The Smallcap Oil & Gas round-up


Pulled a rabbit out of its hat this week with a positive NTORYA-1 DRILLING UPDATE. Earlier in February, Ntorya-1 was drilled to 2,500 metres but failed to encounter the expected sandstone reservoirs at depths between 1,800 to 1,900 metres. However, sandstones were encountered at depths from 2,300 metres and a decision was taken to drill deeper to 2,750 metres. Prior to reaching the current depth the well encountered strong gas shows in a good quality reservoir sandstones at a depth of approximately 2,660 metres. A logging programme is due to start shortly to evaluate the new section drilled below 2,500 metres. The Ntorya-1 well is designed to test the high quality Basal Tertiary and Upper Cretaceous sands previously encountered in Aminex’s Likonde-1 well, 14km to the north. Aminex holds a 75% interest and operatorship of the well, with Solo Oil holding 25%.


Cheered investors today as the company confirmed that Dragon Oil are in preliminary discussions regarding a takeover. Dragon Oil notes the recent movement in Bowleven’s share price and confirms that it is in the preliminary stages of exploring a possible offer for all of the issued and to be issued share capital of Bowleven. The share-price was up 77% this morning.


Cadogan Petroleum;

Advisesd this week that it has decided to temporarily suspend operations on its Pokroskvoe 2a well. Thewell has been drilled to 4,783 metres into the V22 level of the Upper Visean that exhibited gas shows during drilling and led to a 7″ liner being run in and cemented. The logs acquired indicated the presence of hydrocarbons in the lower part of the well and a decision was taken to deepen the well by approximately 350 metres. Whilst pulling out of the hole the running string became stuck and subsequent fishing operations with the limited equipment available in country has not allowed the running tool to be recovered. Management will evaluate the most effective option, amongst those available, to re-enter the well. Following management review a decision has been made to move the drilling rig to the planned Zagoryanska 11 well, a 5,160 metre well into the Upper Visean. Workover programmes on Zagoryanska wells 1, 2 and 8 continues.

Caza Oil & Gas;

Announced that it’s exploring the possibility of selling its San Jacinto Property in Midland County, Texas. Caza said that even more favourable investment opportunities and attractive recent Wolfberry properties’ sale prices has led the management team to explore the possibility of divesting the property. As a result, Caza has listed San Jacinto with the Oil & Gas Asset Clearinghouse, a leading oil and gas property marketing and advisory firm, to determine the level of interest in the current market.

Circle Oil;

Updated regarding the commissioning  of its new pipeline and associated infrastructure for its Rharb Basin permits in Morocco. The pipeline has been successfully pressure tested, certified and commissioned. Test supplies commenced on 1 February 2012 and gas has been supplied to local industry since that date. The total delivery through the new pipeline is currently approximately 36,000 Nm3/d (1.27 MMscf/d). This is scheduled to rise to approximately 90,000 Nm3/d (3.18 MMscf/d) by the start of March. Total deliveries through the old and new pipeline will then be approximately 150,000 Nm3/d (5.30 MMscf/d) with net revenues to Circle, on an annualised basis, increasing to approximately US$14 million per annum.


Enegi Oil;

Release a Garden Hill South Operational Update. Further to the release dated 10 February 2012, Enegi confirmed that Schlumberger has successfully completed the acid injection. The operation went as planned, under very harsh conditions, and approximately 80,000 litres of fluid were used.  The significant quantity of fluid used in relation to the wellbore volume indicates the acid has successfully penetrated the surrounding reservoir. And as further proof of good investor relations Enegi released Photographs of the work on the company website ( Further updates will follow as the programme is executed.

Faroe Petroleum;

Tried to put on a brave face this week. Investors were left disappointed by the results of an exploration well on the Kalvklumpen prospect in the Norwegian North Sea. The 25/6-4 S Kalvklumpen well spudded on 10 January 2012 and reached total depth of 2,738m within the Dunlin Formation. The well targeted sandstones of the Palaeocene Hermod Formation and the Jurassic Brent Group and, whilst excellent reservoirs were confirmed in both targets, no hydrocarbons were encountered.

Magnolia Petroleum;

Acquired an additional 480 gross acres with an average 83.33% working interest in the oil producing Mississippi Lime Formation, Oklahoma. The move comes just days after the company snapped up a 100% interest in 800 acres over the same formation, together with minority interests in leases over a further 284 net acres. This latest deal was conducted via a farm-out, with no upfront cost to the company. Magnolia said it was on course to drill one well in the Mississippi Lime Formation by the end of 2012.


Got its hands on a large chunk of change this weekk. The company announced that funds falling due upon completion of its sale of an 18.375% interest in the Isarene Production Sharing Contract to Enel Trade SpA have been received. The amount received was in excess of $100 million,which  has been partly applied to the repayment of all amounts owing to Macquarie Bank Limited under the $30 million bridge facility negotiated in October 2011. Further contingent consideration amounts may become payable to Petroceltic upon approval of the Declaration of Commerciality by the Algerian authorities, which is expected later in 2012. Post-completion, Petroceltic operates the permit with a 56.625 % interest, Sonatrach maintains a 25% interest, and Enel holds an 18.375% interest.


Has thrown in the towel. The independent oil and gas exploration, development and production company focused on Latin America, announced a General Meeting at 10.00 a.m. on 9 March 2012 to seek approval from Shareholders of the Company for the cancellation of the admission of the Company’s Ordinary Shares of US$0.10 each to trading on AIM (the “De-listing”) and re-registration of the Company as a private limited company further to a request received from the Tribeca Group and the JCR Group.

Providence Resources;

Said that they and thier partners have begun planning an exploration well on the Dunquin exploration prospect, offshore Ireland, which is scheduled to drill in the second quarter of next year. Exxon Mobil, which holds a 27.5% interest and operatorship of Frontier Exploration Licence 3/04 on behalf of its partners, Eni Ireland(27.5%), Repsol (25%), Providence (16.0%) and Sosina Exploration (4.0%). Following a recent meeting, the 2012 budget was approved by all partners which includes the provision for well design activities and procurement of long lead items as part of the ramp up to the drilling of an exploration well on the Dunquin prospect.

San Leon;

Announces that it has completed the drilling, initial evaluation, and has cased its Siciny-2 well in the SW Carboniferous Basin of Poland, which comprises of 880,000 acres held 100% by San Leon.  The well is located in the company’s 100% operated Gora Concession 70km to the southeast of the city of Zielona Gora. More than 265 meters of continuous core were collected across three prospective intervals identified in the Siciny-1 well.  A previously unseen fourth potential Carboniferous shale section and a fractured tight gas sandstone was also encountered below 3,200 meters in the well. During drilling, continuous gas shows (C1-C3) were encountered across the four prospective shale intervals as well as through the tight sandstone interval.  Evaluation and interpretation of the core and logs is expected to take 3-4 months in preparation for future production testing operations.

Sefton Resources;

Released a reserves update for its Tapia and Eureka Canyon Fields in California. The figures were in line with analyst forecasts, with the oil assets valued at £87.7 million and proved reserves unchanged at 3.7m barrels. Based on a report by Reed W. Ferrill & Associates, Sefton said the asset valuation had come in slightly higher than the mid-year valuation despite a reduced oil price. The company reported the quality of reserves was improving as recent work at Tapia had allowed proved undeveloped reserves to move up into the proved developed non-producing and proved developed producing category of reserves. Jim Ellerton, executive chairman of Sefton, said: “The recent drilling at Tapia, together with the renewed cyclic steaming program, a pending updated geologic model from Petrel-Robertson following current core analysis and the completion of Dr Farouq Ali’s thermal stimulation model based on the updated geologic model is expected to have a significant impact on production and reserves by mid-2012″

Solo Oil;

Updated on activities in South Western Ontario, Canada operated by its Joint Venture partner Reef Resources.The recent cold weather in Ontario has improved conditions for completing the pipeline between the existing South Airport gas well and the Ausable process facility. Once the pipeline welding is completed the required road bores will be conducted. The reversal of the Union Gas meter, which will allow the Company to purchase natural gas for re-injection in the Ausable reef, is tentatively scheduled for February 27th.  Piping modifications at the facility will commence once the gas flow is reversed.  This will allow initiation of the gas re-injection scheme.  Additionally, gas and gas liquids from South Airport will also be used for re-injection once the pipeline is completed and commissioned. For Ntorya1 update update see Aminex listing.

Sound Oil;

Advised by the Operator of continuing difficulties on the Cataka-1 exploration well.  Progress in drilling the upper section has continued to be difficult due to the unstable nature of the rock formations.  Attempts to drill ahead from the 13 3/8″ casing were not successful, necessitating a second side-track of the well which was established by milling a window in the casing.  Similar difficulties to the first side-track have been encountered in this new section.  Consequently the Operator has today recommended to the Joint Venture partnership to abandon the well at the present depth of 1413 ft.  The Operator intends to undertake a detailed post drilling evaluation of the operation with a view of returning to the prospect within or at the end of the current drilling campaign.  The rig will now be demobilised and moved to the Jatayu-1 location, approximately 20 km to the southeast. The Operator on Bangkanai has advised that the rig for the Kerendan drilling campaign is expected to be mobilised from Batam Island, Riau to Kalimantan by the end of this month.  It is intended that the rig will commence operations by drilling four development wells on the Kerendan gas field and then begin the exploration programme on the licence.

Tower Resources;

Confirmed that the Mvule-1 exploration well spud at 16.00 hours (GMT) on 12th February 2012. The well is being drilled to an estimated depth of 620 metres. Operations are expected to take two to three weeks and a further announcement will be made once drill results have been determined.

Xcite Energy;

It’s been a great couple of weeks for Xcite as the company share-price went on a surge rising over 60% at time of writing. Of course we did tell you all about the DECC approval being in the bag. Xcite announced that it will host a site visit for media and analysts to the Rowan Norway Jack-up Rig currently moored in Dundee, ahead of its deployment to the Bentley Field.  An overview presentation, containing no new material information, will be given as part of the visit. The presentation is available at

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