Antrim Energy LON:AEY & Premier Oil (LON:PMO) its partner, have plugged and abandoned the Cyclone well in the UK North Sea after failing to find commercial oil. The well in UK block 21/7 reached a total depth of 6,076 feet and encountered 105 feet of Palaeocene Cromarty sands but the well logs identified only residual oil. This suggests that the trap, which was identified as the critical risk factor pre-drill, leaked.
Ascent Resources LON:AST
Who are close to going tits up, launched a formal review of possible asset disposals, including a possible sale of the company, as it searches for a solution to an impending cash crisis. Recently appointed CEO Len Reece completed a review of the Ascent’s international assets and set out plans to drive its main development project – the Petišovci project in Slovenia – into production. Reece has reiterated a commitment to getting the necessary JV partner authorisations to drive Petišovci into production. Securing those authorisations has frustrated the company for several months. With Ascent only funded to cover its overheads until the end of 2012, the company is now “considering all options” for near term funding. It has hired First Energy Capital LLP to assess range of options, which may include farm outs, the sale of assets, and the merger or sale of the company. While discussions have been held with “a number” of third parties concerning a range of these potential transactions as well as other funding solutions, no-one has yet to make an offer for the company.
Bridge Energy LON:BRDG
Reported encouraging results from drilling work on the Garantiana discovery in PL554 in the northern North Sea this week. Drilling commenced on the Garantiana prospect in August 2012 and on 26 October the company announced an oil discovery in the Cook formation with good reservoir properties. A side-track of the initial well is currently being completed. The first wellbore, 34/6-2S, encountered oil in good reservoir of the Lower Jurassic Cook Formation and did not record the oil-water contact. The sidetrack (well 34/6-2 A) was then drilled to appraise the discovery and to identify an oil-water contact in the formation. A production test in the first wellbore gave a representative flow rate of 4,300 barrels of oil per day through a 28/64″ choke. The oil has a low gas-to-oil ratio. The test indicates good flow properties in the Cook Formation. Taking account of the results of the sidetrack, preliminary estimates place the size of the discovery between 25 and 75 million barrels of recoverable oil on a gross basis. Development solutions for the accumulation will now be investigated.The well on the Garantiana prospect is the first exploration well in PL554, where Bridge has a 20% interest.
Circle Oil LON:COP
Are about to add extra production from its Al Amir SE Field in Egypt after successfully drilling a new infill well. Infill producer well AASE-13 was spudded in October on the north central part of the AASE field. Its objective was to appraise both the Shagar and Rahmi sands for production in that location. The well reached encountered net pay in both target sands and has now been completed as a Shagar sand producer. It well flowed oil and gas on test at an average rate of 1,600 barrels of oil per day but has been choked back for flow testing to an initial rate of 873 bopd and 0.836 MMscf/d. Circle is now moving the rig to drill the infill production well AASE-14 in the central part of the AASE field. Elsewhere on Circle’s NW Gemsa Concession, which contains the Al Amir, Geyad and Al Ola development leases, the Geyad 2X ST well is being re-completed as a producer in the Rahmi sands. The total oil production to date from this discovery well in the Geyad field is 210,000 BO.
Edge Resources LON:EDG
Has completed shooting and processing a 3D seismic programme in Primate, Saskatchewan one month ahead of schedule. The Company’s initial analysis of the seismic, which incorporated the recently discovered oil pool in what the Company calls Asset East, is that two additional new oil pools and several potential drilling locations have been identified.
Falkland Oil & Gas LON:FOGL
The oil and gas exploration company focused on its extensive licence areas to the South and East of the Falkland Islands released what can only be described as a laughable RNS “The Scotia well (F31/12-01) has been successfully plugged and abandoned, bringing to an end FOGL’s 2012 drilling programme. Both the Loligo and Scotia wells have been completed safely and within budget. The Leiv Eiriksson will now be demobilised and transit to Norway in the near future.” It’s success Jim but not as we know it!
Faroe Petroleum LON:FPM
Has been provisionally awarded exploration licences in the Dreki area on the Icelandic Continental Shelf in the Icelandic 2nd Licensing Round. The licences are extensive, encompassing seven licence blocks located to the south of the Jan Mayen Ridge, which in turn is located inside the Arctic Circle to the north east of Iceland. The new offshore licence area is located to the south of the Jan Mayen Island, on a ridge which forms part of the Jan Mayen microcontinent. This microcontinent lies between the conjugate margins of both East Greenland and the Norwegian Continental Shelf, where several giant oil and gas fields have been developed. Recent samples taken from the seabed within the northern part of the new licence area have indicated the presence of both Mesozoic sedimentary rocks and a working hydrocarbon system. These are key components associated with many of the oil accumulations found in offshore fields in Norway and the UK.
Jupiter Energy LON:JPRL
Oil strike! Hooray. Jupiter reported that hydrocarbons have been encountered during the drilling of its J-58 well. J-58 is Jupiter’s sixth well and the first well to form part of a drilling program that accompanies the first two year extension to its 100%-owned Block 31 Exploration Licence, which now runs until 31 December 2014. As with the earlier J-55 well – which was completed in October – J-58 is located on a new extension area to the south of the already discovered Akkar East oil accumulation. The well is around 3.8km to the southeast of the J-55 well location. The company believes that the area being targeted by the well may contain up to 10 million barrels of potential resources.
Mediterranean Oil & Gas LON:MOG
Announced this week that it has been granted a one-year extension for the first exploration phase of the Production Sharing Contract for Malta Offshore Area 4. The extension, issued by the Government of Malta, extends the exploration phase to January 2014. The Area 4 PSC licence is currently owned 100% by Mediterranean through its wholly owned subsidiary, Phoenicia Energy. In August Mediterranean agreed to farm-out 75% of the licence to Genel Energy – which is headed by ex-BP boss Tony Hayward – for $10 million. Mediterranean will get a 100% free carry on the first exploration well and a similar deal on a second well (up to $30 million). The two sides have also agreed to work together on acquiring exploration and production assets in the offshore basins of Libya, Tunisia and Malta for at least the next three years.
Mercom Oil LON:MMO
As previously announced, a minority shareholder of Mercom, has set up a company, Nordic acquisition Company Limited (“NAC”) to make an offer for control of Nordic Petroleum ASA, the current holder of the Chard Oil Sands Leases. In the event that this offer is successful, NAC has approached Mercom with regard to the possibility of Mercom making an offer to acquire a 50% interest in the Chard Leases, from Nordic, for a share based consideration of less than $2m. Mercom will update the market with any further developments.
Nighthawk Energy LON:HAWK
The future at Nighthawk is looking increasingly rosy as the company announce yet another new oil discovery at its Jolly Ranch project in Colorado. The discovery was made at the Steamboat Hansen 8-10 well, which is the fourth well in Nighthawk’s five-well 2012 drilling program. The well discovered a Mississippian age conventional oil-bearing reservoir at a depth of just over 8,000 feet. The reservoir has been logged and tested and the well has been brought onto production. Nighthawk said that internal analysis has indicated potential oil initially in place of 4 to 8 million barrels. Planning for further development of the reservoir is underway. Open-hole logging of the Steamboat Hansen 8-10 has apparently identified oil producing potential in the Cherokee shale formation at a depth of around 7,400 feet. The company said the well confirmed significant potential in its hitherto undrilled northern acreage and this area now to be separately identified as the Smoky Hill Project/Whistler 6-22, the final well in the drilling program and also located in the Smoky Hill project area, is currently being tested in the Cherokee and Marmaton formations.
Northern Petroleum LON:NOP
Hit the buffers this week as the Zaedyus-2 appraisal well came up short. It encountered a total of 85 metres of reservoir quality sands with oil shows in several objectives interpreted as not being connected to the Zaedyus-1 discovery well. Plugged 7 abandoned. The future drilling of the next three wells of this four well programme will target some of the greater undrilled prospectivity in both the Cingulata fan system that contains the Zaedyus oil discovery and at least one other major fan system in the licence. Northpet Investment’s Limited a company owned 50% by Northern Petroleum plc and 50% by Wessex Exploration LON:WSX. holds a 2.5% interest. Shell is Operator and holds a 45% stake, Tullow (27.5%), and Total (25%).
Petroceltic LON:PCI
Today provided an update on the Company’s Carisio permit (Eni 47.5% Operator, Petroceltic 47.5%, Condotte 5%) in the Western Po Valley onshore Italy. The Company has been advised that Eni, as operator of the permit, has lodged an application with the Ministry of Economic Development, to suspend the current timing of the commitments on the permit until the completion of the environmental approval process for the Carpignano Sesia-1 well. Following the most recent submission of further environmental studies by Eni to the local environmental and regulatory authorities, this current phase of the permitting process is expected to be completed in the first quarter of 2013. Further clarity on the timing of the drilling of the Carpignano Sesia-1 well is expected on completion of this current permitting phase. The Company continues to support Eni’s ongoing engagement with local and national stakeholders to ensure a successful outcome to this permitting process which will facilitate the timely drilling of this exciting prospect.
Silvermere Energy LON:SLME
Updated on the sales of oil and gas from its Mustang Island 818-L Field following the announcement dated 3 December 2012. This is based on information provided by the Operator, Dominion Production Company. As anticipated the I-1 well was turned back on to flow production through the sales meters Tuesday morning 03 December 2012. At 10.45 am CST Dominion was then advised that the main interconnect pipeline operated by Exxon Mobil was being immediately shut down for up to two weeks for urgent repairs. Andy Morrison, Chief Executive of Silvermere, commented: “This break in production is unfortunately outside of our control.It does not reduce the value of our asset or its income stream. There are many wells from various operators that flow into the pipeline and they, like our I-1 well, will all be shut down during this period. We hope to advise shortly when production has recommenced. This unexpected event also highlights the need, in line with the Board’s stated strategy, for Silvermere to diversify its asset portfolio through investment in other oil & gas properties that are at or near cash flow in order to manage risk and minimise the effects of such delays in respect of any single asset.”
Roxi Petroleum LON:RXP
Some much needed good news came this week for feisty little Roxi. Production from the Munaily field. Roxi has a 58.41% working interest in Munaily, where well H1 has commenced at a rate of 125 barrels of oil per day. The Munaily field is located in the Atyrau Oblast approximately 70 kilometres southeast of the town of Kulsary. The field was discovered in the 1940s and produced from 12 reservoirs in the Cretaceous through to the Triassic; Roxi acquired its interest in the 0.67 square kilometre rehabilitation block in 2008. Munaily has a 15 year full production license, which allows production to be sold at international prices. There are estimated to be 1.2 million barrels of bypassed reserves at Munaily. An agreement has been signed to sell production from well H1 at domestic prices with the proceeds being used to fund the development of an additional two wells. Once these wells are in production Roxi will look to enter into an off-take agreement at international prices. Well done. Keep fighting.
Sefton Resources LON:SER
The fantasy continued this week as Sefton released more “Good news” by diluting it’s own share-holder base by 11.3% raising £648,855 before costs by drawing on its £15 million debtors facility with Darwin Strategic. Commonly known as a Death Spiral. Jimbo also today announced he’d purchased 6,895,000 shares for his retirement plan. Forgetting to mention that the cash to buy them came from Sefton! Funds raised would finance the upgrading of surface facilities and the water disposal system at its Tapia field blah, blah blah…. The stock was down another 6% at time of writing.
Sound Oil LON:SOU
Following the concession award announced last week, the Company expects to gain access to the Rapagnano Field site on 6th December with a view to commencing site operations in the week beginning 10th December. The re-entry & testing process will last approx’ 8 days and then, depending on water levels, a water reduction program including cement squeeze and re-perforation, may be performed which would require an additional 3 days. Hence it is expected that by 19th December, the re-entry of the Rapagnano well with coiled tubing will be complete and a test will have been performed to confirm well deliver-ability. Once a stable gas flow rate has been proved, surface operations will then continue with re-commissioning work and construction of a short export pipeline. The Company is targeting first gas in mid January. As previously announced, the Environment Impact Assessment was approved by the Treviso Province authorities on 8th November. The drilling rig secured for the Nervesa appraisal well was successfully inspected by the Italian Ministry of Economic Development on 23-25 November. A rig contract with LP Drilling, consistent with the Letter of Intent signed in October, will be signed shortly. The UNMIG approval process continues with the Company estimating that final approval for the drilling operation will be received in early January. Well spud is therefore expected at the end of January.
Tangiers Petroleum LON:TPET
Agreed separate farm-out deals involving its licence interests in Morocco and Australia. Morocco; the company entered into an agreement with the Portuguese company Galp Energia, for the assignment of a 50% interest in the Tarfaya Offshore area. The area comprises eight exploration permits, known as Tarfaya Offshore I to VIII, located on the Atlantic Margin, offshore Morocco. Galp Energia will become the operator of the Tarfaya Offshore area, a role that until now has been fulfilled by Tangiers. Tangiers will hold a 25% interest, and the Office National des Hydrocarbures et des Mines, the Moroccan state company, will maintain its 25% interest. The transaction is subject to the regulatory approval of the Moroccan government. The Tarfaya Offshore area is predominantly in water depths of less than 200 metres and covers an area of 11,281 square kilometres. The shallow water means well costs in the Tarfaya area are expected to be substantially lower than most other offshore areas of Morocco as a jack-up rig can be utilised as opposed to a semi-submersible rig or drillship in the deeper water areas. Under the terms of this agreement, Galp Energia will spend US$41 million which will include up to US$7.5 million in back costs reimbursable to Tangiers and the cost of an exploration well, limited by a cap, to be drilled within the Tarfaya Offshore area. This will fulfil the work program commitment for the First Extension Period for the Tarfaya Offshore block.
Urals Energy LON:UEN
More good news came this week from CEO Maximov as he announced that Urals had paid the final loan principal amount of US$7,315,886.00 to Petraco Oil. The payment was made immediately after the receipt of funds for the November shipment of the tanker from Arcticneft in accordance with the terms of the restructuring agreement entered into with Petraco in April 2010 (i.e. within 30 days of the Bill of Lading). The only sums that remain outstanding to Petraco relate to interest and are approximately US$3.0m. This remaining interest payment is to be made before the end of 2013. Urals Energy also said that the arbitrator in the ongoing arbitration against Vyatcheslav Rovneiko has issued a fourth Partial Final Award on the issue of interest, which determines that the amount due by Mr Rovneiko to Urals Energy as at 22 November 2012 is US$6,259,367.97 (inclusive of interest). The arbitrator has ordered that Rovneiko pay that sum to Urals together with penalty interest, which accrues at the rate of US$2,319.09 per day until repayment has been made in full. The Company has formally demanded payment from Mr Rovneiko and is committed to use all appropriate means to collect the outstanding amounts. Urals have contracted Geodynamics Worldwide Srlto conduct a passive seismic study for the identification of potential hydrocarbon pools with Geodynamics applies a patented technology for the detection and determination of resonance energies generated uniquely by hydrocarbons. The technology will be initially utilized at Kolguyev Island, Arcticneft, with the aim of increasing the efficiency of drilling via detailed interpretation of hydrocarbons within a specific area. The results are expected to be finalised by Summer 2013. Commenting on today’s release, CEO Alexei Maximov said: “We are extremely happy with the results of the last two months: the successful shipment and sale of the tanker to Petraco, and subsequent payment of the last portion of the debt amount. We thank Petraco for its ongoing support and look forward to future cooperation. We are also satisfied with the results of the arbitration against our former director, Vyatcheslav Rovneiko, which has confirmed the Company’s legal rights and vindicated our position that this sum must be repaid to the Company. With these two final legacy issues behind us, the Company is well-equipped for a new evolutionary turn based on a strong balance sheet, cleared reputation, and focus on increasing operational efficiency in 2013 and beyond. The passive seismic study is the first part of this.”
Volga Gas LON:VGAS
Issued an updated independent assessment of its oil, gas and condensate reserves. The report was produced by Miller and Lents Ltd and cover the reserves and net present value of future net revenue attached to Volga’s three principal fields, Dobrinskoye, Vostochny Makarovskoye and Uzenskoye. The report attributes Proved and Probable (2P) reserves of 16.1 million barrels of oil and condensate and 167.5 billion cubic feet of gas, a total of 44.0 million barrels of oil equivalent, to the company’s principal fields, and an NPV of US$301.2 million with a 10% per annum discount rate.
