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Proactive Weekly Oil & Gas Round-up: Victoria Oil & Gas, 88 Energy, Highlands Natural Resources ...

Published: 07:45 19 Aug 2017 BST

Oil rig sunset

Shares in Victoria Oil & Gas plc (LON:VOG) posted strong gains this week, up almost 13%  after the company on Thursday gave a bullish update on its drilling programme in Cameroon.

Chief executive Amhet Dik said he expects La-107, on the Logbaba gas and gas condensate field, to be a “substantial producer”.

WATCH: Victoria Oil & Gas expecting La-107 to be a 'substantial' producer

The new well, which will be flow tested soon, should be in production by the end of next month, supplying the country’s second city and industrial hub, Douala.

The CEO’s comment came as VOG said La-107 had reached its target depth of 3,180 metres.

In doing so it encountered an additional 23 metres of net gas sand since the last update. It brings the total in the lower and upper Logbaba formations to 58 metres.

Dik said: “New gas supply is expected to come online during the third quarter and this should allow [us] to finalise contracts with high usage customers we have been in discussion with over the past months.

“It is very satisfying to have over 50 metres of net gas sands in La-107 ‘behind pipe’ and I would like to congratulate the drilling team on the safe delivery of this well."

88 Energy Limited (LON:88E, ASX:88E) also advanced over 12% this week after it said it is ready re-start flow testing its latest well on Alaska’s North Slope.

Work on the Icewine-2 well was suspended for six weeks to allow pressure to build and imbibition (soaking) to occur.

The process has been effective in other plays by allowing frack fluid to be absorbed, displacing water that may be blocking oil and gas molecules from being able to flow through the reservoir.

88 Energy said it will recommence testing of the HRZ shale on August 21.

In the same announcement on Thursday, the company said expanding its gross acreage position increased by 76,996 to 348,116 acres, or 259,114 net to the firm.

Highlands Natural resources completes drilling

Elsewhere, Highlands Natural Resources Plc (LON:HNR) announced Friday that it has completed drilling of its first two wells at the East Denver Niobrara oil and gas project in Colorado.

The company said it has successfully drilled and set surface casing in both the Wildhorse and Powell wells to a total depth of 2,100 feet.

Highlands is now drilling the remainder of the Powell well, which targets the Niobrara C formation and should reach its final depth in about two weeks with a targeted depth of 18,247 feet.

Sirius Petroleum PLC (LON:SRSP) shares jumped on Monday morning after it unveiled an oil offtake deal with a subsidiary of BP PLC (LON:BP), providing the group with some US$10mln of new funds.

The deal supports the group’s plans for the Ororo oil field in Nigeria, and it follows a phase of technical due diligence.

It will allow Sirius to draw down up to US$10mln of ‘pre-payment’ finance, with annual interest charged at Libor plus 9%.

Greka Drilling Ltd (LON:GDL) got a lift on Wednesday from news it has won two new drill contracts with PetroChina Huabei Oilfield Limited, for coal-bed methane blocks in Shanxi Province.

WATCH: Greka Drilling's Randeep Grewal hails new drill contract wins in China

The China-focused drilling and well services contractor estimates that the new contracts will be worth a total of US$2mln.

Jersey Oil & Gas PLC (LON:JOG) rose on Monday after it told investors that partner Statoil has now started drilling the Verbier exploration well in the North Sea.

The AIM-quoted explorer owns an 18% stake in the Statoil project (it is operator, with 70% of the asset) which is targeting significant potential resources.

An initial well could be expanded to include a sidetrack, and the programme is expected to take up to 70 days.

Gulf Keystone Petroleum Limited (LON:GKP)  also announced news on Monday, telling investors it is on course to achieve production guidance of 32,000 to 38,000 barrels of oil per day for the year.

It comes as the company’s flagship Shaikan field, in Kurdistan, reached a major milestone, of producing 40 mln barrels of crude to date.

The company said Shaikan continues to perform in line with expectations, with an average rate of 36,671 barrels of oil per day in the first half.

Rockhopper updated on Egyptian operation

Another bulletin board favourite, Rockhopper Exploration Plc (LON:RKH) told investors this week that its Egyptian operation remains stable, producing around 3,300 barrels of oil equivalent per day in the first half of 2017, and it gave details of well programmes in the country.

The AIM-quoted oiler, which has flagship assets in the Falklands, has a 22% stake in the Abu Sennan concession which includes six oil and gas fields.

It updated investors on two wells at Abu Sennan, Al Jahraa-9 and Al Jahraa SE-2X.

And Empyrean Energy PLC (LON:EME) announced that the ongoing Dempsey 1-15 exploration well in the Sacramento basin, California, is proceeding to plan with reports of gas shows in the well.

Sacgasco Limited (ASX:SGC), the project operator, has informed Empyrean that mud logs from the well indicate that Dempsey 1-15 has intersected multiple intervals of interpreted significant gas shows in sandstones at the producing gas field levels, the company revealed in a statement.

Funding focus

On the funding front, Shares in Petro Matad Limited (LON:MATD) advanced as much as 10% in Tuesday’s early deals as new amendments to a deal were announced, revealing that shareholder dilution will be reduced.

A funding arrangement with Bergen Global Opportunity Fund was announced back in May, and now that deal has been amended by mutual consent – it means that a monthly schedule of equity tranches will be postponed until October 15.

Elsewhere, Britain’s nascent shale gas industry is about to see significant activity, according to AIM-quoted Egdon Resources Ltd (LON:EDR).

The UK onshore oil and gas firm, which is interested in some 200,000 acres of shale assets, in a broader operations update highlighted that a number of parties will be advancing shale operations over the coming months – including a potential ‘play opening’ Spring Road well, in which it has a 14.5% interest.

It is planned that operations will start at Spring Road later this year. The well is located in the Gainsborough Trough, where Egdon is partnered with IGas Energy, Total and others.

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