Matra Petroleum (BUY, 3.9p) (0.8p, ?6.67%) today provided an operational update on progress to production from its Sokolovskoe oil field in Orenburg. Analysis of production and pressure data on the A-13 well suggested that this well should be capable of oil production at around 100 bopd following the installation of surface production facilities and a down-hole electrical submersible pump. The well established water-free oil production during a long-term test in 2011. Fabrication work on the production equipment for the well has commenced, and production from the well is set to recommence shortly thereafter. Once commissioned, it is anticipated oil production will commence at about 40 barrels per day. A work-over rig will then be brought in to install a down-hole electrical submersible pump to maximise production from the well which should increase to around 100 barrels per day. Drilling of the proposed production Well A-14 and the acquisition of the full field 3-D data are needed as the next steps to fully evaluate the Sokolovskoe oil field before proceeding with a full field development decision. Matra anticipates that the proposed Well A-14 will confirm the presence of "Patch Reefs" that are expected to exhibit much better reservoir qualities and production characteristics than those seen in either Well A-12 or Well A-13 which are located on the flank of the field. The Company anticipates that the location of Well A-14 will allow it to intersect the oil reservoir at a higher elevation (i.e. at the top of the structure providing a thicker reservoir section) within the predicted reef build-up. The Company believes that the proposed Well A-14 to be relatively low-risk as it is located at the top of the structure, is up dip of proven oil in Well A-12 which flowed at 960 bopd on test and is located towards Well 309 on the adjacent permit which flowed at 1,850 bopd on test. If the proposed Well A-14 is successful, Matra believe it could add up to an additional 10 million barrels to the Company's contingent resources. Completion of a full field 3-D seismic survey planned for the first half of 2012 will assist in confirming the full extent of the Sokolovskoe structure and assist in locating future drilling locations particularly in the North Eastern part of the field. Further seismic is not required before drilling Well A-14 as that area has good well and seismic control.
Tangiers Petroleum (A$0.64, ?0.0%) today announced that it has completed a private placement book build to raise approximately AUD$6.35 million through the issue of approximately 12.7 Million shares at AUD$0.50/GBP£0.33 in conjunction with its proposed admission to trading on the AIM market of the London Stock Exchange, expected to take place on 3 February 2012. The placement is being conducted under the company's 15% placement capacity under ASX listing rule 7.1. Investors from the US, United Kingdom and Australia participated in the offer. The proceeds of the placement are intended to be used for: advancing the company's exploration program in Morocco and Australia, meeting the costs of the company's AIM listing; and general working capital.
Cove Energy PLC (136.0p, ?0.55%) today announced that it has entered into an agreement to divest its Tanzanian Interests, comprising a 16.38% interest in production operations and 20.475% interest in exploration operations in the Mnazi Bay Production Sharing Contract, to Wentworth Resources Ltd. The Agreement provides for transfer of 100% of the shares of Cove Energy Tanzania Mnazi Bay Limited, a wholly owned group subsidiary of Cove, to Wentworth in exchange for: an increase in profit share from Area 1 Rovuma Offshore Exploration & Production Concession Contract ("Area 1 EPCC") through the termination by Wentworth of its royalty interest of 4.95% over Cove's 8.5% share of the profits derived from the Area 1 EPCC ("Royalty"); two million newly issued fully paid shares in Wentworth ("Consideration Shares") to be retained by Cove; and contingent payments of up to US$8.5 million, depending on future natural gas production thresholds from the Mnazi Bay PSC being achieved (the "Contingent Payment"). Any proceeds arising from the Contingent Payment will be used for general working capital. The Effective Date of the Agreement is 30th September 2011. Cove will continue to meet its financial and contractual obligations under the Mnazi Bay PSC including any drilling costs, until Completion. However, under the terms of the Agreement, Cove will be reimbursed by Wentworth for its costs incurred between the Effective Date and Completion.
Oilfield Services News
Rock Solid Images plc: Award of a Reservoir Characterisation project with a total value of $0.7 million. Rock Solid Images plc announced today that the Company has been chosen to provide rock physics-driven reservoir property inversion services to a leading exploration company, in the offshore transform margin of West Africa. The value of the project exceeds $0.7 million and will be completed by mid-year.
Rig Count News
The Baker Hughes Rig Count is the key barometer for the oilfield services industry and in particular the drilling contractors. Last week's data (week ending (27/01/12) remained positive for the industry as a whole. The U.S. Rig Count stood at 2008, unchanged on the previous week and up 276 year over year with the number of land rigs at 1949. The number of oil rigs stood at 1,225. Gas rigs stood at 777, down 3 as US gas prices remain low with the directional/horizontal rig count at 1,402. The Canadian rig count gained further momentum, up 29 on the previous week.
Written by Steven Asfour, Sales Trader at Fox-Davies
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