The Smallcap Oil & Gas round up

It’s the smallcap round-up. It’s becoming quite a feature. Highs & lows this week came from Lansdowne, Serica, Oilex, Petrel, Range, while Sefton retraced Madagascar dipped & Matra where stuck in RNS limbo!

Bayfield Energy;

Reported that its first exploration well in the Galeota Licence, EG8, has been suspended as an oil and gas discovery. EG8 lies 930m east of a previous discovery well. EG2, which was drilled in 1978 and tested oil and gas. EG8 was deviated from its surface location towards the south west in order to target the crestal area of mapped horizons in the prospective EG2/EG5 Central fault block. The well encountered ten hydrocarbon-bearing sandstone reservoir zones between 1,364ft and 6,000ft below mean sea level. Preliminary analysis indicates that the vertical thickness of net hydrocarbon-bearing sands totals 421ft of which 352ft is gas and 69ft is oil.

Borders & Southern;

Provided an update on the drilling of its Darwin prospect,currently on-going and the drilling of the well has gone according to design. However, progress was stalled due to some technical issues associated with rig equipment. These rig issues have now been addressed and the well is again progressing in accordance with the design. As a result of the delays the Company anticipates another 4 to 5 weeks of activity on the well. A further announcement will be made once the well has reached total depth, the wireline logs have been run and their interpretation completed.

Coastal Energy;

It was good news for investors in Coastal this week as the company reported a new discovery at its Bua Ban South A-01 well in Thailand. The well was drilled to a total depth of 8,500 feet TVD and encountered 88 feet of net pay in the Lower Oligocene section. Coastal said the new discovery demonstrated good reservoir characteristics with 12 percent porosity and that recorded pressure data indicated that this is a new and separate accumulation from the Bua Ban Main field.

Cove Energy;

Released the results of their first flow test on a major gas discovery in the Rovuma Basin Area 1 block, offshore Mozambique. Testing of the Barquentine-2 well flowed gas at an equipment constrained rate of 90 to 100 million cubic feet per day with minimal pressure drawdown supporting future development well designs capable of 100 to 200 MMcf/d. Cove said the test data supported potential unconstrained flow rates of up to 200 MMcf/d and confirmed the requirements for fewer development wells than originally planned. Cove is currently the focus of a huge amount of takeover speculation following a 195p per share cash bid last month by Royal Dutch Shell, valuing the company at £992.4 million.

Egdon Resources;

Said production and revenue figures rose during the first six months of the year (Hooray!) but the company still missed its targets because of production issues at its Ceres and Kirkleatham gas fields. (Boo!) Egdon, who operate in the UK and across mainland Europe, saw year-on-year production jump by 67% to 29,624 barrels of oil equivalent in the 6 months to 31 January 2012. Which amounts to 161 boe per day (for the period against 96 boepd previously. Revenues from oil and gas sales during the period were up by 71% to £1.54 million. Egdon said that Ceres had continued to suffer from issues with production infrastructure and had contributed only minor amounts of production during the period. The field is currently shut-in.

Enegi Oil;

Announced that it has entered into a strategic partnership with Advanced Buoy Technology Ltd to apply for offshore assets in the UK North Sea under the 27th Seaward Licensing Round, organised by the Department of Energy and Climate Change (DECC), which has already commenced.

Gold Oil;

The tiddler with an attitude, has now completed the processing and interpretation of the 3D marine seismic Erika North and South surveys.  An independent Competent Person’s Report has been received from DeGolyer and MacNaughton  which provides new volume and valuation estimates for twelve prospects identified by Gold Oil on the block.  The mean prospective resources certified by D&M total a combined 2.02 billion barrels of oil with a mean potential net present value of US$ 2.6 billion.

Gulf Keystone Petroleum;

Released a litigation update. On 14 March 2012, the English Commercial Court in London ordered Excalibur Ventures LLC (Known by the the this site as The Chancers)to make a payment of £6,000,000 into Court within 21 days as security for the costs of Gulf Keystone and two of its subsidiaries of defending the legal action commenced by Excalibur in December 2010. The English Commercial Court also ordered Excalibur to make a payment of £3,500,000 into Court within 21 days as security for the costs of Texas Keystone Inc. In addition, Excalibur was ordered to pay costs of the 14 March 2012 hearing to the Companies and Texas Keystone Inc. and is required to make interim payments of £110,000 to the Companies and £60,000 to Texas Keystone Inc. within 21 days. As announced by the Company on 26 July 2011, October 2012 has been set as a date for a trial in the English Commercial Court of all the claims asserted by Excalibur. The Companies continue vigorously to dispute and contest the allegations and claims asserted by Excalibur.

Kea Petroleum;

Sprung into life this week as the company released an update on its Drilling Programme in the Taranaki basin of New Zealand was delayed due to extreme weather conditions in the region. Worst affected is the programme to drill Mauku which as previously advised requires challenging access and site preparations. The intention was to begin the drilling of Mauku with a shallow drilling rig but Kea may now proceed to drill the entire of the hole with the bigger rig later. Further, Douglas 1 is now being considered to be drilled before Mauku as the site is already prepared. Puka 1 is now expected to spud later next week.

Lansdowne Oil & Gas & Providence Resources;

Bounced up yesterday. News came through that Providence had successfully flowed oil and gas from their Barryroe appraisal well in the North Celtic Sea Basin, offshore southern Eire. During an ongoing well test, a 24 ft thick net pay interval in the oil bearing basal Wealden sandstone section was perforated as the first phase of the programme. Stabilised flow rates of 3,514 barrels of oil per day and 2.93 million standard cubic feet of gas per day (4,000 BOEPD) were achieved through a 68/64″ choke with a well head pressure of 517 psia without the use of artificial lift. As expected, laboratory reservoir fluid analysis confirmed that the oil is light with a gravity of 42o API and a wax content of 20%. The oil is highly mobile with an in-situ reservoir viscosity of 0.68 centipoises and a gas-oil ratio of c. 800 SCF/STB. The upper gas bearing basal reservoir zone is currently being prepared for testing and flow rates from this section are planned to be comingled with the basal oil zone to assess any additional flow rate potential.

Max Petroleum;

An oil and gas exploration and production company focused on Kazakhstan, announced that the Kazakh Government has granted regulatory approval to convert the Zhana Makat Field to full field development status effective immediately. FFD approval will allow Max Petroleum to develop and produce the Zhana Makat Field for up to a further 25 years, as well as grant the Company a right to sell 80% of crude oil production from Zhana Makat on the export market under the terms of its Blocks A&E exploration and production contract. Current export oil sales are generating after-tax net proceeds that are approximately US$22-US$25 per barrel higher than comparable domestic sales. Zhana Makat is currently producing approximately 2,100 barrels of oil per day.

Range Resources released the Company’s Half Year Report for the period ended 31 December 2011. A copy of the full Half Year Report is available on the company’s website:

San Leon;

The fast growing oil and gas company (Not fast enough!) with an extensive portfolio of assets across Europe and North Africa, noted the announcement from Providence Resources plc updating on the Barryroe well.  San Leon announced, on 23 December 2011, that the Company has assigned its 30% working interest in Standard Exploration Licence 1/11 to Providence in exchange for a 4.5% NPI on the full field. San Leon Energy will not pay any further appraisal or development costs on the Licence and is not paying any costs towards the 48/24-10 well.

Sefton Resources;

One of the star performers last week about turned this week and confirmed its Grand old Duke of York title. The independent oil and gas exploitation and production company with interests in California and Kansas, announced the findings of an Independent Competent Persons Report produced by Dr. Nafi Onat which assesses and values the company’s potential oil and gas resources in Kansas. The report failed to impress. Investors marched them down again!

Serica Energy;

Announced that, subject to the consent of the Ministry of Mines and Energy in Namibia, BP will be joining Serica in the exploration of Licence 0047 offshore Namibia by farming-in to Serica’s interest. Under the transaction, BP will pay to Serica a sum covering Serica’s past costs and earn a 30% interest in the Licence by meeting the full cost of an extensive 3D seismic survey.  As a result of the farm-out, Serica’s interest in the Licence following completion of the seismic survey will be 55%.  Serica has also announced that it has signed a contract with Polarcus Seismic Limited to acquire up to 4,150 square kilometres of 3D seismic across the Licence.

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