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Oil & Gas Round-Up: 27 November

27 November 2009

Coastal Energy (CEO) has completed the Songkhla A-08 development well on Block G5/43 in the Gulf of Thailand. The well is currently testing over 3,500 barrels of oil per day with a 3% water cut.

In Russia, Volga Gas (VGAS) has reported that production from the Uzenskoye #8 supra-salt well has been below expectations recently, leading Volga to bring forward plans to start water injection operations. During September, production reached 1,900 barrels of oil per day and in October averaged 1,543 bopd as the wells were choked back. Volga is hoping that water injection in the first half of 2010 will restore production to the original planned levels of approximately 2,000 bopd.

Volga added that the Vostochny-Uzenskaya #10 supra salt exploration well has been plugged and abandoned after drilling failed to find economic levels of hydrocarbons.

Further test work on Global Petroleum's (GBP) recently drilled Tyler Ranch #4 well on the Leighton prospect in Texas, US, indicated that there was 197 feet of pay in the well. Five wells have been drilled at Leighton under the current programme and all have encountered hydrocarbons in the Olmos reservoir.

Aurelian Oil & Gas (AUL) has signed up Polish drilling company Nafta Pila to drill two appraisal wells on its Siekierki tight gas project in Poland. The rig will be mobilised in May 2010 and is expected to spud the Trzek-2 appraisal well in the same month. Both wells will require significant horizontal sections to be drilled.

Egdon Resources (EDR) has secured a rig to complete its planned drilling operations at Dukes Wood-1 in Nottinghamshire licence PEDL118. Egdon has agreed a contract with British Drilling and Freezing to use the BDF28 drilling rig to complete the drilling of the main section of Dukes Wood-1. The rig is anticipated to be on site in early December with operations expected to take 12 days.

Cove Energy (COV) has received Tanzania Government approval for its plans to farm-in to Artumas Group's Mnazi Bay Production Sharing concession. The three interests include the Mnazi Bay project, along with Area 1 Rovuma Offshore and the Rovuma Onshore Block, both in Mozambique.

Desire Petroleum (DES) and Rockhopper Exploration (RKH) have announced that the Ocean Guardian drilling rig left the Cromarty Firth in Scotland on Thursday 26 November en route to Falkland Island waters. The journey is anticipated to take around two months with the rig expected to arrive in the Falklands ready to commence drilling around early February 2010.

Falkland Oil and Gas (FOGL) said its Loligo, Nimrod, and Endeavour prospects in the South and East Falklands all lie in water depths greater than 1,000m and are best suited to being drilled by a dynamically positioned drillship or semi-submersible. The joint venture of FOGL and BHP is looking to contract such a rig later in 2010.

Faroe Petroleum (FPM) has pre-qualified as an operator for the Greenland 2010 Baffin Bay Licensing Round. The undiscovered oil and gas potential offshore West Greenland, which includes the Baffin Bay Licensing Round area, is estimated by the U.S. Geological Survey to contain up to 18 billion barrels of oil equivalent.

Matra Petroleum (MTA) has raised £2.0 million in a placing of new shares priced at 3p per share. Matra is currently drilling well-13 on its Sokolovskoe field, near the city of Orenburg in Russia. Its application for a production licence over the acreage is now well advanced and a payment of approximately £850,000 will be required when it is issued.

Ascent Resources (AST) has raised £6 million in a placing of new shares with new and existing shareholders at a price of 5 pence per share. The funds raised will be used to accelerate the development of the Company's balanced portfolio of European oil and gas production and exploration projects.

Borders & Southern Petroleum (BOR) has conditionally raised £113.1 million in a placing of new shares at 50p per share. The Placing is subject to Shareholder approval. The Company intends to drill up to three wells in its South Falkland Basin acreage, at a cost of around $180 million.

Falkland Oil & Gas (FOGL) has raised £50 million in a placing of new shares at 115 pence per share. The net proceeds will be used to fully fund FOGL's share of the costs of a drilling programme which could commence in the first half of 2010 with the Ocean Guardian and will also incorporate a deepwater programme of one committed well and other possible discretionary wells, which the Joint Venture expects to commence later in 2010.

Island Gas Resources (IGAS) has raised £13.75 million in a fully underwritten placing of new shares at 60p per share, to accelerate its UK Coal Bed Methane development programme.

And finally, Island Oil & Gas (IOG) has launched a company-wide redundancy programme and said it was continuing to monitor its financial position on an ongoing basis.