It was another active week in the small-cap oil & gas sector.
Author Jamie Ashcroft
Hurricane Energy PLC (LON:HUR) has spudded the Lincoln Crestal well in the Greater Warwick Area, which lies about 100km off the west coast of the Shetland Islands.
The well was spudded – the start of the drilling process – using the Transocean Leader rig, which recently completed work to plug and abandon the Warwick Deep well.
Lincoln Crestal is the second in a three-well programme designed to further test Hurricane’s assets in the Greater Warwick Area, in which Hurricane has a 50% interest following Spirit Energy’s farm-in last September.
Earlier this month, chief executive Robert Trice said this well is now the “preferred candidate” to tie back to the Aoka Mizu floating production storage and offloading vessel, which is stationed in the Lancaster field.
Providence Resources PLC (LON:PVR)
Providence on Thursday extended the backstop date for the farm-in at the Barryroe project.
Chinese group APEC had indicated it would lodge US$10mln to fund exploration on the project by close of play yesterday. However, no money was forthcoming said Providence nor was there any verification about the transfer of funds even though assurances were given that it was underway.
Providence added that it does not expect to extend the backstop date beyond Friday if the money is not transferred or if there is no indication it will be.
Cabot Energy PLC (LON:CAB)
The Canada-focused oil and gas Company raised US$0.5mln from its major shareholder, High Power Petroleum (H2P).
H2P has subscribed for another 4.34mln shares at a price of 9.25p each – the same as yesterday’s closing price. The additional investment will take H2P’s overall stake in Cabot to 66.2%.
Cabot said the proceeds would be used for working capital purposes and to settle amounts owed to trade creditors in Canada. The subscription also generates sufficient funding to see the Company through to the end of August.
TLOU Energy Ltd (LON:TLOU)
It told investors that the Lesedi 4 production pod has now reached ‘Critical Desorption Pressure’, or CDP, which is the point at which coal bed methane wells can start being producible.
Stated another way, CDP is the point at which gas begins to be released from coal following the dewatering process. The company revealed that a short term gas flow test took place, with positive results, and dewatering continues in the Lesedi 3 and Lesedi 4 pods in line with the company’s plans.
Eland Oil & Gas PLC (LON:ELA)
The company completed remedial work on the Gbetiokun-3 well, which will be part of the early production system (EPS) due online this month. In June, the company identified a small leak in the shorter of the well’s two production strings and this has now been remedied.
Gbetiokun-3’s short string has seen oil flows of around 3,800 barrels of oil per day, while the longer string measured around 3,000 bopd. Ahead of the EPS the well was producing via temporary facilities.
It will be one of two wells that will feed the initial phase of the EPS which, with new facilities, is expected to flow around 12,000 bopd gross (5,400 bopd net to Eland).
Chariot Oil & Gas Limited (LON: CHAR)
Chief executive Larry Bottomley highlighted that the Anchois gas discovery, part of the Lixus licence, is expected to deliver strong returns and significant cash flow.
The Chariot boss, in a statement ahead of today’s AGM, noted that Anchois may host one trillion cubic feet of gas resources which makes it a strategically important indigenous source of gas for Morocco.
For Chariot, it represents a rebalancing of its portfolio – adding discovered resources to a basket of assets otherwise dominated by high risk, high reward frontier exploration. Third party reports, namely a development feasibility study and a gas market assessment, have underlined the project’s potential in recent months.
“These studies, which were carried out by third parties, demonstrated the technical feasibility and commercial attractiveness of developing the Anchois gas discovery, which is anticipated to deliver strong returns and significant cash flow, with the potential to offer a strategically important indigenous source of gas into Morocco’s developing energy market,” Bottomley said in a statement.
Tower Resources PLC (LON:TRP)
Tower revealed it has been successful in its appeal against an HMRC decision to deny it credit for input VAT.
In a brief statement, the group noted that, on 8 July, The First-Tier Tribunal (Tax Chamber) delivered its decision to allow the company’s appeal. It added that the decision is subject to a possible further appeal by HMRC to the Upper Tribunal.
If HMRC chooses to make such an appeal, then it must do so within 56 days of the delivery of the First-Tier Tribunal’s decision, the group said, while any such appeal must be based on an error of law. The findings of fact made by the First-Tier Tribunal are final, it noted.
Block Energy PLC (LON:BLOE)
It secured the equipment for its next phase of drilling at the highly prospective West Rustavi prospect.
The Georgia-focused explorer is planning back-to-back horizontal wells to follow up its highly successful 16aZ sidetrack. Production tests 16aZ flowed at more than 1,100 barrels per day or three times the level expected.
Block will pay JSC Norio and Georgia Oil & Gas a total of US$750,000 (equivalent to US$2,055 per day) for 12 months’ exclusive use of a ZJ40 drilling rig, an A50 workover rig and other drilling and workover-related equipment.
SDX Energy Plc (LON:SDX)
The South Disouq field development continues on schedule and on budget. Today, it specifically flagged the completion of one of three key project milestones with the project’s central processing facility and compressor clearing factory acceptance tests successfully.
The new equipment is now being shipped to Egypt and is due on site by mid-August, maintaining the necessary schedule for ‘first gas’ during the fourth quarter. SDX is also examining the potential for further drilling in the vicinity of South Disouq, with present work focused on the interpretation of existing 3D seismic data.
Author Jamie Ashcroft
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