The early indications from Hurricane Energy Plc’s (LON:HUR) latest well at the Lancaster field could have game changing implications not just for the West of Shetland area, but for entire North Sea and the UK.
Results from a pilot appraisal well have confirmed a massive 620-metre oil column, deep in basement rocks.
Hurricane Energy Plc (LON:HUR) shares jumped around 40% in Friday’s early deals after it revealed better than expected results for its first new well at the Lancaster field in the North Sea.
The well measured a 620 metre oil column, extending deeper than a previous third party assessment had anticipated.
A case in point was a seemingly routine announcement earlier Thursday that its second well in Morocco drilled through the salt cap to the second casing point.
As far as oil sector announcements are concerned, that is about as boring as it comes.
The net result of the update? Well, a further 4% increase in the share price, which since the start of July has rocketed from 16.5p to almost 80p.
“The H1 2016 results showed that EnQuest is delivering its production and execution targets while keeping a lid on costs,” Liberum analyst Andrew Whittock said in a note.
It has agreed to sell 45.9mln new shares, priced at 2.25p, to what it referred to as ‘certain investors including some of our shareholders and directors’ through a non-brokered placing. The new shares represent some 60% of the group’s equity, after the placing, and the price is a 59% discount to Wednesday’s closing price in London.
Its first well on the Tendara Block proved the area was host to “commercially significant” accumulations of gas.
The source of yesterday’s pain – which saw around a third wiped from the value of the company – was Pantheon’s inability to drill a time-and money-saving horizontal well on its Texas acreage.
Putting more money into Gulf Keystone Petroleum Limited (LON:GKP) doesn’t make sense for the average investor, but there is definitely still value left in the Kurdistan based oiler, so says one debt holder.
Align Research’s Richard Jennings, who says he bought some Gulf Keystone’s convertible bonds at a ‘material discount’ to face value, also dismisses the US$300mln takeover approach from DNO as undervalued and opportunistic.
The agreement covers land within Exploration Permit EP371 in the Kimberley region of Western Australia and is in the form of an Indigenous Land Use Agreement or ILUA with the Yungngora People.
By going laterally, the firm hoped to improve recoveries. Instead it will revert back to drilling vertical wells.
88 Energy Ltd (LON:88E) has announced a change to its plans for the proposed Icewine 2 well in Alaska where it now intends to drill a vertical well rather than a more complex and more expensive lateral well.
A vertical well is estimated to cost around US$5mln less to drill and the well can be paid for entirely from the group’s current cash position, the company told investors.
How big is Hurricane Energy Plc’s (LON:HUR) Lancaster field? Half a billion barrels, if not significantly more, would be a “realistic target” according oil company expert Malcolm Graham Wood.
Graham Wood, in his well followed oil market blog, said Friday’s impressive results mean the estimates for Lancaster’s resources will immediately increase.
Gupta – who oversaw the company’s admission to AIM back in 2008 – will step down after the next shareholder meeting in October.
The settlement resolves all outstanding issues relating to the reserve bonus and also ends a 1.2% royalty from a contingent payment agreement (CPA) prior to its involvement at Logbaba.
The Tendrara 7 well (TE-7) has now been drilled to a measured vertical depth of 2,203 metres, and casing has now been set and cemented at the top of the Triassic Lower Salt formation.
Aminex plc (LON:AEX) has told investors that the Kiliwani North gas production operations continue to perform well and that the group is focused on an upcoming multi-well appraisal programme on the higher potential Ruvuma PSC.
“The Kiliwani North-1 well is performing well and maintaining a higher interest in the licence allows us to retain more of the revenues generated from the project and strengthen our balance sheet,” said chief executive Jay Bhattacherjee.
Solo Oil PLC (LON:SOLO) told investors it will focus its cash on the higher potential of the larger Ruvuma joint venture, rather than take up an option for more of the revenue generating Kiliwani North field.
The AIM quoted company is partnered with Aminex (LON:AEX) in both projects. It has 25% of the Ruvuma production sharing contract (PSC) in Tanzania and it also has 7.125% of Kiliwani North but it is declining to acquire a further 1.25% in the latter.
Erskine, which had been offline for a number of months, was restarted at the end of August after a blockage in adjoining infrastructure was cleared and a phase of scheduled maintenance came to an end.
It is issuing 70.8mln new shares, priced at 0.67p, which will equate to 39.2% of the group’s enlarged share capital. Lenigas is himself taking 22.38mln shares, giving him 12.4% of the company.
Oil and gas group Tethys Petroleum (LON:TPL TSX:TPL) has declared Olisol in breach of a proposed CS$9.8mln funding after it failed to meet the 2 September deadline.
Tethys said it is still receiving working capital funding from Olisol, a Kazakhstan refiner and distributor, and they are working to complete the private placement, though it is also now looking at alternative funding.
These opportunities are fully funded from existing cash resources, he added.