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Proactive weekly oil & gas highlights: ADES International, Sound Energy, Europa

It was a week of project updates, deals and contract awards...
onshore oil wells
It was another busy week in the sector

Shares in Amerisur Resources PLC (LON:AMER) soared on Friday after it inked a US$93mln farm-out agreement for four exploration blocks in the Putumayo basin, Colombia.

The oil & gas explorer said the deal would involve Occidental Andina, an affiliate of multinational US oil & gas firm Occidental Petroleum Corp (NYSE:OXY), purchasing a 50% interest in each of the blocks, and in return funding a US$93.25mln exploration and appraisal program between 2019 and 2021.

Occidental would fund 85% of the total planned 2D seismic cost expenditure of US$65mln and 100% of the US$38mln planned drilling program.

Highlands Natural Resources Plc (LON:HNR) shrugged off a setback over permits at its West Denver licences with little fuss.

Originally, Highlands applied for 104 development permits for shale operations but withdrew them all after local community objections.

After an initial wobble on the news, shares in the junior bounced strongly as the company predicted rising revenues from its East Denver operation and elsewhere.

Higher oil prices are starting to feed through into the performance of rig operator ADES International PLC (LON:ADES).

The last three months was a strong quarter said Mohamed Farouk, chief executive.

Utilisation rates rose to 83% helped also by the acquisition of three jack-up rigs from Nabors. Revenues, meanwhile, rose 23% quarter -on- quarter to US$47mln with a 52% increase over the same period a year ago. For the nine months of the year so far, revenues have risen by 7% to US$127mln.

Europa Oil & Gas (Holdings) PLC (LON:EOG) is to raise up to £5mln to fund its Irish Atlantic Margin projects and also a new venture in Morocco.

A firm placing will provide £4mln at 3p per share while existing shareholders can subscribe up to another £1mln through an open offer at the same price.

Europa has exploration licences off the west coast of Ireland, where it is currently negotiating farm-in agreements with a major international oil and gas company over three of these - LO 16/20, FEL 1/17 and FEL 3/13.

North Lincolnshire’s planning officer has recommended that local councillors approve planning consent for the development of the Wressle oil field, in which Union Jack Oil PLC (LON:UJO) and Europa Oil & Gas (Holdings) PLC (LON:EOG) have sizeable stakes.

Operator Egdon Resources Plc (LON:EDR) submitted a new planning application back in July, having had its original submission and subsequent appeals knocked back over the past year.

The planning officer, supported by a team of external technical experts, has concluded that their earlier concerns “have been overcome”.

Sound Energy PLC (LON:SOU) said wireline log interpretation of the TE-9 well the Tendrara area of Morocco has not established the presence of producible gas, and hence the well will be plugged and abandoned, and not tested, with the firm to move directly on to the TE-10 surface location.

The AIM-listed Moroccan focused upstream gas company said TE-9, the first of a three well programme to explore three non-related play concepts in the Tendrara area was drilled to a total measured depth of 2925 metres and penetrated both the TAGI primary target and the Paleozoic secondary target.

The group said the well encountered 60 metres of dolomitized silty sandstone, interpreted as an age equivalent to the primary target TAGI sandstone, and petrophysical analysis of the wireline data indicates the interval is of low porosity and therefore poor reservoir quality.

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