The UK Smallcap Oil & Gas round up

It’s been a very busy week for the Smallcaps underverse as positions began to be taken in several companies; Most notably Matra Petroleum which has risen approx’ 100% from its lows of 0.50p. Xcite began to trend up on Thursday as rumours circulated on possible JV’s. More fuel was thrown onto the fire after XEL were halted on the TSX Venture Exchange.Eventually the puzzle was solved as the company announced a $50 million dollar unsecured loan note. While main market listed Aminex charged up nearly 50% on rumours that more news could come on Ntorya-1.

Altona Energy;

An AIM listed energy company, announces that it has entered into a Memorandum of Understanding with Maison Global, an established EPC1 & Project Management provider for clean energy projects in the Peoples’ Republic of China. The Agreement is to collaborate in the business development of project opportunities in the area of coal and biomass gasification in China for the production of transportation fuels, energy products and power.


Announced the resumption of drilling at the Ntorya-1 exploration well in the Ruvuma Basin onshore in Tanzania.  On February 27th 2012, Aminex reported that a gas discovery had been made in a 25 metre gross sand interval between 2,660 metres and 2,685 metres with a 3 metre net gas bearing pay zone in sandstones having 20% porosity at the top and a 16.5 metre thick lower sandstone interval with further possible gas pay. A 7-inch liner has been run to total depth of 2,750 metres and drilling is proceeding at 2,845 metres to investigate a prominent seismic event at approximately 3,000 metres.  Having previously logged oil shows in the Likonde-1 well drilled in 2010, drilling to deeper targets offers the possibility of finding liquid hydrocarbons After reaching TD and logging, a test programme will be carried out once the rig has been moved off.

Bahamas Petroleum;

Busy week for Bahamas. They announced final results for the year ended 31 December 2011. A Directorate change, in came Ross McDonald out went Dursley Stott.

Bayfield Energy;

Began drilling the second well in its exploration and appraisal programme in the offshore Galeota Licence Area, designated EG7. The well spudded on 4 April 2012 and is being drilled by the Rowan Gorilla III jack-up rig, following on from EG8, which was suspended as an oil and gas discovery in March following successful drilling results. The well is located in 112ft of water and lies approximately 800m east of well EG1, which encountered oil in 1964.

Borders & Southern Petroleum;

Released their preliminary unaudited results for the year to 31 December 2011. Highlights of which were… An established an office and supply base in the Falkland Islands…Finalised well engineering for the Darwin East and Stebbing wells…Mobilised the Leiv Eiriksson drilling rig from Greenland to the Falkland Islands…Spudded well 61/17-1 (Darwin East)…Cash Balance (including restricted use cash) as of 31 December 2011, $176.7 million

Cairn Energy;

Purchased Agora Oil & Gas, the private Norwegian company with non-operated exploration, appraisal and development assets in the UK and Norwegian North Sea. Under the terms of the deal, which is subject to regulatory approval, Cairn will pay a total of $450 million through a combination of approximately 43% cash and 57% Cairn shares. Agora is currently owned by RIT Capital Partners and Lord Rothschild’s family interests, along with management. Agora will add drilling activity to Cairn’s 2012 exploration and appraisal programme, with nine wells, eight firm and one contingent, scheduled to be drilled in the UK and Norway in 2012.

Chariot Oil & Gas;

Said that it’s wholly owned subsidiary, Enigma Oil & Gas Exploration Limited, has commenced drilling the first well, 1811/5-1, of its 4 to 5 well drilling programme offshore Namibia. Drilling operations began this morning on the Tapir South prospect using the Maersk Deliverer semi-submersible drilling rig, with Chariot as Operator. The prospect has a 25% Chance of Success and a mean un-risked prospective resource potential of 604 million barrels of oil. In the event of success, the results of this well will significantly increase the Chance of Success on certain of the Company’s other prospects within the Tapir Trend.

Cove Energy;

Released an update of the results of the Barquentine-4 appraisal well in the Rovuma Basin Area 1 block, Offshore Mozambique. Barquentine-4 lies approximately 30km north of the Lagosta discovery well at the southern end of the Windjammer, Lagosta, Barquentine, Camarao (WLBC) gas complex. The well encountered 525 net feet of natural gas pay, which now proves a northern extension of the WLBC gas complex. It marks the ninth successful well in Area 1 Rovuma Offshore and concludes a highly successful WLBC appraisal drilling programme. The companies’ next step it to carry out a new exploration drilling programme in the northern part of the block.

Gulf Keystone Petroleum;

Released a litigation update. Further to the decision of the English Commercial Court in London, a payment of £6,000,000 has been made into Court by Excalibur Ventures LLC  as security for the costs of Gulf Keystone and two of its subsidiaries of defending the legal action commenced by Excalibur in December 2010. Excalibur has also made a payment of £3,500,000 into Court as security for the costs of Texas Keystone Inc. In addition, further to the decision of the English Commercial Court to award costs of the hearing on 14 March 2012 to the Companies and Texas Keystone Inc., interim payments of £110,000 and £60,000 have been made by Excalibur to the Companies and Texas Keystone Inc. respectively. As announced by the Company on 26 July 2011, October 2012 has been set as a date for 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. The Board of Gulf Keystone will provide further updates in due course.

Great News came this week as Madagascar Oil announced a successful resolution to all outstanding issues with the Government of Madagascar surrounding its three exploration blocks. (Hooray). Following a recent Management Committee Meeting with OMNIS, the state regulatory agency responsible for overseeing the country’s oil and gas operations, the validity of the Production Sharing Contracts for Blocks 3105, 3106 and 3107 was confirmed and the forward work programme and budgets for the blocks were approved. This means that Madagascar Oil and the Government have now resolved the outstanding issues surrounding the Exploration Blocks and there are no further disputes with the Government of Madagascar regarding the Company’s licenses. (Hooray again) The Company and OMNIS also approved formal amendments to the PSCs which recognise and adopt the minimum work program for the remainder of the exploration term, and allow for the 15 month delay since December 2010 to be added to the end of the exploration period for each of the Exploration Blocks. Force Majeure event on the Exploration Blocks has now terminated.

Matra Petroleum;

Continued to rise this week as sentiment began to slowly return. Our man Dan spoke to the company this week. More of which over the weekend.

Max Petroleum;

Released an update on drilling at the NUR-1 pre-salt well at the Emba B prospect on Block E. The well has reached the top of the Kungarian salt at a depth of 5,718 metres. Upon drilling into the salt, a high pressure transition was encountered resulting in the drilling tools becoming stuck. Operations are currently underway to retrieve them, after which the Company will set intermediate casing and drill ahead as planned.  The Company currently expects the well to reach total depth of 7,250 metres in early June 2012.

PetroNeft Resources;

Good news came this week from PetroNeft as the company announced their 2P reserves had increased 36% to 131.7 mmbbls…Sibkrayevskoye 49.83 mmbbls… PetroNeft’s proved reserves (P1) increase 50% to 20.03 mmbbls… Lineynoye 8.86 mmbbls… Ledovaya No. 2a well achieves natural flow… Arbuzovskoye pipeline construction completed; Development Programme on schedule…Option to advance Sibkrayevskoye development later this year…Production remains steady at 2,300 bopd. KEEP YOUR EYES ON THEM AS WE HERE ARE WATCHING THEM CLOSELY.

Providence Resources;

Have raised £63.1 million in a share placing priced at 480p per share. The placing is understood to have been heavily oversubscribed and completed at a 5% premium to the company’s pre-placing closing price. In late 2011, Providence kicked off a drilling campaign that was the culmination of several years’ work in building an asset portfolio offshore Ireland. The campaign began with the drilling in the basin of the Barryroe oil discovery in the Celtic Sea Basin and activities are planned to continue through to the end of 2013. The move marked the start of a multi-year, multi-well drilling campaign in six of the eight basins in which Providence has licence interests offshore Ireland.

Northern Petroleum;

Announced this week that their minority interests in the potentially significant Zaedyus oil discovery in Guyane, means further drilling on the licence had been pencilled in for later this year. Northern hold a 1.25% interest in the Shell-operated Guyane Maritime block. Last year, the then-operator Tullow Oil made a major discovery with the wildcat Zaedyus exploration well, where 72 metres of net oil pay was discovered in two turbidite sand systems. Shell now wants to drill again, with a second phase of drilling that will involve the spudding of a delineation well on the discovery. That is likely to be followed by an exploration well on one of the neighbouring prospects within the area captured by 3D seismic survey

Solo Oil;

“Termination” was the buzz word this week from Solo as the company announced that talks with mining company Obtala Resources  over a possible asset deal in Argentina have been “terminated.” A great quote from a famous film! The two sides entered discussions last November and went on to sign a Heads of Agreement for Solo to acquire Ilakon Ltd, an Obtala subsidiary that holds the beneficial rights to the Mina El Carmen block in Argentina. “Terminated!”

Sound Oil;

An operations update came this week from tiddler Sound on their Indonesia assets Citarum PSC, Java (Sound Oil 20%) The 13 3/8″ casing has been successfully installed at the Jatayu-1 exploration well in the vertical hole at 2031 ft measured depth. The Operator drilled the top-hole section as planned. The well will now be deviated towards the Miocene Parigi Formation objective. Bangkanai PSC, Kalimantan (Sound Oil 5%) The license Operator has recently advised that the drilling rig for the Kerendan gas field development and associated exploration drilling has mobilised from Batam, Sumatra on 1st April. Transportation is by three barges the last of which is expected to arrive at the Luwe Hulu staging area in Kalimantan by end April.  The equipment will then take approximately one week to transport to the drilling location.  The first well is expected to spud in early June.

Tangiers Petroleum;

Released some news on their MILLIGANS FORMATION OIL PLAY . Much too lengthy for the round-up. So investors can view or read the it by clicking this link.

Valiant Petroleum;

Said that it has entered into a contract to secure a firm rig slot on the Stena Carron drillship to drill the Handcross prospect (Valiant, 90%, operator) located in UK Blocks 204/18b West of Shetlands. Based on the Stena Carron’s current schedule the rig slot is expected to fall within the first quarter of 2013. The Department of Energy and Climate Change has agreed a six month extension to fulfil the Initial Term obligation. The Handcross prospect is a large stratigraphic trap, similar to the nearby Foinaven and Schiehallion fields, which benefits from a number of geophysical anomalies interpreted to reflect the presence of hydrocarbons in Paleocene sands. Gross prospective resources are estimated internally by Valiant to be 180 million barrels of oil equivalent (net 162 mmboe).

Wessex Exploration;

(See Northern Petroleum entry)

Xcite Energy;

Bounced up yesterday as they announced another drawn down on their Equity Line Agreement with Esousa Holdings, in the amount of £2.12 million (CAD$3.35 million). This draw down has been undertaken at a price of £1.134 (CAD$1.792) per share and will result in the issue of 1,866,813 ordinary shares of no par value in the capital of the Company to Esousa. The funding will be used as future working capital for the Company and to progress towards first oil from the Bentley field. Later on Xcite Energy shares were halted on the Canadian TSX Venture Exchange.  As rumours continued online only to be knocked down as the company announced that it issued US$50 million of unsecured Loan Notes to a fund managed by West Face Capital Inc.a Canada-based investment management firm.

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