logo-loader

Proactive Oil & Gas Weekly Highlights: SDX Energy, UKOG, DGOC, Jersey Oil & Gas, Columbus Energy, Echo, Falcon, Genel

It was a busy week of project updates in the small cap oil and gas sector.

SDX Energy Inc - Proactive Oil & Gas Weekly Highlights: SDX Energy, UKOG, DGOC, Jersey Oil & Gas, Columbus Energy, Echo, Falcon, Genel

SDX Energy PLC’s (LON:SDX) latest well in Morocco, OYF-2 has successfully encountered commercial quantities of gas, in excess of pre-drill estimates.

The OYF-2 well was drilled down to a depth of 1,210 metres. It encountered gas in both the upper and lower Guebbas formations. Both reservoir targets were found to be thicker and of a better quality than expected, SDX revealed in a statement on Tuesday. The company noted that the new discovery confirms that its core productive area extends to the north.

SDX estimates some 1.3bn to 1.9bn cubic feet of recoverable gas in the horizons encountered in OYF-2, and said the result also opens up some 0.5bn to 1.0bn cubic feet of additional prospective resources in the ‘western compartment’ of the lower Guebbas. Well testing is now due to take place in February and, subject to results, the well will be tied-in to existing production infrastructure at an estimated cost of around US$2mln (net to SDX).

UK Oil & Gas PLC (LON:UKOG) on Tuesday released the latest extended production test results from the Horse Hill project, and, told investors that the date for ‘commercial production’ is now being brought forward by six months.

The AIM-listed majority stakeholder in Horse Hill, in a statement, said that it is presently expected that the HH-1 well will begin ‘commercial production’ operations during in spring 2020, followed by the addition of the HH-2z well once ‘test production’ concludes. HH-2z is presently offline awaiting routine well intervention operations to shut off a water ingress, UKOG noted.

In the meantime, the HH-1 has been reopened and after a 16 January restart the well flowed at an initial rate of 435 barrels of oil per day (over a six hour period) and subsequently (over the past 24 hours) has averaged a rate of 293 bopd.

UKOG said that these test rates show that the HH-1 well’s Portland reservoir interval has remained in good condition following the June 2019 shut-in. Following a short, routine well intervention it is expected that HH-1 will be optimised for higher capacity production.

US onshore firm Diversified Gas & Oil PLC (LON:DGOC) released a production update on Monday confirming that its production business is trading in line with current market forecasts. The update, ahead of full results statement due in March, revealed 2019 ‘exit’ production rates of 94,800 barrels oil equivalent per day (boepd) for its consolidated asset base.

The average production rate measured around 96,300 boepd for the fourth quarter, the company said. This marks a 5.7% improvement on the preceding quarter.

The consolidated rate comprises some 70,800 boepd for the group’s ‘legacy assets’ – all wells prior to the 2019 acquisition of HG Energy & EdgeMarc Energy -  and it includes a portfolio of thousands of wells subject to the company’s “Smarter Well Management programme”.

DGOC noted that the ‘legacy’ asset group showed a sixth consecutive quarter where the company’s continued well optimisation efforts have “largely offset what would otherwise have been natural declines in well production.”

North Sea junior Jersey Oil & Gas Plc (LON:JOG) is increasing its ownership of the undeveloped Verbier oil discovery through a deal with Equinor. The explorer, which presently holds 18% of the project, has agreed to buy a 70% interest in Licence P2170 from Equinor in return for contingent future payments, tied to potential successes and milestones.

Jersey will pay US$3mln to Equinor should a filed development plan be sanctioned by the UK Oil & Gas Authority and a further US$5mln will be payable upon ‘first oil’ from Verbier. Beyond that, Equinor also retains rights to royalty payments on the first 35mln barrels of oil produced from Verbier.

Verbier folds into Jersey’s Greater Buchan Area project – alongside the Buchan, J2 and Glenn discoveries – which is being advanced to a concept selection decision in the third quarter, as a precursor to a farm-out process.

Columbus Energy Resources PLC (LON:CERP) this week marked the beginning of CO₂ gas injection in the enhanced oil recovery (EOR) project at the  Trinity Inniss field, Trinidad. The company said that it has so far injected the first tank of gas into the AT5X well at Trinity Inniss and over time it will now determine what impact this has for enhanced production in ‘offset’ wells to AT5X.

"The company has successfully injected the first tranche of CO₂ in the Trinity Inniss field,” said Leo Koot, Columbus chief executive. “The CO₂ project is an important enhanced oil recovery project for both the company and Trinidad. I look forward to updating the market as to the results of the CO₂ pilot project in due course."

On Thursday, Echo Energy PLC (LON:ECHO) told investors that the CLix-1001 well, its first in the Palermo Aike area, is now confirmed as successfully encountering its primary exploration target in the Springhill formation.

Following further analysis of well data, the company said that the primary target was found some 28 metres higher in the well than anticipated, and, some 58 metres above the interpreted regional water contact zone.

More work is needed, though Echo speculated that the target being shallower than anticipated is “potentially indicative” of increased reservoir volumes. Echo said that a programme of completion and conventional inflow testing has been agreed, and, it is slated to start in the second fortnight of February.

Falcon Oil & Gas Ltd (LON:FOG) (CVE:FO) told investors that drilling operations have now started for the new, replacement, horizontal section in the Kyalla well.

The sidetrack well, referred to as ‘Kyalla 117 N2-1H ST2’, will now be drilled horizontally within the Lower Kyalla shale over a lateral length between 1,000 and 2,000 metres. This new section is positioned at a depth of around 1,800 metres.

Genel Energy PLC (LON:GENL) told investors it has received its latest payment for oil produced in Kurdistan, northern Iraq. The company, in a statement, said that the partners in the Taq Taq field received US$7.8mln gross, of which Genel’s share amounts to US$4.3mln. The payment relates to oil sales in September.

Additionally, a further US$7mln ‘override’ payment was received from the KRG representing some 4.5% gross licence revenue for the Tawke field for the month of September.

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

In exchange for publishing services rendered by the Company on behalf of SDX Energy Inc named herein, including the promotion by the Company of SDX Energy Inc in any Content on the Site, the Company receives from...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Full interview: Sativa Group signs significant product listing with WH Smith...

Sativa Group (Nex: SATI) CEO Henry Lees-Buckley dropped into the Vancouver studio of Proactive with news the company has signed a major CBD product listing agreement with WH Smith Travel.  Lees-Buckley talks about just how big that deal is and what he has been hearing from customers...

6 hours, 21 minutes ago

6 min read