FoxDavies Daily Monitor - Matra Petroleum, Petroceltic International and Rialto Energy

Thursday, August 9, 2012

Matra Petroleum (MTA LN, 1.67p, ▲ 8.0%) - Interim Results: The exploration and production activities on the Arkhangelovskoe licence are progressing on schedule. The Company plans to grow oil production from A-13 well on the Sokolovskoe field to 9000bbl in 2H'2012 (from 2,892bbl in 1H'12) and commence 3D and 2D seismic survey across the Arkhangelovskoe licence. With cash and equivalents of EUR5.8 million as at 30 June 2012, the Company is fully funded for its 2012 exploration and production programme. The introduction of Mr Barskiy as a strategic investor is expected to bring considerable new project acquisition opportunities to the Company and will mean the Board can now consider a wider range of growth opportunities than those that were previously available to it. The plan to acquire 3D and 2D seismic survey coupled with the experience and expertise added by the Strategic investor mitigates a number of the risks associated with the valuation of the Company and thus should bode well. We remain positive on the stock and its outlook in the medium term and look forward to news on potential new projects. In this news:

  • The implementation of an acquisition led growth strategy with a focus on Emerging Markets and CIS .
  • The development of a balanced portfolio with production, appraisal and exploration potential
  • Focus on politically and fiscally stable countries favorable for investors
  • Build operational hubs and seek to develop license portfolios around these
  • EUR5.7 million (GBP4.6 million) raised in private placing (11 May 2012)

Petroceltic International (PCI LN, 8.65p, ▲ 7.0%) - Declaration of Commerciality for the Ain Tsila field, Algeria: Today's news is a big positive for the valuation and provides the base to add revenue line. The PSC partners estimate the Ain Tsila field (56.6% WI) to contain gross resources of 2.1 tcf of sales gas, 67 mmbbl of condensate and 108 mmbbl of LPG. Development work is expected to commence in 2014 and first gas is planned for the third quarter 2017. Updates on the development progress will be the key share price driver in the near to medium term. In this news:

  • The field was formally declared commercial on completion of an agreement for Sonatrach to market all of the produced gas from the Ain Tsila field, using a formula linked to Brent oil pricing.
  • Development work is expected to commence in 2014 and first gas is planned for the third quarter 2017, initially from an estimated 18 vertical wells produced through a new gas processing plant at an annual average wet gas plateau rate of 355 million standard cubic feet/day (10.05 million standard cubic metres/day).
  • The plateau length is 14 years and an additional 106 development wells are estimated to be required during the period to maintain this production plateau.

Rialto Energy (RIA LN, 10.6p, ▲ 2.4%) - Positive Gazelle-P4 Development well update: The Company continues to make good progress towards the monetization of Gazelle Field (in Block CI-202 offshore Cote d'Ivoire). The P4 Development Well on Gazelle field has been drilled to 1358m MDRT. With Front End Engineering Design (FEED) already awarded to Petrofac and ongoing drilling of 3 wells on the block, the Company remains on track to commence production from the field by early 2014. We believe this stock should be on investors watch list. Expect positive movements today.

Providence Resources (PVR LN, 622.5p, ▲ 0.9%) and Lansdowne Oil & Gas (LOGP LN, 60.5p, ? 1.3%) - Award of New Licensing Option near Barryroe field: The Barryroe field (PVR 80% WI) in the North Celtic Sea Basin has established permeability data from the overlying secondary reservoirs and is estimated (RPS Energy report in 2010 for Lansdowne Oil & Gas plc (JV partner - 20% WI) to hold 2C and 3C technically recoverable contingent resources of 59mmbo and 144mmbo. This new option has increased acreage position in the most prospective central part of the basin. Against this backdrop, offer of a new Licensing Option 12/4 (500 km2) located to the north and west of the Barryroe oil field also provides scope for adding prospective resources from the field.

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This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More

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