The Smallcap Oil & Gas round up

I have been critical of GKP in the past regarding their Executive pay structure so it’s with pleasure that I congratulate them. It’s been a momentous week for GKP holders as they finally came out on top in the Excalibur litigation fiasco. At last Kozel actually justified his pay and remuneration. Well done to him and good luck to GKP holders.


Antrim Energy (LON: AEY)
Maintenance of the North Cormorant platform has commenced as scheduled and oil production from the Causeway Field in UKCS P1383 Block 211/23d (Antrim working interest 35.5%) and the Cormorant East Field in UKCS P201 Block 211/22a Contender Area (Antrim working interest 8.4%) is currently shut-in. The maintenance work is expected to interrupt production from the Causeway and Cormorant East fields for approximately six weeks.

Chariot Oil & Gas (LON: CHAR)
Some big numbers were being thrown around at ailing CHAR this week. They updated on selected results from an independent audit by Netherland Sewell and Associates Inc. Prospect B, Chariot’s principal drilling candidate, is an Upper Cretaceous canyon-head trap in the shallower petroleum system and has an audited Unrisked Gross Mean Prospective Oil Resource of 469mmbbl, with an estimated probability of geologic success (Pg) of 22%. For this trap type and age of reservoir there are an additional three prospects (Prospects A, C and D) in the 3D seismic volume and three leads (Leads E, G, and H) in the 2D area. These additional prospects and leads range in Unrisked Gross Mean Prospective Oil Resource from 290mmbbl to 1,487mmbbl and success in Prospect B would offer significant follow-on exploration potential in these targets. Within and to the west of the 3D seismic area, Chariot has identified a fairway with Upper Cretaceous deep water fan and channel sands draped over an outboard structural high, with the base of those reservoir sequences eroding into the marine source rocks. In this shallower petroleum system there are two further prospects in the 3D area (Prospects 4 and 6) and three leads in the 2D area (Leads 3, 4 and 5) and these targets range in Unrisked Gross Mean Prospective Oil Resource from 213mmbbl to 758mmbbl. Encouragement in Prospect B would offer significant additional follow-on exploration potential in this fairway too. Chariot has initiated a partnering process to progress the exploration of these prospective licences.

Gulfkeystone Petroleum (LON: GKP)
The champagne corks were popping this week at Gulfkeystone. As finally Kozel did what he should have been seen to be doing for the last 2 years. Earn his vast pay cheque and share options by actually getting on with righting the company. The English High Court dismissed all of Excalibur’s claims and decided all issues in favour of the Defendants.The hearing was adjourned to a date to be fixed, for argument on costs and any application for permission to appeal. Commenting on the Judge’s decision today, Gulf Keystone’s CEO Todd Kozel said: “We are very pleased to have achieved the best possible outcome from the point of view of the Company and our shareholders. We look forward to pursuing the Company’s stated objectives for the future, now that we have the Court’s decision regarding these historical events. We understand that the legal process must take its course once a claim has been lodged, but it has been unfortunate that the Company and its shareholders have experienced significant uncertainty and concern over the last two and a half years and that its executives have been engaged in a protracted and costly dispute to protect the position of the Company and its shareholders. The Board and management will now focus on progressing the ramp-up in production and development of the Shaikan world class discovery in the Kurdistan Region of Iraq. On the corporate front, our next objective is to complete the move to the standard segment of the Official List by the end of 2013.”

Gulfsands Petroleum (LON: GPX)
Announced the appointment of Alan Charles John Cutler to the Board as Director: Finance and Administration. Cutler, aged 54, is a Chartered Accountant with 28 years of experience in the oil and gas exploration and production sector including substantial roles both in the UK and internationally. Alan has been appointed to the board after having initially joined the company in June as Head of Finance and Administration from Setanta Energy, where he was CFO of this company involved in exploration and pre-development activity in the offshore energy sector of Gabon.

Ithaca Energy (LON: IAE)
Announces completion of a highly successful flow test on the first development well drilled on the Stella field and provides a progress update on the Greater Stella Area development activities. The first Stella field development well, “A1”, flowed at a maximum rate of 10,835 barrels of oil equivalent per day on a 7/8-inch choke, with the full production potential of the well limited by the capacity of the well test equipment on the drilling rig. Fluid samples have confirmed the high oil content of the hydrocarbons that will be produced from the well. The maximum rate of 10,835 boepd corresponds to 6,499 barrels of oil per day and 26 million standard cubic feet per day of “liquids rich” gas. The well intersected a high quality net reservoir interval of 1312 feet, with reservoir properties in line with previous wells drilled on the field. The oil is of high quality, approximately 42° API. The facilities that will be used on the “FPF-1” floating production facility to separate and export oil and gas produced from the field will increase the overall oil relative to gas production rate associated with the A1 well, by processing more efficiently than the simple separation facilities available for the purposes of the well test.

Jupiter Energy (LON: JPRL)
Issued the results of two independent reserves reports for the various accumulations on the Block 31 permit. Click HERE to read them.

Mediterranean Oil & Gas (LON: MOG)
Wholly owned subsidiary Medoilgas Italia S.p.A. was informed by the operator ENI that on the morning of 30 August 2013, production from the short string of well Guendalian-3 was shut down due to low pressure at the manifold. An operations team was on site and production recovery operations were started immediately to assess the issue. Diagnostic temperature and pressure profiles were collected which indicate a reduction in the performance and permeability of the well completion. As at 10 September 2013, the production from the short string of Gue-3 remains shut-in. The short string accounted for approximately 49% of the production at Guendalina prior to the shut-in. Post shut-in, the Guendalina Field is producing approximately 34,000 scm per day net MOG (MOG: 20%, ENI: 80% working interest). Remedial operations are planned and a further update will be provided to the market in due course.

Nighthawk Energy (LON: HAWK)
More good news came today from HAWK. Gross average oil production in August 2013 was 1,661 bbls/day, a record month for Nighthawk. Production from the Arikaree Creek oilfield increased over July 2013 levels with the Silverton 16-10 and Snowbird 9-15 wells contributing a combined average of 257 bbls/day. Production from Snowbird 9-15 was impacted by engine problems causing some downtime during the month. A new engine is expected to be installed in September 2013. Nighthawk is also planning a program of preventative maintenance and pressure testing at Arikaree Creek in September 2013 in preparation for the coming winter. This will result in some further downtime during the month. Once this program is completed, Nighthawk anticipates a return to growth in monthly production during the fourth quarter. A number of new drilling permits are being progressed, and subject to final confirmation of these and the drilling rig contract, Nighthawk anticipates further development of Arikaree Creek will commence in mid-October 2013, ahead of the Company’s initial expectations. The first two planned wells in the program are in the same structural block as the Silverton 16-10 and Snowbird 9-15 wells. Subject to successful completion of these two development wells, the Company intends to retain the drilling rig for an expanded program in Q4 2013 that is expected to include exploration wells as well as further development wells at Arikaree Creek. The Company is also seeking a permit to drill a salt water disposal well at Arikaree Creek which, when operational, will substantially reduce operating costs. With the earlier than anticipated resumption of drilling at Arikaree Creek, and the substantial amount of new information that will be available from the new wells, work on the Competent Person Report (“CPR”) will now continue through the fourth quarter. In particular, Nighthawk plans to core one of these wells providing valuable additional information for the CPR and the processing and analysis of this core information will take two to three months.

Nostra Terra Oil & Gas (LON: NTOG)
It’s a win, win for NTOG this week. The week began with the spudding of the next development well in the Verde Prospect, located in Colorado. The first well reached payout in approximately 10 months and continues to be a strong producer with expectations that net proceeds will reach 200% of the initial well and acreage costs by the end of this year. (The second well was a disappointment) The drilling of the third well is expected to take less than 20 days, followed by completion and initial production testing. Nostra owns a 16.25% working interest in this program of development wells, but has recently increased its working interest in this well to 17.54%.

On 2 April 2013, a judgment was entered in favour of Nostra Terra on its claims against Richfield Oil & Gas Company for approximately $1,500,000, plus continuing interest, attorneys’ fees and collection costs all in an amount still to be determined by the court. On 6 September 2013, Richfield filed a Motion with the Court advising of its intent to pay into the Court approximately $1.3 Million in partial satisfaction of the judgment and to seek an Order to cancel the upcoming Sheriff’s Sale of certain oil and gas interests owned by Richfield in Russell County, Kansas and staying further collection efforts by Nostra Terra until a final determination is made by the Court on whether additional sums are owed to Nostra Terra.

On 10 September 2013, the Court held a hearing, at which it granted the Motion. Nostra Terra has confirmed that following the Motion the funds have been deposited with the Court and, as such, the Sheriff’s Sale scheduled to occur on 12 September 2013 and all outstanding writs of execution have been cancelled. A hearing is scheduled for 1 October 2013 to determine any additional sums owed to Nostra Terra, including attorneys’ fees, costs of collection, and reimbursement for operating expenses incurred by Nostra Terra while operating certain Russell County leases throughout the duration of this matter. It is expected following this hearing, that the Court will order distribution of the funds paid into the Court. In addition, if the Court determines that there are additional sums owed to Nostra Terra, Richfield will have fourteen days thereafter to satisfy the judgment in full or the stay on Nostra Terra’s collection efforts will end. The Court further ordered that Richfield is prohibited from transferring any assets outside of the Court’s jurisdiction or encumbering such assets in any way. Matt Lofgran, Chief Executive Officer of Nostra Terra, commented: “We are pleased to see this situation coming to a satisfactory conclusion for Nostra Terra. Nostra has been building a strong portfolio of assets and the $1.3 million cash, when received, puts us in an even stronger cash position which will help us further expand our asset base.”

Petroceltic (LON: PCI)
The independent oil and gas exploration development and production company focused on the Middle East North Africa, the Mediterranean and the Black Sea regions announces its results for the six month period ended 30 June 2013. Click HERE to read them

Petroneft (LON: PTR)
Said this week that they Were encouraged by the stability of production in recent months, which is currently steady at 2,500 bopd. The pressure maintenance programme that commenced at Arbuzovskoye in April 2013 is continuing and is working well. In recent weeks, they have begun to see some positive impact in the production well nearest to the injection well – similar to the response seen earlier at Lineynoye. This should expand to other nearby production wells in the coming months. Production at Lineynoye also remains very stable with little decline evident. We have also benefitted from strong realised oil prices in recent months. Discussions continue on both the re-financing and planned farmout of Licence 61 with particularly good progress on concluding a re-financing of the existing Macquarie Bank facility. PTR continue to make the principal repayments of $650,000 per month to Macquarie Bank from operational cash flows. The current balance on this facility, net of cash held by Macquarie in the Debt Service Reserve Account, is US$13.6 million.

Tethys Petroleum (LON:TPL)
Has commenced drilling of the AKD08 (DOTO) Exploration well in Kazakhstan. The AKD08 Exploration well is located to the south-west of the Company’s producing Doris field and
north of its Dione oil discovery in Kazakhstan. The well is designed to target several potential zones, including the Lower Cretaceous sandstone and Upper Jurassic carbonate sequences as proven in Doris, and also the deeper Triassic sequence which gave significant hydrocarbon shows in nearby wells, including the Company’s AKD01 well (Doris oil discovery). Prospectivity may also exist in the Jurassic sandstone sequence which flowed oil in the Dione (AKD03) well. The Doto prospect has 22 million barrels gross mean unrisked recoverable prospective oil resources attributed to it (Gustavson & Associates, April 30, 2012) in the Cretaceous and Upper Jurassic sequences. The deeper Triassic sequence has not yet been independently assessed, and as such the Company is currently unable to quote a reportable resource estimate for this horizon. However, the Company believes it to be an attractive prospect. The Doto well is expected to take approximately 70 days to drill to a planned total depth of 3,500 metres using Tethys’ own ZJ70 “Telesto” rig. The AKD09 (“Dexa”) Exploration well is now expected to commence drilling in mid October due to a minor delay in
mobilisation of equipment and integration of services with the Doto well.

Wessex Exploration (LON: WSX)
An application has been filed to renew the Juan de Nova Est permit for a five year term and that Wessex will have the right to participate for a 50% interest if such renewal is granted. Juan de Nova is a French overseas territory in the Mozambique Channel, north-west of Madagascar.

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