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Proactive weekly oil and gas news summary: Dart Energy, Antrim, Ithaca, Europa Oil & Gas, Tangiers Petroleum, Fastnet, San Leon Energy


UK focussed, Aussie listed, Dart Energy (ASX:DTE) was at the centre of what was the week’s most exciting news – the entry of French energy utility major GDF Suez into Britain’s shale revolution.

Whilst France’s shale potential is on lockdown, due to a ban on fracking, GDF says it is very confident about the potential of shale gas in the UK. 

On Tuesday, GDF and Dart unveiled a deal which sees the French firm take a 25% stake in thirteen unconventional gas licences in North West England and Wales.

In return it is paying US$12mln upfront and crucially it will pay for up to US$27mln of Dart’s future costs for a programme that will include four shale gas wells. 

The licences, which span 340,510 acres, are estimated thus far to contain up to 60trn cubic feet of gas.

Two other UK focussed oil firms had the headlines on Friday as Antrim (LON:AEY) and Ithaca Energy (LON:IAE) boosted by the restart of the Causeway field, which had been shut-off since August because of scheduled maintenance.

Additionally, it was also confirmed that production rates from Causeway are now expected to rise over the course of the year, due to the start-up of electrical submersible pumps and the use of water injection. Prior to shut-down, Causeway was producing just shy of 3,000 barrels per day.

Meanwhile, off Irish shores, Europa Oil & Gas’s (LON:EOG) major partner Kosmos Energy showed it is wasting no time in assessing the potential of two frontier exploration licences on the Atlantic margin.

Less than six months after farming into the acreage, in the highly prospective South Porcupine Basin, the super-explorer and discoverer of Ghana’s massive Jubilee oil field, has completed its 3D seismic work. And it has done so almost a year ahead of schedule.

The programme covered 1,500 square kilometres (sq. km.) and is designed to de-risk the acreage ahead of drilling.

Analysts estimate the chance of success will move to perhaps one-in-five (from 1-in-10 to 1-in-12) as a result of shooting the seismic.

It is targeting Cretaceous plays of the kind that delivered huge success for Kosmos off the coast of West Africa. The work will help Kosmos, which farmed into 85% of frontier exploration licences (FELs) 2/13 and 3/13 in April, identify potential targets.

Delivery of the processed data is expected by the first quarter of next year and Kosmos is set to make a drilling decision in the second half of 2014. That will then set the ball rolling to begin the work in 2015, or 2016, said Europa, which still retains 15% of the two licences and has a free carry.

A group of small cap explorers, including Tangiers Petroleum (LON:TPET, ASX:TPT), are benefitting from rising investor interest in the emerging oil frontier offshore Morocco.

Tangiers shares advanced strongly this week. Answering a query from the ASX, questioning the reasons for the move in the price, Tangiers said it was not aware of any additional information that might explain the rise.

It did point out, however, that the group’s listed options ceased trading on October 24 and this event may have increased the level of trading activity in the shares.

The potential of Morocco’s nascent oil industry and the scale of opportunity was underlined by the entry of oil major BP.

BP struck a deal with Atlantic exploration specialist Kosmos Energy. In return for significant stakes in three licence blocks – between 26.3% and 45% - BP will pay Kosmos’s costs for three wells, and will also cover some of the potential follow up drilling.

At the same time all the explorers in this emerging oil frontier are keenly awaiting the start of Cairn’s imminent well in the Foum Draa block, and a subsequent well in the Juby Maritime area, both of which flank Tangiers’ 25% owned Tarfaya block.

The two drill programmes mark the beginning of a significant period of work in the frontier, which will comprise 10 wells over the next eighteen months.

A number of other explorers are also expected to benefit – directly and indirectly – from this surge in exploration activity. Among them are; Fastnet (LON:FAST), San Leon Energy (LON:SLE), Longreach Oil & Gas (CVE:LOI) and Pura Vida (ASX:PVD).

Gulfsands Petroleum (LON:GPX) acquired onshore Moroccan assets earlier this year and it is kicking off an initial five well programme this month. The plan is to focus on shallow gas anomalies, at depths between 1,000 and 1,650 metres, which are similar to adjacent commercial discoveries.

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