Smallcap Oil & Gas round-up with a sprinkling of miners!

Smallcap Oil & Gas with a sprinkling of miners. May. 6th. 2011

Red Rock Resources;

The gold mining and exploration company with projects in Kenya and Colombia, and interests in steel feed, uranium, and rare earths, announced that it had agreed to dispose of its entire holding of 15,798,000 common shares in Cue Resources Ltd to its 24.9 per cent. owned associate company Resource Star Limited  for C$1,556,000. A C$200,000 loan from Red Rock to Cue is also being transferred at face value together with warrants to subscribe in aggregate for 15,798,000 common shares in Cue at prices of between C$0.12 and C$0.15. The transaction is subject to approval by shareholders of RSL, other than Red Rock, at an RSL EGM expected to be held in June.  The consideration payable to Red Rock will be paid in two instalments, 40% on completion with the balance six months later.

Borders & Southern Petroleum;

Informed the city that it is to use the Leiv Eiriksson drilling unit in place of the previously contracted Eirik Raude drilling unit. The vessel is likely to be mobilised to the Falkland Islands in October 2011 following the completion of its operations in Greenland. The arrival of the rig and subsequent spud date for Border’s first well should  be in December of this year.

Coastal Energy;

Announced they had discovered oil with the Bua Ban North B-01 exploration well in Thailand. The well encountered 28 feet of net pay in the Upper Oligocene with 23% average porosity and 29 feet of net pay in the Lower Oligocene with 16% average porosity. The well was not tested and the fault block is estimated by Coastal to contain 13 million barrels oil in place. Coastal Energy has now spud the Bua Ban North B-02 well, which will test two Miocene intervals in an optimal structural position.

Cove Energy ;

Announced that offshore Mozambique, a conventional coring programme of the three gas bearing reservoirs has been completed at the Windjammer discovery well site. The rig is now at the Lagosta discovery well site to continue coring programme, after which it will drill the Barquentine 2 appraisal well. A second deepwater rig has been contracted for appraisal drilling and is anticipated to arrive in 4Q2011. In addition a 1,600 km2 3D seismic survey has completed over a potential “oil source kitchen” in the southern licence area and a 3D seismic survey is ongoing over northern licence area between the Barquentine discovery and the Tanzania border near where a recent gas discovery was announced in block 1 Tanzania.

EnCore Oil;

Informed the market that the sidetrack of the Cladhan appraisal well in UK North Sea Block 210/30a encountered two separate reservoir intervals of 12 feet and 169 feet but it has not been possible to confirm if the sands are hydrocarbon bearing and in pressure communication with the original Cladhan discovery. The rig will now drill a second side-track well, 210/30a-4y which will drill into the shallower, central channel to the south. A third sidetrack is also planned.

Independent Resources;

Commenced farm-out negotiations with a number of companies which have experience in optimising development of analogous unconventional gas projects. This follows the completion by DeGolyer and MacNaughton of its three-month review and analysis of the technical data generated from IRG’s wholly owned unconventional gas acreage located near Grosseto, Italy.

Kea Petroleum;

Has commenced production-tests on several oil bearing Mount Messenger Sand intervals which have been encountered at Wingrove-2 in the depth range 1150-1300m. In New Zealand’s onshore Taranaki Basin. The operations will take 15-20 days to complete. If sustained and commercial oil flow is possible from the drill site, Kea expects to be drilling several more wells to appraise and develop the Wingrove structure, which extends over an area in excess of 10 sq km, and has a potential resource of several million barrels.

Madagascar Oil;

Announced that arbitration proceedings were commenced on 29 April 2011 over the Production Sharing Contracts for Blocks 3104, 3105, 3106 and 3107 that it operates in Madagascar. The arbitration filings claim breach of contract by the Government of Madagascar and OMNIS, the regulatory agency of the government that manages the country’s oil and gas resources. Madagascar Oil is seeking a declaration that the PSCs are valid and that OMNIS be instructed to proceed with the approval process of the Company’s work programmes and related extensions as contemplated under the PSCs.
Madagascar Oil has also submitted a notice of dispute to the Government of Madagascar under the rules of the International Centre for Settlement of Investment Disputes with regard to its threatened expropriation of its assets.

Nautical Petroleum;

Has agreed to acquire a further 15% interest in the UKCS Block 9/2b, which includes the Kraken discovery, from Canamens Energy North Sea Limited. Nautical will now have a 50% interest in the Licence while Canamens’ interest will reduce to 20%. Nautical has agreed to fund Canamens’ share of the remaining costs relating to the upcoming 9/02b-E appraisal well and a 3D seismic survey. Nautical has also agreed to waive £7 million of past costs owed by Canamens for the drilling of the 9/02b-4 well and 9/02b-4z sidetrack.

Pan African Resources;

Shareholders were advised that the Company’s operating subsidiary, Barberton Mines  Limited (“Barberton Mines”), has secured final credit approval for a three year revolving credit facility in the amount of R150 million from Nedbank Limited (“Facility”).
This Facility provides the Group with immediate capacity for working capital purposes and general finance requirements, which would include funding of organic growth at Barberton Mines and within the Group. The Facility is co-guaranteed by Pan African and its wholly-owned subsidiary Phoenix Platinum Mining Limited, and does not require any form of hedging as a condition.
Jan Nelson, Pan African’s Chief Executive Officer, commented: “The Pan African Group continues to be unhedged and debt free, with cash on hand of R150m at the date of this announcement. The new revolving credit facility from Nedbank Limited does however provide an efficient funding mechanism to take advantage of organic growth opportunities at Barberton Mines. It also demonstrates the confidence of funders in the long-term sustainability of the mine. In this regard, a feasibility study is currently being completed on treating the Bramber tailings dam, which if viable could increase the annual production of the mine by 20koz. A separate treatment plant will have to be constructed to treat the additional production stream, and this may be funded from the Facility”.

Petroceltic International;

ENEL and Sonatrach have signed an amendment to the Isarene PSC in Algeria to effect the transfer of 18.375% of the rights and obligations under the PSC from Petroceltic to ENEL. The only regulatory condition now remaining relates to the approval of the Amendment by Executive Decree and subsequent publication of this decree in the Official Gazette of the Algerian Government.

Petro Matad;

Stated that the Davsan Tolgoi-4 well in Mongolia has reached the Lower Tsagaantsav reservoir objective and has begun coring operations. Two lengths of core have been recovered to date. The first core has been logged and has physical characteristics that are consistent with the existence of oil. Drilling operations are continuing, with decisions on the amount of coring and the changeover to normal drilling routines to be made as the well progresses.

Range Resources;

Announced that it has secured a ship to transport the exploration drilling rig from the UK to Georgia, thus triggering the commencement of its two exploration well drilling program in Georgia. The Mukhiani well on the Vani 3 Prospect will be first well drilled with an early June spud.

Rockhopper Exploration;

has spud the 14/10-5 appraisal well located just north of the Sea Lion 14/10-2 discovery well and 13 metres updip at top reservoir level. The well is designed to appraise the Sea Lion main fan reservoir and investigate hydrocarbon column and reservoir distribution. Rockhopper intends to flow test the well to obtain a greater understanding than was possible during the test of well 14/10-2 last year.