PROACTIVE NEWS SUMMARY: Wessex Exploration, Max Petroleum, Xcite Energy, Antrim Energy, Provexis, Kalahari Minerals


Today’s news coverage by Proactive Investors was focused primarily on oil and gas companies, which today gave investors a batch of updates to digest. One of today’s main stories was dedicated to today’s £12 million cash call by AIM-listed Wessex Exploration (LON:WSX) that pushed its shares up four percent in afternoon trade.

A total of 240 million shares were placed at 5 pence each, which will expand the company’s equity base by a third, and the funds will be used to finance the firm’s continued participation in the Guyane oil block.

In September operator Tullow Oil (LON:TLW) revealed the Zaedyus well on the Guyane block had uncovered 72 metres of net pay oil in two turbodite fans.

The discovery effectively proved that Guyane is the mirror image of the Jubilee Field on the other side of the Atlantic off the coast of Ghana.

Wessex owns a 1.25 per cent stake in the exploration licence held via a joint venture company called Northpet Investments, which is 50 per cent owned by Northern Petroleum (LON:NOP).

Another article covered today’s positive note on another small cap oil and gas firm Max Petroleum (LON:MXP) from Merchant Securities.

The broker decided to upgrade its target price for the stock to 35.2 pence per share in order to take account of recent positive operational news.

Merchant said that good operational news released by Max on its Zhana Makat project in Kazakhstan was consistent with the independent broker’s outlook for the project.

“We now expect that Zhana Makat will produce 7.7 million barrels,” said Merchant, pointing out that this figure is “only moderately higher” than independent consultant Ryder Scott’s proven and probable reserve estimate of 6.2 million barrels for the field.

After Max announced that Ryder Scott had ascribed 0.9 million barrels of proven reserves to East Kyzylzhar I in mid-November, followed by news that the KZIE-1 discovery well produced light oil at 1,484 barrels per day, Merchant is positive about this development too.

It said that it believes “our 2.7 million barrel target is more likely to be exceeded than not and that Ryder Scott’s estimates of proven and probable reserves already appear out of date”.

Another update in the oil and gas sector came from closely followed North Sea explorer Xcite Energy (LON:XEL). The group said that it has re-configured its approach to the first phase of development of Bentley oil field, in the UK North Sea.

The change comes in response to feedback on the group’s field development plan from the UK government’s Department of Energy and Climate Change (DECC).

Xcite says the new approach provides a more financially efficient outcome.

“This re-configuration has allowed the company to maintain the first oil date in 2012, while enabling the completion of a more cost effective field development plan,” Xcite said in a stock exchange statement.

The original plan proposed a two stage development programme. There will now effectively be three stages in the development.

Phase 1A will see Xcite achieve first oil from the First Stage Production (FSP) area next year. Xcite said the financial resources to start Phase 1A are available, should the DECC approve the development plan.

And, finally, Antrim Energy (TSE:AEN, LON:AEY) said the Antrim-operated Erne exploration well 21/29d-11 in the UK Central North Sea has discovered net oil and gas pays.

Antrim holds a 50 percent working interest in the well, and Premier Oil (LON:PMO) holds the remainder.

Antrim shares rose in reaction to the news, and were trading up more than 7 percent in opening London deals at 82.5 pence, while Premier stock inched up 0.45 percent to 366 pence.

Antrim said in a statement that the well was drilled to a total depth of 5,562 feet.

Preliminary estimates indicate a thick gross hydrocarbon column in excess of 50 feet was encountered in the Eocene Upper Tay Sandstone, including 20 feet of net oil pay and a separate ten feet of net gas pay with average porosity exceeding 30 percent and average hydrocarbon saturation of approximately 80 percent.

Away from the oil and gas sector, Provexis (LON:PXS) announced a restructuring to cut costs by nearly £1 million per annum, which will include the closure of its Liverpool research and development facility with the loss of 7 jobs.

The group has decided to focus its efforts on developing its patented Fruitflow blood-thinning product and the Science in Sport (SiS) nutrition brand it acquired in June this year.

This will mean the winding-down of its collaboration with the University of Liverpool, closure of the facility there, ending development of the NSPNo.3G plantain extract technology and putting its cardiovascular inflammation projects under review.

In the mining sector, Kalahari Minerals (LON:KAH) told investors that Extract Resources (ASX:EXT, TSE:EXT) has now received the mining licence for the Husab uranium project in Namibia.

Kalahari has an indirect stake in the project via its 42.76 percent shareholding in Extract.

This mining licence will enable the project to move into its production phase, establishing Husab as one of the three largest uranium mines in the world.

Kalahari chairman Mark Hohnen said: "The granting of the Mining Licence removes a potential development barrier and ensures Extract can move forward with this globally significant uranium asset, enabling the process of identifying strategic investors and project debt to begin in earnest.

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