Smallcap News; Oil & Gas round-up! With a sprinkling of Miners!

Oil & Gas Round-up with a sprinkling of Miners.
25th March 2011

Sterling Energy.

The independent oil and gas exploration and production company with interests in the Middle East and Africa, provided the following update for the Sterling operated Sangaw North block in Kurdistan (53.33% working interest). Sangaw North #1 Well. The side-tracked wellbore of Sangaw North #1 well has been drilled to a depth of 3,360 metres, into the top of the Jurassic formations and at a depth above where the influx of gas was recorded in the previous wellbore. A liner has been run and cemented across the open hole interval with the liner shoe at approximately 3,340 metres. Sterling now plans to drill ahead and evaluate the Jurassic formations to a well depth of 3,660 metres and estimates this will take approximately one month. During this section, the well is expected to encounter the formations from which gas containing hydrocarbons and hydrogen sulphide entered the well in the previous wellbore. Operations are being conducted using drill pipe resistant to the effects of hydrogen sulphide. The joint venture partners in the Sangaw North Production Sharing Contract (“PSC”) may elect, in the event of encouraging results, to drill further to evaluate deeper Jurassic and Triassic formations. Petrophysical logs have been acquired across open-hole Cretaceous intervals below 2,400 metres, the base of the intervals logged and flow tested in the previous wellbore. Preliminary evaluation of the logs acquired in the current wellbore, together with hydrocarbon shows and other information acquired while drilling, indicate the presence of hydrocarbons within these deeper Cretaceous intervals. A detailed analysis of all the data acquired is being undertaken to identify whether flow testing of certain intervals may be warranted. Flow testing of Cretaceous intervals, if undertaken, will follow any flow testing that may be undertaken in the Jurassic and Triassic intervals after they have been drilled. Extension of Exploration Period; Sterling said that they had received confirmation from the Ministry of Natural Resources of the Kurdistan Regional Government that the first sub-period of the exploration phase of the PSC has been extended by one year to allow for the completion of drilling operations in the Sangaw North #1 well and the evaluation of the results of this well. The first sub-period, including the one year extension, will now continue until November 2011.

Gulf Keystone.

Today announced that the Bekhme-1 Exploration Well has spudded on the Akri-Bijeel block in the Kurdistan Region of Iraq on Monday, 21st March 2011. Bekhme-1 is the second exploration well to be drilled on the Akri-Bijeel block, 20 km to the north-east from the Bijell‑1 discovery well (Operator’s P50 estimate of 2.4 billion barrels of oil in place). Bekhme-1 will target prospective intervals in the Jurassic and the Triassic with a planned depth of approximately 3000 meters. GKP has a 20 percent working interest in the Akri-Bijeel block operated by Kalegran Ltd., a 100% subsidiary of MOL Hungarian Oil and Gas Plc., which holds 80 percent working interest in the block. John Gerstenlauer, Gulf Keystone’s Chief Operating Officer commented:“Bekhme-1 is the first well to be drilled on the large surface feature that dominates the north of the Akri-Bijeel block, which is adjacent to the Shaikan block with proven oil and gas reservoirs. The discoveries at Bijell-1 and Shaikan have considerably de-risked this new drilling target making Bekhme an attractive prospect.”

Andes Enegia.

Announced that it was extremely pleased to secure the buy-out of its joint venture partner’s (Patogonia),Confluencia, San Bernardo and Buen Pasto blocks. Wells El Bloque 1, Meseta del Humo x1 which will enable it to control and stimulate activity on these licences. Andes is in advanced negotiations with one of the major oil companies in Argentina in a farm in transaction in these blocks.  The Board of Andes is confident that it will successfully finish the exploration of these blocks, since most of the obligations under the licence agreements have already been fulfilled. A new work programme is being formulated to deepen the knowledge of the blocks and their commercial potential.Completion of the acquisition is conditional and will occur concurrently with the completion of the acquisition referred to in the announcement released earlier today in which Andes  announced that it has conditionally agreed to acquire a 24% working interest in Vega Grade in exchange for the issue of 10,250,000 Andes ordinary shares and to acquire a further 10% working interest for a consideration of approximately US$1.7 million, as a result of part exercise of the option granted to Andes on 27 November 2007. Consideration for this additional 10% interest has already been satisfied at the time of the issue of the option to Andes in November 2007 and no further consideration for the acquisition of this interest remains payable by Andes. As part of the agreement, Andes now has the option to acquire the remaining 66% of Vega Grande and 100% of La Paloma and Cerro Alquitran.

Vega Grande is a producing asset located in the Mendoza province, with 4.3 MM Boe 1P/2P, accumulated production of 1.6 MM Boe and a daily production of 120 bpd.  Approximately 172km of 2D seismic has been shot over the licence, which Andes considers to be under explored.

Xcite Energy. Said that it had increased its Standby Equity Distribution Agreement (“SEDA”) with YA Global Master SPV Ltd (“Yorkville”) by £40 million to £100 million. This is subject to TSX Venture Exchange approval. THEN TODAY RELEASED THEIR FULL YEAR RESULTS. COPYS OF WHICH CAN BE READ HERE…/

Sound Oil. Were forced to respond to their recent hike in value by way of an announcement. The company stated that they were “not aware of any reason for such movements.”

Solomon Gold. Announced results from further gold bearing vein sets intersected in the second hole at the Meriguna Prospect on the Fauro Island Project in Solomon Islands. Diamond drill hole FDD002 intersected 44m @ 1.67g/t Au from 18m (incl. 18m @ 3.14g/t Au from 25m, and 9m @ 3.94g/t Au from 25m, and 3m @ 7.16g/t Au from 32m). Further vein mineralisation has been intersected between 283m and 293m and awaits assaying. The most prospective level is expected at 300m depth in the boiling zone area and the central vein set of the prospect is expected to be intersected in the current hole at this level.

Salamander Energy. Released their full year 2010 results. Chief Executive James Menzies commented:“Entering 2011, Salamander has passed several key milestones. Group production has grown to over 20,000 boepd, delivering cash flows that permit the Group to comfortably self-finance its extensive capex programme. Having built an extensive portfolio of acreage across South East Asia, Salamander is now positioned to focus on selected regional plays, each offering reserves & production growth opportunities, near-term development and good exploration potential. In particular, the recent Angklung discovery has revealed the potential of the Northern Kutei basin and we will be pursuing this as part of our E&A programme for 2011.”

San Leon Energy. Following on from the announcement that they have commenced an 840 square kilometre 3D seismic survey on their Durresi Block, offshore Albania, San Leon and its Joint Venture Partner signed a Joint Participation Agreement with the Governorate Council of Karbala in Central Iraq. Under this Agreement the consortium will submit a joint proposal to the Ministry of Oil in Iraq for the development of the fields of Kifil, West Kifil and Merjan  under a production sharing contract. These Fields are located in the Karbala province (Kifil is shared between Karbala and Najaf).  San Leon and its partners will shortly enter into formal negotiations with the Ministry about the Project Area. Oisin Fanning Chairman of San Leon Energy commented: “This agreement is the culmination of lengthy discussions conducted jointly with Al Meinaa and highlights our commitment to the joint venture agreement which we signed with them in 2010. We believe that the development of the Karbala fields (estimated at 600 mmbbls) will significantly contribute to the local economy. Our partnership in this project with the Governorate Council shows our determination to rely as much as possible on the contribution of local Iraqis to whom we intend to provide technical training in the field of both seismic acquisition and drilling as one of our first priorities.

Rockhopper Exploration. Provided the following update on the 14/10-4 appraisal well. Significant reservoir package and hydrocarbon column encountered 33m (108 ft) net pay in good quality reservoir with 20% average porosity. Top reservoir encountered 66m (216ft) downdip from 14/10- Oil Water Contact at 2477m true vertical depth subsea (2503m measured depth) in main fan indicates to the Company that the southern main sea lion fan is full to spill Company believes P90 increased significantly Company has significantly increased confidence in commerciality Downhole mini Drill Stem Test successfully flowed oil into the well and indicates better potential flow rates and producibility than at 14/10-2 Oil indicated as medium grade similar to 14/10-2. The well has been successful, proving a thick, high quality reservoir package, a substantial oil column and recognition of the first oil-water contact in the licence to date. The geological prognosis came in very close to prediction. Samuel Moody, Chief Executive, commented: “Following this positive result we believe Sea Lion is highly likely to prove commercially viable.  The well has confirmed our ability to identify good reservoir units on the seismic in our acreage with the sands coming in very close to prognosis. We can now continue to appraise the Sea Lion discovery and to explore additional prospectivity within our acreage with added confidence.”

Range Resources. The International oil and gas exploration, development and production company, announced that whilst fracture stimulation operations continue at the North Chapman Ranch Field, the combined test rates (on a 100% basis) from the Smith #1 and Russell-Bevly #1 wells reached 9.2 MMcf of gas and approximately 769 bbls of oil per day this week, compared to the earlier peak combined rate of 3.3 MMcf of gas and 247 bbls of oil per day achieved in September of last year.  Pete Landau, Executive Director, added “Results of the frac program are encouraging, but we have yet to see the full potential of these wells. At least one zone in the Russell-Bevly remains to be frac’d, and we are still unloading frac fluid from the recently stimulated zones. We are pleased with the results thus far and look forward to further long term stabilized data and additional development drilling later in the year.”

Premier Oil. Following on from the Burgman discovery,released an excellent set of results for 2010. Eight out of 14 exploration and appraisal wells drilled in 2010 were successful, including the discoveries in the Catcher area in the UK. Record profit after tax of US$129.8 million  with an Operating cash flow of $436.0 million, an increase of 25 per cent.  With $1,100 million of UK tax allowances mitigating impact of proposed UK tax changes and  Rising cash flows and increased funding in place to cover ongoing development and growing exploration programme.  Debt facilities expanded and maturities extended.  Net debt was US$405.7 million  representing gearing of 36 per cent.  Cash and undrawn bank facilities (including letter of credit facilities) of $1,202 million at year-end. Proven and probable reserves increased to 261 mmboe a reserve replacement ratio of 138 per cent.  Reserves and resources increased to 488 mmboe. Simon Lockett, Chief Exec, commented, “2010 was an excellent year for the group with exploration success and development project progress.  We have added significant value for our shareholders and are on track to meet our ambitious production growth.2011 has already built on progress made with development drilling complete, further exploration successes and new licences awarded across our three regional businesses”.

PetroLatina. Said that extended production testing has now commenced on the Serafin-1 gas well and will continue for a period of 6 months.The gas field is located in the Company’s Tisquirama licence block in the Middle Magdelana Valley, Colombia. The discovery was made by Texaco in 1991 and was not developed at that time due to a lack of markets for such gas. The gas bearing reservoir is found in the Real Formation at a depth of 4,582 to 4,598ft and the well is located approximately 3km to the northeast of the Querubin-1 producing oil well drilled by the Company in mid 2010. The Serafin-1 gas well was worked over in January 2007 and tested at flow rates of 14 million cubic feet of gas per day.  Based on an assessment by Ryder Scott Company,  independent petroleum consultants, in their reserves report of November 2009, gas initially in place was estimated to be 5.37 billion cubic feet with 1P Reserves of 3.13 Bcf, and the well was expected to be capable of initially producing up to 7 MMscf/d.  The Serafin-1 gas well is currently jointly owned by PetroLatina (50%) and PetroSantander Corporation (50%), although such interests would reduce to 25% each in the event that Ecopetrol S.A. was to exercise its back-in rights and pay its share of capital costs expended to date and ongoing operational costs. The Company is the operator.

Petroceltic International. The upstream oil and gas exploration and production company focused on the Middle East, North Africa and the Mediterranean, announced that it had finally completed logging and drilling of well AT-5 on the Isarene permit in Algeria. Logs at AT-5 showed the objective Ordovician reservoir to be fully gas bearing, and a gross gas column of 75.5 metres was logged, with no gas water contact seen in the well. The overall hydrocarbon pore volumes encountered at this location were significantly in excess of the pre-drilling prognosis. The well was cored with 29 metres of core being recovered from the objective reservoir section. After completion of coring, drilling, logging and borehole image logging of the near vertical AT-5 pilot well, the well has now been side-tracked as originally planned (AT-5Z) and a horizontal section of up to 500 metres is currently being drilled to explore for high natural fracture density associated with a series of tectonic faults.

Pan African Resources. Commenced Bulk Earthworks (Site clearance) at its Phoenix Platinum project in the North West Province (Phoenix) of South Africa. The construction of the Chrome Tailings Retreatment Plant at Phoenix is on schedule and the procurement of major equipment has been completed. Plant construction is scheduled to start in mid-May 2011 with plant commissioning planned for October 2011. The CTRP full production rate of 20,000 tons per month is expected to be achieved in the first quarter of 2012. Jan Nelson, Chief Executive Officer of Pan African commented: “This is another key milestone in the process of Pan African becoming a platinum producer in addition to the Company already producing approximately 100,000 ounces of gold per annum. We are delighted with the progress on site, which is on schedule and on budget. We look forward to reporting first production later this year.”

Nostra Terra Oil&Gas. Released news that drilling had begun on the first horizontal well in the Nesbitt prospect unit, located within the producing Woodlawn field in Harrison County, Texas. The Company has a 3% working interest in the Nesbitt prospect unit, which is operated by New Century Exploration, Inc. The well – the first of three planned within the Nesbitt prospect unit – will be drilled vertically to a depth of approximately 7,000 ft, followed by a horizontal section of up to 3,000 ft. Drilling and initial testing of the well is expected to take approximately 30 days, and Nostra Terra will make further announcements as the operations progress. The Company has a 3% working interest in the Nesbitt prospect unit, which is operated by New Century Exploration, Inc.

Nautical Petroleum. Reiterated the Group news on Burgman. NPE Have a 15% stake (See Encore oil)

Max Petroleum. The oil and gas exploration and development company focused on Kazakhstan, said that it had commenced drilling the ZMA-ET1 appraisal well in the Zhana Makat Field on Block E. The total depth of the well will be approximately 1,450 metres, targeting Triassic reservoirs.

Lansdowne Oil&Gas. Said that SeaEnergy failed to take part in the recent placing. Prior to the issue of new shares SeaEnergy held a 29.9% interest in Lansdowne. SeaEnergy did not participate in the placing but did convert £664,958.50 of loans receiving 2,659,834 new Lansdowne shares at 25p each. As a result the Company (SeaEnergy) now holds 18,765,509 shares in Lansdowne (23.03%).

Gulf Keystone. Announced the eagerly awaited results of the previously reported well test at the Shaikan-2 Appraisal Well. Short term, indicated rates of 10,144 barrels of oil per day with a stabilised flow rate of 8,064 bopd of 26 degree API oil and 2.44 mmscf/d of gas  on a 2″ choke at a 250 psi flowing wellhead pressure. Given the Shaikan-2 well test conditions, as well as the successful well stimulations at Shaikan-1 & 3, the Company anticipates that sustained rates in excess of 10,000 bopd could also potentially be achievable at Shaikan-2. The Shaikan-2 flow rates are consistent with the Shaikan-1 & 3 rates but with higher quality oil and more associated gas, both of which can lead to an enhanced recovery rate. The oil gravity of 26 degrees API is significantly better (lighter) than Shaikan-1 & 3, both of which are currently producing 18 degree API oil from the upper sections of the Jurassic at the Company’s Extended Well Test facility.  Following this test, normal drilling operations will  recommence and the Company anticipates that further Shaikan-2 drilling will follow the Shaikan-1 geological sequence, i.e. through multiple, potential Jurassic and Triassic reservoirs before reaching TD at the bottom of the Triassic or into the top of the Permian, depending on well results. The Company has a 75 percent working interest in the Shaikan block and is partnered with the MOL subsidiary, Kalegran Ltd., and Texas Keystone Inc. which have the remaining 20 and 5 percent working interests respectively.

Global Energy Development. The Latin America focused petroleum exploration and production company,  released its audited final results for the year ended 31 December 2010.

GGG Resources. Clarified its position re’ it’s takeover of Auzex Resources Limited. The GGG Offer involves a significant premium to Auzex shareholders. The proposed Offer represents a 39.3% premium to Auzex’s closing price on ASX on 11 March 2011 (the last trading day prior to the date of the announcement) and a 21.2% premium using one month VWAP’s for GGG and Auzex respectively and a 10.7% premium using three month VWAP’s for GGG and Auzex respectively. Based on the above, Auzex shareholders are being offered a significant premium to create a combined group. On a fully diluted basis, the combined group will have former Auzex shareholders holding 49.15%1 of GGG, thereby creating a virtually equal merger of interests.

EnCore Oil. Announced that the Burgman well 28/9-4 located on UKCS Central North Sea Block 28/9 had successfully encountered good quality hydrocarbons in a Tay sandstone interval.  Based on the results of the well, the joint venture partnership  has decided to drill an immediate side-track from the Burgman well. The well encountered 22 feet of net hydrocarbon pay within the overall Tay sandstone interval; 12 feet of gas in the Upper Tay sandstones and 10 feet of 24 degree API oil in the Lower Tay sandstones.  The Cromarty and Fulmar sections were not hydrocarbon bearing at this location.  A Gas Oil Contact was calculated at 3,560 feet true vertical depth sub sea (TVDSS) and the Oil Water Contact was calculated at 3,980 feet TVDSS, giving a gross gas column of at least 78 feet and a gross oil column of approximately 420 feet. The original Burgman location was selected to intersect all four potential reservoir horizons identified on seismic data: the Upper Tay, Lower Tay, Cromarty and Fulmar.  Although oil bearing, the Lower Tay sands are not well developed at this particular location.  Seismic data strongly suggests that the Lower Tay sands are more thickly developed over a large proportion of the remainder of the Burgman prospect area, as well as being above the newly established oil water contact.  Therefore, the Group will now side-track the current well to target an area prognosed to contain more thickly developed Lower Tay sands.  It is expected that the results of this side-track will be known within the next 10 days, subject to any weather or operational delays.”Based on the information gained from the Burgman well, the Group has concluded that the selected surface drilling location for the Carnaby prospect, which was determined primarily on safety grounds to avoid drilling through an overlying significant shallow gas anomaly whilst using a jack-up rig, is sub-optimally located to effectively test the Carnaby Prospect. The group now  intend to integrate all the information from the wells drilled on Block 28/9 with a newly reprocessed 3D seismic data set in order to gain a better understanding of the on-block volumes and hydrocarbon properties and to assist in moving forward with a suitable development programme for the licence.”

Empyrean Energy Plc. Have taken their case to Investors! And have presented at an  institutional investor roadshow in London on Monday 21 March 2011 to Thursday 24 March 2011. A copy of the presentation can be found on the Company’s website:

Caza Oil & Gas. Disappointed the market with an OP’s Update on Marian Baker #1 well Caza  analyzed data collected from the Well and determined that none of the sands are likely to be productive at commercial rates, the Company has sought approval from its partners in the Well to proceed with plug and abandonment procedures. Caza had a 25% working interest before casing point in the Marian Baker #1 well.  The Well was drilled on time and within the estimated dry hole costs. Then today they released a good set of  Final Results COPYS OF WHICH SHOULD BE AVAILABLE ON THEIR WEB-SITE this afternoon.

Bahamas Petroleum. Released a Tr1 Notification that  Morgan Stanley had a 5% interest in the company after recently posting to shareholders a circular, containing a notice of EGM to be held at IOMA House, Hope Street, Douglas, Isle of Man IM1 1AP on 11 April 2011 at 10.30 a.m.

Edenville Energy. The coal focused African solid energy exploration and development company,  announced that it had signed a Letter of Intent to acquire an interest in a coalfield project in southern Tanzania.Edenville intends to acquire a 50.1% interest, with a proposed increase to 70%, the project area covers approx’ 33km2, and contains known proven reserves of 49 million tonnes of coal (data provided by vendor). Edenville would increase its interest to 70% by committing to an exploration spend on the project of $750,000. The acquisition is conditional upon Edenville being satisfied with its due diligence into the asset. A legally binding agreement is expected to be signed within an agreed 30 day exclusivity period, with completion immediately thereafter.Simon Rollason, Chairman of Edenville, commented that “This project provides an exciting opportunity for Edenville,{ sic} I look forward to announcing completion of the acquisition in the coming weeks.”

Aurelian Oil&Gas. Hailed the appointment of Dr John Smallwood to the Board as Exploration Director of Aurelian, with his employment commencing on 16th May 2011. The Company also announces that Michael Seymour has decided to retire as a Non-executive Director at the forthcoming AGM on 25 May. Michael will continue as a consultant to help maintain some of Aurelian’s Central European relationships and to represent it in his current role as President of the Polish E&P Industry Operators Organisation. Then followed up today by releasing an Operational Update on their First Siekierki Multi Fracced Horizontal Well (“MFHW”) Trzek-2 begins stabilised flow rate test..Second Siekierki  MFHW, Trzek-3, drilling ahead  of schedule..First Bieszczady well targeting prospective resources of up to 100 million barrels (gross) encounters active oil and gas system in zone above primary targets..Confirmation that there will be no restrictions on the development of Polish unconventional gas.

Afren Plc.Informed the market that it had acquired a 74%. operated working interest in the Tanga Block, located offshore Tanzania, from Petrodel who will retain a 26% interest in the block. In consideration for the acquisition of the interest, Afren has agreed to reimburse Petrodel a percentage of the back costs in relation to the block.  Afren will also fund all costs associated with the acquisition, processing and interpretation of an agreed seismic survey over the block amounting to 900 km of shallow and deeper water 2D coverage, after which, when supported by the seismic, Afren will carry Petrodel through the drilling of one shallow water exploration well subject to a cumulative cap on gross costs of US$40 million. The Tanga Block lies northernmost coastal Tanzania, directly south of and adjoining Kenyan blocks L17 and L18 in which Afren holds a 100 per cent. interest. The licence includes onshore, shallow marine and deep marine areas. The block is covered by 200 km of legacy 2D seismic data, and 1,200 km of good quality new 2D seismic data covering mainly the deeper water area, which was acquired by Petrodel. The Tanga Block is well located as it includes a deep basin with a very thick sedimentary section that has the potential to host several source rock intervals and reservoir/seal pairings. Potential petroleum plays recognised to date are Lower Cretaceous sands deposited in deltaic to shallow marine environments, Upper Cretaceous submarine fans, Eocene shelf sands and Miocene fluvial and deltaic sands.  There are structures, particularly along the western flank of the basin, which are interpreted to form viable traps.  Some of these lie in shallow water and could present relatively inexpensive drilling targets. The block is also a possible source of charge into the southern parts of adjacent Kenya block L18.  Oil seeps and shows encountered in previous wells drilled on the nearby Pemba Island attest to the oil potential of the block and surrounding area.

You may also like...

No Responses

  1. Anton Gully says:

    Hey Dan!

    You ever look at Nautilus Minerals (LON:NUS)? A deep sea mining company – I had it “tipped” to me a couple of days ago but it reminds me a lot of Sci-Fi from the 70s. Some of the undersea pictures on their site with the robot arm are golden.

    The government of Papua New Guinea took up a 30% stake in one of their projects recently.

    NB not a suggestion anyone should buy – as I understand it they don’t even have the technology they need to exploit the POTENTIAL resources completely developed yet. And since it was tipped to me it’s dropped in “value” about 6%.