting on the launch, Jens Thostrup, Senior Vice President for Sepura said: “The Sepura STP9000 series of TETRA hand-portables is truly innovative, designed for users who want the best from their digital radios. Mission-critical operatives across the public safety sector will be among the main users of the STP9000. Reflecting the direction of the TETRA market as a whole, it will also appeal to users in the utility, public transport and industrial / manufacturing sectors. The IP67 rating will be of particular interest to organisations and industries where resistance to both fine dust and water ingress are required”.  Thostrup concluded: “Sepura is proud to be launching this innovative series at the TETRA industry’s premier event.”

STProtect is a complete solution and comprises:

• STProtect-enabled Radios – A special STProtect module is located within the Sepura STP9000, 9100, 8000 and 8100 hand-portable radios.
• STProtect Beacons – A series of battery-powered, IP65 STProtect radio beacons can be placed at key, user-defined positions within specific sites.
• STProtect Software – An easy-to-use, fully-featured STProtect management software suite.

In addition to its core function of enabling operatives, particularly lone workers, to be located quickly and easily in an emergency, STProtect also enables organisations to control access to certain areas of sites, monitor employees’ location and movement and provide users, such as maintenance engineers and security guards, with set routes and checkpoints. As a solution, STProtect also offers exceptional levels of flexibility by, for example, allowing users to adjust the range and polling rate of the beacons, enabling the swift importing of building plans and establishing a variety of alarm scenarios.

Jens Thostrup, Senior Vice President at Sepura commented “STProtect will be particularly valuable to organisations such as airports, prisons, industrial sites, shopping centres and stadia.  These sectors often have a requirement for the multiple benefits, particularly security, of a TETRA radio system, but also face the challenge of having to track and locate staff indoors.

Summing up, Thostrup said “STProtect is a proven solution which is already working across a number of sites in Europe and is available for sale across the globe now. As the only dedicated TETRA-based integrated lone worker protection and indoor location system on the market, we believe that the prestigious TETRA World Congress is the ideal platform for its launch”.

The offer period in the Mandatory Offer runs from and including 15 May 2012 to 17:30 hours (CET) on 12 June 2012, and may be extended by up to two weeks.

The offer price is NOK 9.30 per Fairstar share, which represents a premium of more than 22 per cent compared to the closing price of the Fairstar shares on Oslo Børs on 20 April 2012, which was the last trading day prior to the announcement of Dockwise’s agreements to acquire approximately 54 per cent of the shares in Fairstar.

Pareto Project Finance AS and Pareto Securities AS act as financial advisors to Dockwise in relation to the Mandatory Offer, and Pareto Securities AS also acts as the receiving agent in relation thereto.

The complete terms of the Mandatory Offer are set out in an offer document dated 14 May 2012, approved by Oslo Børs, and which will be distributed to all shareholders in Fairstar with known addresses and that legally may receive such document and accept the Mandatory Offer.

The offer document is also available free of charge at the website of Dockwise Ltd. (www.dockwise.com), the website of the receiving agent (www.pareto.no) and at the office of the receiving agent (Address: Pareto Securities AS, Dronning Mauds gate 3, P.O. Box 1411 Vika, 0115 Oslo, Norway, Tel: +47 22 87 87 00).

Registration

You may find information about registration on our website.

The scientific part

The scientific part of the event will take place in Irkutsk. You can find more information about GeoBaikal here.

Call for Papers

The Call for Papers deadline is 1 June 2012. You should submit your paper through the website.

Education programme

Traditionally, EAGE offers a special education programme, this year it includes the 7th EAGE Education Tour (instructor Peter Styles) and two four-hour lectures by prominent instructors from Russia.

Social programme

The social programme includes: geological and archaeological field trips in the Minor Sea area of Lake Baikal; field demonstrations of geophysical equipment, a trip to the Taltsy Museum of Wooden Architecture and Ethnography and the Volkonsky House Museum in Irkutsk; a two-day tour to Minor Sea of Lake Baikal.

Short Courses

Traditionally, EAGE offers a special education programme, this year it includes the 7th EAGE Education Tour (instructor Peter Styles) and two four-hour lectures by prominent instructors from Russia.

Sponsorship

We invite you to become a sponsor of this event. Sponsorship is perceived as a highly cost effective method. When you are a sponsor of the Geobaikal 2012, you will get high visibility in a quality environment that makes your message stand out. Please browse through the Sponsoring opportunities brochure

Yuri Kadzhoyan, former General Director of OOO LUKOIL-Kaliningradmorneft, has retired on a pension.

The Press Service also announces that Denis Rogachev, former OAO LUKOIL First Deputy Chief of Staff, has been appointed General Director of OOO LUKOIL Trading House.

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11,125 inventions, utility models and rationalization proposals were introduced in the production at OAO TATNEFT in 2011 and the Company received 213 patents for inventions and utility models.

The Company has developed and is successfully implementing an innovative development program until 2015. A system of managing the intellectual activity results has been established, including planning and execution of research and development, rationalization and inventive activity, introduction of developments in the production, assessment and analysis of the results, as well as registration and commercialization of intangible assets to implement and develop the creative potential of the Company’s experts..

Numerous awards of prestigious Russian and Republican contests are a confirmation of high intellectual capacity and competitiveness of the Company’s development works made by the Company’s professionals

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Sakhalin Energy CEO Andrey Galaev says: “The Sustainable Development Report is not an end in itself. Instead, it is a most important tool to enhance transparency and openness of our Company and increase public confidence. It is a guarantee that it addresses all of the topical issues of our production, commercial, and social activities, including the Company’s impact on the community and environment of Sakhalin and other territories of the Asia-Pacific region.”

Giving a favourable evaluation of the Report and its full support of Sakhalin Energy’s commitment to the principles of responsible business practices, the RUIE Council for Non-Financial Reporting stated in its findings report that the Company consistently pursued improvement of its reporting process and pointed out that the Report allowed to conclude that sustainable development issues were addressed by the Company on a systemic basis.

The process of the Report preparation, finalizing and approval was based on the Company’s previous experience. In line with the international standards, the Report issue was preceded by two rounds of stakeholder consultations.

The Report features information about production, business, environmental and social activities of Sakhalin Energy in 2011. Special emphasis is placed on corporate governance systems, and on engagements with a wide range of stakeholders. The Report focuses on themes of strategic importance such as environmental and industrial safety assurance, nature conservation and efficient use of natural resources.

Much consideration is given to labour relations, personnel management and development. The Report provides detailed information on the Company’s social investments in education, health care, upgrade of public infrastructure and biodiversity conservation.

The Report presentation ceremony was attended by representatives of the academic and expert communities, federal and Sakhalin legislative and executive authorities, big business, indigenous minorities of the North, non-profit organizations, and other mass media and general public representatives.

The Report is published on the Company Website at www.sakhalinenergy.ru.

In the framework of contracts concluded between OJSC “Surgutneftegas” and LLC “Premium Engineering” have been implemented in design, installation of Red Mountain Energy supplied equipment, and commissioning (NDP). 

The work carried out at this stage, are a continuation of cooperation between the companies “Premium Engineering” and “Surgutneftegaz” in the construction of cryogenic complex in the village. Fedorov (Surgut district). The first phase was successfully completed in 2009. Installation of the second phase started in July 2011 and three months later the parties signed the act on the successful completion of the NDP. 

In the first phase of construction was adopted in the customer service air separation unit (ASU) KDON-1500-1650/50Y capacity 2000 kg / h of liquid nitrogen storage with liquid nitrogen, the total volume of 400 m ³ . 

In the second phase of work was complemented by ASU KDON-1500-1650/50Y liquefier YPN-2200 productivity 1750 kg / h of liquid nitrogen. After completing the second phase of cryogenic performance of complex liquid nitrogen used by OJSC “Surgutneftegas” for intensification of oil production has increased significantly.

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Vercknechonskneftegas, the company responsible for development of the Verkhnechonskoe field in Irkutsk Region, has arranged for round-the-clock monitoring of the situation by Federal Geological Fund experts using online feeds from two satellites. In 2012 the Company spent more than 65 mln rubles on implementation of an integrated fire safety system.

TNK-Uvat, the operator of Uvat Fields in Tyumen Region, has also confirmed that it is fully prepared for the fire season. All fire-fighting tools and equipment have been checked and found to be in good working order, and the company’s personnel have completed theoretical and practical training courses. Federal Fire Service employees keep 24×7 watches at all Uvat Project fields.

“TNK-BP has put in place a set of measures to assure that its industrial facilities remain safe throughout the fire season, including steps designed both to prevent fires from spreading and prepare all relevant services and employees for liquidation of possible incidents. By the beginning of the season, all facilities of the Company will go on high alert in compliance with the most stringent international fire safety standards,” said Viacheslav Kurenkov, Department Director, Health and Safety.

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The average daily production at the Kolvinskoye oil field amounted to 12,500 bopd with a total of 0.4 mbbl produced in April 2012.

The financial results for the first quarter of 2012 will be disclosed on May 22, 2012. An operational update for May 2012 will be disclosed on June 11, 2012.

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Volant is a small, six-employee technology company based in Houston that provides integration solutions for E&P companies to address the challenges of managing ever increasing quantities of geotechnical data. This integration of internal and external data sources with geoscience applications used by the industry enables scientists and engineers to reduce interpretation cycle time and increase efficiency.

“Volant Solutions is adept at helping clients connect many types of well data to multiple geoscience applications”, stated John Adamick, Senior Vice President of Geologic Products. “Their EnerConnect™ and ENVOY™ software solutions are unique products that provide tremendous benefits to oil and gas companies. We are excited by the opportunity to help Volant grow their business and to simultaneously increase the connectivity of TGS well data sets.”

Scott Schneider, CEO of Volant Solutions also commented, “We look forward to working with TGS to integrate TGS’ broad suite of data products with our integration technology in order to provide customers with more efficient access to and usage of TGS data products within their interpretation processes. Volant has developed a robust software solution that facilitates the integration of the leading geoscience databases and applications – the key ingredient that we’ve been missing is the tight integration with vendor data. With the combination of TGS and Volant, we are now capable of providing geoscientists with complete visibility into a vast array of data products directly from their desktops. Volant is extremely excited about the growth potential of the combined companies.”

Source

The Governor Igor Fyodorov held a work meeting in the construction workers’ camp at the Trebs oilfield. At the meeting the preliminary results of accident investigation were discussed, information on the work progress was provided and the plans on completion of emergency response activities were announced. The meeting was attended by the management of JSOC Bashneft and LLC Bashneft-Polyus, head of the Administration of the Federal Supervisory Natural Resources Management Service in the Nenets Autonomous District, representatives of the Administration and the Assembly of Deputies of the Nenets Autonomous District and members of the administration of Zapolyarny region of the Nenets Autonomous District.

«Due to a close cooperation of the Company’s departments, contractors, a special well-kill team, the officials of the Nenets Autonomous District and specialized agencies we managed to rapidly stop the oil well blowout, contain the oil spill, collect and process the major part of oil-containing reservoir fluids in a short time, thus minimizing the adverse environmental impact,» stated the President of JSOC Bashneft Alexander Korsik. «It is also vital to thoroughly investigate the causes of the accident. We must not let this happen again while developing the oilfield.»

«The accident is a distressing event both for the development company and for the whole region,» pointed out the Governor of the Nenets Autonomous District Igor Fyodorov. «We monitor the implementation of emergency response activities with great attention. Bashneft is making every effort to eliminate the consequences of the spill as soon as possible, to process the oil and the contaminated soil. We are ready to assist with this work using all the means in our possession. We have agreed to visit the oilfield again when the main stage of emergency response activities is over. In autumn, in Naryan-Mar the Company will submit a public report on the causes of the accident, the implementation and the results of emergency response activities.»

As was announced at the meeting, before the end of May it is planned to complete the measures aimed at cleaning up the area near the well, to remove and process the oil-containing reservoir fluids. It is planned to invite special organizations to eliminate the residual contamination with the use of sorbents and technologies recommended by the Federal Supervisory Natural Resources Management Service before the end of July and to complete land restoration by October.

Source

Rustam Minnikhanov, President of Tatarstan, held a working conference at OAO “TANECO” (Nizhnekamsk, Republic of Tatarstan), where the issues of operating 1A1 Start-up complex facilities and further implementation of the Project were discussed.

In the beginning of the working visit Head of the Republic accompanied by Irek Faizullin, Minister of Construction/Architecture/Housing and Communal Services of Tatarstan, Shafagat Takhautdinov, General Director of OAO TATNEFT, Nail Maganov, First Deputy General Director of the Company – Head of URNiN, Khamza Bagmanov, General Director of OAO TANECO, Aydar Metshin, Head of the Nizhnekamsk Municipal Area, inspected the construction site of the hydrocracking and sulfur production installations.

Opening the meeting, Rustam Minnikhanov emphasized the status of TANECO as an operating enterprise of the oil refining industry. Today it is a full-fledged enterprise producing and delivering high quality products to consumers. The production capacity of CDU/VDU-7 has been increased up to 110 percent with increasing the oil processing depth at the refinery to 73.3 percent. President of the Republic of Tatarstan paid particular attention to the commissioned sulfur production unit. This installation designed for treatment and disposal of all kinds of sour gas of the Oil Refining and Petrochemical Plants Complex and production of the desired product: liquid and granular sulfur, will improve the ecological situation of the Nizhnekamsk industrial hub.

Khamza Bagmanov, General Director of OAO TANEKO, presented the information about the activities of the Oil Refining and Petrochemical Plants Complex. During the comprehensive testing and operation 4,361 thousand tons of oil were used and processed. Positive dynamics of hydrocarbon feedstock processing was noted over the past months with the yield of light products increasing from 42 percent to 49.3 percent.

A report on the project progress of the hydrocracking installation construction was presented by Nicholay Zaikin, Head of the Department for construction of the combined hydrocracking and petrochemicals production installation. 463 units of the planned 569 ones of the basic technological equipment have been purchased, of which 90 units have already been installed. All the orders for the long term manufacturing equipment for the amount of more than $ 9 billion rubles have been placed with manufacturers.

Concluding the meeting, President of Tatarstan Rustam Minnikhanov put targeted missions before all the participants of the TANECO Project implementation, and also whished the design and construction organizations to work most efficiently and with high quality during the summer months.

Source

Whereas most land seismic data acquisition systems require a physical  connection to retrieve data, UNITE integrates a licence-free wireless connection  so that data can be harvested remotely up to 1000m from the receivers. By  deploying UNITE, CGGVeritas can use helicopters and pickup trucks on the  extremely rugged survey terrain to retrieve the data at any time as well as  benefit from considerable flexibility around numerous potential land permitting  issues.

A wireless network has also been set up on a strategic selection of the UNITE  channels so that their data are transmitted in real time to the central recorder to  ensure a continuous quality control of the survey and avoid shooting blind.

Mark Amelang, VP, Marketing & Customer Relations, Land, CGGVeritas, said:  “Real-time QC is critical because it lets you know that everything is working  properly, eliminating the unnecessary risk of shooting blind and ultimately saving  time and effort, especially when shooting over 1,500-square-miles. This is a  huge advantage compared to other systems on the market.”

Pascal Rouiller, CEO, Sercel, said: “The decision by CGGVeritas to increase to  20,000 UNITE channels on its Pennsylvania multi-client survey further confirms  Sercel’s success in addressing the cable-free market. UNITE’s unique high-speed, long-range wireless capability improves quality control by providing wireless harvesting and real-time data transfer.”

Source

Mikhail Fridman, Executive Chairman of TNK-BP, said:

“In the first quarter of 2012, TNK-BP achieved continued success in its focus on delivering operational excellence and sustainable growth. We increased production by 4% year-on-year to 2.037 million barrels of oil equivalent per day thanks to highly effective greenfield operations in Uvat and Verkhnechonskoye as well as contributions from our international assets. We proved our ability to operate in new areas, with successful completion of our first offshore well in Vietnam, and completed the acquisition of a participating interest in exploration and development blocks in the Solimoes basin in Brazil. In Russia, we progressed our refinery modernization program with completion of a hydrotreater upgrade in Saratov and continued our retail expansion to match the growing consumer demand for quality fuel.

As we proceed into 2012, TNK-BP’s focus will remain on execution and delivering sustainable results in everything we do.”

1Q12 OPERATIONAL HIGHLIGHTS

· Oil and gas production continued to grow, reaching 2,037 mboe/d including affiliates, up 4.0% on the first quarter of 2011.

· Greenfields contribution increased to 16% of total liquids production, compared to 11% in 1Q11.

· Acquisition from HRT O&G of a 45% interest in 21 exploratory blocks in the Brazilian Solimoes basin was completed on 28 March 2012 following receipt of approval from the Brazilian authorities.

· The first production well from our Lan Do satellite development in offshore Vietnam was successfully completed, with the second well also spudded and in progress at the end of the first quarter.

· Implementation of a comprehensive intervention plan in West Siberia continued with the focus on the application of new technologies: over 40 pilot projects are planned for 2012, including an increasing number of multistage fracs and scale-up of successful water shut-off technologies.

· Success replacing our reserves base continued: 9 exploration wells were completed with a 78% success rate, and 137 mln boe of resources were added through exploration and appraisal.

· The reconstruction of the hydrotreater was completed at Saratov refinery, which can now produce 100% of its diesel compliant with Euro-5 standards.

· Deliveries to the Linik refinery in Ukraine were halted from 1 March 2012 due to prevailing local economic conditions.

· A processing scheme at Mozyr refinery was launched with 247 thousand tons of crude oil processed in 1Q12.

· Our position in retail was strengthened with a growing number of higher-margin BP-branded sites and new offer TNK-branded sites: 4 new BP sites were constructed and 1 site modernised and re-branded as a BP site, 1 new TNK site was constructed and a further 5 sites converted into the new offer. The acquisition of 8 sites in the Orel region was completed.

· The share of direct sales to airlines compared to total domestic market jet sales increased to a record level of 78% compared to 45% in 2011. As part of this strategy, in March 2012 we completed acquisition of a 100% interest in the Koltsovo airport fuelling complex in Ekaterinburg.

Commenting on the financial results, Jonathan Muir, Chief Financial Officer, said:

“The first item to highlight is that, as promised, we have successfully made the transition to International Financial Reporting Standards this quarter, and so all numbers disclosed from now on will be under IFRS.

Overall, in the first three months of 2012, TNK-BP continued to demonstrate strong performance against a mixed environment of strong prices offset by rising fixed costs and regulatory pressure.

TNK-BP’s EBITDA adjusted for one-offs amounted to USD 3.9 bn, which is 1% higher year-on-year. The company has also once again confirmed its ability to generate healthy free cash flow, which increased by 48% year-on-year to USD 1.9 bn.

This cash flow is not at the expense of efficient investment in future growth however, and in the first quarter, we also raised our greenfield and inorganic investments to USD 0.5 bn and maintained financial discipline by keeping the gearing ratio at a prudent 29%, strengthening the sustainability of our business for the long-term.”

1Q12 FINANCIAL HIGHLIGHTS

· Gross proceeds for 1Q12 increased by 16% relative to 1Q11 driven by a 14% higher Urals price and production growth.

· Export duties and taxes other than income tax increased by 29% for 1Q12 relative to 1Q11 largely due to the effect of higher Urals prices on export duty and mineral extraction tax rates, increased excise and MET rates, abolishment of the reduced export duty rate for VCNG (starting from 1 May 2011) and lower duty lag benefit. These negative effects were partly offset by increased utilisation of MET allowances for depleted fields and higher production at Verkhnechonskoye field that is not subject to MET.

· Costs (operating expenses, transportation and SD&A) increased by 10% reflecting higher transport tariffs and other uncontrollable inflationary pressures, partly offset by the effect of a weaker rouble.

· EBITDA for 1Q12 amounted to USD 3.6 bn which is 9% lower compared to 1Q11. The positive effects of USD 0.3 bn due to the stronger markets, increased sales volumes, weaker rouble, “60-66” custom duty regime and higher earnings from equity investments were offset by the comparative impact of one-off events (impairment charges of USD 0.2 bn in 1Q12 and gain on the Kovykta assets disposal of USD 0.2 bn in 1Q11) and the negative effects of lower duty lag benefit (USD 0.2 bn).

· 1Q12 Net profit amounted to USD 2.2 bn, which is 17% lower compared to 1Q11 due to the impact of the lower EBITDA described above and a comparatively higher DD&A expense because of the increase in the share of greenfields production.

· Operating cash flow for 1Q12 totalled USD 3.4 bn, up 38% compared to 1Q11, primarily as a result of a comparative effect of changes in working capital, with 1Q 2011 being impacted by an increase in receivables of USD 0.3 bn due to allowing some customers 30 day payment terms where economically advantageous.

· Organic capital investments in 1Q12 amounted to USD 1.1 bn, 22% above 1Q11, largely related to an additional USD 0.4 bn in field development (primarily, Verkhnechonskoye and Yamal) as well as USD 0.1 bn of further investment in projects related to refinery quality upgrades.

1Q12 v. 4Q11 RESULTS

· Gross proceeds for 1Q12 increased by 2% quarter-on-quarter reflecting the Urals price increase partly offset by lower production due to the shorter quarter and a quarter-on-quarter increase in crude oil and products stock.

· Export duties and other taxes increased by 2% quarter-on-quarter driven by the Urals price effect on export duties and MET as well as increased excise and MET rates, partly offset by a comparatively higher duty lag benefit and lower sales volumes.

· Costs (operating expenses, transportation and SD&A) decreased by 4% largely due to the seasonally higher costs in 4Q11 partly offset by the effect of a stronger rouble.

· EBITDA for 1Q12 was 3% higher compared to 4Q11. The positive effects of the stronger markets and comparatively higher earnings from equity investments were partly offset by higher duties and taxes and impairment charges.

· 1Q12 Net profit increased by 6% relative to 4Q11. This increase outpaced the EBITDA growth primarily due to the positive foreign exchange effect on deferred tax.

· Operating cash flow in 1Q12 increased by 31% compared to 4Q11 primarily due to the comparative effect of changes in working capital, with a higher level of custom duty prepayments and lower taxes payable balances at end of 4Q11.

Source

• Revenue at $787 million up 8%
• Operating Income at $54 million
• Strong Increase in Group Backlog
•  Positive Outlook for 2012 confirmed

Effective January 1, 2012, CGGVeritas changed the presentation currency of its consolidated financial statements from the euro to the U.S. dollar to better reflect the profile of an industry with revenues, costs and cash-flows primarily generated in U.S. dollars.

The 2011 first quarter figures shown in this press release were restated as if the change in the Group presentation currency was effective since the January 1, 2004 (IFRS transition). The 4^th quarter 2011 figures are presented for information purposes only. They correspond to the conversion into USD of the 2011 accounts provided in Euros as released last February.  In the context of our new presentation of cash indicators, 2011 first and fourth quarter EBITDAs and multi-client Capex figures were restated.

CGGVeritas CEO, Jean-Georges Malcor commented:

“In the first quarter 2012, Group revenue increased year-on-year as Sercel delivered record sales and Services remained stable. Group results improved despite operating marine contracts this quarter which were awarded during the second half of 2011 at historic low prices. Our performance plan is progressing well and bearing fruit as the marine modernization plan reached completion in early April with the Oceanic Champion returning to operations and our vessel production rate was high at 92% this quarter.

Our backlog is significantly increasing, confirming the recovery in demand for the high end seismic equipment and services market, with marine prices strengthening year on year and good visibility for our land crews across the year.  

With our strengthening operational performance and reinforced technical differentiation, CGGVeritas should continue its journey of growth in 2012 while benefiting from both the excellent financial performance of Sercel and an expected significant improvement of Services, especially in the second half of the year.”

First Quarter 2012 Results

• Group revenue was $787 million, up 8% year-on-year mainly driven by record high Sercel sales.
• Group operating income was $54 million. Group margin was 7%:
  • Sercel margin was high at 33% driven by demand for land and marine high resolution surveys.
  • Services margin was negative at 1% mainly due to the continued very low prices in the marine contracts executed this quarter.
• Net income was a loss of $3 million.
• Operational cash flow was $193 million, stable year-on-year.
• After financial costs paid and capital expenditure, including $65 million for the performance upgrade of the Oceanic Champion, free cash flow was negative at $7 million.
• The acquisition of Global Research Company (GRC) on the 18^th of January strengthened Sercel’s diversification into high resolution downhole gauges and sensors.
• Backlog strengthened to $1.565 billion at the end of March 2012, up 28% year-on-year

Revenue

Group revenue was up 8% year-on-year and down 13% sequentially compared to the fourth quarter which was particularly strong. Services revenue was stable year-on-year, while Sercel reached a quarterly record.

Sercel

First quarter revenue was up 26% year-on-year and up 7% sequentially. This particularly high level of sales was mainly related to the first land equipment deliveries for high channel count surveys in the Middle East and also to sustained marine streamer sales.  Internal sales, which are generally strong in the first quarter, represented 27% of Sercel total revenue as Sentinel and Nautilus were delivered to the Oceanic Champion.

Services

Revenue was stable year-on-year and down 16% sequentially due to the traditional seasonality of multi-client sales in the fourth quarter.

• Marine contract revenue was down 5% year-on-year and sequentially down 23% mainly related to the higher rate of 23% of our fleet dedicated to multi-client programs. The vessel availability rate^[1] grew to 84% and the production rate² to 92% as a result of our strengthening operational performance. The Oceanic Champion, the last of our vessel planned for performance upgrade, left the shipyard on the 31^st of March. She is now operating in the North Sea. Our marine performance plan has reached completion with the Vanquish, Oceanic Endeavour, Oceanic Phoenix and Oceanic Champion vessels all returning to operations over the last 18 months with an enhanced configuration of 12 Sentinel solid streamers and Nautilus navigation systems. The Amadeus vessel was effectively transferred to our Vietnamese Joint-Venture on the 27^th of March.

• Land contract revenue was down 23% compared to an exceptionally strong first quarter 2011. Sequentially, it is up 91%. Our winter campaign in North America, where we operated 12 crews, was successful, our operations in Saudi Arabia were sustained and our crews are beginning to remobilize in North Africa in a still uncertain geopolitical context. Worldwide demand for shallow water and OBC operations continue to be strong.

• Processing, Imaging & Reservoir revenue was up 6% year-on-year and down 15% sequentially compared to the very strong fourth quarter in 2011. Demand for high-end processing remains at high levels especially in our major centers.

• Multi-client revenue was up 52% year-on-year mainly related to strong after-sales in the Gulf of Mexico and the North Sea. Capex was $76 million. The depreciation rate averaged 71%, with 92% in land and 65% in marine, a high rate due to geographical sales mix this quarter. Net Book Value at the end of March 2012 was $536 million compared to $527 million at the end of December 2011.

• Multi-client marine revenue was up 95% year-on-year. Capex was $52 million and was focused on offshore Brazil. Prefunding revenue was low at $22 million, a rate of 42%, as some prefunding was postponed to the second quarter. After-sales were particularly strong for a first quarter and reached $65 million with high levels of client interest for our North Sea and Gulf of Mexico data, ahead of lease sales.

• Multi-client land revenue was down 9% year-on-year. Capex was $24 million dedicated to the pursuit of our Marcellus and Alaska programs. Prefunding revenue was $21 million, a rate of 87%. After-sales were $6 million.

Source 

Neil has held several senior management and executive level positions over the past 25 years with both publicly and privately held companies in the oil and gas sector. His most recent role was as a Project Manager for The Expro Group where he was responsible for the on time supply, installation and commissioning of the Logbaba Plant last year.

Neil gained an honours degree in Mechanical Engineering from Brunel University. He is both a professionally qualified Engineer and Project Manager.

Kevin Foo, Chairman of VOG said:

“We are delighted to welcome Neil to the VOG team. He has a proven track record of bringing projects to fruition and delivering results in demanding environments. We know Neil exceptionally well from his previous role and we are confident that his experience and leadership qualities will ensure we are successful in the implementation of our objectives. In particular, Neil’s first priority will be to help us build out our thermal and power business in Logbaba, Cameroon.”

Source

M Squared’s Firefly system constantly scans a selected area with laser beams. This active approach is a thousand times more sensitive than current thermal and infra-red imagers, and can ‘smell’ gas, liquid and solid particles in concentrations of fewer than 10 parts per million.

Last week the company announced investment of £3.85 million from Business Growth Fund (BGF), a £2.5 billion investment fund backed by the UK’s five main banking groups – Barclays, HSBC, Lloyds, RBS, and Standard Chartered.

M Squared is currently in talks with several oil and gas companies to trial the product, which has been proven in the defence industry. Firefly could significantly cut maintenance costs and reduce production loss by helping to spot leaks much more quickly than current technology allows.

Dr Graeme Malcolm, co-founder and CEO of M Squared Lasers, said: “This technology has the capability to tell operators when and where a leak occurs across a much greater area and with greater accuracy than current point sensors or any other existing gas imaging technology.

“The ability to quickly spot and isolate leaks on a platform, pipeline or processing plant is of fundamental importance, both in terms of worker safety and also the financial and reputational damage which can result from a leak. The BGF investment allows us to take the Firefly product to a much wider audience within the oil and gas sector and demonstrate its effectiveness on a larger scale.”

M Squared Lasers designs and manufactures lasers and photonic optical instruments for applications in frontier science, bio-photonics, defence and oil and gas. M Squared’s Firefly system can be used to detect leaks at production sites, pipelines, petrochemical plants and from storage plants.

The company was founded in 2005 by Dr. Graeme Malcolm and Dr. Gareth Maker who had previously founded opto-electronics company Microlase in 1992 as a spinout from Strathclyde University. Microlase was acquired by Coherent Inc. in 2000.

The former chairman of Bookham Technology, Peter Bordui, recently joined M Squared’s board as chairman.

With an office in San Jose, California, the company sells lasers to and collaborates with a range of blue chip partners across Europe, North America and Asia, including Thales, Philips, Osram, Stanford University and the Max Planck Institute.  The company is working closely with leading operators and service providers to validate a wide range of applications for its remote leak detection technology for oil and gas applications.

BGF’s £3.85 million equity investment will fund the company’s research and development programme as well as its commercial growth.

Duncan Macrae, Edinburgh based Investment Director at BGF, commented: “M Squared’s laser technology represents a genuine step change.  Its products are smaller than others on the market, can be calibrated in minutes rather than hours and can be maintained and upgraded remotely via a web browser.  Customer referencing has been overwhelmingly positive and we are very pleased to be backing such an innovative Scottish business and a first class management team.”

Mr. Bryant, who has 30 years’ experience in Industry, primarily as the Managing Director/CEO of manufacturing businesses, will join the board of M Squared Lasers as a non-executive director and will work closely with the management team.

The investment process was led for M Squared by Dr John Nicholls, an experienced photonics entrepreneur, who recently joined the M Squared Lasers team as Group Director of Strategic Business Development.

BGF will take a minority stake in the business and will join the existing board.

Financial Highlights 2011

• Loss after taxation of US $ 9.4 million
• Completion of US $ 50 million Galaz farm-out with LGI
• Cancellation of deal with Canamens resulting in return of 35% effective interest in BNG LLP to Roxi
• US $ 23.6 million of loans previously due to Canamens being novated to Roxi in exchange for 1.5% royalty payable by Roxi to Canamens based on future production from BNG LLP 2012 to date
• Signing of US $ 30 million BNG farm-out with KNOC
• Vertom Loan facility increased to US $ 7 million loan
• First oil production revenues as pilot production commences on Galaz

Operational Highlights 2011

• Extension of licence area of Galaz granted
• NW Konys (Galaz) licence extended for 2 years to May 2013
• Airshagil (BNG) licence extended for 2 years to June 2013
• Completion of NW Konys reservoir study (Galaz)
• Initial (time) processing of 1400 km2 3D seismic cube completed on BNG
• 37 prospects and leads mapped at depths of 1700m to 5000m on BNG contract area
• Gaffney Cline completed technical audit of 202 mmbbls risked resources on BNG and 13 mmbbls of most-likely contingent resources on South Yelemes
• Well 136 drilled on North Yelemes to 2900m pending testing and evaluation
• Wells NK-9 and NK-10 drilled on NW Konys to 1500m
• Pilot production licenses and emissions licences granted for South Yelemes and NW Konys 2012 to date
• Preparation, tendering and construction of facilities at NW Konys and South Yelemes to commence pilot production
• Well NK-6 commences pilot production on NW Konys (Galaz) at an average production rate of 155 bpd
• Spud NK-7 well on Galaz

Vertom loan extension

Vertom International NV (“Vertom”) has agreed to extend both the amount of its current loan to Roxi and repayment dates. Accordingly, the amount of the facility will be increased from its current $5 million level to $7 million and the repayment date will be extended from the current 29 September
2013 to 30 April 2014. All other terms of the facility remain unaltered.

Related Party Transaction

As Mr Oraziman is associated with Vertom and is a director of the Company and as Vertom is a significant shareholder in Roxi, the extension of the existing Vertom loan facility is a related party transaction under the AIM Rules. With regard to the Company’s requirement for further funding, the
Independent Directors, being the directors other than Mr Oraziman, have considered alternative sources of funding, including bank debt and the issue of equity, and have concluded that such alternatives would be not available to the Company on terms more beneficial than those offered by
Vertom.

The Independent Directors consider, having consulted with the Company’s nominated adviser, Strand Hanson, that the terms of the increased Vertom $7 million debt facility are fair and reasonable insofar as the Company’s shareholders are concerned.

Summary of Operations

Commenting on the preliminary results, Clive Carver, Chairman of Roxi Petroleum plc, said, “I am pleased to report that your Company made very significant advances in 2011 and has continued to do so in the early months of 2012. The two fundamental issues at the start of 2011 were finding a replacement farm-out partner at BNG and securing the required regulatory consents to allow production at our three principal assets. We will look to leverage on the operational and financial strengths of our farm-out partners KNOC and LGI to increase shareholder value and to report further operational successes as they arise.”

Source

Highlights

-     Average production for the reporting period was up 55% from last year. An all time high production peak of 12,810 bbl/day reached during April.

-     We currently have six rigs drilling new wells. Three wells are being drilled in Exillon TP and three in Exillon WS.

-     Our recently installed gas turbines in Exillon WS are fully operational. The Transneft Entry Point is expected to be operational end of Q2 2012.

-     Our oil processing unit in Timan Pechora has been put in operation, resulting in 100% of our oil being prepared to commodity quality on well pad site.

April Production Report

In the latter part of April production climbed to a historical peak of 12,810 bbl/day, up by 5.2% from the latest historical peak of 12,177 bbl/day reached in March.

The impact of increased production was offset by shutting in key producing wells for scheduled workovers in Exillon TP, which resulted in an average Exillon TP production for the month declining to 2,844 bbl/day from 3,261 bbl/day, and Group production declining to 11,463 bbl/day from 11,785 bbl/day in the earlier month. All workovers were successful and Exillon TP current production rate is 3,839 bbl/day.

In May, the Group expects to carry out planned optimization of the pipeline in Exillon WS, which requires installation of booster pump station in the vicinity of EWS II field, and a tie in of pipeline from well pads 5 and 6. During infrastructure optimizations, we may need to temporarily shut in some wells in Exillon WS, which may impact average production numbers during the month.

Before the end of the second quarter, the Group expects to complete wells 7601 in Exillon TP and 38 in Exillon WS, which were originally anticipated to be on stream in April. Operational expenses resulting from the delays are being borne by our subcontractors.

For the period covered by this Interim Management Statement (1 January to 30 April 2012) our production averaged 11,448 bbl/day. This is an increase of 55% over the 7,386 bbl/day in the equivalent period last year.

Drilling

We currently have six rigs drilling new wells – three in Exillon TP and three in Exillon WS:

-     Well 7601 on the ETP III field has reached a depth of 3000 m, with a target depth of 3820m.  This well is being drilled by the contractor, Novator, that drilled neighbouring Well 76 in 2011.

-     Well 2003 on the ETP IV field spudded on 2 May. This is the first of three wells planned from ETP Well Pad 1 in 2012 to be drilled by contractor RS Buriniye.

-     Well 5 on the ETP IV field spudded on 7 May. This is the first of three wells planned from ETP Well Pad 5 in 2012 to be drilled by contractor Usinsk Geo Neft.

-     Well 38 on the EWS I field is a first horizontal sidetrack drilled by the Group. The well is drilled by contractor KNG Services.

-     Well 571 on the EWS I field spudded on 7 May. This is the first of five wells planned from EWS Well Pad 5 in 2012 to be drilled by contractor KNG Services. Well 50 was drilled from the same pad last year, and is currently producing approximately 1600 bpd.

-     Well 61 on the EWS I field spudded on 1 May. This is the first of four wells planned from EWS Well Pad 6 in 2012 to be drilled by contractor KNG Services.

Infrastructure

The gas turbines that we have rented in EWS are operational. The two units are currently generating 1.5 MW to power our operations.

The testing and commissioning of the Transneft Entry Point is continuing, and we anticipate connection in Q2 2012.

Oil processing facility in ETP has been put into operation resulting in 100% of our Timan Pechora crude being prepared to commodity quality at the pad site.

Financials

Our financial performance in the first three months of the year has exceeded budget.  The average selling price for our oil continues to be higher than our budgeted level of US$95/ barrel Urals (and the equivalent level for domestic sales). In addition we have benefited during the period from the way in which the export duty that we pay lags behind increases in the oil price.

During the period, we exported 369,718 barrels of oil at an average realised price of approximately US$ 110 per barrel, and sold 656,075 barrels within Russia at an average realised price of US$ 49.1. Our netbacks for domestic and export sales are similar because of the effect of Export Duty.

Our cash balance was US$ 150.4 million at 30 April 2012. We have US$ 100 million of debt so our net cash position is US$ 50.4 million.

Capital expenditure in the period to 30 April 2012 was approximately US$ 33.0 million (2011: US$ 30.2 million).

Source

The agreement, signed by Rosneft President Eduard Khudainatov and Statoil CEO Helge Lund, envisages cooperation between the companies in setting up a joint venture to explore the Perseevsky license block in the Barents Sea and three blocks in the Sea of Okhotsk, namely Magadan 1, Lisyansky and Kashevarovsky. Statoil will hold a 33.33% stake in the project.

Pursuant to the final agreements Statoil will fully finance geological exploration work at these blocks in line with approved programmes. It is agreed that Statoil will reimburse historical expenses incurred by Rosneft, as well as 33.3% of expenses incurred by the Russian company during the course of license acquisition. Furthermore, the agreement provides for the possibility of one-off bonuses to be paid by Statoil to Rosneft for each commercial oil and gas discovery in accordance with the conditions of the final agreements.

Under the agreement Rosneft will have the unique opportunity to acquire stakes in Statoil’s exploration and development projects and assets at blocks in the North Sea, as well as in the Norwegian section of the Barents Sea.

An important element of the cooperation is the agreement to carry out joint research to identify effective approaches to developing deposits with hard-to-recover oil and gas reserves (oil shale deposits at the Khadumsky formation in the Stavropol territory and highly viscous oil located below the gas cap at the Severo-Komsomolsky field in the Yamalo-Nenets autonomous district). The companies plan to jointly develop the deposits if commercial reserves are discovered.

Rosneft and Statoil also announced intentions to place orders with Russian shipyards for the construction of ice-class vessels and drilling platforms.

Commenting on the agreement, Rosneft President Eduard Khudainatov said: “This large-scale partnership agreement with Statoil – one of the global oil and gas leaders – serves to prove that the Company’s principal shareholder has chosen the right strategy in the area of developing offshore and hard-to-recover reserves. Rosneft’s management will make every effort to execute this plan with utmost effectiveness and to ensure the Company’s progressive development and the capitalisation growth. Partnership between Rosneft and Statoil will contribute significantly to the development of economic relations between Russia and Norway, signifying a new era of unprecedented levels of trust.

The willingness of our overseas partners to develop Russian fields speaks both of the attractiveness and openness of the Russian market. Access for a Russian company to promising international projects will form the foundations for new relationships in the global oil and gas industry.”

Statoil CEO Helge Lund said: “This cooperation agreement is an important milestone in Statoil’s exploration activity in Russia. We are very pleased by entering into a long term collaborative position with Rosneft, one of the leading oil and gas companies in Russia, in large, prospective frontier areas in the Barents Sea and the Sea of Okhotsk as well as joint international projects in Barents and North Seas. By building on both companies’ competence and experience, this agreement is a significant step further in the industrial development of the Northern areas.”

Field Notes

The Perseevsky block is located in the western part of the Barents Sea in an area adjacent to the Norwegian economic zone. Sea depth is 120 – 240 metres.

The Magadan 1 (sea depth of 100 – 160 metres), Lisyansky (sea depth of up to 200 metres) and Kashevarovsky (sea depth of 140 – 350 metres) blocks are located in the Sea of Okhotsk. Total prospective recoverable resources at these four fields stand at approximately 2 billion tonnes of oil and 1.8 trillion cubic metres of gas.

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Compliance with the environmental legislation at the facilities of OAO TATNEFT is ensured by the production and environmental control system (PEC) and environmental analytical control.

For the first time in Russia the Company carried out research on the hygienic substantiation of maximum permissible concentrations of oil in the soil for the purpose of comprehensive assessment of the crude oil production impact on the state of the land plots. This basis was used for development and approval in a prescribed manner of acceptable norms for the allowable residual oil content in the soil after recultivation works in the amount of 2.9 g per 1 kg. The control of land resources is based on the mentioned figures.

Compliance with the established standards of pollutants maximum permissible emissions (MPE) into the air is monitored at 110 settlements located in the zone of the Company’s operations, as well as in the sanitary protection zones of 53 production facilities. Studies of the air basin are carried out for 33 ingredients. In parallel with the meteorological observations the wind speed and direction as well as temperature and relative humidity are measured. All air emissions from the stationary sources of the Company are within the established limits of the maximum permissible emissions (MPE).

Water bodies’ observation system of OAO TATNEFT consists of 1,276 sampling points. This includes observation points for the surface waters sources (springs, rivers, reservoirs) and the underground (artesian wells, wells) water bodies.

The industrial ecological control of water bodies is performed by a central chemical and analytical laboratory and by the field laboratories.

Control of the geologic environment is performed at OAO TATNEFT regarding dangerous exogenous and endogenous processes that may adversely affect the operation of the oil fields, as well as the engineering geological stability of the facilities and communications. A 1050 observation points network was established for monitoring and controlling the dynamic state of the geological environment within Romashkinskoye oil field territory.

The Company manages to maintain a favorable ecological situation within the region of its operations thanks to the introduction of advanced environmentally sound technologies for crude oil and gas production and transportation, including the technology of drilling horizontal wellbores and downhole splitters, dual operation of layers, within the well dumping of the formation water from the lower aquifer to the upper oil reservoir and others.

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The Company is fully automating its loading system for gasoline and diesel fuel, thereby minimizing the likelihood of any dangerous substances entering the environment during loading operations. The Uvek depot upgrade is scheduled for completion by the end of 2013, when the loading rack will be capable of handling 1.3 million tonnes of gasoline and 2 million tonnes of diesel per annum.

“The Uvek fuel depot upgrade will not only minimize operational risks to the environment, but also greatly improve the level of safety at the facility by reducing to a minimum the potential impact of the human factor on operations”, stressed Elena Kompasenko, TNK-BP Vice President, HSE.

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Crude Oil Production

OAO TATNEFT produced 2,128,087 tons of crude oil in April, while the production volume for four months amounted to 8,581,700 tons accounting for 56,819 tons increase versus 2011 (100.7%) with the above-the-plan production amounting to 187,498 tons (102.2%). The amount of 8,455,955 tons of crude oil was delivered with the above-the-plan delivery coming to 266,545 tons.

The production of TATNEFT Group of companies amounted to 8, 675,774 tons of crude oil with the-above-the-plan production amounting to 187,603 tons (102.2%).

New Drilling

The total new drilling penetration for 4 months of 2012 amounted to 215.9 thousand meters (174.1 thousand meters in 2011), including 159.2 thousand meters (141.2 thousand meters in 2011) drilled for OAO TATNEFT with production drilling amounting to 156.9 thousand meters and exploration drilling amounting to 2.3 thousand meters. 17.3 thousand meters (14.3 thousand meters in 2011) were drilled for subsidiaries of OAO TATNEFT, including production drilling in the amount of 14.1 thousand meters and exploration drilling in the amount of 3.2 thousand meters.

113 wells (120 wells in 2011) were constructed and delivered to the customers, including 76 wells (86 wells in 2011) for OAO TATNEFT, including 74 wells of production drilling and 2 wells of exploration drilling. 8 wells (10 wells in 2011) were delivered to the subsidiaries of OAO TATNEFT, including 7 wells of production drilling and 1 well of exploration drilling.

Active Well Stock Drilling

The total penetration of sidetracking and horizontal wellbores during four months of 2012 amounted to 12.3 thousand meters (13.2 thousand meters in 2011), including 6.4 thousand meters (9 thousand meters in 2011) drilled for OAO TATNEFT.

24 wells (29 wells in 2011) were delivered to the customers, including 16 wells (22 wells in 2011) delivered to OAO TATNEFT.

40 drilling crews have been performing traditional well drilling operations since the beginning of 2012. 7 drilling crews are engaged in drilling lateral wellbores and lateral horizontal wellbores. One drilling crew performs drilling to the bituminous deposits of Ashalchinskoye field for NGDU “Nurlatneft”.

For four months of 2012 the penetration per crew in new drilling amounted to 5466.7 м meters, while in 2011 the penetration per crew amounted to 5,043 meters. 29.1 thousand meters were drilled outside the Republic of Tatarstan.

Repair of Wells

631 well remedial operations were performed in April 2012 with a number of the wells subjected to remedial operations for four months amounting 2751 which is 10% more than in 2011 ( 2,501 wells during four months in 2011).

The number of production wells was 2,264 accounting for 9.7 percent increase versus 2011 году (2063 wells in 2011) and the number of injection wells was 374 – 14 percent increase versus 2011 году (328 wells in 2011).

17 wells were repaired outside the Republic of Tatarstan, including 16 wells for OOO “Tatneft-Samara”, 1 well for OAO “Ilekneft (15 wells were repaired during 4 months of 2011, including 13 wells for OOO “Tatneft-Samara” and 2 wells for OOO “Tatneft-Severny”).

The workover operations were performed in 756 wells during four months of 2012 (190 wells in April), including production string sealing performed in 112 wells, shutting-off individual layers and recompletion in other intervals were performed in 56 wells, transfer of wells into different categories and wells completion for injection in 49 wells, liquidation of downhole complications and cleaning of production casing and bottomhole in 83 wells, installation of isolating packers and dual completion systems in 21 wells, physical liquidation in 11 wells. 236 wells were worked over with application of coil tubing (52 wells in April), including 42 wells worked over through the annulus.

Formation hydrofracking operations were performed in 127 wells (31 wells in April), accounting for 34 wells increase versus the similar period in 2011 (93 wells during 4 months of 2011). The cumulative incremental crude oil production resulting from application of this method amounted to 5 million 497 thousand tons.

Twelve small diameter wells were drilled and completed for OAO TATNEFT by the workover crews during four months of 2012. At present drilling of one slim hole is in progress for NGDU “Nurlatneft”, NGDU “Jalilneft” and NGDU “Prikamneft”.

Works on oil recovery enhancement were performed in 692 wells (126 wells in April) including chemical methods applied in 384 wells (l72 wells in April).

The incremental crude oil production resulting from application of crude oil recovery enhancement methods amounted to 1 million 886 thousand tons with application of chemical methods accounting for production of 858 thousand tons.

Bottomhole area treatment operations with application of OAO TATNEFT’s technologies were performed in 1,030 wells during four months of 2012.

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Baker Hughes recently introduced METAL MUNCHER™ AMT (advanced milling technology) cutters to achieve greater efficiency and longer runs with cutting and milling systems used for casing exits and wellbore intervention. Clean and efficient milling operations help operators reduce risks and prevent nonproductive time.

The new cutting structures, featuring insert shapes and metallurgies customized for specific applications, provide more efficient cutting and enhanced durability and impact resistance, resulting in longer runs and fewer trips.

Engineered using pressed sintered tungsten carbide, the AMT cutters are available in a variety of shapes and metallurgies. Depending on the application, a milling tool may include several types of AMT cutters to optimize various aspects of the milling operations. The cutters are designed to mill even the toughest steels, including high chrome and nickel-content materials. The durable technology increases milling penetration rates, extends effective time on bottom in high volume milling applications, and enables greater flexibility during the milling process.

METAL MUNCHER™ AMT cutters feature sharp profiles with chip breaking features to control cutting size and shape, enabling efficient cutting removal and debris management.

Field operators have reported as much as a 300 percent improvement in wear resistance and longevity with Baker Hughes’ inserts. The cutting structures are enabling operations that previously were not feasible due to milling inefficiencies. In the North Sea, METAL MUNCHER™ AMT inserts are driving success in slot recovery and plug and abandonment operations where high volume milling applications are commonplace. In North Dakota, a METAL MUNCHER AMT mill was used to successfully mill out 79 composite plugs in two horizontal wells, in one trip per well, achieving a new record for fracturing plug removal.

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GE Oil & Gas (NYSE: GE) is introducing its next-generation technology for shearing and sealing wellbore tubulars at the 2012 Offshore Technology Conference (OTC) in Houston.

The new Blind Shear Ram is designed for use in GE’s 18-3/4 inch ram blowout preventers (BOP) used in drilling. The new patent-pending Blind Shear Ram has the ability to both shear and seal after cutting 6-5/8 inch tool joints, which are heavy coupling elements for a drill pipe.

GE’s Blind Shear Ram allows customers to use current BOP stack arrangements without having to manage the spacing between rams or create operational methods to avoid 6-5/8 inch tool joints. This technology solution also is designed to eliminate non-shearable sections, allowing for greater shearing flexibility.

The shearing capability was confirmed during testing witnessed by representatives from several leading oil companies. The rams were successfully tested to 15,000 psi after cutting the tool joint. Centralizing arms are designed to allow successful shearing of buckled or offset pipe, and modifications to the block and blade allow greater force to be applied without damage.

“Our new Blind Shear Rams are designed to centralize, shear and seal after cutting tubulars up to and including 6-5/8 inch drill pipe tool joints in the BOP,” said Sam Aquillano, vice president—drilling and surface for GE Oil & Gas. “Previous offerings included a new casing shear ram that could cut but not seal 6-5/8 inch drill pipe tool joints.”

He added, “The Blind Shear Ram is the latest example of how GE continues to seek and develop innovative solutions for the challenges that our customers face in drilling, particularly in deepwater and challenging environments. We are continuing testing to understand the full upper limits of what the new blind shear ram designs can achieve.”

The new ram design is now being offered for use with GE’s current 5K operator.

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New generation tubing and state-of-the art technologies for protecting tubes with a special type coating will help materially increase meantime between failures and minimize energy losses during production.

The entity has already started large-scale development and equipment of wells with new generation tubing – about 6 percent of the producing well stock already uses new generation tubing.

Varyoganneftegaz spent RUR 46 million on testing new tube coating in 2011; this year, Vaniogan wells will be testing a large fiberglass tubing batch till the end of June.

“Fiberglass tubing will be pilot run in 40 wells in 2012. By the year end, the entire batch of the supplied fiberglass tubing will have been run in hole. It will help us have a better idea of the tubing overall reliability and performance”, said TS Varyoganneftegaz Director Sergey Karavaev.

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The Mastiff RIS’ modular design and light weight make it ideal for operations on platforms with limited load capacity and is easily deployed worldwide. With a maximum weight of 24,000 pounds (10886 kg), each RIS module can be transported in a standard 40-foot (12-meter) open-top container.

The Mastiff RIS has a self-pinning mast erection system that improves safety and enables the unit to be rigged up or rigged down in 24 to 48 hours. Hydraulics built into the system enable the modular components to be assembled and disassembled using a hydraulic, self-pinning design, eliminating the need for riding belt operations, and dramatically reducing risks associated with working at height and manual handling of components. The system’s sturdy mast enables safe operation at wind speeds of up to 50 mph (43.5 knots).

The system has a 352-ton pulling capacity. While performing conductor pipe removal, the Mastiff RIS can support cutting and pulling lifts of 50-foot sections of 36-inch conductor pipe, inner casing and cement, a significant improvement over casing jack systems, which work with 5-foot sections.

As an alternative to well abandonment, the Mastiff RIS can be used to initiate a slot recovery program for continued field development prior to the arrival of the drilling rig. Once the pipe is removed, the well slot can be prepared for a new, full-sized wellbore using a full-range of equipment from drive-pipe whipstocks to hammer services, saving valuable rig time and offering the operator the option to further redevelop assets.

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Financial and Operating Highlights:

• Net profit grew 55.6% on Q4 2011;
• EBITDA increased 11.5% on Q4 2011;
• Hydrocarbon output up 2.7% on Q1 2011;
• Refinery throughput increased 25% compared to Q1 2011.

Rosneft’s EBITDA in Q1 2012 amounted to RUB 165 billion. This represents an 11.5% increase on Q4 2011 and a 14.9% drop on Q1 2011. Prudent cost management had a positive impact on EBITDA. Crude production costs fell 6.3% on Q4 2011 to RUB 88.3 per barrel. General and administrative expenses per barrel fell 2.6%.

The increase in the base mineral extraction tax (MET) rate negatively impacted EBITDA, as did increased transport tariffs and electricity prices. EBITDA was also affected by higher excise duties, which were not compensated by a corresponding rise in petroleum product prices on the domestic market. A key factor behind the decrease in EBITDA compared to Q1 2011 was the expiration of reduced MET rates and export duties for oil produced at the Vankor field.

Q1 2012 net profit was RUB 112 billion, which represents a 55.6% increase on Q4 2011 and an 8.9% drop on Q1 2011. Other expenses decreased from Q4 2011, while exchange rate gains rose compared to Q1 2011, which was reflected in a better net profit dynamic compared to that of EBITDA.

As a measure to manage cash flow, Rosneft temporarily stopped collecting advance payments from oil purchasers in Q1 2012, which led to an increase in working capital. Additional factors contributing to a further increase in Rosneft’s working capital were the expansion of the Company’s own oil stocks at refineries in Germany and the creation of petroleum product reserves in Russia in anticipation of a seasonal increase in demand. Cash flow from operations before the changes in working capital was RUB 141 billion, a 9% increase on Q4 2011. Rosneft’s free cash flow before the changes in working capital was RUB 23 billion.

Hydrocarbon production (including production by subsidiaries and share in production by affiliated companies) increased 2.7% in Q1 2012 compared to the same period last year to 2,634 th. boepd. Oil production increased 2.3%, while gas output grew 9.4%.

The Company refined 15.54 million tonnes of crude at refineries in Russia and those of Ruhr Oel GmbH in Germany which represents a 2.3% drop on Q4 2011 and a 25.0% increase compared to Q1 2011. Refinery throughput increased on Q1 2011 thanks to the acquisition of a 50% share of Ruhr Oel GmbH in May 2011. The negligible decrease in refinery throughput in Russia compared to Q4 2011 was due to planned maintenance works at the Komsomolsk and Novokuibyshevsk refineries.

Commenting on Q1 2012 results, Rosneft President Eduard Khudainatov said: “Our Q1 results are much better than planned. We exercised prudent cost management and achieved outstanding efficiency given the macroeconomic environment. Our key objectives for this year are to press ahead with our large-scale production and refining projects and optimise our business across the board.”

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