Smallcap News, Oil,Gas & Miners round-up!

11 March 2011

Ithaca Energy

It’s been a busy week for Itacha. This week they announced that the Sedco 704 semi submersible drilling unit had commenced drilling the final production well for the development of the Athena field. The drilling and completion of the well as a producer is scheduled to last approximately 80 days. Co-venturers are Ithaca operator, 22.5% Dyas UK Ltd 47.5%, EWE Aktiengesellschaft 20% and Zeus Petroleum Limited 10%.

Then came further news  that the Energy Enhancer jack-up drilling unit had commenced drilling a second production well on the Jacky field with a 72 day time-frame. Co-venturers in the Jacky field are Ithaca operator, 47.5%, Dyas UK Limited 42.5% and North Sea Energy UK Limited 10%

The Athena development well is being drilled from the Athena drill centre and is the final well to be drilled of a 180 day campaign of drilling and completion activities. The well is planned to be directionally drilled to produce oil reserves lying in the north-west of Athena. In addition, the well is planned to intersect the top reservoir (Top Scapa A sands) at a point within the appraised Athena oil pool and continue north, drilling at a high angle to provide valuable information relating to an area of the field targeted for future development.

The Jacky Field production well is being drilled to access additional reserves and increase production as part of a field management strategy. The drilling unit has been positioned over the Jacky platform to drill from an existing spare wellbay to facilitate early tie in to the existing production stream. J03 is being directionally drilled to a northern area of the field within the same structure and geological unit (Beatrice ‘A’ Sand) as the existing wells. As previously announced, the drilling programme here will last approximately 72 days.

Valiant Petroleum

Reached  agreements to farm-down and swap part of its 100% holding in blocks 210/29c –210/30b which contain the Cladhan South prospect and sit directly to the south and east of the existing Cladhan discovery. As a net result of the separate transactions, Valiant will hold a 30.0% interest in Cladhan South promoted for the full cost of an initial exploration well, subject to an agreed cap on the promoted costs, and a 40.0% interest in Blocks 21/30f and 22/26c located in the Central North Sea which contain a number of exploration and appraisal opportunities.

Chariot Oil & Gas

Conditionally placed 35,958,376 New Ordinary Shares  at a price of 250 pence per share to raise gross proceeds of £90 million (approximately US$146 million).  The funds will enable Chariot to participate in a minimum of two wells and conduct a further 5,000km² 3D seismic programme across areas of specific interest in the Central Blocks. Upon completion of the Placing, Chariot’s net cash position will be approximately US$150 million dollars.

Northern Petroleum

Commenced drilling operations at their Zaedyus prospect, with well GM-ES-1, in the Guyane Maritime Permit. Northern Petroleum holds a 1.25% beneficial interest in the Tullow Oil operated permit.

Nautical Petroleum;

Announced new estimates of the stock tank oil initially in place (STOIIP) in the Kraken accumulation, located in Block 9/2b (Nautical 35%) and Block 9/1a (Nautical 100%).

In the case of the widespread Heimdal Unit III sand, the new STOIIP range has been estimated at 635-1182-1507 million barrels (Low-Mid-High).  Net to Nautical this represents a range of 231-438-602 million barrels.  This STOIIP range is higher than that from which the previously published best estimate contingent and prospective resources were derived.

In the deeper Heimdal Unit I sand case the volumes have been determined statistically, yielding a range of 269-543-893 million barrels (P90-P50-P10).  Net to Nautical this represents a range of 165-396-695 million barrels, a considerable increase over Nautical’s previous estimates of STOIIP for the Heimdal I.  This summer, the Company will be acquiring 3D seismic across Block 9/1a to better define the Unit I reservoir distribution, prior to drilling an appraisal well.

Matra Petroleum

The Russian focused E&P Company,  released  the long-awaited operational update on the Sokolovskoe Field. Much to the disgruntlement of Investors the update failed to quantify any BOPD! Matra’s Managing Director, Peter Hind said: “We are pleased that well-12 has been successfully side-tracked to a location 50m from the original hole and the well has been terminated in the oil reservoir. The well has been completed with a pre-perforated and uncemented liner across the reservoir interval and we hope that will reduce formation damage. Once the rig has been moved off we will begin production testing the well to ascertain its productivity. Now that a separator and flare-line have been installed at well-13, production has commenced and oil sales will start shortly. The well is now on “clean-up” flow and once stabilised flow is achieved a further pressure build-up survey will be taken to see how we may best improve the well’s performance. “

Kea Petroleum

Informed the market that it had entered into an agreement to acquire a major interest in two onshore Australian petroleum exploration areas; PEL 155 in South Australia’s Otway Basin and ATP 837P in Queensland’s Surat Basin. In both cases, Kea will become the licence Operator and will earn 50% interest in the two licence areas by part funding a total of three wells. All the drilling targets are mapped on recently acquired, good quality 3D seismic, and all are near to existing production. Chairman Ian Gowerie-Smith said “We are delighted to join with Rawson Resources and Energetica, with whom we already have a close working relationship, to test these drill-ready targets. These activities are the start of what we hope will  be an exciting year for Kea, with the drilling of our large Felix Prospect scheduled at the end of the year,  preceded by further wells on Wingrove and on the Douglas Prospect.”

Lansdowne Oil & Gas

Announced that it has conditionally raised £5 million before expenses, by the placing  for cash of 20,000,000 new ordinary shares of £0.05 each at 25 pence per Ordinary Share. Lansdowne intends to use the net proceeds of the placing to pay its share of the cost of a 3D seismic survey over the Barryroe Licence area. The Company is focussed on the underexplored North Celtic Sea Basin which has proven petroleum systems in place for both oil and gas.

Range Resources

The International oil and gas exploration, development and production company announced that production on the Russell Bevly # 1 well had begun to stabilize following the successful fracture stimulation of the lower two zones.

Exec’ Director Pete Landau added, “Results to date from the Russell-Bevly
frac job have provided encouragement for additional development drilling in the field, which will continue with the drilling of the third well in the coming months. Because North Chapman Ranch wells have a high condensate yield, Range and its partners are able to capture currently high oil prices while remaining positioned for the eventual rise in US natural gas prices.”

Red Rock Resources.

Announced the exercise of options over 51 per cent. of the issued share capital of its partner Mineras Four Points SA, at a reduced initial cost, with remaining payments related to the achievement of key targets. The company agreed to acquire 25,500 shares of the total 50,000 issued shares of MFP for a total cash consideration of up to US$7,500,000, of which an initial US$5,502,000 (the “Initial Consideration”) has been paid or is payable on completion of a loan guarantee by the Vendors, with US$1,000,000 deferred until MFP has an average ore production of 150 tonnes per day for a continuous 90 day period and a further $998,000 payable only when MFP achieves a net operating profit of US$10,000,000 in one year.

San Leon Energy

Updated the market on the approval of the assignment of OMV’s interest in Rockall Licence 3/05 to San Leon Energy. OMV pays San Leon GBP3 million on completion of the transaction. San Leon now have a 100% interest in the licence, effective immediately.

Sirius Minerals Plc

The globally diversified potash development group, announced that the Company had completed a placing to raise gross proceeds of £20 million at 13p a share. The majority of the proceeds of the Placing will be used to embark on a new drilling programme and a series of studies on the geological, environmental, and engineering aspects of their York Potash Project. Chris Fraser Ceo & MD said;”The strong support Sirius received in the placing endorses our strategy to build the New Potash Powerhouse.  These funds will enable Sirius to significantly progress our portfolio of potash projects, but in particular the York Potash Project.”

Sound Oil;

Announced that it had been awarded a new exploration licence in Italy, bringing the total number of its active permits in the country to 8. In addition, the Company holds 1 concession, 7 preliminary awards and one exclusive application. Of this total Sound operates 14 of the projects. The new permit lies in the Southern Apennines fairway for shallower gas and deeper oil, adjacent to the Cupello-San Salvo field which has produced over 330 Bscf from the Pliocene play.

Petro Matad

Are hoping to recommence drilling the Davsan Tolgoi-4 well in Mongolia following winter hibernation in April. In addition, a 1,000km infill 2D seismic survey on Block XX will start in next couple of days.  Testing of the wells drilled last year is anticipated to commence in May. Remapping and reinterpretation of the 3D seismic data in the light of the 2010 well results is underway. , Petro Matad has commissioned stratigraphic drilling on Blocks IV and V in Central Mongolia. Stratigraphic drilling is considered essential as there has been no previous oil exploration in the region.

Encore oil

Released their interims with a twist that has got investors trying to read the tea-leaves. After recently releasing news of the Burgman spud(15%)  and the Cladhan appraisal well spud (16.6%)

Encore’s  healthy set of  Interims then went on to Announce that they may demerge some of their assets in to a newly formed company floated on the London AIM thus raising the capital to further progress the assets and avoid a dilution for share-holders.

Encore’s Alan Booth said; In order to maximise the potential value of our exploration portfolio and to avoid undue further dilution of shareholders’ interests by raising additional funds for an extended exploration programme with the associated risks, the Board is currently examining the option of floating a newly formed company containing our exploration assets on AIM, with EnCore retaining a significant shareholding.  The new company would raise the necessary capital to progress a high impact exploration drilling programme. It would be expected that exploration of these assets would be at higher working equity levels than EnCore would have retained, and it is expected that this would also allow the retention of operatorship control which would likely have been lost via individual farm-outs. EnCore would remain exposed to any success through our significant shareholding in the new company.

EnCore’s assets would then comprise:· Two significant appraisal / development assets, Catcher and Cladhan; A potential gas development at Cobra; Two undeveloped gas discoveries in Ireland; A potential gas storage project at Esmond; and Two significant shareholdings; one in onshore-focused Egdon Resources plc and one in a newly formed company focused on exploration offshore UKCS.

“I believe that this would re-position EnCore primarily as an asset development company with significant exposure to exploration upside, but with the ability to commit all of our current capital towards the development assets.  EnCore would then be well placed to focus on moving our key assets, the Catcher and Cladhan projects, through to Field Development Plan (FDP) stage and possibly beyond, ensuring that our capital is directed towards that goal.”

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  1. Barnstonpickle says:

    Hey Dan is this a new section? In response to smallcap posting on you using their stuff?
    I like it my man! Your competitors will no doubt be moaning.


  2. charles says:

    Nice round-up.
    Saves me having to trawl around for this week for a recap.
    Good to see some mining stocks getting a mention

    Keep up the good work

    Sir is watching

  3. Oliver says:

    Any chance you heard any snippets on petrolatina?

  4. eric says:

    Dan how long will it take mta to inform us on A12 flow rates? Do you expect flow rates to be lower than 800bopd because we may have wellbore damage that will be treated. Do you thing Damage will be limited from the sidetrack operation?

  5. eric says:

    Dan how long will it take mta to inform us on A12 flow rates? Do you expect flow rates to be lower than 800bopd because we may have wellbore damage that will be treated. Do you thing Damage will be limited from the sidetrack operation??

  6. robert says:

    Thanks dan, i dont know what we would do without your great blog/ regards robert.

  7. waris says:

    Top Blog informative as well.
    Best financial private blog on the tinternet.

    well done.

  8. Maximo says:

    Hail to the chief
    Interesting read. Much better than the usual tosh written on small cap and most of the others. Yeeeeeeeeeeeeehaaaaaaaaaaaaaaaa

  9. MoneyMan says:

    Hi Dan, love your your blog.
    Any chance of a update on why BHR are getting raped?