Smallcap Oil & Gas round-up


Announced that it has suspended further work on the Nyuni-2 exploration well in offshore Tanzania due to extreme drilling conditions.The company said that it was not possible to run a full suite of electric logging tools to total depth  as a result of obstructions near the base of the well bore.  Repeated attempts to drill out the obstructions were unsuccessful so a decision was made to cement off the lower section of the well bore and deviate around the obstructions using a side-track motor. The sidetracking operation has also proved to be highly problematic and earlier this week the mud motor and drill bit became irretrievably jammed in the well bore.  Engineering advice now indicates that a further side track attempt would only have a limited chance of success.  A decision has therefore now been taken to suspend the well. The stock plummeted 40% yesterday.

Aurelian Oil & Gas;

Released  two TR1 Notifications this week of Major Interests in Shares from Toscafund Asset Management LLP, stating that, as at 30 September 2011 there had been an acquisition of shares.  These transactions took the relevant interests to above the 19% threshold. (As foretold on the Blog last week)

Bahamas Petroleum;

The oil and gas exploration company with offshore license permits in The Commonwealth of The Bahamas, announced that Adrian Collins has been appointed to the Board as Non-Executive Chairman with immediate effect. Adrian (aged 57) is currently Executive Chairman of Liontrust Asset Management PLC, a position he assumed in 2010, having first joined the Board in June 2009 as a Non-Executive Director.  He is also a Non-Executive Director of City Natural Resources High Yield Trust Plc and New City High Yield Fund Ltd.

Cove Energy;

Together with the operator Anadarko  Petroleum Corporation reported exploration and appraisal success from the Camarão well in the Rovuma Basin Area 1 block, Offshore Mozambique (“Area 1 Rovuma Offshore”). Over 380 net feet (116 meters) of natural gas pay confirmed in both exploration and appraisal targets.The Appraisal objective, in Oligocene fan systems, encountered approximately 240 net feet (73 meters) of natural gas pay in an excellent-quality reservoir sands, pressure data confirms static connectivity with the partnership’s previously announced Windjammer and Lagosta discoveries which are some 15 miles apart.The exploration section of the well encountered a 140 net feet (43 meters) of natural gas pay in shallower Miocene and Oligocene sand packages not encountered in previous wells. Anadarko estimates substantial increase in recoverable resources to, at least 10TCF (142 million BOE net to Cove Energy), and is also “optimistic that current estimates will increase, as they still have significant exploration and appraisal work ahead. Cove also announced that, following the receipt of the consent of the Government of Kenya, represented by the Minister of Energy, all necessary permissions and approvals have been granted to the farm out agreement whereby TOTAL E&P Kenya BV , a wholly owned company within the TOTAL S.A group has agreed to acquire a 30% interest in five contiguous deepwater blocks, L5, L7, L11A, L11B and L12, offshore Kenya.

Dominion Petroleum;

Confirmed that it has agreed to farm-out a 20% working interest in Block 7, deepwater Tanzania to a subsidiary of Mubadala Oil & Gas. Following the completion of the transaction Dominion will hold an 80% working interest and operatorship in the Block. Under the terms of the agreement Mubadala will pay Dominion a $20 million cash consideration on closing and carry Dominion’s remaining 80% working interest in a new seismic programme expected to commence prior to year-end up to a cap of US$2,400,000. A large 3D seismic survey was acquired on Block 7 at the end of 2010 over a lead identified as the Alpha structure. Dominion and Mubadala will now work together to assess potential targets, both within Alpha and on other prospects mapped within the survey area. A more detailed review of Block 7 operations was recently provided in Dominion’s Interim Results for the six months ended 30 June 2011 .Completion of the transaction will follow establishment of Mubadala’s subsidiary and is then subject only to Tanzanian Government approval.

Edenville Energy;

Released encouraging results from its resource at the Rukwa Coalfield project in Tanzania, causing shares to surge higher on Thursday.The company drilled 19 holes which show evidence of thickening to the north of the basin, with the 19th hole showing “coal-rich horizons”. Ten out of the eleven assayed holes returned coal results varying from 20.24 to 26.40 mega joules per kg. The company said its strategy is to rapidly establish a defined joint ore reserves committee resource at the primary Rukwa areas, stating that current indications are that the coal, with appropriate processing, is suitable for use for power generation. The predicted demand for electricity in the southern African region, particularly Tanzania, bodes well for the development of the project, the firm said. The full drilling report can be viewed by clicking this link.

Encore Oil/Premier Oil;

Caught the market by surprise as both companys announced a Takeover deal worth £221 million. The deal values EnCore at 70p per share, which shareholders can take in cash or new Premier shares, and has been recommended by the EnCore board. Premier said the purchase was in line with its strategy of acquiring high quality assets in existing core areas using its strong balance sheet. Specifically, it will increase its interest UK Licence PL1430, including the Catcher field, by 15 percent to 50 percent and give it operatorship of what is one of the largest discoveries in the UK North Sea in recent years. The deal will also add a 16.6 percent interest in the Cladhan discovery. Overall, the acquisition will add an additional estimated 17 million barrels of discovered oil reserves and resources from wells drilled to date in the Catcher and Cladhan areas.

Exillon Energy;

Thrilled investors as the company announced that well EWS I – 43 successfully found oil on the south-eastern part of the East EWS I field.
Exillion are a British listed independent oil producer with assets in two oil-rich regions of northern Russia, Timan-Pechora and West Siberia.
The EWS I – 43 well which was spudded on 6 September 2011 was drilled in 21 days on the south-eastern part of the East EWS I field. The well flowed water-free oil naturally to the surface with a flow rate of 595 bbl/day on an 8 mm choke. The well encountered the Jurassic P reservoir at 1,826 meters, confirming 15.5 meters of effective net oil pay within the Jurassic. The well was drilled directionally 0.7 km to the north from the existing well pad. On completion of testing the well will be connected up to existing production facilities.

Global Petroleum;

Advised that Texon Petroleum had advised that the 30 day production information (i.e. 30 days since stabilised flow was established after the Initial Production test) for the second Eagle Ford well in which Global has an interest, Tyler Ranch EFS #2H, will be available next week. In its first 17 days of production, the well produced 21,000 boe (94% oil), slightly more than the first Eagle Ford well (Tyler Ranch EFS #1H) produced in its first 30 days (19,651 boe). Global has a 7.939% working interest (5.95% NRI) in approximately 1,651 acres beneath the Olmos formation including the Eagle Ford Shale.  Global’s interest in the Leighton prospect also includes a 15% working interest in approximately 873 acres from the surface down to the stratigraphic equivalent of the Olmos formation. Eyes on here next week!

Ithaca Energy;

Reported 2011 third quarter production, as well as changes to production reporting following the acquisition of the Cook field and in anticipation of first production from the Athena field. The Company will present the Athena project in London on October 11 2011; after which the presentation will be available on the Company’s website ( Combined export production for the third quarter 2011 totalled 331,383 barrels of oil equivalent andaveraged 3,602 barrels of oil equivalent per day net to Ithaca. The Company’s export production volumes in Q3 2011 comprise production from the Beatrice and Jacky oil fields, the Anglia and Topaz gas fields and oil and gas from the recently acquired Cook field.

Leni Gas & Oil;

Said that it has doubled its land holding in Trinidad by acquiring the production rights to the Goudron Field, where the production potential has been estimated to be in the range 1,000 to 4,000 barrels of oil per day. The deal saw Leni acquire Goudron E&P Ltd, a company which holds exclusive rights to acquire the Incremental Production Service Contract for the Petroleum Company of Trinidad, which owns the Goudron Field in onshore south-eastern Trinidad.Furthermore Leni has secured a three year Equity Line Facility of up to £5 million with Dutchess Opportunity Cayman Fund Ltd, which has been arranged by First Columbus LLP.

Max Petroleum;

Good news came in the form of an announcment that the ZMA-A23 development well in the Zhana Makat Field had reached a total depth of 890 metres, with electric logs indicating 10 metres of net oil pay in Jurassic sandstone reservoirs at depths ranging between 808 and 833 metres.  Bad news came the next day when Max announced that they had finally lost their Tax Appeal. The Supervisory Panel of the Supreme Court of the Republic of Kazakhstan rejecting the Company’s final legal appeal to review the tax claim previously brought against the Company.


Announced the company Annual Report for year ending 30 June 2011 can  be viewed on the Company’s website While at the same time Oilex announced that a suspension halt had been called by the company on their ASX LISTING pending announcements in relation to an independent hydrocarbon resources assessment on Cambay Field,India. Such announcement is currently expected to be made within the next two days, after which trading in the Company’s shares will resume on the ASX. The stock was trading as per usual on the LSE.

Petroceltic International;

The upstream oil and gas exploration and production company focused on North Africa, the Middle East and the Mediterranean, issued an update on operations at the Ain Tsila field on its Isarene permit (Blocks 228 & 229a) in south eastern Algeria.  Petroceltic operates the permit with a 56.625% interest, Sonatrach holds a 25% interest, and Enel holds an 18.375% interest, pending final Government of Algeria ratification. Copys of the up to date report can be viewed by clicking this link.

San Leon Energy;

Announced two director deals. Oison Fanning and Paul Sullivan both reported buys of 1,000,000 each taking their respective holdings to 7.28% of the company.

Solo Oil;

Confirmed the completion of the assignment of additional interests in the Ruvuma Basin PSA in Tanzania from Tullow Tanzania BV. Further to the announcement on 8 September 2011, Tanzanian Government approval for the assignment of interest between Tullow and Solo has been received and the assignment has been completed.  Solo now has a beneficial interest of 18.75% in the Lindi and Mtwara licences which jointly make up the Ruvuma PSA in onshore Tanzania. Tullow has also confirmed that Ndovu Resources Limited, a subsidiary of Aminex plc, is now the operator of the PSA.  Now that operatorship has been formally transferred; an update on the timing of the planned drilling of the Ntorya-1 well, anticipated to spud during November, is expected shortly. **** Todays Ausable field report can be viewed by clicking this link

Sterling Energy;

The ailing independent oil and gas exploration and production company with interests in the Middle East and Africa announced the following board and management appointment. Dr Philip Frank has been appointed, with immediate effect, Exploration Director and a member of the board of directors of the Company. Mr Andrew Grosse has stepped down (Pushed overboard if the truth be told) from the board of directors, with immediate effect, and will leave the Company (THE SOONER THE BETTER) following a short period of handover to Philip.

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