The Smallcap Oil & Gas round up

A very busy week in the Smallcap Oil & Gas Underverse. Good news came from a variety of companies and as per usual dear Max Petroleum treated us all to yet another “Drilling Update”Pete Landau continued to fight the wrong fights pinging off letters to various bloggers threatening legal action. GKP came out with the same old horse-shit about a main market listing which reminds me. Sefton Resources. Hasn’t it gone all quiet? Stay tuned for breaking news on the Sefton Fraud! While our beloved Nostra announced it was looking at saddling the company with an RBL facility (Debt doesn’t do it for me Matt!) A basic lesson in economics. If you have £5 you can’t spend £10. SacOil Directors spat their dummy out and walked. No loss to share-holders there. All in all an eventful week.

Afren (LON: AFR))
Have completed the acquisition of 10.4% of First Hydrocarbon Nigeria Company. Further to the approval by the shareholders of Afren of the acquisition of the beneficial interest in 10.4% of the shares in FHN on 20 May 2013, Afren is pleased to announce that it has now completed the acquisition.

Egdon Resources (LON:EDR)
Has agreed terms with Blackland Park Exploration Limited (“Blackland Park”) and Stelinmatvic Industries Limited (“Stelinmatvic”) for a farm-in to UK Onshore Petroleum Exploration and Development Licence PEDL209  located in Lincolnshire. Under the terms of the Farm-in Agreement Egdon will earn a 60% interest in the Licence in return for paying 100% of the cost of the planned Laughton-1 exploration well to the point of completion of the well for testing or, in the case that the well is a dry hole, abandonment and restoration of the site. Egdon will also assume operatorship of PEDL209. The Licence Interests in PEDL209 at completion will be; Egdon Resources U.K. Limited (Operator) 60%. Blackland Park Exploration Limited 28%. Stelinmatvic Industries Limited 12%. The transfer of interests and operatorship is subject to approval by the Department of Energy and Climate Change.

Empyrean Energy (LON: EME)
The onshore US condensate and gas exploration & production company, is pleased to report that early results from the re-completion of the Cartwright-1H well in the Wilcox interval have been successful and in line with or better than expectations. The well has been turned to sales and is producing gas and oil (condensate). Empyrean holds a 10% Working Interest in the Riverbend Project and Cartwright-1H well. The well produced an average of 745,000 cubic feet of gas per day (“cfgpd”) with 40 barrels of oil per day  for the first 7 days production post testing and an average of 755,000 cfgpd with 37 bopd for the first 14 days of production post testing. Early oil production is in line with expectations (30-40 bopd) and the early gas production is above expectations (200,000 -250,000 cfgpd).

Falcon Oil & Gas. (LON: FOG)
Announced its interim financial statements for the three month period ended 31 March 2013 and the accompanying management’s discussion and analysis. These filings are available at www.sedar.com and on Falcon’s website at www.falconoilandgas.com

Fastnet (LON: FAST)
Said that its wholly owned subsidiary Pathfinder Hydrocarbon Ventures has executed an exclusive option agreement with Oil and Gas Investments Funds to farm into eight Exploration Blocks comprising the Tendrara Lakbir Petroleum Agreement (the “Tendrara Lakbir Licence” or the “Licence Area”) onshore Morocco (see map of the area on the Company’s website: http://www.fastnetoilandgas.com/operations/morocco.aspx).

Gulf Keystone Petroleum (LON: GKP)
Noted the Genel Energy (LON: GENL) RNS regarding a commercial oil discovery at the Ber Bahr-1 exploration well on the Ber Bahr block in the Kurdistan Region of Iraq. Genel Energy, as operator, made the following statement: “The Ber Bahr 1 well original TD was 3933m in the upper Permian Chia Zairi formation. It encountered good oil shows over a c.300m interval in the Jurassic. Two drill stem tests over this interval failed to flow. The original well has now been successfully side tracked and in several tests, conducted over a period of days, achieved a sustainable flow rate of 2100 STB/day of 15 API oil from the Middle Jurassic age Sargelu Formation.” The operator has also stated their intention to begin a phased development of the field in the second half of this year.

Jubilant Energy (LON: JUB)
On 28 May, 2013 entered into a funding agreement with two Jubilant Bhartia Group companies*. The agreement allows for borrowing of up to USD 20 million in aggregate, for a period of three years and will be structured as unsecured loans. KSG#67 the third of the six development wells of the Phase-III-Extension 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 75 barrels of oil per day.

JKX Oil & Gas plc (LON: JKX)
Has successfully completed a second sidetrack of well M-166X well in the productive Devonian sandstone reservoir in the Molchanovskoye North field. The initial 12 hour flow rate stabilised at an average of 1,710 bopd with 2.13 MMcfd gas through a 1 1/8″ choke, with a flowing well head pressure of 600 psi. After further testing, a lower choke size will be chosen to optimise flow conditions and manage the reservoir.

Max Petroleum (LON: MXP)
For the love of God can some one tell this company that the cost of constantly releasing “Updates” far out weighs their significance. Yet another “Nothing” drilling Update. Max has commenced drilling the SAGW-4 appraisal well in the Sagiz West Field on Block E using Zhanros Drilling’s ZJ-30 rig. The well will be drilled to a vertical depth of approximately 1,500 metres and is located approximately four kilometres south of the SAGW-3 well, the nearest producing well in the field. The results of the SAGW-4 well, combined with newly acquired 3D seismic data, will help further evaluate the current estimate of approximately 79.8 million barrels of in-place contingent resources in the field, as well as assist in the design of an extended appraisal drilling programme over the Sagiz West structure expected to commence in the next several months. That’s another £250 quid up the swannee!

Nighthawk Energy (LON: HAWK)
More good news from Steve Gutteridge a man who has quietly gone about transforming the erstwhile “Shitehawk” into a decent little oiler. An update on production from its 100% controlled and operated Smoky Hill and Jolly Ranch projects in the Denver-Julesburg Basin, Colorado. The Big Sky 4-11 well, located on the Arikaree Creek oil-field, commenced production on 24 May 2013. Initial production rates since coming on-stream are ahead of the Company’s expectations and have been in the range of 300-400 barrels of oil/day with no water production. While production from the Steamboat Hansen 8-10 well, also located on the Arikaree Creek oil-field, continues at a steady rate of 280-300 bbls/d with no water production. Additional producing wells located on the Jolly Ranch project are currently contributing a further 80-100 bbls/d in total. With further increases in production anticipated from the current drilling and work-over programs. Hooray!

Northern Petroleum (LON: NOP)
A wholly owned subsidiary of NOP are the successful bidder for 100% of Petroleum Exploration Licence (PEL) 629 covering an area of 5,800km2 with shale oil
prospectivity in a so far lightly explored but producing portion of the onshore Otway Basin with five gas fields having significant amounts of condensate. Only five strati-graphically deep exploration wells have been drilled within the licence and some 4,468 line kilometres of 2-D seismic data recorded. The award is for an initial period of five years

Nostra Terra Oil & Gas (LON: NTOG)
More news from ML this week. Nostra has elected to participate in its sixth well in the Chisholm Trail Prospect (CT6). NTOG also announced that it has exercised an opportunity to increase its Working Interest (“WI”) to 20% in the High Plains Prospect, located in Texas. This has quadrupled the company’s original holding. Work to define prospects is moving forward. The company also stated that they are seeking a reserves report with a view to funding future operations through a “Reserve Based Loan”.   The word you’re omitting Matt is DEBT. Warning. Never a good idea to go from the Black into the Red.

Struggling to keep their focus Range Resources (LON: RRL) released a “draw your attention” to the announcement released by Citation Resources Limited (ASX: CTR) on the current flow testing program on the Atzam #4 well in Guatemala (in which Range has an indirect attributable interest of 24%).Citation Resources has announced that following a technical review program on the Atzam#4 well undertaken with Schlumberger, flow testing of the C13 and C14carbonate sections of the well has commenced with the perforation of these zones currently underway with flow testing of the target zones expected to commence shortly. The C13 and C14 carbonate sections in the well are considered the most prospective oil bearing reservoir units in the well based on theelectric log data, and independently confirmed following review of all the well data by industry experts including Schlumberger. Here’s a tip for embattled CEO Peter Landau. Stop wasting share-holder money chasing bloggers and financial journalists with legal threats. You run the company and it is YOU who are failing it! Concentrate on the company.

SacOil Holdings (LON: SAC)
The shit has hit the fan at SacOil as the company announces that, following the shareholder vote yesterday against Special Resolution Number 1, Messrs John Bentley and Bill Guest have resigned as non-executive directors and Mr Robin Vela has resigned as Executive Director and Chief Executive Officer of the Company with immediate effect. The three directors, representing a majority of the board, believed that the conversion of the Gairloch Limited loans to equity was in the best interests of the Company and its shareholders and had recommended that shareholders vote in favour of the resolution approving such conversion. Following these resignations application has been made for the trading of the Company’s shares on AIM and the JSE to be suspended pending further appointments to the board. Shareholders will be kept appraised of matters in this regard.

San Leon Energy (LON: SLE)
Completed a successful stimulation test on the Czaslaw-1 well in the Nowa Sol licence, Poland. The results of the test indicate system permeability in line with that in the Bakken Formation in North America. During the four-day flow period, small amounts of hydrocarbon gas were produced and flared (~10 cubic meters per hour) along with burnt acid and small amounts of oil. Pressure gauges were deployed downhole during the seven-day build-up test. Upon completion of the test, analysis of the downhole pressure measurements showed satisfactory reservoir pressure of 129 Bar. Pressure transient analysis indicates encouraging system permeability of 0.01-0.1 MD, which is in line with that of the Bakken Formation in North America. The analysis also indicates high skin factor (5-9), suggesting significant flow improvement potential relative to the untargeted limited-size stimulation performed for data gathering. The Company’s staff are currently working with Denver-based stimulation experts to finalise a forward plan for the Czaslaw-1 well, such as running casing in the current 60-degree wellbore in preparation for a larger targeted acid frack. Any such further operations on Czaslaw-1 would be expected to occur this summer, subject to permissions and equipment availability. The Company will provide a further update once the next steps in the forward plan has been finalised.

Xcite Energy (LON: XEL)
Xcite Energy Resources, {XEL Subsidiary} has cancelled its option for a jack-up drilling unit from British American Offshore Limited, a subsidiary of Rowan Companies, Inc. The rig contract was initially entered into in February 2011 and subsequently amended in February 2012 ahead of the pre-production extended well test on the Bentley field, which was completed in September 2012. Following the extended well test, which has led to the significant increase in reserves and updated field development plan, the Company no longer believes the terms and structure of the rig option to be appropriate for its commercial objectives.

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