The Smallcap Oil & Gas round up



Quiet week in the Smallcap Oil & Gas Underverse. Don’t forget to Sign the Sefton Resources e-petition DEMAND AN INVESTIGATION NOW!

Cadogan (LON: CAD)
Announced an improvement in well performance at Borynya 3 following a light acid wash and further testing in the 2745-2685m range interval. Flaring and hydrocarbon samples were collected and oil, condensate and gas were evident. There was no evidence of formation water in the fluids produced. Persistent completion brine leakage from annulus to bottom packer is still preventing sustainable production at this stage. The Company plans to release the work-over rig in the next days after re-completion and well testing will continue in order to properly purge the formation without brine interference in production. As anticipated, an acid-frac will be planned for next year in order to obtain and support sustainable and commercial production at Borynya 3. Further updates on these activities will be provided in due course.

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Europa Oil & Gas (LON: EOG)
The AIM listed oil and gas exploration, development and production company focused on Europe, announced its final results for the 12 month period ended 31 July 2013.
The full Annual Report and Accounts will be available today on the Company’s website at

Gulf Keystone (LON: GKP)
Confirms that, further to a communication received from the Ministry of Natural Resources of the Kurdistan Regional Government, commercial production from its Shaikan field in the Kurdistan Region of Iraq has recommenced. As previously announced, the Company plans to ramp-up ((THE SP) sorry typo!)) production from the first Shaikan production facility to 20,000 barrels of oil per day, while ((((paying themselves tens of millions! sorry typo again!))) completing the construction and commissioning of the second Shaikan production facility, which will add a further 20,000 bopd of production capacity.

Ithaca Energy (LON: IAE)
Came out all trumpets blaring on how super dooper it is that they have; extended and improved long term senior bank debt financing facilities and oil sales agreements. Increased existing Reserve Based Lending facility from $430 million to $610 million, with enhanced terms in the form of a reduced margin cost and greater flexibility over future unallocated capital. This has enabled retirement of the $350 million bridge credit facility established to facilitate the Valiant Petroleum acquisition in April 2013. What a fine piece of business this is increasing your debt via an RBL (Reserve based lending). Spend it before you get it! Ithaca have also established a new five year $100 million corporate facility, providing additional funding flexibility to add new appraisal / development opportunities to the existing portfolio. How about just giving the $100 million back to share-holders as a special divi? Not a chance! The trough needs to be kept full!

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Leni Gas & Oil (LON: LGO)
Good news came this week as the Company reached the significant milestone of achieving net oil production of over 500 barrels per day from combined operations in Trinidad and Spain. The majority of this production growth has come from the Company’s assets in Trinidad where the on-going programme to work-over and reactivate wells is proving successful. LGO’s post-tax profit from operations now exceeds US$300,000 per month and the Company sees this financial position as sustainable and will be further strengthened as new wells continue to be put on production in Trinidad and well enhancement work is undertaken in Spain. Neil Ritson, the Company’s CEO, commented: “Reaching this operational milestone is very encouraging and is a further demonstration of the potential in the Goudron Field in Trinidad. It is also very significant that this production increase, when combined with the recently implemented reduced overriding royalty rates in Trinidad, have seen the Company’s overall cash flow strengthen significantly in the last few months. “ Well done Neil Ritson. Now surely on the way to 1,000bopd.

The week wouldn’t be complete without an RNS from Max Petroleum (LON: MXP) This week we get to learn of “production test results at the Sagiz West field and the spudding of wells at the Sagiz West and Uytas fields.” The SAGW-5 well in the Sagiz West Field is currently testing a Triassic reservoir from depths between 1,324 and 1,330 metres. The well has tested at initial rates on various choke sizes between 100 and 240 bopd and is currently flowing at a stabilized rate of 110 bopd on a 10/64″ choke. After testing for up to 90 days in this reservoir, the well will be recompleted in the next reservoir at depths between 1,283 and 1,296 metres. The Company has also commenced drilling the SAGW-14 appraisal well, the seventh well to be drilled in the field that will further evaluate the southern end of the Sagiz West structure. SAGW-14 will be drilled to a total vertical depth of approx. 1,400 metres targeting Triassic reservoirs. Dear Max expects to drill an additional seven appraisal wells after SAGW-14 as part of its ongoing appraisal programme for the field. At Uytas, the Company has commenced drilling the UTS-9 appraisal well, which will be drilled to a total vertical depth of approximately 550 metres targeting Jurassic reservoirs. After UTS-9, an additional four wells remain to be drilled as part of the initial appraisal programme in the field.

Nighthawk Energy (LON: HAWK)
Updated on production at its 100% controlled and operated Smoky Hill and Jolly Ranch projects in the Denver-Julesburg Basin, Colorado. Average gross oil production in the third quarter of 2013 was 1,528 bbls/day compared to an average of 631 bbls/day in the second quarter. The increase was driven by the successful drilling program at Arikaree Creek with a full quarter of production from the Big Sky 4-11 and Taos 1-10 wells and a first contribution from the Silverton 16-10 and Snowbird 9-15 wells which came on-stream in July 2013. As previously announced, production in September 2013 was affected by planned maintenance work and data collection at all five Arikaree Creek producing wells. As a result, average gross oil production in September 2013 was 1,408 bbls/day. All wells are now back on-line and the data gathered during the scheduled tests of pressure and fluid levels is being analysed. The production rate of Steamboat Hansen 8-10, the Arikaree Creek discovery well, increased during the third quarter. This well has now been in production for over ten months and has produced over 90,000 barrels of oil with no water production. The Company continues to benefit from strong oil prices, and generated net revenues of over US$10 million in the third quarter of 2013.

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Northcote Energy (LON: NCT)
Released a pre placing ramping RNS READ IT HERE then quickly announced a few days later that it  Was “pleased” to dilute it’s own share-holders by announcing that it has raised £1.75 million through placing 159,090,910 new ordinary shares in the Company at a price of 1.1 pence per Placing Share. “Pleased” I think not!

Petroceltic (LON: PCI)
Confirms that it has received formal notification that Sonatrach, the Algerian State Oil Company, is exercising its right under the Isarene Production Sharing Contract to pre-empt the Company’s proposed sale of an 18.375% interest in the PSC. The commercial terms and proceeds of pre-emption are similar to those agreed between the Company and a potential third party purchaser and comprise a $20 million payment on completion, a $140 million development carry and two contingent payments of $10 million each based on the achievement of certain early production and technical completion milestones. Following the completion of the transaction, Sonatrach will hold a 43.375% participating interest, Petroceltic will hold 38.25% and Enel will hold the remaining 18.375%

Peter Landaus’ ailing Range Resources (LON: RRL) received a share price query from the Australian Securities Exchange this week and in response has confirmed that: The Company is not aware of any information concerning it, that has not been announced and which, if known, could be an explanation for recent trading in the securities of the Company. Range notes the recent decrease in its share price on the AIM market and is not aware of any other information concerning it, that has not been announced and which, if known, could be an explanation for recent trading in the securities of the Company. Yes that’s right Peter you don’t know why your company SP is tanking. As the head honcho don’t you think you should know? Could this be one of the reasons. The failure to close the Texas sale? “The purchaser of its Texas assets continues to indicate that it is proceeding to complete settlement of the acquisition, Range is still awaiting receipt of the final consideration for the sale of these assets with Range agreeing to extend the settlement deadline……….

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Salamander Energy (LON: SMDR)
Has spud the West Kerendan-1 exploration well (WK-1), which lies within the Bangkanai PSC, in Central Kalimantan, Indonesia. Salamander has a 70% operated interest in the WK-1 well. The WK-1 well has two main targets, the first of which is the Oligocene Berai Formation carbonates, which form the reservoir in the nearby Kerendan gas field. At West Kerendan, the Upper Berai forms the primary target and has mean recoverable resource potential of 330 Bcf. The WK-1 well’s secondary target comprises an underlying Eocene aged sandstone fairway in a large four way dip closed structure called Sungai Lahei. This higher risk Eocene target has mean recoverable prospective resource potential of 580 Bcf.

Tangiers Petroleum (LON: TPET)
Has terminated its Farm-out Agreement with CWH Resources Limited in relation to the offshore permits WA-442-P and NT/P81 located in the Joseph Bonaparte Gulf, northern Australia. Tangiers terminated the agreement because CWH did not meet the deadline to satisfy the conditions precedent.

Trapoil (LON: TRAP)
Updated in respect of its proposed farm-in to the Trent East Terrace Area and its existing interests in certain adjacent acreage. As announced previously, on 7 February 2013 Trapoil entered into a conditional sale and purchase agreement to potentially acquire a 33.33% working interest in Licence P.685 (Block 43/24a) containing the Trent East gas discovery, from Perenco UK. Holywell Resources is also a party to this Agreement under the terms of which it agreed to acquire Perenco’s residual 66.67% interest in TET. In the event that all of the conditions precedent were not satisfied or waived by 30 September 2013 any of the parties were thereafter entitled to provide 10 days notice of their intention to terminate their involvement. As at 30 September 2013 some legal documentation relating to certain conditions precedent, although acceptable to Trapoil, had not been agreed by Holywell. Given the circumstances Trapoil had no confidence that funds would be placed in an escrow account to cover the anticipated costs of an appraisal well. On 9 October 2013 Perenco issued a notice of its intention to terminate the Agreement in the event that the conditions precedent are not fulfilled by 19 October 2013. Trapoil’s subsidiary, Trap Oil Ltd, currently holds a 30% working interest in the Conrad prospect (Licence P.1923, Block 43/20c), an adjacent block to TET, which it acquired from Holywell last year for a nominal consideration. Trapoil’s partners in Conrad are Centrica Resources 40% working interest and operator and Holywell 30% working interest. A decision to either drill or drop this licence will need to be made by the partnership group by 30 January 2014.

Trapoil also has an outstanding licence application under the Department of Energy and Climate Change’s 27th Seaward Licensing Round for acreage proximate to the Trent East Terrace Area containing the Opal discovery. This potential full or partial licence award by DECC remains pending. The Company has to date been assessing the possible development of Conrad, and the abovementioned potential additional licence award from DECC, as part of its envisaged development plan for TET which comprised a single well tie-back to the Trent platform operated by Perenco. In light of the termination of the TET farm-in opportunity, Trapoil will now proceed to review and evaluate its position with regards to the adjacent acreage.

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Victoria Oil & Gas (LON: VOG)
Provided shareholders with an update on trading and operations with a (Love) letter from Kevin Foo, Chairman and Interim CEO. Click HERE to read it!

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