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Proactive weekly oil and gas highlights: Hurricane Energy, Block Energy, Columbus Energy, 88 Energy ...

It was a short but busy week, for the oil and gas sector.

oil and gas operations
Project updates and fundings kept the market busy

Hurricane Energy PLC (LON:HUR) announced the spudding of the Warwick Deep exploration well, the first to be drilled in partnership with Centrica PLC-backed Spirit Energy. It is the first of three planned wells in the programme, which will assess the Greater Warwick Area (GWA), which comprises the Lincoln discovery and the previously untested Warwick prospect.

The GWA is believed to be a continuation of the large oil reservoirs seen at the Lancaster field, though the two areas are separated by a fault.

Hurricane retains a 50% stake in the GWA following its farm-out deal to Spirit, which committed to fund and execute the drilling campaign. In all, Spirit is to cover Hurricane’s costs in the GWA, up to US$387mln across five potential phases of work.

Block Energy PLC (LON:BLOE)

The firm told investors that ongoing production from the 16aZ well at the West Rustavi field in Georgia validates its expectation-beating initial results.

Production rates from the well are presently constrained due to capacity restraints at surface, but, the company said the rate remains consistent with the initial 1,100 barrels of oil per day (bopd) result reported earlier this month.

It is currently flowing at around 700 bopd, on the smallest possible choke, which is still more than double the pre-drill target of 325 bopd.

Block Energy said it has negotiated terms on additional storage facilities, and is also negotiating new oil sales contracts with local and international buyers.

Columbus Energy Resources PLC (LON:CERP)

The company gave investors a broad update on its operations, including details of an upcoming well in Trinidad and a potential new venture in South America.

In Trinidad, the company is working towards the start of drilling at the South West Peninsular (SWP) in the third quarter, subject to government approvals. The drill plans will be aided by a detailed technical report by independent geoscience specialists, due in the second quarter.

Tower Resources PLC (LON:TRP)

Tower has scheduled a spudding a date of late May for its first well on the Thali block in Cameroon.

The Topaz Driller rig is available in the last week in May, with the location now agreed with Cameroon’s state oil company SNH.

A full drilling team is now in place and operating from the company's offices in Douala, added Tower, and all long lead items have now been acquired and all services contracted on a late-May spud date basis.

NJOM3 will be drilled to a total depth of 1,100 metres intersecting at least three reservoir zones already identified by two discovery wells drilled on the Njonji structure by previous operator Total.

Europa Oil & Gas Holdings PLC (LON:EOG)

Europa sold its 20% stake in the Holmwood project to UK Oil & Gas PLC (LON:UKOG) for £300,000 in cash. UKOG is separately also purchasing Union Jack Oil PLC’s (LON:UJO) 7.5% in the asset for £112,500.

It will mean that UKOG, in aggregate, has consolidated its stake in Holmwood to up to 67.5%. As a result, the company has secured control of the project, which neighbours its flagship Horse Hill discovery, now on the road to development and permanent production.

For Europa and Union Jack, it sees the companies exit a project that had stalled in the planning permission process and, consequently, remains uncertain.

Jersey Oil and Gas PLC (LON:JOG)

Chief executive Andrew Benitz told investors that there is “still plenty to play for” at the Verbier project, as the rig moves off following an unsuccessful appraisal well.

The well failed to upgrade Verbier’s resource base, with the discovery now believed to host closer to 25mln barrels rather than 130mln, and the company today confirmed it was drilled under budget.

Project operator Equinor will carry out a full re-evaluation of the licence area - using well data and reprocessed seismic – to get a better understanding of the reservoir distribution of the primary target. The review will also include an assessment of additional prospectivity in the deeper targets and the other previously identified exploration opportunities, including Cortina.

It will be a precursor to a recommendation to the co-venturers on a potential future appraisal and/or exploration programme.

88 Energy Ltd (LON:88E)

It continues to look forward to a potential farm-out deal for its Project Icewine conventional project area in Alaska. In a quarterly update, the explorer said it expects that the deal is targeted in the second quarter.

“The farm-out process has now progressed to the next stage, with a preferred bidder selected and discussions underway,” the company said. It would potentially tee up an ‘exploration/appraisal’ well next year, the company told investors.

Sound Energy PLC (LON:SOU)

Sound confirmed that its partner Schlumberger has now converted its interest in the Anoual permits, part of the Tendrara exploration venture, into a direct stake in the project.

As a result of the procedural milestone, Sound’s project equity stake amounts to 47.5% alongside Schlumberger with 27.5%, and Moroccan state vehicle ONHYM holding the remaining 25%.

It concludes the process across all the component parts of the Greater Tendrara project area, all of which is now 27.5% owned by Schlumberger. Meanwhile, the process is ongoing to convert Schlumberger’s interest in the TE-5 Horst discovery into a direct stake.

Tlou Energy Ltd (LON:TLOU)

The company raised the equivalent of £1.6mln (A$2.9mln) through a share sale in Botswana.

Sophisticated investors in Botswana have subscribed for 29mln new Tlou shares at the equivalent price of 5.5p (10 Australian cents) – specifically, the investment comes from a long-term existing shareholder as well as a new Botswana-based fund manager.

It comes as Tlou continues to advance its coal bed methane project in Botswana and follows a A$1.2mln funding earlier this month.

Mosman Oil And Gas Ltd (LON:MSMN)

Mosman saw its shares rise in Thursday’s early deals as it revealed production testing results from the Stanley-1 and Stanley-2 wells.

The wells are operated by partner Baja Oil and Gas which reported an initial flow rate of 330 barrels of oil per day from the Stanley-1 well, while the Stanley-2 well flowed between 130 to 135 barrels oil equivalent per day.

"These initial flow rates are a demonstration of the excellent production from multiple stacked reservoirs at Stanley,” said John Barr, Mosman chairman.

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