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COMPANY SNAPSHOT: Heritage Oil, Genel Energy, Ophir Energy, Leni Gas & Oil, Sunrise Resources, African Eagle, Mwana Africa


In the oil and gas sector, Heritage Oil (LON:HOIL) has sold its 26 percent interest in the Miran block in Iraqi Kurdistan to Genel Energy (LON:GENL), while Ophir Energy (LON:OPHR) this morning announced its fourth gas discovery in Block R in Equatorial Guinea.

Heritage Oil will receive US$156 million for its stake in Miran. In addition, Genel will provide a US$294 million exchangeable loan to the company.

The proceeds will be used to fund the previously announced acquisition of an interest in OML 30 assets in Nigeria.

“We believe this sale and loan financing crystallises significant value for shareholders, demonstrating our ability to invest in and monetise assets at an appropriate stage,” said chief executive of Heritage Tony Buckingham.

“The proceeds provide significant financial flexibility allowing us to fund the proposed acquisition of OML 30 without any rights issue or other additional capital requirement from, or potential dilution to, our existing shareholders.”

Leni Gas & Oil (LON:LGO) has also sold some of its assets.

The group has agreed to sell its 20 percent interests in the South Marsh Island-6 and Ship Shoal-180 leases in the gulf of Mexico to Byron Energy, which has 80 percent operating interests in the projects, for US$400,000.

LGO exercised its option under an agreement with Byron to participate in the projects in 2010. There has been no new seismic or drilling activity on the leases and LGO has capitalized the acquisition costs and rental fees at US$212,000.

This sale has no affect on LGO's interests in producing properties in the Gulf of Mexico operated by Marlin Energy, the company added.

The proceeds will be invested in the Moruga North field in Trinidad where final preparations to commence operations have been delayed due to title defects in some of the petroleum rights leases.

These defects have now been remedied and it is expected that work can begin in the next two months.

Sector peer Ophir announced that the Fortuna East-1 (R5) step out exploration well in Block R, Equatorial Guinea, has successfully encountered gas.

This is the fourth gas discovery by Ophir in Block R, and the sixth in the block to date. The company operates Block R with an 80 percent stake.

The eastern lobe of the Fortuna Complex has been estimated to hold mean un-risked resources of 553 billion cubic feet of gas.

Ophir is now drilling Fortuna West-1 (R6), the final well in the 2012 EG drilling programme.

Staying in oil and gas, Jupiter Energy (LON:JPRL) has signed an agreement with a local Kazakh oil trader to sell 2,000 tonnes of oil – which equals 14,000 barrels – at a price of US$365 per tonne.

This represents a reduction of 8.25 percent from the last round of oil sales, reflecting the decline in oil prices since April when the last contract was signed.

The cost of transportation from the field and storage at the facility will be covered by Jupiter.

“The company is currently reviewing its ongoing arrangements in terms of the methodology used for the transportation and storage of oil and any changes to the process will be reflected in the September round of oil sales,” Jupiter said in a statement today.

Another oil and gas group Antrim Energy (LON:AEY) told investors that the UK Department of Energy and Climate Change (DECC) has approved a field development plan or the Fionn field in the UK North Sea Block 211/22a South East Area.

Antrim holds a 35.5 percent working interest in the Fionn licence, which is immediately adjacent to its 35.5 percent owned Causeway field in Block 211/23d.

The development plan utilizes previously drilled and suspended well 211/22a-6 as a production well.

This well, drilled in 2007 during the appraisal phase of Fionn and Causeway, tested oil from the Ness and Etive formations at a combined flow rate of approximately 5,500 barrels of oil per day.

The well will be completed with dual electrical submersible pumps and first oil is anticipated in mid-2013. Initial production is estimated at 4,500 bopd.

Fionn production will be combined with the Causeway field production and transported for processing to the Cormorant North platform.

Moving to the mining sector, Sunrise Resources (LON:SRES) updated investors on its activities today, saying that it has submitted a 50 kg sample of Cue1 kimberlite outcrop from its Cue project in Australia for diamond evaluation.

At the Derryginagh barite project, mining studies are now largely completed and the scoping study for the project is on track to complete at the end of September.

“It is rewarding to report that the Cue diamond project has now progressed to this exciting drill stage and we look forward to reporting the results of diamond sampling and evaluation ,” said executive chairman of Sunrise Patrick Cheetham.

“I am also pleased to report that the Derryginagh barite project is on track for completion at the end of this quarter.”

Elsewhere, African Eagle (LON:AFE) relayed a statement from its joint venture partner BrightStar Resources regarding the Myabi gold project.

The report said recent drilling has discovered a new gold zone at the Chui prospect, which is open at depth and extends over a length of 900 metres.

Drilling has also confirmed high-grade mineralisation continuity at the newly discovered Dalafuma prospect, which exteds over 300 metres and is open at depth.

The company plans follow up drilling on the Dalafuma and Chui prospects as soon as possible.

The potential for additional resources comes from both the newly discovered zone of gold mineralisation at the Chui Prospect and the recently discovered zone of gold mineralisation at Dalafuma which are located to the south of the known gold resources.

“These are extremely encouraging results and support our belief that Miyabi has much more to reveal,” said managing director of BrightStar Mike McKevitt.

In the meantime, Mwana Africa (LON:MWA) has signed a cooperation and development agreement for its wholly owned SEMHKAT copper exploration area with Zhejiang Hailiang Company Limited.

Under the agreement, Hailiang will invest US$25 million over a minimum period of four years to earn a 62 percent voting interest in the exploration joint venture.

Hailiang has the right at any time to transfer a licence into a development company. Once in a DC, exploration and development of the licence area will be progressed further and a JORC standard compliant resource report and feasibility study will be produced.

Assuming a positive result from the feasibility study, a mine will be developed.

Mwana noted that its 38 percent stake in any development company will be non-dilutable.

Hailiang has a further six month option over the Kibolwe prospect. If this option is exercised, Kibolwe will be transferred to its own development company, 40 percent owned by Mwana, and, Hailiang has committed a further US$15m within 12 months after the transfer of the license.

Landore Resources (LON:LND) released its half-yearly figures this morning.

The company said the results of the current drilling campaign on the B4-7 deposit are highly encouraging having significantly increased the potential tonnage amenable to open pit development.

Landore has initiated an in-house resource upgrade, including a full review of all quality assurance-quality control (QAQC) data, geological and grade wireframe modelling, internal resource estimate and the updating of all text required for the final NI43-101 report.

The company will then submit all data for an independent audit and external resource upgrade of the B4-7 deposit. The resource upgrade is anticipated for completion early in the fourth quarter of 2012.

A drilling programme to extend the B4-7 to the west is currently being planned to start in the final quarter of the year. 

Ferrexpo (LON:FXPO) also reported on its performance in the first half of the year.

The FTSE 250 iron ore group said it has made a good start to the year, in line with its expectations against a backdrop of falling iron ore prices.

Revenues for the first six months of the year reached US$731 million, down 15 percent from a year earlier, while pre-tax profits came in at US$169 million – compared with the US$352 million posted for the same period of 2011.

“The group continues on track with its growth projects and is well placed to benefit from its significant investment over the past five years,” said non-executive chairman of Ferrexpo Michael Abrahams.

“While the market outlook has deteriorated recently and remains variable, medium term iron ore pricing should remain underpinned by growth in developing markets.

“In line with its stated strategy, Ferrexpo will continue to exploit its substantial reserves to create sustainable value for shareholders.”

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