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Fox-Davies Capital specialises in assisting international resource companies to gain access to the UK, European and North American capital markets and has a substantial background in emerging markets particularly in Africa, Asia, Russia and the CIS.
Sound Oil, Green Dragon Gas, Europa Oil & Gas, Antrim Energy and others feature in Fox-Davies Newsflash
January 16 2013, 9:05am
Daily Oil & Gas Monitor
Antrim Energy (LON:AEY): Brent System Shutdown Impacts Production – While we still wait for further details on the nature of the incident on Taqa’s Cormorant A platform that led to the shutdown of the Brent system, Antrim’s production from its Causeway and Cormorant East fields has been shut in as investigations are carried out as to the casue of the leak. While this is likely to be localised, a fact that provides no comfort to the operators affected, we will be keeping a keen eye on any announcements to see if there is a wider impact for the North Sea operators.
Faroe Petroleum (LON:FPM): 2012 Not a Bad Year, but 2013 Should be Better – Today’s operational update underlines the frustrating headwinds that hampered the Company’s progress in 2012, a fact which has been reflected in the share price performance. This notwithstanding, last year has laid a significant amount of groundwork for what should be an active 2013. The cash flow from production should support what Faroe is all about, exploration. With 6 wells planned for 2013 and new exploration acreage to add to its hopper, the year has all the ingredients necessary for a good year indeed. Now all that is required is a bit of success with the drill bit.
In this news:
• Current exploration wells
o Rodriguez South (Faroe 30%), Norwegian Sea
o North Uist (Faroe 6.25%), West of Shetland
o Planned near term exploration wells
o Darwin (Faroe 12.5%) - Barents Sea wild cat well scheduled to spud in Q1
o Snilehorn (Faroe 7.5%) - satellite to Njord in the Norwegian Sea scheduled to spud in H2
o Novus (Faroe 50%) - Faroe-operated Norwegian Sea well scheduled to spud in H2
o Butch East and Butch South West (Faroe 15%) - Norwegian North Sea follow-up wells to the Butch oil discovery to be drilled back to back and scheduled to commence in H2
• Licensing rounds
o Following the granting to Faroe of a new licence on the Jan Mayen Ridge in Icelandic waters, Norwegian State-owned oil company Petoro AS has exercised its right to farm into a 25% stake - the first time Petoro has done so outside of Norwegian waters
o Norwegian APA 2012 - eight licences awarded (see separate announcement of even date)
o Norwegian 22nd Round results expected mid-year
• Production
o Total average economic production for the full year 2012 was approximately 7,200*boepd
o During the second half of 2012, production was lower than expected due to temporary unscheduled production shut-downs on the Njord, Brage and Blane fields
o All fields are now back on stream with production currently at approximately 8,000 boepd
o The Hyme development project is progressing according to schedule and is due to start production in Q1. Once on stream it is expected to add approximately 1,000 boepd of net production
o Average 2013 production is anticipated to be in the range of 7,000 - 9,000 boepd
o Development capex in 2013 is expected to be approximately £50m
o 2012 year-end cash position is anticipated to be approximately £75m
Access the full Operational Update here and Norwegian Licence Award here
Green Dragon Gas (LON:GDG): Impressive Update – Now Show Me the Cash Flow – Today’s Update detailing 2012’s operational performance is impressive, on almost any metric that is highlighted by Management. However, before we get too excited we will wait for the cash flow statement, as many a drop is spilt betwixt cup and mouth, and top line growth doesn’t always mean that the same growth is reflected in the bottom line, or, more importantly, the cash flow statement.
In this news:
• Upstream
o Year on year growth of 55% achieved in annualized year end production of 2.6 BcfPY (201,785 cubic meters/day) compared with 1.7 BcfPY (129,457 cubic meters/day) at the end of December 2011.
o Quarterly production in the final quarter was 506 MMcf, a 24% increase on a year earlier (407 MMcf in Q4 2011).
o As at 31 December 2012, 51 LiFaBriC wells had been drilled at the Company's production block in Shizhuang South (GSS), representing a 96% increase on the year earlier.
o There are an additional 11 LiFaBriC wells across the Company's 5 exploration blocks.
o The total number of LiFaBriC wells across all blocks was 62, an increase of 88% year on year. These drilled wells are at various stages of completion, including establishing pipeline connections and de-watering.
• Midstream
o At the GSS production block, of the total 19 km pipeline project which connects the existing Integrated Production Facility (IPF) to the north east corner of the GSS production block, 6.8 km of pipe had been laid by the year end resulting in 21 wells being connected to the IPF.
o The GSS IPF generated 25.4 KWh of power from CBM produced at the block, a 70% increase year on year.
o At GSS, there is now 31.3 km of well gas gathering pipelines, 15.8 km of gas transmission lines, 54.6 km of electrical grid, 6.5 BcfPY (504,000 cubic meters/day) of gas compression capacity and 10 MW power generation facility.
o 4 leased trucks and 5 trailers were added to the truck and trailer fleet division in addition to the self-owned truck and trailer fleet comprising 5 and 12 respectively by year end.
o The midstream wholesale CNG business in Henan and Anhui provinces recorded an 8.8% decline in sales volume. The sales volume in 2012 was 2.54 Bcf (72.2 million cubic meters). Sales volume in 2011 was 2.79 Bcf (79.1 million cubic meters).
• Downstream
o At the GSS production block, piped natural gas (PNG) from the IPF to the West East Pipeline via the Company's self-built, owned and operated pipeline was put into service on a controlled basis. Average daily sales through the pipeline in December 2012 were 2 MMcf/day (58,259 cubic meters/day).
o Two newly constructed retail stations and one in the final stages of construction complemented the 6 existing retail stations as at 31 December 2012.
o Quarterly CNG retail station sales in the final quarter was 105 MMcf (32,521 cubic meters/day), a 49% increase on a year earlier (70 MMcf in Q4: 2011, 21,801 cubic meters/day)
o In Beijing, the jointly controlled entity with Kunlun (CNPC subsidiary), Beijing Huayou (BHY), achieved annual sales volumes of 12.6 Bcf (357.5 million cubic meters), a 4% increase on the year earlier.
Other News:
Sound Oil (LON:SOU): Funding in Place – Management has detailed the ~$14mm cash position as it starts its 2013 investment programme, highlighting the fact that it appears to be well funded through to its first meaningful production and cash flow. The switch in strategy, focusing on tighter operational control of assets, appears to be bearing fruit. We are talking to the Company today and will update you in due course.
Europa Oil & Gas (LON:EOG): Next Step's Important – The Company’s exploration update has underlined the prospectivity of the Kiernan Prospect and the wider Irish Atlantic Margin, which should please the market. However, by the Company’s own admission the risks are high and further work is required. In terms of steps to be taken to monetise its position in the basin, there is little succour. Still, this is a necessary stage that has been completed; the next stage is a key step forward for realising the value in the asset.
