Gulf Keystone (GKP LN) slipped 13% to 248p in afternoon dealing and had traded the same volume as Friday by midday. The Company said the testing program of the Shaikan-4 appraisal well in the Kurdistan Region of Iraq remains on-going, with six out of seven planned tests completed to date. They also said that sidetrack operations at Shaikan-5 Appraisal well were successfully performed at the depth of 1,370 meters, after which the Shaikan-5 drilling operations have resumed below 1,730 meters, to continue drilling to the estimated total depth, or TD, of 3,500 meters, subject to technical conditions. Shaikan-6 appraisal well is currently drilling a 12.25" hole at the depth of 2,058 meters in the Jurassic. Tendering process has commenced for a rig to drill the Shaikan-7 exploration well. Due to unprecedented cold weather and poor visibility, combined with work required to connect an additional 20,000 barrel storage tank, the average Shaikan extended well production between Jan. 1 and Feb. 25 as 2,077 gross barrels of oil per day or bopd. Since Feb. 25, test production has averaged 5,641 gross bopd. The operations update was a detailed one and I have just picked out a couple of points, but another reason the shares could be ticking easier is a report from the Reuters news wires that said '(Reuters reports) - Exxon Mobil and Baghdad have reached agreement for the U.S.-based company to be paid in oil for work on the huge West Qurna-1 oilfield, after months of negotiations over contract terms, an Iraqi oil official said. The U.S. oil and gas major has angered Baghdad by signing an exploration deal with the Kurdistan Regional Government (KRG), which the central government considers illegal. The KRG announced in November the signing of a deal for six exploration blocs with Exxon, the first major oil company to deal directly with the Kurds in northern Iraq. Exxon Chief Executive Rex Tillerson said last week the company was committed to working in both areas of the country. Exxon could not be reached for immediate comment.' We will continue to watch how this one unfolds.
Victoria Oil & Gas (VOG LN) have been a very good market the last few trading sessions, moving from a low of 3.5p to a high of 4.2p. Volumes have also been picking up, trading almost 3 to 4 times the average daily volumes. In the last Interim Financial Report the company said ' Victoria Oil & Gas becomes the first onshore gas and condensate producer in Cameroon supplying the industrial market in December 2011. Second phase of pipeline expansion to central Douala under construction, and expected to be completed in early Q2 2012. Over 1 million standard cubic feet a day ("mmscf/d") of production anticipated from May 2012, expected to rise to 8 mmscf/d by December 2012 and 40 mmscf/d by late 2014' Possibly the market is getting ready for the last few lines of the update. Shares were 3% higher at 4.15p during lunchtime trading.
One to keep a close eye on this week will be Borders & Southern (LON:BOR) as the last spudding update said 'Borders & Southern Petroleum plc. is pleased to announce that their exploration well 61/17-1 was spudded on 31st January 2012. The well is located approximately 140 km south of the Falkland Islands. B&S is the operator of the well, holding a 100% interest in licence PL018. It is the first of a two well exploration programme. The well is designed to test the Darwin East prospect, a fault / dip closed structure with a Lower Cretaceous sandstone reservoir target. The well will investigate geophysical attributes that include a flat spot, amplitude conformance to structure and an AVO anomaly. It is anticipated that operations will take about 45 days. A further announcement will be made once the well has reached total depth and the wireline logs have been run and their interpretation completed.' Now 45 days would take us to roughly the end of this week. We will be watching the news wires for any updates from the company. Shares were 5% easier at 74p during early trading.
Cove Energy (LON:COV) announced a successful first flow test this morning. The RNS said the operator Anadarko Petroleum Corporation ("Anadarko"), is delighted to provide the results of its first flow test in the Rovuma Basin Area 1 block, Offshore Mozambique ("Area 1 Rovuma Offshore"). Testing of the Barquentine-2 well flowed gas at an equipment constrained rate of 90 to 100 million cubic feet per day (MMcf/d), with minimal pressure drawdown supporting future development well designs capable of 100 to 200 MMcf/d. Equipment constrained test flowed gas at rate of 90 to 100 MMcf/d. Test data supports potential unconstrained flow rates up to 200 MMcf/d. Results confirm requirements for fewer development wells than originally planned. Flow rates demonstrate a high permeability reservoir with excellent lateral continuity. The dow jones news wires also put out a story that said GAIL (India) Ltd. (532155.BY) and ONGC Videsh Ltd. haven't yet made a decision on putting a bid to buy Cove Energy PLC (COV.LN), GAIL Chairman B.C. Tripathi said Monday. "We are still evaluating [whether to] bid," Tripathi told reporters. ONGC Videsh, the overseas investment arm of Indian state-run explorer Oil & Natural Gas Corp. (500312.BY), and gas transporter GAIL had on Feb. 28 confirmed that they are participating in the formal sale process announced by the Mozambique-focused natural gas explorer Cove Energy on Jan. 5.
Written by Steven Asfour, Sales Trader at Fox-Davies
This article is for information and discussion purposes only and does not form a recommendation
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