The Smallcap Oil & Gas weekly round up News-letter.

Circle Oil;

Announced an update regarding the Al Amir SE Field Water Injection project and the Geyad-4 well (formerly Geyad-D) in the Geyad field. Copys of the update can be found by clicking the link.

Kermit reporting as the area runs amok with th...

The 2012 Hotlist announcement!

Cove Energy;

Realesed an update on activities in their 8.5 per cent participating interest in the Mozambique Offshore Area 1 block (“Rovuma Area 1”). Cove reports that the latest appraisal well, Lagosta 2 (7.4km north of Lagosta 1), spudded on 11 December 2011 and it is planned that this well will be completed towards late January 2012. In line with its stated strategy Cove has opened a data room to certain parties who expressed an interest in Cove’s participation in the Rovuma Area 1 project. Early stage discussions with major LNG off-takers in the Asian and European markets are currently taking place to secure long term commercial contracts for the planned production from the Rovuma Area 1 project. The Rovuma Area 1 partners also announced that long term drill ship capacity had been secured to continue the high impact appraisal, testing and exploration programme in the block to increase the recoverable gas resource beyond the current range estimate of 15 to 30+ trillion cubic feet.

DEO Petroleum;

An oil and gas development company working in the North Sea, has signed an interim agreement to secure a floating, production, storage and offloading vessel for its Perth field development. DEO acquired its original stake in Perth from Nexen for £10.5m in 2010 and operates the field on behalf of partners Faroe Petroleum & Atlantic Petroleum. The company filed a Field Development Plan to UK authorities in September and has now finalised an interim deal with EMAS Offshore and Construction Pte to secure an FPSO for Perth and other potential discoveries within a 30km radius. The FPSO will have initial gross oil production capacity of 30,000 barrels of oil per day.

Desire Petroleum;

(See Rockhopper)

Dominion Petroleum;

Released an update on the Reccomended offer by Ophir. At a Court Meeting held earlier this week, the Scheme was approved by the requisite majority of Dominion Shareholders. In addition, the Scheme General Meeting Resolutions required to approve the Scheme and the Management Resolutions were duly passed by the requisite majority of Dominion Shareholders at the General Meeting held shortly thereafter.

Enegi Oil;

Released an interesting tid bit this week. Further to the announcement by the Company on 6 December 2011, Enegi announced that it has received confirmation from DLMC that it, and its investors, remain fully committed to the EL1070 Farm-Out Agreement and are currently waiting on drilling operations on the 3K-39 well to be completed and on the results of the subsequent application for a Significant Discovery Licence over the EL1070 area.

Exillon Energy;

The British listed independent oil producer with assets in two oil-rich regions of Russia, Timan-Pechora (“Exillon TP”) and West Siberia (“Exillon WS”), released unaudited production data for the month of November 2011. Average daily production for the Group reached 10,935 bbl/day during the period. Average daily production for Exillon TP was 3,354 bbl/day, and for Exillon WS it was 7,580 bbl/day during the period.Peak daily production for the Group reached 11,473 bbl/day during the period. Exillion expects to make the December production announcement by 16 January 2012.

Global Energy Development;

The Latin America focused petroleum exploitation, development and production company, announced it has purchased and cancelled an aggregate principal amount of U.S.$1,742,000 of its 2006 Variable Coupon Convertible Notes Due 2012.  The Notes were redeemed for cash, paid from the Company’s existing cash resources, at the principal amount of the Notes together with accrued and unpaid interest. Following the purchase and cancellation of this portion of the Notes, the remaining outstanding principal balance of the Notes is US$9,561,600, which is due and payable on 8 December 2012.  Steve Voss, Managing Director, commented, “As we close out 2011, we are pleased with our progress of shifting focus from our current production in the Llanos Basin of Colombia to the development of our assets in the Bocachico and Bolivar Contract Areas as we continue to take steps to strengthen our balance sheet by reducing our remaining convertible note obligations due in December 2012.  This early repurchase of a portion of those Notes is another step in the right direction.”

Gulf Keystone Petroleum;

Provided investors with an update on its ongoing exploration and appraisal programme in the Kurdistan Region of Iraq, which includes the Shaikan block, 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. Copys of the full update can be viewed by clicking the link.  .

Gulfsands Petroleum;

Confirmed that a “force majeure” has been declared on its production sharing contracts in Syria. The move means that for the time being revenues have stopped from the company’s flagship operations on Block 26. The contractual clause was applied because EU sanctions against Syria, which were already impacting on Gulfsands’ operations, were recently ramped up to cover the company’s partner in the country, General Petroleum Corporation. The sanctions have been imposed in response to concerns about ongoing unrest and violent clashes between government forces and protestors.

Lansdowne Oil & Gas;

(See Providence Resources)

Max Petroleum;

Released an RNS today. The Kazakh Government has approved a 3 month extension of Max Petroleum’s trial production project for the Zhana Makat Field until 15 March 2012. The extension is expected to provide the necessary time required for the Company to obtain final regulatory approval to convert Zhana Makat to full field development status under its Blocks A&E exploration and production contract. The Ministry of Oil and Gas has approved the proposed terms for FFD in general, subject to review and final approval by several other regulatory agencies. FFD approval will allow the Company to develop and produce the field for up to 25 years, as well as grant the Company a right to sell 80% of its crude oil production subject to FFD on the export market under the terms of the Contract.

New World Oil and Gas;

Got online lips licking as company announced that it had received an update to the Competent Person’s Report from RPS Energy on the Blue Creek Project, following completion of Phase two of  New World’s seismic programme. This raises the Probability of Geologic success  to 1 in 5 on the two identified Prospects (“A” and “B Crest”) located within the Blue Creek Project in the productive Petén Basin in Northwest Belize.

Niche Group;

Went into temporary suspension this week. As the company noted the recent share price movement and announced that it is in advanced discussions to acquire the entire issued share capital of Oman Resources Limited. Any such transaction would constitute a Reverse Takeover for the purposes of the AIM Rules and accordingly the Company has requested a temporary suspension of trading in its shares until such time as it publishes an Admission Document. A further more detailed announcement will be made shortly.

Petroceltic International;

Announced the appointment of Hugh McCutcheon as a Non-Executive Director. McCutcheon (58), was formerly head of corporate finance at Davy, will join the Board with immediate effect. 24 Hours later PCI issued a further update on well test results from well AT-9 at the Ain Tsila field in Algeria. Petroceltic operates the permit with a 56.625% interest, Sonatrach holds a 25% interest, and Enel holds an 18.375% interest, pending final ratification by the Algerian authorities. Following debottlenecking of the surface flow lines at well AT-9, the well has now tested at a maximum flow rate of 67.6 mmscf/d. This test was without fracture stimulation and is still constrained by surface facilities.


Said that it has entered into a senior secured credit agreement with BNP Paribas to repay and replace its existing facility with Macquarie Bank Limited. In accordance with the terms of the credit agreement, executedthis week, BNP has arranged a revolving senior secured loan facility of up to US$100 million to the Company in order to repay the existing MBL facility and assist with financing the accelerated development and enhancement of the Company’s highly promising oil and gas assets in Colombia. The initial borrowing base has been set at US$36 million, which was made available and drawndown on completion of the credit facility documentation on Friday 9 December 2011.  Of this US$36 million, approximately US$29.425 million has been utilised to repay the Company’s existing senior secured facility and close out all of the related oil price hedging contracts with MBL.

President Petroleum;

President’s current monthly revenue from Louisiana has significantly increased to some US$ 550,000. Net operating profit from operations (after operating expenses and tax) is running at an average of US$ 421,000 per month for the three months to 30 November 2011. This is a 169% increase from the beginning of the year where Louisiana contributed US$ 156,000 per month in the first quarter. BOE production has shifted from a 50:50 ratio of oil to gas, to a ratio of 85% oil and 15% gas. The Company also reports that due to unforeseen completion issues it has been decided at this moment in time to plug and abandon the McKerall 1 sidetrack and well EWL 53. On McKerall 1 it is thought that production flow from the payzone was inhibited due to concrete invasion of the formation and the cost of attempting to rectify this was not economically justified.  At EWL 53 technical issues prevented completing and producing the well from the most productive zone. Whilst the well has been plugged and abandoned, consideration is being given to the drilling of a simple vertical well targeting the main pay zone identified in logs. The results of both these wells are not material to the group and capital costs are available to set-off against the profitability now being achieved from Louisiana operations. In light of the determination of President to focus and expand its operations in Argentina, the Company aims to maintain the solid cash flow from its Louisiana assets, with minimal capital outlay. Peter Levine, Chairman, said: “Whilst it has to be acknowledged that Louisiana is now very much secondary to President’s activities in Argentina, the increase in revenue from Louisiana is pleasing and is paying the Company’s G & A costs as Argentina gears up.”

Providence Resources;

Reported that an appraisal well that it is drilling in the North Celtic Sea Basin, offshore southern Ireland has already encountered notable gas shows. The 48/24-10 Barryroe well is located in 100 m of water approximately 50km offshore Ireland in Standard Exploration Licence (SEL) 1/11. The well has reached section total depth of 4,038m true vertical depth subsea with the key geological horizons having been encountered close to the pre-drill depth prognosis.

Red Emperor Resources;

Informed investors thus; Following a further internal and independent review of the seismic data for the Kursebi area, Red Emperor and its partners in Georgia confirm that work is due to commence on the preparation of the well site and surrounds in readiness to receive the drilling rig for the spudding of the second exploration well on the Kursebi 2 prospect. Spudding of the second well is targeted for late Dec’ 2011 / early Jan’ 2012. As identified in the RPS report announced in December 2010, the Kursebi 2 prospect has mean unrisked gross undiscovered estimated oil in place of 160MMbbls (Red Emperor’s 20% attributable interest is 32MMbbls).

Rockhopper Exploration;

Made its third discovery in the North Basin. Exploration well 14/15-4 penetrated multiple reservoir targets: Beverley, Casper South, Casper and Sea Lion Main Complex and was drilled on licence PL004b. Rockhopper earned a 60% interest through the drilling of the well, which is on a licence that was previously controlled by its partner in the region, Desire Petroleum. Rockhopper said that all four targets were hydrocarbon bearing and that no water wet sands were observed in the well. The excitement for Desire, which had a 40% carried interest in the well, is that it encountered hydrocarbons in the Beverley and Casper South (Shona) reservoirs. The well was located approximately 12.1km to the south west of the 14/10-2 discovery well and 6.3km to the south of well 14/10-9.

San Leon Energy;

Struggling San Leon said that it has spud the Rogity-1 well on its Braniewo S Concession in the Baltic Basin, Poland. The well, which is operated by Talisman Energy Poland, is targeting unconventional shale gas in the Lower Silurian, Ordovician and Upper Cambrian.  This is the second well in a three well program in the Baltic Basin, with an additional well to be drilled in the Szczawno Concession in early 2012. The Rogity-1 well will be the easternmost penetration of the Paleozoic section in the Baltic Basin.  This area is believed to be less thermally mature and is considered to carry more risk than the western part of the Baltic basin, but the Company believes it has the potential for a more liquids rich production. The sp duely responded on the news by heading down!

Valiant Petroleum;

Stated that its full year production for 2011 is projected at around 7,500 barrels of oil per day, in line with guidance maintained throughout the year. The Dons Area work programme for 2012 is currently being finalised with the operator and includes a new production well in Don Southwest, a new water injection well in West Don and a side track of an existing West Don production well which is currently shut in. The programme is anticipated to commence at the beginning of Q2 at a total cost of around $45 million net to Valiant. Project execution for the Causeway development is progressing well with all of the long lead items now ordered and main contracts in place. First oil is anticipated in the second half of 2012. Production guidance for 2012 is in the range of 7,000 to 8,500 bopd and is principally dependent on agreement of the final Dons Area work programme and timing of Causeway first oil. Valiant intends to provide a full operational update to the market early in the new year. And last but not least Xcite Energy finally began to pick its sad sorry arse off the floor with two bits of news. 1/ A share-holder update copys of which can be viewed by clicking this link.

2/ By announcing it has signed a letter of intent with Teekay Shipping Norway AS for the provision of a shuttle tanker for the forthcoming Phase 1A of the Bentley field development programme. A good idea for Xcite may be to splash some cash to keep their poorly web-site updated.  As of yet still not showing the latest news releases.

Xcite Energy; ( NB*** JUST IN THIS AFTERNOON!)

Stunned investors this afternoon by announcing that it has agreed a £25.8 million private placement with Socius CG II, Ltd.  a subsidiary of Socius Capital Group, LLC. Based in Bermuda, Socius invests in emerging growth companies in the United States, Canada, Europe and Australia. The Company also announced that it has entered into a £60 million Equity Credit Facility with Esousa Holdings, LLC with whom Socius has been a co-investor in previous transactions.  The Company has terminated its standby equity agreement with YA Global Master SPV Ltd. dated September 27, 2010. The combination of financing made available from the Placing and the Equity Credit Facility will further strengthen the Company’s balance sheet to allow it to progress Phase 1A of the development of the Bentley field. Commenting on today’s announcement Richard Smith, CEO, said: “Against a challenging economic backdrop, we are very pleased to have further strengthened our balance sheet as we move forward with the field development plan towards first oil.” The Placing will occur in two stages.

There’s never a dull moment on the A.I.M!

Toodle pip!!


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  1. angela says:

    ops you miss Matra Petroleum on your round up Dan…….lol


  2. angela says:

    send it to me Dan, they do not deserve one.

    thanks and GLA

    Ps I will send PH a nice bottle of wine Amarone for Xmas.

  3. Dan says:

    There’s nothing ‘strong’ about raising £25.8mln at 85p. Nothing strong at all. The BoD’s have dithered, stalled and learned a precious lesson. It’s better to secure funding early than at the 11th hour. After 12 months of exploring debt and credit facilities – this is the best they can do. It’s shocking management and they have destroyed a gem of a business. 12 months ago – they could have raised double the amount raised today and at 5 times the sp.

    The poor management decision to fund Bentley’s first stage production has seen them literally give half the company away for just 100p per share. What’s the point in retaining 100% interest in the Bentley licence when you halve its value via share dilution? Any sensible board of directors would have sought a farm out deal with Statoil as they have licence blocks close to Bentley. Last year Statoil bought a slice (approx 20% interest) of Mariner (heavy oil prospect similar to Bentley) from Nautical petroleum for £87.5mln in cash.

    Had Xcite’s shareholders had the calibre of management such as NPE in charge of Bentley – it’s very likely that the sp would be 250p+ (even in this market) and they would have 50% less shares in issue and be fully funded for stage 1.

    Xcite is a classic example for shareholders to learn from. No matter how great your company assets – it’s the BoD’s that hold the keys and if some of them are learner drivers – then be very very aware.