The Smallcap Oil & Gas Round Up

Aminex : AEX

Said yesterday that test work on its Ntorya-1 well in Tanzania’s Ruvuma Basin, had demonstrated “strong commercial potential” re the gas discovery. During testing, the East Africa focused company perforated the upper 3.5 metres of the gross 25 metre sand interval and the well was flow tested on several choke sizes for extended periods over the last four days with corresponding shut-ins for pressure build-up data. The well flowed gas at a maximum rate of 20.1 million standard cubic feet per day the equivalent of 3,350 bopd and an estimated 139 barrels per day of 48 degrees API condensate through a 1″ choke. Small volumes of formation water were also produced. In the meantime, Aminex is in discussion with seismic contractors to acquire conventional 2D marine seismic in the deep-water portion of the Nyuni Area licence. To date approximately 141 kilometres of full-fold data has been acquired, equivalent to 42% of the entire survey. In recent weeks the survey has experienced downtime due to rough seas in the shallow waters of the transition zone as a result of seasonal weather.  To reduce downtime costs and ensure optimum data quality Aminex has reached a mutual agreement with the seismic contractors to suspend temporarily the survey until late October when survey work in the transition zone is expected to resume.

Cadogan Petroleum : CAD

Directors are dropping like flies over at Cadogan. Alessandro Benedetti has ceased to be a director of the Company with immediate effect. Benedetti is the second Board Member to jump ship in as many weeks Ian Baron being the first! What’s going on?

Circle Oil : COP

Released an update regarding operations in the Grombalia Permit, Tunisia. Written confirmation of the six month extension for the fourth validity period of the Grombalia Permit to 18 December 2012 was received from the Direction Générale de l’Energie on 22 June 2012. Preparations are now underway to drill exploration well Bou Argoub-1 (BAB-1) in the South West Belli area of the Grombalia Permit, near to the Belli, El Manzah and Beni Khaled fields. It is expected that the drilling of this well will commence early in the second half of 2012. BAB-1 will have an expected TD of 1,350 metres and is targeting a fault-bounded structural culmination crossing two vertically stacked fractured carbonate reservoirs, the Eocene Bou Dabbous Formation and the Late Cretaceous Abiod Formation. These are the main oil-producing formations in the north eastern part of Tunisia.

Falkland Oil & Gas : FOGL

Confirmed this week the execution of a farm out agreement with Edison International S.p.a. On 20 March 2012, the Board of FOGL announced that it had granted an option to enter into a Farm Out Agreement to an industry counterparty. That counterparty was Edison which was unable to conclude the farm out agreement at that time as it was undertaking a corporate reorganisation which led to EDF becoming a controlling shareholder.

Gold Oil : GOO

Ahead of today’s Annual General Meeting, Gold gold released an update on its activities in Colombia and Peru: Copies of which can be viewed by clicking the link.

Gulf Keystone Petroleum : GKP

Provided an update on its ongoing appraisal programme at the Shaikan block in the Kurdistan Region of Iraq. The Company has completed the drilling operations of the Shaikan-5 appraisal well, drilled 6 km to the north-east of the Shaikan-2 appraisal well. Shaikan-5 is the fourth well in the five-well appraisal programme, which has been drilled to evaluate the eastern culmination of the Shaikan structure. In May 2012, the well reached a total depth of 3,750 metres in the Kurre Chine Dolomite formation in the Triassic, which is the deepest horizon drilled by a Shaikan well to date. Extensive logs and core acquired during the Shaikan-5 drilling operations have further enhanced the Company’s understanding of the reservoir and its fracture system. Results obtained in the Jurassic interval indicated a continuous oil column with approximately 237 metres of net pay, and porosities which are consistent with results obtained elsewhere in the field, most recently with the Shaikan-4 appraisal well. Good hydrocarbon saturations were calculated throughout the Jurassic interval where fracture intensity appears to be comparable to or exceed those seen in other Shaikan wells. Oil shows were also recorded whilst drilling in the Triassic formation.

Gulfsands Petroleum : GPX

And its partner ADX Energy are set to plug and abandon the Sidi Dhaher well in Tunisia after test work failed to find commercial hydrocarbons.

Ithaca Energy : IAE

Has hit problems with one of the four wells on the Athena development. In an update on operations since first oil in May, the company said it had been working towards achieving full and stable production. It has also been assessing the potential of the wells and the optimal production rates for the maximisation of oil recovery from the field over the coming years. While operations have progressed as planned, currently only three of the four production wells on the field are flowing as a result of a suspected downhole restriction in one of the wells. Testing has shown that there are no issues with the integrity of the well or performance of the reservoir in the area of the field drained by the well.

Kea Petroleum : KEA

A mixed bag of news from Kea this week. New Zealand Petroleum and Minerals has extended the duration of its license PEP 381204 for a further five year period. Kea is in an advanced stage of planning for drilling the Mauku 1 well in the PEP 381204. Kea Petroleum currently has an option for a further well using the NRG rig which it intends to use for the Mauku 1 well. At this time the Mauku well is anticipated to spud in late Q4 2012. Jet pumping and swabbing operations have ceased at Douglas-1. The well is currently suspended for a period of approximately 2 months prior to the recommencement of testing operations. Formation water, from extensive fractures within the Tikorangi, mixed with fluids lost down hole during drilling operations dominated flow during testing. During the suspension the fluid contacts may equilibrate, such that hydrocarbons enter the wellbore. The Douglas prospect in the Tikorangi is a fractured limestone play similar to the adjoining Waihapa oil field. Experience from several Waihapa wells demonstrated that only after allowing the fluids to equilibrate were these wells established as commercial oil producers. Kea will be unable to determine whether Douglas will follow this pattern until it resumes testing operations in 2 months time. Sourcing of the equipment to commence a longer term production testing of the Puka-1 well to establish production rates and reservoir characteristics continues and significant progress has been made in this regard. Kea anticipates the longer term testing program to start within the coming fortnight. The 100% owned Puka-1 well is in permit PEP 51153 within New Zealand’s onshore Taranaki Basin. Kea announced on 10 April 2012 that Puka-1 had intersected a 40m interval of Mt. Messenger reservoir quality sands with a net pay of between 4.5m and 9m. Kea has not altered its original estimate of gross recoverable resource of one million barrels of oil with a potential upside of up to three million barrels of oil. On 11 June 2012 Kea announced that oil recovered from sampling was excellent quality light oil with a density of 43.7 Degrees API and a relatively low pour point of 15 Degrees Centigrade. Subject to satisfactory flow rates being established, Kea intends to quickly drill further holes to enable commercial production in scale.

Leni Gas & Oil : LGO

Updated share-holders on production from the initial workover program at the Goudron Field in south-eastern Trinidad. Wells GY-190, GY-245 and GY-254 have been successfully worked over and returned to pump production after clean out, removal of accumulated sand and minor repairs.  Initial production results fully match expectations with the combined rate from these three wells in excess of 30 barrels of oil per day (bopd).   Well GY-245 alone is currently producing at an average rate of 17 bopd.  Optimization of the pump configurations is continuing and higher production rates are likely once the work is completed.

Magnolia Petroleum : MAGP

The AIM quoted US onshore focused oil and gas exploration and production company, issued an operational update on its activities across its portfolio of interests in proven oil plays including the Bakken / Three Forks Sanish, North Dakota and the Mississippi Lime and Woodford / Hunton formations in Oklahoma, in line with its expansion strategy to rapidly grow production and revenues. You can read the update by clicking the link.

Max Petroleum : MAX

Rushed out some much needed good news this earlier this week. The ailing oil and gas exploration and production company focused on Kazakhstan, announced that the ASK-J2 well in the Asanketken Field has begun testing in a Jurassic reservoir from depths between 1,307 and 1,312 metres, flowing at a stable rate of 503 barrels of oil per day with no water. This zone will be produced on test production for 90 days.

Nostra Terra : NTOG

The tiddler with access to lots of cash and growing portfolio of horizontal and vertical drilling projects in the USA, said that it has signed a commitment with Plainsmen Partners LLC to drill a second development well in the Verde prospect in which Nostra Terra has a 16.25% interest, is operated by Plainsmen Partners LLC and covers approximately 636 net acres in south-eastern Colorado. Matt Lofgran, Chief Executive of Nostra Terra, commented: “I’m delighted by the performance of our first Verde discovery well which exceeded our initial expectations, producing just over US$1million gross in nine months. The second well is currently being permitted. Pad construction and drilling is anticipated to start around the end of Q3.  Each of our projects has been chosen because each offers further locations for subsequent, lowered-risk development wells. This should add to our growing portfolio of producing wells.”

Oilex : OEX

Said it was “pleased” to provide an update on its Cambay Field project, onshore Gujarat, India and Timor Sea activities. It’s much too extensive for here. So it’s a click the link to read.

Petro Matad : MATD

The AIM quoted Mongolian oil explorer, announces its audited results for the year ended 31 December 2011. Click the link to read.

Petroneft Resources : PTR

Owner and operator of Licences 61 and 67, Tomsk Oblast, Russian Federation, reports its final results for the year ended 31 December 2011 and provides an operations update. In addition, PetroNeft announces that the Company’s Annual Report and Accounts for the year ended 31 December 2011 and Notice of AGM will be posted to shareholders today (29 June 2012) and is now available online at the Company’s website

San Leon Energy : SLE

It’s been a busy week for the company which began when San released the results of its technical evaluation of the Siciny-2 well in the SW Carboniferous Basin of Poland. Following the company’s successful drilling of the Siciny-2 well to 3,520 meters, the initial evaluation phase of the core & petrophysical data gathered is now complete. More than 265 meters of continuous core were collected across three prospective intervals in the well which were previously identified in the Siciny-IG1 well. Siciny-2 had continuous gas shows throughout the Carboniferous interval. Several previously undrilled high potential Carboniferous fractured, tight gas sandstone intervals were encountered below 2,870 meters and will be the focus of initial testing of the well. The well was cased for future operations including pressure testing of the prospective zones, a dynamic formation integrity test and possible vertical fracture stimulation and production testing across several intervals. San then also announced that it had accepted a cash offer of €9.9 million for its 2.5% overriding royalty interest in the Amstel Field production licence (Block Q13a), offshore Netherlands from GDF Suez E&P, the operator of the Amstel Field.  The Offer will complete by 20 July 2012.Then they finished off the week by releasing their final results today.

Range Resources : RRL

A few crumbs of comfort came this week for holders of RRL as they announced an update with respect to its Trinidad operations. Click the link to read.

Roxi Petroleum : RXP

Released an operational update with respect to its Galaz asset. Well NK14 was spudded on 25 June 2012.  The well is an appraisal well intended to evaluate the main reservoir, at the Jurassic Sand and Lower Cretaceous levels. The well is to be drilled to a Total Depth of 1400m and it is expected to take approximately 25 days to reach Total Depth, including time for coring and wireline logging. As previously announced testing continues at NK7 using different choke sizes. At a choke size of 5mm the flow rate was 157 bopd, at a choke size of 6mm the flow rate was 186 bopd and at a choke rate of 7mm the choke rate was 259 bopd. It remains the plan to perforate and test a second interval and then in July 2012 commence a 90 day production test on the well.

Sefton Resources : SER

The independent oil and gas exploitation and production company with interests in California and Kansas announced the signing of a £15 million Equity Financing Facility with Darwin Strategic Limited.


The £15 million Equity Financing Facility has been agreed with Darwin Strategic Limited, a subsidiary of the Alphagen Volantis fund part of the fund management group Henderson Global Investors. There has been mutual agreement that a £15 million facility would be more appropriate for the Company. A Letter of Intent was signed recently for a £10 million facility. Jim Ellerton, Chairman of the Board, said: “We are pleased to have received the support of Henderson Global in our recent placing and to have signed a £15 million Equity Financing Facility (EFF) with Henderson’s subsidiary Darwin Strategic Limited.

Serica Energy : SQZ

The Minister of Mines and Energy in Namibia has consented to the assignment by Serica of a 30% interest in Serica’s Luderitz Basin Licence 0047 to Exploration (Luderitz Basin) Limited, a wholly owned subsidiary of BP, and the novated Licence has been approved by the Ministry. The assignment results from the farm-in by BP to Serica’s Licence offshore Namibia which was announced in March this year.  Under the terms of the farm-in, BP has agreed to earn a 30% interest in the Licence by meeting the full cost of a 3D seismic survey over an area of up to 4,150 square kilometres across the Licence.

Urals Energy : UEN

It’s well done to CEO Alexei Maximov whose tenacity in facing down former Director  Vyatcheslav Rovneiko  is to be applauded. Urals finally won its longstanding dispute with the former Director and manager of the Company. Get your cheque book out Vyatcheslav and pay back the money you owe the company & the share-holders! As previously announced to the market, the Company instituted arbitration proceedings in London against Vyatcheslav Rovneiko to recover amounts advanced to him pursuant to a Loan Agreement, the principal sum of which was US$3,730,000. Following hearings in the arbitration, the arbitrator issued a Partial Final Award on Preliminary Issues on 21 June 2012 pursuant to which the respondent is liable to repay to the Company the entire principal sum due under the Loan Agreement, plus interest. The final quantification of the respondent’s liability to pay accrued interest and the question of costs remain to be determined by the Tribunal within the next several weeks. The case was vigorously defended by V. Rovneiko who asserted several defences in order to avoid his legal liability to the Company.  However the Company has prevailed and intends to seek all available measures to recover the amount owing to it, including seizing assets of the former Director if that is necessary. CEO Alexei  Maximov commented: “We are pleased with the outcome of the arbitration, recognising the former manager’s obligation to the Company and are happy to report to our shareholders that yet another legacy issue has been resolved as had been promised by the management in the beginning of 2010”.


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