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November 28, 2011 Energy Data Highlights Crude oil futures price 11/23/2011: $96.17/bbl down$6.42 from week earlier up$14.92 from year earlier Natural gas futures price 11/23/2011: $3.460/mmBtu up$0.016 from week earlier down$0.804 from year earlier Retail heating oil price 11/21/2011: $3.935 /gal down$0.007 from week earlier up$0.825 from year earlier Natural gas inventories 11/18/2011: 3,852 Bcf up9 Bcf from week earlier up23 Bcf from year earlier Crude oil inventories 11/18/2011: 330.8 mmbbl down6.2 mmbbl from week earlier down27.8 mmbbl from year earlier

Natural Gas/ Power News

EIA Storage Release 11/23/11 (Actual): +9 Bcf Previous Week: +19 Bcf +0.6% Change from 1 Year Ago +6.4% Change 5-year Average Natural-Gas Find Boosted Off Southeast Africa Anadarko Petroleum Corp. doubled its estimates Monday for gas reserves offshore Mozambique, further evidence of huge gas deposits lying off southeast Africa. Its Barquentine-3 appraisal well "encountered more than 662 net feet (202 meters) of natural gas pay, expanding the estimated recoverable resource range from 15 to more than 30 trillion cubic feet," Houston-based Anadarko said in a statement.

"The positive results of each appraisal well we have drilled and analyzed have continued to increase our estimate of recoverable resources and natural gas in place on our block, and add to our confidence that this could be one of the most important natural gas fields discovered in the last 10 years," Anadarko Chairman and CEO Jim Hackett said. http://online.wsj.com/article/SB1000142405297020393560457706579183822006 0.html?mod=WSJ_hp_LEFTWhatsNewsCollection Anadarko doubles estimates for Mozambique find Anadarko Petroleum, the US oil and gas independent, has more than doubled the estimated size of its biggest natural gas discovery, located off the coast of Mozambique. This could be one of the most important natural gasfields discovered in the last 10 years, Jim Hackett, Anadarkos chief executive, told the Financial Times. Mr Hackett said the Barquentine-3 appraisal well encountered more than 662 net feet of natural gas. That expanded the estimated recoverable resource range from 15,000bn-30,000bn cubic feet of natural gas to an estimated 30,000bn-50,000bn cubic feet. It made its initial discovery of the field in February 2010. Anadarko has not released how much it plans to invest but the size of the find indicates it could easily surpass $10bn over the life of the field. There is no question this will be a commercial project, Mr Hackett said. http://www.ft.com/intl/cms/s/0/ff4258dc-1950-11e1-92d800144feabdc0.html#axzz1f09CFJtt Natural-Gas Prices Buoyed by Cooler Weather Natural-gas prices finished higher, buoyed by cooling weather and anticipation of falling inventories. A smaller-than-expected increase in natural-gas stockpiles reported earlier this week has raised expectations that the record supply of gas in storage soon could begin to shrink. Meanwhile, the recent bout of mild weather is beginning to give way to falling temperatures across the U.S., offering expectations that gas-fired heating demand will rise. "Weather forecasts emerged with greater aggregate heating demand over the next 15 days. No surprise there as we nudge toward December," Pax Saunders, an analyst at Gelber & Associates, said in a research report. http://online.wsj.com/article/SB1000142405297020445210457706055412615924 4.html?mod=WSJ_Commodities_LEFTTopNews

America's New Deal for Global Energy Mix In 1973, Richard Nixon, in the teeth of the Arab oil embargo, pledged that the U.S. would achieve energy independence within seven years. Like his presidency, that didn't quite work out. Net imports provided 35% of U.S. oil in 1973. Seven years later, they supplied 37%, and by 2005, 60%. Now, that trend is reversing fast. In the 12 months ended in August, net imports met just 46% of oil demand. Similarly, net imports of natural gas climbed from 4% of consumption in 1973 to a peak of more than 16% in 2007, but were back under 9% in the year ended in August... In natural gas, the opening of shale resources has caused excess supply and cratered prices. Despite calls to use more natural gas, demand hasn't caught up. That is why the likes of Cheniere Energy now want to liquefy and export natural

gas to cash in on the spread between low U.S. prices and much higher European and Asian ones. Capturing the benefit of this price difference will be a central battle in the natural-gas market over the next decade. Exports of natural gas would tighten domestic supply, raising prices. That is risky politically. Michael Levi at the Council on Foreign Relations reckons those benefiting from the natural-gas glutmainly utilities, petrochemical companies and heating consumersare more organized politically than natural-gas producers and exporters. The argument that gas should be exported not in its raw form but as an input to American-made goods will be tough to ignore. http://online.wsj.com/article/SB1000142405297020376480457706044374770649 0.html?mod=WSJ_Commodities_LEFTTopNews The Non-Green Jobs Boom So President Obama was right all along. Domestic energy production really is a path to prosperity and new job creation. His mistake was predicting that those new jobs would be "green," when the real employment boom is taking place in oil and gas. The Bureau of Labor Statistics reported recently that the U.S. jobless rate remains a dreadful 9%. But look more closely at the data and you can see which industries are bucking the jobless trend. One is oil and gas production, which now employs some 440,000 workers, an 80% increase, or 200,000 more jobs, since 2003. Oil and gas jobs account for more than one in five of all net new private jobs in that period. The ironies here are richer than the shale deposits in North Dakota's Bakken formation. While Washington has tried to force-feed renewable energy with tens of billions in special subsidies, oil and gas production has boomed thanks to private investment. And while renewable technology breakthroughs never seem to arrive, horizontal drilling and hydraulic fracturing have revolutionized oil and gas extractionwith no Energy Department loan guarantees needed. The oil and gas rush has led to a jobs boom. North Dakota has the nation's lowest jobless rate, at 3.5%, and the state now has some 200 rigs pumping 440,000 barrels of oil a day, four times the amount in 2006. The state reports more than 16,000 current job openings, and places like Williston have become meccas for workers seeking jobs that often pay more than $100,000 a year. http://online.wsj.com/article/SB1000142405297020419070457702451008726107 8.html?KEYWORDS=keystone+pipeline Troubled Tepco Sells Assets to Raise $2.5 Billion Tokyo Electric Power Co. unveiled plans Monday to sell shares in other companies for about $2.5 billion as the troubled utility at the heart of the Fukushima Daiichi nuclear disaster seeks to shore up its finances. In by far the largest deal, Tepco said after the close of the Tokyo Stock Exchange Monday that it will sell its entire stakemore than 10%in mobile telecommunications company KDDI Corp. for 521,000 (about $6,700) per share, the stock's closing price in Tokyo, raising about 186.28 billion, or $2.4 billion. http://online.wsj.com/article/SB1000142405297020380220457706579194554500 0.html?mod=WSJ_hp_LEFTWhatsNewsCollection

Green/ Alternative Energy News

Myhrvold: Subsidies Stymie Wind, Solar Innovation This month, the U.S. Department of Commerce launched a formal investigation into complaints, lodged by the U.S. solar-cell manufacturers, that the government of China is funneling loan guarantees, grants and subsidies to its solar-cell companies. Apparently, the Commerce Department is shocked, shocked to learn that a government would subsidize the solar industry. A few days later, the New York Times described a gold rush under way in the U.S. as builders of wind and solar farms cash in on grants and loan guarantees offered by both the federal government and various states. These incentives effectively allow players at every level of the renewable-energy industry to lock in profits of 10 percent to 30 percent a year for the 20- to 30-year life of their plants -- not bad considering 10year Treasury bonds are paying only 2 percent. Both of these developments are symptoms of a larger problem with the worlds current approach to renewable energy. The range of prospects being tried now is dizzying -- from high-tech windmills to biofuels, from corn to algae, from silicon photovoltaic cells to boilers heated by thousands of reflected sunbeams. But they all share one thing that makes them appealing to investors: taxpayer dollars. One of the ugly secrets of the renewable-energy industry is that its products make no economic sense unless they are highly subsidized. http://www.bloomberg.com/news/2011-11-27/energy-subsidies-stymie-wind-solarinnovation-nathan-myhrvold.html

China Aims to Sell 5 Million Alternative-Energy Vehicles by 2020 China aims to sell 5 million alternative-energy vehicles by 2020, the Anhui Economic and Information Technology Commission said on its website, citing a work meeting organized by the industry ministry. The country also plans to have cumulative sales of half a million electric and hybrid cars by 2015, the commission said on its website. http://www.bloomberg.com/news/2011-11-24/china-aims-to-sell-5-millionalternative-energy-vehicles-by-2020.html

Crude Oil News

OPEC Daily Basket Price 11/25/2011- $107.73 (OPEC Daily Basket Price 11/24/2011- $108.10)

Oil Climbs to Highest in More Than a Week on U.S. Sales, Syrian Sanctions

Oil rose above $100 a barrel in New York for the first time in more than a week on signs of economic recovery in the U.S., while sanctions on Syria stoked concern Middle East crude supplies may be threatened. Futures advanced a second day, gaining as much as 4.1 percent. U.S. retail sales during Thanksgiving climbed 16 percent to a record. The Arab League imposed sanctions on Syria after the country refused to halt a crackdown on protesters. The country produced an average of 332,000 barrels of crude a day in August, according to the International Energy Agency. Were likely to see Brent back up to $115 by year-end, Christopher Bellew, a senior broker at Bache Jefferies Ltd. in London. Prices will be supported by colder weather, declining inventories and a positive start to the U.S. shopping season. But Chinese demand remains enigmatic, and the stronger dollar will be a negative influence. http://www.bloomberg.com/news/2011-11-28/oil-climbs-to-highest-in-more-than-aweek-on-u-s-sales-syrian-sanctions.html

U.S. Crude Oil Rises Above $100 On Supply Worries Oil rose sharply on Monday with U.S. crude futures climbing above $100 per barrel as concerns of a supply disruption from the Middle East overshadowed worries over oil demand growth and a worsening economic outlook for the euro zone. Markets got an early boost from a report suggesting the International Monetary Fund was preparing a 600 billion euro ($800 billion) rescue plan for Italy. Oil held on to its gains even after the IMF said it was not in any discussion with Italian authorities on a financing plan due to a weaker dollar and supply worries. http://www.cnbc.com/id/45455564 Spill Casts Pall Over Brazil Oil Patch An oil leak at a Chevron Corp. deep-water well off the Rio de Janeiro coast this month has provoked local outrage and investigations of the U.S. company. It also has become a messy reminder that Brazil's bid to reach prosperity through oil may be costlierand more challengingthan many here expected. The early November leak at Brazil's Frade oil field was plugged successfully after spewing 2,400 barrels of crude into the seaa fraction of the estimated 4.9 million barrels that gushed into Gulf of Mexico last year when the Deepwater Horizon rig exploded at a BP PLC well. In Brazil's case, an oil slick isn't likely to reach the shores, local officials say, and the shiny stain it produced on the ocean surface is dissipating. http://online.wsj.com/article/SB1000142405297020376480457705998353752110 6.html?mod=WSJ_Commodities_LEFTTopNews

EU oil import costs soar above $400bn The European Unions oil import costs have soared to more than $400bn this year as crude prices continue to trade above $100 a barrel, heightening concerns about their impact on the regions economy, the International Energy Agency has warned. The high prices are putting an additional burden on recovery efforts,

said Fatih Birol, chief economist at the leading energy watchdog. If they stay at these levels in the coming months, they could well strangle the economic recovery, he added. According to BPs Statistical Review, this year will be the first year ever with an average annual oil price above $100 a barrel. In real terms, the average annual price is the highest since 1864. http://www.ft.com/intl/cms/s/0/106fbec2-18fe-11e1-92d800144feabdc0.html#axzz1f09CFJtt Growing doubts over Saudi Arabias supply stand-ins Saudi Arabia does not plan to expand its oil production capacity beyond is target of 12.5m barrels a day, as Khalid al-Falih, chief executive of state-owned Saudi Aramco, says that other countries will meet rising demand over the next few years. Can others really raise to the challenge and meet the expected rise in demand? The International Energy Agency forecasts that four nations, on top of Saudi Arabia, would provide the bulk of new supply: Iraq, Brazil, Canada and Kazakhstan. Many have questioned already whether Iraq would deliver. Now, Brazil is also in doubt. Petrobras, the partly state-owned Brazilian company plans to boost the countrys oil production from 2.1m b/d in 2011 to 3.1m b/d by 2015 and a hefty 4.9m b/d by 2020. The expansion plan will cost at least $120bn and probably more and will develop the so-called offshore pre-salt oil fields, which would account for 40 per cent of the countrys production by the end of the decade, up from less than 2 per cent at the moment. http://www.ft.com/intl/cms/s/0/9f03ba2e-199b-11e1-9888-00144feabdc0.html? ftcamp=rss#axzz1f09CFJtt Recent Rig Counts Date of Last Year's Count 24 Nov 10 24 Nov 10 September 2010

Area U.S. Canada

Date of Last Cou Change from Prior Count nt Prior Count Count 23 Nov 2000 11 23 Nov 484 11 -1 -3 +23 18 Nov 11 18 Nov 11 Septembe r 2011

Change from Last Year +313 +69 +98

Internatio October 1197 nal 2011

http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

Weather
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