Occidental Petroleum makes significant discovery in Kern County, California

“We believe this to be the largest new oil and gas discovery made in California in more than 35 years.”— Dr. Ray Irani

Latest Apache North Sea well producing at 10,500 b/d

Apache Corp.’s Forties Charlie 6-3 well commenced production at a rate of 10,500 barrels of oil per day. The well is the seventh development well brought on production at Forties in 2009; its initial production rate is the field’s highest since 1994.

These new wells are contributing to the field’s current strong production of more than 70,000 barrels per day.

“The Forties Charlie 6-3 confirmed Apache’s analysis of 4-D (time-lapse) seismic and reservoir engineering data, which highlighted the potential for similar stranded oil accumulations in close proximity to the Charlie platform,” said Rod Eichler, Apache’s co-COO and president - International. An eighth well - the Forties Alpha 2-5 - recently logged 115 feet of high-quality pay in the Delta-Echo Channel and the Upper Main sands.

Since acquiring Forties in 2003, Apache has invested over $1.2 billion towards infrastructure-related projects aimed at improving the field’s operating efficiency and process system reliability.

Apache owns a 97.14% interest in Forties, which is the largest single oil accumulation discovered and is currently the second-highest producing field in the UK sector of the North Sea.

Marathon sells 20% Angola Block interest to CNOOC, Sinopec for $1.3 billion

Marathon Oil Corp.’s subsidiary, Marathon International Petroleum Angola Block 32 Ltd., has agreed to sell a 20% participating interest in Block 32 offshore Angola to CNOOC International Ltd. (CNOOC), and Sinopec International Petroleum Exploration and Production Corp. for roughly $1.3 billion.

The companies expect to close the transaction by year-end 2009, subject to Government and regulatory approvals. The deal has an effective date of Jan. 1, 2009. Marathon will retain a 10% working interest in the block.

Twelve previously announced discoveries on Block 32 include: Gindungo, Canela, Cola, Gengibre, Mostarda, Salsa, Caril, Manjericao, Louro, Cominhos, Colorau and Alho. Conceptual development studies are underway in order to establish the feasibility of a first development area in the central southeastern part of Block 32.

The concessionaire of Block 32 is Sonangol, Angola’s state-owned oil company. The operator is TOTAL Exploration and Production Angola (Block 32 Ltd.) with 30% interest. Sonangol P&P holds a 20% interest; Esso Exploration and Production Angola (Block 32) holds a 15% interest; and Petrogal holds a 5% interest.

Marathon’s financial advisor for this transaction is Standard Chartered Bank.

Gastar Exploration completes Australian assets sale, plans debt retirement

Gastar Exploration Ltd., an exploration and production company focused on finding and developing natural gas assets in North America, has completed the sale of all of its interest in Petroleum Exploration Licenses 238, 433 and 434 in New South Wales, Australia, and the sale of its shares of Gastar Power Pty Ltd., to affiliates of Santos Ltd.

Gastar received roughly US$217 million of the aggregate US$233 million purchase price at closing and is scheduled to receive the balance upon receipt of certain government approvals. Total net proceeds after payment of Australian income taxes are expected to be US$170.5 million prior to transaction costs. The company may be paid an additional US$16 million in early 2010 if the independently certified gross 2P reserves for the PEL 238 coalbed methane project are at least 1.3 tcf at year-end 2009.

Using a portion of the proceeds, Gastar will retire its $25 million secured term note and pay down the current outstanding balance of $13 million under its secured revolving credit facility. The company intends to offer to repurchase all of its outstanding $100 million of 12-3/4% senior notes with remaining proceeds and expects to retire its $30 million convertible subordinated debentures upon maturity in November 2009.

ExxonMobil begins drilling Libya’s first deepwater well

ExxonMobil Exploration Co.’s affiliate, ExxonMobil Libya Ltd., has started drilling the first deepwater exploration well in Libya. The A1-20/3 well is being drilled in Contract Area 20 located offshore in the Sirte Basin, northeast of the city of Misrata, in the Libyan Mediterranean Sea.

The rig, contracted from Noble Africa Ltd. and named the Noble Homer Ferrington, is capable of operating in water depths up to 7,200 feet, and can drill to a depth of 30,000 feet.

Goodrich Petroleum completes 3rd Haynesville shale well in East Texas

Goodrich Petroleum Corp. has completed its third East Texas horizontal Haynesville Shale well, the Taylor Sealey No. 3H in Panola County, Tex. The well produced into sales at a 24 hour initial production rate of 9.3 MMcf/d on a 24/64 inch choke with 5,200 psi. The company is operator and owns a 100% working interest in the well. The well is located in the Minden field, roughly six miles south of its Lutheran Church 5H well, which had an initial production rate of 9.0 MMcf/d.

Mad Dog South well encounters hydrocarbon pay

Mad Dog South (826-5) appraisal well and sidetrack, drilled and operated by BHP Billiton, encountered significant hydrocarbon bearing reservoir. The well is located on Gulf of Mexico Green Canyon block 826 roughly 100 miles south of Grand Isle, La. in roughly 5,100 feet of water.

The well encountered 280 net feet of hydrocarbons in the objective, Miocene, hydrocarbon bearing sands. The subsequent sidetrack reached a total measured depth of 27,143 feet and discovered an oil column of more than 2,200 feet.

BHP Billiton holds a 23.9% working interest in Mad Dog. While BHP Billiton was the designated operator for the purposes of drilling the Mad Dog South well and sidetrack, BP is the field operator with a 60.5% working interest. Chevron holds a 15.6% working interest in Mad Dog.

Terra Energy snaps up Peace River Arch assets; expands credit facility

Terra Energy has completed the acquisition of certain Peace River Arch assets for roughly $76.6 million. The acquisition consists of high quality, long-life properties primarily located in the Peace River Arch regions of northeast British Columbia and northwest Alberta, including roughly 2,200 boe/d of production, 77,600 gross (46,000 net) acres of undeveloped land, and several “oil targeted” development prospects.

The Arch Assets add more than 8.5 million of Proved plus Probable reserves (6.2 million Total Proved) and extend the company’s Reserve Life Index to over nine years. The acquired reserves are roughly 40% weighted to oil with greater than 98% of Total Proved reserves comprised of Proved Developed Producing reserves.

Based on an acquisition price of $76.6 million, the company acquired Proved plus Probable reserves at a cost of approximately $9.00 per boe (attributing zero value to the undeveloped lands acquired).

Additionally, the company recently finalized an expansion of its revolving credit facility to $90 million with its existing syndicate of lenders.

Forest Oil notes Haynesville well results

Forest Oil Corp. has results from its second horizontal Haynesville Shale well in Red River Parish, La. The Driver 13-1H (100% WI) produced into the sales line at a rate of 20.3 MMcfe/d with 6500 psi flowing casing pressure in early July 2009.

The well was drilled and completed with a horizontal leg of 3,500 feet and a ten stage frac for a total well cost of roughly $9 million.

Forest holds roughly 11,050 net acres in Louisiana prospective for the Haynesville Shale and has identified 110 additional potential horizontal locations on the acreage. The company intends to maintain a one-rig drilling program in Red River Parish for the remainder of 2009 and an additional rig in other prospective areas in the play.