It’s been a busy week once again in the smallcaps oil & gas underverse. Forum Energy hit the headlines. At one point the stock was up over 180%! News came from GKP, Bahamas, & Afren to name but three. The rest as they say is now water under the bridge.
Bad news came this week for holders of Afren as the company announced that the Nunya-1x exploration well in the Keta block offshore Ghana has encountered thick and high quality water-bearing reservoirs. The objective of the Nunya-1x exploration well was to explore a large four-way dip closed Upper Cretaceous prospect in the Keta block, located offshore Ghana. The well intersected 153 metres of very good quality sandstone reservoirs, however they were interpreted as water-bearing. The well was drilled with the Marianas semi-submersible drilling rig to a total depth of 4,550 metres in a water depth of 1,687 metres. Afren has a 35 per cent. carried interest in the Keta Block and is partnered by Eni (35%. &operator), Mitsui (20%) and GNPC (10%.).
Agora Oil & Gas;
Announced that it has signed a farm out agreement with Valiant Petroleum in respect of the Tybalt appraisal well, located in Blocks 211/8c & 13c in the UK Northern North Sea.
Bahamas Petroleum; RED ALERT
Came out fighting this week as the company share-price carried on downward after it was reported that Bahamian Prime Minister Hubert Ingraham would not permit oil drilling if he was returned to office on May 7th. The leader of the opposing Democratic National Alliance, Branville McCartney has criticized Ingraham for signing license deals ‘where Bahamians will get 12.5% of the proceeds of oil. The Company confirms that its petroleum exploration licenses state that; “where the licensee applies for renewal and has complied with the Act, Regulations and the terms and conditions contained in this license, the Governor-General shall renew this License for a further period of three (3) years.” Bahamas Petroleum believes it has significantly exceeded all license commitments and obligations with cumulative expenditure in excess of $50 million. Reports of buys being recommended up to 22p are sheer madness stay well away until this mess is cleared up.
Borders & Southern;
The Falkland Islands exploration group which announced this week a potentially significant new gas condensate discovery, has raised £46.5 million in a share placing at 84 pence per share. The funds will be used to acquire additional 3D seismic within Borders’ existing acreage, to enable further analysis of the results of the Darwin East well and for general working capital purposes, including further contingency funds for the upcoming exploration well.
A fantastic piece of double speak this week from Exillion energy after the FSA ruled against them. No mention whatsoever in Exillions RNS of the substance of the FSA investigation. tHE London listed independent oil producer with assets in two oil-rich regions of northern Russia, Timan-Pechora and West Siberia, confirms that it has concluded a settlement with the FSA in relation to an investigation. Exillon accepts the FSA ‘s decision, which was in connection with failing to identify and notify to the FSA certain Related Party Transactions in 2010. These transactions were disclosed in April 2011 in the Group’s 2010 Financial Statements. The FSA did not conclude that any officer of Exillon Energy had acted improperly, or to suggest that any party benefited financially or that Exillon’s shareholders suffered any losses. Is that right? No it’s not here’s exactly what the company don’t want you to know…..Exillon Energy has been fined £292,950 for not informing UK regulators of nearly £1m of related-party payments to its former chairman. The Financial Services Authority said the Russia-focused FTSE 250 oil explorer had failed to disclose an informal arrangement whereby it paid expenses, including private travel and children’s tuition, for Maksat Arip and then netted them off his annual salary. The UK regulator said the practice had started when Exillon was a private company but continued for about a year after its December 2010 listing on the London Stock Exchange. The company had proper disclosure policies in place but the Russian-speaking managers received inadequate training and failed to identify the £930,000 in payments as related-party transactions.
An oil and gas exploration and production company with a focus on the Philippines, hit the stratosphere this week as they announced that they had received a report by Weatherford Petroleum Consultants on the interpretation of new 3D and 2D data acquired over the Service Contract 72 licence area in 2011. During 2011, 2,202 Line-Km of 2D seismic data were acquired over SC72 in order to further define additional leads already identified, and 565 Km2 of 3D seismic data were acquired over the Sampaguita Gas Field in SC72. The interpretation of these surveys has now been carried out by Weatherford. Their report has given the directors a better understanding of the Sampaguita Gas Field and identified a prospect in the North Bank which is located to the north of Sampaguita within SC72. In addition, the report has identified a number of potential drilling locations.
Gulf Keystone Petroleum;
Has completed a testing programme on its Shaikan-4 deep appraisal well, drilled 6km to the west of the Shaikan-1 discovery well in the Kurdistan Region of Iraq. During testing, the company achieved total maximum aggregate flow rates of 24,000 barrels of oil per day. The extensive well testing programme commenced in December 2011 after Shaikan-4 had drilled to a total depth of 3,387 metres. Preliminary results of the Shaikan-4 drilling operations were a significant contribution to the new data used by Dynamic Global Advisors, independent Houston-based exploration consultants, to calculate an addition of over 3 billion barrels of gross oil-in-place volumes for the Shaikan discovery announced in November 2011.
Hardy Oil & Gas;
Announced that on 23 April 2012 the Company consented to relinquishment of the KG-DWN-2001/1 (D9) exploration licence. On 23 April 2012, the Company received a proposal from Reliance Industries Limited, the operator of Hardy’s D9 block, in which the Company holds a 10 per cent interest, for the relinquishment of the block. The proposal set out that following the integration of all geoscientific data and the results of the three exploration wells, including the KG-D9-A2 natural gas discovery, that the block’s hydrocarbon potential is low and further exploration or appraisal activity is unwarranted. Subsequently, Hardy has provided its consent to the relinquishment of the D9 block.
The Kazakhstan-focused oil exploration and production company, trading on AIM and ASX provided the following update on operations at Block 31, Kazakhstan. Trial production of J-50 and J-52 has commenced with a combined daily production rate of an expected ~600 barrels of oil per day; all production is transported by road tanker to a 3rd party processing and storage facility. Jupiter has entered into agreements with two oil traders for the sale of Jupiter’s oil at the storage facility for a price of $US400/tonne (~$US58/barrel). Both oil traders have agreed to 100% prepayment for the aggregated supply of 6,000 tonnes of oil on the basis that each will take 3,000 tonnes; advance payment of $US1.2m has been received by Jupiter and a further $US1.2m is due next week. Under the sale arrangements, the cost of transportation from the field and subsequent storage at the facility is being borne by Jupiter. The sale price of ~$US58/barrel adjusted for the budgeted costs of transportation and storage at ~$US6/barrel, equates to a net price of ~$US52/barrel.
Informed the market of the commencement of drilling of its Douglas-1 well on permit PEP 51153 within New Zealand’s onshore Taranaki Basin. The Douglas prospect is mapped as a Tikorangi Limestone target at a depth of 3,000m, which Kea expects to reach in four weeks. Following on from that on 25 April 2012, Thornaby Limited, a company wholly owned by the trustees of the I R Gowrie-Smith Family Settlement, of which I R Gowrie-Smith, the Chairman of Kea Petroleum, is a beneficiary, purchased 300,000 Ordinary Shares of 1p each in Kea at a price of 8.5p per share on 24 April 2012. Thornaby Limited’s total beneficial interest in Kea is 69,300,000 Ordinary Shares, representing approximately 13.61% of its issued share capital.
Mediterranean Oil & Gas;
Announced the following: Production from the Guendalina gas field for the first quarter of 2012 achieved an average gross production of 580,000 scm/day. This represents net production by the Company of 116,000 scm/day (MOG interest 20%) and yielded revenue of €4.0 million for the 1st Quarter of 2012. The processing by Fugro-Geoteam Pty Ltd of 1,012 square kilometers of the newly acquired 3D seismic survey data from exploration Area 4 offshore Malta is complete. Interpretation of this data will be carried out by MOG and by ERC Equipoise Ltd, the selected Independent Competent Person, with the results expected early in the 3rd Quarter of 2012. As a result of the strong revenues from Guendalina and our onshore gas assets, the Company proposes to immediately repay €2.0m previously drawn by MOG in February under the short-term secured loan facility entered into with affiliated investment funds of Och-Ziff Capital Management Group to assist the Company fund the acquisition of the 3D seismic data offshore Malta. Following the repayment, the Company will have no debt outstanding. Dr. Bill Higgs, Chief Executive of Mediterranean Oil and Gas, commented: “We have made a very solid start to the year in delivering both reliable cash flow from our producing assets in Italy, and acquiring the seismic data required to evaluate our prospective resources offshore Malta.”
Released an operations update today. The Jolly Ranch work-over and geo-science programs are continuing on schedule. Two work-over rigs have been engaged on-site over the past month and have completed the planned down-hole work on eleven wells. Extensive work on the topside production facilities is now underway. The program has provided valuable additional data on these wells and on the Jolly Ranch acreage as a whole. The Company has also acquired and processed new log information on third party wells and new seismic data. Early conclusions from this work suggest increased potential for production from a number of hydrocarbon-bearing zones. There is also evidence that commercial production levels can be achieved without hydraulic fracture stimulation, substantially reducing development risks and costs. The Board are encouraged by these early results and are seeking to accelerate the planned drilling of new wells. Selection of well locations, permitting work and assessment of rig requirements is now underway.
Red Emperor Resources;
The AIM and ASX exploration group that is currently involved in drilling operations in the Puntland region of Somalia, has raised £6.24 million in a placing priced at 32 pence per share. Funds raised under the placing will be used for exploration activities at the company’s projects in Puntland and in the Republic of Georgia.
The Central Asian oil and gas company with a focus on Kazakhstan, announceS that the NK-7 well was spudded at 00:00hrs (local time) on 25 April 2012. This appraisal well is planned to drill to a total depth of 1400 metres and is targeted to encounter Jurassic sands and Conglomerate in the North Channel of NW Konys. Drilling operations are being coordinated by our operating partners LGI and are expected to take approximately 30 days, after which a further announcement will be made. This is the first of 6 wells expected to be drilled across the Group’s assets before the end of the year.
Released a Statement of Reserves Data and other Oil and Gas Information (Form 51-101F1) and Funding Strategy. The Key Points being…2P oil reserves for the Core Area of approximately 116 MMstb, with NPV10 (after tax) value of approximately $1.46 billion….Funding resources for Phase 1A work programme available to the Company….Funding for Phase 1B work programme planned to be secured from external sources and oil revenue….Advanced discussions being held with group of commercial lending banks to secure reserves based lending facility….Company considering a range of options (including farm-out partner, industry participation, convertible debt instruments and equity) to finance the balance of funds required for Phase 1B; Jefferies and Rothschild appointed to assist. The Company has filed under its profile on SEDAR (www.sedar.com) and on its website, its annual Statement of Reserves Data and other Oil and Gas Information (Form 51-101F1) under National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities and in accordance with the Canadian Oil and Gas Evaluation Handbook, with an effective date of 31 December 2011. The Form 51-101F1 is an annual statement required by Canadian regulations to be filed by the Company, which sets out its interests in oil and gas reserves, provides key data with respect to those interests and identifies changes, if any, which have occurred since the previous annual filing. The information contained in the Form 51-101F1 is taken directly from the recently updated Reserves Assessment Report (“RAR”) prepared by TRACS International Consultancy Limited, an independent qualified reserves auditor, dated 17 February 2012 with an effective date of 31 December 2011. The Form 51-101F is available on the Company’s website at: http://www.xcite-energy.com/companyinformation.htm Oil and Gas Reserves….The Company’s oil and gas reserves are held through its wholly owned subsidiary, Xcite Energy Resources Limited (“XER”), comprising 100% working interest in Block 9/3b, which contains the Bentley field (the “Field”)…..As announced by the Company on 20 February 2012, key information from the RAR in connection with the Core Area of the Field includes…Oil reserves of the type 1P, 2P and 3P for the Core Area of approximately 96 MMstb, 116 MMstb and 140 MMstb, respectively;…NPV10 (after tax) value of oil reserves for the Core Area of approximately $1.076 billion, $1.464 billion and $1.921 billion on a 1P, 2P and 3P basis, respectively*…. NPV10 (after tax) value per barrel of oil reserves in the Core Area of approximately $11.27, $12.64 and $13.77 on a 1P, 2P and 3P basis, respectively*