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Fox-Davies Capital Newsflash including Coastal Energy, Rockhopper, Xcite, Aminex, Patagonia Gold and more

8th Oct 2009, 3:31 am Fox-Davies Capital Newsflash including Coastal Energy, Rockhopper, Xcite, Aminex, Patagonia Gold and more

Coastal Energy  (CEO) announced the completion of the Songkhla A-02 development well on Block G5/43 in the Gulf of Thailand. The well was drilled to a total depth 2,684m and logged approximately 30m of net pay with 20% porosity in the Lower Oligocene primary reservoir. Completion casing has been run and the well has been perforated. The well was cleaning up and flow testing over 3,000bopd when a sudden increase in water production occurred from a suspected channel in the cement behind the production casing. The well is currently producing 1,500bopd.

The Songkhla A-05 injection well was spud on October 4 and was drilled to a total depth of 2,673m. The well will be logged and evaluated in the coming days to determine the prospectivity of the early Miocene, which has been identified as a potential secondary target. The Company currently plans to continue producing the A-02 well while finishing drilling the A-05 injection well and the A-04 development well. Upon completion of these two wells, a remedial cement squeeze and repair operation will be performed on A-02. The repair work is expected to take 7-8 days.

The Company also entered into a contract with EOC Limited to charter a heavy lift barge for installation of its fixed platforms at its Bua Ban field on Block G5/43 in the Gulf of Thailand.  The installation is expected to begin in Q1 2010 and cost approximately $11.2m. The facilities installation will facilitate the development drilling of Bua Ban in 2010.

In the onshore Block L27/43, testing of the Phu Kheng-1 exploration well is expected to be delayed until mid-November due to delays in mobilizing equipment. Initial evaluation results are expected in late 2009.  As announced September 7, 2009, Phu Kheng-1 encountered gas-saturated Jurassic and Triassic sandstones in the Phu Kradung and Nam Phong formations.
 
Rockhopper  (RKH)  noted the recent media speculation that the Company is actively pursuing an equity financing.  Rockhopper today confirms, as previously announced on 11 September, 2009, that it hopes to drill a minimum of two wells on its operated acreage (owned 100%) as part of a larger campaign with Desire Petroleum PLC. The Company further confirms that management are considering a variety of options to finance the cost of the drilling campaign, including a placing of equity.
 
Xcite Energy  (XEL)  announced that it has completed its previously announced placing of 10,141,998 new ordinary shares at a price of 21p per share to raise gross proceeds of approximately £2.1m from investors in the UK and Canada. Completion of the placing is subject to admission to trading on AIM of the new shares which is expected to occur at 2:30 pm (London time) today. The Placing represents 14.2% of the Company's enlarged share capital.
 
Aminex  (AEX)  announced that Mr. Keith Phair has been appointed to the board as a non-executive director with immediate effect and will be proposed for election at the next Annual General Meeting. Mr Phair has held a number of senior global product management positions in the capital markets with major international banks and investment banks.
 
DNO International  (DNO NO)  has resolved its dispute with the Kurdish regional government (KRG) and was allowed to restart operations after the KRG lifted a suspension related to a controversial sale of DNO shares. It is not clear what steps have been taken to end the dispute. However the Company has decided not to resume export production but will rather focus on sales within Iraq until a payment mechanism is agreed with the central government in Baghdad. Indeed DNO started exporting more than 40,000 b/d in June but has yet to receive payment as Baghdad has not agreed a formula for distributing oil revenues.
 
Mining Corporate News
 
Hochschild  (HOC)  announced the successful placement of its offering of $115 million of senior unsecured convertible bonds due 2014, convertible into ordinary shares of the Company. The size of the Bond Offering has been increased from the indicated $100 million. Under the terms of the Bond Offering, there will be a lock-up period from today's date until 180 days after the Closing Date.


The Bonds will have a coupon of 5.75% per annum payable semi-annually on 28 January and 28 July of each year. The initial conversion price is set at a premium of 35% to the clearing price of the concurrent equity placing of 295 pence. The bonds also contain a call option, which becomes exercisable in 2012 if certain terms are met.
The company also announced the completion of an equity placing with gross proceeds of approximately US$145M. A total of 30,735,000 new ordinary shares of 25 pence each in Hochschild were placed at a price of 295 pence per Placing Share.
 
Platinum Australia  (PLAA)  announced that it has received the Pre Feasibility Study Report for the Kalahari Platinum ("Kalplats") Project.  The  PFS  Report  shows  the  project  to  be commercially and technically viable  and able to generate  a return of 25%  on the Base  Case  assumptions based on  mining only four of the seven  known deposits. The Study states that the project would achieve an NPV10 of US$50M, undiscounted cashflows of US$145M, Cash costs of US$340/oz 4E PGM with a 9 year mine life and an initial capital cost of US$91M.
 
Patagonia Gold  (PGD)  announced an updated Resource Estimate at its Cap-Oeste gold and silver project, with a combined total resources of 655,932oz gold equivalent and 88% in the indicated category. This represents an increase of almost 89% on the previous resource calculation.

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