Monday's oil and gas news: Magnolia strikes oil in Oklahoma

Magnolia Petroleum, Xtract Energy and President Energy all updated investors on Monday. Read on to see what they had to say.

Magnolia Petroleum issues Oklahoma drilling update

Magnolia Petroleum (MAGP) on Monday confirmed that hydrocarbons had been encountered in the Roger Swartz #1 vertical well in the Mississippi Lime formation, Oklahoma.

The well had been drilled to a total depth of 5,180 feet, logged and casing has been set to a depth of 5,000 feet.

Testing was underway to determine production capabilities and/or the economic feasibility of further fracturing or stimulation of these zones.

"The company's disclosure that its most recent well, intersecting Oklahoma's Mississippian Lime is a significant step forward on two counts: (i) that the company has intersected a new potential hydrocarbon source; and (ii) that this marks a departure to a more direct operatorship, both a positive for the company," commented analysts at FoxDavies.

"Ultimately, further testing will be required before the well can be deemed anything more than a technical success, but as first steps go, this is a pretty good one."

Xtract Energy slims down

Xtract Energy (XTR) has announced the disposal of its Australian and Moroccan shale assets for an overriding royalty.

The company talked of a "strategic alignment" of Xtract's interest in Julia Creek in Queensland, Australia with Global Oil Shale Group (GOS) as an investor and developer for the deposit.

Under the terms of the agreement, Xtract will assign its oil shale rights in Julia Creek to GOS in exchange for a strategic equity stake in GOS of six million shares on signing the share purchase agreement and satisfying all closing commitments. Xtract will receive a further maximum of 1.5 million shares in GOS in the event of its planned initial public offering, a long-term interest in the Julia Creek project through a 1% net smelter royalty and an initial cash payment of AU$50,000 (

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France strikes deal with ArcelorMittal steel factory

Workers at the factory said that the announcement fell far short of what they had hoped of a Government. Reuters

Prime Minister Jean-Marc Ayrault ArcelorMittal, under fire for the Corus site 18 months ago, said 180 million euros would invest and there would be no redundancies among some 630 employees there had promised.

Marceau said that the two ovens in Florange, a small town of about 11,000 people near the border with Germany, not restarted for now, certain weak European steel demand.

ArcelorMittal would keep them functioning, however, for future use in a test project for environmentally friendly production of steel.

"The Government decided against the idea of a temporary nationalization that was driven in recent days," Ayrault told reporters, three hours before a midnight deadline to strike a deal. "The excluded that option the commitments secured from ArcelorMittal."

Marceau said that the investment would strengthen cold steel and packaging operations at Florange and safe employment in those areas. ArcelorMittal had promised that its investment in Florange in France would not come at the expense of other branches.

The deal, the result of months of negotiations, came as the Italian cabinet was convened for the approval of a bailout for ILVA, Europe's largest steel company, which has 20,000 employees and is threatened with closure after allegations that the emissions from the site had caused an environmental disaster.

Labor leaders of the Florange site responded to fight angry and vowed to ensure that what concessions had his pressed from ArcelorMittal were respected.

"We have been betrayed," said Edouard Martin, a member of the CFDT Union at the Florange ovens, told reporters.

"This is incredible, if that is what politics is about, what a joke," said Walter Broccoli of the Union FO.

The European steel industry suffers from overcapacity at a time of recession in the euro area and cheap competition in emerging markets.

Florange, located in the French former industrial heartland, is symbolic of the country long industrial decline and a test case for whether the President of the Socialist Francois Hollande can make good on a vow to reverse a relentless rise in unemployment.

ArcelorMittal said earlier this year the Florange site two ovens were not viable, but Hollande insisted they be kept open and threatened of a takeover by the temporary state of the site, while the Government requested a permanent buyer.

The two blast furnaces in service approximately 630 from the 2,700 workers together on the entire site.

Marceau offered no details about what workers than not be fired, or a timetable for future projects would do to the use of credits from the European Union for the production of environmentally friendly steel furnaces refresh.

MONTEBOURG HUDDLE

De Hollande Government faced criticism from business leaders this week about roars of the threat to nationalize Florange.

Minister of industry Arnaud Montebourg, which foreign investors this week by Arcelor to say the Indian chief executive, Lakshmi Mittal, no longer welcome in France was shocked, had said that the Government had identified an industrial ready to inject EUR 400 million in the site.

Montebourg huddled in a cafe with a group of Orange-vested Metalworkers protest near the Ministry of finance, telling them earlier on Friday, was still a nationalization option.

Hollande, who fights to calm down both left-wing voters angry at unemployment and foreign investors impatient to see structural reforms, is still wary of the stigma that even a temporary nationalization abroad would wear.

Officials had defended the idea of a temporary nationalization, says that it was a special case because ArcelorMittal had broken promises to keep the furnaces which is running.

But ArcelorMittal denies violating obligations. Sources close to the group say Arcelor planned in 2003 for its 2006 takeover by Mittal

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