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September 27, 2011

Energy Data Highlights

Retail gasoline price 9/26/2011: $3.509/gal down$0.092 from week earlier up$0.815 from year earlier Retail diesel price 9/26/2011: $3.786/gal down$0.047 from week earlier up$0.835 from year earlier Crude oil futures price 9/23/2011: $79.85/bbl down$8.11 from week earlier up$4.67 from year earlier Natural gas futures price 9/23/2011: $3.701/mmBtu down$0.108 from week earlier down$0.319 from year earlier Weekly coal production 9/17/2011: 21.208 million tons up0.514 million tons from week earlier down0.639 million tons from year earlier http://www.eia.gov/ Natural Gas/ Power News EIA Storage Release 9/1/11 (Actual): +89 Bcf Previous Week: +87 Bcf -4.3% Change from 1 Year Ago -1.6% Change 5-year Average Marcellus producer PDC Mountainer buys Seneca-Upshur for $152.5 million PDC Mountaineer, a joint venture of Denver-based independent Petroleum Development Corp. and Lime Rock Partners V, has agreed to buy for $152.5 million the membership interests of producer Seneca-Upshur, which holds 100,000 acres of leases in West Virginia's Marcellus Shale, PDC said Monday. PDCM said the acquisition will give it all rights and all depths to an estimated 90,000 prospective net acres primarily in Harrison, Taylor, Barbour, Upshur, Lewis and Randolph counties of north-central West Virginia and another 10,000 net acres in Mingo and McDowell counties in southwestern West Virginia that are prospective

for the Huron Shale. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/NaturalGas/6522752 Utica Shale Energizes Deal Frenzy in Ohio One of the latest hot spots for deal making is far from New York City or Silicon Valleyit's in eastern Ohio, where energy companies are staking claims in what is being touted as North America's next big energy field, the Utica Shale. While the 170,000-square-mile Utica Shale sprawls beneath parts of eight states and Canada, energy companies and analysts believe the richest reserves of oil and valuable natural-gas liquids, such as propane and butane, lie in eastern Ohio. In recent weeks the buzz around the area has intensified. Large producers' moves into the area are becoming public. This month has seen big acquisitions. And stock analysts are recommending shares of small companies with Ohio acreage. Last week, Exxon Mobil Corp. confirmed it is snapping up drilling rights in the Utica Shale. Exxon won't say how much land it has locked up or where the property lies. But the move caught Wall Street analysts' attention. And Chesapeake Energy Corp., the country's second-largest natural-gas producer, after Exxon, is shopping a stake in its 1.25 million eastern Ohio acres that analysts say could set a new price baseline. Chesapeake Chief Executive Aubrey McClendon has said it may have a joint venture signed as early as next month. http://online.wsj.com/article/SB1000142405297020401060457659278375069720 2.html?mod=WSJ_Commodities_LEFTTopNews Remote Wyoming site could help shape frackings future Natural gas development in the U.S. will depend not only on what happens in Washington and in statehouses across the country. It could be shaped in part by what happens in a big antelope-dotted field south of this remote valley town. Here, Shell Oil Co. and others are taking steps some required and others voluntary that soon may be the norm for reducing the environmental impact of gas drilling and the extraction process called hydraulic fracturing, or fracking. Shell, for instance, now recycles more than half the water it uses in fracturing local wells, reducing the need for locally sourced fresh water. It also has installed equipment that is sharply cutting emissions from drilling rigs and has shrunk its surface footprint by drilling more wells at a single site, rather than spacing them out checkerboard style, as is done in some other fields. http://fuelfix.com/blog/2011/09/26/remote-wyoming-site-could-help-shapefrackings-future/ Russian Sakhalin authorities mull second LNG plant by 2020 An expected increase in gas production from the Sakhalin projects in Russia's Far East will make it expedient to build a second liquefied gas production plant in Sakhalin Island by 2020, apart from the planned expansion of the existing LNG capacities, Sakhalin governor Alexander Khoroshavin said Tuesday. "We believe that with the start of gas production at the Sakhalin 1 and Sakhalin 3 projects it will be [a real possibility] to build a second LNG plant in Sakhalin Island, possibly on the western shore of the island near Ilinskoye," Khoroshavin said at the Sakhalin Oil and Gas conference. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7430853 Egypt's gas supply to Israel sabotaged Masked militants have blown up a terminal on a key pipeline supplying natural gas from Egypt to Israel as well as to Jordan and Lebanon. It's the fifth time this year the pipeline has been sabotaged. http://www.abc.net.au/worldtoday/content/2011/s3326758.htm

Green/ Alternative Energy News

Princeton student creates low cost, more efficient solar panel Princeton University student Eden Full, 19, was awarded more than $380,000 to help spur development of her solar panels that track the sun without the use of electricity. Full, a mechanical engineering student, developed her SunSaluter panels as a low-cost passive solar panel tracker that can increase energy output by 40 percent. The system tracks the sun by using thin strips of aluminum and steel that bend and twist, moving the panel with the sun. As a result, the panels are much more efficient than typical solar panels, and they cost significantly less. http://fuelfix.com/blog/2011/09/26/princeton-student-creates-low-cost-moreefficient-solar-panel/

Crude Oil News

OPEC Daily Basket Price 9/26/2011 $101.81 (9/23/2011 $104.37) Recent Rig Counts Last Count Change Cou from Prior nt Count 6 3 +33 Date of Prior Count 16 Sept 11 16 Sept 11 July 2011 Change Date of from Last Last Year's Year Count +341 +223 +81 24 Sept 10 24 Sept 10 August 2010

Area U.S. Canada Internatio nal

23 Sept 1991 11 23 Sept 505 11 August 1183 2011

http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm Oil Climbs on Optimism Europe Will Tame Debt Crisis, Boosting Fuel Demand Oil rose for a second day in New York on speculation European governments will contain their sovereign-debt crisis, limiting its impact on the global economy and demand for raw materials. Futures gained as much as 3.2 percent, trimming the biggest quarterly decline since the global financial crisis in 2008. U.S. Treasury Secretary Timothy F. Geithner predicted Europe will intensify efforts to contain its debt problems after being pressured at international meetings in Washington last week. European stocks climbed for a third day. Its a risk-on day for oil, said Thorbjorn Bak Jensen, an analyst at Global Risk Management in Middelfart, Denmark, who predicts Brent will average $107 in the fourth quarter. Investors are hoping the European Central Bank will pull a rabbit out of the hat, in the form of an increase in the strength of the bond-buying program. http://www.bloomberg.com/news/2011-09-27/oil-gains-on-optimism-europe-willtame-debt-crisis-boosting-fuel-demand.html Japanese investment in Russian E&P to continue to be crucial: METI official Japanese investments in Russia's oil and gas sector will continue to play a crucial role in meeting Japan's energy demand as Tokyo is eyeing expanded cooperation

with Russia, a Japanese government official said Monday. Given the aftermath of the March earthquake in Japan, Russian exports of LNG played an important role in meeting domestic demand, Hisayoshi Ando, Director-General of the Natural Resources & Fuel Department of the Agency for Natural Resources and Energy at Japan's Ministry of Economy, Trade and Industry, or METI, said Monday, speaking at the 15th Sakhalin Oil and Gas conferenceJapan is the biggest importer of LNG in the world. In 2010, Japan imported 70 million mt of LNG, which accounts to one third of the total LNG volume traded globally, he said. In 2010, Russian exports of LNG accounted for 8.5% of Japan's total LNG imports, of which the majority derived from Sakahlin 2, Ando said. "The demand for LNG has increased sharply and will continue to be high in the mid- and long-term," Ando said. http://www.platts.com/RSSFeedDetailedNews/RSSFeed/Oil/7430860 U.S. Should Welcome Crude From Canadas Dirty Oil Sands: View On first look, it might seem wrong to allow TransCanada Corp. to build the 1,700mile Keystone XL pipeline to carry oil from Alberta, Canada, to the U.S. Gulf Coast. After all, if such a pipeline were to ever leak, as pipelines do, there is some risk it could pollute the Ogallala Aquifer under Nebraskas Sandhills, which supplies 80 percent of that states drinking water. Whats more, a new conduit would seem to only encourage the further development of the Athabascan oil sands in Alberta. This is a dirty business, to be sure A closer look, however, reveals that blocking the $7 billion pipeline would do more harm than good. Consider, first of all, that the Canadian oil sands contain more than 173 billion barrels of recoverable crude, second only to Saudi Arabias 264 billion barrels. Extracting it means almost half a million new jobs for Canada and, for both Canada and the U.S., a sizable supply of oil that is safe from interruption by unfriendly governments. http://www.bloomberg.com/news/2011-09-27/u-s-should-welcome-the-flow-ofcrude-from-canada-s-dirty-oil-sands-view.html Glencore's shipping firm may cut oil tanker fleet Glencore's shipping unit, ST Shipping, may reduce the number of oil tankers in its fleet over the next six months because rock-bottom freight rates have cut into profit margins, a company executive said on Tuesday. ST Shipping is looking at returning several crude oil tankers to owners when long-term contracts expire in the next few months due to negative freight rates, said company director Kent Paulli. (Our fleet) could very well shrink over the next three to six months," Pauli told reporters on the sidelines of an industry conference. http://www.reuters.com/article/2011/09/27/shipping-finance-stshippingidUSL3E7KR1DG20110927 Iran to build super heavy oil refinery Iran is to build the first super heavy oil refinery in Qeshm Island in southern Iran to produce light crude oil and desirable tar. The refinery with the capacity of producing light crude oil and high-quality tar up to 30,000 barrels a day will be run by the next one and a half year. Changing heavy crude oil to other products will make more earnings for the country. Crude oil produced in Iranian Soroush and Norowz fields is among the heaviest products which can be changed to more valuable products and find more profitable markets in Asian and European markets. http://www.isna.ir/ISNA/NewsView.aspx?ID=News-1855845&Lang=E

Weather
Tropical Storm PHILIPPE http://www.nhc.noaa.gov/text/refresh/MIATCPAT2+shtml/270833.shtml 6 to 10 Day Outlooks Temperature

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