The Smallcap Oil & Gas round up.

It’s been a decent week in the smallcaps oil & gas underverse as Europe finally looks to be getting to grips with the magnitude of the Euro Crisis. The ECB unveiled what some analysts called a “game-changing” plan aimed at preventing the single currency from fragmenting. Let’s hope they’re right. Although it’s going to take some years & more grey hairs before we get back to where we were, pre meltdown.

Amerisur Resources : AMER

An oil and gas producer and explorer focused on South America, updated on the well Platanillo-5 in the Platanillo Field, Colombia, the third of a planned eight well drilling campaign. Platanillo-5 is being drilled directionally to a reservoir target approximately 1,400ft north of the bottom hole location of Platanillo-3.  The well has been spudded and is now at a depth of 5,300ft.  The Company expects log data from this well and to update the market by the end of September. Platanillo-3 continues to produce commercially at a controlled rate of approximately 1,500 BOPD. Platanillo-4 has been placed on commercial production with a permanent completion at an initial controlled rate of 500 BOPD. The Company expects to exit 2012 with a production rate of 5,000 BOPD.

Circle Oil Plc : COP

Announced its results for the six month period ended 30 June 2012.  Highlights…Group turnover increased by 23% to US$35.4 million (H1 2011: US$28.7 million)…EBITDA up 60% to US$18.9 million (H1 2011: US$11.8 million)…Profit after tax up 53% to US$13.3 million (H1 2011: US$8.7 million)…US$30 million convertible loan extended for a further three years to July 2015…EGPC receivables have reduced since year-end despite higher sales revenue…New pipeline commissioned in Morocco and gas sales doubled to 4.3-4.5 MMscf/d…Two new producing wells and one new injector successfully drilled in Egypt…Two exploration wells planned in H2 2012 in Tunisia with pre-spud civil engineering works underway in Grombalia…New 2D seismic survey currently being acquired onshore Oman…Initial results of Lalla Mimouna 3D seismic in Morocco confirms prospects for 3rd drilling campaign which is scheduled to commence late 2012. Professor Chris Green, CEO, commented: “Circle’s efforts in exploration and development activities have been rewarded with significantly improved profitability in H1 2012. The net profit to Circle has increased to US$13.3 million for the first half of 2012, an increase of 53% over the same period in 2011. Our daily production in Morocco has risen to 4.3-4.5 MMscf/d with the completion of the new 55 km gas pipeline to Kenitra with further increases expected before the year-end and into 2013. Revenue from this increased production has increased accordingly. With our new 3D seismic over the Sebou and Lalla Mimouna blocks showing multiple prospects we plan to start a five well drilling programme towards year-end and into next year. The production drilling and water injection programme in Egypt is progressing with a view to adding new production wells and repressurising the reservoirs and improving recovery efficiency. Egyptian production continues to provide a steady income. Two exploration wells are to be drilled in Tunisia with civil engineering works commenced on the first well in the Grombalia permit and we are acquiring additional onshore seismic in Oman to delineate exploration drilling targets.”

Gold Oil : GOO

Open warfare has taken its toll on Gold Oil following the appointments of the new Directors at the EGM on August 10th, 2012. The company released an update. Peru, Block Z-34: Discussions are ongoing with interested parties.  A new strategy has been implemented to create more open discussions with interested companies about the conditions for a potential farm-in. Peru, Block 21: Gold Oil received $2 mm from Vale on August 8th in accordance with the farm-in agreement with Vale. Vale has a 70% interest and is the Operator. Gold Oil retains 30% and is carried through the remaining exploration program up to US$10 million. Colombia, Azar Block: The Directors intend to pull out of the Azar Block after a dry well was drilled as announced on 30 August 2012.  Colombia, Nancy-Burdine Block: It is anticipated that the suspension to production will be lifted at the end of October after consultation with the indigenous people in Putumayo region has been concluded. The Company’s General & Administration (G&A) expenses have been reduced by approximately sixty per cent. by closing the office in Australia as of September, reducing the salaries of certain senior employees and the canceling of certain third-party services. As of 10 August 2012 the Company had a cash balance of approximately US$300,000 excluding the Vale payment.  However, a substantial part of the Vale payment has been used to cover the costs of the Azar well in Colombia. At present, the Company is seeking to renegotiate and/or delay certain outstanding payments based on the available cash on hand.  The Directors anticipate that Company will be able to cover the reduced G&A costs on a monthly basis once production has been restarted in Nancy Burdine. The Directors are of the opinion that the Company’s business is sub-scale and therefore are considering potential options to increase the size of the business. The Directors are discussing with the Company’s Nomad the process for lifting the suspension of trading on the Company’s shares on AIM. Here’s comes DILUTION via a placing.

Ithaca Energy : IAE 

Announced a successful drill stem test on the Andrew sandstone interval in the Hurricane appraisal well in the Central North Sea. The test achieved a gross maximum flow rate of approximately 24 million standard cubic feet of gas per day with associated condensate of 1,200 barrels per day from a 44/64-inch fixed choke. The wellbore will now be suspended as a future Andrew reservoir production well with the capability of also producing from the Rogaland reservoir. Well 29/10b-8 was drilled to appraise sands in the eastern lobe of the Hurricane structural closure, located in Ithaca’s Greater Stella Area of the UK Central North Sea. The well intersected 32 feet of Eocene Rogaland sandstone with an average porosity of 28% over the net sands. A full core of the Rogaland reservoir section was extracted and fluid samples and downhole pressure data confirmed the presence of liquid rich gas throughout the interval.

Leni Gas & Oil : LENI

Released news this week on a  sale and purchase agreement concerning its Spanish assets RAVI Corporate Sociedad Limitada had been extended until the 21 September 2012. An additional non-refundable cash deposit of €100,000 has been paid by the buyer to secure this extension. The consideration of €8 million announced on the 18 July 2012 has now been adjusted to €9.3 million to reflect the delays in completion and the associated €50,000 per day surcharge accrued to date. Leni also updated the market on its ongoing  dispute with fellow exploration and production group Mediterranean Oil & Gas :MOG. In August, Leni sold its 10% stake in the Malta Area 4 production sharing contract to Mediterranean for US$1 plus liability for existing costs, giving the Mediterranean 100% control. Mediterranean then went on to farm out 75% of that licence to Genel for $10 million. Mediterranean will also get a 100% free carry on the first exploration well and a similar deal on a second well (up to $30 million). In the update, Leni said its lawyers Mishcon de Reya had attempted to seek confirmation from Mediterranean of the factual position underlying its representations to Leni before the sale of its 10% working interest in Malta Area 4.

Matra Petroleum : MTA

The independent oil and gas exploration and production company  with operations in Russia, announced its results for the six-month period ending 30 June 2012. Click the link to view.

Max Petroleum ; MAX

Said that the BCHW-1 exploration well in the Baichonas West prospect has reached a depth of 1,430 metres with electric logs indicating 13 metres of net pay over a 20 metre interval in the Jurassic Formation at measured depths between 1,170 and 1,190 metres. Reservoir quality is good with porosities ranging from 18% to 26%. MAX has set production casing in the well and expects to begin testing BCHW-1 in October 2012 to determine commerciality after obtaining the relevant government approvals. The Zhanros rig will now move to drill the Dossor Northwest prospect in Western Block E, targeting seven mmbo of mean resources.

Northern Petroleum : NOP

Announced this morning that the La Tosca-1 exploration well is to be plugged and abandoned. La Tosca-1 commenced drilling operations on the 6th August 2012 evaluating the exploration potential of a gas prospect mapped from 3D seismic on the Longastrino permit.

Nostra Terra Oil & Gas : NTOG

Sneaked out another placing as they announced a successful £870,000 before expenses, placing of 241,666,667 new ordinary shares of 0.1p each in the capital of the Company at 0.36 pence per new Ordinary Share. The Placing was undertaken with existing and new investors. The net proceeds of the Placing will be used to support the development of the Chisholm Trial Prospect, the acquisition of which was announced on 29 August 2012, and other work in the field.

Pantheon Resources : PANR

Two bits of news this week from sleeping Pantheon. First we learned that INVESTEC Wealth & Investment had increased their holdings to 7.61%. 72 Minutes later we got The Tyler County Update. What a coincidence! “Directors remain of the opinion that the Tyler County project has the potential to create significant and material value for Pantheon’s shareholders. This view has been strengthened following the favourable results of an extensive Woodbine study conducted in conjunction with the Bureau of Economic Geology at the University of Texas at Austin. This evaluation has been reinforced further by additional geological, geophysical and engineering analyses conducted in recent months.” Pantheon have since risen over 40% Maybe Mr Jerry Ho from Investec can explain? After all Jerry knows all about information gathering he’s been skulking about inside the BMD site using fake email address’s  (Membership  Locked) More of which later. Watch this space

Providence Resources : PVR & Lansdowne Oil & Gas :LOGP 

Released details of an upgraded resource estimate at the Barryroe oil field in the North Celtic Sea Basin, offshore Ireland. In late July, Providence issued updated oil in place figures for the Middle Wealden and Basal Wealden reservoir zones of 1,043 million barrels of oil (P50) and 1,612 million barrels of oil. At that time, the company also noted that there was further upside potential in the hydrocarbon bearing Lower Wealden and Purbeckian sands, as well as identifying the exploration potential of a deeper Upper Jurassic objective. Providence has now completed an evaluation of the in place volumetric resource for these two additional logged hydrocarbon bearing intervals at Barryroe. This assessment was based on previous well data, together with 2D and 3D seismic data. It now estimates an additional total P50 oil in place resource of 778 million barrels of oil and P10 resource of 1,165 million barrels of oil.

Sterling Energy : SEY

Continued to try to flog its dead Kurdistan licences with an update on the Sangaw North Production Sharing Contract. The company is now telling us all that the low-grade 2D Seismic data, which supplements the 2D seismic data previously acquired in the contract area, is expected to better define the potential of a secondary target along the flank of the main structure, Let’s get this right. (They mean the main structure that was a duster!) analogous to the recent discoveries made in adjacent acreage to the south-east of the Sangaw North PSC area. Based on this interpretation, the joint venture partnership may elect to drill an exploration well in 2013. So there you go. By the way; The Korean National Oil Corporation has assigned its 20% working interest in the Sangaw North PSC back to the Kurdistan Regional Government of Iraq (KRG) effective 5 August 2012; Which should tell you exactly why this RNS is nothing but a travesty of the truth. There’s nothing there! Consequently, Sterling’s paying interest in the PSC has increased from 53.33% to 66.67% and Addax’s has increased from 26.67% to 33.33%, while their equity interests remain unchanged at 53.33% and 26.67% respectively. Under the PSC agreement, if Sterling elect not to drill, then the PSC will terminate on 1 February 2013. Angus MacAskill, Sterling’s Chief Executive said “We are pleased to have completed the acquisition of additional 2D seismic data in the Sangaw North block and look forward to the integration and interpretation of this data, which may lead to the drilling of an exploration well in 2013.” Some people just have no shame!

Urals Energy : UEN

Alexi  Maximov continues to do the business over at Ur(in)als Energy. The Petraco Oil Company has released its charge over the Company’s Petrosakh assets. Commenting on the deal Alexei Maximov, CEO said: “This marks an extremely important milestone in Urals Energy’s continued resolution of the legacy issues which have hampered its progress and for the first time in many years, Urals Energy now has one of its assets free of any security. We are thankful to Petraco for their ongoing support and are confident that we will be able to meet the remaining debt obligations fully and in a timely manner according to our agreements.”

Valiant Petroleum : VPP

Launched a strategic review that may involve a sale or merger of the company. Valiant has hired Morgan Stanley to assess its options with a view to maximizing value for shareholders. It said those options may include a transaction such as a farm into, acquisition/farm down/disposal of existing assets or a merger, acquisition or sale of the business. Over the past four years, Valiant has developed a stable production foundation, with production volumes of 7,453 barrels of oil per day delivering strong operating cash flows of $222 million in 2011. It also has a development and exploration portfolio in the UK and Norway. Valiant outlined a fully funded programme of production, development and exploration for 2013. As part of the planning for 2014 to 2016, the Board has decided to review the full range of strategic options available to the company to maximise the value generated from the existing asset base and cash generated from production.

Xcite Energy : XEL

Informed today that it was pleased to announce that through the marketing and offtake agreement with BP Oil, it has sold in excess of 135,000 barrels of Bentley crude to a major refining participant in the European market. Pricing of the Bentley crude was better than the Company’s assumption of anticipated discount to Brent (modelled at 12%) for the conservative full field economics. The pre-production flow test continues to be conducted in line with the Company’s expectations and is approaching the end of its planned programme.  It is expected to be concluded within the next two weeks, with additional crude oil production in this period included as part of the sold cargo. That’s good news for all.

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