It was another interesting week in the oil and gas sector with project updates, funding news and new well programmes starting up.
An independent consultant, commissioned by project operator Po Valley, has confirmed 13.3bn cubic feet of proved and probable gas reserves at the Podere Gallina licence.
Podere Gallina has now been estimated to host some 14.1bn cubic feet of contingent gas resources while the asset’s un-risked prospective resource has increased by 74% to 91.5bn cubic feet. The Selva gas field, which is part of the licence area, is on track for first production in 2020 and once up and running the project is expected to yield 150,000 cubic metres of gas per day.
“This latest CPR provides further confirmation of the significant upside on the Podere Gallina licence,” said Brian Larkin, United chief executive.
Drilling operations are now underway at Union Jack’s 16% owned West Newton project in East Yorkshire. The West Newton A-2 appraisal well is a follow up to a previously drilled discovery well, which yielded a 189bn cubic feet gas equivalent resource in the Kirkham Abbey Shoal formation.
With the new well Union Jack and its partners are targeting Kirkham Abbey and the Cadeby Reef exploration target, which has been estimated to have potential for 79.1mln barrels of oil equivalent.
It received a US$600,000 cash boost and announced a short delay to the publication of the competent persons report (CPR) for the Tilapia licence in the Republic of the Congo.
The AIM-listed independent oil and gas developer said the cash received from Société Nationale des Pétroles du Congo (SNPC) is in line with the payment schedule agreed with the Congolese national oil company for costs relating to the drilling of the TLP-103C well at Tilapia and for development of the licence.
The Blazh-10 well on the Monastyretska license, in the west of Ukraine, produced an average rate of 150 barrels of oil per day during the past 24 hours of a clean-up.
The clean-up flow started after the pay zone was washed with acid to remove potential formation damage from mud filtrate. Cadogan said the produced hydrocarbons will be diverted from the test tank into oil tanks in the area of Blazh-Mon 3 at the end of the clean-up.
The clean-up will continue while the drilling contractor demobilises, after which a full well testing programme will be carried out.
The shares jumped after it reported a 59% increase in quarterly production.
Net production in the three months to the end of March was 6,033 barrels of oil equivalent (BoE), compared to 3,773 BOE in the previous quarter.
Daily production has ramped up further following the recent recompletion of the Stanley-1 well and drilling and completion of Stanley-2. The sale of production from the wells has started.
Diversified Gas & Oil PLC (LON:DGOC)
It revealed that the borrowing base available under its US$1.5bn loans facility has been increased by 31% to US$950mln from US$725mln following the enlargement of its bank syndicate.
The US-based owner and operator of natural gas, natural gas liquids, oil wells and midstream assets in the Appalachian Basin said its bank syndicate, led by KeyBank National Association, has been increased from 12 to 14 banks and now includes Deutsche National Bank and BBVA Compass.
Earlier, shares rose on Tuesday as the firm completed its US$400mln acquisition of assets from HG Energy II Appalacia LLC, delivering some 107 producing wells to the company’s portfolio.
The transaction grows daily production by around 30% to over 90,000 barrels oil equivalent per day, and, it is described as being “immediately accretive”.
The explorer boasted a strong financial position ahead of new well drilling programme, due to start in June.
The company highlighted that it had US$6.9mln of cash and it was debt free. It added that the company has continued to focus on strict cost management, and, efficient operation of the portfolio. General and admin expenses decreased US$1.91mln.
Falcon reported a US$1.38mln loss for the year.
On Tuesday it also, that it has extended its deal to acquire royalties over the Beetaloo basin assets in Australia’s Northern Territory. In a statement, the company detailed that it has secured two additional years to pick up additional royalties (overriding royalty interest – or ORRI) following a prior deal struck in 2013.
At that time, Falcon agreed to acquire the majority of the royalties – it bought a 5% royalty from TOG Group, which had held a total royalty of 8%, and the company had the option to buy another 2%.
The first transaction came when Falcon completed its separate farm-out transaction with Origin Energy, while a decision over the additional 2% was delayed amid the Northern Territory’s fracking moratorium, which began in 2014 and ended in 2018.
With a further two-year extension now agreed, the company has the ability to gain further insights from the shale project before executing a deal.
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