Oil & Gas weekly Round-up. Updating live.
15 April 2011
Coastal Energy ;
Discovered oil in the Miocene interval with the Bua Ban North A-03 exploration well, offshore Thailand. The well encountered 125 feet of net pay and tested a fault block which is south of and deeper than the Miocene discoveries in the A-01 and A-04 wells. Coastal Energy estimated that the fault block contains approximately 20 million barrels of oil in place. The well will be suspended and then completed with a workover rig.
It’s been a good week for holders of Cadogan stock as the company announced that it has reached agreement with Eni S.p.A (“Eni”), the major Italian integrated energy company, for the acquisition of an interest in the Company’s Pokrovskoe and Zagoryanska licences in the east of Ukraine. A strategic alliance. Eni will initially acquire a 30% interest in the Pokrovskoe licence, with the option to acquire a further 30% interest in the future. Eni will also acquire a 60% interest in the Zagoryanska licence. The initial consideration will comprise 100% funding of a work programme of approximately $30 million (excluding VAT), including drilling and seismic re-processing, plus a $38 million payment. Subject to successful results from the above programmes and award of production licences, Eni will pay the Company further amounts of up to $90 million.Then came a settlement update vis-a-vis the previously advised settlement agreement between the Company and Global Process Systems Inc (“GPS”), a further payment of $10m was due to be paid to the Company on 14 February 2011 but has not yet been received. A cure period will expire on 18 April 2011. Under the terms of the agreement, GPS took the gas plants back into stock and undertook to pay the Company $37.5 million. To date, $7.5 million of this sum has been received, with the balance due in three equal tranches, each of $10 million, during 2011. The Company retains legal title to the plants until the final payment has been received. The Company is in discussions with GPS regarding the overdue payment. Pending a conclusion of these discussions, release of Cadogan’s preliminary financial results have been delayed but will occur as soon as practical and, in any event, prior to the end of April.
Released an update regarding the Al Amir SE-7X water injector well located to the west of the Al Amir SE-4X well in the Al Amir Development Lease. Al Amir SE-7X, which started drilling on 27 November 2010, has been successfully sidetracked and has now reached target depth at 15,600 ft measured depth in the Lower Rudeis. The main objectives for this well were to provide water injection support into the Kareem sands and to delineate the Kareem oil-water contact, which is required for technical reasons including resource estimation. Copys of the full update can be found on; www.circleoil.net
Updated the Market on operations at the Sugarloaf Project within the Sugarkane Gas & Condensate Field, Texas.The following wells have been on production for a period of either 30 or 60 days and Empyrean is pleased to provide the market with an update on produced volumes Hollman-1H (3% WI) This Hollman well was fracture stimulated with 18 stages across approximately 4,800 ft of horizontal length. The well commenced flowing on 7th March 2011 and the 30 day production results are provided in the table above. This well achieved first production 43 days after it was spudded…Buehring-1H (3% WI) Drilling operations commenced on the 18th February 2011 and the well reached a TD of 17,386ft on 9th March 2011. Production casing has been run on this well and the fracture stimulation of this well has just been completed with 16 fracture stages. Empyrean will provide an update to the market once 30 day production figures are available…Davenport-1H (1.40% WI) This well location lies across the Sugarloaf and neighbouring Hilcorp operated AMIs in which Empyrean does not participate. As such Empyrean holds a blended working interest of 1.40% in this well This well is presently at approximately 5,000 ft and drilling ahead.PMT-1H (1.11% WI)This well location lies across the Sugarloaf and neighbouring Hilcorp operated AMIs in which Empyrean does not participate.As such Empyrean holds a blended working interest of 1.11% in this well. The well spudded on 14th February 2011 and reached TD on the 26th March 2011 at a Total Depth of 18,200 ft. Production casing has been run on this well and it is awaiting fracture stimulation.
Commenced drilling operations at the Keddington oil field in Lincolnshire. The Keddington-4 well will be drilled as a re-entry and horizontal sidetrack from the Keddington-1Z “donor” well. This oil production well has been shut-in since April 2010. Keddington-4 is planned to penetrate approximately 200 metres of producing Unit 1 sandstone in a new horizontal section. The well is also planned to penetrate the deeper “Namurian” sandstones, which had gas indications in Keddington-3 to provide additional information on this potential gas bearing zone. The well is expected to be completed for free-flowing or pumped production using the existing surface production facilities shortly after the rig is released from the site.
This week saw more good news come from Encore re’ the successful Cladhan appraisal well which encountered oil bearing Upper Jurassic sandstones in two separate reservoir intervals. No Oil Water Contact was observed. The Upper reservoir sequence had a gross True Vertical Thickness (TVT) of 18 feet and a net sand of 13 feet TVT. The sand has an average porosity of 16 per cent. and hydrocarbon saturation of 82 per cent. Pressures suggest that this reservoir is in a separate pressure regime from the Lower reservoir. In the Lower reservoir sequence, the main reservoir in previous Cladhan wells, the well encountered a gross TVT of 256 feet and a net sand of 21 feet TVT. The sand has an average porosity of 16 per cent. and hydrocarbon saturation of 75 per cent. Initial pressure data indicates that the lower sand is in pressure communication with, and is part of the original Cladhan discovery. The well has proven an Oil Down To of 10,447 feet True Vertical Depth Sub Sea (TVDSS), giving a minimum hydrocarbon column of over 1,200 feet.
Said it has agreed with Petoro to swap its 30% interest in the Maria discovery for interests in a number of oil and gas production assets. The Petoro assets are expected to generate average production over 2011 of 7,300 boepd.
Gulf Keystone Petroleum;
It’s been a busy week for Gulf keystone first we had the results for the year ended 31 December 2010 copys of which can be found by clicking this link www.gulfkeystone.com then came a major revision of the gross oil-in-place volumes for the Shaikan discovery in the Kurdistan Region of Iraq. The revised gross oil-in-place volumes for the Shaikan discovery, as calculated by Dynamic Global Advisors (DGA), independent Houston-based exploration consultants, are a P90 value of 4.9 billion barrels to a P10 value of 10.8 billion barrels of oil-in-place with a mean value of 7.5 billion barrels and a P1 value of 15 billion barrels.This is a very significant upward revision from the previously announced range of 1.9 to 7.4 billion barrels of gross oil-in-place with a mean value of 4.2 billion barrels and a P1 value of 13 billion barrels, also calculated by DGA. The revision is based on the data acquired since the last resource evaluation of the Shaikan discovery by DGA issued in January 2010, which was supported by an additional third party analysis by Ryder Scott consultants with a range of gross total petroleum-initially-in-place (PIIP) of 1.52 (P90) to 7.52 (P10) billion barrels.The Shaikan-2 appraisal well is now drilling deeper into the Jurassic and is scheduled to drill on into the Triassic. Once the well reaches TD at the bottom of the Triassic or into the top of the Permian interval, the Company will consider a possible further revision of the Shaikan oil-in-place volumes, taking into account additional information from the reservoirs previously only penetrated by Shaikan-1 and from potential additional discoveries from possible zones below those reached by Shaikan-1, projected by DGA to contain an additional 1 to 5 billion barrels of prospective resources.John Gerstenlauer, Gulf Keystone’s Chief Operating Officer, commented:”We have always believed that the initial gross oil-in-place range for the Shaikan discovery was a conservative estimate that would increase as more information became available. This gross oil-in-place volumes revision by DGA, entirely supported by the Company’s management and Board of Directors, confirms that belief. We eagerly look forward to additional drilling results from Shaikan-2, the soon to be spudded Shaikan-4 and the remainder of the Shaikan appraisal drilling program. We firmly believe that even with this upward revision the numbers for the Shaikan discovery are still conservative.”
Hardy Oil & Gas;
It’s been a terrific few weeks for Hardy oil and gas the share price has risen by over 30% culminating in a TR1 Notification that Lloyds Banking Group have a declared 15% interest in the company.
Leni Gas & Oil;
Announces final details regarding its planned work-over operations at its 100% owned Ayoluengo and Hontomin Oilfields in Northern Spain. The Company’s Spanish subsidiary Compania Petrolifera de Sedano S.L. has signed contracts and agreed work scopes with both the Société de Maintenance Pétrolière and Services Pétrolièrs Schlumberger. Leni has also received all outstanding permits and authorisations from the Spanish authorities in order to commence the planned work-over programme announced on the 17th March 2011. Schlumberger will provide all necessary wireline logging and perforating services, as well as cementing services if required, and SMP will supply their 80-tonne “SMP-2” drilling unit which will be used in conjunction with the Company owned Cardwell 45-tonne rig to ensure overall smooth operations. Mobilisation to the field will commence shortly and the programme is expected to get underway on the 26th April 2011. The estimated production capacity from the work-over programme ranges from 300 to over 500 barrels oil per day. The initial seven well programme is expected to be completed within 60 days.
Neil Ritson, LGO Chief Executive commented:
“We are very pleased to be undertaking this work which will immediately benefit both the production levels and cash flow from our Spanish operations. This is of course especially beneficial at a time of high oil prices. Successful results from this initial programme will lead to further investment in the field facilities and the completion of additional wells.”
Announces that the ZMA-ET1 appraisal well in the Zhana Makat Field reached a total depth of 1,472 metres, with electric logs indicating 22 metres of net oil pay in three Triassic sandstone reservoirs at depths ranging between 1,282 and 1,410 metres. Reservoir quality appears excellent with porosities ranging from 18 to 26%. These reservoirs were the primary objective of this well, which appears to have successfully extended Triassic production and reserves into the southern end of the Field.Max are now running production casing in the well, after which the Sun ZJ-30 drilling rig will move on to drill the ZMA-ET2 appraisal well further to the south of the ZMA-ET1 well, attempting to further extend Triassic production and reserves in Zhana Makat. The Company will complete and test the ZMA-ET1 well using a workover rig over the next several weeks and will announce production test results as soon as practicable.
Released news heralding the start of drilling operations at the Keddington oil field on Lincolnshire. Egdon holds a 75% interest and is operator of the PEDL005 licence. The joint venture partners are Terrain Energy Limited 15%. Alba Resources Limited a wholly owned subsidiary of Nautical Petroleum plc with a 10% interest. The Keddington-4 will be drilled as a re-entry and horizontal sidetrack from the Keddington-1Z “donor” well, which was drilled by Candecca Resources in 1998. This oil production well has been shut-in since the drilling of Keddington-3 and 3Z in April 2010. Keddington-4 is planned to penetrate approximately 200 metres of producing Unit 1 sandstone in a new horizontal section. The well is also planned to penetrate the deeper “Namurian” sandstones, which had gas indications in Keddington-3 to provide additional information on this potential gas bearing zone. The British Drilling and Freezing Limited BDF28 drilling unit began mobilising to the site on 1 April and operations began on 4 April. The plugging-back of the existing well has been completed and the drilling of the sidetrack commenced at 0700 hours on 9 April from a kick-off depth of 2080 metres. The well is intended to be drilled directionally to a total measured depth of around 2750 metres. Drilling and completion operations are expected to last a total of around three weeks. The well is expected to be completed for free-flowing or pumped production using the existing surface production facilities shortly after the rig is released from the site.
The AIM oil and gas producer with projects in the USA, announced that on 13 April 2011 it entered into a further agreement with Hewitt Petroleum, Inc. (now Richfield Oil & Gas Company) and Hewitt Energy Group, Inc. (together the “HPI Entities”) the “Revised Agreement replaces the agreement announced on 5 January 2011 which lapsed unclosed. The principal terms of the Revised Agreement, which on closing will lead to termination of the operational relationship between the Company and the HPI Entities.The Revised Agreement is subject to a maximum 30 day closing period, however it is contemplated to close less than 1 week following execution of this agreement. The Company will make a further announcement to confirm closure. Under the Original Agreement, NTOG was to have acquired the HPI interests in Boxberger and the maximum cash receivable was to have been USD1.2 million payable within 180 days of closing. There was to have been no ability to acquire shares in a publicly traded entity through the exercise of warrants or otherwise. The NTOG Board believes that these changes to the Original Agreement are beneficial to the Company.
The independent oil and gas exploration, development and production company focused on Latin America, announced a production update in respect of the first quarter of 2011. The Company achieved total gross production from its Tisquirama, La Paloma and Midas licence blocks located in the Middle Magdelana Valley, Colombia, in the three months to 31 March 2011 of 193,790 barrels of oil and total net production of 90,536 bbls at an average gross production rate of 2,154 barrels of oil per day and an average net production rate of 1,006 bopd. As announced previously, the Serafin-1 gas well located in the Company’s Tisquirama licence block is currently on an extended 6 month production test at a flow rate of 5.5 MMscf/d of gas and a well pressure of 1,850 pounds per square inch. The well has, during the test period to date, achieved total gross production of 95.98 MMscf of gas (15,997 barrels of oil equivalent) and total net production of 44.15MMscf (7,359 boe). Gas produced during the 6 month extended test period is being sold to Ecopetrol S.A. at 90% of the regulated price for Texaco for Barranca-Ballena’s gas (as regulated by CREG, the Regulatory Commission of Energy and Gas of Colombia). The regulated price is currently $4.2562/million British thermal unit (“BTU”). The Serafin-1 well is jointly owned by PetroLatina (50%) and PetroSantander Corporation (50%). PETROLATINA expects to release the results of an updated independent reserves report commissioned from Ryder Scott Company, L.P. and various geological and petrophysical studies during the current quarter.
Announced that the CRD-2X appraisal well in block 07/03 Vietnam has been drilled to a TD of 3785 metres MDRT, appraising the Miocene sands discovered in 2009 with the CRD-1X well. The well was deepened from the preliminary TD of 3109 metres MDRT to evaluate the Oligocene which was not tested by the CRD-1X well. Two drill stem tests of the hydrocarbon bearing sands in the Oligocene section have been conducted. The first zone tested flowed gas and condensate at rates of 9.7 mmscfd and 870 bopd respectively through a 40/64 inch choke. The second zone tested flowed gas and condensate at rates of 17 mmscfd and 1730 bopd respectively through a 56/64 inch choke. The well will now be sidetracked to further evaluate the distribution of hydrocarbons in the Miocene sands.
Announced that the Dao-Ruang-2 well in Block L15/50, onshore Northeast Thailand had encountered a significant gas column, although it had failed to flow at commercial rates.The rig will now move to drill the Dao-Ruang-3 well which is targeting a separate fracture set on the northern flank of the Dao Ruang structure with a different orientation to those seen in DR-2.
The price of Solo rocketed as the tiddler announced the results of petrophysical analysis of the Ausable#5 well in South Western Ontario by its Joint Venture partner Reef Resources Limited “Results show the presence of 72 metres of net hydrocarbon bearing pay in the main producing intervals. The presence of porosity containing oil, natural gas liquids and natural gas is demonstrated by the electric logs and by inspection of the cores cut in the reservoir zones. Further core analysis is planned and the well will be completed as a production well. The results of the production test results and the full analysis of the cores will be announced once available. The Company will now undertake a work program in order to complete the hole and flow test the well, with the intent of bringing the Ausable #5 well on production. The Ausable reef is currently on production and is generating revenue from the initial Enhanced Oil Recovery Natural Gas Liquids Recycling program.Solo Executive Director, Neil Ritson, commented; “These results, with over 70 metres of net hydrocarbon pay, are extremely encouraging and the Ausable #5 well has a high probability of being productive. This result contributes significantly to the field development plan and to the knowledge necessary to successfully optimise the EOR scheme. The well, financed by Solo’s participating loan, adds further encouragement that the EOR scheme will be commercially successful.”
Released an operational update. The oil and gas exploration company with interests in sub-Saharan Africa, principally in Namibia and Uganda,informed shareholders that sustained reservoir thickness and direct hydrocarbon indicators – AVO anomalies and pock marks – have been confirmed at the main Maastrichtian prospect level Namibia. Additional potential is confirmed at the Palaeocene horizon (defined as a lead in the Competent Persons Report (CPR)) but also at two other formations deeper than the Maastrichtian. A CPR is currently being updated with a targeted publication early in June 2011. In Uganda,.A letter of intent in advance of a contract for the 2-D seismic programme of 150-200 kms has been signed with TESLA-IMC International Limited and line clearance is expected to begin by late April. Completion is targeted for end June 2011, by which time a well location can be selected. A high density geochemical survey, conducted by GORE Geochemical Surveys, is also underway over the prospect area together with focussed sampling around the two existing wells and an oil-bearing well in EA1. The Environmental Impact Assessment and early operational planning for a third well have begun. Now that the political uncertainty with respect to long term development planning in Uganda appears to have been resolved, a final phase of the farm out programme has been initiated. The Tower Board has raised the additional equity capital required to undertake the seismic programme on schedule and a well can still be drilled in October 2011, subject to rig availability. If the cost of seismic is subsequently met by a third party, the funds will be deployed on new projects. Peter Kingston, Executive Chairman of Tower Resources, commented: “I am pleased to confirm that the first well in Namibia, to test the huge potential of the Delta prospect, remains a target within a year. The 3-D seismic interpretation has confirmed the 2-D seismic interpretation but has also opened up significant potential from additional reservoirs. I am also pleased that the Uganda seismic and well programme is still on schedule.”