The Smallcap Oil & Gas round-up

Here we go it’s the smallcaps oil & gas write-up. It’s been a busy week. Particular congratulations to Matt Lofgran who came out  with both barrels blasting; Ned Kelly style!

Aurelian Oil & Gas;

In the foreground, offshore support vessel Toi...
Fishing for oil!

Confusion reigned yesterday as Aurelian released a whole raft of Holding RNS releases. The releases were in-order to comply with the Takeover code, this applies because the company announced that it has entered an Offer Period, which requires  all parties with a holding above 1% notify the market.

Borders & Southern Petroleum;

Announced that it has begun drilling exploration well 61/17-1, which marks the first of a two-well programme on borders’ 100%-held licence PL018. It is anticipated that operations will take about 45 days. The well is designed to test the Darwin East prospect, a fault / dip closed structure with a Lower Cretaceous sandstone reservoir target. It will investigate geophysical attributes that include a flat spot, amplitude conformance to structure and an AVO anomaly.

Caza Oil & Gas;

The exploration, appraisal, development and production company, released an operational update. Copys of which can NOT be viewed by visiting the company website as they have as of yet NOT bothered to incorporate it. You can view the full update by clicking this link.

Chariot Oil & Gas;

Has received full approval from the Ministry of Mines and Energy in Namibia for its farm-out agreement with BP in block 2714A, which was originally announced in August 2011. As part of the farm-out agreement, BP has committed to cover Chariot’s cost of drilling the first exploration well in this block as well as past costs incurred, which have now been received. As a result, the ownership of Southern Block 2714A now consists of 50% Petrobras, 25% BP and 25% Enigma (Chariot’s subsidiary). The block currently has 11 identified prospects, one of which – Nimrod – is due to be tested in the second half of this year with the drilling of the Kabeljou-1 exploration well.

Enegi Oil;

Announced that, based on analysis performed to date and accounting for advice received from an independent consultant reservoir engineer, the Company believes the PaP#1-ST-#3 well can be flowed continuously at controlled rates without damaging the productivity of the Well. Accordingly, the Company intends to flow the Well continuously for approximately 14 days to gather additional data before commencing the bullhead acid squeeze.  Additional personnel have already been recruited to run on-site operations on a 24 hour basis.  In addition, Schlumberger has left certain pieces of equipment onsite in order to facilitate the commencement of the bullhead acid squeeze as soon as practicable after the Well has been flowed. Thank you Schlumberger! Following completion of the workover, the Company intends to complete a new resource report to update the Competent Person’s Report prepared in 2007.

Jupiter Energy;

Said that its J-51 well was currently producing at 600 barrels of oil per day as production testing continues. Drilling work on J-51 was completed last September, ahead of Jupiter’s November dual listing on the AIM market, and is the third commercial discovery on the company’s 100%-held Block 31  acreage.  In 2011 Jupiter said it had hoped to complete the formal production permitting process by the end of 2011 to get the other wells, J-50 and J-52, into production. However, delays at government level have frustrated those efforts for the time being but the company said it was confident of finalising the sign-offs. Jupiter said it was expecting to begin trial production from J-50 and J-52 during the first quarter of 2012. Meanwhile, the flow testing from J-51 and the exploration results of another well, J-53, which is currently being cased and completed, will contribute to a new reserves report for the Akkar East field in the second quarter of 2012.

Kea Petroleum;

Released welcome news this week the company are set to launch their  2012 drilling programme with the Puka-1 well in onshore Taranaki, New Zealand permit area PEP 51153. Puka-1 is expected to spud within the next four weeks and will be drilled to a depth of 1,550m, with a slight lateral deviation, to test for oil in Miocene aged Mount Messenger Sands.

Matra Petroleum;

At long last Matra released some much needed news. The UNLOVED independent oil and gas exploration and production Company with operations in Russia, announced an operations update (Hooray) with an upbeat title “progress to production” from its 100% owned Sokolovskoe oil field discovery in Orenburg. During a long-term test in 2011, Well A-13 established water-free oil production.  Analysis of production and pressure data suggested that this well should be capable of oil production at around 100 bopd following the installation of surface production facilities and a down-hole electrical submersible pump. Fabrication work on the production equipment for Well A-13 has commenced and the major items of equipment are expected to be on site by late February / early March.  Production from the well will be restarted shortly thereafter. Once commissioned, it is anticipated oil production will commence at about 40 barrels per day.  A work-over rig will then be brought in to install a down-hole electrical submersible pump to maximise production from the well which should increase to around 100 barrels per day. The actual timings of commissioning of these facilities and production start-up is subject to change due to the spring snow thaw that can make transportation of heavy equipment to the well-site difficult and could extend the commissioning period by up to four to six weeks. Drilling of the proposed production Well A-14 and the acquisition of the full field 3-D data are needed as the next steps to fully evaluate the Sokolovskoe oil field before proceeding with a full field development decision. The Company anticipates that the proposed Well A-14 will confirm the presence of “Patch Reefs” that are expected to exhibit much better reservoir qualities and production characteristics than those seen in either Well A-12 or Well A-13 which are located on the flank of the field. The Company anticipates that the location of Well A-14 will allow it to intersect the oil reservoir at a higher elevation (i.e. at the top of the structure providing a thicker reservoir section) within the predicted reef build-up.  The Company believes that the proposed Well A-14 to be relatively low-risk as it is located at the top of the structure, is up dip of proven oil in Well A-12 which flowed at 960 bopd on test and is located towards Well 309 on the adjacent permit which flowed at 1,850 bopd on test.  If the proposed Well A-14 is successful, Matra believe it could add up to an additional 10 million barrels to the Company’s contingent resources. Completion of a full field 3-D seismic survey planned for the first half of 2012 will assist in confirming the full extent of the Sokolovskoe structure and assist in locating future drilling locations particularly in the North Eastern part of the field. Further seismic is not required before drilling Well A-14 as that area has good well and seismic control. The Company will issue further updates as work progresses. Matra’s Managing Director, Peter Hind (known by the blog as Misery Guts) said: “Good progress is being made on the fabrication and installation of production equipment on the Sokolovskoe oil discovery and we are excited about achieving oil production in the near future from our considerable oil reserves on this field.”

Max Petroleum;

An oil and gas exploration and production company focused on Kazakhstan, announced that it has begun testing a second Triassic reservoir in the SAGW-1 well in the Sagiz West Field at depths between 1,243 to 1,255 metres, flowing 43 API gravity oil at a stable rate of 430 barrels of oil per day over a 17-hour period.  Additionally, the Company has begun testing a second Jurassic reservoir in the ASK-1 well in the Asanketken Field at depths between 1,271 to 1,277 metres, flowing 36 degree API gravity oil at a stable rate of 1,005 bopd over a 24-hour period.  Both wells are connected to temporary production facilities and will be placed on long-term test production for up to 90 days. Good news Max and well done.

Mediterranean Oil & Gas;

Released the results of an independent valuation of gas reserves at the Guendalina gas field. The study was carried out by RPS Energy, following the start of gas production at the Guendalina gas field on the 25th October 2011, and provides an updated view of potential recoverable reserves and asset value. RPS’s CPR shows revised 2P recoverable reserves of 31.2 Bcf (6.2 Bcf net to MOG), representing an increase of 42% relative to the previous pre-development valuation of 22 Bcf (4.4 Bcf net to MOG). RPS also estimates P3 reserves of 40.3 Bcf (8.1 Bcf net to MOG).  Further, RPS provides an economic valuation of MOG’s 2P net reserves, in which the NPV, using a 10% discount rate, is €27.2 million.

Nautical Petroleum;

Released news that it has entered into an agreement with First Oil Expro Ltd to acquire a 25% interest in UK Petroleum Exploration and Development Licence P1756, North Sea Block 3/27a, which contains the Hydra prospect. Nautical was previously the operator of Block 3/27a, and has exercised an option to farm-in to the block with First Oil Expro. The licence commitment, to be completed by 10 January 2015, is the acquisition of 250km of 2D and 100 sq km of 3D seismic plus a well to be drilled at the discretion of the participants.

New World Oil and Gas;

Released two pieces of news this week the first dealt with a new funding. Yes New World are tapping the market for US$35 million during February.In order to undertake this funding, the Company needs to increase its authority to issue shares and accordingly, a notice of an extraordinary general meeting to take place on Wednesday 15 February 2012 to pass certain resolutions necessary to allow the fundraising to take place. The second announced that Blue Creek Exploration Limited and the Company have agreed to amend the terms of the Farm-Out Agreement entered into between them on 15 June 2011 through the signing of an amendment agreement entered into between New World and BCE on 26 January 2012.  Subject to standard regulatory approval, the Amendment will lead to New World being assigned a higher working interest in the Blue Creek Project, Belize, following completion of the seismic programme. The BCE FOA relates to the 420 sq km Blue Creek Project in the Petén Basin in Northwest Belize with current estimated gross P50 volumetrics of 294MMbbl and a combined Expected Monetary Value (EMV10) of $1.51bn.  New World is the operator of the Project and currently has a 12.5% working interest with the option to raise this to 100% upon the completion of a staged work in programme.  The Company has completed phase one and two of a planned three phase 2-D seismic acquisition programme, with a total of 139.15 line kilometres acquired to date at a cost of US$2,125,000.

Nostra Terra;

Came out fighting this week as Matt Lofgran stuck the boot in on behalf of his loyal share-holders. (About time too). The company has commenced foreclosure proceedings against the Richfield Oil & Gas Company, formerly Hewitt Petroleum, Inc. Under the terms of the agreement announced on 14 April 2011 Richfield and Hewitt Energy Group, Inc., issued to the Company a US$1.3 million secured loan note which has been accruing interest at 10% per annum from the date of issue and which matured on 31 December 2011.  As announced on 6 January 2012, the Company granted Richfield an extension on the repayment date to 31 January 2012.  To date, no funds have been received from Richfield in respect of the Loan Note. Richfield has been notified that it is in default, and Nostra Terra has begun the process of recovering against the collateral.  The Loan Note is secured against producing leases located in Kansas and non-producing leases located in Utah. Nostra Terra is in the process of assuming temporary control to operate the producing leases in Kansas during the foreclosure process. Well done Matt!  Nostra also stated that Following 3D seismic interpretation at Bale Creek, locations of the initial wells have been adjusted.  Site construction is now underway, and spudding is expected to follow. (Hooray)

Range Resources;

Released their quarterly report this week for the PERIOD ENDING 31 DECEMBER 2011. Copys of the report can be viewed by clicking the link.

Solo Oil;

Announces that it has issued and allotted 115,384,615 new Ordinary Shares of 0.01p each at a price of 0.65p per share pursuant to a drawdown of £750,000 from the three year £10 million Equity Line Facility with Dutchess Opportunity Cayman Fund Ltd. The additional funds will be used for capital to increase production in Canada, develop the recently announced Mina El Carmen block in Argentina and further potential cash commitments for Tanzania depending on the results of the current well being drilled.

Tangiers Petroleum;

Floated on AIM today the stock was down 6% at the time of writing as some investors cashed in their discounted shares. Welcome to London!

Tower Resources;

Informed share-holders that it is set to begin drilling the Mvule-1 well in Uganda within 6-9 days. Tower’s subsidiary, Neptune Petroleum, has begun mobilisation of the OGEC K900 drilling rig to the Mvule-1 site. Preparation of the site is near completion and rigging up is about to begin. The well is anticipated to reach a total drilled depth of about 600 metres within two weeks of spud. It will evaluate estimated recoverable resource potential of 80 million barrels.

Xcite Energy;

(As foretold by the blog) Released HEARTY news the company said that they believed that all of the broad operational and planning questions from the Department of Energy and Climate Change with respect to Phase 1A and Phase 1B of the Bentley First Phase Development had been addressed. A number of detailed questions on technical matters were currently being resolved and it expected that this would be completed as a matter of due process.DECC is understood to have issued a letter of comfort to Xcite to confirm its support for the Field Development Plan for the Bentley field and is broadly satisfied with the phased development approach from a resource recovery perspective. This now leaves the formal approval of the FDP subject to funding and any amendments to the FDP that may be proposed by Xcite following the results of Phase 1A, with the re-submission of the FDP expected in the latter half of 2012

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