The Smallcap Oil & Gas Round Up.

It’s been a busy week in the smallcaps underverse. With Barryroe & Irish Sea assets/licences tending to dominate. Keep your eyes on the players in the Irish Sea. That’s the tip from BMD!

Afren : AFR

Announces that development drilling has commenced on the Okoro East field, following the discovery in January 2012.  In addition, a side-track of the existing Okoro-5 well has encountered additional oil volumes in a previously un-swept area of the reservoir within the Okoro main field, offshore south east Nigeria.

Chariot Oil & Gas : CHAR

Confirmed that drilling operations are under way on the Nimrod prospect offshore Namibia. The Kabeljou (2714/6-1) exploration well will be the second in Chariot’s 4 to 5 well Namibian drilling programme and it is being drilled using the Ocean Rig Poseidon drill ship. The Nimrod prospect is located in the Orange Basin in Southern Block 2714A where Chariot has a 25 percent equity interest. Petrobras has a 30 percent interest in the licence and is the operator with BP having 45 percent. The drilling location is 77 kilometres offshore Namibia in 360 metres of water with an estimated total drilling depth of approximately 3,350 metres true vertical depth subsea. The drilling and logging operations are expected to take approximately 60 days.

Circle Oil : COP

Announced an operating update regarding the Al Amir SE Field (“AASE”) and the Geyad field.  To big for the round up but you can read it by clicking the link.

Edge Resources : EDG

Has started its summer drilling programme early after it unexpectedly got its hands on a rig that was between wells on a separate, nearby programme for another operator. Brad Nichol, the president and chief executive of Edge, said: “I’m proud of our operational team, who moved very quickly when we learned of this rig’s availability for a short two well window. This allows us to get the first two wells drilled earlier than planned and start production testing while we continue preparations on the remainder of the programme.”

Empyrean Energy : EME

Released a production update today on Sugarloaf. It’s actually a set of tables with production information listed in them. So to view them click this link.

Exillon Energy : EXI

Well East EWS I – 52 was spudded on 18 June 2012 and drilled in 19 days on the northern part of the East EWS I field.  The well flowed water-free oil naturally to the surface with a test flow rate of 692 bbl/day on an 8 mm choke.  Only part of the net pay zone has so far been perforated.  The well encountered the Jurassic P reservoir at 1,865 metres, confirming 21.7 metres of effective vertical net pay.  Due to the angled trajectory of the well bore this exposed 40.6 metres of effective net oil pay for production. The oil water contact in this area of the field had originally been assumed to be at 1,872 metres.  The new well has not encountered an oil water transition zone and has confirmed the presence of oil at least 21 metres below the originally assumed oil water contact.  This is likely to have a positive impact on both the production and reserves in this area of the field. The well was drilled directionally 1.3 km south east of Pad 5, and is now connected to existing production facilities.

Faroe Petroleum : FPM

Described the initial results of the recently drilled Cooper well in the Norwegian North Sea as “encouraging”. The AIM quoted exploration and production group is now awaiting the results of a drill stem test in order to confirm the well’s commercial potential. Faroe has a 30 percent interest in the 6506/11-9 S Cooper well, which has been drilled to a total depth of 5,330m below sea level and encountered hydrocarbons in Middle Jurassic Garn formation. Based on preliminary results, from an extensive suite of coring, wire line logs, sampling and pressure data; the joint venture has decided to perform a drill stem test (DST) of the Garn formation to evaluate the likely productivity of the reservoir. Faroe said it expects to be able to provide further information from the DST in the coming weeks.

Fastnet Oil & Gas : FAST

A newly listed E&P company focussed on near term exploration acreage in the Celtic Sea and Africa shined briefly this week as they announced the publication of independent technical reports by SLR Consulting on the Molly Malone Basin and Mizzen Basin. Total best case unrisked in-place resource estimates for: The Mizzen Basin is approximately 2.4 billion boe (oil case) or 957 MMboe (gas case)…The Molly Malone Basin is approximately 12.5 billion bbl (oil case) or 3.6 billion boe (gas case)…Technical Reports corroborate the Company’s estimates stated on Admission…The reserves potential outlined in the Technical Reports fits with the Company’s strategy of targeting high impact licences that are likely to be attractive to oil industry majors…Outline of a seismic re-processing programme in order to de-risk and mature prospects within the licence areas…Confirms the significant opportunity presented by the currently under explored Molly and Mizzen Basins…On completion of the work programmes, in line with the Board’s strategy, both the Molly and Mizzen Basins could present a high impact opportunity to potential major industry players.

Gulf Keystone Petroleum : GKP

Reported that drilling is under way on the Gulak-1 exploration well on the Akri-Bijeel block in the Kurdistan Region of Iraq.

Gulfsands Petroleum : GPX

Announced this week that they have renewed its Chorbane permit, located onshore Tunisia, for a further three years.

Lansdowne Oil & Gas ; LOG

Continued its surge upwards as the AIM listed oil and gas exploration company, welcomed this weeks announcement of the resource update by Providence Resources on the Barryroe oil field in the North Celtic Sea Basin.

Nighthawk Energy : HAWK

Announced a steady improvement in production during Q2 2012 and into July as the Company continued to overhaul, refurbish and replace poor quality and unreliable production equipment. Average gross production in Q2 2012 was 42 bbls/day, up from 33 bbls/day in Q1, with three wells contributing from mid-May onwards. Production from additional wells, initially expected in mid-June, began to flow in early July, contributing to gross average production of 57 bbls/day during the first half of the month.

Petrel Resources : PET 

Released an operational update for its Atlantic Margin licence options work conducted since late 2011. The company said that several new potential prospects had been identified. First Phase targeted for completion by end 2012 with significant market interest in Irish offshore exploration David Horgan, Managing Director of Petrel Resources said: “The oil world has been transformed in recent years: despite fluctuations, the oil price remains high.  Ireland’s fiscal terms are competitive and legal title is secure.  Technology has leaped ahead on several fronts, reducing costs and risks.  The combination of three dimensional seismic surveys and directional drilling allow explorers to map and drain complex reservoirs. The planned development of the 1981 Ballyroe discovery, after a dramatic increase in reserves, shows what is now possible. We believe that the Irish offshore will be increasingly attractive to investors.”

Petroceltic : PCI

Provided the following update on the Declaration of Commerciality process in relation to the Ain Tsila gas field situated in the Illizi basin of Algeria. In January 2012 Petroceltic and Enel submitted a draft plan of development for the Ain Tsila field to Sonatrach for its consideration. On 25th April the partners agreed to a 3 month extension until 24 July to enable completion of these discussions and over the last number of months this draft plan has been substantially agreed. In addition, very significant progress has also been made towards the finalisation of the principal terms of the associated Gas Sales arrangements. To facilitate completion of these negotiations, which are at a very advanced stage, Sonatrach, Petroceltic and Enel have agreed to a further 15 day period extending until 10th August 2012, by which time the Declaration of Commerciality is expected to be in final form for submission to the Competent Authorities for approval.

Range Resources : RRL

Updated on the Shabeel North well currently being drilled in Puntland, Somalia by the Company’s Joint Venture Operator, Horn Petroleum. Further to last weeks announcement on the testing of the upper Jesomma sand reservoir which yielded fresh water, the well continued drilling through the entire Jesomma reservoir section and had reached a depth of 2,200 meters. The section contained several additional sands with oil and gas shows and a full set of electrical logs was run to determine if these sands contained potential oil zones which would warrant further testing. The analysis of these logs indicate that the most prospective looking zone in the well was the upper Jesomma sand interval that had already been confirmed by testing to contain fresh water and thus no further testing could be justified. Based on the positive evidence of oil shows and the presence of good quality reservoir in the Jesomma, the partnership has decided to deepen the well in order to evaluate the potential of the Lower Cretaceous and Jurassic sections. The current revised total depth will be approximately 3,400 meters and is expected to take an additional 15 to 20 days to reach that depth. Range also announced that it has increased production from its wells in Trinidad to more than 1,000 barrels of oil per day for the first time. The milestone follows successful results from Range’s most recent two wells targeting the deeper Upper Cruse formation (circa 2,000 ft) on its Morne Diablo Block in Trinidad.

Solo Oil : SOLO

Has accessed £363,000 from the three year £10 million Equity Line Facility with Dutchess Opportunity Cayman Fund Ltd to continue funding the developments and current flow testing programme at the Ntorya-1 discovery well in Tanzania. Solo holds a 25% working interest in the Ruvuma PSA. Solo has issued and allotted 90,844,685 new Ordinary Shares of 0.01 p each at a price of 0.40p pursuant to the drawdown. The new ordinary shares will rank pari passu with the existing ordinary shares in the Company and trading of these shares on AIM is expected to commence on the 1 August 2012. Following Admission, the Company’s issued share capital will consist of 2,778,344,708 Ordinary Shares with a nominal value of 0.01p each, with voting rights , and 265,324,634 deferred shares of 0.69p each.

Sound Oil : SOU

Updated on its Jatayu-1 well operations on the Citarum PSC in Java, Indonesia this week. The well has been drilled in 6″ hole to a depth of 6175 feet TVD.  The well encountered gas shows throughout this interval, utilising high mud weights up to 13.5 ppg due to the presence of over-pressured formations.  Lost circulation was encountered while drilling at 6173 feet TVD, resulting in the decision to stop drilling and log the well. The well site drill cuttings description indicated the lithology of the formation being drilled when losses occurred to be sandstone. Very high mud gas readings were observed over this unit. The Operator is currently running a cement plug at the bottom of the well where mud losses were observed and will then drill ahead to a suitable point to determine whether a more permeable reservoir is present and then log the well.  In the event that it is not possible to cure the drilling fluid losses, a revised forward programme for the well will be issued by the Operator.

Trap Oil : TRAP

The North Sea oil and gas exploration and appraisal company, is set to see its next two wells get drilled in late September or early October. The first well is scheduled to be drilled on the Romeo prospect (Licence P.1666, Block 30/11c), in which Trap Oil holds a 12.5 percent carried interest. It will be drilled by licence operator Suncor Energy, which will then use the same rig to drill the Scotney exploration well (Licence P.1658, Block 20/5b), in which Trap Oil also holds a 12.5 percent carried interest. Drilling of the Magnolia prospect (Licence P.1610, Block 13/23a), operated by Dana Petroleum, in which Trap Oil holds a 10 percent carried interest, is now expected to be delayed until the fourth quarter of 2012. This will have a knock-on effect in respect of the timing for the spudding of the Crazy Horse exploration well (Licence P.1650, Block 14/13), as the drilling rig ‘Ocean Nomad’ has been contracted for both of these wells.

Xcite Energy : XEL

Announced its results for the 3 and 6 month periods ended 30 June 2012. Copys can be viewed by clicking the link.

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