California Oil and Gas Update

The last year has been a busy one in the upstream California oil and gas business. The 2011 Preliminary Report of California Oil and Gas Production Statistics, which was issued in April 2012 by the California Department of Conservation, Division of Oil, Gas, and Geothermal Resources, reports that 4,033 notices of intention to drill were filed with the Division as contrasted with 2,081 in 2010. Although the Preliminary Report for 2012 is not yet issued, anecdotal evidence suggests 2012 will be at least as active as 2011. Much of the excitement involves California\u27s Monterey and Santos Shales. The Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays, published in July 2011 by the United States Energy Information Administration estimates that those shales hold 64% of the undeveloped technically recoverable shale oil resources remaining in discovered shale plays in the United States as of January 1, 2009