Smallcap Oil & Gas Round-up.

Global Zero

Global Zero!

Doesn’t  time fly? Here we are once again with the definitive “smallcap oil & gas round-up!” It’s been a difficult week yet again in the smallcaps underverse as stocks yoyo’d through-out the week. Politicians yet again dithered and failed to come up with ANY credible plans to deal with the financial meltdown both here (EU) and across the pond! (USA).

Ascent Resources;

Has completed fracture stimulation work on its Pg-10 well on the Petišovci Project in Slovenia and said the results had exceeded its expectations. The preliminary testing of the shallowest of two stages has flowed at a stabilised rate of 8.5 million standard cubic feet per day on a 20/64” choke.

The fraccing of Pg-10 is the latest in a programme of work at Petišovci, which started earlier this year when Ascent drilled the Pg-11 well. That well was followed by the sidetrack Pg-11A, which aimed to explore further the new reservoir and later Pg-10, which sought to delineate the areal extent of the reservoirs. Stimulation work on both the Pg-10 and Pg-11A wells is now complete and Ascent is planning that both wells will be recompleted during January and February 2012. A further testing phase will then be undertaken to better understand the long term productivity performance of the reservoir.

Bowleven;

Reported additional oil in its Sapele-3 exploration well in the Douala Basin, offshore Cameroon. The well has encountered a further eight metres of net hydrocarbon pay intersected in deeper reservoirs, in addition to 11 metres of net pay within the Deep Omicron interval previously announced. 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. Earlier in the week Bowleven posted the Annual Report and Accounts and the Notice of AGM which is available on the Company’s website.

Cadogan Petroleum;

Announced the appointment of Mr Gilbert Lehmann as a non-executive director with immediate effect. Mr Lehmann will also become Chairman of the Company’s Audit Committee. Mr Lehmann is currently an adviser to the Executive Board of Areva, the French nuclear energy business, having previously been its Deputy Chief Executive Officer responsible for finance. He is also a past Chief Financial Officer and deputy CEO of Framatone, the predecessor to Areva, and was CFO of Sogee, part of the Rothschild Group.

Caza Oil & Gas;

Released some good news this week in the form of an operational update. Re-entry operations on the Caza McMillan #1 well to test the Yegua 9,650 sand have been successful.  The well was perforated at intervals between 9,692-9,704 feet and 9,714-9,716 feet, then fracture stimulated, resulting in gross, initial production rates of 1.375 million cubic feet of natural gas, 57 barrels of oil and 29 barrels of water per day on a 16/64ths inch choke on November 20, 2011.  The well is still recovering frac fluid and is expected to be online at the sales point within the next ten days. Caza currently has a 42.53% working interest and a 31.05% net revenue interest in the Caza McMillan #1 well.

Falkland Oil and Gas;

Released more details about its forthcoming drilling campaign, which is expected to get under way during the first half of 2012. The Falklands oiler is  currently awaiting the departure of the Leiv Eiriksson rig from Greenland, which is scheduled to arrive in the Falkland Islands in late January 2012. The company will have access to the rig for the third and fourth slots in a combined programme with fellow exploration company Borders & Southern & expects to commence drilling in the second quarter of 2012 on its Loligo prospect in its Northern licence area. Following a detailed review of its budgets and assumptions, the company has identified various drilling options & based on geological, commercial and financial factors at the relevant time, will decide which options to progress. It said it remained funded to drill a well on Loligo and a second well on another Tertiary Channel target such as Nimrod or Vinson. Based on the latest projections, a second well is fully funded only in the event that a shallower well is drilled on Loligo

Gold Oil;

Provided the market with an operational update on operations in Peru and Colombia. PERU; The marine 3D seismic survey over Block Z34 Southern and Northern areas is now being processed by CGGVeritas and fast track results from the Erika South survey are beginning to become available with encouraging initial results.  In preparation for drilling next year, the Company has submitted the initial consultation document and terms of reference to the Ministry of Energy and Mines, which is the first step in the Environmental Impact Assessment approval process,in order to be prepared for drilling late in 2012. Initial results of the 3D seismic processing are assisting in the delineation of these drilling locations. COLOMBIA; Invepetrol, Gold Oil’s 100% subsidiary in Colombia, has commenced formal discussions with Ecopetrol regarding a possible extension of the Nancy Burdine concession contract which currently expires in 2015.  The drilling of the Nancy -2 well, which had been provisionally planned for the year end 2011 but was subject to contract extension, will now be delayed until negotiations with Ecopetrol have been finalised and the contract terms for additional investment in the fields agreed. Azar Block; The Company has now been informed by the operator of the Azar block that the drilling of the La Vega East prospect has now been delayed until first quarter 2012.  This is due to a delay in receiving the required permit from the Ministry of Environment and hence a delay in building of the access road and well location.

Gulf Keystone;

Updated on its ongoing exploration and appraisal programme for the Shaikan block in the Kurdistan Region of Iraq. Shaikan is a major discovery with independently audited gross oil-in-place volumes of between 8 billion barrels to 13.4 billion barrels calculated on the P90 to P10 basis with a mean value of 10.5 billion barrels. GKP has completed the testing programme for the Shaikan-2 appraisal well, drilled nine km to the south-east of the Shaikan-1 discovery well. Following a new Triassic discovery in the Kurre Chine C zone announced in August, the Company has conducted nine well tests in all target formations in the Triassic and Jurassic, with the maximum aggregate flow rate of 18,900 barrels of oil per day (“bopd”). Preliminary results of the Shaikan-2 testing programme formed part of the new data used by Dynamic Global Advisors,to calculate the most recent significant upgrade of the gross oil-in-place volumes for the Shaikan discovery announced in November. Following the conclusion of the Shaikan-2 testing programme, the well will be completed as a producer and tied to an additional Extended Well Test facility which the Company plans to build and install in 2012. The Shaikan-2 WDI 842 rig is currently moving to the location of the Shaikan-6 appraisal well. Gulf Keystone is the Operator of the Shaikan block with a working interest of 75 per cent and is partnered with Kalegran Ltd. (a 100 per cent subsidiary of MOL Hungarian Oil and Gas Plc.) and Texas Keystone Inc., which have working interests of 20 per cent and 5 per cent respectively. The company also announced the appointment of  Mark Anthony Crump Hanson as a Non-Executive Director effective immediately. Mark Anthony Crump Hanson, 58, as well as having a long-winded name,  is a qualified barrister and solicitor, and used to be the former Chief Executive Officer of Global Banking Corporation in Bahrain from 2006 to 2008.

Lansdowne Oil & Gas;

Announced that Providence Resources has commenced appraisal drilling operations on the Barryroe oilfield, offshore southern Ireland. Lansdowne holds a 20% working interest in Licence 1/11. The GSF Arctic III semi-submersible rig commenced drilling at 09.45 am on Sunday, November 20th 2011. The drilling and testing programme of the 48/24-J well is scheduled to take approximately 60 days. Lansdowne further announced that it has taken delivery of the processed 3D seismic surveys carried out this summer over the Amergin, Rosscarbery and Midleton Prospects in the North Celtic Sea Basin, offshore Ireland.

Leni Gas & Oil;

Has raised £176,000 through the issue of 19,000,000 new shares of 0.05p each in the Company at a placing price of 0.93p per share to Dutchess Opportunity Cayman Fund Ltd under the Equity Line Facility of up to £5 million announced previously on the 3 October 2011.  In addition the facility fee due under the ELF of 4,200,000 new shares of 0.05p each has also been issued to Dutchess. They’ve also gave their website a makeover check it out www.lenigasandoil.com

Max Petroleum;

A production and a drilling update came this week from Max. Production. With all producing wells online, the Company reached a record level of production of 5,625 bopd on 19 November 2011, and plans to bring up to seven additional wells onto production before 31 December 2011. Future daily production rates will remain variable due to several high rate wells being subject to periodic shut-in during long-term testing. The Company produced an average of 3,235 bopd since 30 September 2011 and an average of 3,639 bopd since 31 October 2011. Drilling. The ZMA-A19 development well in the Zhana Makat Field has reached a total depth of 948 metres, with electric logs indicating 28 metres of net oil pay.  The pays include 5 metres in the Cretaceous Neocomian reservoir at depths from 648 to 654 metres, and 23 metres in the Jurassic JI and JII reservoirs at depths from 772 to 832 metres.  Reservoir quality appears excellent with porosities ranging from 20% to 34%. The Company has run production casing in the well, which will be completed and placed on production immediately after obtaining the requisite governmental approvals. The PM Lucas IDECO rig is moving to drill the SAGW-2 appraisal well in the Sagiz West Field. Drilling has also commenced at the KZIE-2 appraisal well on the East Kyzylzhar I prospect in Block E. Total depth of the well will be approximately 1,200 metres, targeting Jurassic reservoirs.

New World Oil and Gas;

Released two rns’s this week the first announced an update from the 420 sq km Blue Creek Project located in the productive Petén Basin in Northwest Belize. A successful completion of Phase 2 of seismic acquisition at Blue Creek – 70.95 line kilometres acquired bringing the total for Phases 1 and 2 to 139.15km with field and processed data to be interpreted shortly by the Company’s geophysicist and Competent Person’s Report to be updated by mid December 2011 The updated CPR is expected to include P10, P50, P90 mean volumetrics, scoping economics and an estimated market value for Blue Creek, with Phase 3 seismic acquisition planned to commence immediately – expected completion in Q1 2012. The second rns updated on the progress and planned work programme for 2012 at its 4,107 sq km Danica Jutland Project consisting of two licences, 1/09 and 2/09, located in the productive and highly prospective Jutland on-shore area in South Western Denmark.

Mediterranean Oil & Gas;

Reported that its Guendalina gas field offshore Italy had been producing at 22 million cubic feet per day since operations started one month ago. The central Mediterranean E&P group has a 20% stake in Guendalina, which is 80% owned & operated by ENI. First month production rates are at the upper end of estimates and have quadrupled Mediterranean’s overall daily net production to approximately 4.2 mmscf. Guendalina is located 47km offshore the northeast coast of Italy in 42m of water. The field has independently certified 2P gas reserves of 22 Bcf (4.5 Bcf net to Mog). Mediterranean also said that 3D seismic acquisition work was under way on its Area 4 production sharing contract, offshore Malta, following an agreement with seismic contractor Fugro-Geoteam reported earlier this month.

The Parkmead Group;

Reported their preliminary results for the year ended 30 June 2011. HIGHLIGHTS included,  proven oil and gas team recruited to deliver the Group’s growth plans… Acquisition of a strategic stake in the Platypus gas field and Possum gas prospect offering near term drilling and significant upside potential…Joint venture created with DEO Petroleum plc, providing a strong and focused alliance for growth in the UK Central North Sea…Revenue increased 58% to £3.75 million (2010: £2.36 million)…Total Assets rose to £12.33 million at 30 June 2011 (£11.34 million at 30 June 2010)…Cash balances of £1.3 million as at 30 June 2011…The Group is now fully funded following the provision of a shareholder loan for £8 million. Parkmead’s Executive Chairman, Tom Cross commented: “The last year has been a period of strategic transformation for the Group. I am delighted to have become Parkmead’s Executive Chairman and relish the opportunity to drive the business forward into an exciting new chapter of its development. 2011 has been a successful year and I believe we are now well positioned with the essential skills and resources to build a significant new independent oil and gas company. I am pleased to report on Parkmead’s improved operating capability for the year to 30 June 2011. The Group’s Turnover and Gross Profit both increased substantially and Net Assets have also increased. We remain focused on the pursuit of value-adding acquisitions, at both asset and corporate levels, in line with the Group’s strategy. The Board is pleased to be able to report that our first asset transaction in our core target market was completed earlier this month. In addition, the Group is now fully funded for its forward programme of drilling activities and is well positioned to capitalise on further strategic opportunities.” Yes Tom we’ve heard it all before; the usual company guff. How long before the £8 million “loan” is called in? No mention of the 75% fall in share-price!

Rockhopper Exploration;

Successfully Completed coring operations at well 14/10-9z.  The sidetrack, well 14/10-9z, was drilled to a total depth of 2600m md. A total 60m of core was cut through Casper and Sea Lion bringing the total amount of core cut during the entire drilling campaign to 340m (1,115 ft) to date. Additionally, a further set of formation pressure test points and samples were taken over the Kermit reservoir which indicate residual oil saturation. The well will now be plugged and abandoned as planned and a further announcement will be issued on the spudding of the next well, located in licence PL004b (which Rockhopper has farmed into with operatorship and an aggregate 60% interest), which will target the most southerly extent of the SLMC and additionally the Beverley prospect.

Roxi Petroleum;

Some much needed good news came from Roxi this week as they announced that well NK-9 spudded on 27 October 2011 had reached a total depth of 1,505 metres on 16 November 2011. Preliminary interpretation of wireline logging indicates that the well encountered oil bearing reservoir sands in the Upper Jurassic section at a depth of 1,294 metres Measured Depth.  Upon final interpretation of the wireline logs data, the well will be perforated and tested. The rig is currently being moved to the second well location, NK-10, which will be drilled to appraise the Upper Jurassic sands on the same structure in early December.

Salamander Energy;

Has agreed to acquire the full authorised share capital of Elnusa Chariot International, which holds an 11% interest in the Bangkanai PSC. Salamander is the operator of the Bangkanai PSC and on completion of the transaction will hold an 80% interest in the licence. Salamander is acquiring Chariot from PT. ElnusaPatra Ritel for a cash consideration of US$6 million.

Sefton Resources;

Released a lengthy epistle this week. Drilling has now begun on four new wells at its Tapia Canyon oil field in California. The drilling at Tapia Canyon is expected to take approximately five weeks to complete and should drive up oil production by 75% to an estimated 240 bopd, once the new wells are on stream in early 2012. Sefton noted that Vintage Production, an division of Occidental Petroleum, appeared to have successfully drilled two horizontal wells in the adjacent oil field to Tapia Canyon. Its first well produced 5,152 barrels of oil over a 13-day period (396 bopd) during August but less is known about the second well. Meanwhile, the results of an interim study by Dr Farouq Ali of Heavy Oil Recovery Technologies into the impact steamflooding the Tapia field have apparently been “extremely encouraging”. Sefton said the report reinforced earlier findings that Tapia Canyon has the potential to produce up to 1,750 barrels of oil per day. Progress has also been made at Sefton’s gas pipeline infrastructure in Kansas. The Southern Star gas interconnect agreement has been executed, which will connect Sefton’s pipeline system in Kansas to the Interstate Pipeline System and natural gas markets. Likewise, the North and West parts of the LAGGS gas pipeline system in Kansas are now certified for operations with the adjacent Vanguard pipeline system expected to also be operationally certified shortly.

Solo Oil;

Issued detailed plans for the Ntorya-1 well in the onshore Ruvuma Basin Petroleum Sharing Agreement in Tanzania where the Company holds an 18.75% interest. PSA operator Ndovu Resources Limited, a subsidiary of Aminex advised that the Caroil-6 rig which has been contracted to drill the Ntorya-1 well is currently being mobilised and is expected on site by early December and will spud the well in mid December. The Ntorya-1 well, the second well drilled by the joint venture, will be drilled in the Mtwara Licence and is targeting marine basin floor fans of Oligocene and Cretaceous age.  Over 250 metres of sandstones of this age were identified in the Likonde-1 well drilled in 2010 which encountered both oil and gas shows.  At the planned well location the Ntorya stratigraphic pinch-out trap is mapped to be approximately 200 metres up-dip of Likonde-1 and lies approximately 15 kilometres further south.  The play being tested is geologically analogous with the deep water discoveries already made in the Ruvuma Basin. Solo estimates that the well has a probability of success for the discovery of commercial hydrocarbons (oil or gas) of approximately 20% and has mean recoverable resource potential of over 600 bcf of gas or 100 mmbbls of oil. Solo today announced that its Joint Venture partner Reef Resources secured additional funding through a private placement. This triggers the second tranche of funding from Solo and increases the Company’s interest in the Ausable field development to 38.1%. Reef has raised gross proceeds of CDN$1.69 million through the issue of shares and warrants in Reef.

Sound Oil;

The upstream oil and gas company with assets in Italy and Indonesia, announced that the Casa Tiberi-1 exploration well, operated by its wholly-owned subsidiary Apennine Energy, has been successfully completed.  The well achieved a gas flow rate of 26,000 scmd (approximately 0.91 MMscfd) on a restricted choke during clean-up operations.  The well is currently being suspended and the drilling rig demobilised.  The Company will study data from the well to determine a programme for additional testing of the well and subsequent potential commercial production of the discovery.

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