The Smallcap Oil & Gas round up

“Quiet” week in the Smallcaps world of oil & gas. Nostra have taken a hiding while trench warfare has broken out over at Urals Energy. Rita from MAGP keeps on rolling along while wonders never cease Max Petroleum NEVER released an RNS this week!”


Antrim Energy (LON: AEY)
Routine maintenance of the North Cormorant Platform has been completed 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%) has resumed. Production rates from the Causeway Field are expected to rise over the next year with the startup of the electrical submersible pumps and commencement of water injection.

Caza Oil & Gas (LON: CAZA)
Trousered £500,000 pursuant to its £6 million Standby Equity Distribution Agreement dated November 23, 2012 between the Company and YA Global Master SPV Ltd., an investment fund managed by Yorkville Advisors Global, LP. Caza has issued and allotted 5,263,158 common shares to Yorkville at a price of £0.095 per New Common Share. Following admission, the Company will have 182,965,097 common shares outstanding.

Egdon Resources (LON: EDR)
The UK-based exploration and production company primarily focused on the hydrocarbon-producing basins of onshore UK and France, announces that its Preliminary Results for the year ended 31 July 2013 will be announced on Wednesday 6 November 2013. An analyst meeting will be held at 9.30am on 6 November 2013 at the offices of Buchanan, 107 Cheapside, London, EC2V 6DN.

Europa Oil & Gas (LON: EOG)
Announced this week the completion of a 1,500 sq km 3-D seismic acquisition programme on Frontier Exploration Licences (`FELs’) 2/13 and 3/13 in the South Porcupine Basin, offshore Ireland. Kosmos Energy Ireland Ltd (`Kosmos’) is operator and holder of an 85% interest in both licences with Europa holding the remaining 15%. Processing of the newly acquired seismic data has already commenced and delivery of the processed data is expected in Q1 2014.

JKX Oil & Gas (LON: JKX)
Reports that it is reaching the end of the flowback period following the 10 stage multi-stage frac in well R-103. The gas rate is settling at around 3 MMcfd with 25 bpd of condensate. The rate of frac fluid recovery has fallen to 7 cubic metres per day (45 bpd) and the total frac fluid recovered is now 1,900 cubic metres (12,000 bbl), approx. 35% of the total volume injected during the frac operation and in line with expectations. A production logging tool is currently being run on coiled tubing to assess the relative production from each of the fracced intervals as part of the post frac evaluation. The well will continue to be monitored closely for confirmation of the plateau gas flow rate and the well’s ultimate performance capability.JKX’s Chief Executive, Dr Paul Davies, commented: “Whilst the well performance to date is at the lower end of our expectations, the frac has been effective and the drainage area of the well has been considerably increased. We have commenced correlation of the production results with the existing reservoir data and are looking to identify a location for the next well. Based on our improved knowledge of multi-frac operations, we will be seeking to design our next multi-frac well at a lower cost with improved production rates.” A targeted high resolution 3D seismic programme to aid in the evaluation of the reservoir distribution is under consideration for early 2014 and, based on the PLT results from well R-103, drilling options could include a multi-frac vertical well over the anticipated reservoir thickness of 300 metres. Evaluation work also continues on the northern part of the Rudenkovskoye field where younger, but no less deep reservoirs form the main targets.

Magnolia Petroleum (LON: MAGP)
Lot of RNS releases this week from Rita. For the purposes of clarity I’ll concentrate on just two. MAGP released an operations update across its portfolio of interests in proven US onshore formations including the Bakken, North Dakota and Mississippi Lime, Oklahoma. This update is in line with the Company’s strategy to rapidly build production through drilling and in the process prove up the reserves on its leases. As at 1 August 2013 production stood at 214 boepd. But what is it as of today Rita?Magnolia also announced it has entered into a US$5 million three year Credit Facility. Don’t you mean debt facility?

Nostra Terra (LON: NTOG) * RNS Released at 12pm today
Hit back at BBLoons this afternoon. The AIM quoted oil and gas producer with projects in the USA, commented on speculation about the Company in the context of the recent share price movement and significant volume of trades in recent days. There has been recent speculation on certain message boards (BBLoons/Bashers/DayTraders) regarding a potential placing by the Company of new ordinary shares. These are false rumours and completely unfounded. The Company confirms that it has no intentions to undertake a placing. Matt Lofgran, Chief Executive Officer of Nostra Terra, commented: “We previously announced that in January we had surpassed cash flow positive on an operational basis. This still remains the case, where free cash flow generated from production has been reinvested into additional wells throughout the year. Since that time we have also collected in excess of $1,400,000 from Richfield, and these funds will also be used for upcoming leasing and drilling.”

Ophir Energy (LON: OPHR)
Noted media speculation that it is looking to sell down its interests in Blocks 1, 3 and 4, Tanzania.The Company confirmed it has a process ongoing to sell down a part interest in these Blocks but there is no certainty that this process will conclude successfully nor can there be any certainty over the value of any such deal if it were to complete. Ophir will update the market further on this process as appropriate.

San Leon (LON: SLE)
Further to the Company’s announcement on 25 September 2013, and following the admission of the 542,631,579 Second Placing Shares to trading on AIM this week, San Leon Energy completed the second tranche of the Placing, raising gross proceeds of £25,775,000 million. The Company’s share capital, as enlarged by the Second Placing, now comprises 2,531,726,642 ordinary shares. SLE also released news on the next operational steps for the vertical hydraulic fracture stimulation of the Lewino-1G2 well on its 221,000 acre Gdansk W Concession in Poland’s northern Baltic Basin. The initial vertical frac was performed to test both the fracture stimulation and flow potential of the lower Ordovician shale and to gather necessary data for future horizontal drilling and multi-staged hydraulic fracture stimulation. The Company announced on 16 September 2013 that, in conjunction with United Oilfield Services and other specialist frac consultancies, it would use the data to optimise further frac operations in the well. That design work has now been completed, materials and services have been ordered, and mobilisation of the snubbing unit to prepare the well for the fracs will commence shortly. As with any drilling operation, the timescales can be subject to some variation, however, the snubbing unit will be mobilised in the coming days and the Company expects flowback, clean-up and testing to begin at the end November or early December. During these operations, two further fracs will be performed on Lewino-1G2. The first will be a re-frac of the existing zone, while the second will frac a new overlying part of the Ordovician Caradoccian formation. The design work is expected to optimise these operations by changing several parameters relative to the initial frac, including the use of ceramic propant, which has significantly higher strength than sand, reducing propant crushing, and therefore expected to yield better frac conductivity and communication to the wellbore. Although this is believed to be the first time that ceramic propant has been used in Poland, it is very widely used in the US.

Sterling Energy (LON: SEY)
Still clinging on SEY released its Interim Management Statement for the period beginning 1 July 2013. Click HERE to read it.

Tangiers Petroleum (LON: TPET)
Received a price query today from the Australian Securities Exchange in relation to the rise in the Company’s share price in recent days. In response, the Company noted:
That it is not aware of any additional information which, if known, could be an explanation for recent trading in the Company’s securities; and Interest in offshore Morocco by oil companies and the impending drilling program in the neighbouring blocks to the Company’s Tarfaya Offshore Block in Morocco, which is due to commence shortly, have contributed to the increase in activity and price movement in the Company’s fully paid ordinary shares on AIM and ASX. In addition, the Company’s $0.16 listed options (ASX: TPTOA) ceased trading as at the close of business on 24 October 2013 and this may have also increased trading in the fully paid ordinary shares.

Urals Energy (LON: UEN)
It’s getting dirty over at UEN as the Company came out with a hard hitting RNS titled “Alleged Debt Repayment Agreement” Following receipt by the Company of a requisition notice signed by Alpcot Capital Management Ltd and Fire East Corporation on 25 September 2013, the Company issued a notice convening an EGM to be held on 27 January 2014. Resolutions proposed by the Requisitioners to be considered at the EGM would, if approved by the Company’s shareholders, remove the existing directors, save for Mr. Torbjorn Ranta, and appoint Mr. Maxim Barsky and Mr. Jonathan Kollek to the Company’s board of directors. On 14 October 2013, the Company also announced that a credible third party had approached the Company regarding a potential offer for up to 100% of the issued ordinary share capital of the Company.

The Company has recently received a facsimile copy of a purported ‘Debt Repayment Agreement’, expressed to have been entered into in December 2010 between the Company and a Cyprus company owned by Mr. Vyatcheslav Rovneiko, UEN Cyprus Limited. Under the Alleged Agreement, the Company is expressed to be liable to pay UEN Cyprus Limited the sum of US$41,652,000 on 15 December 2013. The Company has no reason to believe the Alleged Agreement to be a genuine document, and therefore does not accept that the Company could be bound by its terms. Prior to the Alleged Agreement’s production, the Company had no knowledge of its existence whatsoever. The Company has no record of entering into such an agreement and the Alleged Agreement does not carry the Company’s seal. In addition there are other inconsistencies in the Alleged Agreement and this has led the Board of Urals to conclude the Alleged Agreement is a forgery and an attempt by a third party to defraud the Company and, by extension, its shareholders.

The Company has appointed a Committee of the Board to undertake an enquiry and take all available legal steps to establish the origin of the Alleged Agreement and to recommend all appropriate actions necessary to defend the Company, including any possible legal action. The Alleged Agreement was passed to the Company’s Chairman, Mr Andrew Shrager, following a conversation between Mr. Shrager and a Moscow based investment banker who stated that he was acting as an intermediary on behalf of Mr. Maxim Barsky and Mr. Dmitry Bosov (the owner of Alltech and Pechora LNG among other ventures). In this conversation the investment banker stated that Mr. Barsky and Mr. Bosov had acquired the benefit of the Alleged Agreement and that they would publicise the existence of the Alleged Agreement unless the directors of the Company (with the exception of Mr. Ranta) stood down immediately. Similar threats were made to Mr. Leonid Dyachenko and Mr. Alexei Ogarev (both directors of the Company) in a meeting held over the weekend with Mr. Barsky and Mr. Bosov in Moscow. The Board believes that the most logical inference to draw from this sequence of events is that any disclosure of the Alleged Agreement, which, as stated above, the Board believes to be a forgery, would be intended to influence shareholders’ decision making in respect of the resolutions to be proposed at the EGM. The Board intends to investigate fully the Alleged Agreement and will not hesitate to take appropriate legal action against any parties associated with it, including making appropriate reports to the serious fraud authorities in all applicable jurisdictions. The Gloves are off! Ding! Ding!

Victoria Oil & Gas (LON: VOG)
Released a “Chairman’s Statement & Review of Operations” that started with “Dear Shareholders” a favoured opening gambit when things aren’t going well. I wrote to you on 10 October providing an update on many operational matters and whilst I may be repeating myself here, the update included some key messages that I believe are important enough to state again. This year has been a challenging one for Victoria and its shareholders. Like you, I am concerned about the low share price, which I believe grossly undervalues our business and does not reflect the Company’s achievements to date. In less than four years, our Company, backed only by its shareholders, has succeeded in drilling two complex wells, installing gas processing facilities for 20mmscf/d, laying 22km of pipeline and is selling gas and collecting revenue….. Of course there’s a little matter of the massive dilution that has occurred here over the last 4 years. No mention of this years 1,465,329,020 billion placing at 1.6p or the fact that there’s 4,348,552,329 billion shares in issue! Yawnnnnn if you want to read this in full click HERE

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