Smallcap Oil & Gas Round-up.

Greek Tits!

It’s been another rollercoaster week in the smallcaps underverse as inept Greek Politicians wiped billions off the stock markets with a ridiculous attempt to hold a referendum on the EU Bail-out. Thankfully our Euro friends the Germans & the French gave the Greek Prime Minister an ultimatium; In or Out? Which brought Pap(Tit)andreou back to reality.


Has completed the acquisition of a 60 per cent. participating interest in the Barda Rash PSC and 20 per cent. participating interest in the Ain Sifni PSC, located in the Kurdistan region of Iraq, and executed a corporate credit facility for up to US$200 million in connection with the Acquisition. Further to the announcement of 27th July, Afren has completed the acquisition of interests in two contiguous Production Sharing Contracts located in the Kurdistan region of Iraq, a 60%. participating interest in the Barda Rash PSC and a non-operated 20%. participating interest in the Ain Sifni PSC, for a total acquisition cost of US$588.25 million. The company also executed a US$200 million secured term loan facility in connection with the Acquisition.

Altona Energy;

The AIM-listed Australian based clean energy company, announced the appointment of Mr Zheng (Michael) Qiang (aged 55) as Deputy Chairman to the Board, reflecting the importance of his contribution towards the ongoing development of Arckaringa and the Company’s strategy in the PRC. Mr Zheng joined the Board in 2008 following Tongjiang’s investment in Altona and consequent agreement with CNOOC-NEI to develop the substantial CTL Arckaringa fuel and energy project in South Australia.

Ascent Resources;

Has completed initial testing operations following the successful fracture stimulation of its Pg-11A well on the Petišovci tight gas project in Slovenia.


Announced that it is planning to deepen its Sapele-3 exploration well, which is currently drilling in the Douala Basin, offshore Cameroon. Sapele-3 is the latest in a programme of exploration and appraisal drilling in the Douala Basin, where Bowleven reported a discovery with the Sapele-1 well in late 2010. Since then the company has drilled a side track to that first well and the Sapele-2 well, which aimed to appraise the Lower and Deep Omicron discoveries in Miocene reservoirs. The Sapele-3 well lies in 30 metres of water approximately 16km north-west of Sapele-1 and 13km north-west of the D-1r wells.

Chariot Oil & Gas;

Good news came from chariot this week as the company announced the result of further geological and seismic work on the Tapir trend in Northern Blocks 1811 A & B, which has increased the chance of success of the Tapir South prospect from 19% to 25%.  The improvement is primarily due to the recognition of multiple four-way dip closures that contain deep marine channel sandstone geometries which are adjacent to a well-defined oil charge kitchen. As a result the Tapir South prospect is now the preferred first drilling target with the greatest chance of success and well planning is at an advanced stage. Additionally, in the Central Blocks, reprocessing and reinterpretation of the full 3,000km of existing 2D seismic data, previously acquired by Chariot, has identified 11 new leads attributing an aggregate mean unrisked resource potential of 3.9 billion barrels. These leads lie in the northeast section of the acreage and occur in several different target intervals within both structural and stratigraphic traps. As a result of this recent technical work Chariot’s gross mean unrisked prospective resources have increased from 16.1 Bbbls to 20.0 Bbbls.

Desire Petroleum;

Finally announced that the rig contract with Diamond Offshore Drilling for use of the drilling unit the Ocean Guardian for operations in the North Falkland Basin has been amended. Under the amended contract an undefined number of optional wells may be drilled up to 1st March 2012, at which time the Ocean Guardian will leave the Falklands on a long-term contract with another operator. Desire must declare the exercise of such options on or before the spud of the previous well in the campaign. The rig is currently drilling well 14/10-9 for Rockhopper Exploration PLC who have announced they will follow this with a well on the Desire farm in area PL004b.

Exillion Energy;

Released good news this week. The company announced that well EWS I – 18  drilled on the eastern part of EWS I field was successfully tested. EWS I – 18 well, which was spudded on 17 September 2011 was drilled in 16 days on the eastern part of the EWS I field. The well flowed water-free oil naturally to the surface with a flow rate of 596 bbl/day on an 8 mm choke and 818 bbl/day on a 10 mm choke. The well encountered the Jurassic P reservoir at 1,807 meters, confirming 17.1 meters of effective net oil pay within the Jurassic.

Global Petroleum;

Ailing Global presented the market with its Quarterly Report for the period ending 30 September 2011. Copy’s of which CAN NOT be viewed by clicking this link. AS THE COMPANY OBVIOUSLY CAN’T BE BOTHERED TO POST THE REPORT ON ITS own website! Excellent pointer as to why they’re struggling!

Gulf Keystone;

Announced that the Shaikan-5 appraisal well has spudded on the Shaikan block in the Kurdistan Region of Iraq on 28th October 2011. Shaikan-5 is the third deep appraisal well to be drilled on the Company’s major oil discovery with independently audited gross oil-in-place volumes of between 4.9 billion barrels and 10.8 billion barrels calculated on the P90 to P10 basis with a mean value of 7.5 billion barrels.

Ithaca Energy;

Signed an agreement with Ensco Offshore UK Limited to provide a jack up drilling unit for development drilling on the Stella and Harrier fields to commence in 2012.

Leni Gas & Oil;

Dear old Leni announces completion of the rig recertification and return of well Ayo-37 to production. Further to the information given on the 20 October 2011, LGO reported that the Company owned Cardwell service rig has been fully re-commissioned and returned to active deployment on field operations on the 27 October 2011.  All routine maintenance and five-year safety checks have been completed and the rig mast and other equipment upgraded to meet all required safety standards.

Matra Petroleum;

Once again failed to thrill investors with yet another abysmal RNS.  Matra has suspended Workover operations on Well-12 following preliminary works to establish the viability of a cement squeeze to shut-off water flow. The operation successfully established liquid flow outside the liner, however, after a short period the flow path became plugged, preventing further circulation. Managing Director, Peter Hind  tried to put a good spin on the failure but was fooling nobody but himself: “It was encouraging that Well-12, showed oil flow rates in excess of 1,000 bopd on clean-up with nitrogen.  However, remedial cementation is always a difficult operation, made more complicated in this case being a side-track and because of the proximity of the original hole that was drilled below the oil-water-contact. The establishment of fluid circulation outside the liner is further support for the conclusion that water has been flowing outside the liner from the higher Franski zone, located above the target Aphonenski oil reservoir. etc etc.

Max Petroleum;

Unloved Max Petroleum released two RNS’S this week.The Company plugged & abandoned  ZLGS-1 exploration well on the Zhalgyz South prospect in Block A. While today Max released news that it has begun drilling the NUR-1 well on the Emba B prospect in Block E. The well will be drilled to a depth of 7,250 metres, targeting Devonian and Carboniferous reservoirs with unrisked mean resource potential of 467 million barrels of oil equivalent and a 29% geological chance of success.

President Petroleum;

Flickered into life this week as the company announced that evidence from electric wire line logs at the McKerall 1 sidetrack had indicated that commercially productive oil reserves have been identified totalling some 15 feet of projected pay. The reason for drilling the sidetrack was to capture reserves not able to be produced from the original hole at McKerall 1. The well is expected to be completed as a producer and placed on-line shortly.  President has a 49% net revenue interest in the production from the sidetrack. President is currently achieving realisations in excess of US$100 per barrel for its oil in Louisiana and enjoying net backs after tax in excess of US$75 per barrel. President is also pleased to announce that Well 53 at East White Lake, Louisiana, the twin to the previously drilled Well 49 which encountered higher than anticipated pay, is expected to spud in mid-November. Hooray!

Range Resources;

A busy week here for Range as the company released 3 RNS’s all of which can be viewed by clicking the link. Home: Range Resources

Rockhopper Exploration;

Released a plethora of institutional holding updates which has been covered by a Blog post.

Roxi Petroleum;

Some much-needed good news came from Roxi this week as the company announced that the NK-9 well was spudded at 13:00hrs (local time) on 27 October 2011. The well is planned to drill to a total depth of 1500 metres to appraise the discovery of Arskum formation in the south channel of the Galaz block.  Drilling operations are being coordinated by the operating partners LGI and are expected to take approximately 30 days, after which a further announcement will be made. Hooray.

Sefton Resources;

As predicted by the Blog; began to release good news this week with a brief Operational Update with the execution of an agreement for the drilling of four new wells at Tapia Canyon oil field in California. Highlights: Drilling of four new wells at Tapia Canyon scheduled to commence in mid-November and take approximately five weeks to complete. The new wells are expected to be producing in early 2012 which should allow oil production to rise by up to 75% to an estimated 240 barrels of oil per day…Average Tapia 18°API crude purchase price of $107 per barrel received in October which represented a 24.4% premium to NYMEX…Oil production in October at Tapia and Eureka fields was approximately 129 barrels of oil per day…Dr. Farouq Ali is currently in the process of finalizing an interim report on the Tapia steamflood model…Occidental Petroleum Corporation (“Occidental”) via its subsidiary Vintage Production LLC has permitted a third well on its adjacent field to Tapia Canyon.

Serica Energy;

Began to climb this week as the company confirmed market rumours on significant licence acquisitions. Serica confirms that it is in advanced discussions about the award of significant licence areas in Namibia. Agreements are in the process of being finalised and a further announcement will be made in due course. Which came yesterday. Serica has been awarded an 85% interest in a Petroleum Agreement covering four large blocks and part blocks in the prospective Luderitz Basin, offshore Namibia.

Sound Oil;

Informed investors that the Casa Tiberi-1 exploration well commenced drilling operations. The well, located close to Ancona in central Italy, will be drilled to a total depth of 700 m.  Drilling operations are scheduled to take 10 days.

Sterling Energy;

Briefly shone this week as the company released A COMEDY SKETCH RNS; A farmout agreement with Murphy Cameroon Ntem Oil Co., Ltd “Murphy”, a wholly owned subsidiary of Murphy Oil Corporation under which Murphy has been assigned a 50% working interest in, and operatorship of, the Ntem concession contract. Sterling retains a 50% non-operated working interest in the Contract. As consideration, Murphy has paid to Sterling a contribution towards past costs and is committed to fully fund joint operations in relation to the current phase of exploration under the Contract which includes the drilling of one exploration well.  “Murphy’s Law” eventually kicked in the sp sank back to pre Murphy levels!

Tower Resources;

Along with its joint venture partner Wessex Exploration  have signed an assurance agreement for a production sharing contract with the government of the Saharawi Arab Democratic Republic. The agreement covers the Imlili Block, which is located offshore in the territory known as the Western Sahara. Tower and Wessex hold a 50% equity and working interest in the agreement and associated PSC and Wessex is the operator.

Victoria Oil & Gas;

Said that it has completed the acquisition of one-third of a 6.8 per cent. royalty interest in its 95 per cent. owned Logbaba gas and condensate project in Cameroon by making a final cash payment of US$2.5 million. The royalty interest has been acquired from PR Marriott Drilling Limited by the purchase of their one-third interest in Cameroon Holdings Limited, the company entitled to the royalty. As announced on 11 August 2011, VOG purchased 58 per cent. of PRM’s shares in CHL for a consideration of US$2.5 million in cash and drilling equipment with an estimated value of US$1 million. The Company has now completed the acquisition of the remaining 42 per cent. of PRM’s interest in CHL for a cash consideration of US$2.5 million in accordance with the terms of the sale agreement. The Company anticipates that the purchase of this one-third interest in CHL will increase Logbaba project operating income by about 3 per cent. Kevin Foo, Chairman of VOG commented, “I am delighted that we have been able to reduce the long-term cost of the royalty in this way. Independent analysts who have looked at the transaction believe it will prove to be worth several times the consideration paid.”


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  1. will says:

    Hi Dan,

    Just thinking about Oilex, I read with interest the update re India and that seemed very positive however I wanted to gather your thoughts on it. We havrent heard much from them recently and would appreciate your thoughts/a post on them


  2. Bobby says:

    Hi Dan,

    Many thanks for your continuous great posts, i see PELE have their Farmout now with Shell. How significant is this? I remember your great post on PELE in the past, the current market cap is soo low. Your thoughts greatly appreciated.


  3. simon says:

    I have been looking at frontera resources (frr) they have had what looks to be some very promising news reports of late,looks like a sound investment,would appreciate your thoughts,many thanks…

    • Brokerman says:

      Did you email the Blog Simon? I did receive several emails 2/3 weeks ago on Frontera unfortunately I’ve been so busy with work and the new site.


  4. Dan says:

    Max Petroleum (MXP) retained its “buy” rating from Merchant Securities, with a 33.7p target price. The oil and gas company has begun drilling its NUR-1 well in Kazakhstan, targeting the Devonian and Carboniferous reef prospect, which the broker calls world class. Merchant calculates that the current share price reflects the group’s existing reserves, but the prospect of a new discovery is not included. The broker estimates that 467 million barrels of oil will be recoverable, with a 29% chance of success. The shares fell by 0.25p to 13.75p.

  5. DAN says:

    new presentation from Max Petroleum

    Read and try to not get excited

  6. Nibor says:

    Sorry to bother you, Dan, but was I the only fan who failed to receive the password for “November 4, 2011 · 10:14 am Protected: Petrolatina. Breaking news!”?