The Smallcap Oil & Gas round up.

It’s Friday the 13th! Don’t forget to lock your windows tonight! Jason maybe out there!

Ascent Resources : AST

Have completed operations to add additional perforations to the PEN-105A gas well in the Penészlek field of north-eastern Hungary. PEN-105A is a sidetrack of the PEN-105 well and was originally completed in April 2012 with 7 metres of perforations. The total perforated interval is now 24 metres of the gross 59 metres of Miocene volcaniclastic reservoir.

Caza Oil & Gas : CAZA

Released an operational update on the Bradley 29 Prospect in Eddy County, New Mexico, and also announced the sale of its San Jacinto Property in Midland County, Texas. The Bradley “29” Fed Com No. 3H horizontal well reached total measured depth of approximately 12,690 feet in early June 2012, was successfully fracture stimulated in the 2nd Bone Spring sand on June 14th and is currently flowing back hydrocarbons and frac fluids at a gross rate of approximately 900 barrels (bbls) per day.  The Well has averaged 361 bbls of oil and 524 thousand cubic feet of natural gas (Mcfg) per day over the past seven days, which is 449 bbls of oil equivalent (Boe).  The peak rate day to date was 399 bbls of oil and 521 Mcfg, which equals 486 Boe, and 488 bbls of fluid.  As the Well cleans up, the ratio of hydrocarbons to frac fluids continues to climb, which is expected, and this may also translate into higher producing rates for oil and gas once the majority of the frac fluid is recovered.  Caza has a 20% working interest and a 15% net revenue interest in the Well. The Bone Spring formation in Lea and Eddy Counties, New Mexico, contains multiple potential pay zones for oil and liquids-rich natural gas.  Caza’s current prospects in the horizontal Bone Spring play are Lynch, Forehand Ranch, Lennox, Copperline, Mad River, Bradley 29, Two Mesas, Azotea Mesa and Quail Ridge.  The Company has acquired approximately 4,000 net acres in the play to date. Caza announce the successful sale of the San Jacinto property, which includes the Caza Elkins 3401 and 3402 wells.  Management decided to divest the property in order to take advantage of attractive Wolfberry property sale prices and enable the Company to participate in more favorable investment opportunities.  The Company was able to realize a fair price at yesterday’s Oil & Gas Asset Clearinghouse Auction, and the disposal will complete on or before July 31, 2012.  The price received was $6.1MM and exceeded Caza’s internal matrix for return on investment and capital employment.  Caza intends to use the proceeds to further existing assets, specifically in the Bone Spring play in southeast New Mexico, and to pursue new opportunities in order to add additional shareholder value through continued investment in suitable properties.

Ithaca Energy : IAE

Announced this week that they have begun drilling the Hurricane appraisal well in Block 29/10b, which lies within the company’s Greater Stella Area in the UK sector of the Central North Sea. The Ithaca-operated well is being drilled using the Wil-Hunter semi-submersible rig. Ithaca has contracted the services of Applied Drilling Technologies International to manage drilling operations under ‘turnkey’ contract arrangements. The well programme is anticipated to take between 75 to 85 days to complete, including the performance of a drill stem test. The Hurricane discovery well, 29/10-4z, was drilled by Shell in 1995. It encountered 41 degrees API light oil in Eocene Rogaland sands in the western lobe of the structure. Ithaca’s appraisal well will be drilled to the base of the Tertiary section in the eastern lobe of the mapped structure and is designed to satisfy three primary objectives. Independent consultants Sproule International have assigned net Proved and Probable reserves to Hurricane of 2.7 million barrels of oil equivalent, based on the well in the western lobe of the discovery, in its report dated December 31st, 2011. Ithaca has a 54.66% interest in Block 29/10b and its joint venture partners include Dyas UK 25.34% and Petrofac Energy Developments 20%.

Leni Gas & Oil : LGO

Good old Leni announced completion of its initial work over program at the Goudron Field in south-eastern Trinidad. The Company has now completed the first five planned workovers on the Goudron Field and has confirmed that an average production potential per well of 10 barrels of oil per day is achievable from existing wells.  Wells GY-63, 190, 245, 246 and 254 were cleaned, repaired and returned to pumping operations.  The program was completed in 35 days at a cost of approximately $50,000 without any incident or accident. The world loves a tryer! The workover rig has now been temporarily demobilised whilst the transfer of the Incremental Production Service Contract is completed.

Magnolia Petroleum : MAGP

Said that it has raised £565,000 via the issue of 23,529,411 new ordinary shares to Henderson Global Investors and 3,058,824 new ordinary shares to Directors, an employee and an adviser to the Company at a price of 2.125 pence per share. As part of the placing, Henderson will receive 12,000,000 warrants with a deemed exercise price of 2.75p per share. The Warrants are subject to a cashless exchange right, exercisable at the discretion of the holder but not prior to 18 December 2012. In addition, the Company is pleased to announce that it has signed Heads of Terms with Darwin Strategic Limited for the provision of a £10 million Equity Financing Facility, over a period of 36 months. The subscription price of any draw down of the EFF will be the average of the three lowest daily closing bid prices during the 15 trading days immediately following a draw down notice. Just as an asside The BMD SITE WILL BE REVEALING AN EX-DARWIN STRATEGIC EMPLOYEE THAT IS CURRENTLY IN OUR LEGAL CROSS-HAIRS! ALL WILL BE REVEALED SHORTLY. Once court papers have been filed!


Matra Petroleum : MTA

At long last some news came from Matra. Who announced the signing of an agreement with Orenburgskaya Geophysical Expedition, a subsidiary of Geotech, to conduct a seismic survey on its 100% owned Sokolovskoe oil field in Orenburg, Russia. The survey will commence on the 1st August and will include 100 km of 2D seismic and 60 sq km of 3D seismic. The survey will take up to two months with preliminary results expected by the end of 2012 and final results in Q1 2013. This survey is designed to evaluate the prospectively of the Sokolovskoe field ahead of any further financial commitment by the Company and as part of a wider strategic review. Maxim Barskiy, (Our Glorious Leader & Father) Chief Executive of Matra commented: “I love the BMD site.” Oops! “The commissioning of this survey is an important step toward fully understanding the potential of the Sokolovskoe field. The results of the survey will allow us to accurately assess how best to allocate Matra’s resources to maximise shareholder value.”

Premier Oil : PMO

Has agreed a deal to farm-in to a 60 percent stake of Rockhopper Exploration’s : RKH licence interests in the Falkland Islands. Premier will pay an initial $231 million in cash for the interest, which includes Rockhopper’s Sea Lion development. It will also fund an exploration carry of up to $48 million and, subject to field development plan approval, a development carry of up to $722 million. Premier is paying for the move using a combination of its existing cash resources, facilities and cash flow from operations. Premier and Rockhopper have also agreed to pursue jointly exploration opportunities in the Falkland Islands and analogous plays in selected areas offshore Southern Africa.

Sefton Resources : SER

170 barrels per day figure is set to rise as well workovers and associated cyclical steaming continue at its Tapia field in California. Sefton said this week, that a service rig remained on site and that well workers and cyclic steaming is expected to lead to further increases in production. It noted that steaming was continuing to produce elevated results from certain wells ranging from 200% to 300% times their baseline rate. A full report including simulation studies on the steam flood computer model of the Tapia oil field that is being produced by Dr Farouq Ali, is now expected before the end of the summer. In Kansas, where Sefton has oil & gas infrastructure with pipeline interests, joint construction of the LAGGS-Southern Star Interconnect is now in progress. The estimated completion and activation date is September 2012; but Sefton is trying to accelerate all construction items under its control, so that the LAGGS pipeline becomes operational as soon as possible. Sefton has identified 23 potential recompletion oil and gas wells in the proximity to the LAGGS pipeline. Development of the oil wells will be prioritised so as to deliver first revenue from Kansas.

Silvermere Energy : SLME

Provided yet another update covering the tie-in of the I-1 well in its Mustang Island 818-L Field. Notice was given by Dominion to the Texas state authorities of the intention to commence installation operations on 3 July 2012. On the same day, the lift-boat departed from Galveston. It arrived at Mustang Island on 4 July where it performed sonar sweeps around the jacket location. The sonar sweep is used to identify any obstructions or impediments that would hinder or obstruct the pile driving operation. Several pieces of old riser, railings and old pipeline parts were identified and removed by a crew of divers.  Following this procedure, the lift-boat moved approximately 475 feet to the tie-in point to the existing 10-inch line. The line was located by the divers, a trench was jetted out to facilitate the installation of the sub sea tie in point and a surface buoy was placed to mark the location. The lift-boat then headed back to Aransas Pass. It is expected to return to the platform location later today along with the barge transporting the jacket. Pile driving operations are expected to commence shortly thereafter.

Sound Oil : SOU

Reported further progress on drilling work at the Jatayu-1 exploration well on the Citarum block in Java.  A 7” casing has been successfully installed in the present sidetrack immediately above a gas-bearing section encountered in a previous sidetrack. Earlier  in the drilling work, around 390 feet of gross gas-bearing section was identified below 5530 ft TVD (true vertical depth). This interval displayed extremely high mud log gas readings and approximately 600 psi overpressure. Gas shows were still present at the bottom of the previous sidetrack at approximately 5920 ft TVD, when the drill-pipe stuck. This required the present sidetrack to be drilled. It’s the intention now to drill ahead below the casing to approximately 6000 ft TVD and obtain wireline logs over the section of interest. Dependent on logging results a decision will be taken as to whether to target the Parigi objective, some 1700 feet deeper, or to stop drilling and test the well. Sound has a 20 percent interest in the Citarum production sharing contract.

Victoria Oil & Gas : VOG

Some much needed good news came this week from VOG although looking at the share-price. The commencement of continuous production operations at its 95% owned and operated Logbaba gas and condensate project onshore Cameroon managed by its wholly owned subsidiary Rodeo Development Limited. The Company’s first three customers are now taking delivery of gas in sufficient volume to allow the production facilities to operate 24 hours a day, delivering gas in full compliance with specification. These customers have a combined average daily demand of approximately 0.7 mmscf/d. The Company is assisting additional customers to convert their factories to take gas. VOG remains on schedule to increase production to 8 mmscf/d by the end of the year. This will be driven by an increase in the number of thermal (heat requirement) customers and the installation of gas powered electrical generation units on customers’ sites. The first units are expected to come on line in mid Q4 2012. This will be a major development for Cameroon, making clean and reliable power available to industrial users.

Xcite Energy : XEL

Two bits of news this week from XEL. The first one; Commencement of Pre-Production Flow Test. The second one; Pre-production Flow Test Update. All now seems to be back on track for some good news; the pre-production flow test is progressing well, with the planned shut-in period and pressure build-up test having been commenced on 11 July following the initial, successful, clean-up and first oil flow on 9 July. This planned shut-in period and pressure build-up test is designed to obtain key information about the Bentley reservoir and the mobility of its fluids for use in interpreting the subsequent flow data and for planning the next step of the Bentley field development. Following this build-up test, the flow test will continue as planned.


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