The Smallcap Oil & Gas round up

Busy week in the smallcaps oil & gas underverse. Lot of rumours flying around on Takeovers and Board room dramas. Some of it’s true, some of it is speculation. Make your own mind up.

Amerisur Resources (LON: AMER)
Gave us all an update on the well Ave-1 in the Fenix Block, Colombia. Ave-1, an exploration well in the Fenix Block. The objective of the well was to evaluate the oil potential in the Mugrosa formation, located below the reservoirs previously discovered in the Esmeraldas formation by the well Isabel-1. To the drilled depth no prospective sands were encountered in the Mugrosa formation. Within the overlying Esmeraldas formation, a gross column of 99ft TVD and net column of 73ft TVD of Hydrocarbon bearing sands was encountered. This zone was tested and flowed limited volumes of 32.7 degrees API oil and associated gas. Log analysis indicates a slightly lower reservoir quality than that observed in the shallow Esmeraldas section of Isabel-1. The Company is currently preparing a detailed evaluation and stimulation programme for the well.

Andes Energia (LON: AEN)
Struck oil this week. The Las Varillas x-1 well, the most northerly well to be drilled into the Vaca Muerta, was vertically drilled reaching a total depth of 7,851 feet and encountered 410 feet of gross pay in the unconventional Vaca Muerta formation, the primary target. The top of the Vaca Muerta formation was penetrated at a depth of approximately 7,290 feet. The drilling was characterised by the persistent presence of oil and gas shows through most of the Vaca Muerta interval. Geochemical data were sampled at two metre intervals through the entire Vaca Muerta column. Oil was also found in the mud pits. Two 18 metres core samples from the Vaca Muerta formation have been recovered and a comprehensive suite of logs has been run. The analysis of this data during the next few months will provide information on porosity, permeability, total organic carbon content, thermal maturity and hydrocarbon composition, which will be used to design the completion, fracking and production testing of this well.

Caza Oil & Gas (LON: CAZA)
Released a production update for the Company along with an operational update for its Bone Spring exploration and development program in Lea and Eddy Counties, New Mexico. Click HERE to read it.

Egdon Resources (LON: EDR)
It’s been a fracking good month for Egdon share-holders as the Company announced the completion of the Farm-out Agreement with Total E&P UK Limited in respect of UK Onshore Petroleum Exploration and Development Licences PEDL139 and PEDL140. As a consequence of the various agreements between the parties, Egdon will receive $600,000 (ca. £365,000) in cash following completion.

Faroe Petroleum (LON: FPM)
Released an Operational Update this week. It’s well worth a read. Click HERE

Fastnet Oil & Gas (LON: FAST)
Has been notified by the Irish Department of Communications, Energy and Natural Resources that Licensing Option 12/3 (“Mizzen”) and Licensing Option 12/2 (“Molly Malone”) in the Celtic Sea have been extended for a further 18 months so that the further agreed work programme can be carried out. The Licensing Options will be valid until 31 May 2015 at which point the Company may elect to apply to convert these options to Exploration Licences. Paul Griffiths, Managing Director of Fastnet, commented: “We are pleased to receive extensions on these two prospective licence areas to complete the agreed work programme, which is fully funded. The Company recently received the final 3D processing results for Mizzen and Deep Kinsale and have now started distributing the data to a number of international oil and gas companies who have expressed an interest in a potential farm-in”

Frontier Resources (LON: FRI)
Announced that the Minister of Mines and Energy in Namibia has granted the Company a two year extension to its exploration licence covering onshore Blocks 1717 and 1718 in the Owambo Basin. The original licence, awarded in January 2012, is now valid until January 2016. Based on the positive results obtained during the initial phase of the exploration program Frontier requested the licence extension to allow the Company time to collect additional soil gas samples for geochemical analysis and to acquire 2D seismic data over the blocks prior to the commencement of any drilling program.

Hurricane Energy (LON: HUR)
It’s welcome to the pleasuredome this week to Hurricane. The UK-based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs were admitted to the AIM market of the London Stock Exchange under the ticker “HUR”.
The Admission Document, along with the information required by AIM Rule 26, is available on the Company’s website, Good Luck.

Jubilant Energy (LON: JUB)
Announced that KSG#70 (previously referred to as KPL-3E-5), the sixth and last development well of the Phase-IIIExtension drilling campaign in the Kharsang Field, Arunachal Pradesh, has successfully tested for oil and has been put into production at an initial gross rate of 38 barrels of oil per day by artificial lift.

Magnolia Petroleum (LON: MAGP)
More shouting from the roof tops today from Rita as she reported that the Company has received a large number of proposals from operators such as Devon Energy, Newfield Exploration, Chesapeake Energy and Kodiak Exploration to drill increased density or infill wells across its portfolio of producing leases in US onshore formations, including the Bakken, North Dakota, and Mississippi Lime, Oklahoma. Yawnnnn! Much ado about nothing. Yet another placing being lined up…

Nostra Terra (LON: NTOG)
Has entered into a US$25 million credit facility with Texas Capital Bank. The new Facility contains both a three year Revolving Credit Facility and a Standby Letter of Credit Facility with an initial nominal limit of US$25 million. Interest is charged on monies drawn down at the current rate of 4.25% (determined by the higher of either: the sum of the Wall Street Journal Rate plus 1% or 4.25%). Texas Capital Bank is a highly regarded energy lender based in Dallas Texas, with over US$11 billion in assets under management. No warrants or equity are to be issued as part of the facility, hence no dilution to shareholders. The Company has agreed to an initial borrowing base of US$500,000, to be reassessed at least semi-annually.

Range Resources (LON: RRL)
Have been successful with its bid for the St. Mary’s block in Trinidad following the submission in the Trinidad Onshore Bid Round 2013. The successful bid was formally announced by the Ministry of Energy of Trinidad today at the Trinidad and Tobago Energy Conference. The St. Mary’s block comprises 44,731 acres spread over 4 sub-blocks contiguous to Range’s existing Morne Diablo license and the Guayaguayare license (see Niko Resources Ltd. farm-in announcement on 17 December 2013). The main reservoir targets identified in St Mary’s block are Pliocene Deltaic sands, Miocene Herrera sands, Cretaceous sands and the source rock itself. New Head Honcho Rory Scott Russell, CEO, commented: “I am very pleased to be able to announce the award of this significant new acreage today, further consolidating our position and deepening our commitment to safely exploring and developing onshore oil in Trinidad.”

Regal Petroleum (LON: RPT)
Released the test results from the SV-59 well with an update of operational activities at its 100% owned and operated Mekhediviska-Golotvshinska (MEX-GOL) and Svyrydivske (SV) gas and condensate fields in Ukraine. The SV-59 well was drilled to a depth of 5,470 metres and has been undergoing an initial testing programme. A number of intervals in the Visean reservoirs (B-sands) were perforated and testing through a test separator using a variety of choke sizes was undertaken over the past month. After cleaning up, the well flowed at an average rate of approximately 10,500 m3/d of gas and 14 m3/d of condensate (154 boepd in aggregate). The well has now been hooked up to the gas processing facility, and its performance will be monitored during a production testing programme. Ukrainian gas and condensate production for the period from 1 January 2014 to 31 January 2014 averaged 150,082 m3/d of gas and 51 m3/d of condensate (1,258 boepd in aggregate). Following the completion of the upgrade work at the gas processing facility to provide for LPG recovery, the Company is now producing LPG. For the period from 1 January 2014 to 31 January 2014, LPG production rates have averaged 18 m3/d (81 boepd), with an average realised price for the LPG of US$494/m3. The MEX-120 well, which was intermittently producing small volumes of hydrocarbons, has been assessed as a suitable candidate for a hydraulic fracturing programme, and these operations are scheduled to be undertaken during February and March 2014.

Rockhopper Exploration (LON: RKH)
The North Falkland Basin oil and gas exploration company, advised shareholders that Premier Oil has provided an update on the Sea Lion Development at a Capital Markets Day. Details of the Sea Lion Development using a Tension Leg Platform concept were disclosed: It is estimated capital costs (gross) for Phase 1 of the Sea Lion development will total $5.2 billion comprising $3.5bn for surface facilities and $1.7bn for drilling. Capital expenditure to first oil is expected to be $3.8bn. Annual operating expenditure (gross) is expected to average $260 million including Floating Storage Unit rental and well interventions. Premier Oil expects to award the Front End Engineering and Design contracts in 2Q 2014 and to submit the draft Field Development Plan at the end of this year. Also at the end of this year, Engineering Procurement and Construction contracts will be awarded. Field sanction is anticipated in 2Q 2015. Rockhopper continues to anticipate first oil 3½ to 4 years after project sanction. Phase 1 of the Sea Lion Development is expected to recover 293 mmbbl over 25 years.

Sound Oil ( LON: SOU)
Yet more dilution from the not so sound Sound oil. Which as you’ll all remember not so long ago consolidated their shares on a 10 for 1 basis. Sound announced the result of its Open Offer to raise approximately £1.6 million (before expenses) through the issue of up to 38,349,139 Open Offer Shares at 4.2 pence per New Ordinary Share. The Open Offer was underwritten by Peel Hunt and Simon Davies.

Tangiers Petroleum (LON: TPET
The shit has been flying at TPET since Ms Eve Howell and Mr Max de Vietri have resigned as Executive Chairman and Non-executive Director, citing the loss of support of several major shareholders. The shares are now in suspension on the Australian Securities Exchange and on AIM pending the appointment of new directors in order to validly constitute the Company’s board under its constitution.

Trinty Exploration ( LON: TRIN)
Have plugged & abandoned the El Dorado exploration well. The primary objective of the well was to test an undrilled fault block on the west flank of the Trinity operated Brighton field. In aggregate approximately 13 ft of net oil sands and 32 ft of net gas sands were encountered, however these are not deemed commercial.

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